PPrroovviiddiinngg CClleeaann,, HHeeaalltthhyy WWaatteerr ttoo GGuuaatteemmaallaa

Rebecca Adler Franklin Jirón Lily Gruenke

Laura Fishman

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Our Mission: To develop a practical water purification unit that enables Guatemalan entrepreneurs to sell clean water to households at an affordable price

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Table of Contents Introduction to the Problem ............................................................................................ 4 Water Quality and Availability in Patzún ...................................................................... 5

Water Quality ................................................................................................................. 5 Water Availability........................................................................................................... 5

Economic Impact of Providing Clean Water to Guatemala ......................................... 7 Previous “Solutions” and Existing Technologies ........................................................... 8 Water: A Public vs. Private Good ................................................................................. 10 Our Business Model ........................................................................................................ 11

Quality Control............................................................................................................. 11 Marketing and Branding ............................................................................................. 12 Growth Opportunities .................................................................................................. 12

The Solution..................................................................................................................... 13 Product Specifications ................................................................................................. 13 Design Schematic ......................................................................................................... 13 System Optimization..................................................................................................... 15

Financial Information and Future Projections ............................................................ 18 Our Finances ............................................................................................................... 18 Finances of our Customer ........................................................................................... 18

Challenges and Lessons Learned................................................................................... 20 Design for Development................................................................................................... 20 Teamwork ......................................................................................................................... 20 Selected Water Resources .............................................................................................. 22

Books and Papers......................................................................................................... 22 Websites: ....................................................................................................................... 22

Appendix .......................................................................................................................... 24 Appendix A: Map of Guatemala ............................................................................... 25 Appendix B: Technology Selection............................................................................ 26 Appendix C: Timeline................................................................................................. 29 Appendix D: Design Schematic.................................................................................. 30 Appendix E: Technical Drawings.............................................................................. 34 Appendix F: Financial Information .......................................................................... 36

Our Projections ........................................................................................................ 36 Projections for Entrepreneurs ................................................................................. 39

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Introduction to the Problem

If the misery of our poor be caused not by the laws of nature, but by our institutions, great is our sin. -Charles Darwin The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have little. -Franklin Delano Roosevelt

______________________________________________________________________________

Access to water is a fundamental human right and has been implicitly and explicitly supported by international law and governmental practice.1 Nonetheless, 20% of the world’s population lacks safe drinking water and access to adequate purification systems.2 The effects of this are profound. For example, inadequate water supplies and poor water quality endanger health and discriminate against the poor, limit agricultural productivity and economic prosperity, increase crime, and pose national security risks in some countries. Water supply and sanitation (WSS) issues have been increasing in scope, frequency and severity because the demand for water continues to grow with the population while the supply of renewable water remains fixed. In May 2003, the G8 members agreed to undertake efforts to resolve WSS issues throughout the world. This action followed proclamations from the United Nations, the World Summit on Sustainable Development, and the World Water Forum urging responsible parties to make clean water a human right and to ensure water sustainability for future generations all over the globe. Similarly, as a part of the Millennium Development project, there is a task force dedicated to water supply and sanitation issues. Additionally, many non-governmental organizations (NGOs) have undertaken numerous projects which have, for the most part, been rather ineffective at addressing this large-scale problem. At this point in time, it is quite evident that it will take far more than edicts by national or international bodies to address the problems associated with water. In addition to reviewing water issues in the context of Patzún, a midsized, densely populated municipality in the highlands of Guatemala, this paper will discuss our small-scale solution water supply problems. To address this age-old problem, we aim not only to use a unique combination of easy-to-use, easily accessible water purification technologies, but also to address common mistakes which have been overlooked by our predecessors. The successful development and distribution of our water purification system will depend upon a simple yet efficient design, strong working relationships with water supply experts from universities, NGOs, non-profits, governmental agencies in both the United States and in Guatemala, influential community members and upon the input from the end users and end consumers.

1 The human right to water. Gleick, Peter H. Water Policy – Elsevier Science Ltd.1999. 2 Basic Water Requirements for Human Activities: Meeting Basic Needs. Gleick, Peter H. – Water International, 21 (1996) 83-92.

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Water Quality and Availability in Patzún ___________________________________________

To develop an appropriate engineering solution to water supply issues in the developing world, we chose to focus our efforts upon Patzún, Guatemala. As a midsized municipality in the highlands of Guatemala with about 50,000 inhabitants distributed evenly in urban and rural areas, Patzún has abundant water resources, yet only small amounts of potable water.3,4,5 Although Guatemalans are well aware of the necessity of clean water and recognize the correlation between waterborne disease and the consumption of unprocessed water, there is no widespread, reliable water infrastructure and the majority of the population rely on inconvenient, unsafe water collection and storage methods.6,7 Water Quality

The overall water quality in Patzún is diminished by a lack of regulations pertaining to water and sanitation. Natural waterways are being used for waste disposal, primarily human waste which produces widespread water contamination. The lack of understanding of basic hygienic practices, particularly regarding the need to dispose of fecal waste away from water sources, is the single largest contributor to harmful microbes in Guatemalan water-sources and the leading source for waterborne disease. Flooding, erosion, and pesticides also contribute to the low quality of surface water and shallow ground water. Deep ground water is considered safe in some areas, but in others there is significant arsenic contamination.

Results from our primary survey indicate that the water in Patzún is not particularly turbid, but rather appears clean and clear to the eye. Water samples from two different sites in Guatemala were tested for a total bacterial count.8 As expected, the bacterial count was in the normal range of 103 to 105 colonies/mL which is comparable to the number of colonies found in human urine.9 Biological and chemical testing is underway, but preliminary results suggest that there are at least 15 major strains of bacteria.

Water Availability Communities in Guatemala depend heavily upon surface water for their water supply. Our primary survey indicates that Patzún citizens obtain the majority of their water from shallow wells or surface water located within a few miles of their homes. Additionally, people have the option to purchase river water collected in large quantities by local entrepreneurs who drive it into town to store in open cement cisterns for $1.30 per ton which lasts an average household about one and a half months. Those who can

3 United States Army Corps of Engineers, Water Resources Assessment of Guatemala. 2000. 4 Mario Blanco , Personal Correspondance 5 Luis Hernandez, Personal Correspondance 6 Ibid 7 Elaine Bearer, Personal Correspondance 8 Thanks to Mario Blanco for collecting samples 9 Bacterial count measured by Rebecca Adler

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afford it purchase purified water at a price of $2.00 per 5 gallons; however, this is only a viable option for a very small percentage of the population.10 Additionally, 12 ounce bottles of water are available for the equivalent of $0.30 and are purchased on occasion.11 Many families supplement available water resources through the collection of rain water; however, this method can only be used seasonally and requires water to be open to sources of environmental contaminants.

A small portion of Patzún residents already make efforts to purify their water on their own using chlorination. Although chlorine alone is quite effective for killing microbes which lead to water-borne disease, it leaves the water with a chemical taste and is therefore used intermittently. This is however an important fact to take into account since the use of chlorination to clean water indicates 1) there is a viable source for chlorine treatment in the form of chlorine tablets and liquid chlorine dioxane and 2) people are willing to use chemical treatment in their water.

10 Luis Hernandez, Personal Correspondance 11 Mario Blanco, Personal Correspondance

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Economic Impact of Providing Clean Water to Guatemala ________________________________________________________________________

Guatemala’s economy is largely labor and resource-based. This is no different in Patzún, where approximately 50% of the revenue is brought in through agriculture which requires large amounts of physical work.12,13 For this reason, the economy of the area is heavily influenced by water availability and water quality and the provision of clean water to the population would have positive effects upon the economy through the creation of jobs, reduction of disease, and a significant decrease in infant mortality rates. If there were a water purification system which could be used to clean large amounts of drinking water which could be distributed throughout the community at a relatively low cost, there would be a significant decrease in waterborne illness which would in turn result in more profitable farming. Additionally, less money would be spent in vain on children who do not live past the age of five. According to a study done on the economics of water in Namibia, a developing nation with an economy similar to that of Guatemala, an improvement in the quality of water is suspected to improve the productivity of the economy substantially.14

In the long run, if our product is successful, providing clean, drinkable water on a large scale to Guatemala, and potentially other developing nations, will also serve to stimulate the global economy by significantly reducing poverty, disease, and crime in the developing world.15

12 Luis Hernandez 13 E/ME 105 Project Description sheet 14 “ESTIMATING THE ECONOMIC VALUE OF WATER IN NAMIBIA,” 1st WARFSA/Waternet Symposium: Sustainable Use of Water Resources; Maputo; 1-2 November 2000. Estimating The Economic Value Of Water In Namibia 15 Young, Robert A. “Measuring Economic Benefits for Water Investments and Policies,” The World Bank TECHNICAL PAPER NO. 338. 1996.

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Previous “Solutions” and Existing Technologies You must learn from the mistakes of others. You

can't possibly live long enough to make them all

yourself.

-Sam Levenson

______________________________________________________________________________

There are a variety of well-established techniques used to decontaminate water. To select the most appropriate technology, we used a very detailed economic analysis which was guided not only by the price of the technology itself, but also upon ten key considerations pertaining to the effectiveness of the technology itself, the cultural implications and ease of use, and the long and short term maintenance required (see Appendix for a more detailed explanation).

The most effective method of ridding water of fecal waste is prevention.16 Since most of the contamination of water is biological, there is a substantial decrease in contaminants when people begin to dispose of fecal waste away from the water source or when they follow strict hygienic practices. For this method to be reasonably effective, however, it would require a significant behavioral change not only by Patzún residents, but by neighboring villages on a large scale and there would still be a need for other purification efforts on the supply side.

Given the impracticality of the sanitation solution, our analysis reveals that the next best way to approach the decontamination of water is through a physical cleansing of water through slow sand filtration. This method is remarkably cost-effective and could be completely supported by local resources while preventing a dramatic change in lifestyle. Also, this could be done on a large or small scale with about an equal effectiveness of approximately 80-90% depending upon the flow rate.17 To increase the effectiveness of our purification system, we have decided to employ the use of chlorine dioxane as a chemical water disinfectant along with an activated charcoal filter to remove the smell and taste of chlorine. According to our analysis, the increased productivity of our apparatus greatly outweighs the added expense of the chlorine dioxane and the activated charcoal.

Conversations with various water experts, along with published information about the failure of previous water purification projects, indicate that the difficulties in providing clean drinking water stem primarily from the difficulties in sustainability, and not from the effectiveness of the technology itself.18 Technologies, such as Solar Disinfectant, which rely upon the low cost and highly effective method of UV-water treatment, present difficulties not because of the monetary cost of the technology itself, but because of a failure of native people to understand the science behind the technique,

16 Ashuk Gadil, personal correspondence 17 Hazeltine, Barrett and Christopher Bull. Filed Guide to Appropriate Technology. Academic Press, San Fransicso, 2003.

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and the fact that the product is inconvenient to use since the protocol changes depending upon the season.19 Additionally, other home-based purification systems have failed because of cumbersome maintenance procedures and the high price of consumables compared to the initial price of the system itself. Often, NGOs subsidize these projects and there are positive results within the first year, but after the NGOs stops funneling in money into the water purification system, people gradually stop using them due to the associated costs.

Our evaluation of previous development efforts has led us to the identification of two major factors in determining the sustainability of a purification system:

1) A successful, sustainable plan will place emphasis upon market incentives 2) Technologies used should be simple, require only minimal maintenance, and be applied at the community rather than the household level to reduce the cost of production through the economy of scale

19 Sommer, B. Et Al. SODIS—an emerging water treatment process. J Water SRT—Aqua Vol. 46, No. 3, pp. 127-137, 1997.

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Water: A Public vs. Private Good

___________________________________________ Is water a public or private good? There is wide interest in, and support for,

treating water as an economic good and many of our project requirements are based upon this model. However, we recognize the role of water as a basic need, and as social, economic, financial, and environmental resource. Therefore, in order to successfully select the most appropriate business model and pricing structure for our water purification system which will provide the most good for Guatemalan communities, we must consider this important philosophical question and come up with an appropriate pricing structure to reflect these considerations.

The idea that water can be treated as an economic good follows directly from the fact that potable water is scarce but necessary for many basic activities such as drinking, bathing, irrigation and waste disposal. The fact that water can be considered an economic good is indisputable; however, what type of economic good is not so clear.

Goods can be classified into two major categories: 1) public or 2) private. The value of private goods is derived based upon their financial value, which stems directly from how much people are willing to pay for the good. The value of a public good, on the other hand, takes into account other economic factors such as wealth distribution or the impact of the particular good on the economy of the village.

Those who favor water being treated as a private good assume that water should be treated like any other good and that the distribution of clean water, in our case a water purification system, should be determined by what people are willing to pay. The consequence of this approach, however, is that the poor are entirely unable to pay for water even if they value the water as much or even more than the rich. This is what happens now in Guatemala. If, on the other hand, water is treated as a public good, clean water can be provided to everyone, regardless of their economic status. Since water is a basic need for everyone and the quantities of water necessary for life are not dictated by social class, it does not follow that the market can reasonably establish the appropriate pricing schedule.

A product that has the ability to deliver clean, safe water to those who would not otherwise have access could be treated as either a private or a public good. The importance of considering philosophy to create appropriate pricing for our product can not be over-emphasized. It is clear that as responsible engineers we should be mindful of the social and economic implications of our work and establish ways to make our business profitable and sustainable, but also provide relief to the maximum number of people possible.

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Our Business Model

___________________________________________ To distribute clean drinking water to Patzún, Guatemala while being practical

about financial and cultural limitations and taking into account previous failed attempts to address this question, we have decided to focus upon the neighborhood community as our target market. Although Cristal Agua will be structured as a not-for-profit organization, the individuals who purchase our water purification systems will make money within the first few years (see Financial Projections Section and Appendix F). As described above, the water distribution in Patzún relies heavily upon the delivery of large amounts of contaminated water for a low price of $1.30 USD per ton to families throughout the city. Our business plan would target local entrepreneurs as a means to reach individuals who would be able to sell clean, affordable water in their neighborhood. These individuals would purchase our equipment to purify water in bulk to sell to local families. Through this method, significant profit would be gained by the individuals who decide to buy our product, while at the same time making clean water affordable to the majority of the population. This model addresses price concerns and allows for a much greater profit margin. This is because our device could be used to clean large quantities of water, thus decreasing the price significantly through economy of scale. Instead of having to be overly concerned with capital cost, size requirements, and other ease and maintainability concerns, we can focus more on efficiency and productivity of the device. Since there will only be a single person or a small group of people using each device to make money, the user will be more willing to dedicate time to learn how to use the device. Additionally, since the user will be putting a greater quantity of water through the purifier in any one day, the learning curve will be much steeper over time. Within a matter of weeks, no matter how challenging the device is, the user will know how to operate it. The price of our device is also less of a concern since our direct customers are purchasing as an investment with a guaranteed return. Within a number of months, all of the money they invested in our technology will be recouped, and they will begin gaining profits. While price, ease and maintainability are important, they will not serve as our major design specification, and we can instead focus upon maximizing profit by designing a device with the largest throughput and most effective and sturdy design. Quality Control Another crucial component of our business plan focuses upon the quality of not only the water purification unit, but also the end product. Building a good brand name will require that all entrepreneurs take personal care in their clean water supplies that they provide. The market will encourage them to provide high quality water since they have already made a significant monetary investment in our system and would like to maximize their returns. In addition to relying on market forces to ensure quality, we have established several other quality-control methods. First and foremost, our technical staff person will set up the water purification system and deliver detailed maintenance and

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operational procedures. These instructions will also be included in written form in Spanish, English and native languages. Included with the purchase of our Cristal Agua water purification unit will be an easy-to-use water testing kit to be used once a week. Periodic inspections will be customary within the first few years of operation. Our business strategy requires individual families to bring water storage containers to Cristal Agua distribution site to collect their water. Before their containers are filled with clean water, a light chlorine rinse will be used to ensure there are no pre-existing contaminants before the water is added. After the container is filled to the desired level, it will be sealed using a sticker with the Cristal Agua logo over the lid so the customer will know when the container has been opened after the initial water acquisition. Marketing and Branding One of the main features in our business model is that we plan to implement an aggressive marketing strategy and branding campaign from the beginning. Through a continual effort, we aim to become widely recognized throughout Patzún, and later the rest of Guatemala by focusing heavily upon crucial partnerships with churches, schools and health clinics. Additionally, we have designed a Cristal Agua logo which will be used in our propaganda, placed on the barrels of each filtration system, and used to seal each and every container of water that is distributed. Our system will require a significant investment from the entrepreneur. The water purification system will be the equivalent of $1,105. To make this affordable to a good portion of Guatemalan families, we have outlined a partnership with a local bank to finance micro-loans. This pre-negotiated rate will allow us to negotiate the loan rate in advance, will help establish our credibility through community relations and will provide a significant profit for the participating bank such that it is in the interest of the town to invest in our business. Additional partners that we will pursue include both community centers such as schools, churches, and health clinics, and influential community members. We believe that setting up one of our devices in at a community center will not only serve as a public service by providing clean drinking water at no cost, but will also provide us with important early exposure within the community. Furthermore, one of our first customers will serve as an additional partner that will spread our idea via word of mouth and point us to future customers. As a reward he will be receiving a commission based on profits of the company. Growth Opportunities Patzún, Guatemala was chosen as our headquarters and initial distribution point partially because it is similar to many of the surrounding communities. Once we begin to saturate the market in Patzún, our business plan calls for rapid growth to other highland communities. After a few years, we will begin modifying our product design for water purification units designed specifically for other areas of Guatemala and throughout the developing world so we may expand to related endeavors including the production of activated charcoal from corn cobs or the development of cheep water testing kits (see Appendix B).

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The Solution ___________________________________________ Product Specifications In keeping with our target market, we have designed our product to produce clean water for approximately 25 average-sized families that each consumes an average of 3gal/day.20 We will assemble our water purification system using local resources and supply the system with a year-long supply of chlorine solution and activated charcoal. We will also include information on where our customer can purchase more chlorine and activated charcoal and where they can find suitable sand and gravel. The product will contain the following

• 1.00m diameter x 1.60m tall cylindrical barrel for slow sand filtration with lid • 0.50m diameter x 0.70m tall cylindrical barrel for chlorination with lid • Flexible tubing with 2.4 cm diameter connecting the two barrels • Outlet pipe with cap on sand filtration barrel • Exit pipe on chlorination barrel • Valve on exit pipe to control water release • Activated charcoal vessel mounted before the valve • Simple instructions in English and native languages • 1 year long supply of chlorine dioxane solution and granular activated charcoal

Design Schematic

• The bottom of the chlorination barrel is to be placed 0.50m above the bottom of the sand filtration barrel to allow for large containers to be filled easily

• The end of the flexible tubing between the two barrels is to be kept at a height of at least 1.20m to ensure a level of water in the sand filtration barrel about 10cm above the top of the sand. This insures the bio-layer is maintained

• Gravel fills the bottom 0.20m of the sand filtration barrel to keep the sand from traveling into the chlorination tank

• Fine sand depth of 0.90m is placed above the gravel, bringing the top of the sand to 1.10m, which allows for most microbes and other large water contaminants to be removed with a 95% efficiency

Maintenance • Top 2-3 cm of sand should be scraped off every couple of months or when the

water flow rate slows considerably • Ideally, sand will need to be replaced when the sand filter layer is less than 0.70m

in height. After the sand is replaced, water should be run through the system and then left for at least one full day to rebuild the bio-layer

20 This estimate of average water consumption assumes that families will only be purchasing water for drinking and cooking and that some families will purchase water every day while others will purchase on occasion.

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• Activated charcoal must be replaced every month • System requires: 1) 0.71 m3 of sand 2) 0.16 m3 of gravel

Water Purification Process The water purification process using our Cristal Agua purification unit consists of five easy-to-follow steps outlined below: 1) Raw water will be added at the top of the sand filtration barrel by hose, bucket, or other water source. The first time water is ever put into the system, it will have to filter through for two days to develop a bio-layer. 2) Water starts flowing through the system driven by gravity. Filtration through the sand takes out harmful bacteria and other large organic substances. 3) Water flows through the sand, up the connecting pipe, and into the second container for chlorination. Liquid chlorine dioxane is added manually in accordance with the amount of water in the container. Chlorine treatment will kill viruses and the remaining bacteria. Following chlorine treatment, the water will be 99% free of biological contaminants. 4) Water stops flowing through the system when the water level in the sand filtration barrel decreases to the height of the top of the connection pipe. 5) Once the valve is opened, water filters through activated charcoal before exiting. The activated charcoal mostly filters the chlorine to improve the taste of the water. Purified water can then be collected in a clean storage container of choice and sealed with the Cristal Agua logo.

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Figure 2: Basic Product Schematics Raw water flows into a large basin (left) where gravity-driven slow sand filtration takes place. Filtered water then flows into a second smaller container where it is treated with chlorine. Finally, the chlorinated water passes through activated charcoal in the exit pipe before it is collected and ready for use. For more technical drawings, see appendix.

System Optimization

Slow sand filtration can be modeled using Darcy’s Law which states:

kAhQL

= , (0.1)

where Q is the volumetric flow rate of water through the filter, A is the cross-sectional area of the filter, h is the water head (height of water above the sand), L is the length the water must travel through the filter, and k is the hydraulic conductivity. The hydraulic conductivity is a constant of proportionality that is based on the type of sand used, cleanliness of the filter, dirtiness of the water, and several other factors. This constant must be empirically determined in any filter system but typical k values for slow sand filters range from 10-6 m/sec for extremely fine sand to 10-4 m/sec for relatively coarse sand. In order to effectively remove biological contaminants in the raw water with a rate of at least 95%, filters are constructed using fine sand, tend to have a hydraulic conductivity of < 10-5 m/sec, and have working filter lengths of at least 0.9 m. Darcy’s Law describes the state-state behavior of a filter system with a constant flow of raw water that allows for an equilibrium water head to be maintained. Our filter will be run in a batch mode where water will be added periodically and allowed to drain before additional raw water is added. To analyze the draining dynamics we take the time derivative of Darcy’s Law:

dQ kA dhdt L dt

= . (0.2)

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Only the water head is time dependent and the instantaneous change in water head can be expressed as

dh QAdt

= − , (0.3)

where the negative sign indicates the decrease in water level due to an outward flow. Substituting (0.3) into (0.2) we find

dQ k Qdt L

= − . (0.4)

Equation (0.4) is a well-known linear, first-order, ordinary differential equation whose solution is

0( )k tLQ t Q e

−= , (0.5)

where Q0 is the initial volumetric flow rate. Q0 can be expressed as a function of the initial water head, h0, using Darcy’s Law

00

kAhQL

= . (0.6)

To find the total volume of water passed through the filter in a given time period simply integrate (0.5) over that time frame.

Water Output v. Hydrolic Conductivity

0

20

40

60

80

100

120

140

5 6 7 8 9 10 11 12 13 14 15 16 17 18

k (μm/sec)

Wat

er O

utpu

t (ga

l/day

)

V_Cons (gal/day) V_Mid (gal/day) V_Optimistic (gal/day)

Figure 2 – Water Output v. Hydraulic Conductivity: Above, conservative, midrange and optimistic outputs are graphed for a range of hydraulic conductivity ranges. Error bars are used to designate the difference between three refills per day (positive) and only one refill per day (negative) with the data point representing two refills per day.

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To determine the optimum dimensions of our filter we analyzed equation (0.5) over several values of k, a range of filter diameters, and between one and three daily refills. We assume the refills will be evenly spaced throughout the day and that for each refill the filter will be filled to level h0. Filter diameter and height is limited by practical considerations such as a person’s ability to reach into and across the filter to clean it. Since the filter contains two filter materials (fine sand and gravel) there will be two hydraulic conductivities. We considered three systems in our analysis to cover a serious of assumptions on hydraulic conductivities and filter dimensions. The first system represents the most conservative estimates: the gravel’s k is equal to the sands, the water head is limited to 0.3 m, and the filter diameter is 0.75 m. The second system contains more moderate estimates of the system values: the gravel’s k is half that of the sands, the water head is 0.4 m, and the filter diameter is 0.88 m. The third system is the most optimistic and assumes: the gravel’s k is negligible, the water head is 0.5 m, and the filter diameter is 1.0 m. Figure 3 shows the daily water throughput of each of the three systems with data points indicating one, two, and three daily refills. Under the most optimistic conditions the system can filter 130 gallons/day. Assuming a daily consumption of 3 gal/family, the system could supply up to 43 families with clean water. Under the most conservative estimates the system filters 15 gallons/day which is still sufficient for 5 families. We believe a realistic estimate is about 75 gallons/day, which is enough to provide water for 25 families. In addition to the water throughput analysis, we also estimated the necessary size of the storage container. For safety, the container must be able to hold at least one refill and a complete drain of the system. This situation occurs if the user refills the system without swapping or emptying the storage container and then lets the system drain completely. Under the most optimistic water production calculations, i.e. the worse case scenario, the storage container must be able to hold at least 150 gallons of water. The engineering analysis leads to several important conclusions that dictate design constraints. First, the filter should have as large a diameter as possible to maximize output. Second, the head height should be as high as possible. Third, the storage container must be able to hold at least 150 gallons of water. These constraints are met with our design that has a nominal filter diameter of 1.0 m, a head height of 0.5 m, a fine sand filter length of 0.9 m, and a gravel filter length of 0.2 m. Complete technical drawings for the system can be found in Appendix D.

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Financial Information and Future Projections

________________________________________________________________________

Since our business plan involves multiple levels, we must be concerned not only with our financial outlook, but also with that of those who invest in our technology. The following few pages discuss the financial information of our business plan at all levels and show that our business strategy is sustainable and will enable us to bring in enough money to expand, and in time, re-invest money in development of new products while simultaneously bring in sizable profits for Guatemalan entrepreneurs.

Our Finances

We have two major types of expenses for the operation of our business: 1) operational cost and 2) production costs. The majority of expenses come in the form of overhead (shown in Appendix Table F1) which includes labor, office costs, production costs, consulting fees, training, branding and product transportation. We make an effort to see that our employees are generously paid. Additionally, there is a relatively high cost associated with the acquisition and maintenance of our offices in township and that there are adequate funds allocated for the transportation of the assembled purification system to our customers. An integral part of our financial plan includes training workshops for our employees and new customers which will take place quarterly and will help inform crucial business partners about our organization, how we work, what we expect of them, how to run a business and how to maintain and care for the Cristal Agua purification system. These workshops will be run with the cooperation of our Guatemalan consultants, who will be given a share of the profits each year and will be crucial in gaining new customers and increasing revenue as we have projected. The cost of the apparatus primarily comes in the form of one-time material costs, most of which comes from the cost of the large basins for the filtration system and water storage. The consumables, including our logo labels, chlorine and activated charcoal, will be provided by us for the first year and are calculated based on a cost per gallon figure from Guatemalan distributors. Following the first year of business, entrepreneurs will purchase the consumable goods themselves.

Our revenue is brought in through the purchasing of our water purification unit.

The total cost of the unit is $1,105, which was figured as a function of what we needed to charge in order to break even within the first few years. Additionally, much consideration was given to how many people would be able to afford our system at this price. Pre-negotiating a loan with the local bank in Patzún will enable people to afford the machine at this price. Using this scale, and assuming growth rates as outlined in our business plan and in Appendix Table F2, we will bring sizable profits (see Appendix Figure F1).

Finances of our Customer

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Our customer has two major types of expenses: 1) overhead costs which account

for the purchase of the Cristal Agua purification system and 2) production costs which include the cost of consumable goods. The cost of the apparatus itself is made reasonable through the micro-loan, which, based on Guatemalan amortization rates, requires an initial investment of $40 and monthly payments of $39.43 over three years. The cost of consumable items are calculated for years 2+ as a function of the number of gallons of water purified. 21 The last cost for the entrepreneur would come in the form of special seals that will be placed in the bottles they refill. The total cost of the seals per time period below is a function of cost per 5 gallons (the desired size that the end consumer will be encouraged to use). For details see Appendix Table F3.

Revenue to the entrepreneur is based upon a simple calculation of the number of

gallons sold at a price of $0.05/gallon. The number of families ramps up over a period of two years, until 25 families are serviced and due to the micro-loan, the entrepreneur never loses money per year. As shown in Appendix Figure F2, their business should deliver a return on investment in the first nine months and have a relatively stable profit margin of over $800/year after the first three years.

20 Gadil, Akil.

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Challenges and Lessons Learned

___________________________________________

Design for Development

Our major challenges pertaining to our design dealt with access to our target market. Although our first response was both timely and extremely informative, more attempts for replies from residents in the Guatemalan highlands were less successful. This problem was made even worse following the hurricane in late October, which had dramatic effects upon Guatemala as a whole and lead to extensive flooding and limited travel in Patzún. The limited communication made it difficult to get direct feedback about the feasibility of our business model and also made it difficult to determine prices and availability of certain items necessary for our design in Guatemala where we would be building our device using local materials. These challenges did not serve as road blocks; rather they inspired us to modify our plans and to strive for an even greater end-product by utilizing local expertise from within the Los Angeles area. In particular, we met multiple times with Mario Blanco and Elaine Bearer, Caltech employees, with experience in Guatemala and familiar with the Patzún and similar highland communities. Another severe design limitation was keeping the cost low enough to be affordable to people living on a dollar a day. We have addressed these issues in two ways. First we have gone through a few iterations of the product design and specifications with a goal to keep cost low. In our efforts to decrease price we learned some important lessons. First, that a new, fresh approach may be more beneficial to the project instead of trying to fix what is wrong with the current plan. Furthermore, we also learned that it is important for us to carry out an ongoing evaluation of the project in order to determine that we are heading in the right direction, and if a change of course is needed. Instead of creating a household device, we moved to a market-based solution which would generate signification revenue for those using our product. Additionally, we have set up a pre-negotiated micro-loan financing strategy which would make our product accessible to a larger portion of the Guatemalan population. Teamwork

As typical with almost any group, we too had problems with communication. Different people have different priorities, work philosophies, and attitudes which often led to minor disagreements and were particularly evident as the project progressed. These problems were brought to the group and made public so that we might work towards solving them, or at least managing them well enough to complete our project work.

One problem we faced as a group was the lack of motivation to meet as a group. We were rarely available simultaneously and arranging meeting times become an arduous task since group members had multiple conflicts. To circumvent this problem, we decided we would meet once to outline all of our specific jobs and agree to an internal deadline so that we could meet before the project was due to review and assemble

21

individual parts. Although this worked for a while, group members began having problems meeting these deadlines and work often ended up being done at the last minute by some members of the group.

A related problem was combining individual work into a cohesive paper or presentation. We each did our assigned work individually, perhaps with consultation from other group members, and then we sent the finished work to each other through e-mail. It then became Rebecca’s responsibility to collect and edit all the work in one file to turn in. For the regular assignments, this worked, as there were often a couple topics that needed to be addressed, and each team member took one topic. The midterm paper, however, was another matter. Collaborative papers do not work nearly as well as collaborative presentations. Often, people have different writing styles and since different sections of the paper were produced by different people and linked together, the final result was choppy and unimpressive. It was difficult to reorganize, and a few group members reread the paper several times to no avail. Practicing presentations was also difficult because we often met at the beginning of our work week, then completed work individually, then gathered the work through e-mail without meeting again. Some group members found it impractical to try to meet again just to spend a couple minutes practicing a fairly straight-forward presentation. The result was embarrassing, unpolished and fragmented. Nonetheless, our group accomplished a huge amount of work and made significant progress on developing a method to approach water supply problems in the developing world.

22

Selected Water Resources ___________________________________________

Books and Papers: “A Randomized Controlled Trial of Household-based Flocculant-Disinfectant Drinking Water Treatment for Diarrhea Prevention in Rural Guatemala” Reller, Megan E. et. Al. Am. J. Trop. Med. Hyg., 69(4), 2003, pp. 411–419 Basic Water Requirements for Human Activities: Meeting Basic Needs. Gleick, Peter H. – Water International, 21 (1996) 83-92 Davis, Wayne S. and Thomas P. Simon. Biological Assessment and Criteria: Tools for Water Resource Planning and Decision Making. CRC Press LLC, 1995. “Estimating The Economic Value of Water in Namibia,” 1st WARFSA/Waternet Symposium: Sustainable Use of Water Resources; Maputo; 1-2 November 2000. Gleick, Peter H. “The human right to water.” Water Policy – Elsevier Science Ltd.1999. Hazeltine, Barrett and Christopher Bull. Filed Guide to Appropriate Technology. Academic Press, San Fransicso, 2003. Perry, C.J. et. Al. “Water as an Economic Good: A Solution, or a Problem?” http://www.iwmi.cgiar.org/pubs/PUB014/body.htm Problems; Soft Path Water Technologies for the Developing World,” International Water Management Institute, Colombo, Sri Lanka. http://www.nasonline.org/site/PageServer?pagename=SACKLER_water_rijsberman Rijsberman Frank R “The Role of Science in Solving the Earth's Emerging Water Sommer, B. Et Al. SODIS—an emerging water treatment process. J Water SRT—Aqua Vol. 46, No. 3, pp. 127-137, 1997. United States Army Corps of Engineers, Water Resources Assessment of Guatemala. 2000. Steinberg, Ellen B. et. Al “ Prevalence of Infection with Waterborne Pathogens: A Seroepidemiologic Study in Children 6-36 Months old in San Juan Sacatepequez, Guatemala” Am. J. Trop. Med. Hyg., 70(1), 2004, pp. 83-88 Young, Robert A. “Measuring Economic Benefits for Water Investments and Policies,” The World Bank TECHNICAL PAPER NO. 338. 1996. Websites: The Water Resource - http://www.thewaterpage.com/information/welcome.htm UNICEF's water newsletter - http://www.unicef.org/wes/index_documents.html#waterfront WaterAid cases http://www.wateraid.org.uk/what_we_do/case_studies/default.asp Changemakers.net library http://www.changemakers.net/library/index.cfm World Business Council for Sustainable Development http://www.wbcsd.ch National Council for Science and the Environment - http://www.ncseonline.org/NCSEconference/2004conference/ Providing Water Supply MIT engineering and water and sanitation- http://web.mit.edu/urbanupgrading/waterandsanitation/home.html

23

Acknowledgements ______________________________________________________________________________________

The Blanco Family

Luis Hernandez

Elaine Bearer

Jared Leadbetter Akil Gadil Scott Miserendino Sara Adler Ken Pickar

Mo Ollenberger

Fellow E/ME105 students

24

Appendix

25

Appendix A: Map of Guatemala

Figure A1 – Map of Guatemala: Patzún, a mid-sized densely populated municipality located in the Guatemalan highlands is designated by the white star. Its close proximity to Guatemala City will enable our company to easily acquire local materials and will be convenient for publicity.

PPaattzzúúnn

26

Appendix B: Technology Selection Fifteen different technologies were evaluated as a function of effectiveness, cost, environmental impact, throughput, and ease of use in accordance to the following weight factors.

Effectiveness Cost Throughput Taste 0.2 cost/gal 0.8 Gallons/hour 1disease reduction 0.5 capital cost 0.2 clear, sediment free 0.3

Ease of Use Environmental

Concerns: Longevity 0.6 waste disposal -0.3 skill level 0.4 Deforestation -0.2 side effects -0.1 resource availability 1 Toxicity -0.1

Each of the five factors was weighted was follows: Trait Weight Cost 20 Effectiveness 45 Throughput 15 Ease of use 15 Environment 5

Each technology was researched and assigned a score in each category. The results were tabulated and total scores are reflected in the following table.

27

Quantitative Technology Assesment

6065707580859095

100

Activated CSlow Sand (SS)SS, C, ClM

icro FilterSS, protein,C,Cl

ClO2

Cl TabletsNothingUV-penQ

uick SandUV-sunM

etal IonsM

IOX

SanitationBoilingIodine

ProteinDye

Protein, dye

Technology

Scor

e

Figure B1- Quantitative Technology Assessment: 15 water purification technologies were evaluated based on a consideration of 12 different factors. Although Slow sand filtration (SS) along with activated carbon ( C) and chlorine (Cl) ranked third based upon our assessment by a very small margin, the increased number of people willing to drink water by using this technology, we felt would improve since it is more effective and leaves the water tasting clean.

28

29

Appendix C: Timeline

Year 1: Product testing, hire personnel, real estate, establish crucial partnerships

Year 2: Begin Sales in Patzún, optimize business model

Year 3: Market research in other highland communities, hire personnel, establish more partnerships

Year 4: Begin expansion, more market research on other communities

Year 5: Expand to two more communities, begin research on technological modifications for satellite business

possibilities

Year 6: Expand to three more communities

Year 7: Expand to four more communities

Year 8: Expand to five more communities

*Continue with organic growth

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Appendix D: Design Schematic

Figure D1 - System configuration: Design set-up without gravel, sand or water.

31

Figure D2 – System Configuration Interior: Design set-up showing proportion of gravel, sand and water. Note, the top 10 cm or water will always remain to maintain the bio-layer at the top of the sand.

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Figure D3 – Isometric View of functioning filtration system

33

Figure D4 – Detailed view of activated charcoal filter and water spout: The last part of the water filtration process requires the removal of the chlorine treatment through an activated charcoal filter which must be easily replaced. Modular design of this particular section enables the carbon filter to be removed and activated charcoal to be easily replaced.

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Appendix E: Technical Drawings

Figure E1 – Water Storage container technical drawing

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Figure E2 – Filtration Barrel Technical Drawing

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Appendix F: Financial Information Our Projections

Overhead $/year/site Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10Salaries/Labor Cost Technical Labor 1,800 0 1800 1800 3600 9000 12600 19800 27000 32400 39600

Marketing/Advertizement 1,800 0 1800 1800 3600 9000 12600 19800 27000 32400 39600Public Relations 1,800 0 1800 1800 3600 9000 12600 19800 27000 32400 39600Office Secretary 700 0 700 700 1400 3500 4900 7700 10500 12600 15400

Office Costs Real Estate 1,560 1560 1560 3120 7800 10920 17160 23400 28080 34320 43680Office Supplies 4,000 4000 0 4000 8000 12000 16000 20000 20000 24000 28000Office Maintanance 300 300 300 300 600 1500 2100 3300 4500 5400 6600Stationary and Printing 500 500 500 500 1000 2500 3500 5500 7500 9000 11000

Production Cost Tools for Production (hand tools) 500 500 0 500 1000 1500 2000 2500 2500 3000 3500Protective Clothing 50 50 0 50 100 150 200 250 250 300 350

Incentive For employees 1,000 1000 0 500 500 500 1500 1500 1500 1500 1500Training For Customers 200 0 200 300 400 400 400 600 600 800 1000

Label Design 100 100 0 0 0 0 150 0 0 0 200Branding pamplet design 100 100 100 100 200 500 700 1100 1500 1800 2200

Truck 4,000 4000 0 0 0 0 4000 0 4000 0 0Product Transportation Running cost 400 400 400 600 800 800 1600 1600 1600 1600 2000

Ca to Guatemala 2,000 2000 2000 3000 4000 4000 4000 4000 4000 4000 4000Travel Cost Subtotal 14510 11160 19070 36600 65270 96010 130850 167530 195520 238230

Cost/unit $14,510.00 $1,116.00 $953.50 $732.00 $725.22 $685.79 $568.91 $523.53 $488.80 $476.46$/unit

Material Costs sand 2 2 20 40 100 180 280 460 640 800 10001-time plastic container 75 75 750 1500 3750 6750 10500 17250 24000 30000 37500

valve 0.6 0.6 6 12 30 54 84 138 192 240 300gravel 2 2 20 40 100 180 280 460 640 800 1000tubing 2 2 20 40 100 180 280 460 640 800 1000carbon filter container 2 2 20 40 100 180 280 460 640 800 1000Chlorination Tank 50 50 500 1000 2500 4500 7000 11500 16000 20000 25000tool to scrape sand 2 2 20 40 100 180 280 460 640 800 1000Subtotal 135.6 135.6 1356 2712 6780 12204 18984 31188 43392 54240 67800Cost/unit $135.60 $135.60 $135.60 $135.60 $135.60 $135.60 $135.60 $135.60 $135.60 $135.60

$/galRenewables Chlorine 0.000264981 11.92 79.49 158.99 397.47 715.45 1112.92 1828.37 2543.82 3179.77 3974.71

Charcoal 0.000189272 8.52 56.78 113.56 283.91 511.03 794.94 1305.98 1817.01 2271.26 2839.08Subtotal 0.00045 20.44 136.28 272.55 681.38 1,226.48 1,907.86 3,134.35 4,360.83 5,451.04 6,813.79TOTAL $14,666 $12,652 $3,938 $44,061 $78,700 $116,902 $165,172 $215,283 $255,211 $312,844

Cost Sheet

Table F1 – Expenses: Expenses broken down item by item in terms of operational expenses and material expenses for production of the purification system itself. Total expenses are summed at the bottom of the table and are highlighted in red.

37

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 101 10 20 40 301 10 20 10 20 40 30

$0 $11,050 $22,100 50 20 30 40 30$55,250 10 20 30 40

10 20 30 4090 10 20 20 40

$99,450 10 20 30 4010 20 30 40

140 10 20 30 40$154,700 10 20 30 40

10 20 30 4010 20 30 40

230 10 20 30$254,150 10 20 30

10 20 3010 20 3010 20 30

320 10 20$353,600 10 20

10 2010 2010 2010 20

400 10$442,000 10

1010101010

500$552,500

Total Sales

Table F2 – Total sales and revenue over time: Total number of machines sold (blue) and total revenue (bold).

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Financial Projection

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

1 2 3 4 5 6 7 8 9 10

Time (years)

Dol

lars

Cost Revenue Profit

Figure F1 – Financial Projection for First 10 years of operation: Above total cost, revenue and profit are shown for the first ten years of operation. Notice that profit becomes positive just after two years of operation and profits increase rapidly which will allow for money to be re-invested in the business for further expansion and product development. Profit is discounted at a 10% rate per-year.

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Projections for Entrepreneurs

Table F3 – Expenses for Entrepreneurs: The Expenses for Entrepreneurs consist of two categories 1) the overhead costs which is the cost of the apparatus itself and 2) the material costs which is the cost for consumable items like chlorine, charcoal and labels. The cost of the purification system is distributed over three years in the form of a micro-loan with a $40 down payment and payments of $39.43 each month. This way the entrepreneur does not run at a great loss even during the first year. The material costs are dependant upon the number of gallons purified and is based upon the cost of supplies in Guatemala. Supplies will be provided for the first year, and locations of chemical distributors will be supplied with the device itself.

Total SalesYear 1 Year 2 Year 3+

Average Families 8 20 25Gallons Sold 8520 21300 26625Total Revenue $426.00 $1,065.00 $1,331.25 Table F4 – Revenue for Entrepreneurs: The revenue for entrepreneurs is based on the assumption that it will take about two full years for the entrepreneur to attain 25 families to sell water to at an average of about three gallons of water per day for $.05/gal. The ramp up period is gradual, but after three years, the revenue brought in is constant. There are, however, opportunities to increase profits though the purchase of an additional water storage tank or additional purification systems. Also, if the machine is filled up more than 3 times a day, the output of the system can also increase to bring in more revenue.

40

Financial Projections for Entrepeneurs

-$200

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

1 1.5 2 2.5 3 3.5 4 4.5 5

Time (years)

Dol

lars

Cost Revenue Profit

Table F2 - Projection for First 5 years of operation: Above total cost, revenue and profit are shown for the first five years of operation. Notice that profit becomes positive within the first year of operation and profits increase rapidly after the entrepreneur is able to sell his water to 25 families. The total profit of over 800 dollars per year is greater than the average Guatemalan income and due to the low level of maintenance required from the Cristal Agua purification system, will augment other sources of income quite nicely. Profit is discounted at a 10% rate per-year.