Water Demand Management and the Urban Poor
by Madeleen Wegelin-Schuringa
IRC International Water and Sanitation Centre
1. Introduction
The provision of adequate water supply and sanitation to the rapidly growing urban populations is increasingly becoming a problem for governments throughout the world. The continuing expansion of the numbers of people in cities who need water and sanitation services and who cannot readily get these services by self provision, form a continuous pressure to either invest in additional production capacity or to stretch the available supplies to serve more people. At the same time, industrial activity also demands the expansion of urban water supply services. The water resources are threatened not only by this rapidly increasing demand but also through diminishing quality caused by pollution and saline intrusion as well as reducing quantity caused by overexploitation and denuding of water catchment areas. Finally, water demand for agricultural use in most places is also growing and competing with water availability for urban use.
The predominant approach towards meeting these increasing water demands has been towards supply augmentation schemes. But, the cost of developing new sources or expanding existing sources is getting higher and higher as the most accessible water resources have already been tapped. The real cost of water per cubic meter in second and third generation projects in some cities have doubled between a first and the second project and then doubled again between the second and third (Bhatia and Falkenmark, 1993). At the same time, governments are becoming reluctant to pay the rising investment costs as long as utilities are unable to meet these cost from user charges.
It has been demonstrated in many countries that saving water rather than the development of new sources is often the best ‘next’ source of water, both from an economic and from an environmental point of view. Water demand management therefore is seen as the preferred alternative to meet increasing water demand and can be defined as a strategy to improve efficiency and sustainable use of water resources taking into account economic, social and environmental considerations.
The main objective of water demand management is to contribute to more efficient and equitable provision of water and sanitation services and to reach this objective a number of instruments have been developed. These instruments are interdependent and mutually reinforcing and the most optimal way they are applied will depend on the prevailing local conditions and are the topic of a number of presentations in this symposium.
With regard to the domestic consumer, water demand management measures can be divided in:
- Water conservation measures:
- Leakage detection
- Reduction of illegal connections
- In-house retrofitting
- Out-of-house water saving measures
- Water pricing measures:
- Water metering
- Tariff structures
- Information and educational measures:
- Awareness raising
- Public involvement
- In-school education
- Legal measures
- Rules and regulations that form the basis of WDM policy
- Regulations on resale of water
In all cities, a distinction can be made between different income groups (high, middle and low), between the different types of urban areas they live in and hence between the different water demand management measures which are applicable. The authorities responsible for water supply mainly provide subsidized services to high and middle income areas and the inequality of access to basic services is most severely felt in low-income urban areas, where up to 60% of the urban populations are living. The focus of this paper is especially on the applicability of WDM strategies for the urban poor and on approaches to ensure that the WDM savings are indeed also used for a more equitable provision of the water supply. The water quality aspects of WDM, including monitoring of quality, are outside the scope of this paper.
2. Current provision patterns in cities in developing countries
Urban water supply coverage has actually decreased between 1990 and 1994 in parts of the developing world, an indication of urban growth but also of deterioration of existing systems.
Table 1: Urban water supply coverage in 1990 and 1994
| AREA | 1990 | 1994 |
|---|---|---|
| Latin America | 90% | 88% |
| Asia and the Pacific | 83% | 84% |
| West Asia | 87% | 98% |
| Africa | 67% | 64% |
This coverage includes house connections and access to public standpost, managed by the water utility. The overview below gives some more insight in the division between the two types of supply. The people who are not covered by the public network, are dependent on private wells or boreholes, rivers or springs, vendors or neighbours.
Table 2: Percentage of urban population connected to city network or dependent on communal water points
| City | Houseconnection | Public tap |
|---|---|---|
| Jakarta (1991) | 30% | 30% |
| Delhi (1992) | 53% | 37% |
| Phnom Penh (1992) | 70% | - |
| Casablanca (1997) | 80% | 17% |
| Ouagadougou (1994) | 38% | 17% |
| Conakry (1989) | 20% | 5% |
| Buenos Aires (1993) | 80% | - |
These percentages do not reflect the intra urban differences and do not show the desperate water situation existing in many low-income urban areas. For Jakarta, for instance, the Northern sector, which is the most disadvantaged district in terms of water supplies, the coverage was only 13% with private connection and 27% with public standpost, the remainder being dependent on water vendors and neighbourhood resale. This neighbourhood resale can address a very large percentage of water demand, for instance in Conakry, 35% of the residents obtain water from such source. Actual access to safe drinking water is likely to be lower than is reflected by the above percentages due to intermittent supply. Many residents augment the water provided by the utility with water from other sources. In general, access to utility provided water supply is dependent on location and income and different for different segments of society:
High income consumers are able to meet their water requirements at individual household level by being connected to the municipal water supply system or by installing their own facilities such as wells, boreholes or rainwater harvesting systems. The service level is usually in-house multiple taps. Water demand management options applicable for this group are in-house retrofitting and out-of-house water saving measures (garden, swimming pool). Water pricing measures may only be effective in combination with extensive awareness raising campaigns as rich people tend not to save water because of cost.
Middle income groups are the majority of the customers of municipal infrastructure services and hence the recipients of the usually heavy subsidies with which water supply systems are operating. Generally they are connected to the municipal water supply system with individual house or yard connections. In case they live in estates, these estates may have an autonomous piped system, either connected to the municipal system or having a separate source (well, borehole, rainwater collection) for the estate. The category middle income is very diverse with the conditions at the upper end of the category being very near to those of the high income category and the lower end near to conditions in low-income areas. Where water supply systems are deteriorating and becoming insufficient as a consequence of the growth of the urban population, it is specifically this category which experiences a deterioration of service levels and who would benefit directly from an improved and more efficient supply system. The most effective water demand management options for this group are water pricing measures, especially increasing block tariff rates and an effective awareness raising strategy. Depending on the level of organisation within the communities, public involvement in the design of community level water saving measures and leakage control may also be feasible.
Residents of low-income urban areas are rarely consumers at individual household level. The type of water supply system depends on the type of settlement with regard to legal status and security of tenure, and the location within or outside the city limits (suitability of land, but also distances to existing urban infrastructure services). A description of the different types of settlements is given in table 3. Apart from the type of low-income areas within urban areas, a distinction has to be made between different sizes of cities and overall coverage of water supply infrastructure in these cities.
Table 3 also shows that Water Demand Management options in low-income areas depend on the type of system in the area. With household connections, metering and block tariffs are applicable, although this may have adverse effects on access for the poorest (see 3.2). Public taps can be metered and also from hand pumps water can be sold by the bucket. Vending systems are in itself an extremely effective form of WDM as the price per unit will ensure water conservation. Whether or not this vending can be done legally and controlled, depends on the rules and regulations in place.
Table 3: Low income urban areas and water supply systems
| Location | Legally occupied areas | Semi-legally or illegally occupied areas |
|---|---|---|
| Central city | Inner city slum. Connected to city network, but service low due to poor maintenance and repair, and overcrowding. | Small squatter areas on redevelopment sites and public land. Very low security of tenure. Public taps or vendors |
| Within official boundaries of urban area | Low-income housing areas of different types. House-or yard connections service low due to poor maintenance and repair ; vendors | Old squatter areas unsuitably located. Public taps or handpumps, vendors |
| Outside official boundaries, occupied or in process of urbanisation | Low-income housing areas of different types. Autonomous system (borehole, tankers, wells, springs) | Squatter areas and passively urbanised villages. Wells, river, springs |
Having services at community level does not necessarily mean that there is ‘a community’ in the sense of organization. The extent of ‘community’ depends on the way the settlement has originated, on the homogeneity of the population in terms of ethnic background, on the length of stay of most residents, and on the presence and acceptance of traditional forms of leadership. De facto security of tenure and the extent of owner occupancy versus tenant occupancy further influence community cohesion. Residents of low-income urban areas often only obtain infrastructure services if they have the ability to form community based organizations (CBO) of local residents. Only as a CBO can they negotiate with local authorities.
3. Issues affecting Water Demand Management activities in low-income areas
One of the assumed results of Water Demand Management is that the increased availability of water will lead to a more equitable distribution of this water, and thus enhance access of the poor to water supply services. Experience in water supply services to the urban poor, shows that some of the measures taken to facilitate access in fact makes the water more expensive for the poor and that a more equitable distribution needs an active, community focused strategy. Aspects that play a role in the development of such a strategy are legal conditions, water conservation measures, tariff setting, public information and demand responsiveness.
3.1 Regulations regarding retail sale of water
In some places resale of water is restricted by law or by the utility. Reasons for the restriction vary from the impossibility to serve customers in an illegal area and free distribution at public standpost to the argument that profit made by formal or informal vendors should rather be made by the utility itself. Profits in the vending systems, especially where the access to the vending market is restricted, can be enormous.
In Nigeria, for instance, the vast majority of residents obtains its water from an elaborate and well organized water vending system, selling 2.96 million gallons per day for which they pay about US$28,000. At the same time, the public water utility was supplying about 1.5 million gallon per day for which they collected US$ 1,100. Thus the water vending system was providing double the supply and collecting 24 times as much revenue as the water utility (Whittington e.a., 1988).
The vending systems may be controlled by people working in the utilities itself. Therefore deregulation of water sales and easing of supply constraints that could substantially lower both hauling costs and the price of water, may be very difficult to realize as this would threaten the interest of powerful groups (Lovei and Whittington, 1991). On the other hand, vending systems are a source of income generation for many otherwise unemployed people, and profits for these ‘small’ vendors tend to be not very large. Their prices are a reflection of the price per unit at source, time spent on the hauling of water and the waiting times at the water point.
With or without restrictions, vending systems are serving millions of customers in cities in developing countries. The differentials in the cost of water (ratio of price charged by water vendors to prices charged by the public utility) vary from city to city and are dependent on various factors such as access to alternative sources and control and competition of the resale market.
Table 4: Differentials in the cost of water in selected cities
| City | Price ratio |
|---|---|
| Abidjan | 5:1 |
| Dhaka | 12:1 to 25:1 |
| Kampala | 4:1 to 9:1 |
| Karachi | 28:1 to 83:1 |
| Lagos | 4:1 to 10:1 |
| Lima | 17:1 |
| Nairobi | 7:1 to 11:1 |
| Port-au-Prince | 17:1 to 100:1 |
| Surabaya | 20:1 to 60:1 |
| Tegucicalpa | 16:1 to 34:1 |
Since the higher and middle-income residents are more likely to be connected to the water network, it is the low-income groups who are most dependent on vendors. This invalidates the often used argument by public utilities and formal sector water providers that they cannot provide water in low-income areas because residents in low income areas cannot pay sufficient for their water to operate and maintain the system and also to get a return on the capital investment. To the contrary, the prices paid by consumers show willingness-to-pay and economic demand and provide a good basis for water investment decisions and for the design of tariffs.
Households served by vendors pay considerably higher unit prices for water than those connected to the water supply system. An open market and no restriction with respect to resale of water will lower the price per unit and will give residents a chance to generate some income. In addition, it gives communities the option to organize and manage their own water supply.
3.2 Water pricing measures
One of the measures taken to promote water conservation and at the same time increase access and equity in water supply provision, is the establishment of different forms of tariff setting. In a progressive block tariff system (also called increasing block tariff system), the first 5 to 10 m3 have a low, subsidised tariff and the following blocks have an increasingly higher tariff. The rationale for the system is to promote water saving practices with all households and to ensure that low-income households can afford to use an amount of water that is necessary to keep themselves and their environment healthy, typically 20-25 litres/cap/day. The effects of this system, however, can be adverse for the poor in specific circumstances that are quite common throughout cities in the developing world. The first of these is that many low-income families do not have their own connection and buy water per bucket at a neighbours house. With the resale, the neighbour will end up in a higher tariff bracket and will adapt the price per bucket. A second is that many low-income families do not have an individual water connection, but live in compounds with more families or in apartment buildings where individual families have one or more rooms. These people often all share one water meter and the communal water bill ends up in the highest tariff block because of the high number of users. The sharing of one water meter may be the result of utility policy to install one meter per building or may be the result of an attempt to save on the connection cost or meter rent as is illustrated below:
In Rada, Yemen, the system of block pricing was not sufficiently explained to the customers, who had to pay a connection fee to get a house connection. Since in many houses, several households are living together, these households thought to economise on the connection costs by sharing a connection. When their first bills came, they were outraged by the water fees as the block tariff was such that the fees rose steeply after the first 10 cubic metre and then again after the second 10 cubic metre. Many of the houses with several families had consumed over 40 or 50 cubic metre falling in the highest tariff and ending up with an unaffordable water bill. (Wegelin and de Wildt, 6th monitoring report Rada, Yemen, 1996).
Although the progressive block tariff system is a very good instrument for water demand management, the system can have negative effects if the aim is to subsidise minimum water requirements for the poor, especially when the consumers have not been effectively informed about the structure of the tariff system.
3.3 Water conservation measures
High rates of unaccounted for water are common in many cities in developing countries, reaching extreme levels of 40%-60% of the water produced, representing critical water and financial losses. Of the total UFW, an estimated 50% is caused by leakage, usually the result of either lack of maintenance or failure to replace aging systems. Where utilities are focussing on the reduction of leakages, they usually concentrate on the technical aspects of leakage control. However, reporting of above ground leakages by the public, would assist in leak detection and thus reduction of losses. Yet, for people to inform a utility on leaks, requires not only awareness of the need to report, but also information on where to report and motivation to do this reporting. The contrary is usual: a leak is welcomed as a source of free water and is likely to go unreported as long as possible.
When a community group in Kibera, a low-income settlement in Nairobi, were digging the trenches for the piped connection to their community water kiosk, one of the women struck a small diameter pipe which was already located under the trench. The water burst outside forming a small fountain. Within five minutes, the first people arrived to collect the water in all kinds of receptacles. In the next ten minutes a line was formed with people waiting for free water and within half an hour, a man who owned the shop in front of which the leak occurred, started to ask money for the water. It was only days later when the owner of the pipe realized that the lack of water was not caused by one of the usual ‘irregularities in supply in the main’, that the leak was fixed. (author experience)
Similarly, illegal connections can be expected to go unreported if residents do not feel responsibility for the system or a sense of being disadvantaged by these connections. For a utility, it is extremely difficult to get an overview of the incidence and number of illegal connections in a densely populated low-income area, where houses are not numbered and a maze of small footpaths form the roads. They will always be dependent on information from within the area. Also with regard to sources of resale of water as it is highly likely that many of these are also illegally established or operating from a non-metered household connection, forming a large part of Unaccounted For Water.
A final water conservation measure that applies to low-income areas, is metering of public supplies. The Water Utilities Data Book of the Asian Development Bank gives an overview of methods of payment for water for these supplies:
Table 5: Methods of payment for water through public taps and standpipes
| Method of payment | Number of cities |
|---|---|
| Metered use | 12 |
| Flat rate | 9 |
| Property tax | 2 |
| Combination | 3 |
| No payment | 7 |
The total number of cities reviewed in the Data Book is 50, but only 33 out of these have public supplies. Of course, these statistics concern only major cities in Asia and do not reflect the situation in smaller cities and the different continents. But on the whole, there is a tendency to move away from free or utility managed standpipes and this is very much justified. Free, non-managed public taps have an extremely short life span and are a source of much wastage. They also do not reflect the principle of water as an economic good.
The agency needs the co-operation and involvement of the residents for leak detection or reduction of illegal connections. They will only do this when they have a sense of ownership for the system. Where they get water through vendors, kiosks or public taps, this may only be present if the service is based on demand existing in that community and is managed and operated with community involvement
3.4 Public information and demand responsive approaches
It has for long been assumed that communities do not know their infrastructure needs - especially low-income communities. Thus decisions have been made on assumptions by engineers and planners and not on actual information and understanding of household water demand. It is increasingly being recognized that this top-down approach has been the reason for the failure of many initiatives and that communities have to be involved in the decision making process on the water supply system based on their demands. Approaches to project design which incorporate such features are also known as Demand Responsive Approaches (DRA), which is based on four principles:
- Water has to be managed as an economic as well as a social good
- Management has to focus on the lowest appropriate level
- A holistic approach to the use of water resources has to be adopted
- Women have to play a key role in the management of water
Key features in such approaches are:
- Community members make informed choices on:
- Whether to participate in the project
- Technology and service level options based on willingness to pay – based on the principle that more expensive systems cost more
- When and how their services are delivered
- How funds are managed and accounted for
- How their services are operated and maintained
- An adequate flow of information is provided to the community and procedures are adopted to facilitate collective action decisions within the community and between the community and other actors.
- Governments play a facilitative role, set clear national policies and strategies, encourage broad stakeholder consultation and facilitate capacity building and learning
- An enabling environment is created for the participation of a wide range of providers of goods, services and technical assistance to communities, including the private sector and NGOs
(Sara, Garn and Katz, 1998)
Although the term demand responsive approach is relatively new, there are already many experiences and examples of urban communities that have been involved in their own water supply provision. These show that effective information is crucial. Initially, this information is necessary for people to decide whether or not to get involved and to decide the level of service they want and are willing and able to pay for. Once the system is in operation, customers need to be informed on any changes in the ongoing supply such as changes in fees, changes in collection systems or changes in operating hours. Utilities are so used to their (assumed) monopoly that they often completely disregard this aspect of their service, leading to unwillingness to pay for the service with the customers. It is because the usually adequate information and operating service that people prefer vendors and community based systems. But where utilities decide to establish a special section to deal with communication with low-income communities, the results are very promising:
SANAA (the water agency in Tegucicalpa, Honduras) helps the communities in low-income urban areas to set up their own water service associations. These associations install independent water supply systems which residents pay for and operate and maintain and which in the long run cost less than continued buying from unregulated water vendors. Different water source options are promoted such as: direct sale of water from the main network through a master meter; construction of community wells provided with electric pumps, leading the water to a communal tank for further distribution; and water trucks from the SANAA distribution centres which fill up communal tanks from which the community distributes further and pays for the bulk delivery. An evaluation in six communities showed an average service coverage of 85% of the households. Because of problems of water and electricity distribution in the city wide network, water is distributed to different parts of the city at different hours. But the information is communicated effectively, so kiosks are open at different, but fixed times, and women can adjust their domestic management to these hours. (Espejo et al. (1993)
Community based systems vary in degree of community ownership, degree of responsibility for operation and maintenance and in degree of community organization needed as a basis for the service. Examples of systems, progressing in levels of autonomy, are:
Group taps are closest to private connections. Under this system households jointly take one private connection and share the bill. Essential social conditions for the success of this system are that the users form their own group and decide in whose name the connection is registered, where the tap is located and how costs are shared.
A communal water point consists of several taps with a bucket stand, a drain, a soakpit and a valve box which contains also the water meter and can be locked. The user group chooses a small (usually three persons) tap committee, which unlocks and locks the valve box, oversees proper water use, receives and divides the water bill between the user households, collects the money and pays the public authority.
In community-managed vending kiosks water is sold per bucket at public vending points or kiosks. The committee manages the overall fund and takes care of maintenance and repairs of the water supply, up to replacement of pumping equipment.
An autonomous local distribution net is operated by a community organisation that buys water in bulk from the urban utility. The utility either installs a metered master connection to the city net, or fills a community reservoir. From there the local community distributes the water on to the members of the local water user association through private connections or shared taps. The community pays the water charges to the utility and operates, maintains and manages the local system.
Small autonomous water supply systems can be operated by a community. User households are members of a local water users association with an elected water management committee. The water utility gives technical advice and helps arrange for the investment loans, which are partly paid by the community through the water tariff. Sometimes water utilities establish a special unit for experiments with alternative water supply systems.
(adapted from Van Wijk, 1997)
It is not justified to assume that all communities are interested or capable to manage their own systems, many prefer not to be bothered and to pay for a regular service based on a service level they want. But, similar systems or service provision could also be provided effectively by utilities or private water vending enterprises as long as the community has been involved in the process of decision making on the service, according to DRA principles. In this process, transparency with the utility and the private enterprises is a key issue.
Effective information and transparency are main factors that influence community interest and ability to become involved in their own water supply provision. An important advantage of community managed systems is the sense of ownership, leading to higher rates of payment and less abuse of the system. An additional advantage is that profits made in the system can be used for other developmental purposes within the community, rather than flowing back to the utility or private sector.
4. Conclusions
Because in many countries a majority of urban residents lives in low-income areas, it is important to extend Water Demand Management instruments also to these areas. A number of these instruments may not be applicable, such as retrofitting or out-of-house water saving measures, some may have unintended side effects such as the increasing block tariff systems and others are quite applicable, such as metering. But some important instruments that apply to these areas, such as leakage detection, reduction of illegal connections and awareness, require an attitude within these communities that can only be expected if they feel co-ownership over that water.
Demand responsive approaches and community management of water supply systems can bring about this attitude. Effective information and communication are the most prominent requirements on which demand responsive approaches are based and essentially, this feature is also the most important basis for water demand management. Technologies can never change people's attitude and will only be applied effectively if people are motivated to do so. The participatory methodologies that are applied in the DRA approaches and that give communities the power to assess their own priorities and make their own decisions, can also be applied to motivate people to adopt Water Demand Management instruments.
Governments and utilities that want to promote Water Demand Management, therefore should embark on a process of community involvement and consultation and apply demand responsive approaches to water supply in low-income urban areas. For this to happen, it may be necessary to carry out legislative and institutional reforms, facilitating community ownership and management.
The agency will need to change from provider to facilitator, coordinator and supporter of the communities in the management of their water supply. It means that the staff will need to adjust their attitudes and have to become transparent in their decision making. Instead of making all decisions themselves and giving instructions to the community, they will need to listen to people's views and ideas. They will need to answer questions communities ask on technical options, costs, reliability, service levels, requirements for operation and maintenance and on water demand management instruments. This may require the establishment of a new section responsible for information, education, mobilisation and participation of communities and extensive capacity building with the staff to carry out this new role.
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