FEATURE STORY November 14, 2017

Joining Forces to Transform Water and Sanitation Utilities

World Bank Group


Highlights

  • New World Bank report examines different models for how utilities can work together, and launches accompanying online Toolkit.
  • As a newly emerging tool, more than 75 percent of water and sanitation supply utility aggregations have occurred over the past 15 years.
  • Aggregation is not always the answer. Results vary greatly, making the context, purpose, and design of aggregations critically important.

The most precious thing in life is water,” says Wellington Vasconcelos, the mayor of Groaíras, a municipality in the state of Ceará in the northeast region of Brazil. “If we offer quality water, then it is a reason for [people] to have the conditions and courage to stay [in our region].”

Water is a chief concern in Vasconcelos’s municipality. In Ceará, rural water supplies were previously unreliable and the water they had was unsafe to drink. To overcome this challenge, an innovative water supply and sanitation (WSS) utility aggregation[1] model emerged to provide clean and reliable WSS services to communities across the state. Now, water boards are supported in 153 locations for almost 90,000 inhabitants across Ceará.

Aggregating WSS utilities essentially means making utilities work together with the end goal of delivering better services to citizens. WSS utilities work together, or “aggregate”, when multiple municipalities unite under a single administrative structure. How WSS utilities work together varies according to the purpose, context, and design of aggregation. For example, in the Ribatejo region of Portugal, the main goal was to achieve better service quality and greater environmental sustainability. Strongly incentivized by European Union cohesion funds and determined leadership, these goals were achieved by uniting water and wastewater services across seven towns covering about 150,00 people. Depending on the context and design, working together may mean changing the allocation of power or the management of assets and liabilities.

Image
Aerial view of Water Supply and Sanitation Infrastructure in Portugal. © Jorge Medeiros/Videocontacto, Tecnologias de Inf., Ltd/World Bank

The aggregation of WSS utilities began to emerge quite recently as a tool that can transform poor-performing utilities into well-functioning and sustainable ones. In fact, more than 75 percent of WSS utility aggregations have occurred over the past 15 years.

Aggregation can help WSS utilities overcome poor performance, such as water of poor quality and insufficient funding for maintenance. The predominant WSS aggregation type is a top-down, government-mandated process that targets economic efficiency, encompassing all functions and services of the utility.

It’s important to note that WSS aggregation is not always the answer. Examples from all over the world show it does not always lead to economies of scale or better performance. The context, purpose, and design of WSS aggregations are critically important, and the results of WSS aggregation greatly differ between regions.  

The limited data available makes it difficult to understand the strengths, weaknesses, opportunities, and risks associated with WSS utility aggregation processes. Given the lack of documented evidence on the subject, important questions remain: how does WSS utility aggregation work and, crucially, what key characteristics of successful aggregation processes have in common?

Dive Deeper into the World of WSS Utility Aggregation

Thankfully, a new World Bank report Joining Forces for Better Services? When, Why, and How Water and Sanitation Utilities Can Benefit from Working Together explores these areas. Whether you are a policy maker, a practitioner, a researcher, or simply curious about the process behind how clean water flows from your tap, this report can help you understand aggregation reforms and their outcomes over time. The global study builds on robust research, including an analysis of quantitative data from IB-Net data[2] covering over 1,300 utilities from more than 140 countries.

The study does not advocate for or against aggregation. Rather, it encourages practitioners to understand the practicalities behind designing a successful aggregation reform. And it shows how starting with identifying and formulating the purpose of the reform in a way that fits the local context is essential for success.



Learn through First-hand Experience

A series of 14 case studies spanning seven countries provides the cornerstone of this study. From Hungary to Indonesia, they offer insights into how water utilities have managed regulatory requirements, the challenges they faced, and how they evaluated and interpreted the outcomes. Instead of simply presenting data, the case studies provide qualitative evidence gained through firsthand experience—as well as through firsthand mistakes. These case studies provide you with an exclusive look into the WSS utility aggregation experiences through first-hand accounts about the critical decisions made and the perceived outcomes. 

What’s Next?

To shape the future, one needs to understand the past and present, and this exploration of WSS utility aggregation experiences can provide lessons for new aggregation reform processes and help ensure their success. ln particular, the report shows that aggregations are most successful when accompanied by a broader-sector reform. This means things like addressing governance, looking at financing, as well as regulatory issues at the sector level.

Overall, the report provides an opportunity to inform the design of WSS utility aggregations for multiple purposes. The wealth of information presented in the report and online Toolkit shines a light on important existing data, allows for analysis and interpretation of that data in new ways, and inspires further thinking on this important issue.

Explore the interactive map and glossary of related definitions, highlighting global trends in utility aggregation; watch videos with first-hand interviews; and discover the purpose, context, and design of aggregation. In addition, please read and think about our case studies from different countries with each their own WSS challenges and solutions: HungaryBrazilColombiaRomaniaPortugalMozambique, and Indonesia

____________

Editor’s note:

This global study builds on the 2005. “Models of Aggregation for Water and Sanitation Provision.” Water Supply and Sanitation Working Note 1, World Bank, Washington, DC.

[1] The World Bank defines the aggregation of WSS utilities as the process by which two or more WSS service providers combine under a shared organizational structure.

[2] The International Benchmarking Network for Water and Sanitation Utilities (IB-Net) is an initiative to encourage water and sanitation utilities to compile and share a set of core cost and performance indicators, and thus to meet the needs of various stakeholders. It sets forth a common set of data definitions and a minimum set of core indicators, and it provides software to enable easy data collection and calculation of the indicators. It also provides resources for analyzing data and presenting results.