Communal services in Tajikistan: A poverty and social impact assessment C. Stephen Lam Almaty, Kazakhstan 13 April 2011

Presentation overview Communal services: Sectoral overview Communal services: Sectoral overview Poverty and social impact assessment Poverty and social impact assessment Social assistance policy and reform Social assistance policy and reform Lessons learned, recommendations Lessons learned, recommendations

Key sectoral challenges Tariffs: Have risen as infrastructure has deteriorated Have risen as infrastructure has deteriorated Remain too low to finance infrastructure investment Remain too low to finance infrastructure investment Linked to norms, not actual service consumption Linked to norms, not actual service consumption Budget, donor financing for central water, sanitation projects woefully inadequate Many households are unable, or unwilling, to pay higher tariffs Options to bypass central service are available especially for sanitation, solid waste collection Options to bypass central service are available especially for sanitation, solid waste collection Expansion of meterage: Expansion of meterage: Possible in some urban areas But nearly impossible in rural areas

Water and sanitation: Context Key institutions: Urban areas: Khojagi Maniliyu Kommunali (KMK) owns, operates services Urban areas: Khojagi Maniliyu Kommunali (KMK) owns, operates services Rural areas: Rural areas: The Rural Water Supply Department focuses primarily on irrigation The Rural Water Supply Department focuses primarily on irrigation Sewage systems nearly non-existent Sewage systems nearly non-existent reforms let local governments: own services and infrastructure own services and infrastructure outsource service provision to private firms, non-governmental institutions outsource service provision to private firms, non-governmental institutions

Solid waste management: Context Urban areas: KMK owns, operates services Rural areas: No analogous agency to Rural Water Supply Department for solid waste management Institutional vacuum Institutional vacuum Services mostly absent Services mostly absent Its now possible for local governments to: Own services and infrastructure Own services and infrastructure Outsource service provision to private firms and non-governmental institutions Outsource service provision to private firms and non-governmental institutions

Inflation rates: Big increases in communal service tariffs Source: National Statistical Agency, UNDP calculations.

Tariffs: Water, sanitation, waste management Do not fully cover costs of operations and upgrades Based on estimated, not actual, use Households benefitting from and paying tariffs for centrally managed services are: Relatively small numbers Relatively small numbers Mainly in urban areas Mainly in urban areas Short-/ medium-term constraints on raising household tariffs to cost recovery levels: Affordability Affordability Willingness to pay (by-pass options available) Willingness to pay (by-pass options available)

Source: KMK Monthly water tariffs, Dushanbe (2010) Without water meter (per resident) With water meter (per m 3 ) Households$0.62$0.63 Non- households --$0.38

Source: KMK Monthly solid waste tariffs, Dushanbe (2010) Households: - Apartments$0.07 per person - Single family dwellings $0.06 per person Non-commercial institutions $1.14 per m 3 Commercial enterprises $1.60 per cubic m 3

Water and sanitation: finances 2006 Water Sector Development Strategy: Tajikistans investment needs $1 billion Huge financing gaps: 2009 state budget for spending on water sector $1.1 million 2009 state budget for spending on water sector $1.1 million Donors provided $1.5 million Donors provided $1.5 million Donor-financed projects: Concentrated in urban areas Concentrated in urban areas Largely absent in rural areas Largely absent in rural areas

Solid waste management: finances Investment in service infrastructure below WSS levels Donor-financed projects underway in urban areas EBRD $4 million loan EBRD $4 million loan Netherlands $4 million grant Netherlands $4 million grant EC $1.7 million grant to Dushanbe for upgrade, including landfills for next 15 years EC $1.7 million grant to Dushanbe for upgrade, including landfills for next 15 years In rural areas, international organizations not implementing projects

Focus groups Discussions held in: late 2010, early 2011 late 2010, early 2011 Dushanbe, villages outside capital Dushanbe, villages outside capital Results indicate that: Households view: Households view: Service quality, dependability as low Tariffs as high Consumers see need for more funding, but do not see themselves as funding source Consumers see need for more funding, but do not see themselves as funding source

Prospects for improvements Services can be improved via: Implementation of local governance reforms Implementation of local governance reforms Outsourcing to private-, third-sector service providers Outsourcing to private-, third-sector service providers Appropriate oversight needed Appropriate oversight needed Much depends on: Large infrastructure projects funded by donors, central government Large infrastructure projects funded by donors, central government Local governments abilities to finance infrastructure expansion Local governments abilities to finance infrastructure expansion

Improvements in governance and legal environment Legal framework for local provision of communal services in place Many local government officials and technical staff do not understand how relevant legislation pertains to their offices and responsibilities Government officials and service personnel need training to: Upgrade knowledge and technical skills to maintain and operate infrastructure Upgrade knowledge and technical skills to maintain and operate infrastructure Supervise service providers Supervise service providers Attract private capital and know-how Attract private capital and know-how Engage with consumer organizations Engage with consumer organizations Provide better customer service Provide better customer service

Social assistance policy and reform Social assistance policies: Have not significantly reduced poverty Have not significantly reduced poverty Are now undergoing reform Are now undergoing reform Case for linking social assistance to communal service tariffs is weak: Most poor rural households are not paying tariffs for communal services Most poor rural households are not paying tariffs for communal services Its better to link social assistance to low income levels Its better to link social assistance to low income levels

Lessons learned and recommendations Proper legal framework needed for local governments to establish and appropriately manage service providers Local governments need to be accountable to their constituencies Public participation should be an element of local decision-making Introduction of water meters should be accelerated Public education about conservation and meterage should accompany service provision Communal service providers, local officials need capacity development

Thank you