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8/3/2019 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



GACAP II A roachGACAP II A roach ADB has adopted a risk ADB 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 be…That 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



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 ADB’sto supplement ADB’s Guidelines for ImplementingGuidelines for Implementing

GACAP II GACAP 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 risk risk assessments and tailoring TORs to consider sector risk vulnerabilitiesvulnerabilities

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



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

rigidrigid A risk mana ement lan follows the risk A 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 O’Connor.David Ehrhardt, Eric Groom, Jonathan Halpern, and Seini O’Connor.2007.2007. Economic Regulation of Urban Water and Sanitation Services Economic 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 in Deterring 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 Water Advocating for Integrity in the Water

Sector Sector . Berlin: Water Integrity Network.. Berlin: Water Integrity Network.

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Thank YouThank You

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