Water Champion

Country water actions are stories that showcase water reforms undertaken by individuals, communities, organizations, and governments in Asia-Pacific countries and elsewhere.

Maria Paniagua: Small Steps, Big Impacts
June 2003

By Maria Christina Dueñas Knowledge Management Officer Why was it imperative to study Small Scale Independent Private Water Providers (SSPWPs) now? Millions of poor families in Asian cities buy their water from private local sellers. Our study shows that it can even go up to 40% of the population. Yet when donor agencies talk about private sector participation in water supply projects, they normally just refer to large water companies. Few people pay attention to the other private sector-- the SSPWPs that were already serving the people with little legal recognition. Also, there were so many myths about SSPWPs that needed to be clarified. We thought we could definitely help by bringing more information about SSPWPs to the table, and exploring ways to improve their services to the poor. What are some of the significant findings of your study? We can start with the many myths about SSPWPs that we’ve debunked. For instance, many see these local water providers as taking advantage of the poor, providing bad quality water, uncaring about their clientele and more. We found that this is not always the case. They are small family businesses that are well integrated in the community. They provide service at competitive prices. The poor families who consume their water also know what quality of water they’re getting, and pay for it accordingly. Another myth is that SSWPWPs are temporary phenomena. Many think it’s better to concentrate efforts on securing a connection to the water utility. Unfortunately, given the current expansion rate of the utilities, such connection won’t be possible for a lot of poor people in the next 15 or 20 years. During these years, the poor will have to buy their water from the local sellers. We also found that the quality of services the SSPWPs provide is strongly related to their business environment. If we can improve those conditions, we hope to have an impact on their services. For instance, in Cebu, Ho Chi Minh and Manila, some SSPWPs were able to provide services that are comparable to water utilities’-- house connections with 16-24 hour service. That, of course, involved appropriate investment conditions and significant investments on the part of SSPWPs. Unfortunately, local sellers generally have limited access to long-term credits and borrow at high interest rates (5-10% per month) so their cost of doing business remains relatively high. ABOUT THE CHAMPION
Maria Paniagua is an Urban Development and Planning Specialist in the Social Sectors Division (SASS) of the South Asia Department (SARD). She managed the study on small scale private water providers and is now working on integrating the study’s recommendations into ADB operations.
Project Brief

This study was part of a bigger project on Water in Cities conducted under the Regional Technical Assistance 6031: Promoting Effective Water Management Policies and Practices. The study gathered and analyzed information about small-scale private water providers (SSPWPs)—the types of services they provide, their profiles, their constraints and potentials. SSPWP operators are characterized as follows Small scale: small company according to the number of employees Private: they invest in the business and their activities are driven by profit Water provider: provision of water accounts for a big part of the business (>75%) The study covered 8 cities: Cebu, Delhi, Dhaka, Ho Chi Minh, Jakarta, Kathmandu, Shanghai, and Ulan Bataar. It recognized the significant and continuing role of SSPWPs in providing water services to poor urban areas. It also advocated the need to legitimize the SSPWPs participation in the water sector, thereby enabling them to expand their capacity and offer lower tariffs.

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How does the project support the ADB water policy? Let’s start with improving and expanding water service delivery, especially to the poor. For a change, though, we did this by working with the informal sector instead of the public utility. That’s why we’re now fighting for the recognition of SSPWPs as legitimate players in the water sector. We want them to serve the poor better until the latter can actually secure a connection to the utility. Some governments and utilities have now realized that working with SSPWPs can help them to serve more people. We are now helping these countries and utilities develop legal frameworks that encourage long-term investments by SSPWPs, and include SSPWPs in their water supply strategies. This way, SSPWPs will be encouraged to improve their services. We also wanted to provide better information about how most of the poor people get their water—what types of service they use, how much they pay, who can they complain to, what their alternatives are. This supports the policy’s thrust on exchanging water sector information and experience. While we have concentrated in Asia, we’ve been learning from the studies and researches around the globe, and sharing this information with experts from other multilaterals, NGOs, bilaterals, water utilities, governments, and universities. How does the project help the poor? This project IS about the poor. We know that most of the people who don’t have a connection to a water utility are poor. We also know that if you don’t have a connection, you’d have to buy your water from SSPWPs. How does it tie in with the different countries/cities’ water policy or water action agenda? The main problem of SSPWPs is that the decision makers in the water sector don't know much about them, nor recognize them as legitimate players. Unfortunately, there are still no policies and legal frameworks in place that look at SSPWPs and their roles. Ho Chi Minh City is the exception, and it’s a pioneer in this area. This is actually the next challenge for us—to discuss our findings with government officials and public utilities so that they can integrate SSPWPs into their water supply strategies, legal frameworks and regulations. What major challenges were encountered in the course of this project? One challenge was the novelty of the field itself. It was impossible to find local consultants with experience in SSPWPs—many had worked with NGOs and others with water utilities but none with SSPWPs. We ended up managing a diverse but enthusiastic group of consultants. We also had a very limited range of partners. We found only a small group working in this issue but it is very committed. We also got a lot of feedback and support from other experts who gave us their time for free. Time was also a big factor for us. We wanted to present our findings at the 3 rd World Water Forum last March 2003. Two months before the Forum, we had to do a video on SSPWPs with three locations and a very small budget.

Everyone worked like crazy. The resident mission in Vietnam helped us get permits, the consulting team scoured the cities for contacts, the international consultant arranged the interviews, and I suddenly became a video executive producer and anchor! It was amazing that our video actually made sense. We got to the Forum with a rough copy but it made a big difference. There are some points that you just can’t convey in a report. Do you have interesting anecdotes about this project? For me it was being in the field again and seeing everyday life going on. In Manila, while shooting one of the water tenders installing a connection in one of the houses, the neighbor next door was singing Karaoke to her heart’s delight. We could not help but show that in the video, and for the credits we used our improvised singer as the soundtrack! It was also incredible how we made believers of some skeptics. When we told the local consultants what we wanted to study, they all looked at us as if we were mad. The consultant from Delhi kept saying that they did not have any SSPWPs, that SSPWPs were not allowed. Her doubt turned to enthusiasm after the surveys-- she found more than 40 small piped networks run by SSPWPs! What is the way forward for SSPWPs and this project? SSPWPs are like illegal settlements-- everyone thinks that they are only temporary and few want to spend money on improving them. But the reality is that some of these settlements are SSPWP group from left to right: C. here to stay and that the Yniguez, Z. Yanjindulam, M. Paniagua, U. Raghupathi, K. Kumar, I. Sri way forward is not Haryuniwati, F. Nolasco, W. Zhang, A. getting rid of them but Al-Beeroonee, H. Nguyen, H. Conan working with them. SSPWPs can be a transitional or a permanent solution depending on the conditions. We need to look at them case by case. With this project and after the Forum, we were able to generate a lot of interest and support from other partners. We even had our recommendations included in the report of the Camdessus Panel on Financing Water for All. We are now in a position to move the issue further, to mainstream the study's recommendations into operations. To have greater impact, we will partner with other development institutions and build on existing initiatives within ADB. With the issue of SSPWPs, we should try to remember that there are times when transitional solutions should be considered. Ten years may not be much for an ADB project or for a water utility thinking about expanding their services, but it is a very long wait for a woman raising five kids without a water connection.

_______________________________ *This article was first published online at ADB's Water for All website in June 2003: http://www.adb.org/Water/Champions/paniagua.asp. The Water Champions series was developed to showcase individual leadership and initiative in implementing water sector reforms and good practices in Asia and the Pacific. The champions, representing ADB’s developing member countries, are directly involved in improving the water situation in their respective countries or communities. The series is regularly featured in ADB’s Water for All News, which covers water sector developments in the Asia and Pacific region.

file:///C|/Users/Rx/Documents/Water/champions/SCRIBD-COMM100%20For%20Posting/paniagua.html[10/3/2012 11:19:34 AM]

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