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Pro-poor regulation for small town water supply services

Pro-poor regulation for small town water supply services. WASA experience and lessons learned from water supply projects in Lao PDR. Presented by : Noupheuak Virabouth

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Pro-poor regulation for small town water supply services

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  1. Pro-poor regulationfor small town water supply services WASA experience and lessons learned from water supply projects in Lao PDR Presented by: Noupheuak Virabouth Director of the Water Supply Authority (WASA)Deputy Director of Department of Housing and Urban Planning (DHUP), Ministry of Public Works and Transport

  2. Water Supply Authority: WASA • Roles • Establish and implement a Tariff Policy • Encourage efficiency through benchmarking • Encourage competition in the sector where appropriate • Protect the standard of service customers receive • Experiment new scheme strategies • Manages MIREP Programme together with GRET • Encourages improved access to credit

  3. WASA Pro-poor measures • Challenges regarding servicing the poor • Identify the poor • Increase access to the service • Secure access to the service • Pro-poor regulation tools • Tariff policy • Experimentations (MIREP Programme, etc.) World Water Forum #5 – Istanbul – March 19th, 2009

  4. Social Fairness within Tariff Policy • Cross-subsidization in favour of the poor • Higher tariffs for commercial customers • Lower connections fees in exchange for higher consumption tariffs • Lower tariffs for lower levels of service • Fixed charge • Reduce as much as possible because it discriminates the poor • Subsidised connection • Supports subsidised connection fees • Paid through volumetric tariff • Affordability • Less than 5% of poor households’ expenses for water budget

  5. Experimentations under process – MIREP Programme • MIREP Programme Structural Pro-poor benefits

  6. Experimentations under process – MIREP Programme • MIREP Programme Core Pro-poor policy • Free connection for eligible poor households • Households matching criteria, within the service area • OBA scheme to give incentives for connection disbursed by Provincial W&S Investment Funds • Minimum monthly bill exemption • Targeting process using following indicators 1. Income criteria (inability to afford 16kg of rice/cap/mth) 82,500 Kip/cap/mth ↔ $10/cap/mth 2. House construction material (bamboo) 3. No ownership of agricultural land or livestock World Water Forum #5 – Istanbul – March 19th, 2009

  7. MIREP Programme – Key findings • Difficulties to apply national poverty criteria in small towns • Some over-estimate • Some under-estimate • Raises questions for scaling up • Time-consuming process • Identification process in 6 steps: setting criteria with local authorities, drawing list by village heads, validation by communities, capacity to pay study, validation by district • Need for financing: Provincial Investment Funds to be supplemented ! • Missing some of the poorest • Remote location • Not able to pay monthly bill World Water Forum #5 – Istanbul – March 19th, 2009

  8. Willingness to pay versus willingness to charge • All households, including the poor, are willing to pay • Revealed water expenses before piped water are high • e.g. in Hin Heup: average expense = 74,000 Kip/hh/mth(dry season) ↔ $9 /hh/mth • Willingness to pay survey • e.g. in Hin Heup: average for all households = 19,000 Kip/hh/mth ↔ $2.2 /hh/mth • average for poor households = 15,000 Kip/hh/mth ↔ $1.8 /hh/mth • Guidelines for affordability: maximum = 5% of income • e.g. in Hin Heup: 1 m3 ↔ 2,200 Kip US$ 1 ↔ 8,500 Kip World Water Forum #5 – Istanbul – March 19th, 2009

  9. Experimentations under process – Small town project • Lifeline block • Free connection for all • But lifeline block to mitigate disconnection risk for the poor • Example: NPSE Xieng Khouang Province • Two-part tariff: • Fixed charge (maintenance fee) : 2,000 Kip/month • Volumetric charge: • Cross-subsidy for tariff (via block tariff) US$ 1 ↔ 8,500 Kip World Water Forum #5 – Istanbul – March 19th, 2009

  10. Experimentations under process – MIREP Programme • Stakeholder-cooperative review • Workshopheld in MPWT in February 2009 • Raise awareness and start building consensuson pro-poor approaches in the water sector • Various participants: public authorities (national and provincial level), international donors (WSP, UN-Habitat, AFD...) and water suppliers (State owned enterprises and MIREP concessionaires) • Options for continued pro-poor policy • Simplify targeting methodology: uses same list as for free health card • Continue to subsidise connections for the poor • Need for accurate and reliable data on the poorand the demand patterns in general, in order to set appropriate levels of tariffs World Water Forum #5 – Istanbul – March 19th, 2009

  11. Mr. Noupheuak Virabouth Water Supply Authority (WASA)Deputy Director of the Department of Housing and Urban Planning, Ministry of Public Works and TransportLane Xang Avenue, Vientiane Capital, Lao PDR www.wasa.gov.la nvirabouth@yahoo.com GRET ‘Access to Essential Services’ Cluster Campus du Jardin Tropical - 45b av. de la Belle Gabrielle 94736 Nogent sur Marne Cedex, France www.gret.org ase@gret.org Thank you for your attention

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