NEWS

Low connection rates in sewerage projects

Themes: Sanitation Sewerage

In this blog post, I wanted to draw people’s attention to some fascinating recent commentary by Ian Ross around sanitation costings. Ian’s an ex-OPM consultant, now taking time out with LSHTM to do a PhD looking at costs of sanitation: so he’s able to put a lot of his considerable brainpower into thinking about this, with interesting results. Amongst other stuff on Ian’s WASHeconomics.com blog site, he’s recently put out two posts relating to the literature review of urban sanitation costs that Loïc Daudey (another smart guy!) did for us under the Urban Sanitation Research Initiative. Loïc’s article is available open access here.

If you’re interested in the intricacies of sanitation costing, I’d encourage you to read Ian’s blogs. But I wanted to briefly highlight a few points here, particularly around the willingness-to-connect issue in sewerage investment planning.

In his first blog, Ian notes that he’s all in favour of Loïc’s use of comparative cost ratios (e.g. ratio of cost-of-sewerage-systems to cost-of-FSM-systems in Context X), as opposed to simple $ costs, which really can’t be meaningfully compared between different times and places. But Ian queries one of Loïc’s specific conclusions, namely that septic-tank-plus-FSM systems tend to be more expensive than simplified sewerage systems: Ian notes that Loïc’s conclusion is based on comparison of mean cost ratio, whereas if you look at median cost ratio (and thus reduce the effect of outliers) septic-tank-plus-FSM and simplified sewerage have tended to be similar in cost. Fair point I think, though as with all of this analysis the data is so sparse (i.e. few rigorous comparative costing studies) that the jury is probably still out.

In Ian’s second blog taking as his starting point Loïc’s work, he considers the relevance of low “willingness to connect” for sewerage system costs: as is widely known, a very common problem with major development bank investments in sewerage systems has been that many fewer people connect to the system than was anticipated in the optimistic project-prep modelling, so that revenues are much smaller than expected and the per-beneficiary capital cost much higher. In serious costing studies, we would expect this to be taken into account: i.e. we would expect calculation of the real cost per capita, not the pre-implementation projected cost. In terms of policy implications, Ian suggests that FSM systems may be less sensitive to this sort of risk than sewerage systems, because they’re more scalable (if fewer people use the service than anticipated, the already-sunk capital cost is not so dramatic). This makes sense, although the devil would be in the context-dependent detail.

The very smart people in the World Bank who understand pro-poor urban sanitation are very definitely aware of the “willingness-to-connect” issue. But multiple factors continue to favour over-optimistic sewerage system planning, including in-country political pressure for sewerage expansion and internal development bank processes which arguably continue to favour infrastructure-focused “projected bankability” approaches, with insufficient consideration of social and economic realities on the ground. Unfortunately, I predict that in 10 years’ time we’ll still be looking back at current big sewerage investments and seeing the same issue of low connection rates. That’s not necessarily an argument against sewerage: it’s an argument against sewerage investments which don’t pay sufficient attention to achieving high connection rates, which in my view will generally require a considered mix of subsidy “carrot” and regulatory “stick”.

So if you’ve got $10 million to spend on sewerage, don’t spend 90% of it on the infrastructure. Spend 60% on infrastructure and keep 30% aside to support connection. Oh, and put mechanisms in place to ensure that the 30% really is set aside, not simply used to plug the deficit that arises because the infrastructure costs end up higher than projected!

By the way, those figures (90%, 60%, 30%)… I just made them up for illustrative purposes, but I hope you get my gist. It would be interesting to see hard data on how IFI sewerage project money has been spent in the recent past.

Thanks to Ian for fascinating blog posts: worth reading, and I look forward to future analysis!

Blog post written by Guy Norman, WSUP’s Director of Research and Evaluation.

Featured image: A sewer line manhole in Kibera, Nairobi.