United Nations Economic and Social Commission for Asia and the Pacific. Pro-poor Water and Wastewater Management in Small Towns

Transcription

1 United Nations Economic and Social Commission for Asia and the Pacific Pro-poor Water and Wastewater Management in Small Towns Water Supply Management in Colombo SRI LANKA

2 CONTENTS SECTION 1: BACKGROUND... 3 SECTION 2: PRACTICE DEVELOPMENT AND OPERATIONS SECTION 3: OUTCOMES SECTION 4: SUSTAINABILITY SECTION 5: POLICY IMPLICATIONS SECTION 6: INFORMATION SOURCES AND VERIFICATION SECTION 7: CERTIFICATION Note: The views expressed in this paper are those of the authors and do not necessarily reflect the views of the United Nations Secretariat. Mention of firm names and commercial products does not imply the endorsement of the United Nations. This publication has been issued without formal editing. 2

3 1.1. Name of the practice Water concession in Colombo (Sri Lanka) 1.2. Location SECTION 1: BACKGROUND The Project has been implemented in a community located at No. 27, on Nawala Road in Kirula Ward in Colombo Municipal Council area, Sri Lanka Focus Drinking water distribution project initiated through a community organization. This partnership was organized through the National Water Supply and Drainage Board (NWSDB), Sri Lanka and Sevanatha, Urban Resource Center. This pilot project was implemented in partnership with Pubic, Private and Civil Society organizations in order to influence national policy, water related legislations and planning processes to be more participatory, decentralized and community based. 1.4 Scale of the practice Scale of the pilot project implemented is as follows in terms of, population, cost, expenditure and volume of water: Table 1 No. Description Amounts 1. Number of families served Number of housing units in the Settlement Total population Total cost of the project (Capital) Rs.669, Subsidy to families given by Sevanatha for pipe laying and payment to Road Development Authority for the cost of damaging tarmac on the main road from funds received from UNESCAP for PPCP Projects in Sri Lanka. Rs.477,110 Rs.69, Capital cost born by Households Rs.70,000 Capital cost born by the Women s Bank Rs.82, Volume of water used per month 1,400,000 liters 8. Fee collected from 120 housing units per year Rs.143, Cost of water charged by NWSDB per year (actual) Rs.26, Annual recurrent expenditure to WB Rs.60, Gross profit to WB per year Rs.56, Period within which capital cost is recovered by WB 1.7 yrs. 3

4 1.5 Duration of the practice Important dates of events in operation of the practice are given in the following table. Table 2 No. Description Dates 1. Introduction to community about PPCP 25 April Submission of PPCP proposal by the WB to NWSDB 22 November Completion of Feasibility study of the project October Submission of Application for registration as a CBO by the WB with NWSDB 19 October Registration of WB as a CBO with the NWSDB 08 November Offer of PPCP contract to the WB by NWSDB 19 January Signing of the pipe laying contract between WB and Sevanatha 24 March Construction started by the WB 31 May Construction completed (pipe laying completed in time but it took a longer period than expected to get the main water supply line across the main road to the settlement as it had to break the tarmac and to lay pipes through the main road) 10. Beginning of WB operations as households received water under PPCP arrangement 28 February March 2006 This was the first project of its kind in Sri Lanka, implemented by NWSDB in partnership with a CBO, sharing responsibilities of a public agency on a profit making basis. Since March, 2006 the WB has been providing water to 70 households. 1.6 Socioeconomic environment This Water Supply project was implemented in a low income community registered under assessment No of the Colombo Municipal Council. The settlement, located near the eastern boundary of the city faces two main roads on the western and southern edges and railway line to the east of it. The northern part of the settlement borders private property. Nearly 30 years ago this vacant low lying land was owned by the government. A large portion had been reserved for the railway line and roadways. A few families who were tenant of these lands on an annual lease through the government, constructed shacks for rent to low income families. Within a short time the community grew yet the basic services in the community were greatly lacking, namely water and sanitation. Eventually the land was acquired by the Urban Development Authority for a development project, near the railway lines owned by the Railway Department. Due to road widening, the land area of the settlement had been reduced but the population density increased. By year 2004, 426 people were living in 112 housing units in little less than one and half acres of land area. Residents living in this settlement are ethnically mixed with the majority being Sinhalese. Due to its location in the city, the community itself has access to various livelihoods, schools, private and government hospitals and municipal clinics. 1 Assessment number is given for each property registered with the municipality for purposes of property tax and property identification 4

5 Table 3: Housing Condition of 27, Watta, Colombo in 2004 No. Description Number Percentages 1. Permanent Semi-permanent Temporary Total Table 4: Ethnic Composition of Population, 27 Watta, Colombo in 2004 No. Description Number Percentages 1. Sinhalese Tamil Muslims Others (Christians) Total According to the poverty assessment survey carried in Colombo in 2001, 27 Watta community has been identified as one of the poorest settlements, due to the lack of basic services 2. Main access into Watta community is through the main road, with no proper internal access roads. Since the community is considered an illegal shanty settlement, there is no drainage network to discharge waste and storm water. Nearly 100 families in the settlement had been sharing 6 common water taps as their main water supply, while sanitation services within the settlement consisted of 4 common toilets for nearly 500 people. Both of these services placed a burden upon the residents of having to wait in long lines. Due to the lack of facilities, a majority of families built their own makeshift toilets which created further health hazards as waste materials flowed to the open drains. During the rainy season, flooding is a major concern as some houses are inundated with water. With no proper drains, the waste water stagnates inside the settlement creating breeding grounds for mosquitoes and flies which in turn creates health issues. The Colombo municipal council provided households with plastic containers for waste materials that are collected twice a week for disposal to lessen the amount of waste released through the drainage system. Nearly all houses in the settlement have electricity connections obtained legally from the Sri Lanka Electricity Board. The majority of families work in mainly low paying jobs near their homes as daily laborers. According to general observations and interviews conducted in the community, few residents 2 Poverty Profile City of Colombo, Sevanatha and Colombo Municipal Council,

6 are suffering from lack of income and food. Their main complaint is the lack of water and sanitation facilities. According to the settlement profile prepared by Sevanatha in September, 2004, the main issues identified within the community are: Insecure land tenure Inadequate water supply for drinking, washing and for the use of common toilets. No proper sanitation facilities dilapidated few common toilets without adequate water supply No proper internal roads / footpaths No proper drainage network No assessment numbers for houses Some community members in the settlement are engaged in selling illegal hard drugs 1.7 Access to water and sanitation services During community workshops held in Watta 27, household members identified major issues related to water access and sanitation services. According to the community leaders no public utility authority has extended their services to improve the water and sanitation services since Watta 27 is still considered a squatter settlement with residents living illegally on government land. Leaders in the community expressed the concern that the major problem in the settlement was inadequate water prior to the water connections under this project. During the 1980s The Urban Basic Services Program (UBSP) provided basic water and sanitation services to low income families living in slum and shanties in Columbo. As part of this project implemented by the Columbo Municipal Council with UNICEF assistance, Watta 27 received 6 common taps and four toilets for the entire community, which was the only source of water until During this period 15 housing units out of 112 had obtained piped water from NWSDB using private connections. At the time that this project was introduced to the 27 Watta there was one common water tap for an average number of 17 families. Water pressure of these common taps is generally low during the day time peak hours, when residents had to wait in queue for 15 to 30 minutes to fetch a bucket of water. Some households opted to collect water during the evening storing it in small containers for drinking as well as washing purposes. Since women are the main water collectors they often spent a good deal of their time for water collection, washing, cooking and bathing, often spending more than a half day for these chores. Another major problem within the settlement was the lack of toilets and proper drainage. The four common toilets provided by the Colombo Municipal Council in the 1980s under the UBSP are now in urgent need of repair or replacement. Numerous households have built improvised temporary toilets close to the opened-drains within the settlement under their own expenses. The majority are pit latrines or squatting pans, with an outlet pipe that is connected to the opened-drains. Other families have built private toilets within their premises, making a small covered area inside the house using a squatting pan with a long plastic pipe that is connected to the open drain. This has lead to serious health issues since the community is located in low lying land. The people in the community have requested proper drainage within the settlement as stagnation of waste in several locations poses a major health hazard. 6

7 1.8 Institutional structure Currently the provision of drinking water for private and commercial use is generally a state responsibility. On the national and regional level, all water supply activities in the country are carried out by the NWSDB under the National Water Supply Policy, implemented by the Ministry of Water Supply and Urban Development 3. The NWSDB carries out planning, design and construction of major water supply projects in the country. Distribution of water to various consumers is also carried by the same, since it is government policy to categorize water consumers in the country into two main categories: - Domestic consumers - Non-domestic consumers The main objective of the NWSDB is to provide safe drinking water throughout the country. The NWSDB promotes four types of supply systems to have safe drinking water. a. Piped water supply systems b. Deep tube wells c. Protected dug wells d. Rainwater harvesting systems The NWSDB supports government as well non-government sector agencies to implement category b, c, and d. The main responsibility of the NWSDB is to provide safe drinking water, through piped water supply systems, to both domestic and non-domestic consumers. The NWSDB charges a water tariff based on the consumption on a monthly basis from different consumer groups. This monthly water tariff differs according to the consumer group. According to the water policy, a low tariff is charged from the domestic consumers and a higher tariff from the non-domestic consumers, excluding religious and charitable Institutions, government schools and common water stand posts. Sub-categories of consumers according to two main categories are: Domestic Consumers: - Domestics (households) - Government residential quarters - Condominium housing units Non-Domestic Consumers: - Commercial institutions - Industrial Institutions (water based) - Companies engaged in property development and construction work - Export processing zones - Tourist hotels and guest houses - Shipping - Other commercial and private institutions - Government institutions Several organizations are involved in the water sector at local level in urban as well as rural areas. Most households in rural and semi urban areas find their own ways to obtain mainly ground water, extracting water from drilled deep tube wells. In addition, the water is supplied through pipe networks set up by community organizations and local government authorities 3 Portfolio of water supply had been given to several ministries over the last two decades. Currently in Sri Lanka it has a separate ministry for Water Supply as the current President of Sri Lanka has reshuffled his cabinet in February

8 in certain areas of the country. This is also considered a state responsibility as local governments are involved in the water supply, with the capital cost of these water projects provided by the government. The operation and maintenance of this system is handled jointly by government and community organizations. Households using these water sources pay rates determined by the local authorities. In the past such schemes were mainly run by local authorities without charging water fees to the consumers. Currently these schemes are organized through the NWSDB. The government has been providing water for most rural areas through decentralized community managed systems. These schemes, known as community water supply projects are implemented with the support of the NWSDB from financial supports received by the government from multilateral and bilateral donor arrangements. These projects are implemented in communities where people have severe water shortages or no access to water from the major water supply schemes run by the NWSDB. Over the last 20 years the government has implemented many such schemes throughout the country. Prior to the implementation of these schemes, the NWSDB carried out assessment surveys and established district level institutions for project administration. Projects were designed for numerous villages based on the volume of water available and community participation. In community projects, a local NGO is hired as a partner organization for project implementation through community mobilization. The operation and maintenance is carried out by community based organizations. Households pay a water tariff based on their consumption. This tariff is decided by the CBO based on their expenses for running the scheme, while the NWSDB provides necessary technical and regulatory advice at the request of the CBOs. Table 5: Water Tariff Structure (according to revision made by NWSDB on 01 March 2005) A. Water Tariff for Domestic Consumers No. Consumption units per month Rate per unit in Rs to to to to to to to to over Note: one unit is 1000 liters. 8

9 B. Water Tariff for Non-domestic Consumers No. Category Consumption units per month 1. Religious and Charitable 01 to 50 more than 50 Rate per unit in Rs Government schools and Govt. assisted schools For each unit Common taps (stand post) For each unit Commercial Institutions For each unit Industrial Institutions For each unit Companies engaged in property development and construction works For each unit Export processing zones of the BOI For each unit Tourist hotels and Guest houses For each unit Shipping For each unit Other commercial and private institutions For each unit Government institutions For each unit Bulk Supplies: 1. Local Government institutions For each unit Rural water supply schemes maintained by CBOs For each unit Key partners Key partners involved in this practice are as follows: Ministry of Urban Development and Water Supply National Water Supply and Drainage Board Sevanatha Urban Resource Center Sri Lanka Women s Development Services Cooperative (Limited liability) Society alias Women s Bank (WB) Households Ministry of Urban Development and Water Supply This ministry is in charge of providing safe drinking water and proper sanitation for all people of the country, in all geographical areas and climatic zones, as well as special development projects including emergency situations. In addition, the ministry is the regulatory body of the water sector assigned to implement national policies and monitor the improvement of the water supply through monitoring quantity and quality. The ministry prepares legislations with regard to all aspects of safe drinking water through out the country. Designated as the main body on behalf of the Government, the ministry negotiates with multilateral and bilateral agencies for major investments within the water sector of the country. The ministry is headed by a cabinet minister of the parliament and a senior civil servant as the permanent secretary of the ministry. 9

10 National Water Supply and Drainage Board (NWSDB) The National Water Supply and Drainage Board (NWSDB) is the national organization of Sri Lanka responsible for implementation of the water supply policy throughout the country. The NWSDB began as a sub department under the Public Works Department, for Water Supply & Drainage. In 1965 it became a division under the Ministry of Local Government. From 1970, this division functioned as a separate department under the Ministry of Irrigation, Power and Highways and remained so until the present board was established in January 1975 through an Act of Parliament. The National Water Supply and Drainage Board (NWSDB), presently functions under the Ministry of Urban Development & Water Supply as the principal authority providing safe drinking water and facilitating the provision of sanitation in Sri Lanka. In accordance with the Board Act, several major Urban Water Supply Schemes operated by Local Authorities were taken over by the NWSDB to provide more coverage and improved service, which included consumer metering and billing that commenced in The Rural Water Supply & Sanitation programmes include deep well programmes that were implemented by the NWSDB. During the past 30 years the organization has considerably expanded its scope of activities. Employee numbers have increased from approximately one thousand (1,000) in 1975 to nearly seven thousand nine hundred and eighty one (7,981) by The NWSDB is presently operating 287 water supply schemes which provides 28.6% of the total population with pipe borne water, while 10.0% of the population is served with hand pump tube wells. The NWSDB hopes to increase the coverage of piped water to 40% by 2015 as part of the United Nations Millennium Development Goal of 85% safe drinking water coverage by that year. The NWSDB is also responsible for the sewerage system in Colombo and surrounding suburbs. The Planning and Design Division designs pipe lines, water treatment plants and pumping stations using senior engineers who have years of experience in the field of water supply and sewerage. The NWSDB currently operates and maintains more than 287 water supply schemes throughout the country, using modern technology, undertaking development activities using foreign funds and local funds. The Foreign component utilized during 2005 was Rs. 9,115 million, while the local contribution was Rs. million 3,531. Sevanatha Urban Resource Center Sevanatha is a local Non-Governmental Organization engaged in urban sector activities that began in 1989, registered as and NGO under the Ministry of Social Services, Sri Lanka. Sevanatha in turn is affiliated with two regional organizations; the Asian Coalition for Housing Rights (ACHR) based in Thailand and CITYNET in Yokohama in Japan. Sevanatha acts as a resource center assigned to promote community based actions for sustainable urban development which includes local NGOs and community based organizations. Formed by a group of professionals with backgrounds in government housing, and urban development sector in the 1980s, Sevanatha is managed by an executive committee consisting of 8 members who work in public and private sector institutions. Day to day activities of Sevanatha are managed by the executive director who is appointed by the executive committee. 10

11 Sevanatha seeks sustainable solutions for a wide range of issues in urban areas in Sri Lanka, including issues related to poverty and urban governance. The specific areas of action are community organization, housing, land, water, sanitation, waste management, urban agriculture and livelihoods, in partnerships with community and local government organizations. Currently, Sevanatha operates primarily in Colombo, the capital city of Sri Lanka and surrounding municipal areas. Sevanatha has been successful in its Community Action Planning (CAP) project which targets sustainable livelihoods, community managed water, sanitation and decentralized community based waste management. With the head office located in Columbo, additional project offices are located in Negambo, Matale and Badulla in central part of the country. In Kalmunai, located on the eastern coast, Savanatha serves communities affected by the tsunami disaster in Operating with a staff of approximately 35 which includes professionals and administrative staff. Sevanatha has no major long term supporting donor. However it has been able to generate funds for its programs from projects being implemented on various themes related to urban issues. Sri Lanka Women s Development Services Cooperative (Limited liability) Society alias Women s Bank (WB) A cooperative society known as the Women s Bank was formed in 1989 by several community leaders in Colombo with the support of the National Housing Development Authority and UN Habitat. The Women s Bank is an urban poor women s savings and credit organization that was formed within the framework of micro finance institutions with provisions of savings and loans for its members for livelihoods, housing and other emergency needs of households. WB is a self-financed organization of which total capital was over Rupees 500 million in This membership organization was formed from the elected representatives of savings groups based at the community level. Community groups are formed into braches of the WB acting as community banks for a particular geographical area demarcated by the group members. Each branch of the WB consists of from 100 to 150 groups, registered with the Cooperatives Development Department of Sri Lanka as Sri Lanka Women s Development Services Cooperative (Limited liability) Society under Registered No. SAMU 18. Authorized as a national organization, the executive committee consists of 13 members elected by general membership at annual general meetings with the head office located in Colombo. Currently the WB functions in 18 districts out of 25 in the country including war-affected northern and eastern sections of the country. Total membership of the WB is approximately 35,000 with 118 branches throughout the country. The main function of the WB is savings and provisions of loans for its members for livelihoods, housing and other emergency requirements of the households. Households (Community) Households in 27 Watta community are organized into two community based organizations. a. Community Development Council (CDC) 11

12 b. Savings Groups under the WB CDCs in low income settlements are formed by the Public Health Department of Colombo municipality and are the most common CBO in Colombo. Each council elected by the households of each settlement for a period of one year according to the guidelines given by the CMC and registered with the Public Health Department of CMC. Illegal settlements such as 27 Watta are not eligible to receive municipal services which are provided from funds collected from the tax payers in the city. However, it is the responsibility of the local authority to look after the welfare and basic needs of the people who live in the city, including illegal settlements. Therefore, Public Health Department of CMC has assigned a group of health instructors, two per ward, to organize these communities into CBOs. They in turn organize households to keep their environment clean and maintain whatever services the communities have received for their use. Each community is organized into CDCs with the help of CMC in order to obtain secure tenure and basic services such as water supply, sanitation, access roads and electricity. Through a request for assistance in water and sanitation, the CDC contacted Savanatha who in turn initiated this project. Community based savings and credit groups in low income settlements are the other common CBO working in low income settlements in Colombo. The Women s Bank is one of the most respected, with a large network of savings groups formed in low income settlements in the city. For the past six years Women s Bank has operated in 27 Watta, carrying out savings and credit activities with several membership groups. These groups meet every week at settlement level and carry out their savings and credit activities. Settlement level groups are very active compared with CDCs. Community leaders in WB have valuable experience in managing their CBO as a sustainable organization as well as handling money according to standard financial procedures. Settlement level savings and credit groups are linked to their branches and the national organization Needs addressed The two crucial needs of the people living in 27 Watta were safe drinking water and sanitation facilities. The community had made several requests to relevant authorities in the past for these services. Although 27 Watta is a small low income community in Colombo in relation to the size of population of the city, it represents an average size of other low income communities within the city. At the time of project initiation, about 15 households had already obtained water from the NWSDB on a individual basis. According to the national water tariff implemented by the NWSDB for domestic users, nearly 90% of the households were able to afford private water supply and willing to pay for water. According to the community profile prepared prior to this project, the average monthly income of each household was between Rs.6000 and Rs The average monthly water bill per low income households in Colombo according to the national water tariff is between Rs.150 and Rs.300, a rate which is highly subsidized by the NWSDB. 12

13 The monthly average expenditure for low income households for water is less than 3% of their monthly income. Therefore, nearly all families in the community had the capacity to afford a private water supply. In a survey carried out by Sevanatha under the project shows that all households are willing to pay for water based on the national tariff if it is provided on individual user basis. 13

14 SECTION 2: PRACTICE DEVELOPMENT AND OPERATIONS 2.1 Initiation, Planning and Design As part of its commitment to the U.N. Millennium Development Goals, the government of Sri Lanka aims to ensure access to safe drinking water for 85% of the population by the year The government s ultimate target is to secure full coverage by the year At the same time, the NWSDB faces a challenge as 63% of the water supplied in Colombo is non-revenue water. Furthermore, 17% of the non-revenue supply consists of water piped into public taps situated in under-served communities. In other words, 40-45% of the Colombo city population has access to free treated water supplied by the Water Board. Taking into consideration the water supplied to Colombo city alone, the annual loss to the Water Board is estimated at Rs. 278 million. 4 In order to recover lost revenue and improve the scope of water supplies a program called Randiya was instituted by the NWSDB in the year Through Randiya, under-served communities were encouraged to apply for individual piped water connections, which were provided at discounted rates. However, this program was only able to recover 47% of the total value of bills, creating an additional segment of non-paying consumers. In 2004, a pilot project set up by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), initiated the following objectives: Provide piped drinking water supply for private individual use for each household Arrange an operational and maintenance system managed by the community Reduce water wastage and the amount of unaccounted water being recorded through NWSDB Provide a lasting impact on the residents of poor communities within the city Following the successful implementation of this practice in Halgahakumbura, it was decided to replicate this practice in 27 Watta community using remaining budget funds from the initial project. The National Water Supply and Drainage Board (NWSDB) granted a concession to a private company (Petra Engineering), through the involvement of a local NGO (Sevenatha) and the community of Halgahakumbura, authorising it to sell water to individual households for a period of 5 years. The project in 27 Watta community was implemented through a partnership between the National Water Supply and Drainage Board (NWSDB) and the Women s Bank (WB) with the involvement of Sevenatha. Sevanatha first introduced the project to the Director Board of the WB since they had been working in many underserved settlements in Colombo. As a result the WB agreed to discuss water and sanitation issues with the Community Development Council of 27 Watta. At the discussion in 27 Watta community, Sevanatha and NWSDB outlined the objectives to the CDC and WB for the replication practice using the partnership approach, its basic components and shared responsibilities. 4 D.Wickrema and Mr. T.M.M. Mediwaka, Proceedings of Project Completion Workshop,

15 The CDC agreed to accept the WB as private entrepreneur to carry out the water supply provision scheme with their members. Subsequently, Sevanatha with the help of the NWSDB and WB carried out the following activities in 27 Watta community: a. Community awareness and strengthening of the CDC b. Conducting a Community Action Planning workshop at 27 Watta c. Mobilizing CDC to address issues identified at the CAP workshop d. Making CDC request to Sevanatha and the NWSDB to introduce the project e. Sevanatha assisted the WB to prepare a project proposal based for 27 Watta f. The WB was registered with the NWSDB as CBO which is financially and technically capable in implementing a water supply project in Colombo. g. Signing an agreement between the WB and the NWSDB. The WB was given all responsibilities to design, implement and operate a water supply project in 27 Watta by the NWSDB. h. Sevanatha signed an agreement with the WB to provide necessary funds received from UNESCAP for the construction of a water supply network within the community. i. Prepared designs and cost estimates by a consultant engineer hired by Sevanatha j. Sevanatha assisted the WB to prepare all necessary documents needed for project implementation with the community and the NWSDB. Documents included application forms for individual water connections, along with an agreement form for the WB and households, water bills etc. k. The WB carried out construction works laying main pipe lines. l. Trained community mobilizers for project operation and maintenance. m. Signed agreement with individual households by the WB n. Collected first down payment (Rs.1000) from households (applicants) o. The WB ordered water meters from a private company recommended by the NWSDB p. Connected supply line from the main to the individual houses, fixed water meter and provided water supply. q. Under the guidance of the NWSDB, the CDC took actions to remove some common water taps. r. Sevanatha provided training with the NWSDB for selected workers of the WB and community mobilizers on meter reading, billing, accounts and book keeping, tariff collection and O&M of the system. s. The WB carries out operation and pay fee for bulk supply of water to the NWSDB. t. Sevanatha with the WB Conducted several awareness sessions for households about the schemes, roles and responsibilities of partners. The partnership with a community based organization (the Women s Bank) as opposed to a private company contributed to greater success through positive community participation and sustainability in 27 Watta. 2.2 Practice in operation Three key actors were involved in the operation of the practice in 27 Watta community: The National Water Supply and Drainage Board The Women s Bank (Women Cooperative Society) The Community The role of three key actors are as follows: The NWSDB the Bulk supplier of water to the WB The WB the Retail supplier of water to individual households The community the consumers / users Each actor signed a written legal agreement to confirm that they would perform a set of activities based on mutually agreed conditions: 15

16 The WB has signed an agreement with the NWSDB Each household signed an agreement with the WB These agreements specify the services that each principal actor agreed to perform on behalf of their client and the fee they charge the customer for their services. The operations of the practice take place as follows: a. The NWSDB supplied water from their town source in bulk to the boundary of 27 Watta community. A meter for measuring total consumption of water by the community is fixed at the community boundary. b. The WB laid the internal main supply lines and provided connections to each household with a fixed water meter. By the end of 2006, the WB had installed 70 individual connections. c. The Community Development Council (CDC) of the 27 Watta selected and trained a resident from the community for reading household water meters, recording of meter readings, keeping accounts, issuing bills to individual households, collecting tariffs and issuing receipts for payments. Representatives from the Women s Bank monitored the books and received the total monthly collection. d. Each Household customer will receive a water bill issued on a monthly basis. Payments for water can be made on a monthly or weekly basis to the community worker. e. The WB pays a sum of Rs.3000 per month to the community worker for bill collections. f. A volunteer from the WB comes to the community to meet the community worker, then checks all accounts, books and records with regard to the water supply scheme. She will settle all accounts on a monthly basis with the community worker and take the total collection of water tariffs to be deposited in the WB branch. (It should be noted that community workers and volunteers from the Women s Bank are all women) g. Matters related to non-payment, arrears, new connections and repairs are handled by the community worker in consultation with the WB. h. If matters cannot be resolved at the community workers level, the WB informs the CDC who attempts to resolve them jointly. The WB usually arranges quarterly meetings with community members to report the progress of the water scheme. Households in the community itself offer support and suggestions for further improvement of the system. i. If some issues related to illegal connections or water contamination cannot be resolved at the community level, the WB and the CDC will jointly seek the assistance of the NWSDB. Sevanatha will intervene as a mediator for community and the WB. j. The NWSDB reads the bulk water meter each month and sends the bill for total water consumption to the WB. The WB pays the total tariff of water consumption to the NWSDB on a monthly basis. 2.3 Challenges and Responses This project faced several challenges from the beginning through to the operation stage. Due to the unsuccessful attempts in such policies in developing countries in Latin America as well as in Asia, the government was reluctant to introduce the policies for privatization or partnership with private sector for the provision of utility services. Several civil society groups were openly against this policy fearing the private sector would increase the price of water. The government has undertaken taken several attempts in the past to introduce privatization of water service provision, but there has always been considerable resistance from the public. 16

17 Moreover, it was difficult to interest private sector entrepreneurs to invest in small scale water supply schemes in urban low income communities given the high cost of investing in public utilities. Both Sevanatha and the NWSDB conducted several awareness sessions for the community and policy makers concerning the concept of pro-poor PPP. NWSDB was convinced about the partnership concept for the improvement of service delivery in terms of efficiency, effectiveness and sustainability. One of the conditions set forth by the NWSDB in the current practice was that no non-public partner can collect a higher water fee from the households other than the national water tariff for domestic consumers. At the same time, the NWSDB was willing to lower the price of bulk water to a reasonable level the WB could afford and make a profit to running this project on a long term basis. However, it was noted that since the NWSDB is a state agency it needed time to adjust itself to a new management system. Consequently the NWSDB was not efficient in processing the WB s proposal for 27 Watta and the WB was not able to sign a sale agreement with the NWSDB due to the delays in bureaucracy. For over one year no bills had been issued by the NWSDB for bulk water consumption. Although the NWSDB was generally good in advising and providing water to a second party, it was not efficient in coordinating with other utility organizations concerning roads and electricity authorities in the project implementation. Laying new pipe lines became an issue because it needed authorization and approval from the Road Authority. (See also Section 4.3 Challenges Ahead) 2.4 Focus on the Poor As per the poverty profile, 27 Watta community is one of the poorest settlements in Colombo that has been in existence for more than 25 years. Several development programs implemented in the past in other poor communities have addressed the issues related to land, water and sanitation of the urban poor successfully. However no agency has been able to address the issue of water and sanitation of 27 Watta community until this current project was implemented in This project was specially designed for the provision of potable water for the poor living within the city. Therefore, several operational components are built in it, in order to enable other sectors in the economy to engage in the provision of water for the poor. They are: The poorest communities are selected for the project to address vulnerability factors in urban communities stress due to uncertainty, insecure land tenure, frequent flooding due to the lack of proper drainage systems. Identification and program designs are conducted through a participatory process. Community based decentralized process where the entire community plays an active role in the project cycle of implementation, operations and maintenance. Project is managed by a community based micro-finance institution belonging to the community members. The project has been designed with a subsidy element. The community paid part of the capital cost of the water distribution system while the rest was paid through a grant from UNESCAP. The charges for water consumption are based on the national water tariff, subsidized by the government. Average cost for an individual water connection for private use in the city cost about Rs.12,000. This includes pipe installation, materials, water meter and connection fee. 17

18 Since the capital cost in 27 Watta project was subsidized. Individual households pay only Rs for a private water connection including the connection fee and the cost of the water meter. However, applicants for a private water connection were charged Rs.1000 per house connection at the time of water connection with the remaining balance amount of Rs.4000 added into the monthly bill Rs. 100 per month to be paid over a period of 40 months. In addition it was agreed with the CDC that common water stand posts would not be disconnected until all households in the community had individual private water connections on their premises. Those who can not afford a private water connection would not be charged for using the common taps until they installed their own private supply. The project in 27 Watta was designed for one of the poorest communities in the city that was implemented and managed by a cooperative society owned by the urban poor residents. The end result was successful in improving the living conditions in 27 Watta. 2.5 Finance The following table shows how the project in 27 Watta is financed, with monthly operating costs, including net profit. Table 6 Capital Cost and Recurrent Cost of 27 Watta Water Scheme No. Description Sub amounts a. Capital Cost Total Amount 1. Total cost of the project (Capital) Rs.669, Subsidy to families given by Sevanatha for pipe installation and payment to Road Development Authority for the cost of damaging the tarmac of the main road. Funds received from UNESCAP for PPCP Projects in Sri Lanka. 3. Capital cost born by households and Women s Bank (Household contribution is Rs.70,000) b. Operating Cost (based on data collected in May, 2006) Rs.477,110 Rs.69,850 Rs.152, Volume of water used per month 1,490,000 liters (1490 units) 2. Total income per month Rs.9, Cost of water according to NWSDB s bulk meter Rs.2, Recurrent expenditure per month to the WB Rs.4, Total recurrent cost per month Rs.6, Profit per month Rs.2,467 The above table shows sub amounts and total amount related to capital cost and recurrent costs. Last column of the table shows the totals of capital cost, monthly income, recurrent cost and net profit. Total Capital cost of the project is Rs. 669,210. Part of the capital cost was from a grant given by UNESCAP from funds remaining from its pilot project in Halgahakumbura (see sections 2.1). These funds were paid to the contractor for pipe installation (Rs.477,110) and 18

19 to Road Development Authority for road damage (Rs.69,850) caused during installation of the main water connection to city supply line. The balance of the capital cost came from the WB and the individual applicants for water connection which numbered 70 applicants for the individual water connection at the initial stage of the project. Each applicant paid Rs 1000 upfront to the WB for water each connection. A portion of this was spent for purchasing water meters and the water supply line. The remaining Rs4,000 of connection charge are to be paid in Rs100 monthly installments over 40 months. Recurrent Cost Recurrent cost of the project per month consists of the following components: - Payment to the NWSDB for bulk supply is about Rs per month. The WB has negotiated with the NWSDB to purchase water at Rs.1.50 per unit. According to the WB, average water consumption in 27 Watta is about 1,490 units 5 per month. - Other recurrent cost of the project is a monthly payment for meter reader and volunteer. In total the WB pays a sum of Rs per month for this expenditure. The breakdown is as follows: Meter Reader Rs Volunteer ( women member of the WB) Rs. 500 Stationary (bills and notices) Rs. 500 Other cost like transport etc. Rs According to the WB, the average monthly income over the last six months was Rs.9,127. Average revenue per consumer is about Rs broken down as follows: Average monthly water fee per household is about Rs Rs for first 10 Rs.1.25 Rs for second 10 Rs.2.50 Rs for third 5 Rs.6.50 Rs fixed fee per month Rs is capital cost added to monthly bill Therefore, the net profit per month of this venture to the WB is Rs ( ). Net Profit = total monthly income minus both bulk water supply fee and admin cost. Since the NWSDB does not send monthly water bills on time to the WB, the household payments given to the WB are invested into the micro-finance institute for livelihood projects and other needs for its members. Therefore, the WB has assured that if there is minor repair work to be done in the water supply system it would be carried out by the WB immediately. Another positive feature of the project in 27 Watta in Colombo is that there is no record of non-payment of monthly water fees by the consumers since the inception of the scheme. This is due to the fact that payments are handled directly through the WB who considers the water supply partnership as their asset. Consumers have the freedom to pay their monthly water charges as they like; weekly or fortnightly to a WB member living in the settlement. 5 One unit of water as per the NWSDB is 1000 liters. 19

20 2.6 Legal structure The practice has been implemented in partnership with the NWSDB. Key partners involved in the practice are: - The National Water Supply and Drainage Board (established in January 1975 by an Act of Parliament called the National Water Supply and Drainage Board of 02, 19974) - Sri Lanka Women s Development Services Cooperative (Limited liability) Society, known as the Women s Bank (WB): ( Registered as a cooperative society with the Department of Cooperative Department in 1989) In addition the WB is registered by the NWSDB as a CBO eligible for carrying out water supply and sanitation projects in Colombo District under the registered No. COL/11/33/CBO/01. - The Community Development Council ( Registered as a community organization with the Colombo Municipal Council) - Sevanatha Urban Resource Centre. (Registered as a NGO with the Ministry of Social Services, Sri Lanka) These organizations are legally recognized and registered with the Government of Sri Lanka. Partners have gained their legal recognition with the registration with the relevant government authorities and qualify as a legal body to enter into agreement with any legally recognized body to implement physical development projects and for provision of utility services. The roles of key actors are as follows: - The NWSDB the Bulk supplier of water to the WB - The WB the Retail supplier of water to individual households - The community the Consumers / users - Sevanatha Mediator to link community and the WB with the NWSDB In operation of the project, each participant has signed a written legal agreement with the principal actor to confirm that they will perform a set of activities based on mutually agreed conditions. - The WB has signed an agreement with the NWSDB - Each household has signed an agreement with the WB NWSDB is responsible for: - Providing safe drinking water to the city population - Supervising the planning and implementation of water supply schemes in the country - Being the regulatory body whose task is to maintain the standards of drinking water quality and to fix the tariff of water for domestic and non-domestic uses. - Promotes various approaches to increase the access to safe drinking water. This includes community participation and partnership arrangements with the private sector and NGOs. NWSDB carried out the following tasks: - Agreed in principle to promote the Pro-Poor Public and Private Partnership arrangement for the provision of safe drinking water to the poor in the city. - Established a Steering Committee at the NWSDB to support project arrangement in terms of giving policy guidance, institutional support and coordination, progress review, address implementation issues and provide necessary approval for the project implementation. - Assisted to carry out the feasibility study of the project. - Assisted both Sevanatha and the WB in designing the internal water supply network in 27 Watta and advised contractors on how to provide supply connections to individual households and repairing water meters. 20

21 - Provide training on water supply including the operation, maintenance and billing process. - Sign an agreement with the WB to provide bulk water supply for distribution among households in 27 Watta. - Provide legal advise for both NGO and the WB on the operation of system. - Read bulk meter every month and send bills to the WB. - Act as the regulator and mediator in any kind of dispute with regard to water supply between the community and the WB. The Steering committee consisted by the following members: General Manager of the NWSDB Additional General Managers of NWSDB Greater Colombo Area and Foreign Funded Projects Deputy General managers of NWSDB in Non Revenue Water, Rural Water Supply and Commercial Divisions District Engineer the Greater Colombo Area Municipal Engineer, Colombo MC Representative from UNDP President Sevanatha President the WB Representative of the CDC Steering Committee meetings were held on monthly basis, chaired by the GM of the NWSDB. The Women s Bank (Sri Lanka Women s Development Services Cooperative (Limited liability) Society alias Women s Bank (WB) - The WB plays the role of private sector. Its origin and general activities of the WB were described in the above section of the report. Major tasks carried out by the WB are: - submission of the project proposal for 27 Watta for provision of water to the NWSDB - enter into contract with the NWSDB to construct the water supply network within 27 Watta and to provide water to individual households - enter into contract with individual households in 27 Watta to provide water for private use and collect monthly fees for the provision of water from individual households - carry out construction in 27 Watta for provision of the water supply - issue water bills, collect water tariffs, and attend O and M activities. Under the agreement signed with the NWSDB, the WB has the authority to collect water tariffs from the individual households residing at 27 Watta. - Pay water bill to the NWSDB based on the bulk water meter reading - Employ a community worker and volunteers for operational work in 27 Watta - In case of non-payment of water bills by households, the WB has been given the authority by the NWSDB to send reminders for payments to delinquent households and to disconnect the water supply of such households if payments are not made. 2.7 Stakeholder accountability The role and responsibilities mentioned above are carried out according to the agreement signed by each party. All these agreements are open documents for all partners. The community knows the content of the agreement signed by the WB with the NWSDB. Buying and selling prices of water by the WB is known to all partners involved the practice. Obligations of the WB towards the NWSDB and the community in 27 Watta are as follows: - to construct the supply network within 27 Watt to provide water for each household under the supervision of the NWSDB 21