Presentation on theme: "SUSTAINABLE DRINKING WATER TARIFFS IN PERU"— Presentation transcript:
1 SUSTAINABLE DRINKING WATER TARIFFS IN PERU SIDE EVENT“TOWARDS SUSTAINABLE WATER TARIFFS IN LATIN AMERICA”THE NATURE CONSERVANCY (TNC) IN COLLABORATION WITH THE ASSOCIATION OF WATER AND SANITATION REGULATORY ENTITIES OF THE AMERICAS (ADERASA)“5th WORLD WATER FORUM”FESHANE/FESHANE 4José SALAZARPresident, SUNASSIstambul, Turkey March 19th 20091111
2 COVERAGE OF DRINKING WATER – SANITATION SUPPLY IN PERU MILLENIUM GOALSGoal 7: Ensure environmental sustainabilityBy 2015, reduce by half the proportion of people without sustainable access to safe drinking waterNATIONAL AGREEMENTCOMMITMENTSGOVERNMENT POLICYExpantion of the coverage of drinking water and sanitation supply.13 CImprove the drinking water and sanitation infraestructure21 CPERU26,8 MMHab2006With drinking water service20,0 MMHabWith sanitation service15,3 MMHabWithout drinking water service6,8 MMHabWithout sanitation service11,5 MMHabLas inequidades son más evidentes en el área rural donde un 38% de la población no tiene acceso al agua potable y el 70% no cuenta con un sistema digno de disposición sanitaria de excretas (letrina u otro sistema). Otro segmento postergado en términos de inversiones son los servicios atendidos directamente por los municipios (298 servicios a nivel nacional), en este segmento un 41% de la población no cuenta con el servicio de agua potable y un 62% con sistemas de alcantarillado. La situación de coberturas de servicios es menos desfavorable en Lima Metropolitana y en el ámbito de atención de las EPS municipales. En este panorama, para disminuir las inequidades de atención se debe privilegiar al medio rural y a los municipios que por su tamaño de mercado no están integradas a una EPS. Los subsidios a la demanda de estos segmentos deben estar en orden preferente de atención con los escasos recursos del Tesoro Público.2222
3 THE PERUVIAN WATER TREE Governability based in social, environmental and economic benefits: social inclusion, poverty reduction, social peace, public health, cleaner growth, changes in human behavior, better water-allocation, among others …Demand: Cultural education, saver equipments, houses eco-efficient, cleaner production, among others.Funds, donations, loans, guarantees, subsides, etc.Supply: Conservation of watersheds, forestation, desalination, dams for regulation, re-use of waste waters.TARIFFSInvestment management shockPrivate-Public -Partnership, Identification of new opportunitiesRe-defining governability from water approachObjectives, policies, tools, actorsEnterprises, city council, regionsPolitical view:The government is due to citizens3
4 CHANGING WITH ACCOUNTABILITY IN PERU: WATER FOR EVERYONE INITIATIVE POLITICAL APPROACHTECHNICAL APPROACHSUSTAINABLE DRINKING WATER TARIFFSCHANGING WITH ACCOUNTABILITYWATER FOR EVERYONEDRINKING WATER-SANITATION SECTORCONSERVATION SECTOR20062011INVESTMENT GRADECLEANER ECONOMIC GROWTHREGIONALSUSTAINABLE TARIFFSSUSTAINABLE DEVELOPMENTWATER FOR EVERYONEPOVERTY REDUCTIONSOCIAL JUSTICE/EQUITYWithout drinking water access there is no growth, no social justice, no social peace, no democracy, no governability.4
5 WATER FOR EVERYONE INITIATIVE: the Peruvian approach PUBLIC POLICIESPOSITIVE IMPACTS IN THE COUNTRY DEVEOPMENTSOCIAL PEACE, SOCIAL JUSTICE, DEMOCRACYHealth for more PeruviansLess government expenses in health attention related to drinking water and sanitation service accessInvestment in drinking water-sanitation service universal accessPoverty reduction and equityInvestment in drinking water-sanitation service expansionFamilies included in society, now they are citizen with rights.Opportunities for poor peopleSanitation projects that generate jobs for peopleGeneration of jobs in Lima and other cities, this help to maintain the value of the new infrastructure investmentSustainable countrySustainable tariffs : watersheds conservationIntegration of the water value chain (water generation and waste water treatment). Less costs for water enterprises.Cleaner energyInvestment in watershed conservation to improve water regulationWater insure for the clean energy operation, reduce its operation costs and release water for cities in the watershed.
6 WATER FOR EVERYONE INITIATIVE: the Peruvian case PUBLIC POLICIESPOSITIVE IMPACTS IN THE COUNTRY DEVEOPMENTSOCIAL PEACE, SOCIAL JUSTICE, DEMOCRACYWater conservation, food securityEcosystem system compensation or environmental payment schemeWater source conservation for the agriculture, energy, industry and city developmentHome energy and water savingsInvestment in home water saver equipmentsDrinking water savings that it is reflected in the bill, release flow of the familiar budget and water for other familiesCleaner growthInvestment in cleaner technology for industries (producing with less water)Drinking water savings in the industrial sector, that it is reflected in the bill, release industrial cash flow.Generate social consciousness about the water resource economic importance in the country, new generation of responsible citizensSaving cultureEnvironmental education for the futureTourist capital conservationWatershed conservation, with participation of tourist enterprisesInsure the natural capital “water”, source of biodiversity.
7 SUSTAINABLE TARIFFS: The Peruvian setting To achieve the millennium water goals, it is required US$ 5 billions to cope with increasing population demand.To sustain the industrial growth it is required US$ 5 billions (mining, oil, agriculture, industry, etc.) in water generation and eco-efficient technology.Public drinking water utility companies require investments and eco-efficient management, through public-private partnerships.Reducing the drinking water gap: The water sources are declining (because of climate change, pollution) while the drinking water demand is increasing (cities-industrial expansion).A new approach: sustainable drinking water tariffs are integrating the water value chain under a watershed approach with economic driven tariff-modeling.7
8 Water companies value-creation from environmental management ProblemsConsequences for the water utility company1Reduction of water sources due to climate change (ice melting, etc.).A new budget for a new water catch (or a new source of water) + the old water catch infrastructure was not repaid to the creditors yet + conflict with other water users (e.g. hydropower).2Increase of sediments due to river basin erosion (upstream)The regulation-dam life-span is reduced + the storage capacity is reduced + expenses for cleaning the dam + more OPEX.3Increase of floods due to river basin deforestationIncreased expenses to deal with natural disasters (prevention, mitigation) require money + the disruption of services have public-health impact.4PollutionReducing the life-span of pipelines + more OPEX.From a cost benefit analysis, it makes business sense to invest in water source regulation rather than mitigation.
9 SUSTAINABLE DRINKING WATER TARIFF NEW APPROACH: Linking the watershed regulator (country-side) with the drinking water regulator (urban)ConservationWATERSHED APPROACHREGULATORREGULATORGOVERNMENTPublic goodsREGULATORMARKET private goodsECOSYSTEMIC APPROACHWater service$SUSTAINABLE DRINKING WATER TARIFFDrinking water provision is a monopoly, so the regulator has become the interface among government bodies and the private sector, through PPP.9
10 INTEGRATING THE COUNTRY-SIDE WITH THE CITY : Introducing the drinking water value chain within the water billECOSYSTEMIC SERVICEDRINKING WATER-SANITATION UTILITY COMPANYWATER TREATMENTDISTRIBUTIONWASTE WATER TREATMENTWATER GENERATIONCOLLECTIONSTORAGEDRAINAGEWATER SOURCES CONSERVATIONInvestment in conservation in highlands.Search and development of new technologiesInvestment in waste watertreatment plantsInvestment in desalination, regulation dams, etc.Search of new water sourcesRe-use of waste waterSUSTAINABLE DRINKING WATER TARIFFS10101010
11 NATURAL AREAS REGULATOR Reduction of storage capacity SUSTAINABLE DRINKING WATER TARIFF: Moyobamba-Water Utility Company, SM-regionNATURAL AREAS REGULATORSUSTAINABLE TARIFFSWATER REGULATORNATURAL AREADeforestationINFORMAL AGRICULTUREPollutionHigh tariffsLow qualityErosionReduction of storage capacityHigher treatment costCOFFEE CROPSCOUNTRY-SIDESEDIMENTSDrinking Water Sanitation Utility Company MOYOBAMBATHE CITYWATERSHEDTariffs increase depends on people trust on its drinking water-sanitation utility company, which is reflected in the willingness to pay (WTP) for a better service and for restoring the linkages between the country side and the city.11
12 Financial tools for PES in Peru: trust funds created by the regulator ITEMDETAILFUNDINGThe regulator allocate a % in the water bill, paid by the user. The % does not depend on the conservation project pipeline because it is a seed capital fund to be complemented with other funding sources.TYPEThe trust deals only with water-tariff incomes. It can not receive private funds nor subsidize other sectors (e.g., mining, hydropower, agro).COLLECTIONDirectly by the bank, avoiding the water-company intermediation.DISBURSEMENTOutput based, for reducing the bad management-project risk.EARMARKED FOR PROJECTSEach project has to have a positive impact on water regulation, based on hydro-models. Focus on ecological infrastructure not on expenses.MONITORINGOutcome indicators verifiable.LEVERAGEThe tariff is a mandatory funding, which is complemented with government funding (coming from city councils, regional-national government) and private donors (companies, NGOs, others).INVERSANIt is the national water-sanitation fund created by law. Under its umbrella, private and public donors can work together but not mixed (e.g., avoiding the scrambled eggs scheme).12
13 Institutional partnerships for moving forward with sustainable drinking water tariffs PROCESS IN PERUWater, mining, hidroelectric, agroindustrial enterprises, banks, industries, within others players in the watershed.PERUVIAN WATER DONORSMINISTERIO DEL AMBIENTEPRIVATE SECTORDEVELOPEMENT AGENCIESPERUVIAN GOVERNMENTECLAC /UNITED NATIONSGREEN NGOWATER REGULATORS OF SOUTH AMERICAOutcomes of Lima Meeting (June 2008): Strategic partnership, discussion of the strategy and action plan for developing Sustainable Water Tariffs in Latin America.131313
14 VALUE CREATION FOR SUSTAINABLE DRINKING WATER TARIFFS SYNERGYBefore: = 4 (market economy).SUSTAINABLETomorrow : = 10 for the creation of social andenvironmental value, has a positive impact on governability.TARIFFSStrategic allianceTNCECLACNATURALAREASREGULATORWATERREGULATORPOLITICAL APPROACH changing with accountability14
15 LESSONS TO BE LEARNEDRegional potential: Peru has created a sustainable development highway based on drinking water access.Replicable model a regional scale. Each country has to move forward according to its institutional and legal setting.Political will for changing with accountability (“water for everyone programme”). The government is due to the citizen.Without drinking water access: No democracy, No social justice, No social peace, No equity, No economic growth, No governability.Innovation: Partnership between drinking water regulator (city) and natural areas regulator (rural areas) creates long-lasting value for many stakeholders.New generation of leaders are implementing the change.New management eco-tools are created and tested.Harmonization among authorities (ANA, SUNASS, MINAM) and actions TODAY, while the theoretical discussion continues.15
16 SUSTAINABLE DRINKING WATER TARIFFS IN PERU SIDE EVENT“TOWARDS SUSTAINABLE WATER TARIFFS IN LATIN AMERICA”THE NATURE CONSERVANCY (TNC) IN COLLABORATION WITH THE ASSOCIATION OF WATER AND SANITATION REGULATORY ENTITIES OF THE AMERICAS (ADERASA)“5th WORLD WATER FORUM”FESHANE/FESHANE 4José SALAZARPresident, SUNASSIstambul, TurkeyMarch 19 th, 200916161616