gpa_east_africa_case.. - GRID Africa GeoPortal - UNEP

TABLE OF CONTENTSPageTable of ContentsSUMMARY AND OBJECTIVES 1TERMS OF REFERENCE 6DATA SOURCES 7CHAPTER 1. ECONOMIC ANALYSIS AND ENVIRONMENTAL MANAGEMENT 81.1 Environmental Economics – Methodological Principles1.2 Environmental Valuation1.3 Valuation Techniques1.4 Cost-Benefit Analysis: An Introduction1.5 The Value added of Cost-Benefit Analysis1.6 Wastewater Problems and Cost-benefit AnalysisCHAPTER 2. COST– BENEFIT CASE STUDIES 152.1 MOMBASA CASE STUDY 152.2 DAR ES SALAAM CASE STUDY 272.3 BEAU VALLON (SEYCHELLES) CASE STUDY 42CHAPTER 3. ACTION PROGRAMME INPUTS 563.1 Introduction3.2 Merits and Limitations of the Case Studies3.3 Annotated Cost-Benefit Case Study Examples3.4 Action Programme InputsANNEXES - Regional Overview and City / Regional Background 64Annex I - Regional Overview 64Annex II - Mombasa City and Region 70Annex III - Dar-es-Salaam City and Region 78Annex IV - Beau Vallon (Seychelles) 88REFERENCES 99Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20002

EXECUTIVE SUMMARY1. Objectives of the ReportThis Report addresses three main overlapping objectives concerning the application of Cost-Benefit Analysis to wastewater actions: methodological, capacity-building and decisionmakingobjectives:• Methodological objective: To develop, present, clarify and put forward for further usethe steps, concepts and practical data issues involved in the application of Cost-BenefitAnalysis to three East African case studies (Mombasa, Dar-es-Salaam and Beau Vallon-Seychelles).• Capacity-building objective: To demonstrate the main requirements for and the outputsof measuring the costs of environmental impacts and the benefits from investmentresponses, and the contributions to the improvement of capacities for problemidentification and the evaluation of priorities for the design of wastewater managementstrategies.• Decision-making objective: To identify the merits and limitations of Cost-BenefitAnalysis as a vehicle for fostering participation, partnerships and co-operation in thedecision-making process for addressing coastal and marine pollution from land-basedmunicipal sources.This Report serves the above objectives in two main ways:First by the development and presentation of the three Cost-Benefits Case Studies ofMombasa, Dar-es-Salaam and Beau Vallon (Seychelles) on municipal wastewater, whichillustrate concepts and measurement techniques for identifying and estimating costs andbenefits.Second by drawing upon the conclusions of the Case Studies to propose strategicprogramme activities to improve capacities for Cost-benefit Analysis and incorporateeconomic valuation tools into the decision-making process.2. The Structure of the ReportThe structure of the Report is designed to reflect the above objectives. The Report is dividedin three main Chapters:Following this Executive Summary, Chapter 1 sets up the context for the Case Studies. Itintroduces the conceptual framework of Environmental Economics and outlines thetechniques and objectives of Cost-Benefit Analysis in relation to environmental management.Chapter 2 is the core section of the Report. It presents the three Case Studies on Mombasa,Dar-es-Salaam and Beau Vallon (Seychelles), elaborates the approach to and the estimationof costs and benefits, comments on the data problems encountered and draws together theconclusions reached.Each case Study is prefaced by a short introduction to the city context, drawn and edited fromthe National Reports. More detailed background information is included in three separateAnnexes at the end of the Report.Chapter 3 puts forward Action Programme Proposals deriving from the broader issues ofCost-Benefit Analysis, particularly the need to improve its effectiveness and strengthen itscontributions to future programme actions.This Report format aims to draw out and highlight the Cost-Benefit Analysis CaseStudies in Chapter 2, after Chapter 1 which provides methodological support for thedevelopment of the Case Studies, followed up by Chapter 3 which picks up the lessonsfrom the Case Studies to put together Programme Proposals.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20001

The Report includes four Annexes with background material edited from the National Reportssubmitted. They are separated from the main text of this Report for better presentation and forsharpening the focus on the Case Studies and the action proposals.3. The Case Studies: A SummaryThe three Case Studies concern cities, and surrounding coastal settings, with common anddiverse environmental, economic and social conditions. All three Studies share a strong focuson the evaluation of sewage impacts and the estimation of some of the main benefits ofaddressing them with capital-intensive sewerage infrastructure. It is well understood howeverthat effective pollution management entails integrated actions that extend far beyond the coreinterventions of building and operating sewerage infrastructure, including coastal zonemanagement geared towards sustainable development supported by institutional, legal andfinancial strategies tailored to the national and local social and institutional setting.Often, evaluation of sewerage capital projects, because of their large scale and technicalcomplexity, are approached as isolated pollution responses, evaluated in technicalengineering terms that tend to disguise the demand-side options, cost implications and thesynergies with the wider spectrum of coastal management initiatives. The Cost-Benefit CaseStudies, notwithstanding data limitations, helps indicate ways of integrating socio-economicparameters into wastewater strategies and point to directions for future programme actions.The Case Studies, despite differences in the scale and city context and the particular sewageissues, are developed within a common methodological framework based on the fundamentalprinciples of economic valuation of environmental impacts and future project benefits focusedon the direct and indirect economic losses and gains. A clarification is needed: Cost-benefitAnalysis focuses on society's gains and losses and not, like conventional financial analysis,on the financial flows from the point of view of the implementing agencies.Summary of the main characteristics and results of the Case StudiesCharacteristicsBeau Vallon MombasaDar-es-Salaam(Seychelles)Nature of Study Area Bay area and main Major coastal urban Capital city and majortourism location in centrecoastal urban centreMaheSize of Study Area 1,100 ha 282 sq. km 1,350 sq. km.Population (1999) 7,000 650,000 3,500,000Estimated per capita $7,000 $750 $650IncomeMain income source Tourism and fisheries Informal sector jobs Informal sector jobsand tourismand tourismState of the environment Threats of imminent Serious pollution Serious pollutionpollution impacts impactsimpactsMain resource affected Rivers, the bay area Settlements, rivers and Settlements, riversand coastal/marine coastal/marine and coastal/marineenvironment environmentenvironmentMain socio-economic Mainly threat to Mainly health, also Mainly health, alsoconsequencetourism industry tourism, property tourism, propertyvalues and coastal values and coastalenvironmentenvironmentMain pollution control Sewerage System Sewerage System Sewerage SystemresponseAssociated strategic Sustainable coastal Sustainable coastal Sustainable coastalenvironmental objective management managementmanagementEstimated Project $15.0 $100 $222Investment CostEstimated partial annual $21 million (2004) $48 million $65 millioncost of pollution (excludingqualitative impacts)Net Present Value $202 million $291 million $565 millionQualitative benefits not Indirect recreation Indirect recreation, Indirect recreation,quantifiedand non–use mangroves and nonusemangroves and non-biodiversity valuebiodiversity value use biodiversityvalueFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20002

It should be emphasised that most, if not all, Cost Benefit Case Studies are based on a partialassessment of the total costs and benefits, excluding, due to data and time constraints, theestimation of the elusive biodiveristy (non-use) costs and benefits. Some of the mainenvironmental benefits are therefore qualitative. Also, Case Studies are rarely entirelyconclusive and completely numerically accurate, as Cost-Benefit Analysis, unlike physicalscience measurements, concerns the socio-economic impacts of pollution and pollutionabatement as reflected in productivity changes and people's preferences for environmentalquality that can never be studies under strictly controlled “laboratory-type” conditions.Therefore, data and measurement methods are inherently orders-of-magnitude, subject tomargins of error.Nevertheless, the results generated from the Case Studies highlight important conclusionsabout a key cluster of costs and benefits that would otherwise remain vague, or ignored as“non-measurable” and left out of the decision-making process. The well-meaning critics ofCost-Benefit Analysis should appreciate that the choice is between using approximate valuesto estimate damages and benefits, or, by default, applying a zero value for lack of accuratedata. Assuming a zero value is certainly unhelpful as an approach to deal with the costs ofpollution and the consequences of inaction. The contributions of Cost-Benefit Analysis lie inthe approach to the evaluation of environmental proposals despite having to settle for ameasure of statistical inaccuracy.CBA is essentially a matter of depth, the more detailed the data the deeper and moreaccurate the results. The quantitative results of the Case Studies are, as expected, sensitiveto the quality of the available data, particularly those concerning the most important benefits,such as tourism, fisheries and health.4. Programme Issues and Guidelines for ActionIt is difficult, and unwise, to generalise from specific Cost-Benefit Analysis (CBA) CaseStudies that relate to particular city contexts about the broader contributions of the Cost-Benefit approach to the protection and management of coastal and marine resources fromland based sources. CBA Case Studies can be assessed on two levels: There are data andnumerical issues, and there are questions about the approach of CBA to environmentalproblems. The “arithmetic” of CBA is complex and full of choices concerning the best use ofavailable data. There is no good-for-all CBA because data collection is costly in time andresources and, interestingly enough, it is itself subject to cost-benefit analysis to decide if theextra effort to improve the quality of data is worth the extra cost. The second issues of thescope of the approach is more challenging and central to the concern for improving CBA as atools to serve decision-making needs for coastal zone management and sustainabledevelopment objectives.The following section summarises proposals for the incorporation of Cost-Benefit Analysis inthe formulation of the Regional Action Programme.4.1 Integration of Cost-Benefit Analysis in Wastewater Action Plans: ProgrammeObjectives and ActivitiesCost-Benefit Analysis makes three related contributions to wastewater managementproblems:• Introduces methodological tools for resource valuation;• Strengthens capacities for the application of cross-sectoral approaches to problemidentification,evaluation of options and articulation of community support for selectedactions; and• Broadens the basis for participation, partnerships and co-operation in the decisionmakingprocess.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20003

4.2 Programme ObjectivesTo facilitate the application and use of the outputs of Cost-Benefit Analysis in wastewateraction plans, programme objectives should be directed to three main strategic areas:1. Capacity-building to create the skills for applying CBA as a tool for problemidentification,priority-setting and decision-making.2. Exchange of experiences and development of partnerships for increased awarenessof the uses and limitations of Cost-Benefit Analysis in decision-making.3. Development of "social constituency" for wastewater actions and environmentalmanagement based on the realisation of the common community benefits and theircontribution to poverty alleviation resulting from the reduction and elimination of pollutionfrom land-based sources.4.3 Programme ActivitiesA. Capacity-building activities:(i) Initiate and support national level activities to build up a socio-economic database on:• Health costs• tourism income• fisheries production• mangroves productivity and• property values(ii) Provide support for regional level co-operation to develop an appropriate ContingentValuation methodology to bringing within the capacities of the responsible authorities theapplication of economic valuation techniques to the impacts on the quality of the coastal andmarine environment.(iii) Establish a regional forum for co-operation and co-ordination of national activities forreviewing institutional arrangements and responsibilities for CBA aiming to focus on:• Increasing awareness of the need to deal with externalities and implementation of thePolluter Pays Principle (PPP).• The use of CBA as a tool for promoting conservation and assessing development/conservation alternatives.• Bring long-term environmental benefits into the decision-making process.• Gradually shifting the focus of environmental protection from control to management.B. Exchange of experiences and partnership-development activities(i)Conduct national level consultations to:• Review of the results of the Case Studies.• Analyse the wastewater management choices open to the implementing national andmunicipal authorities.• Identify more closely the prevailing financial constraints, affordability problems andopportunities for effective co-operation with bilateral and multilateral donor agencies.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20004

(ii)• Cost-estimate alternative sewerage solutions and define locational, phasing andsocial policy priorities, taking into account wider development, anti-poverty and landuse planning objectives.Conduct a regional workshops to:• Review the recent GPA Draft Recommendations for Decision-making on Sewage andthe niche they provide for CBA.• Review national institutional similarities and differences relevant to the incorporationof CBA for the definition of wastewater priorities and decisions.• Initiate the development of appropriate guidelines for CBA• Identify opportunities and assistance requirements for carrying out pilotdemonstration CBA in selected locations, such as:• Dar-es-Salaam area and/or Oyster bay in Dar-es-Salaam• Mombasa Port area and/or Kenyatta beach in Bambouri coastal area• Maputo Port area• Beau Vallon main tourist area• Zanzibar Port and surrounding area and/or Zanzibar Stone TownC. Demonstration actions and development of "social constituency"(i) Present and discuss the results of pilot CBA projects with a view to building upstakeholders consensus on the costs of inaction arising from pollution and the need forpartnership and participation in consultations with the decision-making authorities, focusingon:• Community and livelihood benefits of saving coastal and marine resources.• Links between wastewater actions, economic development and povertyalleviation.• Bring to the attention of local authorities and NGOs the results of CBA and theneed to strengthen the techniques of socio-economic measurement and resourcevaluation.• Justify increased political support for regional, national and local level cooperationas an added "resource" for more effective use of internationalassistance to address coastal and marine pollution from wastewater sources.4.4 Expected Outputs1. Institutional, social and technical capacity for earlier implementation of twinning projectsand the principles outlined in the GPA Draft Recommendations for Decision-making onSewage.2. Greater scope for implementing "demand-driven" policies for wastewater actions andcritical understanding of affordability, cost recovery and participation considerations.3. Integration of ecological, engineering, financial and socio-economic parameters inwastewater actions.4. Awareness of the links of marine science research to socio-economic policy instrumentsand the objectives of coastal zone management and sustainable development strategies.5. More effective environmental management as a part of regional, national and localdevelopment policy.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20005

TERMS OF REFERENCEThis Report has been prepared within the context of the following Terms of Reference:To prepare, on the basis of available information provided by the Institute of Marine Science(IMS):1. Cost-Benefit Case Studies for selected cities associated with investments and measuresaddressing the sewage problem affecting the coastal, marine and associated fresh waterenvironment, following the methodological framework formulated by a meeting ofgovernment experts and endorsed by UNCED (ref. UNEP (OCA)/MED WG.45/6.The Case Studies will include available information related to:1.1 A general description of the study area1.2 An analysis of the sewage sources contributing to the degradation of the marine andcoastal environment.1.3 An analysis of the actual and potential social and economic costs of pollution bysewage expressed in monetary terms, indirect impacts due to loss or depreciation ofnatural resources, or due to effects in human health.1.4 An analysis of the costs and benefits from measures which have been introduced tocontrol pollution by sewage in coastal areas.1.5 An analysis of costs and benefits of additional measures (legal, administrative,economic, fiscal, technological, institutional) which would have to be introduced inorder to protect marine and coastal areas and to ensure their sustainabledevelopment and use.1.6 An evaluation of costs and benefits in non-monetary terms related to sustainabledevelopment and the quality of life of populations, including those largely outside themonetary economy.2. Derive inputs from the Cost-Benefit Case Studies into the formulation of the GPAStrategic Action Plan on Sewage.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20006

DATA SOURCESThis Report utilises information provided by the following National Reports prepared bynational experts commissioned by the Institute of Marine Science within the framework ofthe GPA Strategic Action on Sewage.1. National Report on Mombasa - Kenya2. National Report on Dar es Salaam - Tanzania3. National Report on Beau Vallon - SeychellesThe National Reports were prepared in response to an outline questionnaire designed tocover data requirements pertaining to the following categories:1. Background data on the physical features, environmental conditions, population andemployment profile, income and hot-spot locations and place names;2. Information on sewage sources and the impacts on environmental resources;3. Data on the of socio-economic importance of the resources affected by pollution;4. Data on the extent and impacts of pollution and the estimated losses incurred (impacts onproductive activities, health, tourism and natural resources);5. Information on projects and measures recently implemented and their estimated cost;6. Information on planned projects and measures and their cost.City level information on the above contained in the National Reports included several gaps,both on project costs and data on production losses necessary for the estimation of futurebenefits. Assumptions were used to derive indicators to move forward and show (a) how gapsmay be addressed until more accurate data become available and (b) how they can be fittedinto the framework developed in this Report.The National Reports were reviewed and edited to extract information to fit, as much aspossible, into the following framework, constructed to be used for the development of theCase Studies:1. City location and setting: To provided an introduction to the city setting and itsenvironmental and socio-economic profile;2. Existing problems: To Identify the main pollutants, their sources and the hot spotlocations;3. Quality of environmental resources: To provide basic indicators of the quality of theresources affected by sewage and their socio-economic significance;4. Environmental impacts: To assess the severity of environmental impacts in relation to“productivity”, health conditions, poverty concerns and biodiversity;5. Cost of impacts: To estimate the cost of the main environmental impacts - focusingprimarily on measurable market-based damages on health, tourism, property values and,to the extent possible, on the identification of “non-use” qualitative aspects of the coastalenvironment;6. Investment cost of projects: To put together available information on current andproposed projects to address pollution impacts and derive indicative cost estimates;7. Expected benefits: To estimate the value of benefits (avoided losses) expected toaccrue from the implementation wastewater projects;8. Cost-Benefit analysis put together: To put forward a Cost-benefit framework, bringtogether the estimated costs and benefits, set out the assumptions and estimationmethods, and, based on the available information and the use of assumptions, calculatethe approximate Net Present Value of the proposed projects.It is important to stress that the development of the Case Studies relied on existing data madeavailable by the National Reports. The National Reports were of high quality and detailed onseveral environmental issues but contained economic data gaps that could not be adequatelyeliminated and are reflected in the Case Studies. However, the Case Studies provide theframework to guide future work to address gaps supported by the analytical frameworkconstructed by the Case Studies.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20007

CHAPTER 1. ECONOMIC ANALYSIS AND ENVIRONMENTAL MANAGEMENTProgress towards bringing about cleaner environment has relied on a philosophy of pollutioncontrol. This has involved costly measures and controversial policy decisions. As a result,developing countries, poor communities and financially constrained enterprises have oftenargued that the environment is an expensive luxury that diverts resources from moreproductive uses. This perspective is giving way to a new paradigm stating that neglecting theenvironment can impose high economic and even financial costs, while many environmentalbenefits can in fact be achieved at low cost. For this to work, however, we need to betterunderstand what motivates those responsible for pollution and their responses to differentregulations, incentives and other pressures. Moreover, we can no longer afford to view theenvironment as a technical issue to be addressed independently from overall municipal andindustrial decision-making. This new approach can be summed up by the expression:environmental management, not just pollution control.Pollution Management: Key Policy Lessons, Pollution Prevention and Abatement Handbook,World Bank, 19981.1 Environmental Economics – Methodological PrinciplesWater and sea pollution, coastal degradation and beach quality deterioration, emerging fromthe twin process of urbanisation and economic development, are central environmentalconcerns in all developing countries. Often, the responsible Government and municipalauthorities, faced with pressing obligations to pursue development objectives and job creationpolicies, are constrained in implementing effective environmental management measures bythe need to ensure that development commitments are not compromised.In addition to the underlying economic pressure on the environment, inadequate managementcapacities, financial constraints, limited awareness of the true value of the environment,compound the scale and severity of impacts on the coastal and marine environment.Environmental economics may be seen as a reaction against sector-specific approaches tothe identification of the sources, impacts and consequences of pollution, thus seeking toincorporate a multi-sectoral framework in sewage strategies in which socio-economic factorsand demand-side approaches play a more important role in:• Highlighting the dependence of economic and social activities on the quality ofenvironmental resources;• Incorporating the full value of environmental quality in decision-making;• Using socio-economic information to identify and estimate the cost of pollution impactsand the benefits of response actions;• Justifying increased wastewater investment with reference to expected environmental andeconomic benefits;• Focusing attention on affordability constraints and livelihood concerns, and• Shifting the focus of coastal and marine protection from control to management actions.1.2 Environmental ValuationThe rule of market economics is that the value of a commodity or service depends on its use.Given the predominance of markets in resource allocation and development decisions, andthe use of market prices as the measure of value for most goods and services, environmentaleconomists have developed a particular perspective on "value" appropriate for environmentalresource management that allows consideration of non-market values. The “use value” ofcoastal resources in terms of production and consumption is only a part of the multiple socialvalue offered to society and therefore under-estimates total economic value which includesthe non-use value.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20008

Environmental economists take a comprehensive look at value, using the concept of TotalEconomic Value (TEV) to capture not only the Use Value (production value) but primarily theelusive Non-Use Value (conservation value) of environmental resources.Environmental Valuation of ResourcesTotal Economic Value (TEV) of a resource consists of:• Use Value (UV), and• Non-use Value (NUV)Use Values may be broken down into• direct use value (DUV),• indirect use value (IUV), and• option value (OV)Non-use value includes• Existence Value (Biodiversity value).Total economic value is therefore:TEV= UV + NUV or, TEV = [DUV + IUV + OV] + NUVSource: Based on D. Pearce, et. al. Introduction to Environmental Economics, 1996.The breakdown and terminology may vary, but generally include the following By disaggregatingthe value of a resource or a site into various components, the valuation problembecomes far more tractable.The following diagram may offer an illustration of the classification of the different categoriesof services and benefits which should be included in the definition of coastal resources.Categories of ValueA. Use Services B.Non-use ServicesDirect use Indirect Use Option ExistenceExtraction and Recreation Future use of Biodivesity andBuilding development Direct and EcologyIndirect servicesAestheticsTimberPopulation visits toSocial wealthcoastQuarrying Aesthetic enjoyment Natural history educationFisheries Habitat National heritageTourism accommodation Marine SpeciesTourism servicesCoastal protectionMarinas Protection againsterosionSource: Adapted from David Pearce et.al., Introduction to Environmental Economics.Direct or Extractive Use Value. Extractive use value derives from goods which can beextracted from or built on coastal sites, such as the use value of timber extracted from coastalforests, fishing from the sea, sand extracted from the beach, hotels and restaurants built onand near the beach, etc. This category of value is generally the easiest to measure byobservable quantities and prices of products in a market context. The task of environmentaleconomists is to record the quantity and price of goods dependent on coastal environmentalquality (productivity approach). For example, tourism accommodation and prices reflect theproductivity of the quality of coastal environment; over-building on the coast will reduce theuse productivity of a particular coastal area.Indirect or Non-Extractive Use Value. Non-extractive (indirect) use value derives from theservices provided by a coastal area. For example, wetlands filtering water, improving waterquality for downstream users, national parks providing opportunities for recreation, etc. Theseservices have value without any goods being extracted, produced or harvested. The value ofnon-extractive use services results from people visiting particular coastal area with particularquality characteristics. Measuring non-extractive use “aesthetic value” is often far moredifficult than measuring extractive use value because the ‘quantities’ of the service providedare often hard to measure and market prices often do not exist. The task of environmentaleconomics is to find proxies for valuing such services. This category of use value, particularlyFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 20009

aesthetic and recreational value, is very relevant to many aspects of coastal zonemanagement.Option Value derives from maintaining the option of taking advantage of the direct and indirectbenefits of a coastal site in the future.Non-Use (Existence or Biodiversity) Value. In contrast to use value, non-use value derivesfrom the benefits which do not involve using the site in any way, the value that people derive fromthe knowledge that the site exists, even if they may never actually visit it. Yet, people place avalue on the existence of coastal and marine ecosystems. If, for example, coastal forests, sanddunes or coral reefs became degraded, many any people would feel a definite sense of loss.Non-use value is the most difficult type of value to estimate, since in most cases it is not, bydefinition, reflected in production or consumption behaviour. This category of value also hasobvious relevance to coastal zone management.1.3 Valuation TechniquesResource valuation methods differ in terms of what they attempt to measure. Some aim tomeasure values directly, others aim to measure the indirect contributions of value to differentsocial and economic activities. The values of coastal resources that can be measured directly,market-based behaviour is most appropriate. For non-market values it is necessary to applyproxies to capture indirect and the non-use value. The table below attempts to put together thecategories of value outlined above with the corresponding menu of available valuationtechniques.Category ofValueDirect UseValueProductionentering themarketIndirect UseServices andOptionExistenceValueChoice of Valuation TechniqueResource Valuation Technique Measure of valueExamples:• Tourism income• Fisheries• Timber• Sand quarryingBiodiversityHabitatRecreationAesthetic-amenityMarket-based dataChange-in-Productivity(Production quantities)Surrogate-proxy marketdata• Cost-based valuation• Contingent valuation(willingness-to-pay)Willingness to pay(or accept payment forloss)• Contingent valuation• Travel costMarket pricesIf market pricesunreliable, alternative costapproaches• Cost of replacement• Defensiveexpenditure• Opportunity Cost(Foregone income)Questionnaire dataProductivity or Market-price Methods. Direct benefits from the use of coastal resources, whichinvolve production activities are reflected in marketable quantities and prices. Direct benefits fromthe coastal environment can be measured using market information. The most obvious exampleis the price paid by tourists to stay and be near the coast. The revenue generated by hotelsprovides a direct measure of the value people place on the use of coastal resources. Whenmarket prices and not available or unreliable, proxy market techniques may be used such asreplacement costs, defensive expenditure, opportunity cost, etc.• Replacement cost. The cost of replacing beach facilities by swimming pools, the cost ofreclaiming beaches, the cost of cleaning up a polluted beach etc., would indicate theminimum use value of the beach.• Protective expenditure cost. The expenditure on engineering works to protect the coastagainst erosion and maintain a particular level of quality and productivity (preventive orprotective investment) also serves to estimate the value of benefits from the use of the beachand its quality.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200010

• Opportunity cost. When decisions are taken to protect the coast that forego developmentopportunities, the income foregone shows the cost of conservation in terms of the itsalternative development use. This approach is particularly useful when financial resourcesneed to be mobilised to fund conservation programmes to compensate local communities forloss of development income.Indirect Valuation. Valuation of indirect benefits from the services and quality of the coastalenvironment, such as habitat, recreation, amenity, as well as the biodiveristy of the coastalenvironment, are not reflected in market transactions. Such indirect benefits are most likely to beunder-estimated in coastal management decisions. Biodiversity involves particularly controversialvaluation issues. The economic valuation of biodiversity does not attempt to place a monetaryvalue on ecology per se but aims to assess people’s preferences for biodiversity and the“demand” for conservation relative to development. This is the area in which environmentaleconomics make particular contribution to coastal management by applying Contingent ValuationMethods (CVM) and the concept of the Willingness-to-Pay (WTP).Contingent Valuation. Contingent valuation relies on data derived through questionnaire surveyby asking target population groups directly about their willingness-to-pay (WTP) to obtain orpreserve a certain level of environmental quality. Respondents are asked to choose from ascaled price-menu how much they would be willing to pay to enjoy environmental benefits. CVMare typically used to ascertain the value of aesthetic benefits and the existence value ofecosystems. CVM are also applied to value publicly or privately provided goods such as watersupply and sewerage in areas without such services.Travel cost. The travel cost method is an example of a technique that attempts to deduce valuefrom observed behaviour. It uses information on visitors’ total expenditure to visit a site or a parkto derive their “demand curve” for the site’s services. The technique assumes that changes intotal travel costs are equivalent to changes in admission fees. From this demand curve, the totalbenefit visitors obtain can be calculated.Hedonic methods. Hedonic models have been widely used to examine the contribution ofenvironmental quality to property prices. An house in an aesthetically pleasing coastal areashould sell for more than a similar house in a polluted area. Hedonic techniques allow this effectto be measured, holding other factors such as size and interior features constant.Further information on valuation techniques is cited in several references including:• D. Pearce et. al. Introduction to Environmental Economics, 1995• Hanley N. and Spash C.L., Cost-Benefit Analysis and the Environment, 1995• D. Perarce & D. Moran, The Economic Value of Biodiversity, 1996• D. Pearce and J. Warford et. al. World Without End, 1992• David Pearce, et. al. A Blueprint for Green Economy, 19901.4 Cost–Benefit Analysis: An IntroductionCost-Benefit Analysis is an informationsupport tool for decision–making oncompeting priorities. In the field ofenvironmental management, it is applied tohelp set environmental action priorities byidentifying and measuring the costs andbenefits of pollution control options andresource management strategies. It providesinputs for decisions on how much capitalinvestment is justified relative to the expectedbenefits. Under ideal conditions, decisionsshould focus on projects and measures thatmaximise net social benefit. In economicterms, this requires an estimate of thePollution Damage in the Nethelands(in millions) Annual damage 1986 US$Air Pollution 0.5 -0.8Water Pollution 0.1- 0.3Noise Pollution 0.0J.B. Opschoor, A Review of MonetaryEstimates of Environmental Improvementsin the Netherlands, OECD Workshop,1986Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200011

marginal benefit of pollution reduction and the marginal cost of the investment to achieve this.Benefit calculation is a complex task entailingestimation of physical damage from pollution(effects on health, economic productivity,ecosystem quality, etc.) and assigningmonetary values to that damage. Assigningmonetary values to environmental damage (andto savings from its reduction) is facilitated bythe application of methods that have technicallimitations and require data that are frequentlyunavailable. The most typical limitation of costbenefitanalysis is the absence of technicalinformation on the links between pollution,changes in environmental quality and theimpacts on economic variables dependent onenvironmental quality. Environmental quality isknown to affect economic variables at twolevels:The Benefits of Pollution Control in theUSA, 1978US$ billionAir pollution 21.7Water pollution• Recreational fishing 1.0• Boating 0.8• Swimming 0.5• Waterfowl hunting 0.1• Non-use benefits 0.6• Commercial fishing 0.4• Other uses 1.4Total 26.5M. Freeman, Air and Water PollutionControl: A Cost-Benefit Assessment, 1982• first direct production performance, such aschanges in the production of goods and services for which there is a market (tourism,fisheries, etc.) and,• second, indirect opportunities available to society for enjoyment of the less tangible“services” of the environment like landscape quality, open space for recreation,conservation of ecosystems.Production changes are easier to estimate through productivity changes in tourism orfisheries outputs, while indirect effects of pollution not reflected in market prices andquantities, have to rely on estimates of people’s valuation of the environment, in other words,the social demand for environmental quality.The application of a Cost-Benefit approach to coastal pollution involves most of the followingdata-intensive estimates, not all of them possible in any given situation with data deficiencies:• Discharge of pollutants by the various sectors, mainly households, tourism, industry,agriculture, quarrying and construction.• Impacts on environmental quality, mainly fresh and sea water, beach quality, marineecosystems.• Impacts of environmental degradation on production and social welfare, mainly fisheries,tourism income, as well as biodiversity and conservation opportunities, that is non-usebenefits available to the population.• Costs of degradation in both quantitative and qualitative terms to show the socioeconomicsignificance of the resources lost or damaged.• Costs of proposed interventions to reduce pollution.• Expected direct and indirect benefits from proposed interventions and investments, and• Comparison of costs and benefits to show the net value of the cost of investment, takinginto account the conservation of resources achieved by that cost.1.5 The "value-added" of Cost-Benefit Analysis to wastewater strategies.Cost-benefit analysis introduces, among other things, environmental resource valuationnecessary for (a) estimating the social and economic value of environmental quality, (b)measuring the benefits accruing from protecting and enhancing that value and (c) help justifyenvironmental investment in terms of the benefits generated by environmental resourcemanagement. If no attention is addressed to the various dimensions comprising the socialvalue of environmental resources, environmental management policies may receive lowpriority because of an under-estimation of the costs of inaction and the full extent of thedamage inflicted on resources. In short, it is a tool for enhancing the effectiveness ofwastewater decision-making and coastal zone management strategies.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200012

Characteristics of Cost – Benefit AnalysisCBA is a powerful and versatile tool that enables economists and planners to construct aninformation and evaluation framework for the appraisal of planned or on-going investments.The main characteristic of CBA is its capability to go beyond financial analysis and profitabilityconcerns, from the point of view of the sponsoring agency, and take into account a widerdefinition of costs and benefits more appropriate for the analysis of environmental and publicutility projects. Since most of the results or outputs of environmental projects are not traded inmarkets for goods and services financial costs and revenues fail to capture thesocial/community benefits associated with environmental improvements. On the basis offinancial criteria environmental investment may fail to prove viable and fail to secure publicfunds. The methodology for comparing costs and benefits is similar whether we are seekingthe economic or financial benefits of investments. What is defined as a cost and what isdefined a benefit is different.Methodology for the Use of Cost-Benefit Analysis in Environmental Projects, G.Constantinides, UNEP(OCA)/MED WG. 45/5, 1992The application of Cost-Benefit Analysis and the use of associated estimation andmeasurement tools, in addition to the technical economic analysis they bring to bear onproject evaluation, help build up awareness of the economic importance of coastal ecologyand create a shared basis for converging responses among different stakeholders. Thisfacilitates the gradual move towards consensus on environmental priorities seen as partthe process of social and economic development and community well-being, rather than assectoral policy concerns of limited direct importance to society at large. The application ofCost-Benefit Analysis and its focus on the links between ecological damage from pollutionand its socio-economic costs, foster a broader framework for improving participationpractices and partnerships that support a common perception of the social consequencesof pollution and areas of agreement on appropriate responses.The contribution of Cost-Benefit Analysis to consensus-building arises from the fact thatenvironmental impacts on the quality of the coastal and marine environment translate intosocio-economic losses due to resource productivity changes, loss of income, health effectsand cumulative impacts on living conditions, poverty and economic development. While theoccurrence of pollution is a subject of scientific activity, the effects of pollution translated inCost-Benefit terms highlight a much broader area of concern about human and economicconditions with cross-cutting community and development affects. The productivity of coastalagriculture, tourism, fisheries and the state of public health are highly dependent on thequality of coastal and marine resources and a major sources of livelihood for the majority ofthe coastal population. The links between pollution and social responses are central to Cost-Benefit Analysis. In short, Cost-benefit Analysis creates a clearer understanding of the factthat solving wastewater pollution problems solves development problems.1.6 Wastewater problems and Cost-Benefit AnalysisUncontrolled wastewater disposal generates human and economic costs through impacts onthree main spheres that inter-mediate between the environment and economic factors:• Living conditions in settlements;• Environmental conditions of rivers and lakes near cities; and• Production conditions of coastal and marine lifeThese three spheres of environmental impacts are clearly identified in the GPA DraftRecommendations for Decision Making on Municipal Wastewater, Chapter 1 "ManagingMunicipal Wastewater: a growing challenge").• Impacts on the living environment. Domestic wastewater is generated by populationactivity in a neighbourhood context with houses, shops, small factories, etc. Sewageaccumulation in settlements poses a serious health risk to the population leading to thespread of diseases, mortality, morbidity, increased public and private medical costs andFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200013

loss of labour force productivity. Cost-benefit Analysis raises questions about theproductivity and health costs involved and attempts to measure the costs and benefitsfrom actions.• Impacts on rivers near the city. Cities without access to on-site or off-site sewagedisposal infrastructure opt to channel sewage to rivers and lakes to dilute the waste andcarry it outside the immediate living environment and often away from the area ofresponsibility of the local municipal authorities. The degradation of river water qualityessentially degrades valuable water resources on which several neighbouring anddownstream communities draw their water for domestic and agricultural use. As above,Cost-Benefit Analysis demonstrates the need to assess and measure the costs ofpolluted rivers and the benefits of taking action.• Impacts on the marine environment. The coastal and marine environment, being theultimate recipient of all wastes, is a development resource for tourism, fisheries andrecreation. The effects of degradation undermine income opportunities and food supply,but the extent of the impacts is often under-estimated when the full damage is not costestimated.It is often assumed that seas could easily dilute wastewater. However, only theorganic oxygen-consuming substances can benefit to some extent from such dilution.Most other pollutants, such as pathogens, nutrients and toxic materials eventually remainin this ultimate sink. Likewise, Cost-Benefit Analysis seeks to incorporate measurementmethods to estimate a large part of the extent of environmental damage to be included inthe future benefits of sustainable coastal management.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200014

CHAPTER 2. COST- BENEFIT CASE STUDIES2.1 MOMBASA CASE STUDY2.1.1 IntroductionThe District of Mombasa covers a total of 282 sq. km, 65 sq. km of which is open water. It isthe smallest among the seven districts that constitute the Coast Province of Kenya. TheDistrict is further divided into the 4 administrative Divisions of Mombasa Island, Likoni, Kisauniand Changamwe. The Island Division is the smallest, but the most built up. It is a port town ofnational and international significance, a center for tourism, maritime commerce and largeindustrial establishments. It also houses large human settlements. The other remainingdivisions are rural in characteristics.Table 1: Area of the District by DivisionDivisionArea in Sq. Km.Mombasa Island13Kisauni100Likoni48Changamwe49Total 210Source: Government of Kenya, Mombasa District Development Plan 1997-2001Population. The population of Mombasa according to the 1999 Population Census is653,000 persons. The population distribution figures by Divisions are not yet available and aretherefore estimated according to the 1989 Census as shown in the table below.Table 2: Population Distribution and Density (persons/km. sq.)Division Population Population DensityMombasa IslandKisauniLikoniChangamwe180,30021800095,400159,30013869218019883251Total 653,000 Average 3,111Source: Government of Kenya, Population Census 1989 and 1999Population growth. The District population growth rate is 4% per annum; rural migration oflabour force for urban employment is the main cause of growth. Mombasa Island and townhave the highest density of population and a concentration of squatter settlements.Changamwe Division also attracts migrant population because of the concentration ofindustrial establishments.Employment. The main source of household income in Mombasa District derives from"informal sector wage employment comprising petty businesses, such as street trading, watervending, hawking, small food, fuel wood and charcoal kiosks, second-hand cloths shops andrepair workshops. These activities are mainly concentrated in the town of Mombasa. Sincethe 1992 there has been a rapid growth of “informal sector” activities under the under thestrain of public sector retrenchments and structural adjustment economic measures.Average Income. Analysis of household income for the Coastal Province of the District for1994 shows that Mombasa had the highest household per capita income of Kenya of K.Sh.57,000 (about 750 US$), mainly from tourism and related urban wage jobs. High income isconcentrated in a small proportion of the urban population while in the rural areas of theDistrict poverty is widespread. Overall, 57% of the population live in poverty.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200015

Population connected to sewerage infrastructure. The population of Mombasa served bywater-borne sewerage is 15% (Mwaguni and Munga, 1997). Other sources quote a figure of10% (Bambra 1998, UNDP – World Bank, Water and Sanitation Program September 1998).In the City of Mombasa only one third of the area of the Island is connected to water-bornesewerage. Except in some parts of Changamwe, the rest of the remaining Divisions of theDistrict are not sewered.Creeks. Mombasa Island is surrounded by a number of Creeks: Tudor, Makupa, Junda,Kilindini and Port Reitz. By their nature, creeks create steep cliffs that contributed to theformation of deep harbours. The port of Kilindini in Mombasa is of great importance not onlyto Kenya and East Africa but also to other land locked countries of central Africa.Mangrove Forests. Mangrove forests are the only gazzetted forests in Mombasa District.They cover a total area of 3059.4 ha; Port Reitz 1017.5 ha. Tudor Creek 1321.4 ha. andMtwapa Creek 720.5 ha.Water Resources. There are no rivers of any major significance in Mombasa District. Watersupply to the district comes from sources outside the District but within the Province and thesupply does not meet the demand. There is a large potential for groundwater in the District tosupplement the shortfall. Groundwater is tapped through shallow wells and boreholes but thewater is often either saline, highly mineralized or if fresh, contaminated from pit latrines orseptic tank soakage pit systems typically used for the disposal of sewage in large settlements.As a result, the supply of surface and ground water comes from sources outside the District.Existing Wastewater Management Infrastructure. There are two treatment plants that werebuilt to serve specific areas of the District. One is located on Mombasa Island and the otherin Changamwe Division. The treatment plant on the Island has been out of use for manyyears, and domestic wastes from the sewered population enter the marine environmentuntreated. The plant in Changamwe has also been out of use for a long time, has since beenre-designed and is now under construction to serve a larger population. This plant, to becommissioned soon, will greatly improve the sewage management in Mombasa. For the restof the population, the management of human wastes is by the use of pit latrines and septictank-soakage pit systems. 15% the population relies on septic tank/soakage pit system while72% use pit latrines. The responsible authorities are over-strained and under-funded andcannot provide regular emptying services to the rapidly growing urban population and who aretherefore left to cope with unsanitary practices. Tourist hotel establishments use septic tanksoakagepit systems for human wastes, although some of them have installed their ownsewage treatment plants.Wastewater Hot Spot Pollution Locations• Kipevu in the Kilindini Creek and Port Reitz Creeks, which receive both domesticsewage and industrial effluents, discharges. Due to the proximity of the industrial area tothe natural drainage basin of the Mombasa Island and the west mainland in Changamwe,most of the pollution load from industrial effluents pour into the Kilindini and Port ReitzCreeks. The Creek waters also receive large volumes of domestic sewage from theChangamwe Division, with Kipevu being the main hot spot.• Mtwapa Creek and the Kizingo sewage outfall in the Tudor Creek in which domesticand institutional sewage are discharged from Shimo La Tewa GK Prison.• Kibarani Dumpsite on the edge of Kilindini Creek is another major hot spot area.Pollution Loads and Pollutants (Coliform Bacteria, BOD, COD, Heavy Metals, Etc.)The main pollutants, according to measurements of Coliform Bacteria, BOD, COD and HeavyMetals carried out by Mwaguni and Munga in 1997 in the marine environment and groundwater sources in Mombasa, are BOD and Suspended Solids (SS) from domestic andindustrial sewage. Domestic sources account for 18% and industrial for 67% of BOD loadsand 10% and 55% of SS loads, as shown below. No comprehensive studies have beenconducted since 1997. Subsequent spot-check analyses indicate that the conditions tend toget worse.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200016

Table 3: Summary of pollution loads from Mombasa District.Source BOD SS Oil N P HM OtherDomesticSewageBeach hotelsStorm waterSolid wasteIndustrialwasteShip waste *Livestockwaste4369(18.0%)100 (04%)522 (2.2%)1846(7.6%)16249(67%)14 (0.1%)1161(4.8%)3964 (10%)85 (0.2%)4447(11.3%)-21837(55.2%)11 (0.0%)9180(23.2%)-----103-622 (41.9%)18 (1.2%)166 (11.2%)-45 (3.0%)2 (0.1%)630 (42.5%)94 (19%)2 (0.4%)11 (2.3%)-6 (1.3%)0.2 (0.0%)364(76.3%)Cr0.25Cu0.001fe 2.9Ni0.005Zn0.11Phenol0.01S:0.12Totals 24233395241031483477(100%)(100%)(100%)(100%)100%* estimated domestic wasteSource: Mwaguni & Munga 1997Table 4: Microbial Contamination & Nutrient Levels-Mombasa Distr. Inshore Water AreasAreaBODmgO/lColiformper 100mlE. Coli per100mlNO ug-asN/lPO ug-as N/lKilindini / Port Reitz CreekTudor Creek0.2-2.40.4-4.00 –1800+0 –16000-5500 – 140.2-4.00.6-7.21.3-2.30.9-5.7Source: Mwaguni & Munga 1997Table 5: Sewage Discharge RatesDischarge Rates –cubic meters per daySource Design Flow Current Flow ProjectedChangamwe Stage 1 17 100 Unknown 51 300Kizingo 31 400 Unknown 94 200Source: Mwaguni & Munga 1997Fresh water Quality. Mombasa District has no surface water resources of its own. TheDistrict depends on surface water supplies from Baricho in Malindi District. These sourceshave low flows during the dry season and siltation causes frequent breakdowns during therain season resulting into perennial water shortages. All ground water sources developedalongside human settlement are unsuitable for drinking purposes because of the presence ofthe permanent sources of contamination from pit latrines and soakage pits. Only those sourcesdeveloped far away from human habitation passed the standards for drinking water.Table 6: Microbial contamination of ground water in Mombasa DistrictSource No Coliform count per100mlWellsWellsBoreholesBoreholes203111#25-1800+0 – 417-1800+0E. Coli count per 100ml Potability*0-1800+00-50Source: Mwaguni & Munga 1997Note: * Potability: 0 - not potable, 1 - potable, # Borehole water treated with ultra-violet radiation, Drinkingwater standards applied in Kenya are: (a) Coliform count < 10/100ml, (b) E. Coli count, nil0101Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200017

Threats to the Coastal and Marine Ecosystems• Pollution impacts from domestic and industrial wastewater and development activities.• Distraction of coral reefs from divers, boat anchors, in addition to the consequences ofdegraded water quality through pollutants and sediments.• Degradation of mangroves, sea grass and breeding habitats for fisheries from over-cutting,pollution, agricultural runoff, beach erosion and waste dumping.• Indirect health hazards from deterioration of fish and sea water quality, threats to fisheriesincome and tourism.2.1.2 COST – BENEFIT ANALYSISTable 7: Mombasa Summary DataArea of Mombasa Distict282 sq.km. - 65 sq, km. open waterPopulation653,000 persons - estimated growth rate 4% p.a.Average population density3,111 p/sq. km. -Mombasa island 13,870 p/sq.km.)4 administrative divisions Mombasa Island, Likoni, Kisauni and ChangamweLabour force370,260 (1997) 417,470 (2001 est.) - est. growthrate 3% p.a.Estimated average household income $660 (lowest $125) - average wage $55 per monthPopulation served by water-borne 15%. - a third of the area of the City of Mombasasewerageand parts of ChangamweMangrove areas lostAbout 50,000 ha in the coastal areaFisheries production2,155 MT of fin fish and shell fish worth $2.2 millionlanded by artisanal and commercial fishermen in1997, 2,198 MT in 1996 - decline of 43 MT.Artisanal landings of 380 MT in 1997 compared to489 MT in 1996 - drop of 109 MTHealth106,000 cases of diarrhoea and skin diseases peryear. Cost of treatment about $ 13 per week usingcheapest drug in government sector, minimum ofabout $130 in private sectorTourism480,000 tourist visitors a year, estimated revenueof $300million - 200,000 visit the marine parksNote: Author's summary based on information from the National Report1. Summary of Existing Information of Wastewater Sources and Pollution ImpactsIt is important at the outset to focus on the key links between wastewater sources, theperceived impacts and the resources affected. The table below is intended to serve as asummary of the information presently available and as a framework for identifying gaps toguide future data collection and refinement.Table 8: Outline of Sources and impacts of pollutionPollution sources and mainMain Impact Areasareas of originDomestic sewageTudor Creek• Old Town of Mombasa (Mombasa Hospital, Tamarind, Old Town,• Ziwani, Tononoka and Coast General Hospital, MombasaGanjoniPolytechnic, and Tudor Estate)Domestic and industrialsewage• Changamwe pertoleumrefinery and industrialareaIndustrial sewage• Shimanzi industria areaMtwapa Creek(Shimo La Tewa GK Prison)Kilindini Creek and Kizingo at the entranceof Tutor Creek(sewage out-falls at Kipevu)Jomo Kenyatta public beach(Bambouri housing area)EcosystemsaffectedLiving environmentin settlementsGround watercontaminationPollution of creeksand downstreamrunoffFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200018

Up-stream runoff• Hoti-hoti river basincatchmentKibarani dumping site(industrial wastes)Coastal and marineecosystemsShip wastes• Kilindini PortNote: Author's summary based on information from the National Report2. Estimated Cost of Proposed ActionsMombasa District Sewerage SystemResponses to wastewater pollution problems in Mombasa have long been delayed and majorinfrastructure projects planned for implementation in the past have not been constructed.According to information provided in the National Report, construction of the MombasaDistrict Sewerage System is now proposed for the coming 5-10 year period. The first stage inthe construction of the system is the Changamwe Sewage Treatment Plant to serve theMombasa Municipal Council Area. The Master Plan study for the treatment plant wassponsored by the City Council, carried out between 1974-1976. The reliminary designsprovided also for the construction of the main sewerage system, as part of the whole ofMombasa District, in three phases, 1976-96, to rehabilitation of the existing but inoperativeprimary wastewater collection system for a population of 77,000 in Chaani UpgradingScheme, Changamwe Estate and Mikindani Site and Service Scheme, and extending thenetwork to connect an additional residential population of 27,000 in the West Mainland andthe industrial area of Changamwe.As the project has not been implemented, and is included as part of the proposed MombasaDistrict Sewerage Syetem, technical information and details about its cost and phasing arescattered and unreliable, for the purposes of this Cost-benefit Study, the proposed project isconsidered as a single overall project. It is hoped that some of the conclusions of this Studymay illustrate useful approaches to defining priorities, alternative solutions and relatedfinancial and socio-economic costs and benefits considerations.The total capital cost of the Mombasa Sewerage Project was estimated 26 years ago atabout $10.0 million. The Changamwe Division section was then estimated at KSh. 111.0million ($1.4 million). However, the most recent cost estimate for the Changamwe Divisionsection is for $10.0 million (KSh. 730.0 million), that is a cost adjustment ratio of 7.14.Applying this ratio to the whole project for the other Divisions, it would follow that theestimated cost of the whole project is now roughly about $71.0 million: Phase I costestimatedat $10.0 million, Phase II at $15.5 million and Phase III at $45.5 million. Likewise,the annual operating cost for the Changamwe Division Project is estimated at $510,000,representing about 5% of the present estimated capital cost. However, an updated costestimate obtained from Mombasa City Council for the construction of the overall Districtsystem raises the capital cost to $120.0 million.According to existing information the proposed District Sewerage System will cover thefollowing areas and components:• Mombasa Island. Extension of the existing sewerage system to cover the entire island toprovide for pre-treatment of sewage before disposal at deep sea outside the reef at Nyali.It is planned to serve the Central Business District, Majengo, the area of the CoastGeneral Hospital and Kilindini Port.• North Mainland. Collection of sewage from the entire mainland to a treatment plantlocated at Bamburi and disposal of pretreated sewage to the deep sea outside the reef,extension of the collection network to Port Tudor and the enlargement of the treatmentplant and extensions to the Bamburi works and an additional out-fall pipe.• West Mainland. Construction of the collection network from Mazeras, Miritini andChangamwe and connection to the existing treatment plant at Changamwe for a sea out-Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200019

fall disposal in deep sea at Kilindini Port. Will cover the areas of Port Reitz, MoiInternational Airport, Miritini and extensions to the northern parts of Changamwe.Extension to Mazeras including the construction of the sea out-fall, development ofsewage systems for Mazeras and the construction of an additional out-fall pipe.• South Mainland. Construction of the sewerage network from Likoni to Ngombeni with atreatment plant at Pungu Fuel and an out-fall off the reefs, the pretreatment plant at Likoniwith the out-fall system and extensions to Ngombeni and a separate out-fall.The available information seems to show that the planning of the project follows anengineering "supply-side approach", making the capital cost an inevitable consequence of apre-determined technical choice. As there is some vagueness about the capital cost of theproject, and because capital costs should in any case be subject to review in the light of costbenefit,affordability and management criteria (demand-side approach), it is necessary to tryand present cost options relating to alternative technical solutions. Based on the informationcited in Table 1.1 "Cost Range per capita for On-Site and Sewered Options", GPA DraftRecommendations for Decision-Making on Sewage, 2000, the following cost analysis isworked out below for guidance.Table 9: Technical options and estimated capital cost of wastewater managementAll population served by off-sideinfrastructure and treatment plantsCostMillion$50% of the population served byoff-side infrastructure andtreatment plants and 50% by onsitedisposal optionsCostmillion$650,000 x 200 per person 130.0 325,000 x $200 per person 65.0325,000 x $5 per person16.2Total 130.0 Total 81.2The above table indicates some of the available choices and a rough capital cost range.Given that in low-income countries effort must be made to plan for affordable wastewatersolutions and that also reduce the financial burden on the authorities and the beneficiarypopulation, the lower-cost options should be selected first. More costly solutions may only bechosen if the additional benefits outweigh the extra costs. It would therefore seem appropriateto assume that the capital cost of the Mombasa Sewerage System, given the optionsavailable, can be reduced to a level considerably lower than the figure of $120.0 or evenclose to $81.0 million. If a middle value is accepted from the range of alternatives, itwould point to a capital cost of $100.0 million without exhausting the range of furtherpossible alternatives based on closer examination of local conditions. This task should beundertaken by a follow up feasibility study.Table 10: Cost Range Estimates1.Adjusted estimate from the original figure by author$ 71.0 million2. New estimate by the Municipal authorities $ 120.0 million3. Estimate based on off-site infrastructure and full population coverage $ 130.0 million4. Estimate based on possible options $ 81.0 million5. Mid-range estimate 100.0 millionThe operating cost of the project, on the basis of 5% of capital cost of $100.0 million is $5.0million per annum.3. Policy Measures ImplementedThe National Report provides a list of measures for strengthening environmentalmanagement institutions including administrative actions put in place and broader on-goingactions comprising part of public sector programmes and management responsibilities. Nocost figures are quoted to be used for the purposes of this study. The measures undertaken,partially or fully, are listed below.1. Establishment of the Mombasa Municipality Department of Environment. TheDepartment is in charge of cleansing, parks, drainage and liquid waste management. ItFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200020

oversees the drainage and sewerage in the Municipality. The monitoring section has a staff of130 employees, but lacks equipment and vehicles to enable it to be effective. The Councilalso runs a pest control programme for mosquitoes, cockroaches and rodents with an annualbudget of KSh.2, 000,000 (about $25,000).2. NEAP Process. National Environmental Action Plans (NEAPs) have been prepared byalmost all African countries as a tool for comprehensive environmental assessment and forintegrating environmental concerns into national development programmes. The NEAP processhas been a vehicle for building environmental awareness, introducing legal instruments forenvironmental protection, improving management capacities and fostering consensus on futureactions. Under the NEAP process, and other related initiatives, combined actions have beenstimulated aiming to put in place environmental management mechanisms including thefollowing:Legal Framework. In 1999, the Government of Kenya enacted the EnvironmentalManagement and Coordination Act. The Act envisages a framework for defining andenforcing environmental standards, policy implementation tools for environmental planning,environmental impact assessment, for protection against water pollution, permits for thedisposal of wastewater and solid wastes, conservation of biological diversity and protection ofenvironmentally sensitive sites and coastal areas.Institutional Framework. The Kenyan government has set up institutions for naturalresources governance and environmental protection, including:• The National Environmental Management Authority for co-ordination of environmentalpolicy at national level.• The Regional Development Authorities, with regional responsibilities.• The Coast Development Authority with responsibilities for development and coastalzone management actions in the Coast Provinces.• Research by NGOs in specialised fields (such as the Coral Reef Conservation Project(CRCP) and the Coral Reef Degradation in the Indian Ocean (CORDIO) project,generating information for the sound management of coastal and marine resources.NGO support, awareness and participation initiatives. Support for the participation ofNGOs in research and policy reviews and provision of information on the impacts of economicdevelopment activities on natural resources.Sustainable tourism. Implementation actions under the Kenya National Tourism DevelopmentMaster Plan directed towards environmental conservation, eco-systems, special-interest tourismand the protection of coastal and other natural resources as crucial elements for sustainabletourism development.Capacity building for compliance with Regional and International Convention. Kenya issignatory to the Nairobi Convention of 1985 for the protection, management and sustainabledevelopment of the marine and coastal environment of the Eastern African Region, signed theArusha Resolutions of 1993 on Integrated Coastal Management and participated in the followupregional meetings in Seychelles 1996 and Maputo 1998. Kenya is also signatory to the RioUNCED Agreement of 1992, becoming a partner in the protecting and managing the oceansfrom impacts arising from both land and marine activities. Most important, Kenya is among the108 countries participating in the Global Programme of Action established with the adoption ofthe Washington Declaration for the protection of the marine environment form land-basedactivities, coordinated by UNDP via the GAP Co-ordination Office in the Hague.4. Cost-Benefit Valuation ApproachThe first step in the development of Cost-Benefit Analysis is to define the valuation methodsand the indicators guiding the quantitative or qualitative estimation of the impacts resultingfrom environmental changes.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200021

There are three main categories of value relative to which costs and benefits are estimated:Direct use value, indirect use value and non-use (existence) value. Costs are associated withreduction of the use and non-use value of the environment, while benefits accrue from actionsand investment that reduce or eliminate the costs and improve environmental quality. Thevaluation approach helps in establishing the link between information on environmentalchanges/impacts and their socio-economic significance and the estimate of the positive ornegative values of these changes expressed as costs or benefits.Table 11: Classification of Values (Costs and Benefits)Category of valueValuation approach and indicatorsDirect UseChange in the productivity of activities that use environmental resources resulting fromchange in environment conditions / qualityTourismIndicator: Change in tourism revenues and avoided lossesFisheriesIndicator: Change in fisheries production and revenues and avoidedlossesHuman Health Indicator: Treatment costs, loss of work-days and loss of life due toenvironment-related diseasesPropertyIndicator: Increment / loss of property valuesIndirect UseChanges in recreation, leisure and amenity opportunities, beach stability and quality offeredto the public in and near coastal areas due to change in environmental conditions / qualityRecreation and Indicator: Number of people and cost of visiting clean and unspoiledamenitycoastal sites reflecting people’s valuation of recreation opportunitiesNon-UseExistence value of environmental quality – biodiversityPreservation of coastal, Indicator: People’s willingness-to-pay for maintaining marine andmarine and landscape coastal biodiversity (quantitative and qualitative information fromquality, cultural and surveys)natural heritageThe first step in the development of the Cost-benefit Study is to assess, on the basis of theavailable information, the existing impacts from wastewater sources and estimate theirapproximate costs. These costs are essentially the costs of inaction. The importance andextent of the costs involved, which will grow without appropriate wastewater investment,provide the benchmark for cost-benefit evaluation of the priority for such investment and theeffectiveness of alternative technical and investment solutions.5. Environmental Costs - the Costs of InactionDirect Costs1. FisheriesThe available data show artisanal fisheries production losses 109 MT in 1997 relative to 1996(380 MT in 1997 compared to 489 MT in 1996). It is reported that “artisanal fish landings since1995 have been steady declining each year due to over-fishing in shallow waters of the reef andpoor environmental conditions that are largely associated with pollution and other anthropogenicfactors”. A reduction in the combined artisanal and commercial production landed of 43 MT wasalso reported. Taking half of the reduction of artisanal fish production only to reflect pollutionrelatedimpacts and conservatively assuming a low price of $2 per kg, the cost of pollutionrelatedfisheries losses are estimated at $489,000 a year.2. TourismThe coastal region of Kenya attracts about 480,000 tourists a year spending an estimated $300million a year, that is an average of $625 expenditure per tourist for a 10-15 day holiday. Thereare no data showing trends in tourism but reported information indicates the presence ofserious threats to tourism due to pollution loads in the Ocean and the creeks and the pollutionimpacts on marine ecology. It is difficult to estimate the impact on tourism without more detailedinformation. There is no study on the reduction of tourism due to pollution threats in East Africa.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200022

The World Bank Report on the Environmental Strategy in Middle East and North Africa, 1995,(Report No. 13601 – MNA) quotes estimates of between 11–22% of tourism reduction onaccount of environmental neglect as plausible, which may be applicable here. “Foreignexchange earnings from tourism and travel reached more than $9 billion in 1992…however,poor environmental quality is threatening the growth of tourism. Municipal and industrialwastewater discharges and polluting beaches, poor sanitary conditions and inadequate wastecollection and disposal are making the environment unattractive, thus a loss of $1-2 billion intourism value, on account of environmental neglect, is quite plausible”. Until more reliable databecome available it would seem possible to assume that at least 10% of tourism income, that is$30.0 million is at risk. If 50% of that is value added, an annual income loss of $15.0 millionmay be estimated as the impact of pollution on tourism. This estimate may be revised whenrelevant data become available.3. Property valuesThe available information does not offer adequate indications if the areas affected by pollutionhave actually suffered loss of value. It is generally known however that properties near pollutedbeaches and creeks become undesirable and either lose in value or do not appreciate in value.On the basis of the available information it is possible to estimate that out of some 130,600housing units in Mombasa District (653,000 population / 5 household size) a third (53,500 units)have a coastal location. It is assumed that 20% (10,700 units) are of high value in the region of$50,000, the rest are low-cost unaffected by environmental degradation. A conservative 5% lossof value (or lack of annual appreciation) would imply an estimated annual cost of $26.7 million.This does not take into account the loss of property tax revenue to the Government and thelocal authorities.4. HealthThere is no information to derive a “dose-response function” showing the response of waterbornediseases to changes in water quality and incremental pollution loads. The availableinformation refers to the cases of diseases typically attributed mainly to poor water qualityaffected from uncontrolled domestic wastewater discharges. It is certain though thatwastewater is the most important source of pollution affecting living conditions in settlementsand a major cause of environmental health problems. The lack of basic wastewaterinfrastructure is prevalent in areas where other factors are present contributing to disease,such as poor hygiene, low education and low income. It is therefore difficult to isolate thedirect impact of wastewater pollution on health, although it is legitimate to assume that thereis a strong association between lack of wastewater infrastructure and the incidence of waterbornediseases. In Mombasa, the use of "bush disposal method" increases child mortality byabout 53% as compared to the use of main sewer. Only about 13% of the population haveaccess to wastewater sewers, which are in any case presently in disrepair.Data for 1994 shows that there were in all the Divisions of Mombasa 127,000 cases ofmalaria, 74,100 cases of skin infections and 30,550 cases of diarrhoea. The correspondingnumbers for Mombasa island were 43,700, 12,500 and 10,000 representing a share of 28% inthe District's total. The highest incidence of malaria is reported in Mombasa island andChangamwe with 76,000 cases a year (1994) accounting for 60% of the total in the wholeDistrict. Malaria is reported as the major cause of death among children between the ages of 1and 5, killing 107 in every 1000 children and 72 children daily.Diarrhoea and skin diseases are more directly related to wastewater pollutants. Forestimating the cost of health impacts only the cases of diarrhoea and skin diseases will beconsidered which amount to 106,000 per year. Two categories of costs are estimated: Thecost of treatment and the cost of income loss from loss of working days. The cost of treatmentis estimated at $1.4 million a year, on the basis of $13.0 per person, (106,000 x $13). Theincome foregone from loss of working days, assuming that half of the persons affected are ofworking age on the basis of a 10-day wage of $18-19, since the monthly wage rate is about$55, is estimated close to $1.0 million a year, (106,000/2 x $18.5 average). The estimatedtotal health cost is $2.4 million a year. Although unemployment is high, informal sector jobsare available for the working population and justify the assumption of income losses due tosickness.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200023

Child mortality, and death in general, is primarily a deep social concern with serious moralimplications. The economic approach to the valuation of losses from death is controversial asit may give the impression of placing a value on human life. The economic approach focusesnot on the value of life per se but on society’s preference to avoid death relative to the cost ofsustaining healthy and productive life. On this basis, it is possible to estimate the partial(economic) losses arising from child death. The available data indicate that 72 children dieevery year from malaria implying some 26,000 deaths a year. It is possible that a number ofchildren die from other water-borne diseases, such as diarrhoea, cholera, etc. The data areinconclusive on this point. It may be reasonable to assume that a smaller number of childrendie from diseases related to wastewater practices and exposure to contaminated water. Theproportion of cholera and other diseases to malaria cases in the general population is about50% and on this basis it may be estimated that the number of children that die of cholera andother diseases is half of the children reported to die from malaria, that is 13,000. What is theeconomic loss from the death of 13,000 children per year? There are two main valuationmethods to estimate the economic impact. One is to estimate the willingness to pay foravoiding exposure to the causes of malaria, (differential risk or risk avoidance method)measured by the difference between safe and unsafe sanitation and living conditions. Theother method (the human capital method) is to estimate the present value of loss of futureearnings. The human capital approach is much simpler and less dependent on detailedinformation that does not exist. At an average constant wage of $660 per year and loss ofabout 13,000 future income earners, the estimated annual cost for loss of earnings starting 10years after death, when children would become wage-earners (if death was avoided) is $8.6million per year (13,000 x $660). Since this income loss will occur in 10 years the presentvalue of this cost today (if discounting is applied - 10 years at 10%) is equivalent to $3.3million per year.Table 12: Health annual cost summaryTreatment cost$ 1.4 millionLoss of income during illness $ 1.0 millionLoss of earnings due to death $ 3.3 millionEstimated total$ 5.7 millionIndirect Costs5. RecreationRecreation benefits concern the enjoyment of coastal areas of natural beauty by the nationalpopulation. Tourism values have been considered above. There is no direct market forrecreation in open access areas and valuation of such environmental services would need tobe based on survey information revealing the social valuation that the local population placeon recreation opportunities, known as "contingent valuation". Such valuation would reflect theindirect (non-production) benefit from the “services” of environmental quality. There is no suchinformation available from previous studies in East Africa. To estimate recreation benefitswould ideally involve calculations of how much people would be willing to pay to haveaccess to recreation areas of a certain level of quality, requiring a survey of socialpreferences. However, recreational benefits are as real and important as direct benefits andcannot simply be ignored. Often, proxy information is used referring to how many people visitcoastal or marine parks for recreation in combination with indicative travel cost data andentrance fees costs to estimate the social valuation of access to protected or natural coastalareas. In the basence of information of this kind it is reasonable to classify this source ofbenefit as qualitative. The interesting question here is to investigate with a surveyquestionnaire how much the local and the national population would be willing to pay toensure that the coastal environment is preserved through coastal management actionsincluding the provision of sewerage infrastructure. Lack of information should not encouragean attitude of ignoring recreational benefits because that would imply putting a zero value onrecreation enjoyment, which is clearly at least misleading.As a partial assessment of recreational benefits may be made in connection with therelocation of the solid waste dumping site from Kibarani to Mwakirunge in the north. Otherthan alleviating the source of ground water and air pollution to the surrounding areas, theFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200024

elocation of the dumpsite at Kibarani to another area will release the site for recreation at thecost of $520,000 reflecting the minimum value attached to pollution-free recreation. Lack ofdata on the size of the population who will be using the area to derive a per capita value andapply it to the whole population, means that this category of benefits will be classified asqualitative.6. MangrovesMangroves are an example of an ecosystem generating both use benefits (poles, charcoal,fire wood, etc.) and non-use benefits (nursery grounds, coastal stabilisation, filtration, etc.).The distraction of mangroves is often caused by harvesting of wood for construction polesand firewood for the immediate needs of coastal communities. These community productshave a direct use value which should be compared to the indirect productivity of mangrovesfor fisheries in the adjoining areas. Data from Mozambique (Hatcher et. al. 1989) indicate thatthe mangrove yield is about 0.5 tons per ha, representing 40 kg per ha per year and a valueof $300 ha/year. The Kenyan coast has about 25,000 ha of mangroves giving an indirectvalue of $7.5 per year. There is no data on the area of mangroves lost in Mombasa, but usingdata form Mozambique for the period 1990-92 during which the average annual reduction ofmangrove areas was about 288 ha, or 2% per year, the indirect productivity cost may beestimated at $150,000 per year. The economic-environmental question is to compare thisindirect benefit loss with the value of poles and fire wood representing the direct use benefits.Without detailed reliable data to verify the net amount it is unwise to place a money value onthe loss of mangroves from an economic point of view. But certainly the cost of protection ofmangroves as an ecological system cannot be considered to generate no indirect value, forthe same reason that standing mangroves cannot be considered to have zero value.7. BiodiversityThe existence value of the environment is a very elusive parameter but one of potentially highvalue. It refers to the value that people themselves place on the preservation of theecosystem free of any use for productive activities. It is the social value of the ecosystem aspart of the natural heritage. The Kenyan coast is a rich ecosystem area characterised by coralreefs, diverse sea grasses and other marine life. Economic valuation is constrained by thedifficulty of establishing proxy values to make up for the lack of market prices and reveal thedemand for coastal and marine diversity. On the other hand, it is unwise to ignore biodiversityvalue and leave it outside the decision-making process. Estimates are typically based onContingent Valuation studies that attempt to utilise survey results which show the responsesof people to questions referring to their willingness to pay for conservation of coral reefs,excluding production and development considerations. There is no such information forKenya or any other part of the region. Such data are rare in any case. A recent review of theempirical biodiversity literature stresses the following:• Existence valuations are rare – only one study estimated the existence value of coral reefsites, that of the Great Barrier Reef;• Most valuation studies involve coral reefs are concerned with their recreational and touristuse value;• The most commonly valued harvested product of coral reefs is fisheries, but the naturalsystems underlying the harvest (e.g. reef-fish relationship) are simplified, if not ignored,and• Coastal protection afforded by the coral reef habitat is the only ecological function valued.Two known studies are often quotes. Hundloe 1987 estimated the existence value of coralreef habitat using a contingent valuation method for the value of coral reef sites within theGreat Barrier Reef in Australia calculated at A$45 million a year. For the Galapagos NationalPark, de Groot 1992 estimated the “inspirational” and “spiritual” value of reefs at $0.72 per ha.Cynthia Cartier and Jack Ruitenbeek, in Integrated Coastal Zone Management of Coral Reefsby Kent Gustavson (ed.), World Bank, 2000Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200025

6. Estimated Annual Cost of Environmental ImpactsTable 13: Estimated Annual Cost of Environmental Impacts in Monetary ValuesImpacts Annual cost inCommentsmillion US$1. Fisheries 0.5 Half of the reported production losses2. Tourism 15.0 Based on half of the revenue losses estimatedfor other countries (no relevant data available)3. Property 26.7 Estimated loss of value due to proximity topolluted areas4. Health 2.43.3Diarrhoea and skin diseases onlyChild death–human capital valuation for loss ofincome only5. Recreation Qualitative benefitsNot quantified6. Mangroves 0.1 Tentative estimates of mangrove losses7. Biodirersity Qualitative benefitsNot quantifiedTotal 48.0The estimates worked out above are partial as they cover only part of the total environmentaldamage perceived to be caused by wastewater pollution. Only production-related impacts arepossible to cost; indirect and non-use costs are classified as qualitative without a monetaryvalue. The annual approximate cost is $48.0 million reflecting the losses to society,expressed in monetary costs for the loss of fisheries, tourism, property productivity and healthcosts.The avoidance of these costs by wastewater investment and related actions willconstitute at least part of the value of benefits to accrue from such actions.Table 14: Cost – Benefit Analysis ($ million)Estimated Capital Cost of Sewerage System 100.0Plus: Annual operating cost capitalised at 10% for 25 years 45.0Total Investment Cost 145.0Estimate value of annual benefits (avoided cost) 48.0Present Value of estimated benefits (10% for 25 years) 435.7Net Present Value 290.7Benefit / Cost Ratio 3.0Sensitivity Analysis assuming 25% varianceEstimated Investment Cost 25% higher 145.0 x 1.25 = 181.2Estimated Benefits 25% lower 435.7 x 0.75 = 326.8Net Present Value 145.6Benefit / Cost Ratio 1.87. Assumptions and Results1. Approximate estimates. The calculations should best be regarded as order-ofmagnitude.Economic estimates are heavily dependent on the quality of data and thelevel of detail aimed at. Nevertheless, the analysis and the quantitative estimatespresented demonstrate the principles, methods and assumptions underlying theapplication of the techniques of Cost-Benefit Analysis to wastewater strategies. Furtherand better data, as they become available, will serve to refine the results given theguidelines, the logical framework and the relationships developed in this Study.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200026

2. Capital cost. The capital cost used concerns the estimated investment for theconstruction of the proposed Sewerage System for the whole Mombasa District based ona combination of cost indicators and data provided from national sources.3. Operating cost. The estimated operating cost is capitalised and added to the capital costto arrive at the total cost.4. Estimated benefits. The estimated annual benefits over the next 25-year period areexpressed in terms of Present Value for comparison with the total capital cost.5. Net Present Value. The Net Present Value (benefits minus costs) shows the net value ofthe Project (or the net “wealth” created for society). It is noted that Cost-Benefit Analysisdoes not focus on the financial implications (funding and cash flows) of the proposedproject from the point of view of the implementing agency, but to the saving quality ofresources for future use by society.6. Benefit / Cost ratio. The Benefit / Cost ratio shows the coverage of costs by theexpected benefits and, like the Net Present Value, is an indicator of the social viability ofthe proposed Project. The ratio of benefits to costs is 3.0 meaning that the benefits arethree time the costs.7. Sensitivity Analysis. A simple sensitivity analysis is attempted to show the changes tothe results from higher costs and lower level of benefits. The percentage of 25% may beconsidered too high but it is wise to used it when cost estimates are broad and benefitestimation contain possible errors an inaccuracies inherent in the data.8. Lack of cost information on measures and administrative expenditure. This Cost-Benefit Analysis does not include the cost of other measures on which information is notavailable. There are data problems that should be mentioned. First, it is difficult toestimate the cost of institutional and legal measures and expenditure for strengthening ofdepartmental responsibilities for monitoring, research, etc. Many measures may havecost overlaps, synergies or “economies of scale”. Lack of such information does notnecessarily pose major problems, for it is possible to take account of "other investmentcosts" by the difference between cost and benefits and the extent to which additionalcosts would still be covered by the benefits from wastewater infrastructure. In any casethe sustainability of the benefits from wastewater infrastructure pre-supposes effectivecoastal zone management, legal enforcement of environmental standards, capacitybuilding, etc.9. Capacity building support. It should be clearly understood that the benefits of pollutionmanagement cannot be fully realised by one-track infrastructure investment in buildingand operating a sewerage system, even though it may be the single most importantinvestment cost. Integrated environmental management programmes, coastal zoneplanning and commitment to sustainable development are essential constituentcomponents of pollution management.10. The Cost of other Investment. How does this Cost-Benefit Study help in taking intioaccount "other investment"? How may this apparent gap be tackled? The above analysisshows a NPV of $291 million, or at least $145 million. It is possible to suggesttherefore that additional management, institutional, legal, research and otherinitiatives, which are in any case required to support the long-term objectives ofinfrastructure projects, should be implemented even if they cost up to $145 – 291million. In CBA terns such level of expenditure over time would be justified. Of course,the separate question of financing such expenditure remains.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200027

2.2 DAR ES SALAAM CASE STUDY2.2.1 IntroductionPopulation. DSM is the commercial capital and largest urban center in Tanzania. DSMregion has an estimated population of 3.5 million, 547,000 households with an average size of6.4 persons. Population growth has since 1988 been about 8% per year. 70% of thepopulation live in 40 unplanned settlements. The region has three administrative districts: IlalaKinondoni and Temeke.Table 1: Population distribution by District, 1999DistrictPopulationIlala 800,000Kinondoni 1,200,000Temeke 1,500,000Total 3,500,000Source: Dar es Salaam City CouncilUrbanization. Urbanisation is the most dynamic factor underlying most of the immediatecauses of environmental degradation. Rapid urban population growth imposes heavydemands on the already densely inhabited housing areas, most of which are unplanned andlack organised sanitary and wastewater infrastructure systems. Urban population growth inDSM is currently around 8% per year outpacing the limited capacities of municipal authoritiesto supply adequate infrastructure facilities. It is estimated that 70% of the population live inover 40 unplanned communities covering an area of 10,000 ha. Uncontrolled disposal ofwastewater and solid wastes is a common problem affecting water sources and livingconditions in all unplanned settlements, particularly in settlements such as Manzese andVingunguti. Outbreaks of water-borne diseases are frequent during the rainy seasons.Water Resources. The region contains watersheds centred around 4 major rivers: Mpiji Riverto the northern boundary of DSM, Msimbazi River flows to the north of the city centre andKizinga and Mzinga Rivers flow into the harbour area of the city. There are also smaller watercourses such as Nyakasangwe, Tegeta, Mbezi, Sinza, Tabata, Minerva. Surface water comesfrom Ruvu River outside the city boundary and the region will always rely on external surfacesources as groundwater is not only polluted from effluents but contains high degree of salinity.Streams provide water to poor families in the unplanned settlements who cannot afford topurchase water commercially.Industry. 80% of the nations’ industries are located in the DSM region. In 1999 there were412 industries on the register of the Ministry of Industries and Trade, including some whichmay have since ceased to operate.Tourism. The coastal climate is favourable to beach tourism. In DSM there are more than 13tourist hotels, and new ones are under construction, with a total of 5,000 beds. The main onesinclude the Sheraton Hotel, New Africa Hotel, Kilimanjaro Hotel (now inoperative),Silversands Hotel, Whitesands Hotel, Jangwani Beach Hotel, Haven of Peace Hotel, Sea CliffHotel, Africana Hotel, Kunduchi Beach Hotel, Bahari Beach Hotel, Oysterbay Hotel, KaribuHotel. According to the Ministry of Natural Resources & Tourism and the Tanzania TouristBoard, the annual average number of tourist is about 201,000 with average annualexpenditure of US$ 190 million.Commercial and Industrial activity and the "Informal Sector". The "informal sector"dominates the economy of DSM. In the last 10-15 years industrial sites sprawled and doubledin size, small-scale commercial, industrial and service units mushroomed in city-centrepavements, road junctions, transportation terminal sites, and along arterial road reserves,absorbing the city unemployed labour force and the rapidly growing number of rural migrants.In 1991, the Ministry of Labour and Youth Development counted more than 210,000businesses with an average of 1.5 jobs per enterprise. Informal sector units are survivalFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200028

activities but it is estimated to generate about 33% of the officially recorded Gross DomesticProduct. Earnings per worker are 2.6 times higher the minimum wages in the urban formalsector..Agriculture. Of the total area of DSM of 1,350km2, an area of 430km2 (or 32%) is taken upby urban development, 20km2 is forest land and 900km2 (or 67%) is rural only part of it inagricultural use. Agriculture is however the main activity within the region. Satellite imagepictures suggest that as much as 23% of the area of the region is used for agricultureproduction.Fishing. The total population of fishermen is disputed, estimates range from 3,000 - 50,000.This vast difference is explained by the small number of licensed fishermen relative to themuch larger number of non- registered fishermen. Despite the number of rivers crossing thecity and the few fresh water lakes and ponds, inland fisheries are limited. Offshore fisheriesare extensively exploited by small-scale fishermen trawling and netting the coastal waterslanding on average some 50,000 kg annually, marketed for more than TSh. 3.0 million.Estimated income. The average annual contribution of DSM region to the national GDP isreported at about 33% and the per capita income at about TSh. 197,000, both highercompared to other regions. The current average wage in DSM is $250. It is estimated that inthe informal sector earnings per worker are 2.6 times higher minimum wages, that is $650.Domestic wastewater services. DSM has no operative sewage collection infrastructure. Thesewerage system is old and degenerated. It covers an area of 130km of sewer, covers 15%of the households and consists of 11 networks supported by 17 pumping stations, includingthe City Center, parts of Sinza, Ubungo and Vingunguti. It was built in the late 1950's and itsattempted rehabilitated in the period 1980–1988 has been unsuccessful. Sewage from theareas supposed to be served is discharged into oxidation ponds and directed to the oceanuntreated. Poor managing of these ponds result in overflowing and spreading of sewer to thesurroundings. Only 4 of the 8 oxidation ponds are considered to be operating (University ofDar-es-Salaam, Kurasini, Mikocheni and Vingunguti). 80% of the households in the rest ofDSM use on-site pit latrines and septic tanks. High water table in various parts of the cityduring the short and long rains further compounds the poor sanitary conditions with many pitsoverflowing into the drainage system emptied manually, often by the families themselves andoccasionally by private companies at a cost.Industrial wastes. The rapid growth of informal sector activities generates industrial wastesin settlement areas and near rivers adjacent to coastal areas. Disposal methods areuncontrolled compounding the domestic wastewater loads reaching the settlements, riversand coastal areas. Car repair and washing activities are often near streams (e.g. Msimbaziriver along Jangwani, near Kilimanjaro Hotel etc) discharging dirty water covered with layersof oil. Within the city industries are concentrated mainly in the Mikocheni light industrial area,Nyerere road industrial area, Changombe industrial area, Morogoro Road industrial area,Mandela express industrial area and Mbezi along Ali Hassan Mwinyi road.• Msimbazi river has been found to be heavily polluted due to effluents from industriesalong Nyerere road industrial area (e.g. Vingunguti abattoir), Morogoro road (e.g.Tanzania-China Friendship Textile mill), Mandela road (e.g. Tradeco Ltd), TanzaniaBreweries Ltd. Dar es Salaam plant, leachate from Vingutinguti crude dump.• Karibu Textile Mill discharges its effluent to the Mzinga River.• Leachate from closed Kabuma crude dump (in Temeke) flowed into the ocean (nowclosed ).Table 2: Pollution load to surface water resources (kg/day)TypeIndustrialEffluent Pit latrines SepticWithoutfacilities TotaltanksBOD 28,330 15,282 3,275 9,897 56,784COD 29,904 16,131 3,457 10,447 49,776Suspended solids 47,216 25,470 5,458 16,495 78,429Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200029

Dissolved solids 83,940 45,280 9,830 29,325 138,923Total N 4,145 2,236 479 1,448 6,859Total P 787 425 91 275 1,302Source: Managing sustainable growth and development of DSM by SDPTable 3: Pollution load to groundwater Resources (kg/day), 1991 ProjectionsSeptic Sewer Losses Total (tons)Type No facility Pit latrines tanks Domestic industryBOD 1,100 15,282 7,641 1,221 1,899 27COD 1,161 16,131 8,068 1,289 1,1994 29Suspended1,833 6,116 3,832 2,035 3,148 18SolidsDissolved3,258 97,857 61,128 3,618 5,596 196SolidsTotal N 120 4,829 3,018 3,618 5,596 10Total P 23 915 572 34 52 2Source: Managing sustainable growth and development of DSM by SDPTable 4: Concentration of heavy metals & petroleum hydrocarbons along the Coast, 1993MetalAreaAfricana HotelbeachKawe beach(Mbezi river)Kawe/MsasaniMlalakuwaMsimbazi bayMsimbazi riverFerry(part area)riverZinc Present Present PresentIron Present Present Present PresentManganase Present PresentOil Present PresentSource: Msafiri M. J. Marine Pollution Studies along Dar-es-Salaam, NEMC, 1993.2.2.2 COST-BENEFIT ANALYSISTable 5: Socio-Economic Summary Data (extracted from the National Report on DSM)Population3,500,000 (70% in 40 unplanned settlements)Annual average growth rate 8%(1988-1999)Area of DSM region1,350 sq.km.Average population density 2,592 persons / sq.km.Average income per capita 250 US$ (informal sector earnings reported at 650 US%)Estimated informal sector 315,000 persons (33% of formal sector GDP)employmentNumber of industries in DSM 412 registered establishments (80% of national formalsector industrial activityTourism201,269 tourists, expenditure $190 million($944 per tourist per year - average 10 days - 95 per day)Solid wastes2,220 tons/day (23% collected and disposed) the restdisposed in open channelsPollution load to surface water 56,800 kg/day BOD, 78,500 Suspended SolidsPollution loads to ground water 27 tons/day BOD, 29 tons/day Suspended SolidsPopulation served by sewerageinfrastructure10-15% of the population (80% served by pit latrines andseptic tanks)Area of mangroves2,266 haInfant mortality rate 102/1000Child Mortality rate 163/1000Health indicatorsAll Diseases• Malaria• Diarrhoea• Skin-eye diseasesTotal 584,000/yr., deaths 130/yr320,000 /yr., 25 deaths/yr.125,000/yr., 22 deaths/yr.132,000/yr.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200030

• Disentery• Cholera• Typhoid5,200/yr.1,440/yr., deaths 77/yr.400/yr., deaths 5/yrNote: Author's summary based on information in the National Report1. Summary of Existing Information of Wastewater Sources and Pollution ImpactsIt is important at the outset to focus on the key links between wastewater sources, theperceived impacts and the resources affected. The table below is intended to serve as a anoutline of the pollution linkages based on the information presently available and a frameworkfor identifying gaps to guide future data collection and refinement.Table 6: Outline of Sources of Pollution and Resources AffectedActivities and Main Source Areas Impacts on Resources LocationsDomestic wastewater1.Water quality and living Msimbazi creek and bay• Unplanned settlements accountingfor 85% of DSM population notserved by any infrastructureconditions in thesettlementsOyster bayUnplanned Settlements(Manzese, Vingunguni, etc.)Industrial effluents and wastes• Nyerere road• Micochemi industrial area• Changombe indutrial area• Morogoro road area• Mandela industrial area• Mbezi / Ali Hassan Mwinyi road• Kamuma dump site (now disused)Agricultural wastes• Vigunguti dump siteLand-based oil spills• Kigamboni and DSM harbourMining near the coast• Mbagala, Chamzi, Pande,• Twangomna, Majohe, Makongo,• Kitunda, Bunju2. Contamination of creekand river systems fromthe disposal or overflowof sewage fromsettlements3. Degradation of thecoastal and marineenvironment fromsewage, river runoff andsediment ultimatelyreaching the coastal andmarine ecosystem4. Land degradationerosionNote: Author's summary based on information in the National Report2. Proposed Wastewater ActionsMsimbazi River,Mzinga River / Kawe beachOcean, Africa beach hotel areaCreeks and rivers (Mpiji,Msimbazi, Kizanga and Mzinga)Harbour areaMbagala, Chamzi, Pande,Twangomna, Majohe, Makongo,Kitunda, BunjuThe National Report provides a list of several proposed actions. The cost information ishowever patchy and inadequate. Information on projects does clearly distinguish thosealready completed from those either presently under construction or planned for future 5-10year period. Also, it is not clear which of the listed projects are regional, for the whole DSMregion, and which are for the city of DSM.The projects listed are cited below and include on-going initiatives/programmes and proposedprojects:Projects1. Suitability of ground water DSM - Guidelines for the monitoring of wells and wetlandsagainst contamination. (1999–2000). UCLAS Department of Environmental Engineering DSM.(Cost $10,000)2. Design Study for Domestic Wastewater Treatment Infrastructure – UASB project (1993 –2001) UCLAS Department of Environmental Engineering DSM. (Cost not available)3. Nation-wide Inventory on Obsolete Pesticides and Veterinary wastes - Chemical WasteManagement Project, NEMC Project (1997–1998), financed by the Royal NetherlandsEmbassy). (Cost not available).Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200031

4. Institutional Capacity Building for EIA - Pollution Control and legal activities (1999–2002)financed by SIDA. (Cost not available).5. Restructuring of DSM City Council City Commission (1996–2000). (Cost not available).7. Risk Assessment of Chemicals and Inventory of Persistent Organic Pollutants in DSM(1999-2000) - Chief Government Chemist Agency. (Cost not available).8. Community-Based Program on Waste management at Keko. (Cost not available).9. DSM Water Supply Project (to prevent DSM water supply from further deteriorating andcollapse) - IDA CR.2867 component / DAWASA. (Cost not available).10. Urban Strategic Plan of DSM. (Cost not available)11. Sustainable Development Programme in DSM City – Establishment of effective coastalgovernance focused on ICM policy formulation - demonstrating intersectoral mechanism,linking local/national ICM initiative, building IMC human and institutional capacity,disseminate of ICM experience regionally and globally - TCMP / NEMC project (1997 –2001). (Cost US$ 3.9million).Legal / Management Measures• Establishment of legal and institutional framework for public and stakeholdersparticipation in environmental management and sustainable development• Improving co-ordination across relevant environmental institutions.• Incorporation of sectoral policies for implementation of national environment policy• Amendment and upgrading of outdated legislation, harmonisation of existing laws andenactment of new legislation.• Strengthening of co-ordination and enforce mechanism.• Improve capacities relating to the responsibilities under regional and multilateral treaties.• Introducing appropriate quality standards for pollutants.• Establishment / improvement of institutional structure for the role and responsibilities ofmunicipalities (strengthening local government and local NGOs for participation inenvironmental planning and implementation• Establishment / improvement of information management systems -,centralised datacollection, processing, dissemination and networking• Programme for marine scientific research• Establishment of financial management and economic studies to improve and enforcerevenue collection• Encouragement of privatisation and contracting of service delivery for gradual introductionof cost recovery mechanisms• Establishment of effective environmental monitoring system• Sensitisation programmes on sustainable development and use of marine and coastalareas• Application of policy instruments including financial incentives and market-basedinstrumentsTwo further observations must be stressed: (1) It is likely that the above list is far fromcomplete (2) The actions listed include legal and institutional strengthening measures foraddressing the broader spectrum of issues of coastal zone management and resourceconservation. However, this Study focuses on wastewater management and does not coverthe whole list of the "supportive" measures.3. Estimated Cost of the Proposed Wastewater ProjectThe estimated cost of the project is not available from the national sources. The costestimated here is approximate and is attempted to take the Cost-Benefit Analysis further andFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200032

provide the opportunity for evaluation and decision-making in light of the conclusions reachedfrom this Study and further as they become available. For this purpose reasonableassumptions are made, to set up the analytical framework, produce an approximate costestimate and show how a Cost Benefit approach may be applied to identify problems, clarifydecision-making issues and support capacity-building actions.In the first instance, a cost estimate may be based partly on relevant indicators and partly onthe estimated cost for the Mombasa District Sewerage Project (see Mombasa Cost BenefitAnalysis). The Mombasa Sewerage Project is estimated at about $100 million for a populationof about 650,000. Applying the DSM and Mombasa population ratio as an indicator forestimating the cost of the DSM Project, resulting ratio is 5.38 (3,500,000 / 650,000). On thisbasis the cost for DSM may be estimated in the region of $500 million. This seems a crudeestimate as well as problematic in terms of affordability.Further refinement should be attempted. A particularly useful information is the fact that 70%of the population of DSM region (2,450,000) live in sparse unplanned settlements located inthe peri-urban areas and the remaining 30% (1,050,000) in the city of DSM. Applying the costindicators referring to technical options identified in the GPA Draft Recommendations forDecision Making on Sewage, also used for the Mombasa Study, the cost may be estimatedat $222 million, $210 million for the city of DSM and $12 million for the peri-urbansettlements, as shown below as Option 2.Table 7: Technical Options and Estimated Capital Cost of Wastewater ManagementOption 1.All population served by off-sideCostMillionOption 230% of the population served byCostmillioninfrastructure and treatment plants $ off-side infrastructure and $treatment plants and 70% by onsitedisposal options3,500,000 x 200 per person 700.0 1,050,000 x $200 per person2,450,000 x $5 per person210.012.25Total 700.0 Total 222.25Note: Cost indicators based on Table 1.1 "Cost Range per capita for On-Site and SeweredOptions", GPA Draft Recommendations Report, 2000If the annual operating cost is estimated at 5% of the capital cost, the annual operating costswill be $10.5 million and $0.6 million respectively, totalling just over $11 million a year.4. Cost - Benefit Valuation ApproachThe first step in the development of Cost-Benefit Analysis is to define the valuation methodsand indicators applied to guide the estimation of quantitative and qualitative impacts (costsand benefits) resulting from environmental changes. Those changes accumulated underpresent wastewater conditions (that is, the costs of degradation) and those changespredicted to occur as a result of the improvements associated with the provision ofsewerage (that is, the benefits of actions).There are three main categories of value relative to which costs and benefits are estimated:Direct use value, indirect use value and non-use (existence) value. Costs are associated withreduction of the use and non-use value of the environment, while benefits accrue from actionsand investment that reduce or eliminate the costs and improve environmental quality. Thevaluation approach helps in establishing the link between information on environmentalchanges/impacts and their socio-economic significance and the estimate of the positive ornegative values of these changes, expressed as costs or benefits.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200033

Table 8: Classification of ValuesType of ValueValuation approach and indicatorsDirect UseChange in the productivity/output of activities that use environmental resources, resulting fromchange in environment conditions / qualityTourismIndicator: Change in tourism revenues and avoided lossesFisheriesIndicator: Change in fisheries production and revenues and avoidedlossesHuman Health Indicator: Treatment costs, loss of work-days and loss of life due toenvironment-related diseasesPropertyIndicator: Increment / loss of property valuesIndirect UseChanges in recreation, leisure and amenity opportunities, beach stability and quality offeredto the public in and near coastal areas due to change in environmental conditions / qualityRecreation and Indicator: Number of people and cost of visiting clean and unspoiledamenitycoastal sites reflecting people’s valuation of recreation opportunitiesNon-UseExistence value of environmental quality – biodiversityPreservation of coastal, Indicator: People’s willingness-to-pay for maintaining marine andmarine and landscape coastal biodiversity (quantitative and qualitative information fromquality, cultural and surveys)natural heritageThe next step in the development of the Cost-benefit Study is to assess, on the basis of theavailable information, the existing impacts from wastewater sources and estimate theirapproximate costs. These costs are essentially the costs of inaction. The importance andextent of the costs of inaction, which grow without appropriate wastewater investment,provide the benchmark for cost-benefit evaluation of the priority for such investment and theeffectiveness of alternative technical and investment solutions.5. Environmental Costs - the Costs of InactionDirect Costs1. FisheriesThe available data indicate that fisheries production is about 5,000 MT per year valued atbetween $5.0 to $10,0 million. There is no hard data on trends to estimate the amount ofannual production and income losses. In the absence of data and in light of the reported state ofmarine pollution and fishing practices, it is possible to assume that the annual loss may be inthe region of 10%. Further data should be used to refine this estimate. Thus, the cost ofpollution-related fisheries loss is estimated between $0.5 - $1.0 a year.2. TourismAccording to the National Report, DSM attracts about 201,000 tourists a year spending about$190 million, or $945 per person for a length of stay of about 10 days. There are no availabledata on recent trend to show growth or decline. Given the lack of pollution managementinfrastructure and the impacts on the " tourism productivity" of the coastal and marineenvironment, it can safely be assumed that tourism is under serious threat. This may betranslated into a possible annual decline of tourism by 5%, as a conservative low-estimate ofthe tourism impact in several countries experiencing pollution threats and problems,unsustainable coastal development activities, population pressures and lack of wastewaterinfrastructure and coastal zone management. In this case it is logical to assume that thegrowth of tourism and income from tourism will be affected, at best tourism arrivals remainingconstant or most likely reduction of tourist arrivals.Three possible tourist scenarios may be examined:• two scenarios without pollution control infrastructure (scenarios 2 and 3), and• a scenario with pollution control infrastructure (scenario 1):Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200034

Scenarios without Pollution Control Infrastructure• The favourable "No growth but no decline" scenario (2): Under this scenario tourismarrivals (and income) is assumed to remain constant at the present level of 200,000arrivals reflecting the (unlikely) situation of absence of immediate and acuteenvironmental problems.• The more realistic "Tourism Decline Scenario (3): Under this scenario tourism is assumedto decline on average at 5% a year, due to serious environmental degradation, reachingjust under 53,000 by the year 2025.Scenario with Pollution Control Infrastructure• Under this "Tourism Growth Scenario with infrastructure”, tourism is assumed to be ableto maintain its growth trend of 5% per year with arrivals reaching 700,000 by the year2025. It is noted here that it is debatable to envisage or desirable to plan for tourismgrowth without a Carrying Capacity Study and a Coastal Zone Management Strategy.The scenarios shown below are instruments to facilitate the estimate of the impact on tourismwith and without the proposed sewerage system.With ProjectYear (1)Trendgrowth5% p.a.Table 9: Tourism scenariosWithout Project(3)Likely CaseScenario5% decline p.a.(2)Optimistic CaseNo growthScenario(4)Cost(un-discounted)(1-3)2000 200,000 200,000 200,000 02001 210,000 200,000 190,000 20,000 x 945 = 18.92002 220,500 200,000 180,500 40,000 x 945 = 37.82003 231,500 200,000 171,475 60,025 x 945 = 56.72004 243,000 200,000 162,900 80,100 x 945 = 75.72005 255,000 200,000 154,750 100,250 x 945 = 94.72006 268,000 200,000 140,000 128,000 x 945 = 120.92007 281,000 200,000 132,500 148,500 x 945 = 140.32008 293,000 200,000 125,800 167,200 x 945 = 158.02009 310,000 200,000 119,500 190,500 x 945 = 180.02010 325,500 200,000 113,500 212,000 x 945 = 200.32011 342,000 200,000 107,800 235,200 x 945 = 221.32012 359,,000 200,000 102,400 156,600 x 945 = 242.52013 377,000 200,000 97,700 279,300 x 945 = 264.02014 396,000 200,000 92,800 303,200 x 945 = 286.52015 426,000 200,000 88,000 338,000 x 945 = 319.52016 436,500 200,000 83,500 353,000 x 945 = 333.52017 458,000 200,000 79,300 378,700 x 945 = 357.82018 481,000 200,000 75,300 405,700 x 945 = 383.42019 505,000 200,000 71,500 433,500 x 945 = 409.62020 530,000 200,000 67,900 462,100 x 945 = 436.72021 557,000 200,000 64,500 492,500 x 945 = 465.42022 590,000 200,000 61,300 528,700 x 945 = 500.02023 614,000 200,000 58,300 555,700 x 945 = 525.02024 645,000 200,000 55,400 589,600 x 945 = 557.22025 677,250 200,000 52,600 624,600 x 945 = 590.2The above scenarios form the basis for estimating the tourism cost of environmentaldegradation and the future cost-avoiding benefits. The basis is the difference between 5%annual tourism growth with infrastructure and 5% annual tourism decline withoutFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200035

infrastructure. As shown above, the un-discounted costs (foregone benefits) are estimated tobuild up to $200 million by the year 2010 and $624 million by the year 2025, with tourismexpenditure in constant prices at $945 per tourist for a 10-day stay. These money figuresover-estimate the real economic values.Two adjustments must be made: (1) gross tourism revenues must be expressed as netincome, or value-added, by taking out the cost of material input purchases and avoid doublecountingand (2) flows accruing in the future must be expressed in terms of present values.Value added is assumed to be 50% of gross revenue. Applying a value added co-efficient of50% (reducing revenues by half) and discounting at 10% and 5% results in values of $38.5million and $61.4 by the year 2010, respectively, and $27.2 million and $87.1 by the year2025 respectively. These figures will be used in the Cost-Benefit Analysis further down.Table 10: Present Value of Tourism Benefits in million $USPresent Value of benefits Discount rate 10% Discount rate 5%Year 2010 38.5 61.4Year 2025 27.2 87.1Note: Discounting to present values, the longer the time horizon of benefits the higher thereduction. Also, for the same time horizon, the higher the discount rate the higher thereduction.In light of the above, the present tourism cost of pollution may be estimated at justunder $9.0 million, taking half of the projected amount for the year 2001 in column 3(value added adjustments) discounted for 1 year at 10%.3. Property valuesThe available information does not offer indications if the areas affected by pollution haveactually suffered loss of value. It is generally known that properties near polluted beaches andcreeks are undesirable and either lose or do not appreciate in value. On the basis of theavailable information it is possible to estimate a rough figure for the number of properties in theplanned residential areas given that 30% of the population live in planned areas and theaverage household size is 6.4. This gives about 164,000 residential properties of various typesand values outside the unplanned settlements. It may be assumed that at a third (55,000) arelocated on the coast or in close proximity to the coast, and, further, that 25% (13,750 units) areof high value in the region of $50,000, while the rest are low-cost units or in locations unaffectedby environmental degradation. A conservative 5% loss of value (or lack of annual appreciation)would imply an estimated annual cost of $34.4 million. This does not take into account the lossof property tax revenue to the Government.4. HealthThere is no information on a “dose-response function” to show the response of water-bornediseases to changes in the quality of water exposed to pollution loads. The availableinformation refers to reports that show the number of incidence of diseases typically attributedmainly to water quality from sources affected by pollution from domestic and industrialsewage and municipal wastes. It is certain however that water pollution is the most severeenvironmental health problem. However, lack of basic infrastructure is more prevalent inareas where other factors contributing to disease are present such as poor hygiene, loweducation and low income. The most apparent link of health problems to liquid wastemanagement is access to sewerage infrastructure. Only about 15% of the population arereported to be connected to water-borne sewers, presently practically inoperative as a carriersystem.The available medical statistics for the period 1993-97 show that, on average, there are inDSM the following cases of diseases per year:Table 11: Average cases of disease per year for the period 1993-1997DiseasesNo of casesMalaria 326,000 (55%)Diarrhoea 125,000 (21%)Skin infections 132,000 (22%)Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200036

Disentery 5,200 (>1.0%)Cholera 1,500 (>1.0%)Typhoid 400 (>1.0%)Total 590,100 (100%)Malaria has the highest incidence (55%), while cholera the highest cause of death. On thebasis of the above figures, 118,000 cases of disease on average are reported a year(590,100 / 5 years). At an average cost of treatment of $13 per person, the cost of treatmentmay be estimated at $1.5 million a year. The loss of income from work-days lost, assumingonly about 50% (59,000 persons) are of working age, may be estimated at $1.6 million(59,000 x $27.0 loss of earnings for 15 days), totalling $3.1 million a year. Despite highunemployment, the availability of informal sector jobs would account for the assumed incomeloss. Infant and child mortality is reported to be 102/1000 and 163/000 per year respectively.If the population size of the age group 1-5 years old is about, say, 15% of the total populationof 3,500,000, the relevant population group amounts to 525,000 children, implying roughly anannual child mortality of between 53,550 and 85,575, or a mid-value of 69,500. The economicapproach to the valuation of losses from death is controversial as it may give the impressionof placing a value on human life. The economic approach focuses not on the value of life perse but on the cost arising from loss of productive years caused by death. On this basis, it ispossible to estimate the partial losses arising from child mortality. There are two mainvaluation methods to estimate the economic impacts. One is to estimate the willingness topay for improving sanitary conditions and avoid exposure to environmental-related causes ofmortality (differential risk or risk avoidance method) measured by the difference in thewillingness to pay for safe relative to unsafe sanitation and living conditions. The othermethod (the human capital method) relies on the estimate present value of loss of futureearnings. The human capital approach is much simpler and less dependent on detailedinformation. At an average wage of $650 per year, the estimated annual cost of loss of futureearnings for 69,500 children, starting 15 years after death (if death was avoided), is $45million. Since this income loss will occur in 10 years the present value of this cost today (ifdiscounting is applied - 10 years at 10%) is equivalent to $17.3 million per year.Indirect CostsTable 12: Health annual cost summaryTreatment cost$ 1.5 millionLoss of income during illness $ 1.6 millionLoss of earnings due to death $ 17.3 millionEstimated total$ 20.4 million5. RecreationRecreation benefits concern the enjoyment of coastal areas of natural beauty by the nationalpopulation. Tourism benefits have been considered above. Often, there is no market forrecreation in open access areas and valuation of such environmental services would need tobe based on information revealing the social valuation of recreation opportunities to the localpopulation. Such valuation would reflect the indirect benefit from the “services” ofenvironmental quality. There is no such information available from previous studies in EastAfrica. To estimate recreation benefits would ideally involve calculations of how much peoplewould be willing to pay to have access to recreation areas of a certain level of quality,requiring a survey of social preferences. However, recreational benefits are as real andimportant as direct benefits and cannot simply be ignored. In the absence of any informationon how many people visit coastal or marine parks for recreation and indications of proxyprices, such as entrance fees or travel costs, it is reasonable to classify this source of benefitas qualitative. The interesting question here is to investigate on the basis of a questionnairehow much the local and the national population would be willing to pay to ensure that thecoastal environment is preserved through coastal management actions including sewerageinfrastructure. Lack of information should not encourage an attitude of ignoring recreationalbenefits because that would imply putting a zero value on recreation enjoyment, which isclearly misleading.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200037

6. MangrovesMangroves are an example of an ecosystem generating both use and non-use benefits, likeforests which provide timber with use benefits and, among other things, nursery ground withindirect and non-use benefits that are obtained when mangroves are preserved. Thedistraction of mangroves is often caused by harvesting of wood for construction poles andfirewood for the immediate needs of coastal communities. These community products have adirect use value which should be compared to the indirect productivity of mangroves forfisheries in the adjoining areas. Data from Mozambique (Hatcher et. al. 1989) indicate that themangrove yield is about 0.5 tons per ha, representing 40 kg per ha per year and a value of$300 ha/year. The Dar es Salaam there are about 2,266 ha of mangroves giving an indirectvalue of $0.7 per year. There is no data on the area of mangroves lost in Dar es Salaam inthe past 10 years to derive an annual rate. But using data form Mozambique for the period1990-92 during which the average annual reduction of mangrove areas was about 288 ha, or2% per year, the indirect productivity cost is about $14,000 a year. It is now a question ofcomparing this amount with the value of poles and firewood harvested from mangroves.Without detailed reliable data to verify the net amount it is unwise to place a money value onthe loss of mangroves from an economic point of view. But certainly the protection ofmangroves cannot be considered to have zero value.7. BiodiversityThe existence value of the environment is a very elusive parameter but one of potentially highvalue. It refers to the value that people themselves estimate of the preservation of theecosystem free of any use for productive activities. It is the social value of the ecosystem aspart of the natural heritage. The Kenyan coast is a rich ecosystem area characterised by coralreefs, diverse sea grasses and other marine life. Economic valuation is constrained by thelack of information to make up for the lack of market demand and estimate a social demandfor coastal and marine diversity. On the other hand, it is unwise to ignore and leave it outsidethe decision-making process. Estimates are typically based on Contingent Valuation studiesthat attempt to utilise survey results which show the responses of people to questionsreferring to their willingness to pay for conservation of coral reefs, excluding production anddevelopment considerations. There is no such information for Dar es Salaam or any countryin the region and they are rare in any case.A recent review of the empirical biodiversity literature stresses the following:• Existence valuations are rare – only one study estimated the existence value of coral reefsites, that of the Great Barrier Reef;• Most valuation studies involve coral reefs are concerned with their recreational and touristuse value;• The most commonly valued harvested product of coral reefs is fisheries, but the naturalsystems underlying the harvest (e.g. reef-fish relationship) are simplified, if not ignored,and• Coastal protection afforded by the coral reef habitat is the only ecological function valued.Two known studies are often quotes. Hundloe 1987 estimated the existence value of coralreef habitat using a contingent valuation method for the value of coral reef sites within theGreat Barrier Reef in Australia calculated at A$45 million a year. For the Galapagos NationalPark, de Groot 1992 estimated the “inspirational” and “spiritual” value of reefs at $0.72 per ha.Cynthia Cartier and Jack Ruitenbeck, in Integrated Coastal Zone Management of Coral Reefsby Kent Gustavson (ed.), World Bank, 20006. Estimated Annual Cost of Environmental ImpactsThe estimates worked out above are partial and cover only part of the total environmentaldamage perceived to be caused by pollution, as only some of the impacts are possible to costand excluding qualitative impacts. The annual estimated cost summarised below is $64.8million. This reflects the losses suffered which, when action is taken to address/avoid them,will constitute part of the benefits from such action.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200038

Table 13: Estimated Annual Costs of Environmental Impacts in Monetary Values, 2000Impacts Annual cost in Commentsmillion US$Direct Costs1. Fisheries 1.0 Loss of production2. Tourism 9.0 Loss of tourism income3. Property 34.4 Reduction of value or lack of appreciation4. Health 3.117.3Treatment costs and loss of earningsHuman capital loss from deathIndirect Costs5. Recreation Qualitative impacts Not quantified6. Mangroves Qualitative impacts Not quantified7. Biodirersity Qualitative impacts Not quantifiedTotal 64.8 Partial estimateTable 14: Cost – Benefit Analysis of Future Sewage Investment(in million $)Year Capital Oper. & Total Benefits Net PV @ PVCost(1)Maint.Cost(2)Cost(3) (4)Benefits(5)10% 5%2001 - - - (65) (65) (59) (62)2002 100 - 100 (75) (175) (145) (159)2003 110 5 115 (84) (199) (150) (172)2004 12 10 22 (94) (116) (79) (95)2005 - 10 10 103 93 58 732006 - 10 10 116 106 60 792007 - 10 10 126 116 59 822008 - 10 10 135 125 58 852009 - 10 10 146 136 58 882010 - 10 10 156 146 56 9010-year Net Present Value (84) 92011 - 10 10 167 157 55 921012 - 10 10 177 167 53 932013 - 10 10 188 178 52 942014 - 10 10 199 189 51 962015 - 10 10 216 206 50 992016 - 10 10 223 213 47 972017 - 10 10 235 225 45 982018 - 10 10 248 238 43 992019 - 10 10 261 251 41 992020 - 10 10 274 264 39 992021 - 10 10 289 279 38 1002022 - 10 10 306 296 36 1012023 - 10 10 319 309 35 1012024 - 10 10 335 325 33 1012025 - 10 10 351 341 31 10125-year Net Present Value 565 1,479@Notes:• The cost column in column (1) shows the estimated capital cost of the SewerageSystem of $222 spread between 2002-2004.• The operating cost in column (2) is 5% for year 2003 on the capital cost of year2002 and 5% thereafter for the whole amount of 222. The annual cost is assumedto include maintenance.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200039

• The total cost in column (3) is made up of the capital and the operating costs.• Column (4) shows the benefits; for years 2001-4, before the system is in placeand the estimated annual environmental costs will continue to be incurred, theyare negative benefits or "dis-benefits". In year 2005 and after the environmentalcost will be avoided counted as benefits. The dis-benefits and benefits include theestimated annual costs as in the table "Estimated annual costs of environmentalimpacts in monetary values” totalling $65 million. The amount shown for eachyear increases and is made up of the constant amount of $ 56 ($65 minus $9million representing the tourism cost) adding back the estimated cost of tourismfrom column (3) of the Scenarios Table reduced by 50% to include only valueadded.Thus, for year 2002 the dis-benefits of $75 million include $56 million plus$18.9 million ($37.8 x 0.5) = $74.9 million. The same method is followed up to theyear 2025.• Column (5) shows the Net benefits, that is for the year 2001-4 when dis-benefitsare incurred it is the total investment cost plus the annual environmental cost, andfor the rest of the period when benefits accrue it is the annual benefits minus theinvestment cost.• The last two Columns show the discounted value at 10% and 5%, adding up tothe Net Present Value at the bottom of the Table of $565 million and 1,479million respectively. As a 10% discount factor is conventionally adopted in prefeasibilitystudies the estimated 25-year NPV at 10% is $565 million.Table 15: Sensitivity Analysis ($ million)Estimated Investment Cost 222Annual Operating Cost capitalised at 10% for 25 years 91 (10 x annuity factor 9.0)Total Estimated Investment Cost 313Present Value of Estimated Benefits at 10% for 25 years 878Net Present Value (25 years at 10%) 565Benefit / Cost ratio 2.8Estimated Investment cost by 25% higher 313 x 1.25 = 391Estimated benefits by 25% lower 878 x 0.75 = 659Benefit / Cost ratio 1.77. ResultsIt is important to stress once more that the calculations underlying the CBA Study should bestbe regarded as orders-of-magnitude. Economic estimates are heavily dependent on thequality of data and the level of detail attempted. Despite possible over- or under-estimationsinherent in the quality of available data, calculations may be adjusted in the light of moreaccurate data as and when they become available, according to the methodology and thesteps demonstrated here. The simple sensitivity analysis attempted here with variance of agenerous 25% should counterbalance some possible inaccuracies or estimation errors.Nevertheless, certain key results should be emphasised:1. The Net Present Value (benefits over costs) shows the value of the net “wealth” created bythe Project available to society. It is noted that Cost-Benefit Analysis does not focus on thefinancial implications (funding and cash flows) of the proposed project from the point of viewof the implementing agency, but to the saving and quality of resources for future use bysociety.2. The Benefit/Cost ratio shows the coverage of costs by the expected benefits and, like theNet present Value, is an indicator of the social viability of the proposed Project. The ratio ofbenefits to costs is between 1.7 and 2.8 meaning that the benefits are by that much greaterthan the costs.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200040

3. This Cost-Benefit Analysis does not include the cost of other measures on whichinformation is not available. This does not necessarily poses a major problem because, in theabsence of cost estimates, it is possible to make provision within the framework of Cost-Benefit Analysis for "other costs" (institutional and legal measures, strengthening ofdepartmental responsibilities for monitoring and research, etc), and see the difference in theNPV. In any case, (a) such measures are necessary to support wastewater initiatives and (b)institutional investments involve cost overlaps, synergies and “economies of scale” whenconsidered jointly with wastewater actions as part of an overall coastal managementprogramme. It should be clearly understood that the benefits of pollution management cannotbe fully realised by one-track infrastructure action focused on building and operatingSewerage Systems, although this may be the single most important investment cost.Integrated environmental management programmes, coastal zone planning and commitmentto sustainable development are essential constituent components of pollution management.The cost of policies and administrative actions are not reflected in this Case Study due to lackof cost data. This parameter needs to be taken into account.4. How then could the cost of "other measures" be taken into account wthin the framework ofthis CBA? The above analysis shows a NPV of $565 million. It is possible to suggesttherefore that additional management, institutional, legal, research and otherinitiatives, which are in any case required to support the long-term objectives ofinfrastructure projects, should be implemented even if they cost up to $565 million or$22-23 million a year. In terns of CBA such level of expenditure over time would be justified.Of course, the separate question of financing such expenditure remains crucial.5. CBA Case Study also provides the context for identifying preliminary design options atleast from the cost point of view to ensure affordability and application of sociallyacceptable cost-recovery tariff mechanism. The investment cost of the Project isestimated at $222 million to serve a population of 3.5 million. This should be furtherscrutinised to investigate additional cost-saving technical options and land use planningpriorities to target actions to the most polluted areas first. It would seem important toprioritise the locations with the most immediate pollution hot spots problems and target onthose areas where the benefit will be higher per unit of investment, or more accurately tomaximise net marginal benefit.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200041

2.3 BEAU VALLON (SEYCHELLES) CASE-STUDY2.3.1 IntroductionSeychelles is situated in the Western Indian Ocean between 4 and 11 degrees south of theequator. It comprises a group of 115 islands with a land area of 455 km 2 , spread over anExclusive Economic Zone (EEZ) of over 1.3 million square kilometres. The islands are allfound within a radius of 50 km from the main island of Mahé, which with a land area of 154square kilometres, amounts to one third of the total land area of Seychelles.The study area of Greater Beau Vallon is situated in the North West of Mahé and covers atotal area of 1,100 hectares, elevation varies from 0 to 880 metres. The area has an enclosedbody of water with two embryonic fringing reefs. The sandy beach extends app. 1.8kmbounds to the north with piles of granite rocks and to the west with granitic reefs. Apart fromthis beach the coastline of the bay consists of some small creeks separated from one anotherby the in-situ rock.About 20% of the land of Beau Vallon is urban development with housing and hotels. There isrelatively dense development along the coast with three of the island’s largest hotels andseveral guesthouses and restaurants. It is a prime tourism and leisure activity area. It is alsoan important fish-landing site, with some limited fishing activity.Population. The area of Beau Vallon has a population of some 7,000, or 9% of the totalSeychelles population. The annual population growth rate is estimated at 2%, the number ofinhabitants per dwelling is 4.5 and urban development density is at 10–15 dwellings perhectare. Plans for the sub-division of land are already under way, and new development ofapartment buildings in the next five years will increase population and land use conflicts. Atotal of 512 additional units will be completed in the study area in the next years,corresponding to a net population increase of some 1,152 inhabitants.Table 1: Population Projections for Greater Beau VallonYear 1995 2002 2010Population 6,501 7,617 8,924Source: SOGREAH, 1996Tourism. Tourism is the mainstay of the Seychelles economy and it is likely to remain so inthe near future. The sector accounts for approximately 18% of GDP, employs one fifth of thelabour force generating the major part of foreign exchange earnings and a significant sourceof government revenue.Tourist arrivals have increased from 37,000 in 1975 to 130,000 in 1998. According to theDivision of Tourism, in January 1999, there were 21 large hotels, 79 small hotels and 32 selfcatering establishments, providing altogether some 4840 beds.Most of the large hotels are now privately-owned by international firms. A number of familyrunsmall hotels have been built in the last 10 years. Service industries directly related totourism include restaurants, bars, discotheques, shops and watersport facilities. The tourismsector provides employment and business opportunities to a wide range of services(entertainment services, taxi drivers, etc.). It has been calculated that on average theexpenditure of 18.7 tourists creates one direct job in the tourism sector itself, and for everydirect job an additional 1.38 secondary jobs are created in the other sectors of the economy(Grandcourt, 1995).Table 2: Tourism Projections for Greater Beau VallonNumber of rooms 1994 2002 2010Hotels 383 685 685Guesthouses 96 201 252Total 479 886 937Source: SOGREAH, 1996Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200042

Public ServicesExisting services include schools, a home for the elderly and a district clinic. Their impact isincluded in the domestic requirements calculations presented further on in the document.Recreational SectorBeau Vallon is a very important zone for recreation not only for the tourists but also for thelocal community. Recreational activities include swimming, snorkelling, diving and watersports. The recreational sector provides additional employment and maintains a state ofholiday ambience in the area.Hydrology. Overlooking the Beau Vallon/Bel Ombre area are heights of up to 880 m inaltitude at the Morne Seychellois mountain group. There are two main rivers emptying into thebay, the Sullivan river and the Mare Anglaise river. These form the main estuaries in the area.There are also five smaller rivers in the study area. There is no in-depth seepage and virtuallyno groundwater reservoirs. In spite of the retarding effect of the very dense vegetation, therunoff water concentration times are very short (from 15 to 60 minutes). As a consequence,rainfall immediately causes flooding in certain areas. The land area of the catchment isbetween 1000 and 1100 hectares.Oceanography. The oceanographic data shows clear alternate phenomena depending onthe prevailing wind direction: during the trade wind period the currents veer counter clockwisein the bay, while it reverses in a clockwise direction during the Northwest monsoon. Thecurrent speed is in any case extremely week, making the bay a confined area. As the bay issheltered from strong Southeast swells, there is a net surplus input of fresh water from theland (SETOI, 1990).Geology and Soils. Low-lying areas of Beau Vallon are the coastal plain area and low-lyingareas around the main river mouths. The sediments of the former are dominantly calcareouswhilst the latter are characterised by sediments consisting of fine clays and quartz derivedfrom laterites. The coastal shorelands of Beau Vallon consist entirely of calcareous sands.The soil types in the mountainous areas behind the coastal plain comprise laterite andkaolinitc clays forming red earth giving a base of dense vegetation.Beach Characteristics. The sandy beach of Beau Vallon is approximately 1.8 kilometreslong with an average width of 30 metres at low tide. Sand dunes exist only in a few smallareas protected by beach debris and by Takamaka trees. The sand is yellowish-white incolour and fine to medium. The Beau Vallon Beach is the most built-up beach in Seychellesand sea walls and buildings on the high water mark are evident. The beach is very active andseasonal movement of sand takes place. However, there is definite evidence of beacherosion characteristic of such highly disturbed sandy coasts (Shah, 1998).Ecology. The ecological characteristics of the Beau Vallon coastal zone are numerous bothspatially and in biodiversity, which include brackish water marshes, coastal vegetation, coralreefs and other marine fauna and flora (Payet, 1995). There are eight areas that can beconsidered as special ecosystems:Table 3: Special EcosystemsArea In m 2 DescriptionNorthern Fringing Reef 700,000 Coral ReefSouthern Fringing Reef 260,000 Coral ReefNorthern Fringing Reef Flat 250,000 Inter-tidal and Littoral EcosystemSouthern Fringing Reef Flat 62,500 Inter-tidal and Littoral EcosystemMare Anglaise River Estuary 5,500 Ecosystems of Estuaries and Enclosed SeasSullivan River Estuary 3,900 Ecosystems of Estuaries and Enclosed SeasMare Anglaise River Wetlands 46,800 River and Stream EcosystemsSullivan River Wetlands 15,600 River and Stream EcosystemsSource: Grandcourt, 1995Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200043

In the marsh areas, various species of mangroves are predominant with a host of crab andbird species. The amount of dissolved oxygen is usually very poor, ranging from 2 to 4 mg/l.This often allows for the propagation of anaerobic conditions within the marsh area. Thesemarshes act as buffer zones to reduce fresh water intrusions on the coral beds and provide azone of stabilisation and degradation of organic matter (Payet, 1995).Artisanal Fisheries SectorFish is the staple diet of the island and fish consumption is expected to increase further withthe development of more processed fish products. The percentage of the total workingpopulation engaged in fishing has risen from 3.6% in 1977 to about 9% to date; at least 50%of these are self-employed. Coastal fishing at the Beau Vallon bay is mainly dominated byhand-lines, traps and beach seines. The most important species caught are Carangidae, thered snapper, green snapper, groupers, and the Indian mackerel (Grandcourt, 1995).With about 25 fishing boats, the greater Beau Vallon area is the second largest fishing site onMahé. The annual tonnage caught is estimated at some 1,100 tons. Most fishing activity takesplace from boats, there is also a small amount of artisanal fishing by foot.AgricultureAll farming activity in Beau Vallon is carried out by family farms. Animal pollution sources fromcattle, pigs, poultry etc. give a total of 2,260 population equivalent.Pollution Sources and ProblemsThe major source of freshwater pollution in Seychelles is sewage effluents. This has becomean important environmental and human health concern. Although the Government ofSeychelles has regarded adequate provision of sanitation as a basic need, the provision ofsatisfactory levels of sanitation has been frustrated by the haphazard nature of thedevelopment pattern. The 1998 Census revealed that 74% of dwelling on Mahé were servedby modern sanitation systems, the percentage in the study area is higher at 80%. However,this figure conceals major deficiencies. Only Victoria possesses a public water-bornesanitation system. Others are planned.Pollution sources, loads and typesPollution sources in the study area can be categorised as follows:• Individual households with traditional socio-economic activities including the keeping ofdomestic animals• Tourism industryThe following table summarises water pollution loads generated by various sources on Mahéisland.Table 4: Water pollution generated in Mahé (tonnes)BOD 5 SSFisheries industry 97.42 59.44Other foods industry 3 393.10 17 345.74Manufacturing industry 1.64 2.78Urban settlement and construction 0.54 0.74Natural processes 1.25 12.91Total 3 493.95 17421.61Source: Shah, 1997The greater Beau Vallon area has a total population equivalent of some 7,300, with sewageeffluent discharges estimated at 900 kl/day. There is strong evidence of significant faecalcontamination in the rivers, largely attributed to diffuse pollution caused by ineffective andinappropriate sewerage arrangements (Shah, 1997). Approximately 80% of the houses in theBeau Vallon Bay area are served by potable water network. In the absence of collectivesewerage infrastructures, the existing dwellings are equipped with simple septic tanksfollowed by a cesspool or a dry-pit from which the overflow waters seep into the ground andrivers. Likewise, 20% of the houses are reported to be without modern lavatories, latrines inthe best of cases, and sometimes without any equipment, and pollutants are spread directlyon the ground. There are three major hotels in the study area with sewerage treatmentFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200044

facilities: Berjaya Beau Vallon, Coral Strand and Le Meridien Fisherman’s Cove with a total of333 rooms (1,236 population-equivalent). Hotel establishments over a certain size forinstance are required by law to install centralised wastewater treatment systems prior todisposing wastewater into the environment.Virtually all tourism establishments are located on the coastal fronting on the beach. Theproximity to marine waters therefore exacerbates the wastewater impact of tourismestablishments. The package treatment plants of the larger hotels are not functioningadequately. All the other establishments use septic tank systems which notoriously leak(Shah, 1998). The 1996 SOGREH Report on the Beau Vallon Bay sewerage project statesthat the pollution in Beau Vallon Bay, is caused by: tourism sector of the area 1/6 shares,domestic sector of the area 5/6 shares.NameTable 5: Sources of sewage from hotels and guest houses in Beau VallonSeweragePresent Impact Potential ImpactTreatmentAS; outlet in road Algal growth,side drainodourBerjaya Beau Vallon BayHotelWater quality and coraldeteriorationCoral Strand Hotel AS; 150 m. sea Algal growth, Water quality and coraloutfallnutrientdeteriorationoverloadingSun Resorts B.V. Prop. STVacoa Village ST Algal growth Water quality deterioration,leakage into marshBeau VallonST Algal growth Water quality deteriorationBungalowGeogina’a cottages ST Algal growth Water quality deteriorationVilla de Rose ST Unknown UnknownPti Payot GuestST Unknown UnknownHouseLe Meridien fisherman’s ST (installed AS in Algal growth Water quality deteriorationCove1997)Notes: ST: Septic tank, AS: Activated Sludge Treatment, Source: Shah, 1998Ground and Surface Water QualityThe following tables present an overview of river water quality at different sites:Table 6: Overview of water QualityRiver area PH Resist. SC/cm Total coliform/Faecal streptococciNortholme 7.5 12720 3200/60Upper St Loius 7.2 21890 350/50Lower St Loius 6.8 14820 700/80Mare Anglaise 7.1 5565 6000/30Danziles 7.3 11110 18000/120Upper Niol 7.2 38485 10/6Lower Niol 7.0 21730 150/24Sullivan 7.1 10685 1200/16Source: SOGREAH, 1996River area Faecal coliform count/100 ml NH4Mg/lNO2Mg/lNortholme 160 0 0.04Upper St Loius 110 0.1 0.02Lower St Loius 240 0 0.03Mare Anglaise 40 0 0.05Danziles 250 0 0Upper Niol 2 0 0.02Lower Niol 16 0.1 0.02Sullivan 1000 0 0.04Source: SOGREAH, 1996Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200045

Dissolved inorganic nitrogen: The two main forms of inorganic nitrogen are ammonium (NH4)and nitrates (NO3). Ammonium originates from animal or human waste and from the bacterialdecomposition of organic nitrogen. The rivers give NH4 values of between 0.1 to 0.4 mg/l,thus indicating contamination. The analyses therefore proved contamination of human/animalorigin which is harmful to the marine environment.Phosphates: High concentration indicates pollution of domestic and agricultural origin. Thehighest concentration was found in the Sullivan River. (SOGREAH, 1996).Bacteria content of naturally occurring water is found to be important in the riversBOD and SS: The water from an unpolluted river have values ranging from 3 to 5 mg/l BODand 30 mg/l for suspended solids. The river water analysis was found to be of very poorquality in terms of BOD.Table 7: River Water AnalysisRiver area PO3 Mg/l MO Mg/lNortholme 0.02 2.7Upper St Louis 0 2.1Lower St Louis 0.03 3.7Mare Anglaise 0.05 2.5Danziles 0 0Upper Niol 0 1.3Lower Niol 0.01 2.4Sullivan 0.03 2.6Source: SOGREAH, 1996Marine watersBacterial pollution of seawater concerns essentially bathing water and shellfish cultivationwater. Bacterial contamination is a major factor for urban sewage being disposed into the sea.Appropriate European regulation define the threshold levels to be respected in bathing waterand in the flesh of shellfish destined for human consumption.Organic pollution materials are well received in the marine environment on condition that theyare practically all biodegradable. Organic pollutants may have harmful effects only ifinsufficiently dissolved with oxygen or if they are disposed off in stagnant water areas.The coastal areas close to the two river outlets, namely the Mare Anglaise and the SullivanRiver have the highest level of faecal contamination at least for 1.3 months in each year anddeemed unbatheable according to European standards for bathing water. The unsuitablelevels are expected to occur after periods of heavy rains. In only 2 months on average peryear are the levels of faecal coliform at its lowest level. The best area for swimming is locatedin front of Coral Strand Hotel. (Payet, 1996)Indicators of sea water quality in terms of faecal coliform values around the Beau Vallon coastshowed 60% of values unsatisfactory for recreational use by WHO standards (Payet, 1996).The level of faecal coliform in the water is depended upon rainfall and the inputs dischargedby hotels. The observable trend of faecal coliform along the Sullivan river shows that there isa contribution of faecal coliform from the hotels. There is also a relatively rapid decay offaecal coliform close of the coast, probably as a result of the wetland area present at the riveroutlet. The relative contribution of point source pollution (e.g. from hotels) in terms of faecalcoliform to the overall quality of the coastal waters is estimated to be about 43%. The poorturn-over of water in the bay induces a decrease in seawater sodium chloride concentration,itself highly detrimental to coral life, and therefore to all marine organisms associated with thecoral reef ecosystem and trapping of nutrients and polluting substances.Up to now, there is little evidence of medical problems associated with contamination due tosewage in the Beau Vallon area.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200046

Potable waterWith continued improvement in piped water supply coverage, there has been a noticeablereduction in the use of streams and rivers as water sources for drinking. However,contamination of water sources continues. Potable water sources or the Beau Vallon areacome from the Rhodas and Le Niol rivers. The surface water at the inlet of both Rodhas andLa Niol Rivers have been found to be polluted from non-point sources such as householdseptic tanks. The sources of such pollution are undoubtedly associated with humansettlements further upstream. The water quality immediately downstream from the Le NiolWater Treatment works which treats water from these two rivers, is virtually the same.However, as the river passes human settlements and farms on its way to the sea the pollutionload increases (Shah, 1997). The figure below illustrates the water quality of these rivers.Table 8: Water Quality of surface river water at Le Niol Treatment Works inletAnalysis Rodhas River Le Niol RiverPhysicalAppearance Clear ClearColour (Hazen) 0-15 5-100Turbidity (NTU) 0.5-5 0.5-5Conductivity (µs/cm 20-100 20-100Total Solids (mg/L) 30-150 50-300BacteriologicalTotal Coliforms (CFU/100ml at 35°C) 10-200 10-200E.coli (CFU/100ml@44.5°C) 10-200 10-100Faecal streptococci (CFU/100ml@35°C) 5-30 5-20Source: PUC, 1998A Project funded by the European Union in 1997 has resulted in rehabilitation of the existingLe Niol Water Treatment Works. This has resulted in significant reduction in post-filteredwater by reduction of the high turbidity raw water. A great health benefit is therefore nowavailable to all the residents in the entire Beau Vallon area. Throughout the year cleardrinkable water is now available to all those residents and the hotels and guesthouses inthese districts. This clear water also avoids the need for these residents to boil waterparticularly during the rainy season. Prior to the refurbishment works, during the rainy seasonthe piped water was noticeably red in colour owing to this high turbidity and the inadequacy ofthe plant to remove it. The occurrence of water borne diseases may have been higher inthese conditions (Shah, 1997).Fisheries issuesContamination of shellfish and fish owing to sewerage is still not an issue and there has beenno known case of shellfish poisoning due to sewage-related contamination. Nevertheless, thethreat looms on the horizon, especially if efforts are not made to reverse current trends incoastal pollution.2.3.2 COST-BENEFIT ANALYSISBeau Vallon (Seychelles) Summary DataArea• Seychelles: 455 sq. km• Greater Beau Vallon: 1,100 haPopulation• Seychelles: 78,000• Greater Beau Vallon: 7,000 (9% of total Seychelles population)• Population projections: 7,600 for 2002 for 9,000 for 2010• Estimated population growth: 2% average per annum• Number of households: 1,555 (average household size 4.5 persons)• Estimated number of housing units: 1,555• Population density: 10-15 dwellings per ha (45-67 persons per ha)Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200047

TourismSeychelles• Number of tourist arrivals per year: 130,000• Number of tourist beds: 4840 projected for 2002• Number of tourist accommodation establishments: 132• Estimated tourist receipts: 150 million UD$ (18% of GDP)• Estimated expenditure per tourist: 1,154 US$• Estimated expenditure per tourist per day: 144 US$ (8 days length of stay)Beau Vallon• Number of beds: 1000 (1994), 1,800 (2002), 2000 (2010)Pollution loadsSeychelles• BOD: 3,500 tons• SS: 17,500 tonsBeau Vallon• Estimated sewage effluent discharge: 900 kl/day (population equivalent about 7,300)• Access to water and sanitary facilities: 80% of the houses served by potable waternetwork.• Absence of collective sewerage infrastructures, (dwellings equipped with simple septictanks-cesspool or dry-pit, overflow seepage into the ground and rivers).• 20% of dwellings unequipped with modern lavatories (latrines, in the best of cases, andsometimes without any equipment - pollutants spread directly on the ground.Note: Author's summary based on information from the National Report1. Sources and Impacts of Pollution: A SummaryAs an introduction to the Cost-Benefit Analysis, an attempt is made to focus on the key issuesof concern, summarise them and bring together the pollution sources, the perceived impactsand the resources affected. The table below is intended to be as comprehensive as possiblebut it should not be expected to be complete as several important gaps exist in the stock ofavailable information. It does however provide a context and a guide for future data collection.Table 9. Outline of Sources and Threats of Impacts of PollutionActivity – Source Ecosystem affected LocationHousing (including Sullivan and Mare Anglaise Riversdomestic animals • evidence of feacal contamination,7,300, with sewage ground water infiltrationeffluent discharges Ground water qualityestimated at 900 kl/day Marine ecosystem• water quality, coral deteriorationand threat to all marine organismsassociated with coral reefecosystem. Poor turn-over of waterin the bay lowering seawatersodium chloride concentrationdetrimental to coral and marineecosystemTourism accommodationLeakage from septictanks to rivers, groundand sea water• Sullivan and Mare Anglaise Riversevidence of feacal contamination,ground water infiltrationMarine ecosystem• Water quality, coral deteriorationand threat to all marine organisms –as aboveFood industryNote: Author's summary based on information from the National ReportBeau Vallon Bay and coastalarea close to the riversHigh level of feacalcontamination 1.3 months ayear. Only 2 months a yearfeacal contamination at itslowestReduced attractiveness ofpresent and future holidayhousing developmentBeau Vallon Bay and coastaltourist area close to the riversReduced attractiveness ofpresent and future tourismdevelopmentThe lack of sewerage infrastructure in Beau Vallon puts at risk public health and the quality ofthe coastal environment. The construction of Beau Vallon sewerage infrastructure aims toremove the emerging public health hazard and protect the coastal environment from pollutionFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200048

esulting from the continuation of the current practice of discharging untreated sewage fromdomestic and tourist sources into the rivers near and the sea. Without investment ininfrastructure, the increase of sewage from population and tourism growth will poseimmediate risks of fresh and sea water contamination, leading to infectious diseases throughthe water distribution system and the deterioration of sea water quality. Both will have directimpacts on tourism and indirect impact through increased health problems. With the project,these threats are expected to be removed, resulting in the following benefits:1. Direct benefits to 80% of the residential population of Beau Vallon who will be connectedto the sewage collection network by the year 2010, estimated at about 6,000 people orabout 1,330 households. This will eliminate the cost of regular removal of domesticsewage from the septic tanks and increase the supply of useable water for various uses.2. Direct benefits to property owners from higher real estate values, estimated at about1,555 housing units, about 363 ha of available building land (a third of the total vacantland) and about 132 tourist accommodation units.3. Direct benefits to the local tourism industry of Beau Vallon, presently comprising about1,500 beds and attracting about 43,000 visitors spending approximately 50.0 million US$.The planned pollution control investment will create benefits at least equal to the avoidedlosses from tourism decline. The current growth trend in tourism is about 5% per yearwhich will not be maintained without sewerage infrastructure.4. Direct benefits to fisheries production, estimated at 1,100 tons a year that may beaffected by impacts to the near-shore marine environment.5. Indirect benefits from the preservation of the quality of the marine environment now understress from sewage discharges directly in the Bay or through the rivers of Sullivan andMare Anglaise.2. Cost-Benefit Valuation ApproachThe first step in the development of Cost-Benefit Analysis is to define the categories ofbenefits to be considered, the approach adopted for their valuation and the basic indicatorsguiding the monetary or qualitative estimation.Benefits fall into three categories: Direct use benefits, indirect use benefits and non-usebenefits.The following table explains the valuation approach to be followed. The valuation approach isthe link between environmental information concerning degradation impacts and theidentification of cost and benefit consequences. In other words, it guides the approach to theuse and interpretation of available environmental information to identify and valueenvironmental costs (from inaction) and environmental benefits (from taking proposedactions).An important clarification is needed. Benefits of environmental investment / measures areoften the avoidance of negative impacts made possible by investment. The present pollutionimpacts identified in the Case Study are the main source of benefits of the investmentconsidered. For example, loss of resource productivity for fisheries or mangroves or tourism,due to pollution is a cost, while the restoration of productivity and the avoidance of pollutioncosts is a benefit.Table 10: Classification of ValuesType of ValueValuation approach and indicatorsDirect Use ValueChange in the productivity (outputs) of activities using environmental resources, resulting fromchange in environment conditions / qualityTourismIndicator: Change in tourism revenues and avoided lossesFisheriesIndicator: Change in fisheries production and revenues and avoidedFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200049

lossesHuman Health Indicator: Treatment costs, loss of work-days and loss of human lifedue to environment-related diseasesPropertyIndicator: Increment / loss of property valuesIndirect Use ValueChanges in recreation, leisure and amenity opportunities, beach stability and quality offeredto the public in and near coastal areas due to change in environmental conditions / qualityRecreation and Indicator: Number of people and cost of visiting clean and unspoiledamenitycoastal sites reflecting people’s valuation of recreation opportunitiesNon-Use BenefitsExistence value of environmental quality – biodiversityPreservation of coastal,marine and landscapequality, cultural andnatural heritageIndicator: People’s willingness-to-pay for maintaining marine andcoastal biodiversity (quantitative and qualitative information fromsurveys)3. Estimation of Environmental Costs - The Costs of InactionDirect Costs1. Tourism.The Beau Vallon Bay area attracts about 43,000 tourists a year spending about $1,152 for an8-day holiday, thus generating total gross revenue of $50.0 million a year. Recent touristarrival trends show an average growth rate of about 5% per year. This trend has beenmaintained relative to the present state of the environment, generally without major pollutionimpacts. It is certain that in the near future pollution will become a major concern. Given thetendency for increased activity and population growth, without sewage collection, disposaland treatment infrastructure environmental impacts will emerge. In that case, it is logical toassume that the growth of tourism and income from tourism will be affected through reductionof arrivals and/or prices.To set up a framework of future tourism projections under different environmental conditions,three possible tourist scenarios are examined: Two scenarios without pollution controlinfrastructure (scenarios 2 and 3), and the scenario with pollution control infrastructure:Scenarios without Pollution Control Infrastructure:• The favourable scenario (2): Under this scenario tourism is assumed to continue to growat 5% up to the year 2003, reaching just under 50,000 tourist, reflecting the absence ofimmediate serious environmental problems, remaining constant for the rest of the periodup to 2024.• The more realistic scenario (3): Under this scenario tourism is assumed to decline at anaverage of 5% a year due to environmental degradation (Reference: AppliedEnvironmental Economics in Africa, World Bank, 1995)Scenario with Pollution Control Infrastructure• Under this “with infrastructure” scenario, tourism is assumed to be able to maintain itsgrowth trend of 5% per year up to the year 2005 and grow at 2% after 2005, even thoughit may be debatable to assume that by the year 2024 tourist arrivals will be about 80,000.These scenarios are instruments to estimate the impact on tourism with and without theplanned sewerage system. On the basis of these assumptions the tourism cost ofenvironmental degradation, expressed as the difference between tourism growth withinfrastructure and tourism decline of 5% a year without infrastructure, builds up over time asshown below. Tourism expenditure is assumed at constant prices of $1,152 per tourist visit.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200050

YearArrivalsWith ProjectTrend growth5% pa 2000-52% pa after 2005Table 11: Tourism ScenariosArrivalsWithout ProjectOptimistic LikelyScenario Scenario(No growth) 5% declinepa(2)(3)Cost(undiscounted)(1)(1-3)2000 43,000 43,000 43,000 02001 45,150 45,150 45,150 02002 47,407 47,407 47,407 02003 49,777 49,777 49,777 02004 52,266 49,777 47,288 4,978x1,152=5.7x0.5 = 2.82005 54,880 49,777 44,923 9,957x1,152=11.5x 0.5 = 5.72006 55,977 49,777 42,676 13,301x1,152=15.3x 0.5 = 7.62007 57,097 49,777 40,542 16,555x1,152=19.0x0.5 = 9.52008 58,240 49,777 38,514 19,726x1,152=22.70.5 = 11.32009 59,403 49,777 36,588 22,815x1,152=26.3x0.5=13.12010 60,590 49,777 34,758 25,832x1,152=29.7x0.5 = 14.82011 61,803 49,777 33,020 28,783x1,152=33.2x0.5 = 16.62012 63,040 49,777 31,369 31,671x1,152=36.5x0.5 = 18.22013 64,300 49,777 29,800 34,500x1,152=39.7x0.5 = 19.82014 65,586 49,777 28,310 37,276x1,152=42.9x0.5 = 21.42015 66,898 49,000 26,895 40,003x1,152=46.0x0.5 = 23.02016 68,236 49,777 25,550 42,686x1,152=49.2x0.5 =24.62017 69,600 49,777 24,272 45,328x1,152=52.2x0.5 = 26.12018 70,993 49,777 23,058 47,935x1,152=55.2x0.5 = 27.62019 72,413 49,777 21,905 50,511x1,152=58.2x0.5 = 29.12020 73,860 49,777 20,809 53,051x1,152=61.1x0.5 = 30.52021 75,338 49,777 19,768 55,570x1,152=64.0x0.5 = 32.02022 76,842 49,777 18,779 58,063x1,152=66.9x0.5 = 33.52023 78,382 49,777 17,840 60,542x1,152=69.7x0.5 = 34.82024 80,000 49,777 16,948 63,052x1,152=72.6x0.5 = 36.3This is adopted as the basis for estimating the cost of inaction, and conversely, the value oftourism benefits likely to accrue from preventing pollution through sewerage infrastructure.Two adjustments need to be made to avoid double counting and over-estimation. First, not alltourist revenue is net income but only that part of it representing value-added. It is assumedthat value-added is 50% of gross revenues (already applied in the above table). Second,money flows accruing in the future have to be expressed in terms of Present Values.Discounting at 10% and 5% results in benefits of 5.7 million US$ and 9.1 US$ by the year2010, respectively, and 3.7 million US$ and 11.3 US$ by the year 2024 respectively. It isnoted that due to discounting to present values, longer-term benefits are reduced, and thehigher the discount rate the greater the reduction.Table 12: Present Value of Tourism Benefits/Costs in Million $Present Value of benefits Discount rate 10% Discount rate 5%Year 2010 5.7 9.1Year 2024 3.7 11.3Note: The higher the discount rate the lower the present value. The scenarios and the basiccalculations are shown in the following table.2. FisheriesCurrent fisheries output in Beau Vallon is estimated at 1,100 tons a year. There is noinformation if it has declined or increased in recent years. It is assumed to be relativelyconstant. Assuming an average consumer price of 5$ per kg., the value of output is $5.5million a year. This production value is at risk from sea pollution and habitat degradation.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200051

Dose-response data are not available to show the sensitivity of fisheries production toincreased levels of pollution. It is therefore assumed that, if half of the output is immediately atrisk, the fisheries cost of pollution (and the value of benefits from avoided losses andexcluding future growth of output) is roughly 3.0 $ million a year.3. Human healthAt present, there is little evidence of health problems associated with contamination due tosewage discharge in the Beau Vallon area. It is therefore difficult to estimate health costs onthe basis of national data. Assumptions have to be made therefore. In the event of a choleraepidemic in Seychelles (as it was assumed in a recent study for Mauritius in the context ofthe Montagne Jacquot Sewerage System), say by the year 2002/2003, until the seweragesystem become operative, it would reduce tourism arrivals by at least 10% below the "withproject" scenario. Assuming a conservative 5% reduction per annum due to generalenvironmental degradation but without major diseases such as cholera that would destroytourism in Seychelles, would amount to a decline of tourist arrivals from 50,000 in 2003 to21,000 in 2020. A 10% annual decline would bring it down to zero. It should be noted that astudy of the impact of cholera in Peru in 1991 showed the decline of gross tourism earningsdue to cholera epidemic to range between 6-28%.A more realistic estimate of possible health impacts may be based on the treatment costs andwork-days lost. If 20% of the 2010 population (8,500 x 0.20 = 1,700) are affected by somewater-borne diseases once a year, requiring 15 days absence from work and a low $15treatment cost per day, the cost may be estimated as follows: The cost of treatment atapproximately $382,500 per year (15$ x 1,700 x 15) and the cost of loss of employmentincome approximately at $510,000 per year (20$ x 1,700 x 15), totalling US$ 892,500 ayear. This cost excludes the human distress and pain which are not quantified. They arequalitative impacts.4. Property valuesThere are at present about 1,555 housing units in Beau Vallon (7,000 population / 4.5 = 1,555units on 155 ha –10 units ha). Total building land is assumed to be a third of the total landarea, that is 1,100 ha / 3 = 366 ha. Therefore, the available land area for development overthe next 10 years is estimated at 211 ha (366 ha stock minus 155 already developed). Of this,35 ha will be developed in the next 5 years and another 35 ha assumed for the following 5years, leaving 141 ha as open space or for long-term needs. If the average value of the 1,555existing housing units is about $ 75,000, a10% reduction of that value due to proximity to apotentially polluted part of the coast or river, the annual loss of value would be $ 11.6 million(75,000 x 1,555 x 0.10). This value would represent the annual cost to properties in areaspresently at risk (in terms of foregone value increment) and, equally, the expected benefit toaccrue from the sewerage infrastructure which will serve them. Similarly, the estimated valueof the 70 ha of development land for the next 10 years may be in the region of about $26.2million, assuming a density of 10 units per ha and an average value of $37,500 per plot, beinghalf the value per developed plot with housing on it (70x10x$37,500). 10% of that would be$2.6 million of additional benefit to property, totalling an estimated annual amount of $14.2million, without counting the 141 ha for open space.Indirect Costs5. RecreationThere is no information on the social valuation of recreation opportunities to the localpopulation. Such valuation would reflect the indirect benefit from the “services” ofenvironmental quality for which there are no market prices to record it even approximately.However, recreational benefits are as real and important as direct benefits and cannot simplybe ignored. In the absence of any information on how many people visit coastal or marineparks and indications of proxy prices, such as entrance fees or travel costs, it is reasonable toclassify this source of benefit as qualitative.To estimate recreation benefits would ideally involve calculations of how much people wouldbe willing to pay to have access to recreation areas of a certain level of quality, requiring asurvey of social preferences.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200052

Some useful indications may be derived from the example of the Marine Protected Area ofaround Cerf Island and in Ste. Anne Marine Park (Integrated Coastal Zone Management inthe Seychelles, C.G. Lundin & O. Linden, 1995, p. 45-46). The coral reefs of Cerf and theisland itself provide a natural barrier to ocean waves towards Victoria and the East Coast ofMahe. If the corals were to die because of sedimentation or pollution from human activities,the reefs would gradually wear away, the shoreline of the islands in the Marine Park woulderode and currents would reach Mahe. Data for 1992 shows that more than 27,000 foreignvisitors spent about SR. 9.0 million in the Ste. Anne Marine National Park and the governmentcollected about SR. 500,000 from entrance fees indicating a rough estimate of visitorsvaluation of the marine park environment. If the visitors to the Marine Park would increase atthe same rate as the number of visitors to the Seychelles (5% per year), this would give afigure for the year 2,000 equal to about 40,000 visitors spending an amount (in constant 1992prices) of SR. 13.3 million (or $2.3 million) and another 132,000 of entrance fees. To avoiddouble-counting, tourist income is excluded counting only the national population. Theentrance fee of $3.3 per person based on 1992 prices may be a conservative indication of thewillingness to pay for recreation, that is the minimum of what the national population wouldalso be willing to pay for visiting and enjoying unpolluted and well-managed coastal recreationareas. Applying this as a minimum measure of the recreation benefit for the expectedpopulation of Beau Vallon for the year 2003 (8,000), the minimum value would be $26,400 peryear. If the amount of $ 3.3 for the year 1992 is increased by 10% a year to reflect theincrease in real income by 2003/4 the value would be in the region of $75,300 per year.Non-use Value6. BiodiversityThe existence value of the environment is a very elusive parameter but one of potentially highvalue. It refers to the value that people themselves estimate for the preservation of theecosystem free of any use for productive activities. It is the value of the ecosystem beingthere as part of the natural heritage. There is certainly no market for the existence of coastaland marine diversity. As it is unwise to ignore this non-use value, estimates are attempted,typically based on Contingent Valuation Methods, that make use of survey results to show theresponses of people to questions referring to their willingness to pay for the conservation ofcoral reefs, excluding production and development considerations. There is no suchinformation for the Seychelles or any other part of the region and it is rare in any case.A recent review of the empirical biodiversity literature stresses the following:• Existence valuations are rare – only one study estimated the existence value of coral reefsites, that of the Great Barrier Reef;• Most valuation studies involve coral reefs are concerned with their recreational and touristuse value;• The most commonly valued harvested product of coral reefs is fisheries, but the naturalsystems underlying the harvest (e.g. reef-fish relationship) are simplified, if not ignored,and• Coastal protection afforded by the coral reef habitat is the only ecological function valued.Two known studies are often quotes. Hundloe 1987 estimated the existence value of coralreef habitat using a contingent valuation method for the value of coral reef sites within theGreat Barrier Reef in Australia calculated at A$45 million a year. For the Galapagos NationalPark, de Groot 1992 estimated the “inspirational” and “spiritual” value of reefs at $0.72 per ha.Cynthia Cartier and Jack Ruitenbeck, in Integrated Coastal Zone Management of Coral Reefsby Kent Gustavson (ed.), World Bank, 2000Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200053

Table 13: Estimated Potential Annual Costs of Pollution without SewerageInfrastructure(year 2004)Impacts Million US$ %1. Tourism 2.85 142. Fisheries 3.00 143. Health 0.90 44. Property 14.20 685. Recreation 0.06 > 16. Biodiversity -Total (excluding non-use/ existence benefits) 21.01 (rounded to 21.0) 100The estimated GDP of Seychelles is $ 641.0 million, which implies that the annualpotential pollution cost is about 3.2% of the GDP.Table 14: Costs and Benefits of Sewerage Infrastructure in million $Year Capital Recurren Total Benefits Net PV @ 10% PV @Cost t Cost CostBenefit5%s2002 7.44 - 7.44 - (7.44) (6.15) (6.75)2003 - 0.54 0.54 - (0.54) (0.40) (0.47)2004 - 0.54 0.54 21.0 20.47 13.98 16.842005 2.14 0.54 2.68 23.9 21.22 13.17 16.622006 - 0.71 0.71 25.8 25.09 14.16 18.722007 - 0.71 0.71 27.7 27.00 13.85 19.182008 5.36 0.71 6.07 29.5 23.43 10.93 15.852009 - 1.14 1.14 31.3 30.16 12.80 19.442010 - 1.14 1.14 33.0 31.86 12.28 19.5510-year Net Present Value 84.62 118.982011 - 1.14 1.14 34.8 33.66 11.79 19.681012 - 1.14 1.14 36.4 35.26 11.55 19.632013 - 1.14 1.14 38.0 36.86 10.67 19.542014 - 1.14 1.14 39.6 38.46 10.12 19.422015 - 1.14 1.14 41.2 40.06 9.60 19.262016 - 1.14 1.14 42.8 41.66 9.06 19.082017 - 1.14 1.14 44.3 43.16 8.53 18.832018 - 1.14 1.14 45.8 44.66 8.03 18.552019 - 1.14 1.14 47.3 46.16 7.54 18.262020 - 1.14 1.14 48.7 47.56 7.07 17.922021 - 1.14 1.14 50.2 49.06 6.63 17.612022 - 1.14 1.14 51.7 50.56 6.21 17.282023 - 1.14 1.14 53.0 51.86 5.80 16.882024 - 1.14 1.14 54.5 53.36 5.42 16.5524-year Net Present Value 202.64 377.47Notes: The cost column shows the estimated capital cost for the construction of theSewerage System of $15 spread between 2002-2008. The operating cost is spreadlikewise. The benefits comprise those from the sources estimated and shown in theprevious table “Estimated Potential Annual Costs of Pollution without SewerageInfrastructure”. The value of tourism benefits are adjusted according to the figureson the right hand column of the Tourism Scenarios table. Benefits are assumed tobegin in 2004.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200054

Table 15: Sensitivity Analysis ($ million)Estimated Investment Cost 15.0Annual Operating Cost capitalised at 10% for 24 years 10.24Total Estimated Investment Cost 25.24Present Value of Estimated Benefits at 10% for 24 years 227.88Net Present Value 202.64Benefit / Cost ratio 9Estimated Investment cost by 25% higher 25.0 x 1.25 = 31.0Estimated benefits by 25% lower 228.0 x 0.75 = 171.0Benefit / Cost ratio 5.54. Assumptions and ResultsThe calculations should best be regarded as orders-of-magnitude. Economic estimates areheavily dependent on the quality of data and the level of detail attempted. The capital costconcerns the estimated investment for the construction of the proposed Sewerage System forthe Beau Vallon Area and is taken as given. The estimated 25-year period Net Present Valueis $202 million at 10% and $377 million at 5%. This shows the sensitivity of the results to thediscount rate at which future benefits are translated into present values. The Net PresentValue (benefits over costs) shows the value of the net “wealth” created by the Project,available to society. It is noted that Cost-Benefit Analysis does not focus on the financialimplications (funding and cash flows) of the proposed project from the point of view of theimplementing agency, but to the saving quality of resources for future use by society.The Benefit/Cost ratio shows the coverage of costs by the expected benefits and, like the NetPresent Value, is an indicator of the social viability of the proposed Project. The ratio ofbenefits to costs is 9 meaning that the benefits are nine times the costs.The simple sensitivity analysis is attempted to show the changes to the results from highercosts and lower level of benefits. The Benefit-Cost Ratio is reduced to 5.5. The percentage of25% may be considered too high but it is wise to used it when cost estimates are broad andbenefit estimation contain possible errors an inaccuracies inherent in the available data.This Cost-Benefit Analysis does not include the cost of other measures on which informationis not available. This does not necessarily pose a major problem because it is possible tosuggest an alternative approach compatible with Cost-Benefit Analysis. There are datadifficulties involved. It is difficult to estimate the cost of institutional and legal measures, andexpenditure for strengthening departmental responsibilities for monitoring and research, etc.Also many measures may have cost overlaps, synergies or “economies of scale”. Also, thebenefits of pollution management cannot be fully realised by one-track infrastructure actionconfined to building and operating Sewerage Systems, although it may be the single mostimportant investment cost. Integrated environmental management programmes, coastal zoneplanning and commitment to sustainable development are essential constituent componentsof pollution management.How far could this issue be addressed within the framework of this present CBA? The aboveanalysis shows a NPV of $202 million. It is possible to suggest therefore that additionalmanagement, institutional, legal/regulatory, research and other initiatives, which are inany case required to support the long-term objectives of infrastructure projects,should be implemented even if they cost up to $202 million. In terns of CBA such level ofexpenditure over time would be justified. Of course, the separate question of financing suchexpenditure remains. The Case Study may also provide guidelines for identifying preliminarydesign options at least from the cost point of view. The estimated investment cost of theProject ($15 million) will serve a population equivalent of 13,000. It should be possible toprioritise actions targeted at the most immediate hot spots problems yielding the higherbenefits per unit of investment. Social benefit should be a major consideration, together withcost-saving construction phasing, in prioritising the use of investment resources for sewerageinfrastructure.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200055

CHAPTER 3. ACTION PROGRAMME INPUTS3.1 IntroductionIt is difficult to generalise from specific Case Studies that relate to particular city contextsabout the broader contributions of the Cost-Benefit approach to environmental management.It is useful however to attempt to point to some salient broad conclusions and suggestguidelines for the incorporation of key elements of environmental economics in the design ofregional Action Programmes.The outputs of CBA Case Studies can be assessed on two levels: There are the data andnumerical issues, and there are questions about the approach of CBA to environmentalproblems. The “arithmetic” of CBA is complex and full of choices concerning the best use ofavailable data. In reality all CBA is constrained by data limitations that affect the accuracy theresults. There is no good-for-all CBA because data collection is costly in time and resourcesand, interestingly enough, it is itself subject to cost-benefit analysis to decide if the extra effortto improve the quality of data is worth the cost. The second issues of the approach is morechallenging and central to the concerns for improving the tools for coastal zone managementand sustainable development.This section will address two related themes:• First, to put forward conclusions about the merits and limitations of the Case Studies andsuggestions for future work, and• Second, to draw together outline guidelines as contributions to the Action ProgrammeFramework.3.2 Case Studies: Merits and LimitationsThe three Case Studies concern areas with common and diverse environmental, economicand social conditions. All three have a strong common focus on the evaluation of sewageimpacts and the benefits of addressing them with capital-intensive sewerage infrastructure.There are broader pollution management issues that transcend sewerage infrastructureinvestment; Effective pollution management calls for much more than the core interventions ofbuilding and operating sewerage infrastructure entailing integrated coastal zone managementcapacities geared towards sustainable development. Implementation of sewerage strategiesare a part of Coastal Zone Management comprising institutional, legal and financialresponses that are implemented according to national priorities. It is misleading to draw asharp distinction between sewerage strategies and coastal zone management strategies,because that implies separate evaluation approaches. Often, evaluation of sewerageinvestments, because of their engineering complexity and financial cost, are approached asisolated projects in engineering and financial terms without sufficient consideration for socioeconomicimpacts and benefits.There is a need to highlight the linkages of sewerage strategies with the wider coastalmanagement process. The Case Studies followed the fundamental principles of the costbenefitmethodological framework despite differences in the engineering designcharacteristics an city profile to show the scope of this approach applied to sewerageinfrastructure, perceived as part of coastal zone management investment. The case Studiestherefore share a common focus on the valuation of environmental impacts / benefits basedon a wider definition of value comprising direct use, indirect use and non-use qualitativevalues.A broad comparison of the main characteristics and results of the Case Studies aresummarised below:Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200056

Summary of the main characteristics and results of the Case StudiesCharacteristicsBeau Vallon MombasaDar-es-Salaam(Seychelles)Nature of Study Area Bay area and main Major coastal urban Capital city and majortourism location in centrecoastal urban centreMaheSize of Study Area 1,100 ha 282 sq. km 1,350 sq. km.Population (1999) 7,000 650,000 3,500,000Estimated per capita $7,000 $750 $650IncomeMain income source Tourism and fisheries Informal sector jobs Informal sector jobsand tourismand tourismState of the environment Threats of imminent Serious pollution Serious pollutionpollution impacts impactsimpactsMain resource affected Rivers, the bay area Settlements, rivers and Settlements, riversand coastal/marine coastal/marine and coastal/marineenvironment environmentenvironmentMain socio-economic Mainly threat to Mainly health, also Mainly health, alsoconsequencetourism industry tourism, property tourism, propertyvalues and coastal values and coastalenvironmentenvironmentMain pollution control Sewerage System Sewerage System Sewerage SystemresponseAssociated strategic Sustainable coastal Sustainable coastal Sustainable coastalenvironmental objective management managementmanagementEstimated Project $15.0 $100 $222Investment CostEstimated partial annual $21 million (2004) $48 million $65 millioncost of pollution (excludingqualitative impacts)Net Present Value $202 million $291 million $565 millionQualitative benefits not Indirect recreation Indirect recreation, Indirect recreation,quantifiedand non–use mangroves and nonusemangroves and non-biodiversity valuebiodiversity value use biodiversityvaluePresent Value of $228 million $681 million $1,479 millionBenefitsNet Present Value $202 million 506 million $543 millionQualitative benefits not Indirect recreation Indirect recreation, Indirect recreation,quantifiedand non–use mangroves and mangroves andbiodiversity value non-usebiodiversity valuenon-use biodiversityvalueCBA is essentially a matter of depth, the more detailed the data the deeper and moreaccurate the results The quantitative results of the Case Studies are, as expected, sensitiveto the quality of the available data, particularly those concerning the most important benefits,such as tourism and health. Some general comments include the following:More detailed data on tourism trends would on the one hand improve the accuracy of theestimates but would require a longer study time. To strike a balance, the Case Studies utilisescenarios to work out optimistic and most-likely projections on future trends. Tourism“productivity” reduction of 5 – 10% are adopted as reasonable indicators. It is necessary to dofurther research to calibrate these indicators to suit specific city conditions.Health statistics provide a general view of the severity of health conditions. Poor healthconditions and the incidence of diseases are attributed to polluted water from municipalsewage. It is not possible with the available data to establish a direct link between changes inwater quality and changes in health conditions (dose-response function) to allow conclusionsabout how many life-years would be saved by increased population access to sewerageinfrastructure through additional investment. The Case Studies focus on the human capitalapproach to valuation estimating the treatment cost and income loss from poor health anddeath based on crude numbers of mortality and morbidity.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200057

Property impacts are widely known to depend on surrounding environmental amenity.Coastal and near-coast property is particularly vulnerable to environmental quality. To obtainbetter estimates of the environmental impacts on property value it is necessary to compareproperties with identical or similar characteristics (size, building quality, accessibility, etc.) inpolluted and pollution-free locations to isolate the impact of pollution. It would also bepreferable to use city zoning and land value maps to determine the proportion of residentialproperties falling within the “sphere of influence” of the coastal environment. In the CaseStudies, a conservative percentage of 5-10% reduction / appreciation of value is used on a20-25% of the housing market.The qualitative aspects are even more difficult to assess and require special ContingentValuation (CV) research results. The indirect effects of pollution on recreation (and thebenefits from pollution management) are classified in the Case Studies as qualitative due tolack of questionnaire data estimating people’s willingness-to-pay (WTP) for recreationalopportunities.In other words, the “total” benefits of sewerage infrastructure are under-estimated inthe Case Studies since, of lack of choice, they left out indirect and non-use benefitscomprising a very important category of benefits of potentially high socio-economicvalue, characterised as qualitative.To estimate indirect and particularly non-use benefits, CV studies are required. Such studiesare widely used tools to assess the social valuation of coastal and marine resources and theirbiodiversity significance (The Economic Value of Biodiversity, D. Pearce and D. Moran, 1996,also, Review of the Empirical Biodiversity Literature, Cynthia Cartier & Jack Ruitenbeek,2000). To assess total benefits, special studies should be carried out on resource valuationfocused on the social value of non-market benefits associated with conservation of coastaland marine ecosystems. When no value is given to the quality of non-market resources, dueto lack of estimates, decision-makers would still agree that ecosystem degradation is an"undesirable" environmental issue but may be encouraged to think of it as an issue beyondmanagement solutions and outside the ambit of environmental investment analysis. If such anapproach prevails, how will then proposals for increased investment for coastal zonemanagement be evaluated and justified when coastal ecology is assumed to have zero orunknown social value?Given that CV requires capacity-building and research resources, many Cost-Benefit Studiesconducted within strict time limits underline the fact that the estimated benefits under-estimatethe total value of benefits as they exclude the non-use biodiversity benefits. This perhapsillustrates the fact that despite much methodological progress and impressive results, Cost-Benefit Analysis of environmental management programmes is still a developing perspective.It should therefore be underlined that most Cost Benefit Case Studies, if not all, are at bestpartial, including only some of the total benefits from policy actions. Also, Cost BenefitAnalysis is rarely entirely conclusive and completely accurate in numerical terms. Cost-Benefit Analysis, unlike biophysical analysis, concerns socio-economic responses to pollutionand environmental degradation that can never be studied under strictly controlled “laboratorytype”conditions and, therefore, data and measurement methods are inherently orders-ofmagnitude,subject to margins of error. Nevertheless, the results generated provide importantconclusions about a whole range of benefits that would otherwise remain conceptually vague,and ignored as “inaccurate” and remain outside the decision-making process. The choiceseems to be between using an approximate value for estimating benefits and a zero value.Assuming a zero value is certainly unhelpful as an approach to justify coastal zonemanagement actions.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200058

3.3 Annotated Cost-Benefit Case Study ExamplesIt may be useful to cite a few Cost-Benefit Case Study examples to illustrate the commontechniques and the typical results produced by this approach. The examples below also showsome interesting parallels with the Case Studies presented in this Report.1. Cost and Benefits of Measures for the Protection of the Environment from land-Based Sources of Pollution: Case Study of the Island of Rhodes, Glafkos Constantinides,UNEP/MAP Technical Report Series No. 72, 1992.Population: 106,500 – growth rate 1971-81 2.2% p.a.Area: 1,400 sq. km.Location: Greece, south-eastern corner of the Aegean SeaMain economic activity: Tourism – arrivals 981,000 (1990)The estimated monetised effects / damages of pollution was approximately $15.2 million, representingabout 3% of the island’s GDP.Costs and Benefits of Projects for the Protection of the Marine EnvironmentCosts of InvestmentAmount ($ million)Rhodes city sewerage system 46.0Annual operating cost 1.6 million – capitalised at 10% for 30 years 15.0Total Investment Cost 61.0Estimated annual benefits from:• Cost savings• Property value increase• Tourism incomeTotal annual benefits4.6 (28.5%)7.5 (46.5%)4.0 (25%)16.1 (100%)Present Value (30 years / 10%) 152.0Net Present Value 91.0Benefit-Cost Ratio 2.5This case study illustrates at least two fundamental issues:First, that investment for reducing the degradation of the coastal environment from land-based sourcesis associated with significant direct and indirect benefits which can be estimated in approximatemonetary values. Second, that despite numerous estimation and measurement problems, cost-benefitanalysis can and should be fully introduced as an instrument for the preparation of environmentalmanagement programmes focusing attention on the benefits justifying the required expenditure.2. Costs and Benefits of measures for the protection of Degradation of theEnvironment from Land-Based Sources of Pollution: Case Study of the Bay of Izmir,T.I. Balkas and F. Juhasz, UNEP/MAP, Technical Report Series No. 72, 1992Population: 1.8 million (1992), 2000 projected 2.3 millionArea: The urban conurbation around the bay (Izmir Metropolitan Municipality) is 88,000 haLocation: Turkey, western part of the Aegean SeaMain economic activity: Industrial, commercial, tourism and port centreCost and benefits of the restoration of the BayCost of InvestmentAmount ($ million)Sewerage System for domestic and industrial wastes 938.0Running Cost 75.0 – capitalised at 10% for 25 years 680.01,618Estimated discounted benefits (conservative scenario) from:• Tourism• Fisheries• Salt production• Ground water• Corrosion• Recreation• Health (water use)Total3,412 (71%)133 (3%)843 (18%)70 (1%)25 (0.5%)225 (5%)65 (1.5%)4,773 (100%)Net Present Value 3,155Benefit Cost Ratio 3.0Preliminary assessment suggests that the benefits of the proposed sewerage system for Izmir and theimplementation of the protocols of the Barcelona Convention could significantly outweigh the costs ofthe control measures by a factor of 3. The result is based on tourism-led future development of the Baywhich appears to be environmentally the least damaging and economically the most beneficial.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200059

3. Wastewater Treatment in Ismailia – Egypt. In J.T. Winpenny, Values for theEnvironment: A Guide to Economic Appraisal, HMSO, 1993, based on Luken, CanalCities Water and Wastewater Phase II, USAID, 1987.Location: Ismailia is located on the shores of Lake Timsah, half way along the Suez Canal in Egypt.Population: 300,000 in 1985, estimate to grow to 500,000 by 1995.Estimation methods: focused on three categories of benefits: recreational use, recreation-related illnessand amenity.Ismailia Wastewater Treatment Plant, Estimates of Annual Benefit in million Egyptian PoundsBenefits With project Without Project DifferenceRecreational Use 16.5 3.5 13.0Recreational Illness (costs avoided) 2.1 - 2.1Amenity value(full increase inrental income for5,000-10,000 units)12.5 – 25.010-25% reductionin rental incomefor 5,000-10,000units)11.25 – 18.7 11.25 – 6.3Total 16.35 – 21.44. Mauritius Environmental Sewerage and Sanitation Project (Montagne JacquotSewerage System), Republic of Mauritius, Environmental Sewerage and SanitationProject: Project Appraisal Document, World Bank, 1998 (17289 MAR)The Study considered direct benefits to residential water consumers, benefits to higher real estatevalues and benefits from avoided loss of tourism revenue, health care costs that would occur from awater-related epidemic.Summary Table of Cost – Benefit Analysis (in million Mau Rs in 1977 prices)Estimated Investment Cost (1987/8 –2031/2 ) 4,358Estimated Benefits (1987/8 – 2031/2)• From consumer payments• From Land values• From avoided cost of an epidemicTotal benefits5,7412.7204,75713,218Estimated Net Benefits 8,860Net Present Value at 10% 1,1163.4 Inputs to the Regional Action ProgrammeA. Programme Approach: Economic Appraisal as a Vital Instrument in EnvironmentalManagementThe application of Cost-Benefit Analysis demonstrates that environmental investment hingeslargely on identifying and estimating the full socio-economic value of environmentalresources that a proposed investment will protect. Without an estimate of the value ofenvironmental resources, governments are constrained to invest in environmental protectionwhen what will be protected is considered to have no value. To increase environmentalinvestment it is necessary to demonstrate that environmental investment improvesenvironmental quality and to link quality improvement to increase in value.There is another key issue addressed by Cost–Benefit Analysis. It assigns an estimatedsocio-economic value to ecological resources improving the methodological tools anddecision making capacities for environmental management. When the nature, extend andimportance of environmental resources are expressed in ecological terms, it becomes difficultto identify and incorporate the social and economic significance of environmental actionswithin an investment appraisal process. Cost-Benefit Analysis links ecological resources toan economic valuation system to demonstrate that the costs of protection measuresare worth the cost.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200060

Cost-Benefit Analysis is therefore an important instrument for bringing within thedecision-making process the estimated benefits of environmental management,making the cost of management socially viable, justifying the channelling of capitalfunds to environmental projects and thus enhancing the effectiveness ofenvironmental management.In East Africa coastal pollution is most urgent in the poorest and most rapidly growingurban coastal population centres of Dar es Salaam, Mombasa and Maputo. In thesecoastal urban centres the pressures on wastewater infrastructure from the growth of domesticand industrial pollution loads are as acute as the financial constraints that cripple effectiveresponse. In addition, implementation capacities, monitoring facilities and manpower trainingneeds add to the problems.The financial cost of the required sewerage infrastructure is very high and almost certainlyfinancially unaffortable. The contribution of Cost-Benefit Analysis in sewerage strategy isto identify the need for a more detailed cost analysis. More importantly, to bring intothe picture and focus attention on the benefits that will accrue from the proposedinvestment to help justify the investment in light of the magnitude of benefits.The introduction of methods of Cost-Benefit Analysis in the Framework Action Plan willincorporate basic principles of socio-economic evaluation as an instrument for defining futurepriorities taking into account the social viability of sewerage strategies and associatedenvironmental management actions the cost of which would otherwise seem prohibitive.B. Integrating Cost-Benefit Analysis in Wastewater Action Plans: ProgrammeObjectives and ActivitiesCost-Benefit Analysis makes three related contributions to wastewater managementproblems:• Introduces methodological tools for resource valuation;• Strengthens capacities for cross-sectoral approaches to problem-identification, evaluationof options and articulation of community support for selected actions; and• Broadens the basis for participation, partnerships and co-operation in the decision-makingprocess.Programme ObjectivesTo facilitate the application and use of the outputs of Cost-Benefit Analysis in wastewateraction plans, programme objectives should be directed to three main strategic areas:4. Capacity-building to create the skills for applying CBA as a tool for problemidentification,priority-setting and decision-making.5. Exchange of experiences and development of partnerships for increasing awarenessof the uses and limitations of Cost-Benefit Analysis in decision-making.6. Development of "social constituency" for wastewater actions and environmentalmanagement based on community benefits and poverty alleviation associated withreduction and elimination of pollution from land-based sources.Programme ActivitiesC. Capacity-building activities:(i) Initiate and support national level activities to build up of a socio-economic database on:Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200061

• Health costs• tourism income• fisheries production• mangroves productivity and• property values(ii) Provide support for regional level co-operation to develop an appropriate ContingentValuation methodology to bringing within the capacities of the responsible authorities theapplication of economic valuation techniques to changes in coastal and marine environmentalquality.(iii) Establish a regional forum for co-operation and co-ordination of national activities forreviewing institutional arrangements and responsibilities for CBA aiming to focus on:• Increasing awareness of the need to dealing with externalities and implementation ofthe Polluter Pays Principle• The use of CBA as a tool for promoting conservation and assessing development/conservation alternatives• Bring long-term environmental benefits into the decision-making process• Gradually shift the focus of environmental protection from control to managementD. Exchange of experiences and partnership-development activities(i)Conduct national level consultations to:• Review of the results of the Case Studies• indicate the wastewater management choices open to the implementing national andmunicipal authorities• identify more closely the prevailing financial constraints, affordability problems andopportunities for co-operation with international donor agencies• cost-estimate alternative sewerage solutions and define locational, phasing and socialpolicy priorities, taking into account wider development, anti-poverty and land useplanning objectives(ii)Conduct a regional workshops to:• Review the recent GPA Draft Recommendations for Decision-making on Sewage and theniche they provide for CBA• Review national institutional similarities and differences relative to the incorporation ofCBA in wastewater priorities and decisions• Initiate the development of appropriate guidelines for CBA• Identify opportunities and assistance requirements for carrying out pilot demonstrationCBA in selected locations, such as:• Dar-es-Salaam area and/or Oyster bay in Dar-es-Salaam• Mombasa Port area and/or Kenyatta beach in Bambouri coastal area• Maputo Port area• Beau Vallon main tourist area• Zanzibar Port and surrounding area and/or Zanzibar Stone TownFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200062

C.Demonstration actions and development of "social constituency"(i) Present and discuss the results of pilot CBA projects with a view to building upstakeholders consensus on the costs of inaction arising from pollution and the need forpartnership and participation in consultations with the decision-making authorities, focusingon:• Community benefits of saving coastal and marine resources• The links between wastewater actions, economic development and poverty alleviation• bring to the attention of local authorities and NGOs the need to strengthen thetechniques of socio-economic cost-benefit analysis and resource valuation• justify increased political support for regional, national and local level co-operation asan added "resource" for effective use of international assistance to address coastaland marine pollution from wastewater sourcesExpected Outputs6. Institutional, social and technical capacity for earlier implementation of the GPA DraftRecommendations for Decision-making on Sewage7. Greater scope for implementing "demand-driven" policies for wastewater actions andcritical understanding of affordability, cost recovery and participation considerations.8. Integration of ecological, engineering, financial and socio-economic parameters inwastewater actions9. Closer understanding of the links of marine science research to socio-economic policyinstruments and the objectives of coastal zone management and sustainabledevelopment strategies.10. More effective environmental management as a part of regional, national and localdevelopment policy.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200063

Annex IRegional OverviewThe Western Indian Ocean Region comprises the coastal States of Kenya, Mozambique,Somalia, South Africa, and Tanzania and the island States of Comoros, Madagascar,Mauritius, Reunion, and Seychelles. The coastal States are among the world's poorestcountries with annual per capita gross national product of less than $ 1,000, crippled by rapidurbanisation, poverty, structural-adjustment problems and over-dependence on informalsector activities. The coastal zone of the region between Somalia and Mozambique, taking upabout 12% of the land area, is home to 25 million people accounting for about 20% of theregion's population. Population trends indicate that in the major coastal cities of Mombasa,Dar es Salaam and Maputo the population will double in about 25 years.The coastal and marine environment of Eastern African presents great ecological diversityendowed with coral reefs, sea grass meadows, lagoons, mangroves and beaches ofconsiderable natural beauty. Of the 38 types of designated marine and coastal habitats, atleast more than 12 types of habitats are found within each country of the region. There is ahigh degree of ecological interdependence among ecosystems; the conditions that supportthe coastal ecosystem are influenced by conditions in adjacent ecosystems. Typically,mangrove ecosystems form a nursery ground for a variety of fish, some of which mature incoral reefs and sea grass meadows; nutrient, sediment and organic matter interchangebetween the ecosystems. These ecosystems are important repository of biodiversity, bothflora and fauna. Based on 52 tropical inshore fishes, it has been found that endemism ofspecies in the region is 22% compared to 13% for the Red Sea and 6% for the Eastern IndianOcean. The Region includes five of the world’s seven coastal turtle nest and more than 20cetacean species. The coastal ecology supports productive resources used in economicactivities providing food and income to the coastal population.Coral reefs are found in all countries, with Mozambique, Madagascar and Tanzania havingthe largest area coverage. The economies of all the countries benefit from reef fisheries, aswell as reef-related tourism. Artisan fisheries typically account for more than 95 % of the totalmarine catch, these activities being mostly in reef, sea grass and associated platformenvironments thus providing employment and income to most coastal communities. Coralgrows in clear water and is extremely sensitive to pollution, whether due to chemicalcontaminants or suspended sediments.Mangrove forests are biologically rich ecosystems and an important form of coastalvegetation. Their extensive root systems stabilise sediments, provide shelter for an array ofbirds, marine animals, and commercially important fish and crustaceans. The decompositionof mangrove litter provides a source of food for both mangroves and shrimp communities inadjacent habitats. While molluscs, crabs, fishes, and shrimps caught from the mangroveecosystems are direct sources of food and income, mangroves are also the primary source ofconstruction timber, fire wood and charcoal. Consequently, mangroves are under increasingpressure from expanding coastal population. Mozambique has the largest total area ofmangrove in the region with 396,080 hectares. Madagascar and Tanzania have 327,000 and98,157 respectively (UNEP, No. 167, 1998).Environmental degradation is a major threat not only to ecological diversity itself but also toproduction and the livelihood sources on which coastal communities depend. The underlyingcauses of environmental degradation are associated with rapid coastal urbanisation, sprawl ofunplanned peri-urban settlements and expansion of trading activities that widen the gapbetween the expanding needs for sanitation and wastewater infrastructure and the limitedfinancial resources and institutional capacities to match the scale of the demand.Urbanization Trends: percentage of urban population 1960,1994 and 2000Country 1960 1994 2000Kenya 7 27 32Tanzania 5 24 28Mozambique 4 33 41Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200064

Mauritius 33 41 42Seychelles 25 54 59Source: Human Development Report, 1997Country Economic IndicatorsThe national economy for Tanzania has been growing at 3.1% per year since 1987 thatgreatly exceeded the average annual rate of the previous 5 years that had reached 1% peryear. The private sector accounts for 80% of internal trade, of which 70% involves domesticproduction. Yet, growth in the agriculture sector, which remains the larger potential employer,fell from 19% of GDP in 1995 to 13.5% in 1996. The economy of the country is dependant onagriculture; approximately 90 % of the population is engaged, directly or indirectly, inagricultural activities which produce 60% of GDP and more than 75% of the foreign exchangeearnings. Other important economic sectors include fisheries, mining, wildlife, forestry, andtourism. Zanzibar, a rather closed economy in the past, has recently opened up to tradefollowing the adoption of the free trade policy in the mid-1980s. This has attracted manyinvestors most notably in the tourism sector. Following these developments, Zanzibar haswitnessed significant social and economic changes. New industries have flourished alongmost of the eastern coastal area.The economy of Kenya is dependent mainly on agriculture, tourism and industry. These threesectors contribute over 85% to the GDP, about 20%, 45% and 20% respectively. Fisheriesand mining account for less than 1%. The national economy of Kenya has been growing at1.8 % per year since 1988, with the inflation rate at 6.6 %.Prior to independence in 1976, the Seychelles was primarily a subsistence agriculturalfishingeconomy with limited cash crop exports. During the 1970s and 1980s tourism wasestablished as a major economic sector, followed by manufacturing and fishing activities,while agriculture has steadily declined in importance. Fisheries and manufacturing havecontinued to be the focus of economic activities during the 1990s. While tourism is today thefastest growing sector in the Seychelles economy, in 1995 tourism and food-related industrywere estimated to generate roughly the same share of GDP, about 20%. Tourism earns over60% of foreign exchange, compared to 10% of fisheries that produced some 90% of domesticexports of goods.Mozambique is one of the eight poorest countries in the world. The country’s debt wasaround 1 billion US $ in 1990 that grew to about 5 billion US $ in 1996. To reverse economicdecline, the Mozambique government, in the context of the 1987 Structural AdjustmentProgramme aimed to reduce state control of the economy and promote the family sector as avital component of the private sector-led development process in agriculture production andmarketing. These and other economic reforms have contributed positive results withconsequent GDP growth of about 1% in 1986 reaching 2% in 1990. The main economicsectors in Mozambique are agriculture and fisheries each contributing about 40 % of the totalexport earning in 1995 (UNEP TDA/SAPWOI, Maputo, 1998).Coastal PollutionCoastal pollution in the region originates predominantly from land-based sources mainlyassociated with urban and industrial uses. Major pollution sources are connected to urbanindustrial and municipal activities in areas where such used are concentrated. According toUNEP/IMS, UDSM/FAO/SIDA, (1998), the pollution issues of greatest concern include:• Microbial contamination of groundwater resources from uncontrolled on-site disposalpractices or degenerated sewerage infrastructures. The majority of the population in theregion in Kenya, Tanzania and Mozambique use septic tanks and pit latrines. Accordingto Mwaguni and Munga, (1997), analyses of water samples from wells and boreholesindicate widespread microbial contamination (total and feacal coliform) of groundwater inMombasa; only 3 of the 23 wells sampled passed drinking water standards. Studies in theMaputo Bay have revealed that feacal coliforms, feacal streptococci and escherichia coliwere detected in marine water and shellfish tissues. (Fernandes and Hauengue, 1997).Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200065

• Degradation of coastal and marine water quality due to the release of untreated sewage,industrial waste and agrochemicals. Eutrophication due to the release of inorganicnutrients (phosphate, nitrate and ammonia) into coastal waters from domestic sewagearound Zanzibar has been identified as one of the main cause of the decreased cover ofcoral-reef-building algae (Bjork et al., 1995).• Destruction of coastal habitats from disposal of untreated domestic wastes. Domesticsolid wastes, such as organic wastes, paper and plastics, are collected by municipalservices in only some parts of the larger coastal towns. Given the limited coverage of thecollection system, the bulk of wastes are not disposed in dumping sites and pile up inresidential and industrial areas near the coast posing a hazard to public health and thecoastal environment. In Mombasa only 53% of the 103, 000 tons of annual solid wasteproduction is collected. The dumping of domestic waste on mangrove forests aroundMakupa Creek and in Lamu has been reported (Linden and Lundin, 1997). Also inZanzibar, domestic solid wastes is being dumped on Maruhubi mangroves (DorschConsult and Ministry of Water, Construction, Energy, Lands, and Environment, 1992).ResponsesThe countries of the Western Indian Ocean are either parties to a number of regionalinitiatives or actively participate in the activities promoted under regional programmes,including:• Intergovernmental Oceanographic Commission’s Regional Committee for Co-operativeInvestigations in the North and Central Western Indian Ocean (IOCINCWIO)• Eastern African and the Islands States Integrated Coastal Management Process• Indian Ocean Commission (COI) for the island states• Convention for the Protection, Management and Development of the Marine and CoastalEnvironment of the East African Region and related protocols (The Nairobi Convention).In recognition of the strategic importance of water supply and sanitation services, internationaland regional programmes have drawn attention to the identification of their significance, theseverity of the impacts of poor management and the need to formulate and implementsustainable strategies. Water and related issues is the focus of Chapter 18 of Agenda 21. Keyissues of concern include the role of water and sanitation in promoting sustainable urbansettlement planning, particularly for access to safe drinking water, provision of affordablesanitation infrastructure, participation and private sector initiatives in the design and operationof service delivery systems and capacity-building for resource management and enforcement.The management of the marine environment, including the maritime zones outside thenational jurisdiction of coastal states, has long been a major concern of the internationalcommunity. The first UN Conference on the Law of the Sea, held in Geneva in 1958, broughttogether several UN agencies, intergovernmental organisations and individual States for thepurpose of developing strategies to protect the marine environment. The Regional SeaProgramme of UNEP, initiated in 1974, is a major outcome of this effort aiming to provide acomprehensive framework for regional co-operation in the Seas and Oceans.In 1980 the Eastern African region became part of the UNEP’s Regional Sea Programme.The Eastern Africa Action Plan, the Nairobi Convention for the Protection, Development andManagement of the marine environment and related Protocols were developed in the early1980s under the auspices of UNEP’s Regional Sea Programme. The Nairobi Convention andits related Protocols were adopted in 1985 dealing with the prevention and control of marinepollution from ships, pollution caused by dumping of wastes from land-based sources,pollution from seabed activities and air borne pollution.Several responses have been initiated to develop a framework for regional co-operationdirected to the protection and management of coastal and marine resources, particularly toFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200066

tackle wastewater management capacities and coastal management tools and institutions. In1993, the ministers of environment and natural resources of the Eastern African countries metin Arusha, Tanzania and signed a resolution recognising the importance of sustainablemanagement of coastal zones. At the Second Policy Conference on Integrated Coastal ZoneManagement in Eastern Africa and Island States, in Seychelles in 1996, policy makers fromthe region assessed successes and failures in ICZM since Arusha and discussed and agreedon actions. Following these initiatives, additional actions have been pursued to create aregional framework for mobilizing available human, institutional and financial resources toaddress both national and regional priority concerns. The First Meeting of the ContractingParties to the Nairobi Convention in 1997 approved the preparation of a TransboundaryDiagnostic Analysis (TDA) and a Strategic Action Programme (SAP) for the Marine andCoastal Environment of the Western Indian Ocean, supported by a Global EnvironmentalFacility Project Development Facility (GEF PDF-B) grant.Major global and regional level initiatives for municipal wastewater management aremobilised under the Global Programme of Action (GAP) for the Protection of the MarineEnvironment from Land-based Activities adopted by an intergovernmental conference held inWashington, D.C., USA, in 1995. The overriding goal of the GPA is to prevent the degradationof the marine environment from land-based activities, by facilitating the realisation by Statesof their duty to preserve and protect the marine environment. To facilitate implementation ofGPA around the world, UNEP organised, during the period 1996-1998, in co-operation withrelevant regional organisations, a series of regional technical workshops of governmentdesignatedexperts, as well as representatives of international organisations, the privatesector and experts from non-governmental organisations. Seven regional technicalworkshops were convened by UNEP within the framework of the Regional Seas Programmeto identified the priority and stimulate partnerships, modes of co-operation and strategies foraddressing threats to the coastal and marine environment from municipal wastewater.In order to meet the above request the UNEP/GPA Coordination Office developed a StrategicAction Plan on sewage whose principal aim is to support efforts of States to addressproblems associated with pollution emanating from the disposal of untreated or inadequatelytreated waste water into the environment. The action plan is a proposal jointly put forward byUNEP, WHO, Habitat (UNCHS) and the Water Supply and Sanitation Collaborative Council(WSSCC). The Strategic Action Plan has three principal components: (i) assessment whoseaim is to identify the problems to be addressed and opportunities as well as cost benefits (ii)management component which assesses measures for addressing the problem at national,regional and global levels (iii) co-ordination at local and global levels and (iv) timetable for itsimplementation.Broader Coastal Environmental ProblemsThe following table summarizes the main issues and problems outlined in relevant countryreports and other relevant sources (Western Indian Ocean, Transboundary DiagnosticReport, 1998).IssueImmediate Cause (s)Kenya1. Water Quality degradation• Domestic Sewage and solid waste disposal• Treatment plant inadequacy2. Habitatmodification/degradation and lossof biodiversity• Industrial solid and liquid disposal• Sedimentation due to deforestation/agriculturalactivities• Unplanned development plans such as tourismdevelopment and urbanisation• Clearing of mangrove forests for salt pansFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200067

• Resource over-exploitation• Sand mining• Destructive fishing methods3. Restricted access (usage) toresources and resource useconflict• Poor land use planning• Changes of use of resources• Lack of integrated approach to resources use4. Microbial contamination ofgroundwater• On-site domestic sewage disposal• Poor domestic refuse disposal• Soil erosion and siltation5.Saline intrusion6. Marine pollutionMozambique1. Coastal habitat degradationand loss of biodiversity• Increased abstraction of groundwater• Oil spills• Ballast water discharge• Ships solid and oily waste disposal• Siltation from poor land use• Over-exploitation of resources• Destructive fishing methods2. Groundwater contamination3. Water quality degradation4. Restricted access to resources,e.g. beach, fish landing sites,ports and harbours, etc.5. Excessive water abstractionSeychelles1. Public health concerns/ waterquality and potential coastalhabitat degradation2. Coastal deposition of red soilduring rainy season due toan unplanned access roadconstruction sites.3. Habitat/ecosystemdegradation4. Decreasing harvests onmarine and coastal livingresources5. Marine pollution• Saline intrusion due to excessive ground waterabstraction• Domestic and industrial sewage disposal• Domestic waste water• Agrochemical run-off• Domestic solid waste• Industrial waste• Poor or lack of land use plans in coastal urbanisationand tourism related development• Dam construction and agricultural activities upstream• On-site domestic sewage disposal• Industrial effluent disposal• Siltation• Landfills• Increasing catch/effort for pelagic species such tuna,billfish, kingfish by industrial fishery sector• Oil spillsFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200068

Tanzania1. water quality degradation2. groundwater contamination andsalt water intrusion• Ballast water discharge• Domestic sewage and solid wastes• Industrial liquid and solid wastes• Agrochemical run-off• On-site domestic sewage• Excessive groundwater abstraction3. Habitat/ecosystemdegradation/ Loss of criticalhabitats and biodiversityparticularly the the dugong(Dugong dugon) and turtles• Siltation due to poor land use• Sand mining and quarrying♦ Clearance of mangrove forests for salt pans• Destructive fishing methods• Industrial development and wastes• Coral mining• Incidental catches4. Restricted access toresources and use conflicts5. Decreasing harvests onmarine and coastal livingresources6. Marine pollution• Poor/Lack of land use plans• Increasing catch/effort by artisanal fishermen and onpelagic species such tuna, billfish, kingfish by industrialfisheries• Oil spills• Ballast water dischargeFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200069

Annex IIMombasa Regional and City ProfileCity BackgroundThe District of Mombasa covers a total of 282 sq. km, 65 sq. km of which is open water. It isthe smallest among the seven districts that constitute the Coast Province of Kenya. TheDistrict is further divided into the 4 administrative Divisions of Mombasa Island, Likoni, Kisauniand Changamwe. The Island Division is the smallest, but the most built up. It is a port town ofnational and international significance, a center for tourism, maritime commerce and largeindustrial establishments. It also houses large human settlements. The other remainingdivisions are rural in characteristics.Area of the District by DivisionDivisionArea in Sq. Km.Mombasa Island13Kisauni100Likoni48Changamwe49Total 210Source: Government of Kenya, Mombasa District Development Plan 1997-2001Creeks. Mombasa Island is surrounded by a number of Creeks: Tudor, Makupa, Junda,Kilindini and Port Reitz. By their nature, creeks create steep cliffs that contributed to theformation of deep harbours. The port of Kilindini in Mombasa is of great importance not onlyto Kenya and East Africa but also to other land locked countries of central Africa.Mangrove Forests. Mangrove forests are the only gazzetted forests in Mombasa District.They cover a total area of 3059.4 ha; Port Reitz 1017.5 ha. Tudor Creek 1321.4 ha. andMtwapa Creek 720.5 ha.Watershed conditions. There are no rivers of any major significance in Mombasa District.Water supply to the district comes from sources outside the District but within the Provinceand the supply does not meet the demand. There is a large potential for groundwater in theDistrict to supplement the shortfall. Groundwater is tapped through shallow wells andboreholes but the water is often either saline, highly mineralized or if fresh, contaminated frompit latrines or septic tank soakage pit systems typically used for the disposal of sewage inlarge settlements. As a result, the supply of surface and ground water comes from sourcesoutside the District.The present state of the quality of the groundwater in Mombasa remains poor and is expectedto deteriorate as population needs and other economic uses of the water continue to increasewhile alternative supplies are not found. The cost of water management and water qualitymonitoring is presently unaffordable both for the local authority and any imposition of wateruser charges for cost-recovery will be unaffordable to the households.Population. The population of Mombasa according to the 1999 Population Census is653,000 persons. The population distribution figures by Divisions are not yet available and aretherefore estimated according to the 1989 Census as shown in the table below.Population Distribution and Density (persons/km. sq.)Division Population Population DensityMombasa IslandKisauniLikoniChangamwe180,30021800095,400159,30013869218019883251Total 653,000 Average 3,111Source: Government of Kenya, Population Census 1989 and 1999Population growth. The District population growth rate is 4% per annum, which is higherthan that of the Province of 3.1% per annum. In-migration of labour force for urbanFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200070

employment is the main factor responsible for the higher growth rate in Mombasa. MombasaIsland and town - the focus of the study area - have the highest density of population for thewhole district. The area attracts large migrant population because, in addition to wageemployment opportunities, offers easy access to transport, while the connecting bridge makestransportation to the Central Business District very easy. This stimulated the development ofvast human settlements in housing estates and squatter populations in slum areas.Changamwe Division has also attracted a large population because of the concentration of alarge number of industrial establishments there.Employment. The main source of household income in Mombasa District derives from wageemployment, increasingly in trading and personal services in the “informal sector”. Since the1992, the economy of the country has been performing poorly under the strain of public sectorretrenchments and job freezes. This has stimulated the growth of “informal sector”employment comprising petty businesses, such as street trading, water vending, hawking,small-scale food kiosks and second-hand cloths shops, selling fire, fuel wood and charcoaland other personal services. These activities are mainly concentrated in the town ofMombasa and are typically unrecorded in official statistics. Still, informal sector grown hasbeen lower than the growth of the labour force. It is estimated that in the period 1995 – 2001employment will have to grow by an average of 4.3% annually to absorb the available labourforce, a growth rate very unlikely to be achieved given the prevailing economic circumstancesand the young age-composition of Kenya’s labour force. For instance, those in the 15-24 agebracketaccount for 36% of the total labour force (EAMAT/KO, 1995:4).The labour force was 370,261 in 1997 and is expected to reach 417,469 by the year 2001(Mombasa District Development Plan 1997-2001). Currently, manufacturing accounts for 21%of wage employment, community, social and personal services account for another 32%,while transport and communication for about 21%.Major Industries in Mombasa DistrictIndustryNo. of PlantsBakeries8Cement1Dying6Electricity generation3Fish Processing2Grain Milling8Glass Manufacturing1Iron and Steel7Milk Processing1Non-ferrous12Petroleum Refining1Plastics Manufacture8Roofing felt and adhesives2Soft Drinks2Soap Manufacturing2Textile Manufacturing22Vegetable & animal oils & fats9Total 95Source. Government of Kenya, Ministry of IndustryAverage Income. Analysis of household income for the Coastal Province of the District for1994 shows that Mombasa recorded the highest household per capita income of KenyaShillings 57,011 (about 750 US$), which is mainly due to tourism and related urban wagejobs. Income is not equally distributed. High income is concentrated in a small proportion ofthe urban population while the majority in the rural areas of the District live in poverty. Thepoverty rate of the Coast Province in 1998 was estimated to be at 57%. An income survey byDr. Swazuri in 1999 showed severe income disparities in the population sample of Mombasa.Average annual household income in the affluent areas is Ksh.3, 465,600 (about 45,000 US$)and that in the rural areas of the District such as Mwakirunge was Ksh.86, 210 (1,120 US$).The lowest earned income recorded was Ksh.9, 600 (about 125 US$), while the highest wasKsh.14.4 m (187,000 US$) per year.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200071

Population covered by sewerage infrastructure. The population of Mombasa served bywater-borne sewerage is 15% (Mwaguni and Munga, 1997). In another study conducted byBambra 1997/8, the figure quoted is 10% as reported in the Sanitation StakeholderConsultation Workshop Document of the Mombasa Experience (UNDP – World Bank, Waterand Sanitation Program September 1998). On average therefore, only 12-13 % of thepopulation is served by the water-borne sewerage network. The decrease is explained by therapid population growth in areas outside the coverage of the system and the limited extensionof the systems itself. In terms of area covered, only one third of the city of Mombasa Islandis connected to water-borne sewerage. Except in some parts of Changamwe, the rest of theremaining Divisions of the District are not sewered. However, the situation is expected toimprove in the very near future when the expansion and re-design of the sewerage system iscompleted to serve the whole of Changamwe Division. This will significantly increase both thepercentage of population and the area covered by the sewerage infrastructure.Existing Wastewater Management Infrastructure. There are two treatment plants that werebuilt to serve specific areas of the District. One is located on Mombasa Island and the otherin Changamwe Division. The treatment plant on the Island has been out of use for manyyears, and domestic wastes from the sewered population enter the marine environmentuntreated. The plant in Changamwe has also been out of use for a long time, has since beenre-designed and is now under construction to serve a larger population. This plant, to becommissioned soon, will greatly improve the sewage management in Mombasa. For the restof the population, the management of human wastes is by the use of pit latrines and septictank-soakage pit systems. 15% the population relies on septic tank/soakage pit system while72% use pit latrines. The responsible authorities are over-strained and under-funded andcannot provide regular emptying services to the rapidly growing urban population and who aretherefore left to cope with unsanitary practices. Tourist hotel establishments use septic tanksoakagepit systems for human wastes, although some of them have installed their ownsewage treatment plants.Main Point Sources of Pollution (Domestic, Industrial, Ports)The following are the locations concentrating industrial and domestic uses generatingsewage:• Old Town for mainly domestic sewage• Ziwani, Tononoka and Ganjoni residences are illegally connected to the stormwaterdrains using them for domestic sewage waste discharges,• Changamwe for both domestic and industrial wastes• Shimanzi are for industrial wastesThe main discharge areas receiving pollution loads from industrial, domestic and portactivities are:• In Tudor Creek, the point sources of pollution are Mombasa Hospital, Tamarind, OldTown, Coast General Hospital, Mombasa Polytechnic, and Tudor Estate. These sourcesdischarge raw sewage and hospital waste of unknown composition.• In the Mtwapa Creek the point source of pollution is the Shimo La Tewa GK Prison,which largely discharges wastes of human origin.• The sewage out-falls at Kipevu in the Kilindini Creek and Kizingo at the entrance of theTudor Creek where raw sewage enters the marine environment due to the breakdown ofthe sewage treatment facilities and from other point sources.• The Hodi hodi river - a seasonal river - discharges sewage from the sprawling housingestates of Bamburi into the Indian Ocean near the Jomo Kenyatta Public Beach.Other point source of pollution have emerged from the illegal connection of sewer lines fromindividual homes to storm water drains thereby discharging sewage to the marineenvironment. Such places include:• Ziwani, Tononoka and Kongowea which drains into Tudor Creek, and• Ganjoni, which drains to Kilindini Creek.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200072

Sources of industrial effluent include:• The petroleum refinery at Changamwe, which produces considerable quantities ofhazardous sludge, contaminated oil marcaptans and tetraethyl lead.• The Kibarani Dumping site which receives both domestic and industrial wastes. At theKilindini Port the point sources of pollution are those from shipping activities.Hot Spot Locations• Kipevu in the Kilindini Creek and Port Reitz Creeks, which receive both domesticsewage and industrial effluents, discharges. Due to the proximity of the industrial area tothe natural drainage basin of the Mombasa Island and the west mainland in Changamwe,most of the pollution load from industrial effluents pour into the Kilindini and Port ReitzCreeks. The Creek waters also receive large volumes of domestic sewage from theChangamwe Division, with Kipevu being the main hot spot.• Mtwapa Creek and the Kizingo sewage outfall in the Tudor Creek in which domesticand institutional sewage are discharged from Shimo La Tewa GK Prison.• Kibarani Dumpsite on the edge of Kilindini Creek is another major hot spot area.Pollution Loads and Pollutants (Coliform Bacteria, BOD, COD, Heavy Metals, Etc.)The main pollutants, according to measurements of Coliform Bacteria, BOD, COD and HeavyMetals carried out by Mwaguni and Munga in 1997 in the marine environment and groundwater sources in Mombasa, are BOD and Suspended Solids (SS) from domestic andindustrial sewage. Domestic sources account for 18% and industrial for 67% of BOD loadsand 10% and 55% of SS loads, as shown below. No comprehensive studies have beenconducted since 1997. Subsequent spot-check analyses indicate that the conditions tend toget worse.Summary of pollution loads from Mombasa District.Source BOD SS Oil N P HM OtherDomesticSewageBeach hotelsStorm waterSolid wasteIndustrialwasteShip waste *Livestockwaste4369(18.0%)100 (04%)522 (2.2%)1846(7.6%)16249(67%)14 (0.1%)1161(4.8%)3964 (10%)85 (0.2%)4447(11.3%)-21837(55.2%)11 (0.0%)9180(23.2%)-----103-622 (41.9%)18 (1.2%)166 (11.2%)-45 (3.0%)2 (0.1%)630 (42.5%)94 (19%)2 (0.4%)11 (2.3%)-6 (1.3%)0.2 (0.0%)364(76.3%)Cr0.25Cu0.001fe 2.9Ni0.005Zn0.11Phenol0.01S:0.12Totals 24233395241031483477(100%)(100%)(100%)(100%)100%* estimated domestic wasteSource: Mwaguni & Munga 1997Microbial Contamination and Nutrient Levels in Mombasa District Inshore Water AreasAreaBODmgO/lColiformper 100mlE. Coli per100mlNO ug-asN/lPO ug-as N/lKilindini / Port Reitz CreekTudor Creek0.2-2.40.4-4.00 –1800+0 –16000-5500 – 140.2-4.00.6-7.21.3-2.30.9-5.7Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200073

Source: Mwaguni & Munga 1997Sewage Discharge RatesDischarge Rates –cubic meters per daySource Design Flow Current Flow ProjectedChangamwe Stage 1 17 100 Unknown 51 300Kizingo 31 400 Unknown 94 200Environmental Impacts and Resources AffectedFresh water. Mombasa District has no surface water resources of its own. The Districtdepends on surface water supplies from Baricho in Malindi District. This source experienceslow flows during the dry season and siltation causes frequent breakdowns during the rainseason resulting into perennial water shortages in Mombasa. Groundwater sources is themain source of water supply to the population of Mombasa supplementing surface water, butdue to inadequate water management, lack of distribution infrastructure and proximity to humansettlements, ground water sources are saline or contaminated with feacal matter. Studies byMwaguni & Munga- 1993, 1997 and Mwaguni 1999, have confirmed that all ground watersources developed alongside human settlement did not pass the test for drinking water. Onlythose sources developed far away from human habitation passed the standards for drinkingwater. Since the largest number of the sources have been developed near or within humansettlements, treatment of such sources to make them potable is not sustainable because of thepresence of the permanent sources of contamination from pit latrines and soakage pits.Microbial contamination of ground water in Mombasa DistrictSource No Coliform count per100mlE. Coli count per 100ml Potability*WellsWellsBoreholesBoreholes203111#25-1800+0 – 417-1800+00-1800+00-500101Source: Mwaguni & Munga 1997* Potability: 0 - not potable, 1 - potable# Borehole water treated with ultra-violet radiationDrinking water standards applied in Kenya are: -(a) Coliform count < 10/100ml, (b) E. Coli count, nilMarine and Coastal Ecosystems. Important marine and coastal ecosystems on the KenyaCoast include: Coral reefs, beaches, mangroves, lagoons, coastal and Kaya forests, marine andinland reserves and historical sites. Coastal reefs support a rich diversity of species and protectthe shoreline from wave action. Mangrove habitat form important nursery grounds for a varietyof fishes and crustacean, for various species of sea birds, act as nutrient trap that help reducepollution loads to the marine environment in addition to providing stability of the shorelineagainst erosion. Biodiversity in intertidal mangrove forests is usually high. Between the reefsystem and the shoreline are the biologically productive lagoons, which are critical to fishingactivities. The sandy beaches and sea grasses are ideal for numerous marine creatures,providing nestling grounds for various species of turtles, fishes and mollusks. The lowland andKaya forests support a high diversity of flora and fauna.• Pollution from industrial effluents and sewage and development pressures create impactson these eco-systems leading to their degradation.• Snorkellers trample on coral reefs, the reefs suffer anchor damage in addition to sufferingthe consequences of degraded water quality through oil pollution, siltation and thedischarges of sewage.• Mangroves suffer from over-cutting, pollution from oil spills and waste dumping and fromthe effects of sedimentation and improper oyster harvesting. The consequences of this isthe decline of fuel wood and mangrove poles for building, loss of livelihood for mangroveharvesters and loss of breeding habitat for fisheries and associated impact on fish catch.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200074

• The clearing of mangroves, coastal and kaya forests, and increased development and usesof the beach have resulted into the erosion of the beaches and the coastline with theconsequent losses of nestling habitats for turtles and loss of scenic and aesthetic qualitiesfor tourism.• Decline in water quality, beach erosion and sedimentation have also led to the degradationof sea grasses.• Fish habitats (Coral reefs and mangroves) have been degraded with consequent loss ofbreeding and spawning habitats for fish leading to decline in fish production.• Reduced fish production also reduces incomes to fishermen with corresponding increasedprices for buyers.• Public health threats associated with drinking contaminated water, the consumption ofcontaminated seafood and recreational contact.• Degraded environmental quality results in the decline of tourist visits and loss of means oflivelihood to boat and tour operators from businesses and tourism associated revenues.Health Impacts and threat - Indicators of Health Problems. Due to various types of waterborne diseases, which afflict children, the source of water for domestic use has and methodsof sewage disposal direct affect the level of child mortality and morbidity. It is reported in theKenya Population Census (1989) Analytical Report on Child Mortality that the proportions ofchild mortality was directly related to the various sources of water in relation to their qualityattributes. Lakewater was reported as the most important factor responsible for high childmortality. Important differences are reported in child mortality by means of sewage disposal, akind of dose-response function: The use of main sewer yielded the lowest proportions of childmortality, while disposal of sewage in the bush resulted in the highest child mortality. Onaverage, use of the bush disposal method increases child mortality by about 53% ascompared to use of main sewer. Indiscriminate use of small plastic containers to dispose ofwaste matter is commonplace in Mombasa, a phenomenon commonly referred to as “flyingtoilets”. Such disposal methods are common responses to the lack of infrastructure underconditions of rapidly growing population, poverty and public sector financial stringency.Spontaneous methods of waste disposal are contributory factors to the prevalence of waterbornediseases such as malaria, diarrhoel diseases and worms. These diseases have been themajor causes of death among the infants as reported above. According to the Economic Surveyof 1996, the mortality rate in Mombasa was 60/1000 for infants under 1 year.The national average reported was 66/1000. No statistics could be found for children betweenthe ages 1 and 5 years for the same period for Mombasa. However, national statistics for 1998indicate that mortality in general has gone up across the board. This increase in mortality isattributed to the HIV/AIDS pandemic. Figures cited indicate mortality of 74/1000 for infants and112/1000 for children between the ages 1 and 5 years.Malaria has been singled out as the major cause of death among children between the ages of1 and 5 killing 107/1000 children. It kills 72 children daily and accounts for 30% of all outpatientcases and 19% of admissions, 5.1% of who die. The major diseases reported in Mombasainclude malaria, pneumonia, tuberculosis, diarrhea and anemia. Recently typhoid has emergedto as one of the most devastating water-borne disease. In 1994, malaria constituted 33.4% of allcases reported, while pneumonia was 19.5%. Tuberculosis recorded 19.8%; diarhoeal diseasesconstituted 8%, while the rest recorded 19.1%.Out Patient Morbidity in the District of Mombasa 1994Diseases Island Kisauni Changamwe Likoni Total %MalariaRespiratorySkin InfectionDiarrhoeaOthers43,73232,53312,53410,18421,36525,80916,07810,7228,5175,67931,92114,7038,6027,6374,64825,56010,8225,9284,2054,757127,02274,13675,57230,54372,89833.419.519.88.019.1Source: Municipal Council of MombasaA case is reported in February-March 1999, in Mombasa, where a sewer line burstcontaminated the main reticulated water supply with the following consequences: 470 out ofFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200075

1628 people tested positive for cholera with some reported death, while 66 out of 179 testedpositive for typhoid, also with reported deaths.Treatment costs. In terms of cost to the individual, treating typhoid for example would requirethe expenditure of KSh. 1000 per week (about $ 13) for a full dose of treatment if the patientwere treated with the cheapest drug available in a government hospital. In a private facility aminimum of KSh. 10,200 (about $130) would be required for a similar treatment.Average wage of working population. The average basic wage and salary of workers inMombasa in 1998 as reported in the Economic Survey of 1999 was KSh. 4,241 (about $55) permonth.Production Losses and ThreatsFisheries. Fishing is an important economic activity in Mombasa District employ a largepercentage of the labour force either directly or indirectly. Most of the fishing takes place withinthe sheltered waters of the reef. The types of fish caught include: parrot fish, rabbit fish,scavengers, snappers, pouters, unicorns, little mackerel and barracuda. Others are sharks/rays,crustacean, squid and octopus. Aquarium fish, which contributes immensely to the amountcaught is mainly for export.A total of 2,155 metric tonnes (MT) of fin fish and shell fish worth Kenya Shillings 171 million(about $2.2 million) was landed by both artisanal and commercial fishermen in 1997, ascompared to the 2,198 MT caught in 1996, showing a decline of 43 MT. The artisanal fishinglanded 380 MT in 1997 compared to 489 MT in 1996, showing a significant drop of 109 MT.The drop in fish landings is attributed to the Likoni ethnic clashes and the EL-Nino weatherphenomenon, which kept many fishermen away. However, looking at artisanal fish landingssince 1995, they have been showing a steady decline each year. Over-fishing within the shallowwaters of the reef and poor environmental conditions that are largely associated with pollutionand other anthropogenic factors has caused this steady decline.The commercial fisheries landed 1775 MT valued at KSh.138, 877, 2,000 in 1997 comparedto 1709 MT landed in 1996. The increase in fish landing is attributed to favourable fishingconditions in the deeper waters. The main exports market for fish and fish products are Europeand the Far East.Fish Production 1997 by SpeciesSpecies Quantity Kgs Value KSh.Demersal 174, 188 14, 130, 308Pelagics 82, 995 6, 582,955Sharks, Sardines, Mixed Fish/ others 77, 959 4, 439, 785Crustacean 27, 585 4, 723,330Miscellaneous 17, 190 1, 958, 635TOTAL 379, 917 31, 835, 013Source: 1997 Mombasa District Fisheries Annual ReportEcosystems Attracting Tourism. The most important ecosystems attracting tourism includecoral reefs, sandy beaches, coastal forests and mangroves. Coral reefs have undisputedvalue in attracting tourism. Because of the high species richness and diversity in coral reefs,tourists have been attracted to these areas to dive, snorkel or scuba to enjoy the aquatic life.Tourists usually see moray eels, scorpion fish, lionfish, large groupers, and octopus, lobstersrays and occasionally, whale sharks and manta rays. Diving has thus become one of the mostimportant tourist attractions. Unfortunately, tourism has created demands on the inedibleresources of the coral reefs. Large quantities of shells and corals are known to have beencollected. Many other species are probably being collected. Over-exploitation and carelesscollection methods have led to serious habitat damage. These pressures, coupled with siltdeposition, pollution from hotels, industries, domestic effluent and oil discharges, havediminished both the productivity and the species richness and diversity of the coral reefs. Thishas in turn reduced the tourist visits to these areas.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200076

Clean sandy beaches are another tourist attraction. Unfortunately due to sewage problemsand those associated with coastal erosion, coupled with an unstable coastline, some beacheshave lost value as tourist attractions.Mangrove forests also play an important role in tourism attraction. Bird life is rich and varied inmost mangrove forests. This has attracted the development of boardwalks in mangrove forestsfor tourists to come and watch the birds. Unfortunately, the mangrove forests are being clearedto give way to physical development of tourist infrastructure facilities, thus destroying the basison which the tourism depend on. In 1988 for example an oil spill of 2 000 000 liters of fuel oilfrom a punctured storage facility destroyed 5 hactres of mangrove forest in Kipevu on the edgeof the Kilindini Creek. Such a loss of a valuable ecosystems has a direct link to loss in theaesthetic value of the environment and therefore not attractive to tourism activities therebycontributing to a loss in tourism earnings.Adjacent Coastal Land Uses Affected. The main adjacent land use affected by sewage inMombasa is recreational. The Kibarani area where sewage is dumped has been identified asa very suitable area for developing recreational facilities. Because of the conditionsassociated with the site, this has never been attempted. Also, due to the presence of garbageat the Mackinon Market, many businessmen of high quality have been relocated. Potentiallyhigh value properties for residential housing have been lost due to sewage in the Bamburiarea.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200077

Annex IIIDar-es-Salaam Regional and City ProfileLocation. Dar-es-Salaam (DSM) lies in the eastern part of Tanzania mainland, locatedbetween latitudes 6 0 27’ and 7 0 15’ South of equator and between 39 0 and 39 0 33’ east of theGreen Witch Meridian line. It lies between 6.34’ and 7.10’ South on the West Indian Oceancoastline, stretching about 100 km between the Mpiji River to the north and beyond theMzinga River in the south, enclosing a land of 1,350km 2 . The region is divided into threeMunicipal Districts, namely Ilala, Kinondoni and Temeke that are subdivided into 72 wards.Population. DSM is the commercial capital and largest urban center in Tanzania. It has anestimated population of 3.5 million people, Ilala 800,000, Kinondoni 1,200,000 and Temeke1,500,000. Since 1988 the average growth rate has been about 8% per annum. The totalnumber of households is about 547,000 with an average size of 6.4 persons. 70% of thepopulation live in 40 unplanned settlements.Population distribution by District, 1999DistrictPopulationIlala 800,000Kinondoni 1,200,000Temeke 1,500,000Total 3,500,000Source: Dar es Salaam City CouncilClimate. DSM region has tropical equatorial climate, a mean annual temperature of 26 0 C andan average humidity of 96% in the morning and 67% in the afternoon. The annual rainfallaverages over 1000mm.Morphological characteristics. The region is characterised by four distinct landforms:(a) Shoreline & Beach: The shoreland immediately abutting the sea, comprising sand dunesand tidal swamps.(b) Coastal Plain: A limestone coastal plain to the west of shoreland extending to the Puguhills, overlain with clay bound Pleistocene with fairly uniform relief lying between 15 and35m above sea level and slopes of less than 3%. Whilst extending 10kms to the west ofthe city, the plain narrows to 2kms at Kawe in the north before widening to 8kms at theMpiji river, and varies between 8-5kms in width to the southwest where the relief is moreirregular gradually merges into the more elevated head waters of Mzinga river. Lakes andponds are scattered throughout this landform where rich clay soils and zero gradientimpede natural drainage.(c) Inland Alluvial Plains: Rivers originating from the Pugu hills to the east dissect the coastalplain in a series of steep sided U-shaped valleys, culminating in creeks and mangroveswamps before entering the Indian Ocean. Dar es Salaam harbor penetrating almost10kms inland along the Kizinga and Mzinga creeks forming the principal topographicalfeature of the region. These valley soils are generally poorly drained silt clays enrichedwith organic matters.(d) Upland Plateau: The deeply dissected Pugu hills, which bound the region to the westaverage 100 to 200m above mean sea level rising some 330m at some point, arecharacterised by steep weathered slopes and well drained of unconsolidated gravely clayboundsoils.Water Resources. The region contains watersheds of 4 major rivers. Mpiji River forms thenorthern boundary of DSM, Msimbazi River flows to the north of the city centre and Kizingaand Mzinga Rivers flow into the harbour area of the city. There are also smaller water coursessuch as Nyakasangwe, Tegeta, Mbezi, Sinza, Tabata, Minerva. Apart from a small pumpingstation at Mtoni on the Kizinga River, all regulated water comes from Ruvu River outside thecity boundary. Due to the distance involved, there is high leakage and limited free flow. Theregion will always rely on external surface sources as groundwater is not only polluted fromeffluents but contains high degree of salinity. Whilst the primary function of these riversystems is for drainage with only a small pumping station in Kizinga River, some streams areFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200078

occasionally used as last resort water sources by poor families in unplanned settlements whocannot afford to purchase water commercially.Industry. 80% of the nations’ industries are located in the DSM region. In 1999 there were412 industries on the register of the Ministry of Industries and Trade, including some whichmay have since ceased to operate.Industries in Dar es SalaamCategoryNo. of industriesFood and beverage manufacturing, chemicals and cosmetics 162Metal products 55Textile mills, garments, leather and plastic products 90Paper & paper products, Printing, Publishing & allied industries 33Wood and wood products 17Building & construction materials 14Electrical appliances, battery industries 12Animal feed 8Motor / vehicles assembly and maintenance 10Glass & Glass products 5Ginnery and tobacco 3Mineral 2Petroleum refineries 1Source: Ministry of Industries and Trade. (International Standards: Industrialclassification of all economic activities Part II List of major Divisions, Divisions andmajor groups).Tourism. The coastal climate is favourable to beach tourism. In DSM there are more than 13tourist hotels, and new ones are under construction, with a total of 5,000 beds. The main onesinclude the Sheraton Hotel, New Africa Hotel, Kilimanjaro Hotel (now inoperative),Silversands Hotel, Whitesands Hotel, Jangwani Beach Hotel, Haven of Peace Hotel, Sea CliffHotel, Africana Hotel, Kunduchi Beach Hotel, Bahari Beach Hotel, Oysterbay Hotel, KaribuHotel. According to the Ministry of Natural Resources & Tourism and the Tanzania TouristBoard, the annual average number of tourist is about 201,000 with average annualexpenditure of US$ 190 million.Commercial and Industrial activity and the "Informal Sector". Until the 1980s, the maincommercial and industrial areas were mainly those designated by the Urban Master Plan ofthe City, covering an area of some 170 ha for the Central Business District and over 2000 hafor the and industrial areas. By 1992, industrial sites sprawled and doubled in size; smallscalecommercial, industrial and service units mushroomed throughout the city, in response tohigh urbanisation and rising unemployment in the formal sector, occupying city centerpavements, road junctions, transportation terminal sites, as well as locations along arterialroad reserves. The informal sector in DSM region is growing rapidly. In 1991, the Ministry ofLabour and Youth Development counted more than 210,000 businesses with an average of1.5 jobs per enterprise (Report on Self-help organisation in the informal sector of the DSM,SIDO/GTZ Project, 1995). By definition many informal activities are low-cost, unregisteredand escape official statistics; 95% of informal businesses are survival activities. Overall, theinformal sector is estimated to generate over 32% of the officially recorded Gross DomesticProduct. Earnings per worker are 2.6 times higher the minimum wages in the urban formalsector..Agriculture. Of the total area of DSM of 1,350km2, an area of 430km2 (or 32%) is taken upby urban development, 20km2 is forest land and 900km2 (or 67%) is rural only part of it inagricultural use. Agriculture is however the main activity within the region. Satellite imagepictures suggest that as much as 23% of the area of the region is used for agricultureproduction.Fishing. The total population of fishermen is disputed, estimates range from 3,000 - 50,000.This vast difference is explained by the small number of licensed fishermen relative to themuch larger number of non- registered fishermen. Despite the number of rivers crossing thecity and the few fresh water lakes and ponds, inland fisheries are limited. Offshore fisheriesFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200079

are extensively exploited by small-scale fishermen trawling and netting the coastal waterslanding on average some 50,000 kg annually, marketed for more than TSh. 3.0 million.The fishermen are divided into three groups. Wealthy fishermen owing fleet of boats withengines on board, nets and gear. They employ hired labour. This group comprises richfishermen with resources to buy dynamite and use it in their fishing techniques together withtrawling and small mesh nets. Small-boat owners fishing in shallow water near their villagesfor their livelihood and family consumption. Poor fishermen (the largest group) mostlyemployed boat owners as labourers.Fish species caught in marine waters of DSMCOMMON NAME REPRESENTATIVE SPICIES LOCAL NAMERays Rhinoptera javanica TaaFlat fish Psettodes GoyogoyoSardine Sardinella gibbosa DagaaThread fish Polynemus spp. KupeCat fish Arius spp. HongoreHalf beaks Hemiramphus spp. ChuchungeMackerel Rastrellinger kanagurta VibuaParrot fish Leptoscarus spp PonoRabbit fish Siganus spp. TasiScavenger Lethrinus spp ChanguKing fish Scomberomorus commerson NguruTuna Auxis thazard SehewaJacks Seriola rivoliana KolekoleRockcod Epinephelus spp ChewaSilver Biddes Gerres spp ChaaMullets Mugil cephalus MkiziMilk fish Chanos chanos MwatikoCobia Rachycentron canadum SongoroSword fish Xiphias gladius SamsuliQueen fish Scomberdes PanduSource: An Aquamarine Profile of DSM region by NEMC, 1995.Quarrying. Sand, stone, limestone and clay are extracted in key locations for building andconstruction purposes. Salt is mined in the shore for domestic consumption. Approved sandquarrying areas include Mbagala, Chamazi, Pande, Twangomna, Majohe Makonge, Kitunda,Mpiji, Pugu and Bunju, with other more urban areas where mining is carried out unofficiallysuch as Kawe, Mbezi beach, Tegeta Mtongani, Boko & Tabata. Stone is mainly extractedfrom Kunduchi, Mjimwema, Boko, Bunju and Kigamboni quarries, supplemented by smallscalefamily operations in disused quarries scattered throughout the urban area, especially inMsasani, Oysterbay & Masaki. Limestone is quarried from Wazo / Kunduchi outcrops for theTanzania Portland Cement Company Ltd. at Wazo Hill cement factory. Clay is extracted fromupper Msimbazi river valley for the manufacturing of bricks.Estimated income. The average annual contribution of DSM region to the national GDP isreported at 33% and the per capita income at about TSh. 197,000 (National Accounts ofTanzania 1976-1994), both higher compared to other regions. The current average wage inDSM is 250 US$. The liberalisation of the economy, intended to stimulate private sectordevelopment and markets for goods and services, has contributed to rapid growth of informalsector activities that increasingly absorb working population released from the previouslyprotected public and parastatal sectors. It is estimated that in the informal sector earnings perworker are 2.6 times higher minimum wages.Health facilities. In this region health facilities are located in various parts of the areacomprising both informal and formal health establishments. Despite improvements in medicalpractice, the informal sector still plays an important role in the community. The formal sectoris run by various institutions including the Government, voluntary agencies, parastatal andother private organisations. There are in the region 429 health units that include 36 hospitals,13 health centres and 380 dispensaries.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200080

Distribution of hospitals, health centres and dispensaries in DSM region, 1997Number of hospitalsVoluntaryFacilities Government agency Parastatal Private TotalHospitals 3 1 2 30 36Health centres 4 2 2 5 13Dispensaries 52 65 61 202 380Source: An Environmental Health Profile for DSM region by NEMC1998General Environmental Sector ProblemsUrbanization. Urbanisation is the most dynamic factor underlying most of the immediatecauses of environmental degradation. Rapid urban population growth imposes heavydemands on the already densely inhabited housing areas, most of which are unplanned andlack organised sanitary and wastewater infrastructure systems. Urban population growth inDSM is currently around 8% per year outpacing the limited capacities of municipal authoritiesto supply adequate infrastructure facilities. It is estimated that 70% of the population live inover 40 unplanned communities covering an area of 10,000 ha. Uncontrolled disposal ofwastewater and solid wastes is a common problem affecting water sources and livingconditions in all unplanned settlements, particularly in settlements such as Manzese andVingunguti. Outbreaks of water-borne diseases are frequent during the rainy seasons.Domestic wastewater. DSM has no operative sewage collection infrastructure. Thesewerage system is old and degenerated. It covers an area of 130km of sewer and consistsof 11 networks supported by 17 pumping stations, including the City Center, parts of Sinza,Ubungo and Vingunguti. It was built in the late 1950's and its attempted rehabilitated in theperiod 1980–1988 has been unsuccessful. Sewage from the areas supposed to be served isdischarged into oxidation ponds and directed to the ocean untreated. Poor managing of theseponds result in overflowing and spreading of sewer to the surroundings. Only 4 of the 8oxidation ponds are considered to be operating (University of Dar-es-Salaam, Kurasini,Mikocheni and Vingunguti). Only 15% of the households are connected to the system. 80% ofthe households in the rest of DSM use on-site pit latrines and septic tanks. High water table invarious parts of the city during the short and long rains further compounds the poor sanitaryconditions with many pits overflowing into the drainage system emptied manually, often by thefamilies themselves and occasionally by private companies at a cost.Industrial wastes. The rapid growth of informal sector activities, particularly workshops andrepair establishments, generate industrial wastes in settlement areas and near rivers adjacentto coastal areas. Industrial development and more so small and medium size workshops arenot subject to proper Environmental Impact Assessment due to institutional inadequaciesrelative to the sheer scale, pace of undetected nature of informal sector activities. Carwashing activities are often sited near streams (e.g. Msimbazi river along Jangwani, nearKilimanjaro Hotel etc) discharging dirty water covered with layers of oil. At the ports shipshandle large quantities of oil with frequent oil leakage from Tazama Pipeline. Oil spills alsooccur during operational transfer of oil from tankers into receiving facilities. Within the cityindustries are concentrated mainly in the Mikocheni light industrial area, Nyerere roadindustrial area, Changombe industrial area, Morogoro Road industrial area, Mandela expressindustrial area and Mbezi along Ali Hassan Mwinyi road. Many industries discharge untreatedeffluents directly or through storm water drainage, river creeks and streams or estuarydrainage into the sea.• Msimbazi river has been found to be heavily polluted due to effluents from industriesalong Nyerere road industrial area (e.g. Vingunguti abattoir), Morogoro road (e.g.Tanzania-China Friendship Textile mill), Mandela road (e.g. Tradeco Ltd), TanzaniaBreweries Ltd. Dar es Salaam plant, leachate from Vingutinguti crude dump.• Karibu Textile Mill discharges its effluent to the Mzinga River.• Leachate from closed Kabuma crude dump (in Temeke) flowed into the ocean (nowclosed ).The extent of industrial pollutants has not been quantified to provide further information.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200081

Solid wastes. It is estimated that about 2,220 tons/day of solid wastes are generated in thecity of DSM. Currently only 23% of the generated quantity is collected and disposed of to theVingunguti crude dumpsite. Smoke, dust and intolerable smell is released to the nearbyresidential areas creating vermin and mosquito breeding, whilst lack of hazardous wastesseparation contaminates ground water resources. Solid wastes are burnt and dumped instreets and open space (Changanikeni, Makumbusho, Mpakani road, etc) that furtherdegrade living and health conditions. It is estimated that 64 million m3 of municipal wastes ayear are disposed of into open channels that percolate into the ground or flow in rivers(Kishimba M. A, and Mkenda A., The Impact of Structural Adjustment Programs and UrbanPollution and Sanitation: Empirical Evidence from Tanzania Major Cities, and Njau G. J. andMugurusi E. K., Towards Sustainable Environment in DSM: AMREF, 1995).Production of solid wastes in the regionSource Quantity (tons/day) 1995 Quantity (tons/day) 2000Domestic 870 1020Market 200 335Industrial 100 240Institutional 80 120Commercial 50 130Street cleaning 40 130Car wrecks 30 50Hazardous wastes 30 110Hospital wastes 25 75Construction wastes 5 15Total 1430 2,220Sources: for year 1995: Kishimba M A, Mkenda A & Njau D J SustainableEnvironment in Tanzania for year 2000: Dump Management at Vingunguti Dump.Soil conditions and the high water table in the city intensify the vulnerability of theenvironment to poor waste disposal practices. Systems for collecting domestic, institutional,commercial and industrial solid wastes are operate inefficiently, if at all. The city centregarbage collection service is now privatised, run by private companies as well as Community-Based Organisations and industries and other commercial enterprises. The Kabuma dumpsiteclose to the Indian Ocean was used until 1988. There have been problem in identifyingsuitable alternative site(s) for final solid waste disposal following the closure of other sitessuch as Tabata, Mbagala Kilungule, Kabuma and Kunduchi as a result of protests fromresidents. Since 1992 a new crude dump at Vingunguti has been used. This dump is locatedat residential area bounded by Msimbazi River and the residential area. The City Council hasearmarked other places for disposing of solid wastes in Kunduchi Mtongani quarries inKinondoni, Mbagala behind Saint Antony Secondary School in Temeke and Pugu Kajiungeniat old Aduco in Ilala. Scavengers search and collect refuse for re-use, some collect and cookfood within the dump, build houses adjacent to the dump and even in the dump itself. Solidwaste flows into Msimbazi River and finally into the ocean. As stated in FAO/UNEP MarinePollution in East Africa Region:“In Tanzania a few kilometers stretch of Dar-es-Salaam coast is polluted with sewage andindustrial wastes. Faecal lumps and floating solids litter areas around the harbour……..a foulodour due to severe Oxygen depletion of the waters pervades the coastline. The natural floraand fauna within the polluted areas have been smothered” (page 5 para. 88)Agricultural wastes. About 900 sq. km. of DSM are reserved for agriculture. Agriculture isstill a major activity within the city. Application of agro-chemicals, disposal and run-off ofwastes is uncontrolled. Contamination of soils, water sources and valuable resources iswidespread. The national inventory on obsolete pesticides and unwanted chemicalsconducted by NEMC 1997 revealed the presence of piles of stock of obsolete pesticides ofabout 127,000 kg. and 123,000 kg. of veterinary wastes in various water catchment areas orclose to water bodies kept in leaked containers and stores. Soil erosion sediments reach theOcean either directly or through seepage and runoffs or indirectly through the creeks andrivers. The level of concentration of these chemicals and the load of suspended materials inthe rivers and estuaries has not yet been evaluatedFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200082

Vehicle Traffic. Smoke emitted from cars pollutes the air. A study conducted in 1996 byNEMC through the Commission for Energy, Environment, Science and Technology (CEEST),revealed high levels of SO 2 and Suspended Particulate Matters in some selected locationswithin Dar es Salaam. There is effective monitoring of air quality; industrial development,importation of vehicles, population growth and construction are likely to increase the problem.Oil spills. In DSM there is one oil refinery situated in Kigamboni near Dar es Salaam harbour.This plant receives 750,000 metric tons/ year of crude oil discharged from tankers intooffshore coupling pipeline located to the west of inner Makutumba island. Apart from wastesproduced in the refining process the refinery also pollutes the marine environment by sporadicoil spills which have resulted in chronic pollution of the harbour area and the coastline. Oilfrom tankers, waste oil discharged from garages, thermal power plants and few industries aredisposed without any treatment or control underground or into drains, rivers and creeks.There no statistical data as the pollution load due to oil spillage.Coastal erosion. The DSM beach stretches from Mpiji River to the north for about 100 kmand in the south to the Mzinga River and up to Mpakani village. The width of beaches variesfrom 0 in the creek areas, such as Gezaulole, Police Mess etc., to over 200m in other area,such as Mbweni, Ndege beach, Ununio, Kunduchi, Bunyuni and other areas. The northerncoast of DSM between Msasani bay and Mbweni is an area of sensitive sand beach ridges oftourist attraction. Erosion is common in areas under development pressure (tourist hotels,institutions, residential villas and fishing villages also caused by variation in the supply ofsediment load to the coastal system by rivers, quarrying of coraline limestone, sand andbeach rocks.Floods. A number of low-lying areas along the coast are currently subject to occasional orregular marine inundation at high tides. Soils characterised by mangrove swamps with poorlydrained clay exhibiting high shrink-swell properties. These areas are unsuited to urbandevelopment even if engineered barriers are constructed for shore protection. Highly mobileof sand dunes coupled with intense recreational use, under limited management, result inbeach erosion, which threatens property and physical structures. Sea level rise in large partsof the coastline to the north and south of the city is a potential environmental hazard. The Cityis dissected by a number of rivers close to sea level which are easily flooded during bothshort and long rains. The typical alluvial accumulation of silt and clay materials makes forpoor drainage posing the same development constraints as those found in coastal swamps.Fishing practices. Reefs break waves are breeding areas for most marine flora and fauna.Dynamiting smashes the coral reefs and destroys the habitat of fish and other reef dwellingorganisms. The rubble of smashed coral is subject to wave erosion and pollutes the marineenvironment. Application of dynamite for fishing cause considerable adverse effects to marineand coastal environment. Dynamite fishing cause explosion and fire and produce toxicsubstances in ocean and air. Exposure to these substances affects fishermen, damages fishand bottom flora and fauna. Apart from fire and explosion effects, dynamite fishing leads tooverfishing and destroys fish breeding grounds. The Aquamarine Profile of DSM regionproduced by NEMC 1995, indicates the main hot spots of dynamite fishing are Mwakatumbeislands, Msasani bay, Sinda islands, Kimbiji, Pemba mnazi, Kunduchi and Mbweni-Ununuovillages.Environmental ImpactsWater Resources. A water quality survey conducted in 1988 identified extensive surfacewater pollution as:• High conductivity suggested substantial dissolved and suspended solid loads.• Low dissolved oxygen indicated high biological and /or oxygen demands.• High bacteriological / pollution with evidence of pathogens with human excreta.• High kjeldahl nitrogen and low orthophosphate counts suggested extensiveeutrophication, as ammonia released from the decay of fresh sewage as well as allsoluble phosphates was being absorbed in the algae.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200083

Pollution load to surface water resources (kg/day)TypeIndustrialEffluent Pit latrines SepticWithoutfacilities TotaltanksBOD 28,330 15,282 3,275 9,897 56,784COD 29,904 16,131 3,457 10,447 49,776Suspended solids 47,216 25,470 5,458 16,495 78,429Dissolved solids 83,940 45,280 9,830 29,325 138,923Total N 4,145 2,236 479 1,448 6,859Total P 787 425 91 275 1,302Source: Managing sustainable growth and development of DSM by SDPA survey of groundwater quality from a number of boreholes drilled in 1980 concluded that itshigh salinity excluded if from being considered as a potable resource. The salinity probablyresulting from the leaching of the predominantly saline sand / clay geology of the region ratherthan saline intrusion. The majority of groundwater resources within the built up area are alsocontaminated as a result of poor sanitary arrangements, with more than 118,822 tons ofpolluted water discharged to the ground daily. Projected 1991 pollution loads from landsources included 68tons BOD, 7tons COD, 147tons Suspended Solids, 219tons DissolvedSolids, 21tons of total Nitrogen and 33tons of total Phosphorus; which result in high nutrientsand suspended solids loads, as well as occurrences of pathogens at places where freshexcreta are released. The high levels of nitrogen and phosphorus result in algae andseaweed blooms, the decay of which combined with accumulated suspended matter on theforeshore could give rise to the pungent odours occasionally experienced at low tide in thevicinity of the salender bridge and along ocean road.Pollution load to groundwater Resources (kg/day), 1991 ProjectionsSeptic Sewer Losses Total (tons)Type No facility Pit latrines tanks Domestic industryBOD 1,100 15,282 7,641 1,221 1,899 27COD 1,161 16,131 8,068 1,289 1,1994 29Suspended1,833 6,116 3,832 2,035 3,148 18SolidsDissolved3,258 97,857 61,128 3,618 5,596 196SolidsTotal N 120 4,829 3,018 3,618 5,596 10Total P 23 915 572 34 52 2Source: Managing sustainable growth and development of DSM by SDPShallow and deep wells are used to provide variable qualities for washing rather than drinkingwater. More than 18,000 people relying on groundwater from 144 shallow wells in 52 periurbanvillages. Many industrialists also supplement the city supply with their own deep wells.There are 51 such wells recorded within the city boundaries.The results of a survey in 1988 on quality of coastal waters (Managing sustainable growthand development of DSM by SDP) suggesting that:• The conductivity to be rather low for ocean water, indicating the presence of fresh waterdilution.• Whilst both BOD and COD were low, the most probable number of F-Coli was high at30,000/100ml, as was the MPN of total Coli counted at 600,000/100ml suggesting seriousbacteriological pollution.• The relatively high-suspended solids could result from pollution.• Low Ammonia Nitrogen but high Kjeldahl nitrogen evidenced eutrophications as did loworthophosphate levels.1n 1999, NEMC conducted a rapid assessment of Msimbazi river around VingungutiDumpsite (Report on Situation around Vingunguti Crude Dump by NEMC, 1999). It wasobserved that at very place people utilizes river water for domestic and agricultural purposesincluding fishing, feeding animals, washing clothes, irrigating vegetables etc. while the riverFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200084

water is not safe for human consumption or other uses. The results for the analysis of theriver water showed that the latter is contaminated from all sorts of pollutants including toxicones. Also, vegetables were found to be contaminated by heavy metals.Readings of pollutant loads in discharge stabilization ponds and sea outfalls, off the oceanroad have show high turbidity but rapid dilution of discharges from short distance source andtherefore limited potential impacts on coral growth and mangrove forests. Pollution loadsdischarged at DSM harbour and the Msimbazi creek, generally from longer distance sources,reveal higher pollution loads (Managing sustainable growth and development of DSM bySDP).Wastewater polluted loads affect sequentially the surface and ground water resources used inthe settlements, the nearby rivers and merge into the runoff reaching the coastal area andlater entering into the marine environment. Cumulative health and environmental hazardsemerge as a result of the combined impacts on living conditions and the quality of naturalresources from diverse point sources. Marine pollution is typically the ultimate recipient ofdomestic pollutants in "brown" and "black" wastewater discharged either directly to the sea orindirectly through additional loads from agricultural runoff, sediment and silt and oil wastesfrom industrial effluents.Sea water quality. Measurements made in 1993 of heavy metals and petroleumhydrocarbons content of marine water along the coast of DSM City and rivers entering theIndian Ocean are presented below.Concentration of heavy metals and petroleum hydrocarbons along the Coast, 1993MetalAreaAfricana HotelbeachKawe beach(Mbezi river)Kawe/MsasaniMlalakuwaMsimbazi bayMsimbazi riverFerry(part area)riverZinc Present Present PresentIron Present Present Present PresentManganase Present PresentOil Present PresentSource: Msafiri M. J. Marine Pollution Studies along Dar-es-Salaam, NEMC, 1993.There was high concentration of Zinc in Kawe beach area and Msimbazi bay where riversMbezi and Msimbazi enter the ocean. This is attributed to the disposal of industrialwastewater into or near the rivers by industries located up-stream.It was also found that at the Africana Hotel Beach, Mlalakuwa and Msimbazi rivers and theDSM Port area, iron concentration was high. High concentration is caused by the wastes fromtourist hotels along the beach, construction sites, workshops, garages and industries locatedupstream along the rivers. High concentration values are also found in Msimbazi bay (mouthof Msimbazi river) and the Port areas due to the discharge of industrial wastes up-streamalong Msimbazi river adding to the wastes from anchored vessels, ships and boar repairactivities in the Port area.October 1999 NEMC conducted an industrial monitoring program for selected categories of13 industrial sector within the city. The analysis of pollutant concentration in the dischargedwastewater to the receiving bodies showed that:• Oxygen depletion in receiving water (rivers and storm water drainage)• Suspended solids• Presence of toxic substances (heavy metals)• High organic loads from on-site wastewater septic disposal tanks.The Fisheries Sector. Fishing is very important in DSM for employment, family food supplyand for animal feed. Fishing methods include freshwater fishing, marine fishing, dynamitefishing and beach seine. Freshwater fishing is mainly for household consumption. Few lakesand ponds are used for inland fisheries resources in Mikocheni, Kawe, Kimara, Tegeta, Boko,Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200085

Mtoni and Pugu. Existing lakes include Luhanga, Makurumula, Msimbazi River and Tandale.No data is available for the actual catch. Marine fisheries employs more than 3000 men invillages such as Mbweni, Ununio, Kunduchi, Mtongani, Kawe, Kimbiji, Gezaulole, Mjimwemaetc. Fish catch in 1995 was about 5,000 MT. The main types of fishnets are gillnets, sharknets, sieve nets, hand lines and traps. Beach seine is practised mostly by small-scalefishermen with canoes or small boats who fish in shallow waters. The demand for fish in thecity of DSM exceeds local supply. Fish is imported from Lake Victoria, Mtera Dam, Ifakara,Lake Tanganyika and Nyumbaya Mungu, while local fish is also exported. Fish handlingmethods are very poor. At landing stations fish are thrown on sand at the beach where theyare gutted and de-scaled, the offal is left on the beach and decompose hence becomes asource of pollution. Due to shortage of fresh water at these stations, fish are washed withseawater, catches pile on the sand under high temperatures, increasing the decompositionrate. Effects to fish due to pollution in marine are expected. Through food chain processtransferring of toxic pollutants to consumers is highly possible. Although various surveys havebeen carried out to determine the quality and quantity of fish resources, the impacts onfisheries from land based pollutants and their costs have not been studies within theframework of a cost-benefit analysis.Mangroves. There are 2,266 ha of mangrove forests distributed throughout the coastal area.They serve as a nursery for many species and provide physical habitat for numerous fish,crustacean and many varieties of important species and they are a threatened resource. Theyare cut and used by local people for construction, export, firewood, charcoal making, boatbuilding and salt making and release land for rice farms. Most of the mangrove tree cutting isunregulated and is carried out without permits although mangrove forests are gazzetted asforest reserves.Distribution of mangroves by districtDistrict Location Area (ha)Temeke Mbezi river 570.3Mbuyuni 476.7Shugu/Mtandika 270.8Ras Dege 245.0Mbwamaji 29.6Mjimwema 80.9Mtoni 378.4Kinondoni Kunduchi Creek 68.7Ras Kiromoni 20.2Mbweni area 100.6Ilala Msimbazi River 25.3Source: An aquamarine profile of Dar es Salaam region, March 1995 by NEMCMarine ecosystem (coral reefs, sea grasses and other marine life). Untreated municipaland industrial wastewater discharges, runoff and sediments from rivers ultimately reach thecoastal and marine environment. The degradation of the marine environment is often "out ofsight" and responsibility is evaded on the assumption that the "sink" capacity of theenvironment will absorb the impact. Coastal area predominant in Coraline Islands, includingMbudya Island, Bongoyo Island, Sinda Island, Fungu Yasini Island, Pangavini Island andMakatumbe Island. These islands in addition to their diversity, provide protection to the DSMcoastline. Degradation from land based pollutants have diverse ecological and productivityimpacts that are not valued in cost-benefit terms due to conceptual and measurementdifficulties. It is now increasingly recognised that at least part of the most important indirectimpacts on the marine environment, other than the direct impacts on fisheries, can beestimated through the foregone tourism and recreation opportunities. Coastal lagoons, mudflats and shallow mud-silt bottoms in protected bays and estuaries associated with coral reefsform a good habitat for sea grass and fish species. Degradation of habitats creates directproduction changes and indirect losses to the "existence or non-use" benefits from marineresource quality. Apart from land-based pollutants, bad fishing practices such as use ofbottom traps, beach seines and explosive fishing techniques, cause considerable damage tofish, bottom flora and fauna and coral reefs and sea grasses.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200086

Tourism. Tourism is one of the strongest linkages of coastal ecology to measurableproductivity aspects of coastal resources. Degradation of the quality of the coastalenvironment is reflected in reduced environmental quality and its productivity for sustainabletourism. Unlike biodiversity changes that need deep research to determine, tourism impactsfrom environmental degradation can be measures in terms of reduced revenues or loss ofpotential revenues. Equally, increasing intensity of tourist related development is often itself acause of beach quality changes and a source of wastewater affecting the coastalenvironment. In DSM not only present tourism opportunities are limited due to the dischargeof wastewater, but also the tourism development that exists (for example Oyster Bay area,Africana and Kunduchi hotel area) is unplanned, without appropriate infrastructure, sufferingfrom lack of coastal management capacities.Health problems. From the Environmental Profile for DSM produced by NEMC 1997, takenfrom “Health Statistics Abstract 1994”, the following health information is quotes:Infant / Under 5 years mortality ratesINFANT MORTALITY RATEUNDER 5 YEARS MORTALITY RATE1975 1985 1995 1975 1985 1995108 105 102 179 173 163Maternal mortalityYEAR 1992 1993 1994 1995MMR 220 398 237 328Source: An Environmental Health Profile for DSM region by NEMC1998Communicable diseases. The region is especially vulnerable to epidemics andcommunicable diseases posing a major threat to the health and wellbeing of the people.Based on the available medical records of 1997, DSM is faced with common communicablediseases in the following descending order.Major communicable diseases in DSM 1993-1997DISEASE NO. OF CASES % NO. OF DEATHMalaria 1,630,676 42.69 127Upper Respiratory Tract775,973 20.31 10InfectionsDiarrhea 626,741 16.41 111Skin diseases 426,280 11.6 -Eye infection 233,329 5.85 -Schistosomiasis 68,974 1.8 31Tuberculosis 28,395 0.74 -Dysentery 25,921 0.68 1Measles 4,118 0.19 15Cholera 7,246 0.11 383Typhoid 1,956 0.05 4Meningitis 202 0.01 24Source: An Environmental Health Profile for DSM region by NEMC1998Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200087

Annex IVSeychelles (Beau Valon Area) ProfileSituated in the Western Indian Ocean between 4 and 11 degrees south of the equator, theRepublic of Seychelles comprises a group of 115 islands with a land area of 455 km 2 , spreadover an Exclusive Economic Zone (EEZ) of over 1.3 million square kilometres.Forty-one of the islands in the group are granitic and mountainous, considered to befragments of the ancient Gondwanaland. They are all found within a radius of 50 km from themain granitic island of Mahé, which with a land area of 154 square kilometres, amounts toone third of the total land area of Seychelles.The islands are of rugged formation and great scenic beauty, some seemingly rising straightout of the sea to great heights. Because of their mountainous nature there is little flat land.Mahé is the most important island. It lies between 4 and 5 degrees South and 55 and 56degrees East. Mahé is about 27km long and up to 11 km wide. A range of mountain runsdown the whole length, most of which are over 300m, rising to the peak of Morne Seychelloisat 905m.Description of study area. The study area is Greater Beau Vallon; it is situated in the NorthWest of Mahé and covers a total area of 1,100 hectares, elevation varies from 0 to 880metres. The area has an enclosed body of water with two embryonic fringing reefs. The sandybeach extends app. 1.8km bounds to the north with piles of granite rocks and to the west withgranitic reefs. Apart from this beach the coastline of the bay consists of some small creeksseparated from one another by the in-situ rock.Human Development. The site is highly developed with about 20% of the land urbanised.This includes human settlements and hotels. There are relatively dense settlements along thecoast, as well as three of the island’s largest hotels and several guesthouses and restaurants.It is a prime tourism and leisure activity area. It is also an important fish-landing site, withsome limited fishing activity.Urban development includes three categories: a heavily built-up centre around the three mainhotels in the Pascal Village and Bel Ombre districts (about 35 inhabitants/ha), a less densearea at Mare Anglaise (about 13 inhabitants/ha) and the sparsely populated sectors (about 7inhabitants/ha) to the north at a higher elevation. Many dwellings are built on sloping land andare difficult to access. The grounds are very rocky with large granite boulders. In many cases,the ravine will be the only outlet for wastewater.Hydrology. Overlooking the Beau Vallon/Bel Ombre area are heights of up to 880 m inaltitude at the Morne Seychellois mountain group. There are two main rivers emptying into thebay, the Sullivan river and the Mare Anglaise river. These form the main estuaries in the area.There are also five smaller rivers in the study area. Water catchment basins are very small.There is no in-depth seepage and virtually no groundwater reservoirs. In spite of the retardingeffect of the very dense vegetation, the runoff water concentration times are very short (from15 to 60 minutes). As a consequence, rainfall immediately causes flooding in certain areas.The land area of the catchment is between 1000 and 1100 hectares, while elevation variesfrom 0 to 880 metres. Its mean annual rainfall varies from 2000mm to 3200mm at an altitudeof 800 metres. The area is covered by relatively dense vegetation, which protects the groundfrom excessive erosion from tropical rainfall. Most of the streams that empty into the bay arelittered with granite rocks which creates individual pools of stagnant water and irregularities inthe breadth of the river. (Payet, 1996).Climate. The climate of the Beau Vallon area is similar to the other areas of Mahé. The BelOmbre area receives around 3,000mm rain per annum as compared to the mean for Mahé,which is 2,524mm. There are relatively strong Southeast trade winds in May and October,which have an effect on the coastal water movements. Heavy rainfall is typical during theNorthwest monsoons.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200088

Oceanography. The oceanographic data shows clear alternate phenomena depending onthe prevailing wind direction: during the trade wind period the currents veer counter clockwisein the bay, while it reverses in a clockwise direction during the Northwest monsoon. Thecurrent speed is in any case extremely week, making the bay a confined area. As the bay issheltered from strong Southeast swells, there is a net surplus input of fresh water from theland (SETOI, 1990).Geology and Soils. Low-lying areas of Beau Vallon are the coastal plain area and low-lyingareas around the main river mouths. The sediments of the former are dominantly calcareouswhilst the latter are characterised by sediments consisting of fine clays and quartz derivedfrom laterites. The coastal shorelands of Beau Vallon consist entirely of calcareous sands.The soil types in the mountainous areas behind the coastal plain comprise laterite andkaolinitc clays forming red earth giving a base of dense vegetation.Beach Characteristics. The sandy beach of Beau Vallon is approximately 1.8 kilometreslong with an average width of 30 metres at low tide. Sand dunes exist only in a few smallareas protected by beach debris and by Takamaka trees. The sand is yellowish-white incolour and fine to medium. The Beau Vallon Beach is the most built-up beach in Seychellesand sea walls and buildings on the high water mark are evident. The beach is very active andseasonal movement of sand takes place. However, there is definite evidence of beacherosion characteristic of such highly disturbed sandy coasts (Shah, 1998).Ecology. The ecological characteristics of the Beau Vallon coastal zone are numerous bothspatially and in biodiversity, which include brackish water marshes, coastal vegetation, coralreefs and other marine fauna and flora (Payet, 1995). There are eight areas that can beconsidered as special ecosystems:Area In m 2 DescriptionNorthern Fringing Reef 700,000 Coral ReefSouthern Fringing Reef 260,000 Coral ReefNorthern Fringing Reef Flat 250,000 Inter-tidal and Littoral EcosystemSouthern Fringing Reef Flat 62,500 Inter-tidal and Littoral EcosystemMare Anglaise River Estuary 5,500 Ecosystems of Estuaries and Enclosed SeasSullivan River Estuary 3,900 Ecosystems of Estuaries and Enclosed SeasMare Anglaise River Wetlands 46,800 River and Stream EcosystemsSullivan River Wetlands 15,600 River and Stream EcosystemsSource: Grandcourt, 1995In the marsh areas, various species of mangroves are predominant with a host of crab andbird species. The amount of dissolved oxygen is usually very poor, ranging from 2 to 4 mg/l.This often allows for the propagation of anaerobic conditions within the marsh area. Thesemarshes act as buffer zones to reduce fresh water intrusions on the coral beds and provide azone of stabilisation and degradation of organic matter (Payet, 1995).Population. The area of Beau Vallon has a population of some 7,000, or 9% of the totalSeychelles population. The annual population growth rate is estimated at 2%, the number ofinhabitants per dwelling is 4.5 and urban development density is at 10–15 dwellings perhectare. Plans for the sub-division of land are already under way, and new development ofapartment buildings in the next five years will increase population and land use conflicts. Atotal of 512 additional units will be completed in the study area in the next years,corresponding to a net population increase of some 1,152 inhabitants.Population Projections for greater Beau VallonYear 1995 2002 2010Population 6,501 7,617 8,924Source: SOGREAH, 1996Tourism. Tourism is the mainstay of the Seychelles economy and it is likely to remain so inthe near future. The sector accounts for approximately 18% of GDP, employs one fifth of theFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200089

labour force generating the major part of foreign exchange earnings and a significant sourceof government revenue.Tourist arrivals have increased from 37,000 in 1975 to 130,000 in 1998. According to theDivision of Tourism, in January 1999, there were 21 large hotels, 79 small hotels and 32 selfcatering establishments, providing altogether some 4840 beds.Most of the large hotels are now privately-owned by international firms. A number of familyrunsmall hotels have been built in the last 10 years. Service industries directly related totourism include restaurants, bars, discotheques, shops and watersport facilities. The tourismsector provides employment and business opportunities to a wide range of services(entertainment services, taxi drivers, etc.). It has been calculated that on average theexpenditure of 18.7 tourists creates one direct job in the tourism sector itself, and for everydirect job an additional 1.38 secondary jobs are created in the other sectors of the economy(Grandcourt, 1995).Tourism Projections for greater Beau VallonNumber of rooms 1994 2002 2010Hotels 383 685 685Guesthouses 96 201 252Total 479 886 937Source: SOGREAH, 1996Artisanal Fisheries SectorFish is the staple diet of the island and fish consumption is expected to increase further withthe development of more processed fish products. The percentage of the total workingpopulation engaged in fishing has risen from 3.6% in 1977 to about 9% to date; at least 50%of these are self-employed. Coastal fishing at the Beau Vallon bay is mainly dominated byhand-lines, traps and beach seines. The most important species caught are Carangidae, thered snapper, green snapper, groupers, and the Indian mackerel (Grandcourt, 1995).With about 25 fishing boats, the greater Beau Vallon area is the second largest fishing site onMahé. The annual tonnage caught is estimated at some 1,100 tons. Most fishing activity takesplace from boats, there is also a small amount of artisanal fishing by foot.AgricultureAll farming activity in Beau Vallon is carried out by family farms. Animal pollution sources fromcattle, pigs, poultry etc. give a total of 2,260 population equivalent.Public ServicesExisting services include schools, a home for the elderly and a district clinic. Their impact isincluded in the domestic requirements calculations presented further on in the document.Recreational SectorBeau Vallon is a very important zone for recreation not only for the tourists but also for thelocal community. Recreational activities include swimming, snorkelling, diving and watersports. The recreational sector provides additional employment and maintains a state ofholiday ambience in the area.Pollution Sources and ProblemsThe major source of freshwater pollution in Seychelles is sewage effluents. This has becomean important environmental and human health concern. Although the Government ofSeychelles has regarded adequate provision of sanitation as a basic need, the provision ofsatisfactory levels of sanitation has been frustrated by the haphazard nature of thedevelopment pattern. The 1998 Census revealed that 74% of dwelling on Mahé were servedby modern sanitation systems, the percentage in the study area is higher at 80%. However,this figure conceals major deficiencies. Only Victoria possesses a public water-bornesanitation system. Others are planned.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200090

Pollution loadsThe following table summarises water pollution loads generated by various sources on Mahéisland.Water pollution generated in Mahé (tonnes)BOD 5 SSFisheries industry 97.42 59.44Other foods industry 3 393.10 17 345.74Manufacturing industry 1.64 2.78Urban settlement and construction 0.54 0.74Natural processes 1.25 12.91Total 3 493.95 17421.61Source: Shah, 1997TypesThe greater Beau Vallon area has a total population equivalent of some 7,300, with sewageeffluent discharges estimated at 900 kl/day. There is strong evidence of significant faecalcontamination in the rivers, largely attributed to diffuse pollution caused by ineffective andinappropriate sewerage arrangements (Shah, 1997). Coastal and human health in the area isvery much linked to adequate treatment of wastewater; significant pollution would adverselyaffect all socio-economy activities.Pollution sources in the study area can be categorised as follows:• Individual households with traditional socio-economic activities including the keeping ofdomestic animals• Tourism industrySourcesAccording to a recent census, approximately 80% of the houses in the Beau Vallon Bay areaare served by potable water network. In the absence of collective sewerage infrastructures,the existing dwellings are equipped with simple septic tanks followed by a cesspool or a drypitfrom which the overflow waters seep into the ground and rivers. Likewise, 20% of thehouses are reported to be without modern lavatories, latrines in the best of cases, andsometimes without any equipment, and pollutants are spread directly on the ground. It iscommon for households to rear pigs and chicken close to their homes. Animal slurries aremore destructive than that of humans. According to a survey made at Beau Vallon, quite anumber of households, even those living in flats, have pig sties with slurry pits and outfallsnear rivers (Payet, 1996). There are three major hotels in the study area with seweragetreatment facilities: Berjaya Beau Vallon, Coral Strand and Le Meridien Fisherman’s Covewith a total of 333 rooms (1,236 population equivalent). Hotel establishments over a certainsize for instance are required by law to install centralised wastewater treatment systems priorto disposing wastewater into the environment.Virtually all tourism establishments are located on the coastal fronting on the beach. Theproximity to marine waters therefore exacerbates the wastewater impact of tourismestablishments. The package treatment plants of the larger hotels are not functioningadequately. All the other establishments use septic tank systems which notoriously leak(Shah, 1998). The 1996 SOGREH Report on the Beau Vallon Bay sewerage project statesthat the pollution in Beau Vallon Bay, is caused by: tourism sector of the area 1/6 shares,domestic sector of the area 5/6 shares.NameBerjaya Beau Vallon BayHotelSources of sewage from hotels and guest houses in Beau VallonSeweragePresent Impact Potential ImpactTreatmentAS; outlet in road Algal growth,side drainodourWater quality and coraldeteriorationCoral Strand HotelSun Resorts B.V. Prop.AS; 150 m. seaoutfallSTAlgal growth,nutrientoverloadingWater quality and coraldeteriorationFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200091

Vacoa Village ST Algal growth Water quality deterioration,leakage into marshBeau VallonST Algal growth Water quality deteriorationBungalowGeogina’a cottages ST Algal growth Water quality deteriorationVilla de Rose ST Unknown UnknownPti Payot GuestST Unknown UnknownHouseLe Meridien fisherman’s ST (installed AS in Algal growth Water quality deteriorationCove1997)Notes: ST: Septic tank, AS: Activated Sludge Treatment, Source: Shah, 1998The Quality of Environmental ResourcesGround and Surface WaterPollution levels can be measured at different sites in the study area, one being the fresh waterof the rivers and another being the seawater of the bay. A simple method used in 1996 bySOGREAH to give orders of magnitude of monthly mean values for river flow andgroundwater infiltration. Regular water analyses were carried out on the main water sourcesrunning into the Bay to measure BOD and SS concentrations. The following tables present anoverview of river water quality at different sites:River area PH Resist. SC/cm Total coliform/Faecalstreptococci1 Northolme 7.5 12720 3200/602 Upper St Loius 7.2 21890 350/503 Lower St Loius 6.8 14820 700/804 Mare Anglaise 7.1 5565 6000/305 Danziles 7.3 11110 18000/1206 Upper Niol 7.2 38485 10/67 Lower Niol 7.0 21730 150/248 1 Sullivan 7.1 10685 1200/16Source: SOGREAH, 1996River area Faecal coliform count/100 ml NH4Mg/lNO2Mg/l1 Northolme 160 0 0.042 Upper St Loius 110 0.1 0.023 Lower St Loius 240 0 0.034 Mare Anglaise 40 0 0.055 Danziles 250 0 06 Upper Niol 2 0 0.027 Lower Niol 16 0.1 0.028 Sullivan 1000 0 0.04Source: SOGREAH, 1996Dissolved inorganic nitrogen: The two main forms of inorganic nitrogen are ammonium (NH4)and nitrates (NO3). Ammonium originates from animal or human waste and from the bacterialdecomposition of organic nitrogen. The rivers give NH4 values of between 0.1 to 0.4 mg/l,thus indicating contamination. The analyses therefore proved contamination of human/animalorigin which is harmful to the marine environment.Phosphates: High concentration indicates pollution of domestic and agricultural origin. Thehighest concentration was found in the Sullivan River. (SOGREAH, 1996).1 Short explanation for above/below cited river areas:1 abandoned farm2 relatively clean3 high pollution level caused by human waste4 high pollution level caused by human waste5 high concentration of faecal coliform6/7 low mineral contents8 high pollution level caused by human wasteFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200092

Bacteria content of naturally occurring water is found to be important in the riversBOD and SS: The water from an unpolluted river have values ranging from 3 to 5 mg/l BODand 30 mg/l for suspended solids. The river water analysis was found to be of very poorquality in terms of BOD.River area PO3 Mg/l MO Mg/l1 Northolme 0.02 2.72 Upper St Louis 0 2.13 Lower St Louis 0.03 3.74 Mare Anglaise 0.05 2.55 Danziles 0 06 Upper Niol 0 1.37 Lower Niol 0.01 2.48 Sullivan 0.03 2.6Source: SOGREAH, 1996Freshwater analysis from different rivers sources confirm that these sources are polluted to avariable degree, mainly attributed to human activities.Marine watersBacterial pollution of seawater concerns essentially bathing water and shellfish cultivationwater. Bacterial contamination is a major factor for urban sewage being disposed into the sea.Appropriate European regulation define the threshold levels to be respected in bathing waterand in the flesh of shellfish destined for human consumption.Organic pollution materials are well received in the marine environment on condition that theyare practically all biodegradable. Organic pollutants may have harmful effects only ifinsufficiently dissolved with oxygen or if they are disposed off in stagnant water areas.The coastal areas close to the two river outlets, namely the Mare Anglaise and the SullivanRiver have the highest level of faecal contamination at least for 1.3 months in each year anddeemed unbatheable according to European standards for bathing water. The unsuitablelevels are expected to occur after periods of heavy rains. In only 2 months on average peryear are the levels of faecal coliform at its lowest level. The best area for swimming is locatedin front of Coral Strand Hotel. (Payet, 1996)Indicators of sea water quality in terms of faecal coliform values around the Beau Vallon coastshowed 60% of values unsatisfactory for recreational use by WHO standards (Payet, 1996).The level of faecal coliform in the water is depended upon rainfall and the inputs dischargedby hotels. The observable trend of faecal coliform along the Sullivan river shows that there isa contribution of faecal coliform from the hotels. There is also a relatively rapid decay offaecal coliform close of the coast, probably as a result of the wetland area present at the riveroutlet. The relative contribution of point source pollution (e.g. from hotels) in terms of faecalcoliform to the overall quality of the coastal waters is estimated to be about 43%. The poorturn-over of water in the bay induces a decrease in seawater sodium chloride concentration,itself highly detrimental to coral life, and therefore to all marine organisms associated with thecoral reef ecosystem and trapping of nutrients and polluting substances.Coral ReefsThe coral reefs of Beau Vallon are poor with little diversity. The special conditions in the bayhave led to the formation of poorly developed structures forming two embryonic fringing reefs.The coral reefs consist of an inner reef flat, a reef front and an outer slope. Under presentconditions good coral populations are located only in the southern part of the bay. Other coralreefs are also present at depths of 7 to 20 m beyond the outer slope. Unfortunately, soft coral,which thrives on organic matter enrichments, are thought to be competing with existing coralspecies. The coral reefs are poorly developed in the bay due to the desalinisation of theseawater from inland fresh water. There is also an extensive seaweed bed between thebeach and the reef flat. Its role is very important, especially in the Beau Vallon bay. TheseFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200093

sea grass beds are able to soak up nutrient influxes from the coast and therefore provide aline of protection for the coral reef (SETOI, 1990).The release of polluted water as a result of houses, hotels and stock raising farms mayinduce acute toxicity to the hard coral species resulting in bleaching and a shift in the coralreef ecology making conditions more favourable to soft coral species. Steadily the fastgrowing soft corals enter in competition with the slow growing hard ones that are very sooncovered and killed by the blanket of soft corals.ImpactsHealth and sewageThe problem of sewerage and the human health impacts resulting from inadequate disposalmethods is a multi-sectoral problem in Seychelles. Increasing affluence in Seychelles and theexpansion of the middle class population have resulted in conversions of former plantationsand even hilly areas into housing estates and dispersed residential units. Although theproblems of sewerage have been recognised by planners, the problems of disposal havegrown. In addition, all the construction activity in particular on hilly slopes results in majorerosion of red earth. The result is that when major rains occur heavy sediment loads andother associated contaminants such as nutrients and bacteria associated with wastewater areflushed into the sea. This runoff may be a significant public health risk in the future.Up to now, there is little evidence of medical problems associated with contamination due tosewage in the Beau Vallon area.Water-borne diseasesWater-borne diseases from contamination is not a major issue compared to other countries inthe region. However, there are still ongoing problems with certain intestinal parasites. Duringthe 1990-2000 period the Ministry of Health implemented a programme, sponsored by WHO,on intestinal parasite control in school children. The programme has also sensitised childrenon habits of personal hygiene and the level of parasites has decreased significantly in thatage group.Potable waterWith continued improvement in piped water supply coverage, there has been a noticeablereduction in the use of streams and rivers as water sources for drinking. However,contamination of water sources continues. Potable water sources or the Beau Vallon areacome from the Rhodas and Le Niol rivers. The surface water at the inlet of both Rodhas andLa Niol Rivers have been found to be polluted from non-point sources such as householdseptic tanks. The sources of such pollution are undoubtedly associated with humansettlements further upstream. The water quality immediately downstream from the Le NiolWater Treatment works which treats water from these two rivers, is virtually the same.However, as the river passes human settlements and farms on its way to the sea the pollutionload increases (Shah, 1997). The figure below illustrates the water quality of these rivers.Water Quality of surface river water at Le Niol Treatment Works inletAnalysis Rodhas River Le Niol RiverPhysicalAppearance Clear ClearColour (Hazen) 0-15 5-100Turbidity (NTU) 0.5-5 0.5-5Conductivity (µs/cm 20-100 20-100Total Solids (mg/L) 30-150 50-300BacteriologicalTotal Coliforms (CFU/100ml at 35°C) 10-200 10-200E.coli (CFU/100ml@44.5°C) 10-200 10-100Faecal streptococci (CFU/100ml@35°C) 5-30 5-20Source: PUC, 1998Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200094

A Project funded by the European Union in 1997 has resulted in rehabilitation of the existingLe Niol Water Treatment Works. This has resulted in significant reduction in post-filteredwater by reduction of the high turbidity raw water. A great health benefit is therefore nowavailable to all the residents in the entire Beau Vallon area. Throughout the year cleardrinkable water is now available to all those residents and the hotels and guesthouses inthese districts. This clear water also avoids the need for these residents to boil waterparticularly during the rainy season. Prior to the refurbishment works, during the rainy seasonthe piped water was noticeably red in colour owing to this high turbidity and the inadequacy ofthe plant to remove it. The occurrence of water borne diseases may have been higher inthese conditions (Shah, 1997).Land contaminationContamination of land and losses in economic production is not an issue in Seychelles.Fisheries issuesContamination of shellfish and fish owing to sewerage is still not an issue and there has beenno known case of shellfish poisoning due to sewage-related contamination. Nevertheless, thethreat looms on the horizon, especially if efforts are not made to reverse current trends incoastal pollution.Pollution ControlInstitutions and LegislationThe Ministry of Environment through its Environmental Assessment and Pollution ControlDivision is primarily responsible for control of pollution in Seychelles. The Division iscomposed of specialized technical officers such as biochemists as well as tertiary level staffsuch as Inspectors. The management of solid waste is the responsibility of the Solid Wasteand Cleaning Agency (SWAC). The Public Utilities Co. is responsible for sewerage collectionand disposal. The Seychelles Bureau of Standards is mandated to develop environmentalstandards. In addition, it operates the national environmental laboratory. The Ministry ofTourism and Transport is responsible for tourism development and land and sea transport.The Ports and Marine Services Division of the Ministry of Tourism and Transport isresponsible for marine pollution from ships and in the harbour. The Seychelles Coast Guard isresponsible for the Oil Spill Contingency Plan. The following table describes the principallegislation governing pollution control in coastal and marine areas.Principal legislative instruments for control of pollution in coastal and marine areasPublic Utilities Corporation (Sewerage) Provides authority for managing sewerage controlRegulations (SI 9 of 1987)and treatmentNational Parks and Nature ConservancyAct Chap 141.Provides authority for protected areas includingpollution control.Environment Protection (Standard Sets standards for water and air quality.Regulations 1995)Environment Protection Act, 1994 Defines activities for coastal management,Environmental Impact Assessment, and pollutioncontrolEnvironment Protection (Impact Lists protected areas, which need authorisation forAssessment) Regulations 1996any project or activity.the Derelict Motor Vehicles (Disposal) Act Controls the disposal of cars and other vehicles(18 1972)Merchant shipping (oil Pollution) SeychellesOrder 1975Restricts and demarcates liability for oil pollutiondamageMarine Pollution Regulations (SI 51 of 1981) Provides power to the Harbour Master to controldischarges from shipsDumping at Sea Act (Overseas Territories) Prevents dumping of waste at sea.Order (SI 36 of 1976).Source: Shah, 1997The principal enforcement agency for all laws is the Police. In general in the past enforcementcapabilities by the Police have been severely lacking. The Ministry of Environment and theSWAC have recently taken a stronger stance towards polluters and it was recentlyannounced that violators will be taken to court and strongest penalties will be applied.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200095

Sewerage ManagementSewerage management institutionsPresently, the wastewater of Seychelles are managed through various laws and administeredby different departments. The division of responsibilities can be very briefly defined as follows:• The Public Utilities Corporation (PUC). All centralised sewerage systems in Seychellesare controlled by PUC, a government parastatal responsible for the provision of adequatesanitation for the people of Seychelles on the basis of the PUC Act of 1985.• The Division of Environment is responsible for conservation and protection of theenvironment, including responsibility for monitoring of the quality of both liquid and solidwastes, and waste water effluents and sludge disposal.• The Ministry of Health through its Environmental Health Division has the responsibility formonitoring and improving hygiene conditions in the country, advising and educating thepublic on good sanitary practices, and controlling the quality of portable water. A HealthInspector stationed at each of the local health centres throughout the country carries outmonitoring and inspections and also responds to people’s complaints on any health andsanitation related problems.Financing mechanismsSewerage tariffs are established uniformly for the whole country. The present tariff, which islinked to the water tariff covers only the operation and maintenance costs of the existingsewerage schemes. The government is presently meeting the cost of capital investments.Based on PUC guidelines commercial and industrial developments will be required to havetheir own sewage pre-treatment plants, so as to ensure that effluent discharges fromenterprises into public sewers conform to stipulated standards. This will facilitate the efficientoperation of the system, which is primarily designed to handle domestic sewage.Expected development trendsThe present population density is 22 inhabitant/ha, with future projects, population andtourism growth a figure of 40 inhabitants/ha is expected by the year 2010.Total population equivalent1994 2002 2010Residents *1 6501 7617 8924Future urban growth 1223 1432Tourism *2 1183 2138 2633Total 7684 10988 12989Source: SOGREAH, 1996*1 Calculated using a growth rate of 2%*2 Two person per room and a mean annual occupation rate of 85% are assumedVolume of wastewaterfor population equivalent that could be connected to the centralised sewerage system2002 2010Domestic population 6405 7504Tourist (85% occupancy rate) 2079 2633Total 8484 10137Rated discharged m3/d 1662 2020BOD kg/d 480 583SS kg/d 590 717Oil, grease kg/d 192 233The wastewater will be treated in two stages, for 6000 population equivalent in stage 1 and12000 population equivalent in stage 2 by the year 2010. This represents a respectivedischarge of 1200 kl/day and 2400 kl/day.Population Projections for greater Beau VallonYear Ha 2002 2010Population equivalent 301 7,617 8,924Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200096

Urban development in the Beau Vallon area is projected to accommodate• 222 units on the land occupied previously by a government owned farm.• 75 units on the Land Bank Project• 115 units at Mare Anglaise• 100 units at the northern limit of the study area• 512 additional units and net population increase of 1,152 population equivalent by 2010(net immigration inflow of 50%)New hotel developments are also planned in the study area. The table below providesprojections based on figures, which include expressions of interest from various private sectororganisations.Tourism Projections for greater Beau VallonNumber of rooms 1994 2002 2010Hotels 383 685 685Guesthouses 96 201 252Total 479 886 937Source: SOGREAH, 1996Sewerage PolicyAnalysis of the biological and chemical state of the marine environment of the bay in 1989-90by SETOI, concluded that the quality of the sea water is deteriorating as a result of humanactivities and if nothing was done the Beau Vallon Beach and tourist sites would sufferirreversible consequences. The Government of Seychelles, through PUC commissionedsewerage studies covering the entire greater Beau Vallon area, prior to undertake physicalimplementation of a centralised wastewater treatment plant. The French ConsultantSOGREAH carried out the studies (1994-1997) funded by the Caise Francaise deDeveloppement (CFD) and the Government. The Beau Vallon Bay Sewerage Project wasdesigned providing for the construction of a new wastewater collection and disposalinfrastructure system to serve the sewerage needs of the northern portion of the island by theyear 2010. The cost of the Study was SR 3.7 million (or $0.6).The Environmental Management Plan for Seychelles (EMPS) 1990–2000 based onsustainable development objectives, stated:“...unless adequate precautions are soon taken then the limits of environmental tolerance onand around Mahé could be exceeded with costly or irreversible consequences. The growth ofnew industries will compound the already existing problems of waste treatment and disposal.High levels of marine pollution are already building up in the main Victoria harbour area.Unless great care is exercised the impact of sewage and other wastes could seriously attackthe marine environment and aquatic resources on which the economy depends.” (EMPS,1990)The objective of development policy is, by the year 2010, to increase the percentage ofpopulation of Beau Vallon served by water-borne sewerage systems from 20% at present to70%. The remaining balance will be served by individual sanitation systems, mainly septictanks, reducing the percentage served by pit latrines to 10%. Sewerage, like other socialservices, are regarded as basic needs, although the Government’s objective is to reconcileservice delivery with service efficient, cost recovery and affordability criteria. The generalstrategy determining which area shall be served by central sewerage systems include thefollowing guidelines that qualify Greater Beau Vallon for Central Sewerage System.• all areas with population density of over 25 persons per hectare or with 1 house on plotsof 1,500 sq. metres or less;• all hotels with more then 25 rooms.Measures/Projects implementedThe EMPS 1990 – 2000 identified major areas of concern with regard to wastewatertreatment and recommended certain actions, which included a number a large scaleinvestments. Prior to 1999, no major centralised wastewater treatment work had been built inSeychelles.. However, the issue has been studied extensively; the greater Victoria SewerageFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200097

REFERENCESA. Background Regional Environmental References (WIO, TDA Report, 1998)1. Abdoulhalik, F. M. 1997. Marine Science Country Profiles: Comoros. IntergovernmentalOceanographic Commission. Paris.2. Anon., 1998. Water-related and environmental issues and problems of Kenya and theirpotential regional and transboundary importance. Preparation of the transboundary diagnosticanalysis and strategic action program for the marine and coastal environment of the WesternIndian Ocean3. Anon., 1998. Mauritius. Water-related and environmental issues and problems of Mauritiusand their potential regional and transboundary importance. Prepared as a nationalcontribution to the regional transboundary diagnostic analysis and strategic action program forthe marine and coastal environment of the Western Indian Ocean4. Anon., 1998. Tanzania Water-related and environmental issues and problems of Tanzaniaand their potential regional and transboundary importance. Preparation of the transboundarydiagnostic analysis and strategic action program for the marine and coastal environment ofthe Western Indian Ocean.5. Anon, 1994. Sector report for the formulation of the Master Plan. State Secretariat ofFisheries, Maputo, Mozambique.6. Arthurton, R. S., 1992. Beach erosion: Case studies on the East African Coast. InProceeding of the International Convention on the Rational Use of the Coastal Zone.UNESCO-IOC and Bordomer Organisation. Bordeaux. pp 91-95.7. Bjork, M., Mohammed, M. S., Bjorkland, M. and Semesi, A. 1995. Coralline algae,important coral reef builders threatened by pollution. Ambio, 24, 502-505.8. DANIDA/The World Bank, 1994. The United Republic of Tanzania, Ministry of Water,Energy and Minerals. Rapid water resources assessment, Vol. 1, Main Report. (Draft Final)58pp with appendices.9. Dorsch Consult and Minisrty of Water, Construction, Energy, Lands and Environment,1992. Rehabilitation and improvement of Zanzibar Municipality sewerage, drainage and solidwaste disposal system. Intermediate Report. Zanzibar. 193 pp.10. Dulvy, N.K.., D. Stanwell-Smith, W.R.T. Darwall, and C.J. Horrill. 1995. Coral mining atMafia Island, Tanzania: A management dilemma. Ambio 24: 356-365.11. Fernandes, A. and Hauengue, M. A. 1997. Protection and management of the marine andcoastal areas of the Eastern African Region (EAF/5): Land-based sources and activitiesaffecting the coastal marine and associated fresh water environments; Mozambique NationalReport. 25 pp.12. Guard, M. 1997. An assessment of community dependence on, and management ofcoastal resources in southern Tanzania. Second Meeting for Preparation of theTransboundary Diagnostic Analysis of the Western Indian Ocean Nairobi, Kenya 1-4December, 1997. UNEP, Nairobi: 16pp.13. Guard, M. and M. Masaiganah. 1997. Dynamite fishing in southern Tanzania, Geographicvariation, Intensity of use and possible solution. Mar. Poll. Bull. (in press).14. Human Development Report, 1997. United Nations Development Programme.15. IUCN/UNEP, 1982. Conservation of Coastal and Marine Ecosystems and LivingResources of the East African Region. UNEP Regional Seas Reports and Studies No.11.UNEP, Nairobi.16. Insull, A.D., U.C. Barg and P. Martosubroto. 1995. Coastal fisheries and aquaculturewithin integrated coastal area management in East Africa. In Linden, O. (editor) 1995.Proceedings of the Workshop and Policy Conference on Integrated Coastal ZoneManagement in Eastern Africa including the Island States, 21-23 April, 1993 Arusha,Tanzania. Coastal Management Center (CMC), Manila Philippines. 371pp. 19-36pp.17. Linden, O. and Lundin, C. G. 1997. The journey from Arusha to Seychelles. Proceedingsof the Second Policy Conference on Integrated Coastal Zone Management in East Africanand Island States, Seychelles, 23-25 October, 1996. Land, Water and Natural HabitatsDivision Environment Department, The World Bank. Washington.18. Linden, O. (editor) 1995. Proceedings of the Workshop and Policy Conference onIntegrated Coastal Zone Management in Eastern Africa including the Island States, 21-23Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200099

April, 1993 Arusha, Tanzania. Coastal Management Center (CMC), Manila Philippines.371pp.19. Linden, O. and Lundin, C.G. (eds.) 1995. Integrated Coastal Zone Managemnt inTanzania: Proceedings of the National Workshop 8-12 May, 1995. The Government ofTanzania, Sida, The World Bank, pp. 166.20. Lundin, C.G. and Linden, O. (eds.) 1995. Integrated Coastal Zone Management inSeychelles: Proceedings from a National Workshop, 20-24 February, 1995. Government ofSeychelles, Sida, The World Bank. Environment Department, World Bank, Washngton DC.1995, pp. 158.21. Lundin, C.G. and O. Linden (eds), 1996. Integrated Coastal Zone Management inMozambique. Proceedings of the National Workshop on Integrated Coastal ZoneManagement in Mozambique. Inhaca Island and Maputo, Mozambique, May 5-10, 1996.22. Makoloweka, S. and K. Shurcliff. 1997. Silencing the dynamite fishers. People and thePlanet, 6(2): 24-25.23. Matthes, H. and J.M. Kapetsky. 1988. Worldwide compendium of mangrove-associatedaquatic species of economic importance. FAO Fish. Circ. 814. 236pp.24. Mwaguni, S. and Munga, D. 1997. Land based sources and activities affecting the qualityand uses of the marine coastal and associated freshwater environments along the Kenyacoast. Coastal Development Authority, Mombasa. National Institute for Statistics (1996),Maputo, Mozambique.25. National Physical Development Plan 1995. Volume 1 : Strategy and Policies PlanningDivision, Ministry of Housing, Lands and Town and Country Planning, Mauritius.26. Sheppard, C.R.C. 1987. Coral species of the Indian Ocean and adjacent seas: asynonymized compilation and some regional patterns. Atoll Res. Bull. 307: 1-32.27. Ranaivoson, J. 1997. Marine Science Country Profiles: Madagascar. IntergovernmentalOceanographic Commission. Paris.28. Salm, R., 1998. Community dependence on and management of marine and coastalresources in the Western Indian Ocean: The role of Non-Governmental Organisations.Prepared for UNEP Water Branch as a contribution to the Preparation of a TransboundaryDiagnostic Analysis and Strategic Action Programme for the Marine and Coastal Environmentof the Western Indian Ocean. 32pp.29. UNEP/Institute of Marine Sciences, University of Dar es Salaam/FAO/SIDA. 1998.Overview of Land-based sources and activities affecting the marine, coastal and associatedfreshwater environment in the Eastern African Region. UNEP Regional Seas Reports andStudies No. 167.30. UNEP, 1997. Meeting of NGOs and National Coordinators for Preparation of theTransboundary Diagnostic Analysis and Strategic Action Programme for the Western IndianOcean. Nairobi, Kenya, 1-4 December, 1997. UNEP (WATER)/GEF-WIO/1.4. The report ofthe meeting ANNEX4 – NGO REPORTS.31. UNEP, 1997. Report of the First Ad Hoc Meeting of the National Coordinators for thepreparation of the Transboundary Diagnostic Analysis of the Western Indian Ocean. Nairobi,Kenya, 28 July-1 August 1997.32. UNEP, 1997. Report of the Meeting of NGOs and National Coordinators for Preparation ofthe Transboundary Diagnostic Analysis and Strategic Action Programme for the WesternIndian Ocean. Nairobi, Kenya 1-4 December 1997. 13pp.33. UNEP, 1984. Marine and coastal conservation in the East African region. UNEP RegionalSeas Reports and Studies No. 39. UNEP, Nairobi.34. Water Resources, 1996/7. The World Resources Institute, Washington, D.C.B. References on Mombasa cited in the National Report1 Municipal Council of Mombasa 1987: Mombasa Sewerage Project Phase 1 Part (A):Waste Mainland Changamwe Sewage Treatment Works, Vol. 12 GOK 1996: Kenya Population Census 1989, Analytical Report Vol. V. Mortality.3 GOK 1999: Economic Survey4 GOK 1999: Environmental Management and Coordination Act5 GOK 1975: Mombasa Water Pollution and Waste Disposal Study6 GOK : Mombasa District Development Plan 1997-2001Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 2000100

7 GOK 1997: Mombasa District Fisheries Report8 GOK 1995: National Tourism Development Master Plan9 GOK: 1996: Environmental Impact Assessment Guidelines and AdministrativeProcedures10 GOK 1990: Coast Development Authority Act Cap 449 of the Laws of Kenya11 GOK 1999: National Policy on Water Resources Management andDevelopment12 UNEP 1999: Land Based Sources and Activities Affecting the Marine Coastal andAssociated fresh Water Environments in Comoros, Kenya, Madagascar, Mauritius,Mozambique, Seychelles and United Republic of Tanzania13 UNEP 1998: Eastern Africa Atlas of Coastal Resources 1: Kenya14 Nguta and Mwaguni 1995: In IMO Regional Workshop Integrated Management in PortTowns and Cities of Eastern and Southern Africa15 Anon 1996: Towards Integrated Management and Sustainable Development of Kenya’sCoast16 Anon 1999: Progress in Integrated Management and Sustainable Development ofKenya’s CoastC. References on Dar es Salaam cited in the National Report1. Sustainable Development Program - Dar es Salaam City, "Managing the sustainablegrowth and development of Dar es Salaam, Environmental Profile of the Metropolitan Area",1992.2. NEMC, "Environmental Health Profile for Dar es Salaam region", 1998.3. NEMC, "An aquamarine Profile of Dar es Salaam region", 1995.4. NEMC, "Industrial Monitoring in Dar es Salaam report", 1999.5. NEMC, "Situation around Vingunguti Dump report", 1999.6. Vice President Office, "Tanzania Country Study on Biological Biodiversity", 1998.7. NEMC, "Inventory of Obsolete Pesticides and Veterinary wastes in Tanzania", 1998.8. J. Lubuva & A. F. Fuko, "Local Government Reforms in Tanzania, A Case Study on theCity of Dar es Salaam", 1999.9. B. T. Mapunda, "The Law of the Sea in Tanzania, An assessment of the implementation ofthe 1982 UN Convention on the Law of the Sea", 1999.10. NEMC, "Inventory of Environment-related projects", 1999.11. M. A. Kishimba, A. Mkenda & D. J. Njau "Sustainable Environment in Tanzania", 1995.12. SIDO/GTZ Project, "Informal Sector in Dar es Salaam region report", 1995.13. FAO/UNEP, "Marine Pollution in East Africa Region", UNEP Regional Sea Reports andStudies No. 8, UNEP, 1982.14. NEMC, " Marine Pollution Along Dar es Salaam Coast", 1993.D. References on Seychelles cited in the National Report1. ENVI.R.O, 1996. La Digue Landfill Environmental Impact Assessment. European Unionand Division of Environment, Mahé.2. Grandcourt, E. M., 1995, Coastal Profile of Beau Vallon, Prepared as part of UNEPEAF5/Project (Integrated Coastal Area Management Project), SFA, Seychelles3. Government of Seychelles. 1995. Public Sector Investment Program (PSIP). Ministry ofForeign Affairs, Planning and Environment, Seychelles.4. Government of Seychelles, 1990, Environmental Management Plan of the Seychelles(EMPS), 1990 – 20005. Government of Seychelles, 2000, Environmental Management Plan of the Seychelles(EMPS), 2000 – 2010 (in press)6. Henri, Kerstin, 1997, Preparation for a round table on private sector development in theSeychelles, Sector Study: Water and Sanitation, Seychelles7. Henri, Kerstin, 1997, Background report to the Seychelles Tourism Master Plan for theWater and Sanitation Sector, Seychelles8. MISD, 1995. Preliminary Results of the 1994 Census. Management and InformationSystems Division, Ministry of Administration and Manpower, Mahé.9. Payet, Rolph, 1995, Integrated Coastal Zone Workshop, Case Study – A Coastal ZoneStrategy for Beau Vallon Bay, MFAPE, Seychelles10. Payet, Rolph, 1996, Beau Vallon Bay Marine Coastal Area Study, Water Quality:Microbiological Monitoring Report, DOE, SeychellesFinal Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 2000101

11. SETOI 1990, Beau Vallon Bay Sewerage Project - Feasibility Study. Societe d'EtudesTechniques, La Reunion.12. Shah, N.J. 1994 (a) . Environmental Protection and Marine Research in Seychelles, In:J.van der Land (ed.) Oceanic Reefs of the Seychelles. National Museum of Natural History,Leiden.13. Shah. N.J. 1995 (a). Coastal Zone Management in Seychelles. In: O. Linden and C.Lundin (eds.) Integrated Coastal Zone Management in Seychelles. 14-125. The World Bankand SIDA.14. Shah. N.J. 1995 (h). The Interactions between Tourism and Biodiversity. In: L.Hedlund,B.Hagerhall and K.Johannesson. Bodiversity and Sustainable Use of Coastal Waters.Swedish Scientific Committee on Biological Diversity, Sweden.15. Shah. N.J. 1996 (a). Climate Change and Small Islands in Africa: the Seychelles goesbeyond rhetoric to action on the ground. Impact, 19: 22.16. Shah. N.J. 1996 (b). How Do We Get From Here to There ? The Challenge of AchievingIntegrated Coastal Zone Management in Seychelles. Tropical Coasts, 3 (1) 14-17.17. SOGREAH, 1996, Beau Vallon Bay Sewerage Project, Feasibility Review and DetailedEngineering Design, Feasibility Review, Final Report, Text, Republic of Seychelles18. Shah, N. J. 1997 Environmental Impact Assessment Report, Rehabilitation of Le NiolWaterworks, PUC, Seychelles19. Shah, N. J. 1998 Environmental Impact Assessment Report, Resort Development at BeauVallon Bay, Hotel des SeychellesE. References on Cost-Benefit Analysis1. Cost-Benefit Analysis and the Environment, Hanley N. and Spash C.L., 19952. The Economic Value of Biodiversity, D. Perarce & D. Moran, 19963. Introduction to Environmental Economics, D. Pearce et.al, 19944. Blueprint for a Green Economy, D. Pearce et.al5. Economics and the Natural World, World Bank, David Pearce,19926. World Without End, D. Perace and J. Warford, 19957. Cost-benefit analysis of measures for the protection of Degradation of the Environmentfrom Land-Based Sources of Pollution Rhodes-Greece, Glafkos Constantinides, UNEP-MAP,Technical Report Series No. 72, 19928. Costs and Benefits of measures for the protection of Degradation of the Environment fromLand-Based Sources of Pollution: Case Study of the Bay of Izmir, T.I. Balkas and F. Juhasz,UNEP/MAP, Technical Report Series No. 72, 19929. Mauritius Environmental Sewerage and Sanitation Project (Montagne Jacquot SewerageSystem), Republic of Mauritius, Environmental Sewerage and Sanitation Project: ProjectAppraisal Document, World Bank, 1998 (17289 MAR)10. Wastewater Treatment in Ismailia – Egypt, in J.T. Winpenny, Values for the Environment:A Guide to Economic Appraisal, HMSO, 1993,11. Canal Cities Water and Wastewater Phase II, USAID, Luken 1987.12. Values for the Environment:A Guide to Economic Appraisal, HMSO, 1993Guidelines for Integrated Coastal Area Management, UNEP-PAP, 199413. Applying Environmental Economics in Africa, World Bank, 199514. Environmental Economics and Sustainable Development, Mohan Munasinghe, WorldBank Environment Paper Number 3, 199315. Principles of Cost – Benefit Analysis, E. Mishan, 199016. Integrated Coastal Zone Management of Coral Reefs by Kent Gustavson (ed.), WorldBank, 200016. Review of Biodiversty Literature, 2000, Cynthia Cartier and Jack Ruitenbeck, in IntegratedCoastal Zone Management of Coral Reefs by Kent Gustavson (ed.), World Bank, 200017. GPA Draft Recommendations for Decision-making on Sewage, 2000, UNEP CoordinationOffice - Global Programme of Action.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 2000102