RURAL WATER SUPPLY IN UKRAINE: STATUS AND PROSPECTS IN THE CONTEXT OF DECENTRALIZATION Viacheslav SOROKOVSKYI, Decentralization/Public Services expert, DESPRO DESPRO - Swiss-Ukrainian Decentralisation Support project Implemented by Skat Consulting Ltd - Swiss Resource Centre and Consultancies for Development Danube Water Conference, Vienna, May 18, 2017

UKRAINE: Rural water service provision is shaped by administrative fragmentation, now under amalgamation Unitary state Population - about 42,5 million, excl. ARC (State Statistics, (1/3/2017) One third of population lives in rural areas GDI per capita – 2640 US$ (WB, 2017) 4 tiers public administration Local Self Governance set-up: National level Regions - 27 Sub-regional - 490 rayons Local: Cities – 460 Small cities/towns - 885 Village councils ≈ 11 000 ONGOING REFORM: Amalgamated communities (hromadas) – 419 (10/05/2017)

UKRAINE: State policies, implementation and monitoring in water supply urban-biased (urban utilities) Policy formulation Principles set in the law No special focus on rural water supply Much about rules and regulations (e.g. service performance, tariff setting, licensing ) Less about support functions Implementation and financing State Program “Drinking Water” : 2006-2011 – urban water supply only 2012 – incl. rural water supply 2013 onwards - did not receive financing Monitoring and evaluation National report since 2010 is not published annually; issues with data quality and lack of data for services in rural areas

UKRAINE: less than 1 in 5 people in villages have access to piped water supply € 15 mln € 5 mln € 2 mln 30% MDG target € X Sources: State Statistics Service (2003-2014) National Report on Drinking Water Quality and Drinking Water Supply (2015) State programme “Drinking water of Ukraine” financing

And what is happening at local level? VIDEO https://www.youtube.com/watch?v=FoDdwsac2H0

Scaling-up of local government led projects i) access to information and know-how building ii) availability of seed grants and iii) clearer national and regional policies

Typical areas for improvement of water utilities in small towns*: PUBLICLY OWNED – PUBLICLY MANAGED: How to raise the bar for municipal enterprise performance Municipal (communal) enterprises : A new trend for rural areas starting with amalgamates municipalities Typical areas for improvement of water utilities in small towns*: Introducing strategic planning (instead of available resource- based planning ) Proper asset management Overcoming HR-related problems (staff qualification, incentives) Modern practices for accounting and financial management Source: DESPRO data, based on experience in 5 partner small towns in 4 regions of Ukraine: Sumy, Dnipropetrovsk, Poltava, and Ivano-Frankivsk (2014-2016)

A KEY QUESTION FOR THE STATE TO ADDRESS URBAN-RURAL SERVICES GAP: Shall and can DECENTRALISATION bring a new paradigm to complement existing state policies in water supply?

THANK YOU FOR YOUR ATTENTION!

Licensed business activity: PUBLICLY OWNED – PUBLICLY MANAGED: landscape of practices 2993 utilities - water supply (and sewerage) service providers (2015*): 1605 (54%) – communal 64 (3 %) - state other 43% – systems managed by public institutions (e.g. schools, hospitals, military base, etc.) Licensed business activity: National regulator: >30,000 people served and >30,000 m3/year Regional authorities – other licensed providers Tariff approval: National regulator – for nationally licensed utilities Local self-government – for others Sources: * National report on Drinking Water Quality and Drinking Water Supply for 2015 (Minregion, 2016)