Rosario Querubin

Project Proposal: Philippine Water Utility Scoping Study Background A scoping study on the Philippine water utility has to be undertaken to determine the technical assistance and financing needs of selected water utilities. Findings of the study will aid in providing direction as to the assistance that should be extended to water utilities that can uplift the poor state of the water supply sector. Studies on the Philippine water sector showed that the water needs of the population has not been met and many poor households remained unconnected to water supply systems despite the fact that the Philippines is endowed with abundant water resources. The access of the population to water supply services and sanitation facilities even declined due to rapid population growth, economic development, urbanization, and industrialization. According to the National Economic and Development Authority (NEDA)1, the water sector’s failure to meet the water needs of the population are due to the fragmented institutional environment, weak regulatory framework, inadequate support for service providers and utilities, lack of access to financing and investments, low levels of tariffs and cost recovery, and lack of technical and managerial capacity. These resulted to slow capacity expansion, low quality of services and inefficient operations of water utilities. There is no national government department or an apex body that has overall responsibility for water sector policy and coordination. No specific government agency is tasked to prioritize investment on water and sanitation. Water supply investments of the government remained significantly low relative to overall public infrastructure spending. The poor performance of many water utilities is due to limited access to affordable long-term investment capital that impedes the ability of water utilities to expand and improve services. Many small public sector water service providers (water districts and LGU-run water utilities) are suffering from low profitability, high levels of non-revenue water, weak institutional capacity, and limited technical capacity. Water districts do not receive subsidies from local government units (LGUs) and are compelled to generate enough income to cover operating and maintenance costs, debt service, and essential capital expenditure. Economies of scale is an issue as the Local Water Utilities Administration (LWUA) reported that more than half of the 502 operational water districts in 2011 had less than 3,000 service connections. Many LGUs have also shown little interest in pursuing water supply projects due to local leadership uncertainties brought about by the three-year electoral terms. If ever the LGU decided to establish a water supply project, there is an observed absence of commercial practices in most LGU-run water utilities and lack of ability to service loans. In 2005, a World Bank study assessed that water utilities under direct LGU management are poorly operated because of the lack of technical, financial, and management capabilities at the local level. The performance of community-managed systems is also constrained by a lack of technical and management capabilities, although less pronounced than in LGU-run utilities. In the 2005 benchmarking study funded by the World Bank’s Water and Sanitation Program, the Rural Waterworks and Sanitation Associations (RWSAs), cooperatives, and private operators were found to generally perform better than LGU-run water utilities. The government remains the major source of grant or debt financing for water districts and LGUs through the LWUA and the Municipal Development Fund Office, but both have limited funds or capacity. 1 NEDA, The Philippine Water Supply Sector Roadmap, 2nd Edition, 2013 Objectives      To gather information about the technical assistance and financing needs of a sample of water utilities in the Philippines; To improve the internal systems of the water utilities such as billing system, inventory control, business planning and financial management; To determine the needs of utilities for technical assistance and for financing to repair, improve, upgrade and expand their water and sewage facilities, including treatment plants, conveyance pipes, water tanks, meters, control valves and distribution lines; To identify the obstacles, hindrances or reasons why the utilities are not able to obtain the technical assistance and financing that they need; To identify some solutions to overcome the obstacles and hindrances. Scope The project will undergo the following phases: Phase 1: Establishment of a data base Past studies on the water sector were limited by lack of up-to-date, integrated, harmonized, and comprehensive data on the water sector. There is also no validated statistics for Level III (water piped into private premises) water service providers (WSPs). There are also no comprehensive sector statistics on water distribution service levels and quality among WSPs. Thus it is necessary to undertake the following steps to establish data base for the surveys: 1. Only the list of water districts is available from the Water Districts Directory of the LWUA. The directory provides the address, telephone number, name of the General Manager and e-mail address. Classification of water district is not available. Fieldwork to LWUA is necessary to gather information on classification of the water district and what other information are available for the study. 2. Fieldwork to NEDA is also necessary to check if the updated and reliable data on water supply and sanitation provision, including access and coverage, has been gathered and made available for public use 3. Fieldwork to the Department of Interior and Local Government to check for the list of LGUs that established their own water utility. Otherwise, the research team will check the website of each selected LGUs. 4. There is no comprehensive information on the private sector undergoing water projects. These have to be searched from NEDA or the internet. 5. Majority of the RWSAs are not registered with the National Water Resources Board nor are they attached to a national agency. Source of this information has to be searched. Phase 2: Selection of water utilities that will be included in the Mail Survey and Utility Managers Interview 1. For the Mail survey, 160 water districts will be selected from the Water Districts Directory of the LWUA that belong to class B, C and D and; 160 LGU-run water utilities, 40 private water operators; and 40 Rural Water Supply Associations (RWSAs) from the existing 500 RWSAs and also water service cooperatives. All of these water utilities should be located in towns and cities with at least 30,000 population based on the Census of Population by cities and towns. The Water Districts directory contains the addresses of the water districts and the names of their General Manager. 2. For the Utility Managers Interview, 48 water districts will be selected from the Water Districts Directory of the LWUA that belong to class B, C and D; 48 LGU-run water utilities; 12 private water operators; and 12 RWSAs and water service cooperatives. The Water Districts Directory has the name, email, and telephone number of the General Manager as well as the website of some WDs. Phase 3: Develop the detailed questions the Mail Survey and formulate the Interview Guide for the Utility Manager Interview. Then produce detailed draft questionnaire for the Mail Survey and for the Utility Manager Interviews. Phase 4: Conduct of Mail Survey and Utility Manager Interview after field tests. Phase 5: Process all collected data and analyze the results of the Mail Survey and the Utility Manager Interviews and come up with observations of trends or common facts. Phase 6: Presentation of Results Timeframe Description of Work Start and End Dates Phase 1 Establishment of a data base June 2019 Phase 2 Selection of water utilities that will be included in the Mail Survey and Utility Managers Interview Develop the questionnaire for the Mail Survey and the Interview Guide for the Utility Manager Interview Conduct of Mail Survey and Utility Manager Interview Process all collected data and analyze the results Presentation of results June 2019 Phase 3 Phase 4 Phase 5 Phase 6 July 2019 July 2019 August 2019 September 2019 Project Budget Description of Work Phase One Phase Two Phase Three Anticipated Costs … … … … Total $ 0.00 Key Stakeholders Client Sponsor Project manager [name] [name] [name] Monitoring and Evaluation [Describe how progress will be evaluated throughout and at the end of the project. Formulate clear indicators for objectives and result.] Approval Signatures [Name], Project Client [Name], Project Sponsor [Name], Project Manager