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Strengthening the Water Supply Sector Program (Financed by the Japan Special Fund)

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Strengthening the Water Supply Sector Program (Financed by the Japan Special Fund) Technical Assistance Consultant’s Report Project Number: TA No. 4585-KAZ November 2005 Kazakhstan: Strengthening the Water Supply Sector Program (Financed by the Japan Special Fund) Prepared by Arthur McIntosh Astana, Kazakhstan For Ministry of Agriculture Committee for Water Resources This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design. RESPECT FOR WATER IS RESPECT FOR LIFE “WATER! You have no taste, no colour, no odour. You cannot be described. One can be delighted in You without even perceiving what You are. You are not just essential for life, You are the life yourself. You are the greatest treasure in the world, but the most vulnerable. You, so clean in the interior of the Earth…You do not stand any impurities, You do not stand anything alien. You are the divinity that can be so easily frightened away. But you give us everlasting common happiness.” from a French Poet Antuan de Sent- Ekzupery Those who make decisions about the funding and development of water supplies should ponder on the above. The spiritual dimension of water (which has been recognized in civilizations for thousands of years) makes it unique among all other services provided by governments for their people. An investment in water is an investment in life. 1 Rate of Exchange (November 2, 2005) Currency unit = Tenge (T) Tenge 1.00 = $0.00747 $1.00 = T 133.77 Abbreviations and Acronyms ADB – Asian Development Bank ARNM – Agency for Regulation of Natural Monopolies BTS – Block Tariff Structure CSSEC – Committee for State Sanitary and Epidemiological Control CWR – Committee for Water Resources HDPE – High Density Polyethylene Km3 – cubic kilometers M3 – cubic meter NKO – North-Kazakhstan Oblast NRW – Non-Revenue Water O&M – Operation and Maintenance OSME – Oblast State Municipal Enterprise PSP – Private Sector Participation PWSP – Potable Water Supply Program TA – Technical Assistance UNDP – United Nations Development Program 2 IMPLEMENTING THE WATER SUPPLY PROGRAM IN RURAL SETTLEMENTS TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................................... 6 PART I THE TECHNICAL ASSISTANCE..................................................................................... 11 1.2 OBJECTIVES............................................................................................................................. 11 1.3 ORIGINAL SCOPE OF WORK ...................................................................................................... 11 1.4 REVISED SCOPE OF WORK ....................................................................................................... 11 1.5 PROJECT TEAM ........................................................................................................................ 12 1.6 PROJECT ACTIVITIES ................................................................................................................ 12 1.7 ACKNOWLEDGEMENTS .............................................................................................................. 13 PART II SITUATION OVERVIEW ............................................................................................... 14 2.1 GEOGRAPHY ........................................................................................................................... 14 2.2 CLIMATE.................................................................................................................................. 14 2.3 WATER RESOURCES FOR WATER SUPPLY ................................................................................ 14 2.4 THE PAST................................................................................................................................20 2.5 THE PRESENT ......................................................................................................................... 22 2.6 THE POSITIVES........................................................................................................................ 28 PART III THE WATER SUPPLY SECTOR PROGRAM 2002-2010 .............................................. 29 3.1 THE MILLENNIUM DEVELOPMENT GOALS................................................................................... 29 3.2 THE INITIAL WATER SUPPLY PROGRAM..................................................................................... 29 3.3 COMMENTS FROM THE ROUND TABLE DISCUSSIONS.................................................................. 32 3.4 THE SECOND STAGE WATER SUPPLY PROGRAM 2006-2010 .................................................... 34 3.5 USE OF THE REPUBLICAN BUDGET FOR LOCAL WATER SUPPLY SYSTEMS .................................. 39 3.6 USE OF THE OBLAST BUDGETS FOR THE WATER PROGRAM....................................................... 39 3.7 RULES FOR CONSIDERING BUDGET INVESTMENT PROJECTS ...................................................... 40 PART IV IMPLEMENTING THE PROGRAM .................................................................................. 41 4.1 INSTITUTIONAL FRAMEWORK ................................................................................................... 41 4.2 PUBLIC AWARENESS AND THE INVOLVEMENT OF CIVIL SOCIETY ................................................ 42 4.3 SERVICE LEVELS AND SELECTION CRITERIA ............................................................................. 44 4.4 APPROPRIATE TECHNOLOGY ................................................................................................... 45 4.5 FINANCING ............................................................................................................................. 48 4.6 PROCUREMENT....................................................................................................................... 48 4.7 HUMAN RESOURCES & DEVELOPING PEOPLE........................................................................... 50 4.8 TIME IS OF THE ESSENCE ........................................................................................................ 51 4.9 OPERATION AND MAINTENANCE............................................................................................... 51 4.10 TARIFFS AND SUBSIDIES ........................................................................................................ 52 4.11 PRIVATE SECTOR PARTICIPATION (PSP) ................................................................................ 60 4.12 REGULATION ......................................................................................................................... 61 4.13 SANITATION .......................................................................................................................... 63 PART V MAKING THE PROGRAM SUSTAINABLE ................................................................... 64 5.1 LEGISLATION .......................................................................................................................... 64 5.2 INSTITUTIONAL FRAMEWORK FOR RURAL WATER SUPPLIES ...................................................... 65 5.3 ANALYSIS OF INSTITUTIONAL FRAMEWORK ............................................................................... 65 5.4 DRAFT POLICY FOR IMPLEMENTING THE PROGRAM................................................................... 66 5.5 MONITORING THE PROGRAM.................................................................................................... 67 3 PART VI AN URBAN CAMEO ....................................................................................................... 69 6.1 INSTITUTIONAL AND LEGAL FRAMEWORK FOR VODOKANALS...................................................... 69 6.2 WATER LOSSES AND METERING .............................................................................................. 69 6.3 TARIFFS, SUBSIDIES AND DEVELOPMENT FINANCING ................................................................ 70 6.4 BENCHMARKING OF WATER UTILITIES ...................................................................................... 74 PART VII STAKEHOLDER WORKSHOP....................................................................................... 76 7.1 AGENDA .................................................................................................................................. 76 7.2 LIST OF PARTICIPANTS ............................................................................................................. 78 7.3 PRESENTATIONS OF TA TEAM .................................................................................................. 81 7.4 MINUTES OF WORKSHOP ......................................................................................................... 92 7.5 WORKSHOP PARTICIPANTS’ RESPONSE CARDS....................................................................... 102 PART VIII RECOMMENDATIONS ............................................................................................... 107 8.1 INSTITUTIONAL FRAMEWORK .................................................................................................. 107 8.2 FUNDING ............................................................................................................................... 107 8.3 TIME IS OF THE ESSENCE ......................................................................................................
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