Latin America is home to the largest freshwater reserves in the world, while at the same time, those resources are unevenly distributed. At SWM we want to take a closer look at the water situation in the region as a whole, so we have carried out a series of interviews on #WaterinLATAM with different public officials and experts in this field from Latin America to learn more about it.
We start by interviewing Claudia Crosa, Director for Drinking Water and Sanitation in Paraguay.
Question - What do you think are the main water problems in Latin America?
Answer - Even though water resources are abundant, their distribution is not geographically balanced nor is it sustainable. Water resources are not always abundant near population settlements, and there may be areas where the water regime is not continuous, with very arid periods. In addition, water resources are rapidly becoming polluted, so wherever water is available, the treatment to render it potable is becoming more and more onerous. The challenges of water transport are quite common, and require strong investments in infrastructure.
Along the same line, but dealing with sanitation, the low level of coverage of sewerage and waste water treatment services contributes to the pollution of water resources, which in turn affects limited available water resources.
Also, we have huge challenges in terms of institutional arrangements, the coordination of actors in the sector, and the regulation of service providers.
Q - How about in your country in particular?
A - Pollution of surface water bodies by solid waste and untreated waste water (from households, commercial and industrial uses) are an increasing problem in Paraguay. This is because we lack effective control of waste discharges and regulation of water uses for different purposes.
Also related is the absence of payment for the use of water resources for different purposes (as raw material, as an effluent-receiving water body, etc.). This does not contribute to a rational use of water resources, and does not allow raising revenue that can be targeted towards promoting the protection and/or recovery of water bodies as sources.
Q - What measures is the government taking in this regard?
A - Sanitation infrastructure projects are being designed (currently pre-feasibility and feasibility studies are ongoing) and implemented, including household waste water collection and treatment before it is discharged into the environment, in urban, semi-urban and rural areas of Paraguay.
A National Drinking Water and Sanitation Plan has been drafted: this document establishes the main guidelines to address the lack of coverage of these basic services, with three strategic core themes to achieve Sustainable development Goal no. 6.
The plan sets as a priority the regulations pursuant to the Water Resources Law of Paraguay, establishing payment fees for the use of water resources.
Q - Over the past few years we have seen the concept of water governance gaining momentum. Is there awareness about the importance of water governance in your country? What are the main gaps?
A - Awareness about the importance of water governance has increased substantially with the entry into force of the Water Resources Law and the legal regulations, still under development, for the drinking water and sanitation sector. They deal with the main water use, basic human consumption, as well as with environmental protection, through the promotion of sanitation and waste water treatment.
In order to ensure coordination across different sectors, a Division of Drinking Water and Sanitation will be created directly under the Ministry of Public Works and Communications, thus the administration of this sector will have the highest rank within the ministry's hierarchy. This move by the government shows a strong will to promote the sector and ensure the necessary governance.
However, there are still important gaps to bridge in order to ensure universal access to water services. Only 76% of the population in the country has running water, and the coverage of the sewerage networks is only 11%. We are talking about the current coverage, so effluent which undergoes some type of treatment before it is finally discharged into the receiving water bodies.
- Financial gap: Just in the drinking water and sanitation sector, it is estimated that Paraguay will require an investment of more than USD 6 billion to bridge the gap in coverage of drinking water and sanitation services (for the population that still lacks access to those services) by 2030, with different levels of investment needed by urban, suburban and rural areas (DAPSAN, 2017). To achieve also coverage quality goals, the investment required will be even larger, since this would also contemplate upgrades to existing infrastructure. In order to bridge only the estimated gap in access to drinking water and sanitation, from 2019 to 2030, the sector should invest USD 487.4 million every year. If we take into account that the average investment in the sector from 2013 to 2017 has been USD 68.5 million, an additional USD 418.9 million USD will be required on top of current investments. The only way to achieve these levels of investment and implementation is through an aggressive strategy to mobilise resources, combining adequate tariffs to ensure systems are sustained and increased investments by the private sector. Nevertheless, the institutional and legal framework still needs to be reinforced to be able to attract private investments to the drinking water and sanitation sector. Similarly, strategies need to be defined to involve municipal governments, through financing support to the sector, as well as through more active participation in management associated with the provision of services.
- Information gap: In the drinking water and sanitation sector, the management, compilation, processing and dissemination of data and information, particularly about service provision (coverage, quality, consistency, etc.) is very difficult. The large number of different entities involved in the sector generates documents and data that are not standardised nor clear. Diffuse and scattered information can bring about confusion and even errors when it comes to carrying out studies and developing strategies for the sector.
- Capacity gap: Water services infrastructure will get built only if you also invest in capacity building at every level of water management, project design, construction works, operation of systems, treatment plants, etc.
Efforts should also focus on building the capacity of service providers to increase the coverage of services and improve their quality, increase efficiency, reduce late payments and ensure the user has a better experience.
Q - Is the existing legislation enough to manage water resources?
A - Not yet. The legal framework governing the water sector needs to be updated, completed and harmonised, tackling gaps such as urban drainage management, as well as regulations pursuant to the Water Resources Law. Also pertaining to this law, a detailed study and assessment of water resources needs to be completed.
Q - What is the coverage of water supply and sanitation services in the country? What investments are required to increase coverage?
A - We have two types of data at the country level.
Level of access, national population
- Improved water source: 95.3%
- Improved sanitation: 80.3%
Improved water sources: piped water (located inside the user’s dwelling, plot or yard, or the neighbour's, public taps), tube wells or boreholes, protected dug wells, protected springs, rainwater collection, cart with small tank/tanker truck, bottled water.
Improved sanitation facilities: sewerage network, septic tank and cesspit, cesspit without septic tank, ventilated pit latrine (shared with a ventilation tube), ventilated pit latrine (with slab, roof, walls and door).
Service coverage at the country level:
- Water distribution network: 78%
- Sewerage network: 11%
- Waste water treatment: 2%
- Water undergoing disinfection treatment: 79.1% of the population served (out of the 78% indicated above)
Q - Estimates indicate that the cost of low quality water in Latin America entails a loss of 1% to 3% of the GDP. Are there measurements of water quality in the country? What are the investments in this area?
A - We have measurements of the quality of the water supplied by service providers. As of December 2017, 79.1% of the 78% of the population with water supplied through the distribution network was undergoing disinfection (ERSSAN).
A study estimated that the economic impact of lacking drinking water and sanitation services and the inadequate quality of those services in Paraguay was 1.63% of the GDP in 2016. The cost represents a situation of inaction, so not doing anything concerning the current situation of the national drinking water and sanitation infrastructure; it can also be interpreted as the gross annual social benefit of the current situation concerning both services (Zapata, 2018).
Q - In general terms, does the user pay for all the costs of water conveyance and treatment? How are water prices set for the different uses?
A - The tariffs for water supplied through the distribution network and sewerage services are based on specific tariff studies carried out and approved by the Water Services Regulatory Authority (ERSSAN) for each service provider. They are then submitted for consideration by the owner of the service (the Executive Power) to be introduced as a Decree, with the technical assistance of the responsible authority (the Directorate for Drinking Water and Sanitation of the Ministry of Public Works and Communications).
In the case of services provided by operators with less than 2,000 connections to the water distribution network (permit holders), the tariff is derived after an analysis of all revenues (water sales and other operating revenue) and expenditures (administrative and operating expenses) over a period of six months, through a cash flow, taking also into account any service provider's liabilities. Out of the total expenditure, including liabilities, a remnant revenue is calculated so that the service provider can meet any contingencies.
In the case of services provided by operators with more than 2,000 connections to the water distribution network (concession holders), the tariff is based on the significant change in the cost incurred by the operator to provide the service, reflected in the consumer price index (CPI).
A series of subsidies for drinking water and sanitation services are available, defined according to sector legislation and other applicable legal instruments:
- Subsidies for water consumption in precarious settlements. To date, there is no protocol to apply them. Nevertheless, in the absence of a protocol, the service provider has the right to charge the service to the owner of the service (the Government of Paraguay). So far, there is only one case of a service provider (a concession holder) who has requested the reimbursement of this subsidy from the Government of Paraguay, for certain settlements in the country.
- Subsidies for water consumption by residential users with limited resources (who do not necessarily live in settlements). These subsidies are not currently applied because they are pending clarification by the owner of the service (the Government of Paraguay) and the regulatory authority on the requirements to access the subsidy, including the classification of urban sectors that can benefit from it.
- Subsidies to invest in the construction of new drinking water systems in rural and/or suburban areas, through the so called Sanitation Boards, based on the planned size of the systems to be built. This type of subsidy establishes a funding policy for investment in rural areas, with resources from donations, loans and public funds. The conditions to access the subsidy are different depending on whether the funding is requested by a rural service provider with more than 150 connections, with less than or exactly 150 connections, or serving indigenous communities. This type of subsidy favours the last two categories; as such, it introduces perverse incentives that may lead to: unintended proliferation of service providers, resulting in the fragmentation of the sector; providers declaring a smaller than real number of connections to access greater benefits; high regulatory and supervision burden for authorities; lag in obtaining uniform tariffs, efficiency, quality and maintenance of services, and, finally, low sustainability of services.
Q - What are the most important achievements in the country with regards to water security?
A: In the past few years progress has been made in planning and developing a national drinking water and sanitation policy. As a result, the Ministry of Public Works and Communications released the National Drinking Water and Sanitation Plan in August 2018. This document provides a reference framework that outlines priorities, objectives, strategies and actions to achieve universal access to suitable drinking water and sanitation services in Paraguay. It focuses efforts on vulnerable sectors that have been previously overlooked and face social problems such as poverty, illiteracy, child malnutrition and, thus, a low level of human development.
Q - What are the main water resource management challenges into the future?
A - Implement integrated water resource management, instead of each sector managing resources in isolation (water resources, drinking water and sanitation, agriculture and farming, energy, and other sectors).
As a framework for integrated water resource management, implement water resource administration systems at the river basin level; these systems should have authority over the different territorial units in the country.