Lessons Learned from Rural Water Supply Projects in the Philippines

Identifying Elements of SustainabilityEvidence-Based RecommendationsThis Field Note describes a study of the performance and sustainability of eight major rural water supplyprojects undertaken in the Philippines over the last decade. The lessons learned from the study includethe importance of community involvement, local government capacity building, cost recovery, andtargeting the poor.

January 2004

Field Note

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Eight major rural water supply projects were initiated in the 1990s, usingvarious new financing and implementation approaches for rural water supply.This new generation of projects tried to secure commitment and sustainabilityby requiring stakeholder contributions.

1Soriano and Test Consultants, Inc. (2003). Readers can access the full report online at www.wpep.org.

Introduction

From 1978 to 1990, 11 major rural watersupply projects were undertaken in thePhilippines, totaling more than US$120million. Toward the end of this period, thegovernment estimated that there wereonly 4,400 functioning rural water supplysystems in the country, which was about5 percent of the 96,200 systems requiredto provide the rural population with

adequate water services. Theseplanning data revealed that rural watersupply systems were falling into disuseand disrepair almost as quickly as theywere built.

During the 1990s the rural water sectorchanged significantly. Responsibility for thedevelopment of local water supply andsanitation services devolved from thecentral to the local government, and there

was also a substantial decrease in the levelof central government funding available forrural water supply.

Against this backdrop, eight major ruralwater supply projects were initiated inthe 1990s (see Figure 1), using variousnew financing and implementationapproaches for rural water supply. Thisnew generation of projects tried to securecommitment and sustainability by requiringcapital contributions from communitiesand local governments. The projectsalso invested more heavily in “soft”components, such as institutionalstrengthening, capacity building,community-based planning, and healthand hygiene promotion.

The Water Supply and SanitationPerformance Enhancement Project(WPEP), an action research project in thePhilippines (see Box 1), commissioned afield-based study, “Rural Water: Modelsfor Sustainable Development and SectorFinancing,” which assessed theperformance and sustainability of 15 ruralwater supply systems implemented underthese eight projects.1 The lessons learnedwere then used to make recommendationsfor the design of ongoing and futureprojects and to suggest changes in thenational framework for the rural watersector. This Field Note provides a summaryof the WPEP study.

Background

Per capita income in the Philippines islower than the regional average in EastAsia and the Pacific. Recently, growth in

Executive Summary

A flood of aid during the international decade for water supply and

sanitation (1980-89) failed to provide universal access to safe water for

all Filipinos. At the end of the decade less than 5 percent of the planned

systems remained in operation, forcing national attention on the issue of

service sustainability. In response, a new generation of rural water

supply projects emerged during the 1990s. These included eight major

donor-funded projects that experimented with new approaches to

financing and implementation. In 2003 a study by the Water Supply and

Sanitation Performance Enhancement Project (WPEP) assessed the

sustainability and performance of these projects. Overall, the findings of

the study suggest that projects with significant investments in capacity

and institution building produced the most sustainable rural water supply

systems. It also showed unequivocally that the involvement of the local

government and communities aids the preparation, planning,

implementation, and management of such systems, and that sustainability

is improved when these processes are monitored by external agencies.

The study suggests that the success of projects will require strengthening

local capacity and building institutions to operate and maintain systems,

developing mechanisms for cost recovery, explicitly targeting the needs

of the poor, and providing more incentives for local investment.

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Identifying Elements of Sustainability

the agricultural sector has also beenminimal. Despite the relatively small ruralpopulation, more than 60 percent of thepoor live in rural areas.2 In addition,population density and population growthare about double the average for theregion, making both natural resourcemanagement and environmental issuesincreasingly critical.

Basic policies for the water supply sectorin the Philippines were first established in1978. Universal water supply coverage wasdeclared a policy of the state, to bebrought about through:

• Rationalization of the organizational structure of the water supply sector

• Formation of water districts, associations,cooperatives, or corporations for theconstruction, operation, and maintenanceof water supply systems (in preference tosystems directly operated and managedby local governments)

• Encouragement of self-help and self-sustaining water supply projects.

The Department of Public Works andHighways (DPWH) was given responsibilityfor the construction of wells and springdevelopment in rural areas, while theDepartment of Local Government andCommunity Development (DLGCD) wascharged with the formation and support ofthe water associations and cooperatives

needed to operate and maintain thesewater supply systems.

The Rural Water Supply and SanitationMaster Plan of 1988 suggested that81,900 rural water supply systems neededto be installed by 1991 to complement the4,300 systems in place.3 Therefore, theplan directed the DPWH to “undertake theconstruction of water wells, rainwatercollectors, development of springs, andrehabilitation of existing water wells in allbarangays4 in the Philippines in such numberas may be needed and feasible, taking intoconsideration the population, hydrologicconditions, project development andoperational costs, financial and economicfactors, and institutional arrangements.”

2Philippines, National Statistics Office (1999)3Philippines, National Economic and Development Authority (1988)4Barangay is a village and is the smallest political unit in the Philippines.

Figure 1: The eight major rural water supply projects undertaken in the 1990s

Project

Agrarian Reform Communities Development Project and Community Project (ARCP)

Central Visayas Water and Sanitation Project (CVWSP)

First Water Supply Sewerage and Sanitation Sector Project (FW4SP)

Institution Building for Decentralized Implementation of Community Water Supply and Sanitation Project (WATSAN)

Poverty Alleviation Fund II Potable Water Development and Sanitation (PAF2)

Rural Water Supply and Sanitation Sector Project (RW3SP)

Rural Water Supply and Sanitation Project—Phase IV (RWS4)

Second Island Provincial Water Supply and Sanitation Project (SIPRWSSP)

Planned schemes(Number)

SupportingAgency

Project cost (US$)

WB = World Bank; OECF = Overseas Economic Cooperation Fund of Japan; ADB = Asian Development Bank; GoP = Government of the Philippines; AusAID = AustralianAgency for International Development; UNDP = United Nations Development Program Source: Test Consultants, Inc. (2003)

WB

AusAID

WB

UNDP

GoP

ADB

OECF

ADB

3.9M

28M

85M

1.5M

11M

57M

9.0M

27M

54

507

6,500

148

4,100

1,200

3,000

2,300

These projects combined funding from two or three sources—nationalgovernments, local government units, and water users association...but werenot necessarily providing the levels of service that communities required.

There are three levels used to designatewater systems in the Philippines (see Box 2).As part of the 1988 plan, the DPWHplanned to increase the number of Level Isystems by 96,200, so as to completelyclose the demand gap by 1991. The planspecified that each barangay in the countrywould receive at least one additional potablewater source until about 100,000 rural watersupply facilities were installed. The fundswere to come from the annual appropriationsfor the DPWH and from financial grantsand concessional loans extended to thePhilippines. In order to ensure the properoperation and maintenance of each new

water facility, local water users associationswere formed. These included barangaywaterworks and sanitation associations,community-based organizations, and watercooperatives. The DPWH was to train themin the operation and maintenance of thewater facility prior to handing overmanagement. The associations’ memberswere to pay minimal charges to cover themaintenance and normal repairs of thewater facilities and in some cases a smallpercentage of capital costs.

Eight major rural water supply projectswere implemented between 1990 and

1998, each using the combined funds fromtwo or all of the following three sources—national governments, local governmentunits (LGUs),5 and water users associations(see Figure 2). The first three projectsbegan between 1990 and 1991 andincluded no financing from LGUs. In theseearly projects, the national governmenttypically provided grants equal to 90 to 100percent of the total project cost. Theremainder (a maximum of 10 percent) wasprovided by the community through itswater users association in the form ofvoluntary labor, donated land, or cashcontributions. Any costs associated withexpanded levels of service, such as watertreatment or more complex distributionsystems with house connections, were tobe borne wholly by the community.

After the devolution of 1991 (see Box 3),LGUs were asked to make a contributiontoward project costs. In two of the largerprojects (PAF2 and RW3SP), LGUs wereasked to match the 10 percent of totalproject costs contributed by the waterusers associations, thus allowing thenational government to reduce its grant to80 percent. However, three other projects(CVWSP, WATSAN, and ARCP) adopted amore radical approach. Communitycontributions were reduced to zero, and allproject costs were met by the national andlocal government. The LGU share of capitalexpenditures ranged from 10 to 52percent, and they also had far greaterinvolvement in implementation.

The national policy for rural water supplyevolved even further in the last few years.The 2002 guidelines from the NationalEconomic Development Authority (NEDA)

5Local government units are territorial and political subdivisions of the Philippines. They are either provinces, cities, municipalities, or barangays.3

Box 1: THE WATER SUPPLY AND SANITATION PERFORMANCE ENHANCEMENT PROJECT (WPEP)

WPEP is an action research project in the Philippines that is jointly funded by theGovernment of Australia through the Australian Agency for InternationalDevelopment (AusAID), the Water and Sanitation Program of the World Bank(WSP), and the Government of the Philippines. The executing agency for thegovernment is the Water Supply and Sanitation Program Management Office of theDepartment of Interior and Local Government, with support from the WSP–EastAsia and the Pacific (WSP-EAP). The goal of the project is to enhance the accessof the underserved rural and urban poor to adequate water and sanitation serviceson a sustainable basis.

The WPEP action research agenda is demand-driven through consultation with abroad range of water supply and sanitation sector practitioners in the Philippines. InPhase I of the project, WPEP funded six background studies, which provided thebasis for the learning agenda. Following consultation with sector stakeholders onthese studies, Phase II of the project commissioned local consultants to undertakefour field-based studies on the following topics: • Small towns water supply management models• Urban sewerage and sanitation• Small-scale water providers • Sustainable development and sector financing for rural water models

This Field Note is one of a series summarizing the results of this research program.

4

recommend a relatively sophisticatedcost-sharing scheme between the nationalgovernment and the LGUs.6 Under thesenew rules, the national government grantsfor rural water supply have been reducedsignificantly, varying between 20 and 50percent depending on the income class ofthe LGU and the level of service provided.This reduction in direct funding by thenational government has been offset byconsiderable increases in the allocation ofresources to local governments, thusprovincial and municipal LGUs are nowexpected to contribute the majority of theremaining costs of the provision of ruralwater supply. The policy does not refer tocommunity contributions.

AssessingPerformance

In 2003, WPEP completed the study“Rural Water: Models for Sustainable

Development and Sector Financing.”The study team selected 15 rural watersupply systems implemented under theeight major projects (listed in Figure 1)as representative case studies. The teamanalyzed these cases using three datacollection methods—methodology forparticipatory assessment, householdsurvey, and specialist appraisal. Thespecific objectives of the study were to:

• Examine users’ preferences for different types of services, willingness andcapacity to pay, perceptions onparticipating in water users associations,and satisfaction with services

• Assess responses to the various financing polices of the rural water supply projects

• Assess the sustainability of the selected rural water supply systems

• Use the findings to make recommendations on the design for

ongoing and future projects and forchanges in the national policies andinstitutional frameworks for the ruralwater sector.

Selection of suitable case systems provedchallenging. A sampling framework wasused to ensure that the cases included amix of different project rules, levels ofservice, and geographical variation. Projectrecords were examined to select suitablesites but it soon became apparent that thesituation on the ground was very differentfrom that in the records. The field teamsfound that most of the systems they visitedwere no longer operational, some of thesystems did not have any formalmanagement organizations, and beneficiarycommunities had often received fundingand assistance from so many differentsources that the users could no longerremember which systems or parts wereprovided by which project. Only 5 of theoriginal 15 cases selected from the projectrecords met the sampling criteria. In severalinstances, the field teams had to visit more

6Philippines, Department of Finance (2002)

In-kind contributions often mean that local elites donate surplus land in return for privileged access, while poorerhouseholds are pressured into providing free labor

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Box 2: LEVELS OF WATER SYSTEMS IN THE PHILIPPINES

• Level 1—Stand-alone water points, including shallow wells, handpumps, or rainwater collectors

• Level 2—Piped water supply with a communal water point, such as spring system or borewell

• Level 3—Piped water supply with a private water point, such as a house connection

5

than 10 alternate schemes before findingan operational system with a formalmanagement organization. However,eventually 15 suitable case study systemswere found (see Figure 3).

Findings

The study examined a number of diverseissues but only some of the major findingsare featured in this summary. The followinginclude the most significant findingsregarding performance and sustainability orresults that proved to be contrary to theassumptions that underpinned the originaldesign of the projects.

Overall Sustainability

The team used the methodology forparticipatory assessment8 to gather datafrom users on their perceptions of thesustainability of the selected systems.Using this method, an assessor, togetherwith individuals from the community,assessed sustainability in terms of systemquality, effective functioning, effectivefinancing, and effective management.To give a score for overall sustainability,the team then aggregated the scores andcombined these with the score given foreffective use (whether the project had anyimpact on well-being and poverty) (seeFigure 4).

Specialist appraisals were also employedto make ratings of the overall sustainabilityof the case study systems. This includedtechnical, financial, institutional, and socialsustainability. A multidisciplinary team of

five specialists appraised each watersupply system using data collected fromkey informant interviews with severalstakeholders—water users; representativesfrom various technical, financial, andnational agencies; and staff from LGUs.Using the data, the specialists rated eachsystem according to the four dimensions ofsustainability and then scaled andaggregated the scores in order to create anoverall sustainability rating (see Figure 5).

While the methodology for participatoryassessment and the specialist appraisalprovide different scales to measure theoverall sustainability of the case studies,

several cases from two of the projectsstand out in both assessments:

• The Kibudtungan Barangay Waterworks and Sanitation Association from theWATSAN project ranks first using themethodology for participatoryassessment and second using thespecialist appraisal.

• The four systems studied under the CVWSP rank in the top six using themethodology for participatoryassessment, and three of the fourcases rank in the top five using thespecialist appraisal.

Some of the systems visited did not have formal management organizations,and communities had often received funding and assistance from so manydifferent sources that the users could no longer remember which systems orparts were provided by which project.

7Soriano and Test Consultants, Inc. (2003)8The methodology for participatory assessment (MPA) has been tested worldwide in 88 communities. For more information on the approach, consult Dayal and others (2000).6 he methodology for participatory assessment has beentested worldwide in 88 communities. For more information on the approach, consult Dayal and others (2000).Tuding, Paitan Sur, Santa Lucia, Capitongan & Usmad

Box 3: DEVOLUTION FOLLOWING THE 1991 LOCAL GOVERNMENT CODE7

The implementation of the 1991 Local Government Code (LGC) triggered a processof political and administrative devolution that brought major changes to thegovernance structure of the Philippines. The LGC transferred powers andresponsibilities from the central government to the LGUs, including primaryresponsibility for the development of water supply and sanitation services. Thisprocess was also accompanied by large increases in the incomes of the LGUs. Alarge change was that LGUs were now required to share the installation costs forrural water supply systems, while responsibility for system implementation wastransferred from the central agencies to the provincial and municipal governments.

Under the LGC, national agencies were supposed to improve coordination ofnational government policies and programs and provide adequate technical andfinancial assistance to less-developed LGUs. The Department of Interior and LocalGovernment (DILG) was supposed to develop national water supply programs. TheDPWH was meant to provide technical assistance in design and operation andmaintenance to local governments. The Department of Health (DOH) wasdesignated as responsible for the promotion of public health and hygiene andmonitoring of water quality. However, the reality today is that most national agencieshave not changed their roles substantially. For instance, the DPWH still performsengineering and construction functions, such as well drilling and springdevelopment, although now for locally funded projects.

The WATSAN and CVWSP projects hada great deal in common. Both wererelatively small projects, implementedlargely by LGUs rather than nationalagencies. Both invested heavily in buildinginstitutions and capacity, and encouragedLGU and community involvement in theplanning, construction, and managementof the systems. Both also includedregular monitoring of the operation andmaintenance of their water supply systemsthrough provincial planning anddevelopment officers.

Most of these features did not belongto projects with cases rated as“marginally sustainable” or “unsustainable”in the specialist appraisal. These less-successful cases are generally part oflarge, centrally implemented projects (forexample, FW4SP, RWS4), which spentlittle on institution building and rarelyinvolved LGUs or communities in

planning, implementing, or monitoring theirwater supply schemes.

Access to Water Supply

As part of the assessment of socialsustainability and performance, goodaccess to water was examined. “Goodaccess” is defined in the assessment toolas regular access to a safe and reliablewater supply. This excludes cases wheredistance to the water source is excessive,water is rationed, or water pressure orquality is inadequate. On average, only 19percent of households in each communityhave good access to the profiled facilities.In five cases, only 10 percent ofhouseholds in the community have goodaccess. Out of 15 cases, only four havegood access scores higher than 30percent. The highest access scores are forthe two water cooperative-managedsystems constructed under the CVWSP.

The majority of the households with goodaccess are middle-income users, withrelatively few upper-income users. In manycases, those without good access chooseto use other water suppliers. Surveys ofhouseholds that have not joined the waterusers associations reveal that:

• 40 percent prefer to use an alternative water source nearer to their house

• 17 percent report insufficient funds to pay for water charges charged by water users associations

• 5 percent perceive that the quantity of water available from the association-runfacilities is insufficient.

The study also suggests that the 15case study water supply systems have little impact on services for the poor. Fifty-six percent of the

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Identifying Elements of Sustainability

7 In the two level 1 cases that charge tariffs (four of the six level 1 cases do not charge)8 With the exception of Tuding where acute water scarcity forces households to pay high water charges despite a low level of service (many households prefer to pay for private water deliveries)

Figure 2: Distribution of financing by project

Project Financing

Agrarian Reform Communities Development Project and Community Project

Central Visayas Water and Sanitation Project

First Water Supply Sewerage and Sanitation Sector Project

Institution Building for Decentralized Implementation ofCommunity Water Supply and Sanitation Project

Poverty Alleviation Fund II Potable Water Development and Sanitation

Rural Water Supply and Sanitation Sector Project

Rural Water Supply and Sanitation Project—Phase IV

Second Island Provincial Water Supply and Sanitation Project

Water Users Association Source: Test Consultants, Inc. (2003)National Government Local Government Unit

80 to 90% 20 to 10%

90% 10%

90% 10%

48 to 90% 52 to 10%

80% 10% 10%

80% 10% 10%

90% 10%

90% 10%

communities define their households aspoor, but only 12 percent of these poorhouseholds have good access to the ruralwater supply system. In half the casestudies, less than 5 percent of poor

households have good access to the watersupply system.The location and layout ofthe facilities studied was often determinedby the availability of donated land, easeof construction, or minimum cost

requirements. As a result, the poor, whotend to live in marginal areas and areexcluded from discussions regarding waterservices, often have closer alternative watersupplies than the facilities managed by

7

There appears to be a clear link between projects that place emphasis oninstitution building and those that achieve cost recovery.

9 Dayal et al (2000) ‘Methodology for participatory assessments: with communities, institutions and policy makers’, Washington DC: Water and Sanitation Program 10 For more detail on this process, consult TEST (2003) 11 Technical and environmental performance were combined into one rating

Figure 3: The characteristics of case study locations

Project Location

BWSA

CBO

COOP

COOP

CBO

CBO

BWSA

BWSA

BWSA

CBO/LGU*

BWSA

BWSA

BWSA

CBO*

BWSA

Level of Service and Source of Water1 2 3

Type of WaterUsers Association

Well

Well

Well

Well

Well

Well

Kasitrusan

Lapan-Lapan

Bato

Cantumog

Bagacay

Usmad

Bimmotobot

Paagan

Tuding

Paitan Sur

Kibudtungan

Santa Lucia

Capitongan

Damires

Hoskyn

Spring

Spring

Spring

Spring

Well

Spring

Spring

Spring

Spring

Spring

Spring

Spring

Well

BWSA = Barangay Waterworks and Sanitation Association; CBO = Community-based Organization; COOP = Water Cooperative; LGU = Local Government Unit;* = informal management organization

Agrarian Reform Communities Development Project and Community Project

Central Visayas Water and Sanitation Project

First Water Supply Sewerage and Sanitation Sector Project

Institution Building for Decentralized Implementationof Community Water Supply and Sanitation Project

Poverty Alleviation Fund II Potable Water Development and Sanitation

Rural Water Supply and Sanitation Sector Project

Rural Water Supply and Sanitation Project–Phase IV

Second Island Provincial Water Supply and Sanitation Project

8

water users associations. The study’sfindings confirm that the poor generallycontinue to use these (often free) alternativesources even after improved facilities havebeen installed in their community.

Cost Recovery

When assessing financial sustainability,cost recovery was examined. It is thenational government policy for users ofLevel 1 systems to pay minimal chargesto cover maintenance and normal repairsand for users of Level 2 systems tocontribute an additional amount fordepreciation or asset replacement. Whenthe projects were implemented, they allhad varying approaches and gave differentemphasis to cost recovery, but only theRW3SP had rules requiring that tariffscover asset replacement.

In practice today, only two of the six casestudies with Level 1 water supply systems(Capitongan and Bagacay) have waterusers associations that collect watercharges on a regular basis. The rest of theLevel 1 associations rely on adhoccollections when repairs or replacementsare required. In contrast, all but one of theassociations from the Level 2 and Level 3systems collect regular water tariffs.

The water tariffs charged by the associationsappear affordable. The average householdincome reported by users is approximatelyUS$100 per month, and the averagemonthly water charge is US$0.66, whichmeans than less than 1 percent of theiraverage income is spent on water charges.Typical water supply costs in relation tolevel of service are as follows:

• Level 1 facilities—In the two cases that charge tariffs, US$0.09 is charged permonth (0.1 percent of the average income)

• Level 2 facilities—US$0.15 per month is charged per month (0.8 percent of theaverage income)

• Level 3 facilities—US$1.88 per month is charged per month (2 percent of theaverage income).

There appears to be a clear link betweenprojects that place emphasis on institutionbuilding and those that achieve effectivecost recovery. The case study systemsfrom the projects that did not invest ininstitution building (FW4SP, RWS4, andPAF2) do not currently charge for water.Most of these systems have insignificantsavings and do not have updated financialrecords. In contrast, the case studysystems implemented under the projectsthat did invest in institution building(WATSAN, CVWSP, RW3SP) exhibitgenerally good financial management. Inthese cases, tariffs are in line with costs foroperation and maintenance, accounts arein order, and several of these water usersassociations have managed to build upsubstantial cash reserves.

Three of the more successful water usersassociations (Bato Cooperative, CantumogCooperative, and Kibudtungan BarangayAssociation) have installed water meters ontheir house connections and are usingprogressive tariffs to bill the userhouseholds. The users pay for theinstallation of their private service pipesand water meters, and the systems appearto be working well. The level of service and

the management effectiveness of theseassociations are unusually high comparedto other rural systems.

Demand-Responsiveness

In examining technical and institutionalsustainability, one of the lessons concerneddemand-responsiveness. In most cases,the projects offered lower levels of servicethan those desired by the communities.Despite the projects’ limitations, thecommunities have generally managed toget what they need, either by increasingthe size of their community contributions orby finding alternative sources of finance.

CVWSP was the only one of the eightprojects to offer Level 3 water supplysystems, but none of the communities in

9Soriano and Test Consultants (2003)

Identifying Elements of Sustainability

The study team visited many schemes that were nolonger operational

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its four case study systems chose thisoption. Therefore, all 15 case studieswere originally Level 1 or 2 water supplysystems, with six Level 1 systems andnine Level 2 systems.

A review of the current status of the casestudy systems confirms the importanceof the initial level of service provided.The six Level 1 case studies all remain atLevel 1, while seven out of the nine Level 2systems have been upgraded to Level 3systems (or to combination Level 2 and3 systems). These improvements arepossible because the communities haveobtained additional financing, thus

the upgrades often reflect the politicalconnections of the communities in questionrather than the strength of their demands.However, genuine demand for higher levelsof service has been expressed in severalcases, most notably where householdshave constructed their own houseconnections using local materials, suchas flexible pipes.

Local Government UnitContributions

In examining responses to financingpolicies, the study shows that the moresuccessful and sustainable case study

systems all receive contributions fromLGUs toward capital expenditures. Inmost cases, these contributions involvetaking responsibility for soft components(institutional development, training,transport, and support), rather than forhardware (materials and construction).Importantly, this ensures that local bodiesform relationships with the water usersassociations at an early stage and involvethem in vital decisions, such as the siteselection of the water supply facilities.

However, the case studies also reveal thatLGUs are sometimes reluctant tocontribute toward the rural water supply

9

One of the lessons concerned demand-responsiveness. In most cases, theprojects offered lower levels of service than those desired by the communities.

100 200 300 400 500

Figure 4: Overall sustainability according to the methodology for participatory assessment

Score

Bato

Cantumog

Paitan Sur

Damires

Usmad

Bagacay

Tuding

Paagan

Lower Bimmotobot

Kasitrusan

Santa Lucia

Hoskyn

Capitongon

Kibudtungan

Water Cooperatives

Community-basedOrganizations

BarangayWaterworksand SanitationAssociations

Type of Water Users Association

Effective Functioning Effective Financing Effective Management Effective UseSystem Quality

Locations

Maxim

um S

core for Sustainability

schemes being implemented within theirjurisdiction. This may be a function of theirrelationship with the implementing agency,but it also draws attention to the fact thatsmaller municipal LGUs have constrainedbudgets and may struggle to meet thehigher levels of cost sharing that newnational policies for rural water supply arecurrently emphasizing.

Community Contributions

Community contributions toward capitalcosts are supposed to diminish the riskof building inappropriate facilities in ruralcommunities. The rationale is thatimpoverished communities may acceptany water system that is offered for free,but will think twice before agreeing tocontribute toward such a system. It isalso thought that community contributionsincrease users’ sense of ownership of asystem, thus ensuring more interest andinvolvement in planning, construction,and management, which in turn resultsin a more sustainable system.

Surprisingly, in examining responses tofinancing policies, the link betweencommunity contributions and increasedsustainability is yet to be established. TheWATSAN and CVWSP projects, whichproduced five of the most sustainable casesexamined by the study, did not requirecommunity contributions (unless higherlevels of service were demanded), whereassix out of the seven least sustainableschemes did receive communitycontributions. In part, this finding relates toa general policy trend toward lowercommunity contributions (with higher LGUcontributions), but it may also be becausemost of these community contributions werein-kind (labor, local materials, land, andfood for the workers). Further investigationon this funding, particularly any distinctionbetween in-kind and financial contributions,would be useful in the future.

Institutional Arrangements

In examining institutional sustainability, thestudy shows that the training and capacity

building given to the water usersassociations and the support andmonitoring provided by external agenciesvary among case study systems. Theinvolvement of barangay officials prior tothe implementation of the project appearshelpful in developing the water usersassociation and in ensuring thatappropriate beneficiaries are targeted andinvolved in the early stages of projectplanning and site selection. Assistance isalso helpful for the proper registration andaccreditation of the association with theappropriate authorities.

The six most sustainable cases identifiedusing both assessment methods includetwo barangay waterworks and sanitationassociations, two water cooperatives, andtwo community-based organizations. Thusthere is little evidence that any one of thesethree forms of water users associations isinherently more sustainable than the others.However, the water cooperatives appear tohave advantages in several other areas,including access to water supply andexternal support.

The two water cooperative-managed casestudies have the highest levels of access.This may be related to the more cost-efficient tariffs charged by the cooperatives.For instance, Kibudtungan BarangayWaterworks and Sanitation Associationis rated the most overall sustainable caseby the MPA method (see Box 4), but itcharges almost three times as much percubic meter as the cooperatives and hasmuch lower access figures (only 16percent households have good accessto the water supply). The cooperativesalso have the advantage of external

10

Intended beneficiaries of rural water supply projects continue to rely on traditional sources of water, as they seethat little has improved with the often distant and unreliable new systems

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support from the Cooperative DevelopmentAuthority (CDA), a non-technical body thatdoes not assist with water supply problems,but monitors performance, examinesfinancial records, and carries out generaltraining and support.

Conclusion

A key message of this study is that thelarge, centrally managed projects failed toproduce sustainable rural water supply

systems. The sheer number of rural watersupply schemes required to ensureuniversal access to safe water supply andthe declared intention of the nationalgovernment to meet this objective asrapidly as possible put heavy pressureon rural water supply projects. The resultwas overly ambitious targets and costcutting in order to produce as manysystems as possible from the limitedresources available. Data on the numberof complete or functioning rural watersupply schemes are scant, but it appearsthat most of these large projects managed

to install less than half the intended numberof systems, of which many are no longeroperational. Although these large projectsinstalled many rural water supply facilities,it now seems clear that they wereinefficient, and their impacts were limited.

The findings of the WPEP study suggestthat smaller projects, with significantinvestments in capacity and institutionbuilding, produce the most sustainable andeffectively used rural water supplyschemes. It is also apparent that localinvolvement of the LGUs and communities

11

The study shows that the more successful and sustainable systems receivedcontributions from local government units toward soft components such asinstitutional development, training, and support.

4 8 12

Figure 5: Overall sustainability according to the specialist appraisal

Overall sustainability

Technical Financial Institutional Social

Scoring: less than 6 points = unsustainable; 6 points = marginally sustainable; greater than 6 points = sustainable

Bato

Cantumog

Paitan Sur

Damires

Lapan-Lapan

Usmad

Bagacay

Tuding

Paagan

Bimmotobot

Kasitrusan

Santa Lucia

Hoskyn

Capitongon

Kibudtungan

Water Cooperatives

Community-basedOrganizations

BarangayWaterworksand SanitationAssociations

Type of Water Users Association

Locations

aids system preparation, planning,implementation, and management, andthat sustainability is improved whenthese processes are monitored by externalagencies. In general, the communitiesdemanded higher levels of service thanthose being offered by rural water supplyprojects. In most cases the communitiesupgraded their systems themselves orpersuaded someone else to fund theimprovements. This confirms theimportance of informed choice anddemand-responsiveness in the provision ofrural water supply services. Projects musthave less rigid rules on technical optionsand should offer a menu of options andrelated costs that allow local users to selectthe most appropriate system for theirspecific needs and payment capacities.

The findings on financing are not as clear.The most sustainable systems all receivedcontributions from the LGUs for capitalexpenditures, but these contributionsvaried greatly, and there is somesuggestion that smaller LGUs werereluctant to contribute. However, it seemslikely that the requirement that LGUscontribute was beneficial, as it increasedtheir involvement with the systems.

Within the group of cases studied, none ofthe better-performing projects requiredcommunities to contribute toward capitalcosts. When community contributions weremade, they were often in-kind, and appearto have had little or no impact onsustainability. However, there is evidencethat cash contributions are associated withmore sustainable water supply schemes.This distinction needs further considerationand follow-up in the future.

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Identifying Elements of Sustainability

Box 4: KIBUDTUNGAN BARANGAY WATERWORKS AND SANITATION ASSOCIATION9

Before the water supply system for the Kibudtungan Barangay Waterworksand Sanitation Association was constructed, the community dependedon a spring source located about a kilometer away or bought water fromwater vendors at US$0.06 per 5-gallon container. Now, water is onlybought from vendors during power failures or when major system repairsare taking place.

The water system was implemented through the WATSAN project in 1997.The project was originally designed to provide Level 2 water service to thecommunity through seven public water points (requiring construction of anelevated reservoir and 600 meters of pipeline). Except for the pipelaying,which was undertaken through bayanihan (self-help), the rest of thecomponents, including materials and labor, were contracted out by theproject. The officers and management staff were trained in health andsanitation aspects and attended short courses on bookkeeping, financialreporting, and general management. A local resident was hired as thesystem caretaker and maintenance person. Having been trained inplumbing at a local vocational school, the caretaker introduced technicalimprovements that have greatly enhanced performance of the system.

Of the 49 original member households, about 20 opted for private houseconnections (Level 3) at the outset. House connections required a watermeter, several lengths of pipeline, in-house taps, and plumbing service.The average cost was about US$50. There are now over 120 userhouseholds, of which about 80 have house connections. The water rateschedule was designed with the help of the municipal engineer based onthe progressive charging system used by nearby water districts. When firstpresented to the association’s governing general assembly, it encounteredmuch opposition. However, when it was explained that the progressivenature of the tariff was designed to prevent wasteful use and that it wasactually much cheaper than the U$0.06 per container charged by watervendors, negative sentiments soon died down.

As a result of the tariff adjustments, the association is able to make areasonable return, which the users have decided to put toward subsidizingthe local public school and assisting poorer households within thecommunity to access a convenient water supply.

9Soriano and Test Consultants, Inc. (2003)

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A number of sector constraints areidentified by the study:

• National-level capacity is not accessible. There is little evidence thatnational-level bodies have any positiveimpact on the sustainability of the ruralwater supply schemes studied. It isnotable that, despite the wealth oftechnical knowledge and skills containedwithin bodies like the DPWH and localwater districts, there is no mechanism forwater users associations to accessthis knowledge.

• Technical problems often hinder sustainability. Several of the systemsstudied are struggling to functionbecause of relatively simple technicalfaults. They appear to be receiving noassistance in solving these problems.

• There is insufficient focus on services for the poor. Though povertyalleviation was not an explicit objective ofthe rural water supply projects studied(except for PAF2), it is noticeable thatmost of the case study systems havehad little impact on water supply servicesfor the poor. The location and layout ofthe facilities for the projects were oftendetermined by the availability of donatedland, by ease of construction, or byminimum cost requirements. As a result,the poor, who tend to live in marginalareas and are usually excluded fromdiscussions regarding water services,often have closer alternative watersupplies than the facilities run by waterusers associations. The study findingsconfirm that the poor generally continueto use these alternative sources, which

are often free, even after improvedfacilities have been installed in theircommunity.

The lessons from this study suggest thatprojects need to focus more on supportand follow-up activities, while localgovernments need incentives to be involvedthroughout the lifetime of the implementedsystems. Rural water supply efforts needto be concentrated on institutionaldevelopment, financial management,encouraging local involvement, and hygienepromotion. However, these issues arecomplex, and success requires extensiveresources, including much time, money,and trained staff. Small well-fundedprojects have the flexibility and dedicatedstaff needed to produce effective schemesbut these results may be difficult toreplicate on a larger scale.

Recommendations

The following recommendations attemptto address some of the constraintsidentified by the study, making suggestionsfor the design of ongoing and futureprojects and for changes to the nationalpolicy and institutional framework for therural water sector.

1. Invest in institutional strengthening and capacity building

There needs to be a balance betweenambitious project targets for schemecompletion and the development ofsustainable rural water supply services. At

present, too much effort and funding isspent on facilities and not enough is spenton ensuring that these facilities are welloperated, well managed, and effectivelyused by the intended beneficiaries. Newprojects should aim for fewer systems butwith more investment on institutionalstrengthening and capacity building. Thisinvestment should be directed toward bothwater users associations and relevantLGUs, so that LGUs gradually accumulatethe experience and skills needed to advise,regulate, and monitor the rural watersupply systems within their jurisdiction.

An important part of this process will bethe recognition that rural water supplyschemes are not complete until sustainable(in terms of all aspects of sustainability—technical, financial, environmental,institutional, and social) services areestablished. Project completion or successshould be measured by sustainableoutcomes rather than inputs such as thenumber of handpumps or pipe networksinstalled. This change in approach willrequire the introduction of moresophisticated monitoring and evaluationtools, such as the MPA used in the WPEPstudy, long-term impact assessments, aswell as the introduction of more reliable andsustainable databases.

2. Emphasize cost recovery

Declining government funds for rural watersupply make cost recovery even moreimportant. Rural water supply projectsshould ensure that appropriate financialmechanisms are in place before systemcompletion or handover. Water usersassociations should be well trained in tariff

There is a strong argument for funding incremental improvements and upgradesto existing water supplies used by poor households, rather than subsidizing thedevelopment of new ones.

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setting, and regulations for tariff increasesshould be ratified by the associationsprior to starting operation. LGUs canplay an important role in this process byencouraging and facilitating local networksof water service providers to sharemanagement and cost-recoveryinformation on salary levels, operationalcosts, maintenance activities, tariff levels,replacements costs, etc.

3. Improve access to services by the poor

Improved access should be the mainobjective of any rural water supply andsanitation project, as the poor generallyhave the lowest access to safe watersupply and suffer most from the poorhealth associated with inadequate waterand sanitation services. The first step isto identify the poor and determine theirpriorities. However, poor households arerarely comfortable communicating directlywith external agencies or governments,

thus it is often more effective to have localnon-governmental organizations (NGOs)intermediate between the community andthe project.

The WPEP study demonstrates that thepoor often continue to use traditionalwater sources in preference to an improvedwater supply located elsewhere in thelocality. This provides a strong argumentfor funding incremental improvements andupgrades to existing water supplies usedby poor households, rather than subsidizingthe development of new ones (whosebenefits are often captured by householdsthat are not poor).

4. Provide incentives for investment

Common policy and project rules willprovide greater incentives for LGUs andcommunities to invest in rural water supplysystems. At present, they are reluctantto contribute toward infrastructure costs

because they believe that there is alwaysa chance that someone else (politician,external donor, or NGO) will providethem with the facilities free of charge.Changing these perceptions and thereality will require consistent, progressive,and transparent national policies andprograms as well as solid commitmentfrom local politicians.

On average, only 19 percent of the communities consider themselves to have good access to the facilities, and itis the middle-income users that primarily enjoy these

Test

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Identifying Elements of Sustainability

East Asia and the PacificJakarta Stock Exchange BuildingTower 2, 13th Floor.Jendral Sudirman Kav. 52-53Jakarta 12190Indonesia

Phone: (62-21) 5299 3003Fax: (62-21) 5299 3004E-mail: wspeap@worldbank.orgWeb site: http://www.wsp.org

January 2004Water and Sanitation Program—East Asia and the Pacific

WSP MISSION: To help the poor gain sustained access toimproved water and sanitation services.

WSP FUNDING PARTNERS: The Governments of Australia, Belgium,Canada, Denmark, Germany, Italy, Japan,Luxembourg, the Netherlands, Norway,Sweden, Switzerland, and the UnitedKingdom, the United Nations DevelopmentProgramme, and the World Bank.

ACKNOWLEDGMENTS:This document was written by AndyRobinson, based on “Rural Water: Modelsfor Sustainable Development and SectorFinancing” by Dr. Maria Cecilia Soriano andTest Consultants, Inc. (2003), andcopyedited by Elisa Knebel. It is availableonline at http://www.wpep.org. The inputsof the Filipino and internationalpeer reviewers, members of the WPEPProject’s steering committee and technicalworking group, and World Bank staff, havebeen invaluable.

Cover Photo by Test Consultants, IncCreated by setiaputraPrinted at Subur Jaringan Cetak Terpadu

The findings, interpretations, and conclusions expressed are entirely those of the author and should not be attributed in any manner toThe World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the companies they represent.

ABOUT THE SERIES:

WSP Field Notes describe andanalyze projects and activities inwater and sanitation that providelessons for sector leaders,administrators, and individualstackling the water and sanitationchallenges in urban and ruralareas. The criteria for selection ofstories included in this series arelarge-scale impact, demonstrablesustainability, good cost recovery,replicable conditions, andleadership.

References

Dayal, R., van Wijk, C., and N. Mukherjee.2000. “Methodology for ParticipatoryAssessments: with Communities,Institutions and Policy Makers.” WorldBank, Water and Sanitation Program,Washington, D.C.

Government of the Philippines, Department of Finance. 2002. National Government-Local Government Unit Cost SharingPolicy. Policy Governing Board, MunicipalDevelopment Fund Office, Manila.

Government of the Philippines, National Economic and Authority. 1988. Rural WaterSupply and Sanitation Master Plan. Manila.

Government of the Philippines, National Statistics Office. 1999. Annual PovertyIndicators Survey. Manila.

Soriano, C., and Test Consultants, Inc. 2003. “Rural Water: Models for SustainableDevelopment and Sector Financing.” WaterSupply and Sanitation PerformanceEnhancement Project, Manila. [Available at www.wpep.org]