Water supply and sanitation in Nicaragua

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Water supply and sanitation in Nicaragua is provided by a national public utility in urban areas and water committees in rural areas. Despite relatively high levels of investment, access to water in urban areas has barely kept up with population growth, access to urban sanitation has actually declined and service quality remains poor. However, a substantial increase in access to water supply and sanitation has been reached in rural areas.

The water sector underwent major reforms in 1998; separating policy, regulatory and operating functions. Decentralization is being talked about, but actual implementation is very slow. The current administration opposes private sector participation.

Contents

[edit] Access

Urban (58% of the population) Rural (42% of the population) Total
Water Broad definition 90% 63% 79%
House connections 84% 27% 60%
Sanitation Broad definition 56% 34% 47%
Sewerage 22% 0% 13%

Source: WHO/UNICEF Joint Monitoring Program (2004), based on data from the 2001 Demographic and Health Survey (DHS) and the 2001 Living Standards Measurement Survey (LSMS) [1]

Access to water supply and sanitation in urban areas of Nicaragua has been declining, since there has been little expansion in access while the population grew. However, there have been significant improvements in rural areas since 1990, starting from a low base. Access to improved water supply in rural areas has increased significantly from 46% in 1990 to 63% in 2004.[2] Access to improved sanitation in rural areas has increased from 24% in 1990 to 34% in 2004.[3] According to the 2005 census, access to improved water supply in Nicaragua stands at 76.7% in 2005, which is lower than the JMP estimate shown above. Access to improved sanitation, however, was 84.6% according to the census, probably using a much broader definition than the JMP quoted above.[4]

[edit] Service quality

Water supply in 47% of localities monitored by the regulatory agency (46 out of 96 systems) is not continuous.[5] This share is higher in the dry season than in the wet season. The national utility ENACAL has been labelled as "one of the most notorious overbillers in the country".[6]

Bacteriological urban drinking water quality was considered acceptable by the WHO based on samples analyzed by the national utility.[7]

In 2005 CONAPAS estimated that 42% of the collected wastewater was treated.[8]

[edit] Responsibility for water supply and sanitation

Map of Nicaragua

The responsibilities in the water and sanitation sector in Nicaragua are defined in the General Drinking Water and Sewerage Services Law, Law No. 297 of 1998, as well as the Law-Decree No. 276 of 1998 that created ENACAL and Law No. 275 of 1998 that transformed INAA into a regulatory agency.[9] A draft General Water Law (Proyecto de Ley General de Aguas Nacionales), which is focused on water resources, has been discussed by the National Assembly since 2003.

[edit] Service provision

According to the municipal law municipalities are responsible to provide water and sanitation services in Nicaragua. However, in practice only very few municipalities do provide these services. Instead about 60% of water users are served by the national water and sewerage company Empresa Nicaragüense de Acueductos y Alcantarillados (ENACAL), which serves most urban areas. A further 30% are served by community organizations (potable water committees) in rural areas. Only 10% of users are served by three departmental water companies in Matagalpa, Jinotega and Rio Blanco as well as by 26 small municipalities.[10]

In 2000 there were 3,185 registered rural water systems in the country, of which 70% relied on wells.[11] Today their total number is estimated at 5,000.[12]

[edit] Policy and regulation

Responsibility for policy setting in the Nicaraguan water and sanitation sector is vested in the National Council for Drinking Water and Sanitation - Comisión Nacional de Agua Potable y Alcantarillado Sanitario (CONAPAS). CONAPAS includes the Secretariat of the Presidency, the Ministry of Health, the Ministry of Environment, the national utility ENACAL, the regulatory agency INAA, the Institute for Territorial Studies (INETER) and the Social Investment Fund FISE.

The regulatory agency, the National Water and Sewerage Institute - Instituto Nicaragüense de Acueductos y Alcantarillados, INAA - is in charge of sector regulation. It handles customer complaints, approves tariff increases and can provide concessions for service providers. However, there were no tariff increase requests since 2003 and no requests for concessions, so that the regulator has been condemned to inactivity.

[edit] Other functions

The Social Investment Fund FISE finances infrastructure and supports local communities in the management of infrastructure. In the water and sanitation sector it has been particularly active in rural water supply and sanitation.

Besides providing services in urban areas ENACAL also supported community organizations in rural areas and has been quite successful in this field. Both the WHO and the US-financed Environmental Health Project report high levels of sustainability of rural water service provision in projects supported by ENACAL's rural water directorate.[13] However, in 2005, the responsibility for support to rural communities was given to FISE and donor funds are channeled now through it.[14]

[edit] History and recent developments

View of Asososca Lagoon and Lake Managua
View of Asososca Lagoon and Lake Managua

Under the Somoza government until 1979 the larger urban water systems were operated by the private sector, while a Ministerial department was in charge of water systems in smaller towns.[15] After the revolution a centralized public national water company, the Instituto Nicaragüense de Acueductos y Alcantarillados (INAA), was created.

After the electoral defeat of Daniel Ortega's first administration (1979-1990) the subsequent governments tried to decentralize service provision without much success. In 1998, under the administration of Arnoldo Alemán (1997-2002), the sector was reformed, but not decentralized. The reform consisted in the separation of policy, regulatory and service provision functions: CONAPAS was created to set policies; ENACAL was created to provide services, taking over most of the staff and assets of INAA; and a new regulatory agency was created that inherited the name INAA.[16]

In 2003, the Nicaraguan National Assembly passed a moratorium on any water privatization "until a national water law has been approved".[17]

Neither before the 1998 reform nor afterwards was there much change in the sector towards decentralization or the establishment of public-private partnerships. The financial self-sufficiency of ENACAL improved between 1998 and 2001, but there were public protests against the hardship imposed by higher tariffs.[18] Subsequently tariffs were frozen during the administration of Enrique Bolaños (2002-2007), leading to a gradual deterioration of the utility's financial situation. In October 2005 CONAPAS approved a sector strategy that aims - again - at decentralization, financial self-sufficiency and strengthening of the regulator. In addition, it calls for the development of a sustainable operational model for rural areas. In early 2006 ENACAL signed a five-year service contract for commercial services (meter reading, billing, customer service), supported by the IDB as part of the modernization of ENACAL.[19] The contract has been criticized by a consumer advocacy group who argues the agreement will make access to public water more costly to most Nicaraguans[20].

The current Ortega administration came to power in November 2006. It has yet to define its water and sanitation policy. This administration does oppose to private sector participation and has been critical of autonomous regulation. One option considered by the government is to establish a National Water Authority.

In January 2007 CONAPAS launched a 10-year comprehensive water and sanitation plan. It foresees investments of US$592m and will focus on rural areas using the Social Fund FISE as an implementing agency.[21]

[edit] Donor coordination

The various donors that support the Nicaraguan government in its efforts to improve water supply and sanitation coordinate in a sector table and have subscribed in 2005 to a Sector-Wide Approach (SwAp) to even better coordinate their efforts.[22]

[edit] Financial Aspects

[edit] Tariffs and Subsidies

Urban water and sewer tariffs charged by ENACAL have been increased susbtantially between 1998 and 2001, with annual increases of 28, 27 and 12 % in 1998, 1999 and 2000 respectively.[23] Such high and sustained increases were unusual in the region. While these increases allowed the public utility to regain its financial health, in 2001 they led to protests and legal action against a proposed further 30% tariff increase.[24] Since 2003 tariffs have been frozen in nominal terms. This has again eroded the financial health of the utility leading to its near bankruptcy and making transfers necessary since 2005 to cover operational losses.

ENACAL tariffs are complex and ostensibly aim at protecting the poor. Tariffs vary depending on the city (about one third higher than in Managua in all other cities for reasons that are not entirely clear), user category (three residential user categories and "institutions", which pay the highest tariffs; within the residential user categories the ratio between lowest and highest tariffs is 1:3) and consumption (higher tariffs for consumption above 20 and 50 cubic meters per month respectively). While overall subsidies are probably not very high given high tariff levels, the poorest who have no access to water and sewerage or are served by rural water committees are per definitionem excluded from these subsidies. It has been estimated that an average household in the two lowest income quintiles in the interior of the country that receives water services from ENACAL paid the equivalent of US$ 6.50 per month in 2003, which corresponds to about 7% of its income estimated at US$ 93 per month.[25] While this share is very high, the bill is probably lower than the economic cost of time spent carrying the water and the burden of disease from unsafe water.

[edit] Investment and Financing

Investments in water and sanitation from 2002-2006 were US$178m or on average more than US$35m per year. This corresponds to 0.75% of GDP or US$9/capita/year, which is relatively high compared to many other Latin American countries. Investments are almost entirely financed by foreign donors and the government passes foreign credits on as grants to ENACAL and to water committees in rural areas. In contrast, of the US$215m invested by the national water utility in 1990-1999 (US$24m per year in nominal prices) 16% was self-financed by the utility and 7% was financed by the government with its own resources, the remainder coming from foreign donors.[26]

There are no data on investments by NGOs, which provide funds mainly for infrastructure in rural areas.

[edit] Efficiency

The efficiency of urban service provision is low, with estimated non-revenue water of more than 56% and labor productivity of 7.6 employees per 1000 water connections, more than twice the level that is considered good practice.

[edit] References

  1. ^ WHO/UNICEF JMP Water and Sanitation
  2. ^ WHO/UNICEF JMP Water
  3. ^ WHO/UNICEF JMP Sanitation
  4. ^ 2005 census INEC
  5. ^ WSP, p. 10 [1]
  6. ^ Doing Business in Nicaragua [2]
  7. ^ WHO 2000
  8. ^ IDB, p. 1
  9. ^ INAA website, section "Antecendentes" [3]
  10. ^ IDB, p. 1
  11. ^ WHO 2000 [4]
  12. ^ IDB, p. 1 [5]
  13. ^ WHO 2000 [6] and EHP 2000 [7]
  14. ^ IDB, p.2
  15. ^ WHO 2000
  16. ^ WHO 2000 [8]
  17. ^ Food&Water Watch April 2004[9]
  18. ^ Public Citizen [10]
  19. ^ IDB 2005 IDB
  20. ^ Public Citizen [11]
  21. ^ IRC 2007 [12]
  22. ^ WSP
  23. ^ WHO 2000
  24. ^ Public Citizen [13]
  25. ^ ADERASA: Las tarifas de agua potable y alcantarillado en América Latina, p. 70
  26. ^ WHO 2000

[edit] External links

[edit] See also

[edit] Comments

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