This month’s DBIA Book Club brings you Reinventing Water and Wastewater Systems, an insightful look at the past, present and future state of water and wastewater services. In response to the worldwide water crisis foreseen within the pages of the book, Reinventing Water and Wastewater Systems presents practical solutions for making drinking water more affordable and available, as well as strategies for improving water sanitation to satisfy the demands of a growing global population. Through extensive data and case histories, this book demonstrates the potential success of privatizing water delivery and wastewater treatment facilities. In addition, it provides examples of state-of-the-art techniques for achieving higher efficiencies in water infrastructure facilities through reengineering, improved technologies and quality benchmarking.
Leading global engineers and economists from such entities as the World Bank, Stone and Weber Consultants, Atlantis Water Fund and Anglian Water Company contributed chapters to the book. Editor Paul Seindenstat agreed to discuss the book with DBIA.
Q: Reinventing Water and Wastewater Systems stated that there is a worldwide water crisis. Define what this should mean to your readers and how it influenced the creation of this book.
A: There are several dimensions to global water problems: access to piped and treated water, connection to wastewater networks, maintenance of water/wastewater infrastructure [and] cost of water delivery systems.
Growth of population, larger economies, and increased urbanization have exerted significant pressure on water/wastewater systems. This pressure particularly has affected developing economies where scarce capital limits providing access and adequate treatment facilities. The overriding problem is in the urban water sector that presents difficult economic and political choices for governments. Making available water and sanitation services has reduced disease and yielded many other health benefits. At the same time, offering free or cheap access to water has accelerated use, putting more pressure on the infrastructure and boosting cost.
The water sector, however, has been plagued by a long history of under-pricing and opposition to full cost pricing for ethical and social reasons. Often governments, especially in the developing world, have been unwilling to acknowledge water as a finite natural resource and an economic good — a commodity that needs a market price that reflects the cost of provision and its fundamental value to society. The overall result is that water systems are often operated inefficiently and that services are unreliable, lacking coverage, regular maintenance, and good design. Poor sections of the population in developing countries frequently do not have access to public water services. Currently more than 1.1 billion people worldwide lack access to safe drinking water and 2.4 billion do not have access to basic sanitation facilities. One of the Millennium Development goals agreed by the international community in 2000 was to halve those numbers by 2015.
Improving the delivery of urban water and waste water services is a critical issue for many developing countries. In developed countries, investment requirements to maintain the existing infrastructure will increase substantially over the next years, requiring greater efficiency through better management and the use of new sources for investments. Billions of new investment will be required to renew an ageing underground and treatment plant infrastructure.
Q: What practical solutions does Reinventing Water and Wastewater Systems offer for making drinking water more affordable and available?
A: The solutions are associated with choosing an optimal organizational structure of the water utility. The first consideration is what entity makes provision for water service: a governmental body or a private enterprise. More importantly, then, what entity would produce the service is then addressed. Consequently there could a government owned and operated utility, government owned but contracting with a private enterprise to operate, or a privately owned and operated utility typically subject to public regulation.
Often improvements can be made in terms of costs and quality of service by choosing a structure that offers the best fit for a given political entity. For example, water systems in developing countries have generally found that some form of a public-private partnership works well. Mexico and Bolivia are examples. Developed economies can restructure the regulatory system for private utilities (Great Britain and Australia). Also, government-owned stock corporations are another option (Netherlands). Finally, municipal systems might examine restructuring (Washington Suburban Sanitary Commission) or public private partnerships (Seattle, Wash., Wilmington, Del., North Brunswick, N.J. and West Haven, Conn.)
Operating efficiencies can be the product of new management approaches and techniques. Examples include benchmarking in Great Britain, reengineering in Phoenix using the Internet and financing desalination systems.
Q: What practical solutions/strategies does Reinventing Water and Wastewater Systems present for improving water sanitation?
A: Dealing with sanitation issues involves many of the same pathways for improvement as touched upon in question two above. However, sanitation technology tends to be more complex and a system’s operation is more challenging. Compared to water, sanitation technological advances are faster moving and require more technical sophistication to implement.
To install a sanitary sewer system requires significant capital, a major challenge for developing countries with enormous infrastructural demands and limited investment capability. This is especially difficult given the imperative to connect the enormous number of households who currently are not connected.
It seems clear that public-private partnerships offer a reasonable solution to fund and manage systems. Of course, care always must be taken to ensure clear contractual arrangements and to practice careful oversight. The book offers several case studies and practical advice.
Q: The book demonstrates that the privatization of water delivery and wastewater treatment facilities results in a higher possibility for success, what factors do you believe attributes to this outcome?
A: Two major factors contribute to the successful performance of public-private operations: incentives and competition. Direct rewards for good performance are inherent in for-profit enterprises that financially can motivate managers. On the other hand, inadequate performance can penalize managers and employees as well as threatening the existence of the enterprise itself. Additionally, the private sector typically has fewer constraints on rewarding good employee performance or penalizing poor performance.
Injecting competition in water markets is an important device in achieving better market outcomes. Government operated water departments or regulated private utilities are in a pure monopoly environment. Public-private arrangements can inject competition in the bidding for contracts that can lead to lower costs and higher quality service.
There are other favorable factors as well. Private capital financing can reduce the strain on government in raising investment funds in the face of many capital budget demands. As environmental rules grow stricter, the burden of meeting rising standards can be shifted to the private operator. In wastewater treatment, economics of scale are evident. A multi-operation private organization can initiate and transfer the latest technology and service many utilities at a reasonable cost.
Q: What is the most valuable lesson learned from producing this book?
A: Many nations can benefit by utilizing private producers or by restructuring operations by invoking private sector principles if the environmental conditions for success can be introduced and enforced. The immediate concern for developing countries is to connect residents as quickly as possible to a piped system of safe water. All countries are striving for both safe and clean water at an affordable cost. Since the technology associated with wastewater is more complex and more rapidly changing, private sector involvement would likely more forward more rapidly for that operation compared to the more technically simple and staple water treatment process.
Public water and wastewater utilities, in contemplating alternative delivery options that more efficiently meet their and their customers’ needs, might derive some lessons by examining experiences of variously organized utilities in the world. Potentially large improvements may be achieved in public systems.
Our book attempts to give insight into these experiences as well as giving examples of state-of-the-art techniques for achieving higher efficiencies in water infrastructure facilities through reengineering, improved technologies, and quality benchmarking.
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