1. Masroor Ahmad Sr. Water and Sanitation Specialist, WSP, WB, Islamabad PAKISTAN WATER SUPPLY AND SANITATION SECTOR STUDY PAKISTAN URBAN FORUM STUDY OVERVIEW PAKISTAN WATER SUPPLY AND SANITATION SECTOR STUDY PAKISTAN URBAN FORUM STUDY OVERVIEW KARACHI JANUARY 11, 2014

2. Study Objectives & Scope To assess the provision of services disaggregated by province & region To provide a framework for governments to take informed decisions on improving service delivery To identify the priority areas for reform and investment Takes stock of the sector across a range of technical, financial, environmental, and institutional dimensions Identifies the key issues of the sector and draws on international experiences It is the first comprehensive study that captures both water and sanitation in both urban and rural areas across the entire country

3. Process & Partners National Launch of Concept – April 2012 Planning Commission – Coordination Consultative sessions with PHEDs, LGDs, PnDs, DoF, WASAs, KWSB, (selected)TMAs and CSOs in four provinces and three regions Reality check - sharing early findings with provinces & regions Soft launch of National Sector Study – April 2013 Brainstorming on What Next….

4. Output The sector work comprises three volumes each covering four provinces & three regions.

5. WaterSanitation UrbanRuralNationalUrbanRuralNational Improved Unimproved CountryYear Total Improved (%) Piped on Premises (%) Total Improved (%) Improved (%) Open Defecation (%) Bangladesh 19908726757758343933 2010852080815755564 India 1990884963695171875 20109748909258233451 Nepal 1990964374763771080 20109353888948273149 Pakistan 1990955681857272752 20109658899272344823 Sri Lanka 19909137626785677014 2010996790918893920 Access to Water and Sanitation in the South Asia Region Pakistan Summary: Above average for water supply Middling for sanitation

6. South Asia International Comparisons WaterSanitation UrbanRuralNationalUrbanRuralNational Improved Unimproved CountryYear Total Improved (%) Piped on Premises (%) Total Improved (%) Piped on Premises (%) Total Improved (%) Open Defecation (%) Total for SAR 199090536687257122467 20109651881390643041 Total for LAC 1990958764378580386818 201098928161948460804 Total for World 19909581621876 294925 2010968081298979476315 Summary for South Asia: Comparable or better in access to improved water supplies Below international comparators for quality of service – piped water supply Below international comparators for sanitation

8. Countries with the Largest Numbers of People Practicing Open Defecation The quality of service in the rural sanitation sub sector is best considered in terms of the level of open defecation. Overall the rate of Open Defecation (OD) is 40 million people, 34% of the rural population which places Pakistan as the third largest OD country after India (626 million, 78% of rural population) and Indonesia (63 million and 55% of rural population)

9. Investment Requirements 9 Rs 163 Bn is estimated investment required for the three years 2013-15 to achieving the Pakistan’s MDG for 2015 of 100% access to water supply and 67% access to improved sanitation Estimated rural water investment was at Rs 54.09 billion and rural sanitation at Rs 92.21 billion giving a total rural requirement of Rs 146.3 billion. This is equivalent to about 0.31% of annual GDP over the three year period with rural accounting for about 90% of the total

10. 10 Drinking Water and Sanitation Allocations as Proportion to Provincial ADP 2011-12

11. Urban Summary No city has 24/7 service, high risk of water-borne epidemics No utility is financially self sustaining, not even recovering OpEx 10% of wastewater is treated, leading to environmental degradation 10 % -15% consumer metering which undermines good commercial practices Current sector investment is around 0.16 percent of GDP versus international comparators in the region of 0.2 percent to 0.4 percent High levels of Non revenue water; high energy consumption costs ranging from 19-57% of operating expenditure Institutional structure is fragmented with almost nil autonomy (independent management decision making), poor governance (weak accountability reporting & monitoring) and limited financial space (compromising service quality)

12. Urban Recommendations Improve Institutional Autonomy and Accountability Regional utilities (intermediate towns) - NSUSC Corporate utilities (million+ cites) WSSP in Peshawar Public reporting of performance Encourage Cost Recovery from User Fees with emphasis on technical and commercial efficiency Increase the Level of Public Funding and make it contingent on delivering results (Performance Based Finance) Undertake Pilot Public-Private Partnerships (PPPs) Scale Up Wastewater Treatment to protect water sources Improve the Knowledge Gap on Service Provision (P-WOPs utilities network) Special focus on Urban Slums (CLC unit in Faisalabad – WASA)

13. Rural Water 13 The two main models for rural water service delivery that currently exist are the following: 1.Provincial or regional level institutions such as PHEDs in Khyber Pakhtunkhwa, Balochistan, and Sindh develop the schemes and subsequently operate them. 2.In Punjab, AJK, and FATA, provincial- or regional-level institutions such as PHEDs develop the schemes, and they are subsequently operated and maintained by community-based organizations Punjab, AJK and GB have shown very good financial sustainability with high levels of cost recovery (and in a number of cases revenues exceed operating costs). PCRWR, however, found that up to 50% of schemes are not operational Domestic Private Entrepreneurs models ?

14. Source Failure Major defects in machinery / rising main / distribution network / etc... Technical (49%) Non Payment of dues Revenue not matching expenditure Poor cost recovery Non-representative CBO Community conflict Theft of major components like electric motor, transformer, etc... Financial / Managerial (51%) Reasons for Non-Functioning Schemes in Sindh Diagnosis of Failure of Rural Water Supply Schemes in Punjab

15.  Department (PHED) is operating on “Zero” operational (O&M) budget  4100 schemes, 2870 functional  Every CBO is a mini PHED  The level of services varies from district to district and within districts Realignment & extension of rising main & networks Strong women participation Computerized billing, Rs 70-150/month bill Savings (up to 5 M) & investments Stand bye arrangements (generators, motor, pumps etc) Water ++ 100% water metering CBOs NGOs “Zero” WAPDA arrears24x7 model CBOs members EntrepreneursServing as models for other provinces Punjab CBOs Model

16. Demand Responsive Approach to Rural Water Supplies in South Asia Communities contributing to CAPEX Communities involved in entire Scheme Cycle Communities Managing O&M Oversight Mechanisms Communities willing to PAY for WSS Services IndiaUpfront contribution ranging from Rs 300 to Rs 1,000 per HH Planning, Designing, Implementing, Managing Schemes Small Schemes: O&M managed by Village Level Committees Large Schemes: O&M contracted out Social Audits by Communities 50% to 100% O&M Cost Recovery through User Charges Bangladesh 5,000 Tk per HH (Max 10% of CAPEX) Planning and Designing Water points – Community managed; Small Schemes- Operator managed Local Government (Union Parishad) 100% O&M cost recovery from users Sri LankaMax of 10% of CAPEX Like IndiaMulti village – Local govt. Single Village - Communities NWSDB and local govt. 100% from user charges NepalCash contribution is 2.5% and total (with in-kind ) is 20%) AllCommunity level schemes – managed by WSUCs (user committee) Dept of Water Supply and Sewerage (mandated) 100%

17. How is Rs 100 spent? D ATA FROM C OST E FFECTIVENESS S TUDY

18. Rural Recommendations Roles and Responsibilities of Key Agencies must be clarified and CBOs given a Central Role Long term backstopping needed for sustainability Investment support programs from (Federal and Provincial Levels) should be expanded and focused on the delivery of outcomes Reinforce Policies of O&M Cost Recovery from User Fees Introduce Training and Capacity Building to Support Transitions to New Roles Begin to Address Knowledge Gaps – particularly the high level of non-functionality Target Outcome achievements in Sanitation Sector through PATS Develop sector-wide M&E system

19. What Next (2013-2016) Supporting Provinces/Regions/utilities in implementing recommendations National Programmatic Support TA – (Technical Advisory Program – TAP) Focus on developing results based, financeable, opportunities, e.g. 1.Performance based leakage reduction in urban areas 2.Wastewater treatment PPPs 3.Root cause assessment of non-function RWSS schemes as pre-cursor to performance based rehab financing

20. THANK YOU

22. Urban Cities & Population By 2030, about 50 percent of Pakistan’s population, or about 137 million people, will be living in urban areas Number of million+ cities will increase from 8 in 2012 to at least 12 Population density quadrupled from 42 persons per kilometer in 1951 to 166 persons in 1998 About 40 percent of the population in the larger cities currently live in katchiabadis (Planning Commission)

23. Characteristics of Well Performing Utility Well run water service providers tend to have: Autonomy—financial and managerial—to operate the provider without undue interference on a day-to-day basis and in the long-term interests of the community Accountability—to a range of stakeholders to demonstrate that they provide the services and performance expected of them, whether that performance be technical or financial Customer orientation—to ensure that the provision of service to customers is the focus of management and staff Market orientation—to ensure that the service is provided as efficiently as possible and thus minimizes costs to both customers and government (as a sector financier).

24. NWSC Key Achievements (from Audited Accounts of NWSC, 1998 to 2012) 24 Performance Indicator19982012 Service Coverage48%77% Total Connections50,826295,000 New Connections per year3,31723,400 Metered Connections37,217 293,730 Staff per 1000 Connections366 Collection Efficiency60%96% NRW50%32.6% Proportion Metered Accounts65%99.0 % Annual Turnover (Billion Shs)21155 Surplus (Before. Dep.) (Millions USD) 4.0 (loss)13.8 (Surplus) or Ushs 36.1 billion

25. 25 PSLM 2010-11 (Population in 2012 = 183.5M) JMP 2012 update (Population in 2010 173.5) Province/RegionPunjab % (Million) KP % (Million) Sindh % (Million) Baluchistan % (Million) AJK % (Million) FATA % (Million) w/o access to improved water (Urban ) 9% (4.1M) 8% (0.3M)4% (1M)4% (0.1M)15% (1M)NA4% (6M) Level of Water Service in Province/Region

26. 26 Urban water coverage in 2010 is just below the 2015 target of 97%, and urban sanitation is well below with 2010 coverage at 72% versus a 2015 target of 86% Pakistan Water Supply Coverage Estimates Urban (%)Rural (%)Total (%) 199020082010199020082010199020082010 Improved Water9596 818889859192 Piped on premises56575882123 3436 Other unimproved39 38736766635756 Unimproved544876665 Pakistan Sanitation Coverage Estimates Urban (%)Rural (%)Total (%) 199020082010199020082010199020082010 Improved facilities 72 73134274548 Shared facilities 666156356 Other unimproved 1418 2026 182423 Open defecation 844723834522623 National Coverage

27. Cost inefficiencies higher in Supply driven Schemes (Piped Water) D ATA FROM C OST E FFECTIVENESS S TUDY

28. Institutional Arrangement & Sector Actors/Institutions The 1973 Constitution assigns policy, planning, and financing responsibility to provinces and service provision to LGs The 18 th amendment has resulted in fiscal, administrative and functional decentralization of several sectors to provinces Currently, five actors are providing services across the country: Households (self provision). According to the PSLM 2010-11, at least 46% in urban areas and 84% of households in rural areas receive water through hand-pumps, motor-pumps, and dug wells in urban areas. According to the MICS 42% of households in urban areas and 95% in rural areas are not connected to a public sewer in urban areas Communities operate and maintain (O&M) of smaller rural water supply and sanitation systems PHED is responsible for construction and major O&M of rural water supply and sanitation, and construction and major O&M of urban water supply and sanitation. PHEDs are responsible for all engineering works for rural and urban areas except for the million+ cities WASAs/KWSB Million+ cities of Lahore, Faisalabad, Gujranwala, Rawalpindi, Multan & Quetta have WASAs and Karachi has KW&SB as service providers Municipalities Intermediate towns have municipalities/municipal administrations as service providers

29. - Slide 5 on institutional arrangements should come after Slide 6 Access to W & S in the South Asia area. Best to bring in the regional context up front. Island of success & achievements like UU Punjab to Sindh to KP, OPP in Karachi, Corporate Urban utility in Peshawar no mention on OPP?