Communal services in Tajikistan: A poverty and social impact assessment

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

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

3. Key sectoral challenges • Tariffs: • Have risen as infrastructure has deteriorated • Remain too low to finance infrastructure investment • 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 • Expansion of meterage: • Possible in some urban areas . . . • . . . But nearly impossible in rural areas

4. Water and sanitation: Context • Key institutions: • Urban areas: KhojagiManiliyuKommunali (KMK) owns, operates services • Rural areas: • The Rural Water Supply Department focuses primarily on irrigation • Sewage systems nearly non-existent • 2009-2010 reforms let local governments: • own services and infrastructure • outsource service provision to private firms, non-governmental institutions

5. 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 • Services mostly absent • It’s now possible for local governments to: • Own services and infrastructure • Outsource service provision to private firms and non-governmental institutions

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

7. 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 • Mainly in urban areas • Short-/ medium-term constraints on raising household tariffs to cost recovery levels: • Affordability • Willingness to pay (by-pass options available)

8. Source: KMK

9. Source: KMK

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

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

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

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

14. 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 • Supervise service providers • Attract private capital and know-how • Engage with consumer organizations • Provide better customer service

15. Social assistance policy and reform • Social assistance policies: • Have not significantly reduced poverty • 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 • It’s better to link social assistance to low income levels

16. 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

17. Thank you