Benchmarking to Improve Urban Water Supply Delivery in Bangladesh

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1 WATER AND SANITATION PROGRAM: Report Targeting the Urban Poor and Improving Services in Small Towns Benchmarking to Improve Urban Water Supply Delivery in Bangladesh 2014 The Water and Sanitation Program is a multi-donor partnership administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services.

2 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Acknowledgments This note was prepared by the Bangladesh Benchmarking Project Team, led by Abdul Motaleb (Senior Water and Sanitation Specialist, Water Sanitation Program), Arif Ahamed (Water and Sanitation Specialist, SASDU), Zakir Hossain (Local Consultant), and Cesar E. Yniguez (Benchmarking Adviser), with advisory assistance from Alexander Danilenko and Berta Macheve of the Water and Sanitation Program. The team would like to acknowledge the support provided by the Bangladeshi authorities and sector stakeholders. It would especially like to express its gratitude to the senior government officials, managing directors of Dhaka, Chittagong, Khulna, Rajshahi Water and Sewerage Authorities, Honorable Mayors of Pourashavas, donor agencies, and private operators who kindly offered their time, documentation, data, and expert feedback and guidance in the process of preparing this note. The team is particularly indebted to Mr. Abu Alam Md. Shahid Khan, Local Government Division (LGD) Secretary, Ms. Zuena Aziz, LGD Additional Secretary, Mr. Shamsuddin Ahmed, LGD Joint Secretary, and Mr. Khairul Islam, Deputy Secretary of the Ministry of Local Government Rural Development and Cooperatives (MLGRD&C). We would like to thank the management of Dhaka, Chittagong, Khulan, Rajshahi Water and Sewerage Authorities, and all the participating Pourashavas/Municipalities for their invaluable support during the preparation of this note. The review benefitted immensely from policy-oriented national and international workshops held on November 13 14, 2011 and April 15 18, 2012, led by the LGD of the Ministry. These workshops were enriched by the participation of Mr. Alexander Danilenko, Ms. Berta Adelaide Da Silva Macheve, Ms. Rosemary Rop, Mr. Masroor Ahmed, Ms. Vandana Bhatnagar, and Mr. Christopher Juan Costain of the Water and Sanitation Program (WSP). The workshops were attended by Mr. Imran Amir Ali of the World Bank Institute (WBI) serving as a resource person, Mr. William Muhairwe, former Managing Director of the National Water and Sewerage Corporation, Kampala Uganda, Mr. Neil Mcleaod, Managing Director of ethekwini Water and Sanitation, Mr. Sam Parker of Water and Sanitation for Urban Poor UK, and Mr. Taqsem Ahmed Khan, Managing Director of Dhaka WASA. The policy workshops brought together key policymakers, urban water utilities, private operators working in Bangladesh, active donors to the water sector in Bangladesh, and renowned experts in public-private partnerships (PPPs). The Policy Note was completed under the technical advice and oversight of Mr. William Kingdom, Lead Water and Sanitation Specialist, SASDU, Ms. Caroline Van Den Berg, Lead Water and Sanitation Specialist, MNSWA, and Mr. Stephan Raphael Dahan, Water and Sanitation Specialist, ECSUW. The team would like to express its sincere gratitude and thanks to them. Water and Sanitation Program (WSP) reports are published to communicate the results of WSP s work to the development community. Some sources cited may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed herein are entirely those of the author and should not be attributed to the World Bank or its affiliated organizations, or to members of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to wsp@worldbank.org. WSP encourages the dissemination of its work and will normally grant permission promptly. For more information, please visit or wspsa@worldbank.org International Bank for Reconstruction and Development/The World Bank Write Media Benchmarking in Bangladesh

3 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Targeting the Urban Poor and Improving Services in Small Towns Benchmarking to Improve Urban Water Supply Delivery in Bangladesh

4 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Abbreviations and Acronyms ADB ADP AusAID BADC BAEC BAMWSP BBS BDT BM&PIP BSTI BRGM BWDB CEGIS CHT DAE DANIDA DPHE DOE GSB IWM JICA LGD LGED LGI Lpcd MLGRD&C MIS MoU MTBF NGO NRW PPP PSU RDA SDP SIP SWAP UNICEF UP WASA WATSAN WBIUR WHO WSP WSS UWUN Asian Development Bank Annual Development Program Australian Agency for International Development Bangladesh Agriculture Development Corporation Bangladesh Atomic Energy Commission Bangladesh Arsenic Mitigation Water Supply Project Bangladesh Bureau of Statistics Bangladesh Taka Benchmarking and Performance Improvement Planning Bangladesh Standard Testing Institute French Geological Survey Bangladesh Water Development Board Center for Environment and Geographical Information System Chittagong Hill Tracts Department of Agriculture Extension Danish International Development Assistance Department of Public Health Engineering Department of Environment Geological Survey of Bangladesh Institute of Water Modeling Japan International Cooperation Agency Local Government Division Local Government Engineering Department Local Government Institution liters per capita per day Ministry of Local Government, Rural Development, and Cooperatives Management Information System Memorandum of Understanding Mid-Term Budget Framework Nongovernmental organization Non-revenue water Public-private partnership Policy Support Unit Rural Development Academy Sector Development Program Sector Investment Plan Sector Wide Approach United Nations International Children Emergency Fund Union Parishad Water Supply and Sewerage Authority Water and Sanitation World Bank Institute Urban Reforms World Health Organization Water and Sanitation Program Water Supply and Sanitation Urban Water Utilities Network 4 Benchmarking in Bangladesh

5 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Contents Executive Summary Bangladesh: Administrative, Economic, and Social Profile Country Overview, Urbanization, and Poverty Institutional Structure of the Local Government and Urban Water Department of Public Health Engineering (DPHE) Water Supply and Sewerage Authorities (WASAs) City Corporations and Municipalities (Pourashavas) Tariff Setting Mechanism and Tariff Levels Local Government Institutions (Union Parishad) Long-Term Vision of Country Development (2009) and Water and Sanitation Services Water Resources Surface Water Groundwater Legal Framework for Water and Sanitation Policies and Strategies for Water Supply and Sanitation National Strategies for Water Supply and Sanitation Status of Water and Sanitation Based on Performance Assessment Introduction Sample Definition Water Coverage and Urbanization Wastewater Collection and Sanitation Water Production, Consumption, and Losses Financial Performance Assets and Investment Practice Benchmarking and Performance Improvement Process in Bangladesh WSP-WBI Training on Successful Water Utility Reforms Conclusions...32 References...34 Annex Water Quality Standards and Guidelines...35 Water Quality Monitoring...35 Annex Status of Contamination...37 National Policy and Implementation Plan for Arsenic Mitigation Annex

6 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Location of Utilities in Bangladesh using IB-NET 6 Benchmarking in Bangladesh

7 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Executive Summary Water service is a key life-supporting facility in Bangladesh. Water in municipalities (Pourashavas) is provided by the municipal water companies, which are ring-fenced water departments of Pourashavas. There are 309 Pourashavas in the country. In the six largest cities, the Government established three city corporations and four water and sewerage authorities (WASA) with similar functions, but also with somewhat specialized authority. Benchmarking and performance improvement planning were introduced to municipal water providers in Bangladesh in They were developed under the Bangladesh Benchmarking and Performance Improvement Planning (BM&PIP) for the Urban Water Utilities Project facilitated by the Water and Sanitation Program (WSP), in cooperation with the Department of Public Health Engineering (DPHE) and the Local Government Division (LGD) of the Ministry of Local Government, Rural Development, and Cooperatives (MLGRDC). Performance data from 11 utilities were collected and analyzed in 2007 for the first time. A national workshop was convened in May 2008 to present the findings and discuss ways of improving the performance shown by the benchmarking indicators. A draft framework for the establishment of an urban water utilities network was prepared by representatives of five Pourashavas with WaterAid Bangladesh and the Bangladesh Municipal Development Fund. The draft was subsequently reviewed and discussed among the Pourashava utilities, leading to the establishment of the Urban Water Utilities Network for Performance Improvement (UWUN) in March 2009 by mayors and representatives of 10 Pourashavas. With over 146 million people in an area of 147,570 km 2, Bangladesh is one of the most densely populated countries in the world. The overall population growth rate is about 1.5 percent. However, the influx of population in urban areas has taken the growth rate over 3.5 percent, on average, whereas the growth rate of urban migration in metropolitan cities is about 5 percent. Dhaka is the capital and the largest metropolitan city in the country, with more than 12.5 million people. The next largest city is the port city of Chittagong, with more than 3.65 million people. Urban areas in Bangladesh can be divided into three tiers: Dhaka and Chittagong that have populations of many millions; four other City Corporations with populations of between 0.5 to 1.5 million; and 309 urban municipalities with populations of 0.05 to 0.5 million. The total urban population, estimated to be about 25 million, is expected to be 50 million by the end of Local government institutions, that is, the City Corporations and Pourashavas, are legally responsible for water supply and sanitation for the people, including the poor people, within the municipality area, except in Dhaka, Chittagong, Rajshahi, and Khulna. A water supply and sewerage authority (WASA) has been set up in each of these City Corporations. Among the water utilities, only Dhaka WASA also provides sewerage services. While Dhaka Water Supply and Sewerage Authority (DWASA) covers water services for 89 percent of its residents, Rajshahi Water Supply and Sewerage Authority (RWASA) covers 67 percent, Chittagong Water Supply and Sewerage Authority (CWASA) covers 40 percent, and Khulna Water Supply and Sewerage Authority (KWASA) covers 24 percent. Only 102 Pourashavas have an intermittent piped water supply that serves very limited households. The average coverage by piped water supply in the Pourashavas is only 39 percent; the remaining 32 percent is served by hand tube wells. At present, urban populations, especially poor people, are the most vulnerable if water supply and sanitation services are inadequate. Large numbers of future urban populations will thus require a reliable and safe piped water supply system. The lack of effective management capacity has been identified by the Government of Bangladesh and other stakeholders as a major reason why urban utilities are not performing well. Benchmarking is recognized as an effective tool to monitor performance and formulate performance improvement programs. 7

8 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Executive Summary Over the period, 33 large municipal providers participated in the annual benchmarking exercise, with 30 UWUN members doing performance improvement activities through sharing expertise and experiences during network meetings and workshops in 10 exchange visits. As a result, DWASA and Manikganj have reduced their non-revenue water (NRW); Jessore has increased its coverage; Lakshmipur has rationalized its flat-rate tariff, thereby increasing its revenues; collection efficiency has improved in Faridpur through the availability of more bank payment outlets and in Haziganj through a computerized billing system; and Gazipur and Moulvibazar were able to optimize use of their production wells through production metering, among other means. More utilities are joining UWUN and participating in its activities and programs. In FY13, WSP is supporting the consolidation of the BM&PIP process through the compilation of an urban water utility data book summarizing the performance of the 33 utilities on the key benchmarking indicators. WSP will be seeking to extend this benchmarking process further by drawing in other partners (the ADB, JICA, and GIZ) through the hosting of key benchmarking data sets through the Water Supply and Sanitation Local Consultative Group (WSS LCG) mechanism. WSP will also be extending support for consumer satisfaction surveys with other utilities. The past six years provided several opportunities for WASAs, City Corporations, and Pourashavas to develop and implement programs for performance improvement among the water service providers using benchmarking as a tool and networking as a vehicle for learning to improve their performance. Both small and notable achievements have encouraged more utilities to participate in BM&PIP programs, with technical and financial support from the LGD, DPHE, and the WSP at the World Bank. The challenge is to sustain the existing programs with guidance and support from national government sector agencies (the LGD and DPHE), while the WSP and other development partners find ways of providing technical support for enhancing and improving the current programs. Table 1: Preliminary Utility Benchmarking Data Performance Indicators Average Top Quartile Coverage % Consumption (lpcd) Water availability (hrs/day) Unaccounted for water (%) Operating ratio Collection period Staff/1,000 connections Figure 1: Evolution of Performance Assessment of Water Providers in Bangladesh ( ) 2007 First training in performance assessment utilities collected and analyzed performance data for the first time Performance improvement plans developed for Dhaka, Jessore, and another eight utilities water utilities participate in benchmarking >40% of country urban population covered Dhaka WASA: NRW down from 41% to 33%. Account receivable drop from 422 days to 212. Jessore increased coverage from 52% to 84%, reduced staff per connection from 8.2 to 6.2 per 1,000 connections. Haziganj: Collection efficiency: 92% Investment programs developed based on outcome indicators and measurable development objectives. 8 Benchmarking in Bangladesh

9 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Executive Summary The study concluded that Bangladesh municipal water providers are facing significant pressure from urbanization. The difficulty in accommodating new residents is reflected by many performance indicators: from coverage rates and rationing of the water through shortened hours of operation, as well as the falling value of assets per capita. It is important to study trends on the utility level and then prepare investment programs for the most needed utilities, which, as of today, would be utilities for the fifth group serving populations from 500,000 to 1 million that experience the most difficulties. Tariffs are low, reflecting the low cost of operation of the water utilities, whereas labor costs dominate (over 50 percent in almost every utility). This presents a threat for modernization and implementation of new technologies as over-use of many utilities can place a significant burden on the reform process. Electricity costs are also high, illustrating the exposure of water utilities to potential financial shocks if electricity prices for providers become unregulated. Collection rates are low for all utilities. The current practice of writing off bad debts does not motivate utilities to enforce collection and presents a problem for many of them as inaction in this regard can promote non-payment, specifically for new residents. The following chapter summarizes the status of the urban water sector and presents the development trends of water utilities in the country. Annex 1 and 2 describe the water quality issues, and Annex 3 provides a summary of the performance for each water provider that participated in the exercise. Figure 2: water utility coverage (%) Figure 3: unaccounted for water (%)

10 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh I. Bangladesh: Administrative, Economic, and Social Profile 1.1 Country Overview, Urbanization, and Poverty With an area of 144,000 square kilometers and an estimated population of about 150 million in 2010, Bangladesh is one of the most densely populated countries in the world. It consists of seven divisions, which are further subdivided into 64 districts, and the districts into 482 upazilas (subdistricts). Finally, upazilas are divided into 4,498 unions. There are provisions in the administrative set up for local governments at the district, upazila, and union levels, but at present, local governments exist in upazilas and unions. In urban areas, there are two types of local government for water services: six City Corporations for large and metropolitan cities and 308 Pourashavas (municipalities) for smaller entities. Since independence in 1971, the national GDP has more than tripled in real terms and food production has increased at a similar rate. Sustained economic growth since the early 1990s has allowed the country to make good progress with poverty reduction despite a series of external setbacks. GDP grew at an average of 5.8 percent over the past decade, with GDP per capita reaching US$840 in Ready-made garments and remittances have emerged as the twin drivers of the economy. Even more impressive than the economic growth has been progress with improving the social and human dimensions. Bangladesh s faster gains in human development than in income growth result from public policies that have complemented the remarkable energy at the grassroots level. The population growth rate has declined from 2.9 percent per annum in 1974 to 1.2 percent in 2009, and the incidence of poverty has been declining along this trend. The infant mortality rate (under 5 years old) declined from 151 deaths per 1,000 live births in 1991 to 65 deaths per 1,000 live births in 2007, and during the same period, the infant mortality rate dropped from 94 deaths per 1,000 live births to Figure 1.1 shows population projections up to 2025, made in line with the Bangladesh Bureau of Statistics population projection under the assumption of a total fertility rate of 2.1 percent by Population projections for both urban and rural populations were done by the Planning Commission, Urban Development Directorate (UDD) and the National Institute of Population Research and Training (NIPORT). It is expected that the rural population will stabilize after 2015, with some reduction after 2025, due to migration to the cities. On the contrary, urban population is expected to increase sharply, due mainly to high migration from rural areas. The total population of the country in the next five year tranches, that is, in 2015, 2020, and 2025, is projected to be 162 million, 172 million, and 183 million, respectively. Figure 1.1: Population Projection Population in million Population Projection Total Urban Rural 1 Management Information System, Directorate General of Health Services, Government of the People s Republic of Bangladesh. Health Bulletin Benchmarking in Bangladesh

11 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Bangladesh: Administrative, Economic, and Social Profile The national head count poverty index declined from 57 percent in the early 1990s to 49 percent in 2000 and 40 percent in In 2009, the poverty level is estimated to be between 31.1 percent and 32.5 percent. Despite rises in household income, gaps in poverty across different occupation groups, gender, and region persist or are growing. The bottom 40 percent, which coincides with the proportion of poor in the total population, received only 14.4 percent of the total income, whereas the top 5 percent received nearly 27 percent of the total income in Various studies indicate that the extreme poor are mainly women. Regional disparities in poverty also remain: poverty is higher in the western region of the country and lower in the eastern region. The poverty incidence in the three northwestern divisions, namely Khulna, Barisal, and Rajshahi, was 45.7 percent, 52.0 percent, and 51.2 percent, respectively, in 2005, while the incidence of poverty in southeastern divisions Dhaka, Chittagong, and Sylhet were comparatively lower at 32.0 percent, 34.0 percent, and 33.8 percent, respectively Institutional Structure of the Local Government and Urban Water Historical Background The institutional framework for communal services has taken shape over the past 150 years, from the passing of the Bengal Local Self Government Act in 1885 establishing Union Committees responsible for roads, public health, and primary education and authorizing them to raise funds. Municipalities in urban areas have been rendering public health services since The Department of Public Health Engineering (DPHE) was created in 1935 as a sector agency to promote public health by ensuring the provision of safe drinking water and, since 1954, sanitation as well. After independence in 1971, the Government of Bangladesh first emphasized rehabilitation of damaged water supply and sanitation services and subsequently started installation of new facilities through the DPHE. Since then, the water and sanitation sector went through a phase of rapid development with increased participation from citizens. National Water Supply and Sanitation Institutional Framework At the national level, the Local Government Division of the Ministry of Local Government, Rural Development, and Cooperatives has overall responsibility for the water and sanitation sector. The DPHE and WASAs are under the administrative control of the LGD. DPHE is responsible for the implementation of water supply and sanitation projects in the public sector in rural and urban areas outside the areas covered by the WASAs. In addition to the DPHE, the Local Government Engineering Department (LGED), also under the LGD, implements water and drainage projects in urban areas as part of urban infrastructure development projects. Coordination at the national level between the sector stakeholders such as government agencies, NGOs, development partners, and the private sector is performed by the National Forum for Water Supply and Sanitation, established in the LGD. Figure 1.2: Organizational Structures under the Local Government Division Local Government Division Line agencies Semi-autonomous agencies Local Government Institutions URBAN RURAL DPHE LGED WASAs Dhaka WASA Chittagong WASA Khulna WASA 6 x City Corporations 308 x Pourashavas 64 x Zila Parishad 482 x Upazila Parishad 4,466 x Union Parishad 2 Bangladesh Bureau of Statistics. Household Income and Expenditure Survey (HIES), No national level HIES was carried out after Government of Bangladesh (2008). A Strategy for Poverty Reduction in the Lagging Regions of Bangladesh, General Economics Division, Planning Commission, Dhaka. 11

12 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Bangladesh: Administrative, Economic, and Social Profile In urban areas, the DPHE was originally responsible for water and sanitation services, but the Pourashavas and the City Corporations have gradually become more involved in the planning, implementation, and management of the water systems. Water Supply and Sewerage Authorities were established in 1963 in Dhaka and Chittagong, with responsibility for water supply, sewerage, and drainage. Since 1990, Dhaka WASA s coverage extended to the town of Narayanganj. The Khulna and Rajshahi WASAs were also created in the 1990s. The Local Government Division under the Ministry of Local Government, Rural Development, and Cooperatives is mandated to provide overall guidance to the water sector. The LGD implements and oversees policies and plans and implements development programs through the organizations under it. Capacity building of the LGD and the government organizations under it is focused here. It is expected that other organizations in the sector, such as NGOs and the private sector, would take the initiative to build capacities in line with their functions as suggested in the Sector Development Program (SDP). The organizational structure of the different organizations under the LGD involved in the implementation of water and sanitation is shown in Figure 1.2. The organizations under the LGD are of three types: (i) line agencies consisting of the DPHE and LGED; (ii) semi-autonomous organizations, such as the three WASAs; and (iii) Local Government Institutions (LGIs) in urban and rural areas. The DPHE as the national focal agency for water and sanitation is involved in urban and rural areas. The WASAs, urban LGIs such as City Corporations and Pourashavas, and the LGED deal with urban areas. Of the six City Corporations, those in Dhaka, Chittagong, and Khulna do not address water and sanitation as these cities have WASAs for this purpose. Rural areas are handled by the rural LGIs (essentially Upazila Parishad and Union Parishad; at present, Zila Parishad has no substantive role). Structure and Functions The LGD performs a wide range of functions including policymaking, planning, financial mobilization, and allocations and the development and maintenance of the institutional framework for Water Supply and Sanitation (WSS). Framing of operational rules, regulations, guidelines, and procedures for the agencies and institutions and their supervision, monitoring, and evaluation are an important part of its functions. The LGD shares with the Planning Commission the tasks of policy decision making, sector allocation, and funding, as well as project appraisals, approval, monitoring, and evaluation. It also liaises and negotiates with donors through the External Relations Division (ERD) of the Ministry of Finance (MoF) for commitment of resources for the sector program. There are about 200 staff in the LGD, most of whom are permanent. The LGD is headed by the Secretary and operates through its four Wings, each headed by a Joint Secretary. Different agencies and institutes are placed in the Wings as follows: Administration Wing: Apart from administration and audit, the District Councils (Zila Parishad) and the Upazila and Union Parishads Development Wing: City Corporations, Pourashavas, and the LGED MEI Wing: Three cells planning, evaluation, and monitoring Water Supply Wing: The DPHE and Dhaka, Chittagong, and Khulna WASAs The Policy Support Unit (PSU), headed by a Director (Deputy Secretary), is placed under the Water Supply Wing and at present operates in project mode, with financial support from the Danish International Development Agency (DANIDA). It has been agreed with the LGD that the PSU would be integrated as a permanent unit by The LGD also implements innovative projects such as the Hygiene Sanitation and Water Supply (HYSAWA) project that finances the Union Parishads (UP) for water and sanitation intervention out of a dedicated fund, which functions under Company Laws. 1.3 Department of Public Health Engineering (DPHE) According to the National Policy for Safe Drinking Water Supply and Sanitation, 1998, the DPHE is the national focal agency for water and sanitation. It is involved in planning and implementing water and sanitation facilities in rural and urban areas, except areas under the oversight of WASAs. The DPHE carries out the implementation works in collaboration with the City Corporations, Pourashavas, and Union Parishads. 12 Benchmarking in Bangladesh

13 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Bangladesh: Administrative, Economic, and Social Profile The DPHE has a number of executive engineers at the district levels and sub-assistant engineers at the upazila level. There are also four tube well mechanics in each upazila. According to its November 2009 organogram, the DPHE has 7,052 sanctioned staff positions of which 444 are Class-I engineers and 652 Class-II engineers (sub-assistant engineers). This position includes the recently approved 363 new staff, including 242 Class-1 engineers (assistant engineers). Each assistant engineer would be in charge of two or three upazilas. All new staff have not yet been appointed; however, this recent expansion would enhance the DPHE s field strength. As the lead agency for the sector, the DPHE s organizational strength is a vital element in the development of the sector. 1.4 Water Supply and Sewerage Authorities (WASAs) WASAs were first established in Dhaka and Chittagong through the E.P. Ordinance of 1963 to address the water supply and sanitation needs of large cities. The intention was to operate the organizations according to different laws from public law, which was viewed as not being sufficiently flexible to operate utilities under commercial practices. However, the organizations were managed by governmentappointed staff and functioned mainly under public rules and regulations and as such, the desired commercial efficiency did not materialize. In order to address growing needs and mounting complexities, the WASA Act was enacted in 1996 to create more autonomy in WASA operations by establishing a WASA Board consisting of representatives of different stakeholder entities. To date, only the top management, that is, the Managing Director and the Deputy Managing Directors, are recruited externally on commercial terms and conditions. The salaries and benefits of the other levels are fixed according to the public service salary benefit structure with no incentive package for better performance. Khulna WASA was established in 2008, and there is the possibility of establishing another WASA soon in Rajshahi. Table 1.1: Present and Future Major Functions of the DPHE under the Local Government Division Present Functions NATIONAL Conduct hydrogeological investigation for safe water sources and emergency intervention during natural calamities. To a limited extent, carry out water quality monitoring and R&D for appropriate WSS technologies. URBAN Plan and implement WSS projects jointly with the LGIs. Future Functions NATIONAL Continue with hydrogeological investigation and emergency intervention during natural calamities. Carry out national water quality monitoring and surveillance, including groundwater level and quality monitoring. Strengthen R&D activities. Maintain a national WSS database. URBAN Provide technical assistance to LGIs to plan and implement WSS projects and to ensure efficient systems operation, including water safety plans. Support the LGD/Regulator to set service standards and monitor the service level. On behalf of the LGD, advise and monitor the use of surface and groundwater. Table 1.2: Present and Future Major Functions of the WASAs Present Functions Manage operation of the WASAs, which requires technical and financial improvements. Future Functions Provide WSS services in accordance with the quality and service standards set by the LGD/Water Regulatory Commission. Ensure customer care and services to disadvantaged communities. Operate the water supply section (and conservancy section) following sound technical and commercial practices. Partner with the private sector and NGOs in some service delivery areas. 13

14 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Bangladesh: Administrative, Economic, and Social Profile 1.5 City Corporations and Municipalities (Pourashavas) Water supply and sanitation (WSS) services are among the mandated functions of the City Corporations and Pourashavas. Previously, WSS development projects were solely implemented by the DPHE, but to gradually transfer more responsibilities, the modalities have changed and projects are now jointly implemented. The DPHE implements relatively more sophisticated technical interventions such as treatment plants, production wells, and transmission lines, whereas City Corporations and Pourashavas implement piped networks. Under some donor-supported urban development projects, the LGED also implements WSS installations in a similar manner as the DPHE. Water and sanitation assets are owned by the DPHE, which is also responsible for investments, and in some cases, the Pourashavas are involved in the process of investment. However, all operation and maintenance responsibility falls to the City Corporations and Pourashavas. Water supply is managed by the water supply sections of the City Corporations and Pourashavas, while sanitation is managed by the conservancy sections. Both sections are under the Engineering Department. The Pourashava (municipality) is fully authorized to produce and supply water and render related services to its citizens according to the Pourashava Act of 2009: 1. A prescribed application form (fixed price) by the Pourashava will be collected and submitted with a plumbing plan of the location where the connection will be placed. 2. The inspection and examination shall be completed by the Pourashava water supply section within 30 days of submission of the application. 3. Within 15 days of receiving written reports from the Pourashava water supply section, the Pourashava will approve/reject the application, inform the applicant, and collect the prescribed connection fee (there are different fees for different diameters of pipe water connection including domestic/commercial/ industrial) along with other necessary expenditures specified by the Pourashava. 4. If the abovementioned fees are not submitted by the applicant within one month of obtaining permission for connection, the Pourashava reserves the right to cancel permission for the connection. 5. If any location is provided with a water connection, the Pourashava can, if it deems necessary, place a meter at an appropriate location and the applicant will be obligated to pay the meter price and meter establishment cost as fixed by the Pourashava. 6. In the case of water being provided through a connection without a meter, the Pourashava shall set the monthly water rate time to time based on the water supply pipeline diameter and connection type. 7. There are also by-laws on water price payment, prevention of misuse and wastage of water, restrictions on taking a water supply connection from other sources, irregular water supply, disconnecting the connection, and establishing re-connection of water. The Local Government Acts regarding City Corporations and Pourashavas give them the authority to recruit staff and set water rates. However, this authority is not fully realized due to the need for approval from the LGD or owing to their own reluctance. Autonomy regarding the functions of the water sections and their low capacity is the prime concern in the context of effective service delivery and sustainability. The smaller the Pourashava, the greater the need for capacity support. 1.6 Tariff Setting Mechanism and Tariff Levels The Pourashava is responsible for setting the water tariff rate in accordance with the Pourashava Water Supply By-Law of 1999, and the Pourashava council imposes the rate without requiring prior permission from the Government. Therefore, the water tariff varies substantially from utility to utility and there is no fixed rule or regulation to periodically update monthly water tariff rates, which is left completely to the utility s discretion. Some Pourashavas change rates at threeto five-year intervals; some do not change rates even over 10 to 12 years. In fact, Pourashavas have been operating under these arrangements without a supervision and monitoring mechanism from the central level. The same arrangement exists for the City Corporation and Water Supply and Sewerage Authorities. The following different water tariff rates exist in different utilities in Bangladesh. 14 Benchmarking in Bangladesh

15 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Bangladesh: Administrative, Economic, and Social Profile Table 1.3: Water Tariff Rates (2012) Name of Utility Residential Tariff per 1,000 liter (BD taka) Dhaka WASA 7.24 Chittagong WASA 6.57 In the absence of a water meter, the tariff is fixed by the diameter of the pipe connection Table 1.4: Fixed Water Tariff (per connection per month) Sl. No Name of Utility 12 mm diameter Remarks Pipe Connection 1 Rajshahi WASA Most utilities have 12 mm diameter pipe 2 Khulna WASA connections (residential). Some utilities have water meters, but they are few 3 Sylhet City Corporation in number. 4 Barisal City Corporation Rangpur City Corporation Gazipur City Corporation Chapai Nawabganj Pourashava Chuadanga Jessore Manikganj Meherpur Narsingdi Bagerhat Chandpur Kushtia Laksham Lakshmipur Lalmonirhat Narail Rajbari Satkhira Shariatpur Bhola Chowmuhani Faridpur Gopalgonj Hajigonj Munshiganj Natore Noapara Sherpur

16 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Bangladesh: Administrative, Economic, and Social Profile 1.7 Local Government Institutions (Union Parishad) The Union Parishad (UP) is the lowest tier of local government; in fact it is the only type of LGI that has been active for a long time, while the other levels are sometimes abolished or are not fully effective. As such, attention is focused on UP functions and their capacity development. The roles of the Upazila Parishad in water and sanitation are still evolving and may also have some prominence in the future. The provision of WSS services constitutes an important part of the mandate of UPs, although the local government functions are much wider. UPs are staffed with only one secretary to serve all purposes. UPs receive annual block grants through upazilas and generate a limited amount of revenue by levying taxes and fees, for example property transfer tax and registration fees, leases of market, water bodies, and ferry ghats. Under the Union Parishad Act of 2009, UPs must have 12 Standing Committees for welfare and development, of which the Union Water and Sanitation (WATSAN) is one. In order to involve the UPs in WSS services under different DPHE projects, the WATSAN Committee was established in 1994, the Tube Well Site Selection Committee in 1998, and the Union Arsenic Committee in A lack of staff, little autonomy, insufficient finances, and the absence of a proper administrative support structure weakened the UPs to the extent that they are close to the rural people and have social and political influence over them, but their potential has not been fully realized. 1.8 Long-Term Vision of Country Development (2009) and Water and Sanitation Services The Government has adopted a long-term vision for the country s development, reflected in the Perspective Plan of Bangladesh , which provides goals for the future along with an indicative plan for achieving these goals by The Government has identified five priority areas: (i) maintenance of macroeconomic stability and control over commodity prices in the face of the global economic crisis; (ii) effective action against corruption; (iii) power and energy; (iv) the elimination of poverty and inequity; and (iv) establishment of good governance. In order to achieve the long-term vision, 12 sets of targets for different sectors have been set for the macroeconomy, including Ensure living accommodation for the entire population by 2015, supply pure drinking water for the entire population by 2011, and bring each house under hygienic sanitation by This target indeed reflects the high priority that the Government attaches to the water and sanitation sector in its development agenda. The five priority areas and the 12 sets of targets are reflected in the Poverty Reduction Strategy Paper II and the upcoming Sixth Five- Year Plan. 16 Benchmarking in Bangladesh

17 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh 2. Water Resources 2.1 Surface Water Bangladesh lies across the delta of four major rivers, the Ganges-Padma, the Brahmaputra-Jamuna, the Meghna, and the Teesra. These rivers and their distributaries discharge about 5 million cubic feet of water per second into the Bay of Bengal at peak periods. The annual sediment load of the rivers has been estimated at between 1.5 and 2.4 billion metric tons. In total, Bangladesh has about 24,000 kilometers of rivers, streams, and canals. The surface water system of Bangladesh consists of the major river network, the world s largest delta, and the massive flood plains, which become inundated in the monsoon season. Seasonality is a major consideration for any surface water in Bangladesh. In addition to the network of rivers, the surface water system is composed of lakes and over one thousand beels and haors, which are saucer-like depressed basins of a marshy character. There are also ox-bow lakes, the remnants of dead rivers in the southwestern parts of the country. In addition to these natural water bodies, there are several ponds of various sizes in each village. The total number of ponds is estimated to Table 2.1: Water Bodies in Bangladesh Type of Water Body Area (km 2 ) Main rivers (Padma, Meghna, 2,174 and Jamuna) Other rivers and canals 2,626 Dead rivers and ox-bow lakes 225 Beels/haors/natural water bodies 1,540 Estuary 5,518 Total 12,082 Source: SPARRSO Report, be 1,288,222 (Bangladesh Bureau of Statistics2007). The areas of the individual water bodies are provided in Table 2.1; the total area of the water bodies is over 12,000 square kilometers, which is about 8 percent of the total land area of Bangladesh. Surface waters are substantially polluted by agricultural, industrial, domestic, and municipal sources. The quantity of silt generated during the monsoon is very high, while algae grow this extensive in stagnant water bodies such as ponds in the dry season. In addition, unsanitary practices contribute significantly to the deterioration of surface water quality. The fecal coliform concentration, an indicator of pollution due to unsanitary practices, in most surface water bodies, is between 500 to several thousand per 100 milliliters. Therefore, the use of surface water for drinking requires elaborate and expensive treatment, including clarification and disinfection. There are several constraints hampering the use of surface water for drinking in urban areas. First, it is not available year round in many parts of the country. Second, the investment, operation, and maintenance costs are much higher than for groundwater-based systems. Third, salinity is a limiting factor in coastal districts, while industrial pollution in and around the large cities is a major concern. Finally, in rural areas, there is less availability of ponds safe from polluting activities such as fish farming and domestic purposes such as bathing and washing. Moreover, there are reports of the presence of toxins 4 in pond water. Furthermore, rainfall in Bangladesh varies widely, not only from season to season, but also from one region to another. The mean annual rainfall varies from 1,400 millimeters in the western part of the country to almost 5,000 millimeters in the northeast and is characterized by wide seasonal fluctuation. 4 World Health Organization, Geneva. Occurrence of Cyanobacterial Toxins (Microcystins) in Surface Waters of Rural Bangladesh Pilot Study Report, May Water, Sanitation, and Health Protection of the Human Environment. 17

18 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Water Resources About 90 percent of the total rainfall occurs in the period between June and September. Surface water issues in Bangladesh can therefore be summarized as follows: (i) varying water availability during different seasons as well as its irregular occurrence; (ii) an intricate network of alluvial rivers carrying a huge annual discharge and sediment load, which is also unstable in nature causing embankment erosion; (iii) withdrawal in upstream areas, which has a serious effect on socioeconomic growth, the environment and ecology, and threatens fish habitations; (iv) inland navigation blockages; (v) increased water demand for domestic use; and (vi) an increase in salinity in the coastal belt. 2.2 Groundwater The use of groundwater in Bangladesh is managed by various agencies. Despite the existence of national policies on both water resources and on safe water and sanitation, there is no integrated strategy to ensure the beneficial use, protection, and sustainability of this vital natural resource. Current developments are mostly done on an ad hoc basis driven by demand. Groundwater accounts for over 90 percent of the drinking water supply in the country. In some parts of rural areas, such as the coastal belt, where suitable aquifers are unavailable, pond sand filters (PSF) are used to treat pond water. Due to the arsenic problem in groundwater, alternative solutions like PSF are being used in many parts of the country. Groundwater from quaternary to recent sediments is the principal source of water for domestic, industrial, and irrigation use in Bangladesh. Shallow alluvial aquifers are recharged through rainfall and flooding, and replenished almost everywhere each year, except in areas like Dhaka where, due to continuously increasing abstraction, groundwater levels decline continuously. Recharge to deeper aquifers is more difficult to assess. The aquifer system can be divided into three parts: (i) An upper or main aquifer, extending to about 150 meters, 5 the source of what is referred to in this report as shallow groundwater; (ii) A deep aquifer, extending from 150 meters to about 350 meters; and (iii) A very deep or lower aquifer, extending below 350 meters to as much as 1,600 meters, about which very little is known. The available recharge for groundwater in the shallow aquifers, the varying sources of demand (water supply, environment, Table 2.2: Usable Recharge and Groundwater Demand Region Gross Area Usable (1) Groundwater Demand (mm 3 ) (2) Balance: (kha) Recharge Water Environment Agriculture Total UR GD (mm 3 ) Supply (mm 3, %) Northwest 3,016 12, ,290 9,548 11, (6%) Northeast ,357 1,749 17,066 (74%) North-central 3,569 23, ,082 4,285 - Southeast 3,007 9, ,158 1,584 8,216 (84%) South-central 1,426 3, ,581 (74%) Southwest 2,562 5, ,196 5, (9%) Eastern Hills Total (mm 3 ) 13,580 54,100 2,208 2,999 19,993 25,200 28,900 (%) - - (8.8%) (11.9%) (79.3%) (100%) (53%) Notes: 1. Resource Assessment by NWP-II. 2. Groundwater demand estimated by the NWMP. 5 The value of 150 meters is a useful guide, but does not have precise significance although it is the approximate limit of aquifers deposited since the Last Glacial Maximum and is an approximate limiting depth for the occurrence of arsenic pollution. However, older and arsenic-free aquifers often occur at shallower depths. 18 Benchmarking in Bangladesh

19 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh Water Resources and agriculture), and its balance for different hydrogeological regions is assessed up to 2025 and summarized in Table 2.2. Only 8.8 percent of groundwater is used for water supply, 11.9 percent for transportation, and 79.3 percent for agriculture. The resource availability indicates that without considering water quality issues, there should be no serious regional problem of groundwater availability for water supply. However, at the subregional level, it is noted that recharge could be a constraint along the western border of Bangladesh, and especially beneath the High Barind. The lowering of groundwater in and around Dhaka due to over-abstraction is a specific problem. Deep wells ( meters) were originally installed in the coastal area to avoid salinity. In early 2000, a survey found that only 1 percent of deep wells exceeded arsenic concentrations of 50 parts per billion (ppb) and none greatly exceeded that level. Since 2002, deep wells have been installed at a faster rate in that area. Deep wells are also increasingly installed further north and over large areas of central Bangladesh as a solution to the shallow tube wells where high levels of arsenic contamination are generally found. For these reasons, deep aquifers are becoming increasingly important for water supply, especially in rural areas. The development (abstraction) of deep aquifers is constrained overall by the threat of migrating arsenic and salinity and locally hindered by the presence of boron, iron, and manganese. To what extent deep groundwater is a renewable resource is a matter of serious debate, but it is certain that this resource can supply large quantities of good quality water for many years. This potential is best demonstrated by the deep municipal well field at Khulna, which has sustained intensive pumping for more than 45 years with no evidence of either salinization or arsenic pollution (BRGM, 2005). The key uncertainty associated with exploring deep aquifers, however, stems from the almost complete absence of water quality and quantity monitoring of deep groundwater (as opposed to production wells). The main organizations involved in groundwater management are listed in Table 2.3. To this list of stakeholders must be added the private sector which, as farmers and as householders, are by far the largest abstractors of groundwater, but are not formally represented in water management. Table 2.3: Organizations Involved in Groundwater Management Ministry Water Resources Major Role WARPO, BWDB Department Minor Role Local Government DPHE, WASAs LGIs, LGED, RDA Agriculture BADC, BMDA DAE Environment Science & Technology Energy & Minerals Private Sector DOE BAEC GSB IWM, CEGIS, consulting firms The functions involved in groundwater management can be classified into five groups: (i) monitoring; (ii) assessment; (iii) protection and regulation; (iv) well development; and (v) research and development. An assessment of the current roles of the main organization is set out along with recommendations for their possible future roles, as discussed further below. The roles of some agencies have changed dramatically in the past two decades; notably, the Bangladesh Agriculture Development Corporation (BADC) and to a lesser extent the Bangladesh Water Development Board (BWDB) played a major role in installing irrigation wells, but now have virtually none. It should also be noted that no agency 6 has meaningfully controlled the activities of the private sector in abstracting groundwater, and there has been only limited control and coordination between ministries. A detailed discussion of water quality is presented in Annexes 1 and 2 of this report. 6 With the possible exception of Dhaka WASA. 19

20 Benchmarking to Improve Urban Water Supply Delivery in Bangladesh 3. Legal Framework for Water and Sanitation The legal framework of the water and sanitation sector in Bangladesh consists of acts and ordinances and other legal instruments specifying the functions and responsibilities of various sector organizations; the major ones are outlined in Table 3.1. The acts and ordinances relating to the functioning of water and sanitation activities for the water resources sector are also provided. Under the provisions of the acts and ordinances, different rules, regulations, by-laws, and executive orders are prepared by the relevant ministries and agencies, for example, the various Dhaka WASA rules and regulations, which are issued at different times, and the Pourashava Water Supply Model By-Law, A review of the existing legal framework 7 reveals: Table 3.1: Legal Instruments Governing the Water and Sanitation Sector Acts and Ordinances Rules of Business 1996 Local Government Acts Local Government (Pourashava) Act, 2008 Local Government (City Corporations) Act, 2008 Upazila Parishad Act, 2008 Union Parishad Act, 2008 WASA Act, 1996 Brief Description This instrument allocates responsibilities to various government departments and ministries. It allocates responsibility for water supply and sanitation in rural areas and in urban areas not declared municipalities to the Local Government Division through the DPHE. These Acts specify the responsibilities relating to water and sanitation at the different levels of local government. Responsibilities include the provision and maintenance of water supply, sanitation, and drainage facilities, and the prevention of pollution of water sources. This Act gives power to the Government to establish WASAs in any area, with permission to perform any work relating to water supply, sewage systems, solid waste collection, and drainage. It also describes the composition of the Board and delineates responsibilities between the Board and the Managing Director. At present, WASAs are established in Dhaka, Chittagong, and Khulna. Environmental Conservancy Act, 1995 This Act is followed by the Environmental Conservation Rules, 1997, establishing a framework for environmental management and setting environmental quality standards, including water quality standards. Acts and Ordinances related to public health and hygiene, e.g. Penal Code, 1860 Public Health (Emergency Provisions) Ordinance, 1944 Pure Food Ordinance, 1956 Factory Acts, 1965 Public health concerns are addressed by various legal instruments and controlled locally and by local government entities. 7 Institutional Review of the Water and Sanitation Sector, 1994 by UPI (now PSU) and Final Report on Dhaka WASA and Pourashava Water Supply Section, December 2009 (under ADB s Management Support for Dhaka WASA). 20 Benchmarking in Bangladesh