Water services regulation and water security

Water Services Regula0on and Water Security Oxford Interna0onal Water Security Conference “Water Security, Risk and Society” 18 April 2012 Eng. Robert Gakubia, CEO Water Services Regulatory Board, Kenya

Framing Water Services Regula0on & Water Security (1) • Water Security at what level? Interna0onal, na#onal, sub-­‐na#onal etc.

• Water resources regula0on vs. water services regula#on à enhancing water security by ensuring sustainable access to services with same minimum standard for all

• Urban vs. rural water services (different technology & mgmt.); implica0ons for regula0on

Framing Water Services Regula0on & Water Security (2) Socio-­‐Poli#cal

• Inequity (coverage/access)

Challenges to Water Security in Water Services

• Affordability • Improved living condi#ons Supply/Demand (service standards) • Infrastructure (inadequate/ • Inadequate public par#cipa#on Financial old) (Transparency & Acctblty.)

• Lack/unreliability of • Water resource availability funding (climate variability/change) • Past underinvestment Environment/Public • User compe##on Health • Unsustainable tariffs •

P opula#on g rowth • Public health needs/ • Increased per capita demand risks • Water quality standards Managerial: • Environmental health • Low efficiency • High NRW • Water conserva#on • Low capacity • Lack of managerial autonomy • Low transparency • Poor accountability • Low consumer responsiveness

Framing Water Services Regula0on & Water Security (3) • Key compounding issues to consider in Kenya’s water services sector: – Demography & Urbaniza0on; urban crisis – Poverty; vulnerability of (urban) poor – Human rights (non-­‐discrimina0on, empowerment) – Governance (accountability) & poli0ciza0on – Long-­‐term sustainability (financial, environmental) & Regulatory risks

Urban Crisis & Water Security (1) Increasing demand in urban centres as water risk: The developing world, with its rapidly expanding urban centers, will see the biggest increases in water demand, as its population grows larger and more affluent. Migrations to cities will drive major increases in water demand for personal consumption, sanitation, industry (…)

Global Water Security, Intelligence Community Assessment, February 2012

YET: Need to dis0nguish between actual and latent demand; even today large number of urban poor, whose demand remains unheard (the underserved)

Urban Crisis & Water Security (2) Sanitation/public health hotspots within cities/ towns!

Urban low income (underserved) areas are areas of water insecurity!

Nairobi 282 low income areas Kenya

7.9 million people living in 1,882 low income areas in 212 ci0es and towns

Urban Crisis & Water Security (3) Urban un(der)served . . .

§ Unsafe water sources, e.g. shallow wells, boreholes § Unregulated small scale providers § Water quality poor and uncontrolled § Water price high and uncontrolled § Water availability unpredictable § Disastrous sanitary situation § Informal environment (no accountability) High level of water insecurity coupled with: steady deterioration of living conditions, more severe manifestation of poverty than in rural setting

Human Rights and Water Security Cons0tu0on of Kenya (2010) recognizes Human Right to Water and Sanita#on, obliging water sector ins0tu0ons to work towards its progressive realiza0on This involves: 1. Targe0ng of policy, planning & implementa0on towards more equitable access 2. Formaliza0on of urban water services, ensuring same minimum standards for all (water quality, availability, price) 3. Socially acceptable commercialisa0on for sustainable services 4. Regular monitoring of & public repor0ng on progress 5. Ins0tu0onaliza0on of consumer par0cipa0on and empowerment

Governance and Water Security (1) § Many afempts to address water mgmt issues have been inadequate; WHY???

Capital investments in infrastructure . . . also require investments in capacity and ins9tu9onal development to realize and sustain the benefits of increased investments

WWDR 3 § Even most highly acclaimed technical and managerial exper0se not useful in environment of dysfunc#onal governance § Lack of Good Governance one of root causes of major constraints within our socie0es; water sector is NO EXCEPTION!

Governance and Water Security(2) Poor governance results in chain of water insecurity ↓ Lack of transparency & accountability ↓ Abuse of power ↓ Deficiencies in the management of water supply and sanita0on ↓ Poor/ineffec0ve investments, poor service delivery ↓ Non-­‐fulfillment of the needs of the popula0on ↓ (a) consumer discrimina#on – the underserved & (b) consumer frustra#on – the “badly served” ↓ Low revenues ↓ Ul0mately, leads to water insecurity, threatening human lives & sector sustainability

The Role of Regula0on in Ensuring Water Security (1) Protec0ng consumers by 1. Ensuring same minimum standards for all through formaliza#on of services 2. Se[ng, monitoring & enforcing service standards; inter alia rela0ng to risk mi0ga0on (water quality, availability) 3. Approving jus0fied tariffs for financial sustainability 4. Ensuring cost effec#ve & efficient mgmt. & opera#on of services 5. Ensuring value for money and impact in investments

The Role of Regula0on in Ensuring Water Security (2) Protec0ng consumers by 6. Ensuring sound corporate governance 7. Holding u#li#es accountable (public repor0ng, enforcement) 8. Monitoring performance and spurring yards#ck compe##on (u0lity ranking) 9. Empowering consumers through ins0tu0onalised engagement mechanism

Trend in Water Access in Urban Kenya Improvement over Time (21 main urban WSPs) 80

70

% Water Coverage

70

60

60

60

63

50 40

40

42

2005/06

2006/07

30 20 10 0 2007/08 2008/09 Year

2009/10

2010/11

Trends in Kenya’s Water Sector Budget Water Sector Budget (MWI) 45,000 40,000

30,000

2/3 donor Contribution

25,000 20,000 15,000

Recurrent

10,000

Development Total

5,000

20 10 /2 01 1 20 11 /2 01 2

20 09 /1 0

20 08 /0 9

20 07 /0 8

20 06 /0 7

0

20 05 /0 6

Ksh Millions

35,000

Fiscal Year

Regulatory Risks § Non-­‐conducive policy environment

§ Regulatory capture (vested poli0cal interests, powerful agents, internal corporate governance)

§ Financial and managerial autonomy

§ Lack of capacity to balance actors’ needs

§ Legi0macy from consumer perspec0ve

THANK YOU FOR YOUR ATTENTION!