Closing the water infrastructure gaps: challenges and lessons learnt by a medium
income country
I.
The widening water infrastructure gap
Existing water-related MDGs have proved to be successful drivers to tackle the
immediate public health concerns of water-borne diseases. This is best illustrated by
MDG target 7.c (halving the proportion of people without sustainable access to safe
drinking water) being amongst the first MDG targets to be met, well in advance of the
2015 deadline. Nevertheless, an estimated 90% of all wastewater in developing countries
is still discharged untreated directly into rivers, lakes or oceans. Such one-sided focus on
the provision of drinking water thus results in a waterworks “gap”: a situation where the
improvement of the drinking water capacity remains unmatched by sanitation. Such an
infrastructure gap gives rise to a wide range of public health and environmental risks as
well as may generate social tensions. Prolonged gaps also jeopardise the financial
sustainability of the water utility system.
Normally, enhanced access to drinking water results in increased water consumption.
Increased water abstraction leads to a depletion of groundwater and surface water
resources, uncontrolled discharge of sewage irreversibly pollutes the same (already
depleting) aquifers and surface water bodies. The combined effects of such spiraling
water quantity and quality decline may generate public health risks of a similar
magnitude as those relating to poor access to drinking water (i.e. the ones that were to be
resolved in the first place).
Economic rationale also calls for the avoidance of prolonged infrastructure gaps. Without
adequate sewer systems water recycling – an important requirement for economic
expansion and long-term resource conservation – remains unfeasible. The financing of
incomplete waterworks poses a continuous challenge both in terms of water pricing and
attracting public (national or foreign) funds.
II.
Key politico-economic challenges in addressing the problem
It follows from the foregoing that the water infrastructure gap should be avoided or, once
present, should be closed as early as possible. The scale of this compelling challenge
however makes governments confront a number of critical choices:
- the magnitude of upfront investment: even if funds are available, the sheer scale
of the financial demand puts sanitation on competition with other important pubic
development projects (transport, spatial planning etc.);
- the fundamental principles of water pricing policy: what level of water tariffs can
and should be set in a given region? Drinking water provided for free results in
wasteful use, exploding maintenance costs, lack of private investment (and
possibly: loss of foreign development assistance). Under such policy the
infrastructure gap can never be closed as all available public money is taken up by
the base subsidy. At the other end of the spectrum lies the full cost recovery
principle where the fee payable by every user covers not only maintenance cost
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III.
(plus minimal profit), but resource protection, development and depreciation of
the network. Swift introduction of such a policy may result in a prohibitively high
tariffs placing an unbearable burden on the population;
government control over water pricing policy: who sets the price of water? In
certain countries the government has no control whatsoever over the principles of
water pricing, whereas in other countries there is a uniform national price range
applicable to all service providers;
ownership structure/operational control: who owns/runs the hardware?
Experience shows that local and national government ownership and a strong
regulatory influence over the operation of waterworks is a key factor in finding
the right balance;
lack of “long-termism” in politics: decreasing marginal political gains once basic
infrastructure in place. When competing public projects are at issue, investment in
sanitation may be repeatedly delayed for the sake of other projects with more
rapid political turnover.
Lessons from a medium income country: the Hungarian experience
As the below table demonstrates in a 20 year retrospect Hungary has made a significant
progress in closing the infrastructure gap. The Hungarian experience is particularly
relevant in this field as access to drinking water was already almost universally ensured
back in 1990. Consequently, since that period political focus has been on the continuous
upgrade of the sanitation system. A 90% connectedness to the public sewer system is
planned to be reached by the end of 2015.
The most important internal driver in the process has been a genuine political will to
address the problem. (Mainly) local politicians remained dedicated to the completion of
the waste water collection infrastructure. The reduction of state subsidies to
drinking/industrial water bills contributed considerably to remove some of the inherent
distortions in attitude and practice: water consumption by the public dropped by some
40% and industrial water usage dropped even more significantly (the former also driven
by an industrial restructuring). As a result, some of the planned water treatment capacities
turned out to be redundant.
Equally important was the role of external drivers. Hungary’s convergence to European
Union legislation in the 1990s and its eventual access to the EU in 2004 was the most
important determinant factor in closing the water infrastructure gap. The EU places an
obligation on Member States to develop and implement detailed drinking water and waste
water programs over a general timeframe of 10-15 years. It also provides funding for the
planning and construction of certain waterworks (under today’s Cohesion Fund
regulations a less developed region may receive above 80% of the total project cost). The
Hungarian program has already yielded important results such the halting of groundwater
quality degradation and considerable decrease in nutrient loads into the River Danube by
the capital city of Budapest. Hungary also played an important role in other forms of
international cooperation, such as the development and implementation of the 1999
UNECE Water and Health Protocol, the world’s first treaty addressing drinking water,
sanitation and environmental protection in an integrated fashion.
The main lessons that can be drawn from the Hungarian experience (and which be seen
as typical in most Central and Eastern European middle income countries) are as follows:
- international funding is indispensable;
- international funds become (more) available if certain national (sometimes
international) standards are developed and complied with regarding:
o water quality
o planning
o internal legal framework
o public participation (for non-EU members: the UNECE Water and Health
Protocol offers a useful framework)
- national ownership of the basic infrastructure facilitates the process (in Hungary a
partial privatization in the 1990s was a main hindrance)
- progressively increasing water prices are key to
o motive rational user behavior
o ensure the long term financial sustainability of the infrastructure.
IV.
From MGDs to SDGs
How do these lessons fit into the wider sustainable development agenda? First, without
prejudice to the achievements under the existing MDGs, a comprehensive water-related
SDG should be developed. Such an SDG should, among others, call for the parallel
improvement of access to drinking water and sanitation with a view to avoiding the
cumulative negative public health, social and economic implications of a rapidly growing
infrastructure gap. Development of international standards for drinking water and
sanitation should be encouraged. The central role of governments should be emphasized
in:
- ownership of the water infrastructure
- regulation of water pricing
- market supervision and consumer protection
This should be matched by an enhanced focus by international development (donor)
policy on closing the infrastructure gap.