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Annual GSO&EUWI EECCA WG meeting
Costing MDGs on Water Supply and
Sanitation in the Kyrgyz Republic and
Selecting a “Preferred” Scenario through
a National Policy Dialogue
-– Bucharest, 24-25 November 2009 –
Nurmamat Mullakeldiev, Head, Dept. of Rural Water Supplies,
deputy Chairman of Coordination Council
EAP Task Force
Contents
Organisation of the National Policy Dialogue (NPD)
Key features of the Kyrgyz Republic and the WSS sector
Challenges faced by the WSS sector
Interpretation of MDGs for WSS in the context of Kyrgyzstan
and Baseline scenario
Costing alternative targets and selecting a “preferred”
scenario
Key financial measures to close the financing gap
Next steps
EAP Task Force
Organisation of the National Policy Dialogue
Mutual understanding has been reached with key partners
on main objectives and organization of the NPD
To develop a financing strategy for urban and rural WSS with water-
related MDGs as target
Membership of a Coordination Council (CC) to guide the
process and provide a platform for the dialogue and
Regulation on CC were approved
(decree of the Prime-Minister of the KR dated 22.07.08 № 377-р);
Consultant was mobilised to inform and facilitate the dialogue
Five National Policy Dialogue meetings so far
EAP Task Force
Kyrgyz Republic – Key Features
Low-income country (2007 GDP: some 750 USD per capita)
High proportion of people living in poverty (some 42%)
Present financial and economic crisis and uncertain marco-economic outlook
Small population (some 5.2 million) with low population density
Rural population almost two-thirds of the total population, almost one-third of villages with less than 750 people
25 urban settlements with WSS managed by vodokanals; 1/3 of villages with centralised (piped) water supply
Plentiful water resources but glaciers shrinking
Harsh climate (from +45oC to -30oC) and high seismic activity threaten sustainability of WSS infrastructure
Rocky ground, plenty of distant villages in high lands – impact on unit costs
EAP Task Force
Challenges for WSS in Kyrgyzstan
Lack of accurate information on water production and use
Urban access – 98% to improved water sources, 56% to piped water; 51% to improved sanitation and 49% to basic
Rural access – 81% to improved water sources, 50-56% to piped water through street-posts; universal access to basic sanitation (0% to improved sanitation)
85% of old water supply systems use groundwater but use of surface water rising – problems with pollution and health
Poor condition of existing infrastructure and poor level of service (reliability, predictability, water quality)
Unwillingness to pay for poor level of service
EAP Task Force
Impacts on Health and Environment
20% water supply systems do not comply with sanitary norms with many lacking sanitary protection zones, water treatment plants and disinfection systems (SES, 2008)
Waste water treatment plants either don’t work at all (in villages), or don’t provide required level of treatment and waste sewerages into the rivers
Hence - problems with environmental pollution and population health: 485 cases of water-born diseases per 100,000 people in 2007
Children’s mortality from acute water-born enteric infections remains high. Typhoid and paratyphoid morbidity caused by poor drinking water quality remains a big problem
EAP Task Force
Financial Challenges in the WSS Sector
Low levels of cost recovery - low tariffs and collection rates. Payment for WSS is from 0% to 0.9% (Bishkek) of HH income. Overall collection rate in KR is about 40%
Cross-subsidisation of population by industry/commercial enterprises
Low level of public budget contributions for WSS (0.3% of public expenditure), complicated by the exclusion of Dept. for Rural WS from the Medium-Term Budgetary Framework (MTBF)
Effectiveness of external lending is extremely variable
Objective factors:
- uncertain macroeconomic outlook on national and international levels
- harsh climate and seismic conditions (increasing costs)
EAP Task Force
Institutional Challenges
Lack of coordinating and regulatory bodies for the WSS sector as a whole, lack of policy for the whole WSS sector
Lack of coordination between the Country development Strategy (CDS), water sector development objectives and policies for other sectors (e.g. Regional development and Housing)
Over-fragmentation and decentralisation of the water sector
meaning a lack of economies of scale and too much diversity in unit
costs (many villages with low HH income and high unit costs)
Lack of capacity at local level for service delivery and financing
Lack of database and Management Information System (MIS) for
sound decision making
Over-reliance on Soviet consumption norms restricting realistic
target definition
EAP Task Force
Interpretation of MDGs on WSS consistent with
National Policies
Preserving the present situation is not an acceptable policy option,
even if financially feasible, because MDGs on WSS not fully achieved
Interpretation of MDGs on WSS in Kyrgyzstan agreed through
NPD and consistent with national socio-economic policies:
- universal access to piped water supplies via street post or in-house tap, min 35 lcd, < 100 m from dwelling (already achieved in urban areas and in 34 big villages)
- universal access to improved sanitation (sewerage, septic tanks or hygienic pit latrines for all)
consistent with the Country Development Strategy (CDS) ; and
consistent with, but more ambitious than official UN/WSSD definitions of MDGs on WSS (5 lcd no farther than 1 km, basic sanitation)
EAP Task Force
Costing Alternative Development Scenarios
EAP Task Force
Name and key assumptions on service level Financial costs over 2007-2027,
million KGS
Financing gap over 2007-2027,
million KGS *
1 - Basic Improvements Urban: improved management of existing services
Rural: - universal access to piped water supplies via street
posts, min 35 lcd, < 100 m
– improved school sanitation, but for many households
– still basic sanitation
52,988 42,488
2 - Millennium Development Goals on WSS - universal access to piped water supplies via street post
or in-house tap, min 35 lcd, < 100 m
- universal access to improved sanitation
56,994 46,494
3 - Maximum Coverage Water supply:
- 100% access to piped WSS via in-house tap for urban
- 50% home/50% street-post access in rural areas
Sanitation: same as Scenario 2
84,822 74,322
* - assuming that financing of the WSS sector will stay at the base year (2007) level
Key Financial Measures Recommended
for Closing the Financing Gap
Domestic tariffs gradually increased to 2.5% household income with a
maximum of 5% of household income for any income group (the
maximum level of affordability) from current levels of <0.5%. Maximum
level of affordability achieved after 20 years and supported by targeted
support to the poor via strengthened social support system
Increased collection rates from current low levels (<25% in rural areas and
<50% in urban areas, at present) to 60% in rural areas and 85% in urban
areas, in 5 years
Increase public budget expenditure on WSS from current levels of about
0.3% of total budget to 2% of public budget (still less than some EECCA
countries) after 20 years. The present 0.3% includes repayments of IFI
loans and WSS contributions for budgetary organisations
Additional external financing (over and above existing commitments):
Basic Improvements - €6 million; MDGs - €22 million, Maximal - €270 million
EAP Task Force
Results of Scenario Assessment
Scenario 1 does not fully comply with MDGs and national policies (CDS)
re: sanitation and improving the quality of life
Scenario 3 requires unrealistically high level of external financing (€270
million), exceeding also the absorptive capacity of Kyrgyzstan
Scenario 2:
the Coordination council were agreed that Scenario 2 represents
the best balance of achieving the required improvements in WSS
services for the Kyrgyz Republic (meeting Millennium Development
Goals) but with a realistic requirement for additional external funding
assistance (1 billion KGS or EUR 22 million)
This scenario focuses on extensions of piped water supplies and
improving sanitation in rural areas, as well as on significant improvements
in the quality of service within the existing piped networks in urban areas
EAP Task Force
Financing the Preferred Development
Scenario 2 with Policy Measures in Place
EAP Task Force
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
'000s of KGS
Operation and maintenance Reinvestment
ADB/WB interest & loan repayment Additional loan repayments
Service extension - anticipated funding Service extension - additional loans
Total finance with all policy measures
Next steps
Develop a sound National Policy for the whole WSS to provide
clarification on policy objectives, roles and responsibilities,
resources etc. and integrate the Financing Strategy
Mobilise sufficient resources and implement the MDG scenario
and associated Financing strategy, as part of the National policy
for WSS. GoKR should maintain dialogue with donors
Assistance to the Kyrgyz Republic from donors, OECD/EAP
Task Force and other international organisations in developing
the National policy document, as well as the capacity of the co-
ordination body and at local level (water utilities and local self-
government) is needed and would be highly appreciated!
Thank you!
EAP Task Force
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