Costs and financing
S. Smits, B. van Koppen and P. Moriarty: Characterising the multiple use approach at community level: findings from case studies in 8 countries
Multiple-use services (MUS) have gained increased attention, as an approach to of providing water services that meet people’s multiple water needs in an integrated manner. This paper tries to characterise key elements of mus at community level, and assesses performance through a review of case studies conducted in Bolivia, Colombia, Ethiopia, India, Nepal, South Africa, Thailand and Zimbabwe. The cases show that people almost universally use water for domestic and productive activities at and around the homestead. The case studies demonstrate how levels of access can be provided by different types and combinations of technologies, and incremental changes made. These need to be accompanied by additional financial and management measures to ensure sustainability of services. The additional requirements posed are considered not to be insurmountable and can all be addressed in a feasible manner, and often justified by the additional benefits. [authors abstract]
M. Adank, B. Belete, M. Jeths: Costs and benefits of multiple uses of water: a case from Ethiopia
This paper presents a study conducted under the RiPPLE project1, with the objective to provide better insight in the costs and benefits of multiple use water services. In this study, the costs related to the provision of water services and the benefits related to water use were analysed for two cases in the East Haraghe zone, Ethiopia, each taking a different path towards multiple use services. In the Ido Jalala case, domestic water supply services were upgraded to enable small-scale irrigation, while in the Ifa Daba case, irrigation services were upgrades to also cater for domestic water use. In both cases, water was used for multiple uses by the community members, regardless of the water services provided. The study shows that in the studied cases, the benefits of multiple use easily outweigh the costs involved in providing water services. It also shows that with relatively small additional costs, single use water services can be upgraded to multiple use water services, which facilitate multiple uses, bringing along relatively high additional benefits. [authors abstract]
Powerpoint presentation by Tom Slaymaker and Marieke Adank given at the Thematic Group Meeting in London, 2007.
Powerpoint presentation by Stef Smits, IRC, given at the Thematic Group Meeting in London, 2007.
A powerpoint presented by Marieke Adank, IRC, in Delft, 2007, on a framework to evaluate the costs and benefits of the multiple use approach.
It has been argued (see for example the book Beyond Domestic) that productive uses of ‘domestic’ water can lead to improved financial sustainability. Household water users may be more likely to be able and willing to pay water charges when they are cultivating gardens or keeping some livestock as well as consuming water for normal domestic purposes.
In March 2005, IRC undertook a study to assess the financial sustainability of water supply systems for five municipal Autonomous Water and Sanitation Companies (SAAS) on Santiago Island in Cape Verde. Some wellfields here are used to supply water for domestic consumption as well as water for irrigated agriculture around the towns, and the water companies manage supply for both users. But the water companies do not recover enough water fees to cover costs and currently they face serious problems of financial sustainability. The main reason for this situation is a subsidised tariff for irrigation water, which is much lower than production costs that the water companies have to bear. Furthermore the water companies face an additional problem: decentralised government institutions have large outstanding debts owing to the water companies.
The tariffs for irrigation are maximum CVE15/m3 (USD 0.17) for traditional irrigation and CVE8/m3 (USD 0.09) for farmers using drip irrigation. These rates are established by the Ministry of Agriculture as an incentive for agricultural production and are beyond the direct control of the water companies. However, the average cost of production per m3 to the water companies is much higher: between CVE37/m3 and CVE110/m3 (0.42 - 1.24 USD respectively). This difference is paid for by drinking water consumers. The burden falls disproportionately on those who pay the highest prices per m3: poor consumers who rely upon water provided by tankers and fountains. Effectively, the poorest in the towns are subsidising the low price of water for irrigation. But the water companies do not have enough drinking water consumers to cover the “hole” in their accounts created by the sale of water for irrigation. Each month, the financial deficit of the water companies grows worse. To make the situation more complex, a poverty analysis shows that the small towns with the highest percentage of extreme poverty (where income is less than CVE 2.403 (27 USD) per capita per month), have the largest irrigation areas. In some cases, the minimum monthly domestic water tariff reaches up to 21% of the income of the poorest.
In this case, due to the way in which tariffs are set, productive use for irrigation from a multiple use water supply is leading to serious problems of equity and financial sustainability which threatens to undermine the entire system.
For more information contact Catarina Fonseca at fonseca@irc.nl The book Beyond Domestic: Case studies on poverty and productive uses of water at the household level (Eds. Moriarty, P., Butterworth, J., & van Koppen, B.) is available from publications@irc.nl with reduced rates available for organisations in the south.
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