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Costing sustainable services: the life-cycle cost approach
1. Costing sustainable services
The life-cycle cost approach
Catarina Fonseca
Patrick Moriarty
Stef Smits
21st March, Washington DC
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2. All materials available from:
www.washcost.info
www.waterservicesthatlast.org
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3. Part 1: The Danger Zone
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4. 4 Water and Sanitation Services That Last March 2011
7. Danger zone: as basic
infrastructure is
The Danger Zone? provided, coverage
risks stagnating
Management /
recurrent expenditure
dominates
Capital expenditure
dominates Capital maintenance exp.
dominates
25% 50% 75% 100%
Coverage rates
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11. ‘Life-cycle costs (LCC):
The costs of ensuring adequate water, sanitation
and hygiene (WASH) services to a specific
population in a determined geographical area
- not just for a few years but indefinitely.’
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12. 2$-3$ per
capita per
year…
2.000$ per
rehabilitation in
Mozambique
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13. How to compare costs when services are
different?
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15. Water service levels
Accessibility
Quantity Status
Quality (min=distance Reliability
Service level (lpcd) (JMP)
and crowding)
High >= 60 Good <= 10 Very reliable
Improved
Intermediate >= 40
Acceptable <=30 Reliable/secure
Basic
>= 20
(normative)
Sub-standard >=5 Problematic <=60 Problematic
Unimproved
No service <5 Unacceptable > 60 Unreliable/insecure
Source: Moriarty et al., 2011
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16. Service levels for borehole with hand-pump
1.
2
0.
5
0.
1
Under revision: data will be published in April
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19. Handling the danger zone
Facilitation of the
Learning Alliances
Better
Data from identification of
Implementation gaps in planning
Better
Data used in
dissagregated
planning
lifecycle unit costs
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20. Ghana (Government)
- District Monitoring and Evaluation System (DiMES)
going to become a national monitoring system.
- In 2012 CWSA will roll out the DiMES to all
Metropolitan, Municipal, District Assemblies
(MMDAs)
- Working groups on how to finance capital
maintenance
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21. Mean HH one-off
water supply
investment ($)
Northern SC: 47
Northern BC: 26
Southern BC: 86
HH one-off investment in water supply
tends to be lower the northern and
southern SC and BC colonies.
HH investment in borewells, booster
pumps, storage tanks has a negative
tradeoff for other users
Some HHs in the OC colony have
made “recent” one-off investments of
$500+ in their water supplies.
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22. NGO Fontes Foundation in Uganda
Costs by categories for their Katunguru water project 2004-2010 in 2010$US
Source: Koestler et. al, 2010
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23. Final messages
1. Life cycle cost approach enables a comparison of different
service delivery models internalising country norms, number
of users and poverty analysis
2. Service level analysis provides a more nuanced
understanding of where problems of sustaining coverage
may lie
3. A firm grasp of costs and services to be delivered, leads to
more cost-effective financing strategies reducing slippage
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24. Many organisations and governments already using
components of the life-cycle costs approach
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Between 1990 and 2010 over 2 billion people gained access to improved water sources (275.000 people a day) Instead of 24% there are now 11% of the World population without access
The rate of new infrastructure installation and rehabilitation cannot keep up with the failure rates of existing infrastructure