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8/3/2019 CS50 - Guidance Note on Urban Water Supply Sector Risk Assessment by Sandra Nicoll http://slidepdf.com/reader/full/cs50-guidance-note-on-urban-water-supply-sector-risk-assessment-by-sandra 1/15 a er an overnance o s o n ess on: a er an overnance o s o n ess on: Guidance Note on Urban Water Supply Guidance Note on Urban Water Supply ec or s ssessmen ec or s ssessmen Sandra Nicoll Sandra Nicoll Public Management, Governance and Participation Public Management, Governance and Participation Division, RSDD Division, RSDD 07 May 2010 07 May 2010 1

CS50 - Guidance Note on Urban Water Supply Sector Risk Assessment by Sandra Nicoll

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    a er an overnance o s o n ess on:a er an overnance o s o n ess on:

    Guidance Note on Urban Water SupplyGuidance Note on Urban Water Supply

    ec or s ssessmenec or s ssessmen

    Sandra NicollSandra Nicoll

    Public Management, Governance and ParticipationPublic Management, Governance and Participation

    Division, RSDDDivision, RSDD

    07 May 201007 May 2010

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    and Governance CoP staff with the Urbanand Governance CoP staff with the Urban

    But a so to prov e an opportun ty orBut a so to prov e an opportun ty or

    water sector and governance colleagues towater sector and governance colleagues to

    meet toget er to scuss water sectormeet toget er to scuss water sectorgovernance issues more broadlygovernance issues more broadly

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    Context for Sector Governance in ADBContext for Sector Governance in ADB

    Urban Water Supply Sector Risk AssessmentUrban Water Supply Sector Risk AssessmentGuidance NoteGuidance Note

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    Second Governance and AnticorruptionSecond Governance and Anticorruption

    Action Plan (GACAP II )Action Plan (GACAP II )

    Public financial managementPublic financial management

    Combating corruptionCombating corruption

    Applied at three levels:Applied at three levels:

    oun ryoun ry SectorSector

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    ro ecro ec

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    GACAP II A roachGACAP II A roach ADB has adopted a riskADB has adopted a risk--based approach to governancebased approach to governance

    assessment an pr or t zat on o areas or supportassessment an pr or t zat on o areas or support

    That DMC and ADB develo ment ob ectives will not beThat DMC and ADB develo ment ob ectives will not bemet, or will be adversely affected by poor governance,met, or will be adversely affected by poor governance,weakly performing institutions or vulnerability toweakly performing institutions or vulnerability to

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    Implementation of GACAP IIImplementation of GACAP II

    Country

    -Country PartnershipInforms,

    Procurement,

    Corruption

    trategy reparat on

    Country Risk Management PlanInforms

    Sector Sector Risk Mngt Plana) Sector reform support actions

    b) Capacity development actionsc Pro ect desi n/im lementation

    Informs Results Frameworks Sector Road Maps

    Risk Assessment PFM,Procurement,

    Corruption

    measures

    InformsInforms

    Informs

    Project

    Project/Program RRPdesi n documents

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    Project risk mitigation measures

    identifiedProject Risk Mngt Plan

    Practical Mitigation Measures

    Risk Assessment FM,

    Procurement,Corruption

    Informs

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    Introduction to Sector Guidance NotesIntroduction to Sector Guidance Notes

    RSGP has prepared a series of sector guidance notes: (i)RSGP has prepared a series of sector guidance notes: (i)electricity, (ii) urban water supply, (iii) education (inelectricity, (ii) urban water supply, (iii) education (inprocess), and (iv) road transport (in process)process), and (iv) road transport (in process)

    Joint effort with CoPsJoint effort with CoPs

    MeantMeant to supplement ADBsto supplement ADBs Guidelines for ImplementingGuidelines for Implementing

    GACAP IIGACAP II n en e o a s a n comm ss on ng un er a ngn en e o a s a n comm ss on ng un er a ng

    risk assessments and tailoring TORs to consider sector riskrisk assessments and tailoring TORs to consider sector riskvulnerabilitiesvulnerabilities

    Part of efforts to generate knowledge products that canPart of efforts to generate knowledge products that caninform future CPS preparationinform future CPS preparation

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    Guidance Note: Urban Water SupplyGuidance Note: Urban Water Supply

    Sector Risk AssessmentSector Risk Assessment

    The urban water su l sector is vulnerable toThe urban water su l sector is vulnerable to

    risks due to the involvement of multiplerisks due to the involvement of multipleinstitutions in water governance, capital intensity,institutions in water governance, capital intensity,--

    and private sectors, and high demand for waterand private sectors, and high demand for water

    services, among others.services, among others.

    Sector risks can occur along a value chain Sector risks can occur along a value chain olic , le al framework, re ulation, lannin ,olic , le al framework, re ulation, lannin ,

    financial management, procurement, humanfinancial management, procurement, humanresources, and sector operations.resources, and sector operations.

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    Framework for Sector Risk AssessmentFramework for Sector Risk Assessment

    Institutional Risks Policy, legal framework, and regulation

    Organizational

    Risks Planning, financial management, procurement,an uman resources

    O erations Water harvesting and storage, water treatment,

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    distribution, and customer interface

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    Illustrative Governance RisksIllustrative Governance Risks

    Polic

    Vested interests influence policy and investment prioritiesto enrich themselves and/ or their assoc iates. These

    .

    The absenc e of a legal framework for manag ing

    Legal

    framework

    , - -sharing arrangements, poses corruption risks.

    Regulation

    undermines independent sec tor regulation.

    Planning

    Inadequate planning can lead to ineffic ient de livery ofwater.Lack of informed partic ipation by stakeholders in

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    Illustrative Governance RisksIllustrative Governance Risks

    Financial

    Insuffic ient revenue streams to cover operations andmaintenance lead to poor service quality and undermine

    .

    The absenc e of procurement professiona ls leads to loose

    contrac ts, legal disputes, and nondelivery of services.rocure-ment Large-scale proc urement crea tes opportunities for

    corruption when transparent proc urem ent proc esses areabsent.

    Humanresources

    Conflic t of interest in senior level appointments can leadto ac tions that favor certain contrac tors and patrons.

    Operations

    Private water vendors and cartels collude with pub licoffic ials to p revent network extension, forc ing c ustomers

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    .

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    RemarksRemarks The guidance note is not intended to beThe guidance note is not intended to be

    rigidrigid A risk mana ement lan follows the riskA risk mana ement lan follows the risk

    assessmentassessment

    Risk mana ement measures are excludedRisk mana ement measures are excludedfrom the guidance note becausefrom the guidance note becausedifferences in countr context call fordifferences in countr context call for

    measures that aremeasures that are tailoredtailored to specificto specificsituationssituations

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    Water Risk Assessments/Risk Management PlansWater Risk Assessments/Risk Management PlansCountryCountry SectorSector YearYear

    ArmeniaArmenia Urban devt (drinking water)Urban devt (drinking water) 20092009CambodiaCambodia Water resource mana ementWater resource mana ement 20072007

    PakistanPakistan Urban devt (water supply &Urban devt (water supply & 20092009

    PRCPRC Wastewater managementWastewater management 20072007

    SamoaSamoa Drainage & sanitation infraDrainage & sanitation infra 20072007

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    Key ReferencesKey References

    1.1. David Ehrhardt, Eric Groom, Jonathan Halpern, and Seini OConnor.David Ehrhardt, Eric Groom, Jonathan Halpern, and Seini OConnor.2007.2007.Economic Regulation of Urban Water and Sanitation ServicesEconomic Regulation of Urban Water and Sanitation Services..

    as ng on, : e or an .as ng on, : e or an .

    2.2. Jonathan Halpern, Charles Kenny, Eric Dickson, David Ehrhardt, andJonathan Halpern, Charles Kenny, Eric Dickson, David Ehrhardt, andChloe Oliver. 2008.Chloe Oliver. 2008.Deterring Corruption and Improving Governance inDeterring Corruption and Improving Governance in

    .. Working Note No. 18. Washington, DC: The World Bank.Working Note No. 18. Washington, DC: The World Bank.

    3.3. Janelle Plummer and Piers Cross. 2007. Tackling Corruption in theJanelle Plummer and Piers Cross. 2007. Tackling Corruption in theWater and Sanitation Sector in Africa. In J. Edgardo Campos and SanjayWater and Sanitation Sector in Africa. In J. Edgardo Campos and SanjayPradhan, eds.Pradhan, eds. The Many Faces of Corruption.The Many Faces of Corruption. Washington, DC: TheWashington, DC: TheWorld Bank.World Bank.

    4.4. Transparency International. 2008.Transparency International. 2008. Global Corruption Report 2008:Global Corruption Report 2008:

    . .. .5.5. Water Integrity Network. 2008.Water Integrity Network. 2008.Advocating for Integrity in the WaterAdvocating for Integrity in the Water

    SectorSector. Berlin: Water Integrity Network.. Berlin: Water Integrity Network.

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    Thank YouThank You

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