Water Distribution Public, Private, or Both

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KREI Seminar - May 14, 2008

• Water DistributionPublic, Private, or Both
• by
• K. William Easter
• Professor of Applied EconomicsUniversity of
  Minnesota

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The Gadag Rural Water Project (India) will
replace the need for getting water from a
traditional scrape in the river bed with piped
supplies
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• Current conditions
• 97.5 of worlds water is salt water and another
  2 is frozen or not accessible
• Four to five fold increase in water use since
  1940s (2 to 4 growth rate)
• Over a billion people lack clean water and about
  two billion have poor sanitation
• Women or children may have to walk 5 to 10 miles
  for water
• Bottled water costs 30 to 300 per barrel (oil
  120)

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• Current conditions - - contd.
• Four gallons of water to produce a gallon of
  ethanol
• Consumptive water use in LDCs (distribution)
• Agriculture (irrigation), 70-80
• Commercial and industrial uses, 10-22
• Domestic uses, 8-10

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• Human rights to water and the private sector
• Basic right to water for domestic use
• Access to village well or public water tap?
• Should this be right to safe water?
• Low water price for basic human needs?
• Allocate a greater share of water to domestic
  use?
• How does this compare to basic right to food?

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• Human rights to water and the private sector - -
  contd.
• Agricultural and commercial use (90 of
  consumptive uses)
• Isnt this water better treated as an economic
  good?
• Do we need to reduce demand and reallocate more
  to domestic and environmental uses?
• If we do, then we need to price water at its
  scarcity value
• How much to allocate for environmental uses?
• 30 to 50 of stream flow

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• How water has developed in the 20th century
• In early stages of settlement, people located
  near water sources (rivers and lakes)
• As populations, cities, and demands for food all
  increased, access to water became more difficult
• First approach in LDC was to develop large
  multipurpose irrigation projects with foreign
  assistance TVA model
• Some private irrigation was also developed, such
  as the Gezira Scheme in Sudan, with farmers as
  tenants
• In 1980s large expansion of private irrigation
  well development in Asia

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• How water has developed in the 20th century - -
  contd.
• Growth in LDC cities took off in 1960s and 1970s
• In 1960, only one LDC city over 10 million
• In 2000, seventeen LDC cities over 10 million
• Now in LDCs, 50 live in urban areas
• Large cities in LDCs underinvest and poorly
  manage water supply and sewage systems
• 50 of water is unaccounted for in Cairo,
  Lagos,Mexico City, Jakarta, Manila, and Lima
• Cost of new supplies may be 2 to 3 times cost of
  existing supplies

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• How water has developed in the 20th century - -
  contd.
• Poor quality water service continues particularly
  for the urban poor in LDCs
• Still 50 of the people, including the poor, live
  in rural areas where many have unsafe water
  supplies
• 1980 was first UN water decade the 2005-2015
  decade is UN water for life decade
• During the first water decade, we just kept up
  with population growth. The number of those
  without safe water stayed constant.

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• Given this situation, what can we do?
• What about the private management options in
  urban areas? (Table 1) Design and build is most
  common U.S. private activity.
• Irrigation has also helped meet rural domestic
  water needs
• Some existing systems using groundwater and
  springs
• Punjab, India, southeastern Brazil, and
  Bangladesh wells and hand pumps
• Oman and Brazil examples of water markets
• Might use markets to reallocate water to domestic
  uses both permanent and temporary
• California did in 1990s -- temporary
• Chile and Australia have done a little --
  permanent

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(No Transcript)
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• Villages not adequately served, cant treat them
  equally
• Type I villages high willingness to pay (WTP)
  for private connections but not for public taps.
• Type II villages low WTP for private
  connections but majority will pay for public
  taps.
• Type III villages WTP for improved service but
  too costly for them.
• Type IV villages low WTP for improved service.

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• Conclusions
• Technology for obtaining clean water is much
  improved.
• No one model fits all.
• Community must be involved in water investment
  decisions.
• Subsidies for low income communities who want and
  will maintain system (Type III).
• Technical assistance for those who want system
  and can pay (Type I and II).
• In some cases, subsidies for public taps (Type I)

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• Conclusions - - contd.
• For communities not ready for improved service,
  wait until they are ready (Type IV).
• Use private sector where it can help, but public
  sector will still need to play an important
  governance role.
• We will need to improve water use in agriculture
  and industry so that there is more for domestic
  and environmental uses.
• World Bank estimates we need to invest 600 to
  700 billion in water improvement and development.

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DSM Industries Trichy - Deep Well Hand Pump
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Malawi is a landlocked, sub-Saharan country that
is fighting chronic water shortages and the
effects of a severe food crisis in 2006.
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Sosal, Honduras Girl washing clothes at her new
pila. Photo credit WaterPartners International
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Women getting water from the Ak-ela well in March
2004. The Senai Foundation is a non-profit
support organization for the people of Eritrea.
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Indian woman getting water from a truck
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URL to access presentation

• http//www.apec.umn.edu/faculty/weaster/