Water for people.pdf - WHO Thailand Digital Repository

R E C O G N I Z I N G A N D V A L U I N G T H E M A N Y F A C E S O F W A T E R / 3 3 9Box 13.9: The cost recovery approach in the Seine-Normandy basinIn the Seine-Normandy basin, and more generally in France,the bill paid by domestic and industrial users connected tothe water system covers the cost of distribution andcollection services: ‘water pays for water’. This cost variesaccording to the local economic and technical configuration.In addition, a charge is levied by the Water Agency, which ismade up of a charge on discharged pollution and a chargelinked to resource withdrawal. The revenues drawn fromthese fees are redistributed by the Water Agency in the formof free loans or subsidies, which are intended to encouragethe various end-users to improve the way they use theresource, via investments or better working techniques. Thedifferent categories of end-users are supportedapproximately in proportion to the fees they pay, althoughsome transfers are made between both different types ofend-users and different geographic zones in the basin.The calculation of the pollution charge is in accordancewith the polluter pays principle. The Water Agencyrevenues are entirely dedicated to supporting pollutionreduction and clean-up actions. The nuisance caused by aspecific water use over another one (negativeexternalities) still has to be measured and accounted for inthe tariff. This is one of the WFD recommendations to befulfilled by 2010.In 1999, the price of water in the Seine-Normandybasin was, on average, 2.74¤/m 3 (about US$2.70/m 3 ). Onaverage, the amount spent on drinking water per householdrepresented 1.03 percent of total income and 4 percent ofhousing costs. The water sector directly employs 18,700people in the basin (in the drinking water and sanitationsectors) and represents an annual investment of about60¤/inhabitant per year (about US$60/inhabitant/year).Source: Prepared for the World Water Assessment Programme (WWAP) by the Seine-Normandy Basin Agency (AESN), 2002.The Changing Roles of WaterGovernanceAvailable options for better valuation of water and waterinfrastructure development depend very much on appropriategovernance and institutional arrangements, whether it is a decision toget into contractual arrangements with operators for water andsanitation services or to set a tariff policy or to ensure better waterallocation. With users becoming more involved in managing waterresources, the concept of management transfer has been a centraltheme in valuing water. Programmes that transfer existinggovernment-managed water systems to private firms, financiallyautonomous utilities and water user associations, are beingimplemented in many countries. In this context, governance modalitiescan be linked with water valuation and financing, as outlined below.Everyone a part of the solutionTargets established through the Millennium Development Goals requireadequate financing to be realized. As presented earlier, mobilizing therequired financing is very difficult, and the existing absorption capacityof many governments is limited. From the point of view of watershortages, if consumers wish to avoid supply insecurities, they must‘buy’ their security through contributions, which may, at times, beexpensive. The role of consumers and other stakeholders is crucial indetermining how to value water and introduce realistic prices. Apreliminary review of fifty-nine country reports regarding progress inimplementing Chapter 18 of Agenda 21, reveals that twenty-threecountries have set up policies to involve stakeholders, including theprivate sector in water resources project development. For example,the Slovak Republic has formulated strong policies to valuegroundwater through people’s participation, while the Ukraine’spolicies focus on dwindling supplies and encourage demandmanagement through popular participation. Ghana has established aWater Resources Commission through an act of Parliament (1996) toensure public participation in all aspects of water resourcemanagement. The Orangi project of Pakistan is one of the most laudedexamples of the success of mobilizing resources through civicparticipation in improving the sanitation of a shantytown.Decentralization and devolutionIn the developing world, an approach that is increasingly beingpracticed is to decentralize water management responsibilities tothe lowest possible levels of the administration. Examples exist inSri Lanka and Thailand, where the municipal water supplyresponsibilities have been delegated to the municipal authorities.There has been a considerable effort in replicating the French WaterAgency approach and its Associations Syndicales Autorisées (ASA).