Economic Assessment of Sanitation Interventions in Vietnam - WSP

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X. RecommendationsThe economic performance of sanitation and hygiene projectsis favorable throughout the country. The actual performanceof sanitation programs is often lower than idealperformance, as indicated by the non-use of toilets andcontinued pollution of the environment. This indicatesthat attention must be given to the determinants of nonperformance.The study findings emphasize the importance of choosingthe right sanitation option in terms financial sustainability,when moving up the sanitation ladder and upgrading existingsystems. They also indicate the need to consider other,non-quantified benefits not included in the benefit-costratios. Recommendations from the study are:Recommendation 1: Intensify efforts to increase accessto basic improved sanitation in rural areas and improvedwastewater management in urban areasDespite the progress of the country in meeting the MDGtargets for sanitation, a sizeable number of rural peoplestill use unimproved sanitation facilities, and only a smallproportion of urban wastewater is treated adequately. Asa result, the estimated economic burden of poor sanitationin the country remains high. This suggests a need formore investment in improved sanitation facilities. This investmentis essential to reducing the costs that poor sanitationimposes on health, water for drinking and other uses,tourism, business operations, and the overall quality of life.This may also stimulate economic activity in markets thatprovide inputs to and outputs from (reuse) the sanitationsector. The sources of investment funds for the sanitationand hygiene sector should be strengthened and diversified,while interventions by the public sector and developmentbanks should be targeted to maximize developmental benefits,especially aiming to increase access and uptake amongpoor and vulnerable households.Recommendation 2: Sanitation planning should carefullyconsider the performance of alternative technologyoptions and delivery approaches to maximize programefficiencyEarly sanitation planning would avoid inefficient investmentin sanitation systems that are not financially sustainableor that are inadequate for a population’s needs and laterrequire upgrading. Broader economic costs and benefitsand direct financial requirements and impacts should bothbe considered as part of technology and program deliveryselection. Technology selection and project design shouldtake into account life-cycle costs, future increases in theprice of construction, the specific conditions of target sitesand the related opportunities and limitations of sanitationprograms. Decision makers at all levels should be encouragedto select those technologies and designs that not onlysuccessfully capture the financial and economic benefits ofsanitation, but also at an affordable cost that is appropriateto the specific context.Based on the results of this and other studies, guidelinesshould be drawn up for technology options and programdelivery approaches for different geographical, demographicand socio-economic settings in Vietnam. Local authoritycapacity and skill in planning, design and contractingshould be built and mobilized to enable improved planningat decentralized level. To increase program efficiency,lower-cost and standard designs that incorporate improvedenvironmental features should be made available to projectdesign teams.Furthermore, Vietnamese environmental standards are stillnot fully developed to enable the planning of sustainable sanitationoptions. There are still large gaps and contradictionsamong effluent standards and water resource classification.This complexity leads to the selection of inefficient technol-108Economic Assessment of Sanitation Interventions
Economic Assessment of Sanitation Interventions in Vietnam | Recommendationsogy and inequity in relation to different wastewater discharges.Therefore, continued attention is required in these areas.Safer reuse of treated wastewater and sludge in agriculturewould bring significant positive benefits in Vietnam. Safeand efficient resource recovery systems should be appliedmore widely, especially in areas (e.g. farming communities)that have a high capacity to benefit from these systems.Recommendation 3: A manageable monitoring andevaluation (M&E) framework should be designed forsanitation programs – a framework that defines how tomeasure relevant impacts of sanitation options comprehensivelySanitation program managers and implementers, and governmentstaff, need to better understand the efficiency ofsanitation programs, so that they can fine-tune ongoingprograms for implementation, and practice ex-post evaluationfor better design and implementation of future sanitationprograms. Outcome-oriented M&E is a relatively newconcept in Vietnam and hence needs to be introduced ina way that fits in with national systems and processes. It isnecessary to develop an adequate information mechanism,database, and M&E and reporting systems in the water andsanitation sector. Furthermore, users need to be sensitizedand trained appropriately in the M&E system.Recommendation 4: Encourage the private sector to bepart of the solutionThere are significant opportunities for sanitation markets inVietnam, in which the private sector is well placed to playa major role. Besides the benefits of reduced environmentalpollution and improved public health, the benefits associatedwith resource recovery and sanitation market activitiesare potentially major, including job creation and povertyalleviation. Integrated waste management also brings anumber of social and economic benefits. Adequate policiesand mechanisms and sufficient supporting tools are neededto encourage public and private sector participation. Demonstrationprojects are needed that relate to critical issuessuch as cost reduction and resource recovery. Since resourcerecovery covers different stakeholders, inter-sectoral cooperationis needed.‘Willingness to pay’ data must be carefully collected andused with caution. Government capital subsidies to householdscreate favorable conditions for implementation, butthe ‘polluter pays’ principle should be applied to ensure financialsustainability of the sanitation system. Regulatoryframeworks are also needed to strengthen pollution controlcapacity at different levels of management.The differences between the economic and social benefitsto society versus the financial benefits to sanitation businesses(based on the willingness of consumers to pay) meanthat special financial instruments should be applied. Thetwo models with greatest potential in Vietnam are RevolvingFunds, mainly in the urban areas, and Micro-Finance,which is widely applicable. However, poorer householdsshould receive loans with more favorable interest rates andpayback conditions to increase uptake and reduce inequity.Recommendation 5: Mobilize community participationas it is crucial to the sustainability of sanitation programsAppropriate sensitization and involvement of both customersand service providers/scheme owners is crucial to thesustainability of sanitation program investment and serviceflows. It is therefore recommended that a comprehensivebehavior change strategy that includes community/beneficiaryparticipation be implemented, covering all phases ofproject development, from preparation to post-construction.Approaches should be based on consultation andparticipation, and the key stakeholders (customers, serviceproviders and scheme owners) should not only be at thereceiving end of information, but also actively involved indecisions, and the promotion and improvement of services.The participation of women in particular is crucial to thesuccess of a project. Strategies and plans must be accompaniedby proper selection and capacity building of localbehavior change strategy facilitators. Moreover, the projectsshould provide support to local organizations so that afterit is phased out, behavior change and IEC follow-up will beperformed by local stakeholders.Recommendation 6: Further operational research isneeded to inform decision makers on benefits not coveredadequately in this study, and impacts and determinantsof success that are highly context-specificwww.wsp.org109
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Economic Assessment ofSanitation In
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Economic Assessment of Sanitation I
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ForewordTarget 10 of the Millennium
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Glossary of TermsBenefit-cost ratio
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AcknowledgmentsThe Economics of San
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V. National Benefits of Improved Sa
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Table 32. Sanitation coverage, and
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Figure 34. What factors were of mos
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Annex Table E1. Level of satisfacti
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Annex Table J1. Site U1 (Dong Thap,
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PopulationSelected Development Indi
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III.Study MethodsThe study methodol
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IV.Local Benefits of Improved Sanit
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Page 166 and 167: ANNEX TABLESANNEX A. STUDY METHODST
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