Operation and Maintenance for Safe Drinking Water –

1. Operation and Maintenance for Safe Drinking Water – Institutional development to achieve water quality improvements Borneo Convention Centre, Kuching 2 November 2010 • David SutherlandInter-Regional Coordinator Water Quality Partnership for Health

2. Presentation Questions • What do we mean by institutional development? • Why institutional development? • What functions does institutional development need to address to achieve water quality improvement? • What mechanisms and resources are required to bring about institutional development?

3. What do we mean by Institutional Development? • Legal status of water supplier & quality – external focus • Policy and regulatory context for water quality and supplier – external focus but internal consequences • Technical / human resources – internal focus • Financing mechanisms - external and internal focus

4. External / Internal Institutional Development? • Internal / external relations at the heart of delivering improvements • How do rules, regulations and policies impact on the water supplier and how can the supplier influence? • How can organizations organize to meet these external demands? What resources, KPIs, SOPs meet the demands? • Just wait for external requirements or innovate?

5. Legal Status • National legislation • of water quality functions – standards, delivery, financing, monitoring, regulation • of supplier – status (ownership, fundraising powers) and duties • Who is responsible for what and how are tasks funded and resourced? • E.g. World Bank IEG – greater success when suppliers are autonomous free from political interference - > poor management (tariff setting)

6. Policy and Regulatory Context • Similar issues to legal status • of water quality functions – standards, delivery, financing, monitoring, regulation • of supplier – status, duties, KPIs, monitoring and reporting • Who is responsible for what and how are tasks funded and resourced? • E.g. World Bank IEG – 50% of projects where no policy in place. Short term projects for immediate local concerns - needs long term support.

7. Technical and human resources Staff, training, equipment, management systems Internal case to senior management Prioritization KPIs – value for money – incentives all linked to financing

8. Financing mechanisms • Where does the money come from and under what conditions? Fundamental issue. • Tariffs (level and collection rates) • Public budget (direct and indirect) • External (private/IFI/donor) • Capex versus Opex dilemma • can’t increase tariffs until service improves, can’t improve service until income increases

9. Financing - Recent / current work - OECD OECD Financing Strategies • National Policy Dialogues – Coordination Council • FEASIBLE Financial Modeling • Baseline – asset maintenance and finance sources OECD Baseline.pptx • Investment strategies – options and selection OECD Investment.pptx • Policy development – annotated outline • Levels of service • Tariffs and social protection measures • Government investment

10. Financing - Recent / current work - ADB • ADB Water Operational Framework 2011-2020 • “Investments will have to be made in rehabilitating networks… and to introduce a strong culture of non-revenue water management. Thecostsof making these investmentshave been demonstrated to be far lower than the costs of developing new water sources…….” • “Projects for supporting investments in urban water supply would include non-revenue water reduction, improved asset management, network rehabilitation, and corporate restructuring. New source development and associated treatment and distribution facilities will be supported only when performance improvement and efficiency gains are secured and deficits demonstrated to persist.” • Possible contributions to O&M costs

11. Why institutional development? There is a demand for it - lack of capacity for monitoring, operation and maintenance Increasing legal exposure and increased financial implications of litigation for outbreaks It makes sense

12. What are we improving to achieve water quality improvements? • Better knowledge and management of assets • Improved operation and maintenance procedures • Improved monitoring (system and water quality) – surveillance, operational monitoring and investigative monitoring

13. How are we going to achieve improvements? • Senior management drive or strong support • Adequately equipped and motivated team in place for MOM – training and incentives • Customers that will pay for improved service – advocacy, communication, tangible benefits • Assets maintained and improvements made Basically - Investment planning

14. Comprehensive planning process with institutions in place and with capacity

15. Comprehensive Process - Key Performance Indicators • Relating to: • Water volumes (27 KPIs) • Assets (13 KPIs) • Customers (19 KPIs) • Environment (13 KPIs) • Pricing (8 KPIs) • Finance (29 KPIs) • Health (7 KPIs) • TOTAL: 116 KPIs These need to be monitored!

16. Current investment planning shortcomings in less regulated situations? • Ineffective or absent national/regional policies or frameworks • Inadequate Economic/Water Safety Regulations • Focus on supplying water - not especially safe water • Investments not weighted for water quality risks • Lack of Key Performance Indicators effectively monitored • Conditions of funding ignores O&M and ongoing risk management -> poor O&M -> unsafe water

17. A pilot process under WHO/AusAID partnership – conceptual framework

18. Safe Water Investment Plans - Pilot Steps • System assessment • short term how to manage what you have • identify what you need in the long term • Develop Safe Water Investment (and Improvement) Plan - CAPEX and OPEX • Work with partners (public, private) for financing (and planning, QA and regulation) • Utility/region/national investment requirements

19. Institutional Development Questions • What are the main constraints to improvements? – policy, regulation, technical and human resources, finance • How much is internal and how much external – what can water suppliers control and what /who do they need to rely on for delivery of improvements? • How can you best make the case for investment in water quality improvements? • What are the key performance indicators which need to be met to attract finance and achieve improved water quality?