By: Fika Fawzia
When asked whether it is more important for the urban poor to have ‘access’ or ‘affordability‘ for clean water supply, I believe the question has a built-in assumption that access and affordability is a trade-off, while it is not necessarily true. The urban poor can have cheap access to safe and clean water, provided that the cities they live in have the correct enabling institutional and regulatory framework to do so.
Access to clean water supply is the basic step in achieving a minimum standard of health and in undertaking economic activities, thus many argue that access to water is a human right. However, as water becomes increasingly scarce and valuable, it is argued that water should be priced by the market to correctly value this resource.
As a result, even though water is a human right, there are costs associated in delivering water and there is a need to pay because the price is used as a control measure to avoid overconsumption and underinvestment in enhancing the resource.
The problem of access and affordability for clean and safe water supply for the urban poor is like two sides of the same coin. In general, the poor who are not connected with network pipes don’t have access to the formal water supply and in turn, they look for other informal alternatives, such as water vendors or resellers (which are more expensive), or from ground water or nearby rivers (which are cheaper but pose serious risks for their health and safety).
The lack of connection for the poor is usually caused by the expensive connection costs or regulatory barriers for them to connect (i.e. they live in illegal land/slums). This is particularly the case in Jakarta, Indonesia, whereby of the 56% of the residents connected to the network (Jakarta Water Supply Regulatory Body, 2004), most of the unconnected are the poor (who live in both legal and illegal lands) and they use a combination of ground water, vended water and water from public hydrants instead. Vended water in Jakarta, costs 10-32 times more compared with the costs of networked water supply (ADB, 2003). The poor, who have few means to begin with, end up paying more for water.
In theory, if universal coverage is applied, the poor would be benefiting from affordable access to the networked water supply. However, achieving universal coverage is not as simple as it seems because service providers usually don’t have enough funds to start with in order to expand the network.
If you are the service provider, you are then faced with the dilemma of raising the price towards cost recovery levels, but by doing so, you are further excluding the poor because they don’t have the financial capacity to connect in the first place. In some occasions, if you are a private service provider, your prices are even regulated by the government which doesn’t give you the flexibility to adjust the price.
The popular policies for providing access to the poor are cross-subsidies and/or through Increasing Block Tariff (IBT) models for pricing. However, research shows that subsidies and IBTs can be wrongly targeted, as the benefits usually go to the middle-income groups more than the poor. When most of the poor are not connected, subsidies to lower the costs to connect to the pipes are then more effective than consumption subsidies.
Even if they are not connected, the poor are still potential consumers and service providers should actively engage them to assess their demands and willingness to pay for the type of water services that they need. Furthermore, the regulator must have the adequate monitoring capacity to ensure that universal coverage is the overarching principle so service providers can be innovative in servicing the poor.
When they are connected to the network pipes, the affordability issue for the poor can be adjusted through tariff and pricing policies. In between the waiting time for the poor to be connected, innovative measures to connect the poor with ‘good-enough’ water supply can be followed through.
Small Piped Water Networks (SPWN) in Manila, Tien Giang, and Ahmedabad City for example, are measures to connect the poor through demand-driven community-based arrangements that are both convenient and affordable. Customers don’t have to travel long distances to get water and they can pay in small amounts (daily or every few days) and pay connection fees by installment.
Through SPWNs, those who are lacking in land tenure can also still benefit through cooperation arrangements between community based organizations and the formal service providers who connects the main water line to the SPWNs. Public-private-community arrangements such as these are only feasible if the institutional and regulatory frameworks are in support of it.
If regulators ensure the principal of universal coverage and pro-poor institutional and regulatory frameworks are in place, choosing access or affordability would not be a problem because in the end, the urban poor can have the best of both worlds: cheap and convenient access to clean and safe water supply.