Water and sanitation

Water Utility: basic concepts and definitions

• Water and Sanitation is one of the United Nations’ Sustainable Development

Goals (SDGs):
• universal and equitable access to safe and affordable water
• access to adequate and equitable sanitation and hygiene for all (World Bank)

• Water utilities are monopoly suppliers of water services to most customers

• The decisions in water sector are not strictly economic-rational, but social

Aral sea
Definitions of water services

Water service Definition

Water supply production and delivery of potable water, i.e., water

that is safe for drinking

Sanitation collection and treatment used-water and water-

carried solids and the following reuse of water and
disposal of solids
! blue green algae
Water supply system
Sanitation system
Ownership and organization structure

• Public, private and mixed ownership

• Regulation and the overall quality control
• Day-to-day operations
• No relation between performance and ownership!
• Organization structure
• integrated water utilities vs. separation by service
• e.g. Dutch system where sewerage run by city, water supply by municipal or provincial
companies, and water treatment by water boards
• e.g. Munich, separated into three companies for bulk water supply, water and
wastewater network operations, and retail
Public vs. private management
Advantages Disadvantages
Private • Less risk for local authorities • Not welcome by some
• Financing stakeholders
• Management expertise • Economic risk in case of default
• Efficiency • Unlimited period of time
• Expansion of coverage
Private management • Less risk for local authorities • Not welcome by some
• Financing stakeholders
• Management expertise • Economic risk in case of default
• Efficiency • Subject to political decisions
• Expansion of coverage
• Defined period of time
Public • Social acceptance • Potentially lower efficiency
• Financing
Performance targets of water utilities

• Social performance:
• service quality
• coverage
• engineering structure reliability
• Financial performance:
• self–sufficiency of water utilities
• sufficient revenues
• lowering costs
Cycle of utility under-performance
Revenue and non-revenue water
Revenue undercollection – how to overcome?
• Revenue vs. non-revenue water
• Engineering enhancement
• Re-organization of payments
• Pay-for-services vs. pay-for-water
• What about sustainability?
• Fee size vs. revenue size
• Revenue collection
• Vendors
• agency (main office, branch or mobile office, meter reader and payment collector)
• passive (bank service)
• remote (phone, internet, mail, payment terminals)
• Third parties
• traditional or specialized financial institutions (banks, post offices, specialized service companies)
• commercial institution (supermarkets, pharmacies, petrol station, lotteries, etc.)
Revenue collections
• Collection efficiency or collection ratio
• the percentage of the total amount billed that is collected
• Collection period
• is the time to collect the debt, usually measured in days or months

• What improves revenue collections?

• privatization
• why?
• re-considering billing and collections process
• any successful billing practice must ensure that bills are raised on a monthly basis and based on volumes
• customers pay for what they consume
• adoption of 100 per cent metering of customer connections
• customer databases
• tariff and billing structures
• delivery of bills
• facilities for customer payments
Russian water utility sector development: USSR

• The planning system of Soviet Union aimed the development and maintenance of
housing and communal sector at a sufficiently high level:
• to maximize the population coverage by water supply and sanitation services
• levels of consumption
• uninterrupted provision of services of adequate quality
• but:
• high capital intensity
• high expansion of utility facilities rather than high reliability
• excessively high water consumption norms (economical water consumption was not
stimulated)
• capacity reserve for the future consumption growth
Russian water utility sector development: the reform

• 1998-2003
• Up to 70% and up to 90% (in big cities) of bills are payed by the consumers

• All investments were made from budget funds, and operational costs were covered by higher
tariffs for industrial consumers in a way of cross-subsidization

• Tariffs set by authorities were not upcoming with the rising inflation

• Since 2003 private participation through rent and lease agreement were introduced, as well
as some of municipal unitary enterprises were incorporated
Russian water utility sector development: current
situation
• more than 4000 organizations, providing water supply and sanitation services
• 86% - municipal organizations in the form of municipal unitary enterprises
• 11% - under lease or concession
• 3% - private companies, owned by municipalities
 Mean

Omsk,JSC OmskVodokanal

Novosibirsk,MUE Gorvodokanal Basic tariffs on wa-

Krasnoyarsk,OOO Krasnoyarskiy zhilischno-kommunalniy kompleks
ter supply and san-
itation
Kazan,MUE Vodokanal

Nizhni Novgorod,JSC Nizhegorodskiy Vodokanal

Volgograd,MUE Gorvodokanal Volgograda

Chelyabinsk,MUE PO vodosnabzheniya I vodootvedeniya

Ufa,MUE Ufavodokanal

Voronezh,MUE Vodokanal Voronezha

Samara,ME Samaravodokanal

Perm,OOO Novogor-Prikamye

Ekaterinburg,MUE Vodokanal

Rostov-na-Donu,JSC PO Vodokanal

0 5 10 15 20
Sanitation 25 Water30supply 35 40 45

Tariff, m3/rub
Sustainable water management
Sustainable development: definition

• “Sustainable development meets the needs of the present generation without

compromising the ability of future generations to meet their needs” [Brundtland
report, 1987]

• Key concepts:
• What do we mean by our needs?
• What is required in order to meet the needs of future generations?

• Sustainable development is about long-term conditions for humanity’s

multidimensional well-being
Sustainable development: the problem

• Sustainable development deals with the long-term prosperity or collapse of

societies.
• examples?

• Causes of collapse
• environmental impacts
• Ex.: deforestation and destruction of soil
• ?: How many global hectares are required to provide us with resources we use and to absorb the
waste we produce?
• But: Lev Gumilev, The theory of the ethnogenesis
Sustainable development: ways to solve the problem
• What to do?
• the new principles for resource management
• resources – what are they?

• i.e. the concept of sustainable development discusses a set of

principles and skills needed for new resource management
Ecological issues for city sustainable
development
• Water
• Vegetating
• Soil
• Materials and resources

• Tragedy of commons
Sustainability in water
• sustainable use of water requires the development and maintenance
of a required flow of benefits to a particular group or place,
undiminished over time without reducing benefits to other groups or
ecosystems
Water (1)
• Human Impacts on water systems
• Water quality degradation
• Stream channel degradation
• Reduced water supply
• Approaches to mitigate them?
• Stormwater management
Water (2)
• Stormwater design approaches:
• Practices that reduce runoff
• Practices that mitigate runoff by emulating evapotranspiration and infiltration
• Practices that convey runoff from larger events
• Practices that protect or restore receiving water bodies
Components of integrated urban water and
resource management system include
• Water conservation
• Distributed stormwater management
• Low impact development
• Rainwater harvesting
• Distributed water treatment
• Water reclamation and recycling
• Heat recovery
• Organic management for energy production
• Nutrient recovery
• Source separation
Water demarketing
• Lowering demand through marketing
• Social marketing
• Price increase
• Restrictions

• What are the pros and cons of each method?

• Is water a public good?
How to popularize
“sustainable behavior”?
• For government
• For public sector
• For business
• For people
• Ex.: energy efficiency policy (USA vs. Russia)
• Ex.: https://www.youtube.com/watch?v=Il1RX6_h9Xc