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Republic of the Philippines Strategy Update and Implementation Plan

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Report No: AUS1511 Republic of the Philippines Public Disclosure Authorized Strategy Update and Implementation Plan Developing the Institutional Framework for the Water Supply and Sanitation Sector and Identifying Investment Plans & Programs Public Disclosure Authorized May 2013 EASPS EAST ASIA AND PACIFIC Public Disclosure Authorized Public Disclosure Authorized Standard Disclaimer: This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the 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 concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Copyright Statement: The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/ The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, http://www.copyright.com/. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. Developing the Institutional Framework for the Water Supply and Sanitation Sector and Identifying Investment Plans & Programs FINAL REPORT MAY 2013 LIST OF ACRONYMS ADB Asian Development Bank APIS Annual Poverty Indicator Surveys BWSA Barangay Water and Sanitation Association CAPEX Capital Expenditures CBO Community Based Organization CDA Cooperative Development Authority CIPH City-wide Investment Plan for Health CPC Certificate of Public Convenience CWA Clean Water Act DAR Department of Agrarian Reform DBM Department of Budget and Management DENR Department of Environment and Natural Resources DILG Department of the Interior and Local Government DOE Department of Energy DOF Department of Finance DOH Department of Health DPWH Department of Public Works and Highways EMB Environmental Management Bureau EO Executive Order FHSIS Field Health Services Information System FOREX Foreign Exchange GFI Government Financial Institutions GOP Government of the Philippines HHs Households HUC Highly Urbanized City IBRD International Bank for Rehabilitation and Development (World Bank) JMP Joint Monitoring Program KPI Key Performance Indicators LGU Local Government Units lps liters per second LWUA Local Water Utilities Administration MDG Millennium Development Goal MDGF Millennium Development Goal Fund MDFO Municipal Development Fund Office MDS Monthly Data Sheet MIPH Municipal-wide Investment Plan for Health mm millimeter MTPDP Medium Term Philippine Development Plan MWCI Manila Water Company, Inc. MWSI Maynilad Water Services, Inc. MWSS Metropolitan Waterworks and Sewerage System NAPC-WASCO National Anti-Poverty Commission-Water Supply Coordination Office NEDA National Economic and Development Authority NG National Government NGO Non-Government Organizations NSSMP National Sewerage and Septage Management Programs NRW Non-Revenue Water NSO National Statistics Office NWRB National Water Resources Board NWRMO National Water Resources Management Office OBA Output-Based Aid OP Office of the President OPEX Operational Expenditures PD Presidential Decree PIPH Province-wide Investment Plan for health PMO Project Management Office PNSDW Philippine National Standards for Drinking Water PPP Public-Private Partnership PSA Philippine Sanitation Alliance PSP Private Sector Participation PWSSR Philippine Water Supply and Sanitation Roadmap PSSR Philippine Sustainable Sanitation Roadmap R.A. Republic Act RO Regulatory Office RORB Return on Rate Base RWSA Rural water and Sanitation Association SBWRB Subic Bay Water Regulatory Board SC Supreme Court SEC Securities and Exchange Commission TA Technical Assistance ToR Terms of Reference TWG Technical Working Group WB World Bank WD Water District WEDC Water, Engineering Development Center WHO/UNICEF World World Health organization/United Nation International Children Emergency Fund WRC Water Water Regulatory Commission WSP Water Water Service Provider WSS Water Water Supply and Sanitation TABLE OF CONTENTS Page EXECUTIVE SUMMARY 1 - 8 A INTRODUCTION 9 1. Background 9 2. Terms of Reference (TOR) 10 3. Methodology/Approach 10 4. Study Limitations 10 B. SECTOR ASSESSMENT 12 1. The Water and Sanitation Sector Overview 12 2. Water Supply Coverage 15 3. Millennium Development Goals: WS Targets 18 4. Public Health and Sanitation 19 5. WSS Sector Issues and Challenges 23 C. DEMAND GAP ANALYSIS 26 1. Population Projections 26 2. Served Population, 2011 28 3. Number of WSPs, 2011 32 4. LGUs with Septage and Sewerage facilities 32 5. Target Setting Basis 32 6. Target Summary 35 D. INVESTMENT REQUIREMENTS 37 1. Basic Formula 37 2. Basis for Infrastructure Cost Estimates 37 3. Unit Cost Estimates 38 4. Infrastructure Investment Requirements 40 5. Capacity Building Requirements 42 6. Fund Sourcing 43 E. INSTITUTIONAL RECOMMENDATIONS 44 1. Review of Sector Assessment Reports 44 2. Water Sector Constraints and Weaknesses 45 3. Sanitation Sector Constraints and Weaknesses 47 4. WSS Constraints Summary 48 5. Major Recommendations of Various WSS Studies 48 6. Institutional Recommendations 52 7. Structural Recommendations for DPWH 56 8. Infrastructure Programs 56 F. ACTION PLANNING FOR THE DPWH 61 1. The DPWH 61 2. DPWH WSS Sector Role 61 3. Proposed DPWH WSS Structure 63 4. Action Plans 64 Annexes A Terms of Reference 67 B Summary of Population Projections 69 C Sample Letter of DPWH Secretary Sent to Various Agencies 75 D Data Template 77 E Population Served in 2011 by Regions 78 F Number of Water Supply Providers 84 G Seventy Five Level III Data Samples 89 H Level III Unit Cost for all Main Island Locations 91 I Level III Unit Cost Considering All Samples 94 J Cost of an Upgradable Level III 96 K Breakdown of WDs and LGU WSPs According to Size Classification 97 Tables 1: Primary WSS Agencies and their Roles 13 2: Water Supply Providers 14 3: 2003 Market Share by Type of Provider 15 4: Population Served by Water Supply Providers, as of 2000 16 5: Regional Coverage 16 6: JMP: Use of Improved Drinking Water Sources 18 7: MDG Target for Water Supply 19 8: Projected Population Projections 29 9: Agencies Furnishing Data 30 10: 2011 Served Population 30 11: Comparison between 2003 and 2011 Coverage Data 30 12: Regional Comparison of Population Coverage, 2007 vs 2011 31 13: Comparison of Water Supply Providers 32 14: Water Supply Target Population To Be Served 35 15: Target Population To Be Served 35 16: Target LGUs 36 17: Unit Cost for Level III Water Supply System Infrastructure 39 18: Water Supply Investment Requirements, Php B 40 19: Sanitation Targets 41 20: Sanitation Investment Requirements 41 21: Summary of WSS Infrastructure Investment Requirements 42 22: WSP Training Duration 42 23: Major Sector Reports/Papers 44 24: Major Institutional Recommendations 48 25: Recommendations for Sector Framework 52 26: Major Roles of Agencies 53 27: Government WSPs by Connection Size 56 28: Water Supply Funding Source Requirements 57 29: WS Government Funding Requirements 57 30: Sanitation Fund Sources 58 31: Summary of WSS Funding Requirements from the National Government 58 32: Proposed Roles of the DPWH 63 33: Initial Manpower Complement of the WSS Unit 64 Figures: 1: Water Supply Coverage: NEDA and JMP 19 2: Types of Trends-Population Projections 27 3: Proposed WSS Structure in DPWH 63 References 101 Developing the Institutional Framework for the WSS Sector and Identifying Investment Plans and Programs April 2013 EXECUTIVE SUMMARY Developing the Institutional Framework for the Water Supply and Sanitation Sector and Identifying Investment Plans and Programs 1. The Secretary of the DPWH was appointed as the “Water Czar” to promote the development of the sector. With the water supply MDG targets due by 2015 and with the water supply roadmap envisioning universal coverage by 2025, there is a need to establish the extent of investment required to improve water supply coverage and to sustain water supply operation through improved governance of water service providers and local governments. This project, through a Technical Assistance of the World Bank, was conceived to (1) determine the appropriate WSS structure within DPWH and develop its implementation and operation plan, and (2) identify targets, investment plans and programs. 2. The following methodology and approach were adopted for this study: i. Stock taking on the type of utilities, their location and number of service connections (levels II and III); ii. The following activities were done in parallel with the stock taking activities. Population projections for all the towns/cities with the 2010 census data as baseline; Gathering of data for cost estimating purposes, Review of past sector reports to have an overview of reforms
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  • Chapter 5 Improved Infrastructure and Logistics Support

    Chapter 5 Improved Infrastructure and Logistics Support

    Chapter 5 Improved Infrastructure and Logistics Support I. REGIONAL DEVELOPMENT CHALLENGES AND OPPORTUNITIES Davao Region still needs to improve its infrastructure facilities and services. While the Davao International Airport has been recently completed, road infrastructure, seaport, and telecommunication facilities need to be upgraded. Flood control and similar structures are needed in flood prone areas while power and water supply facilities are still lacking in the region’s remote and underserved areas. While the region is pushing for increased production of staple crops, irrigation support facilities in major agricultural production areas are still inadequate. Off-site infrastructure in designated tourism and agri-industrial areas are likewise needed to encourage investment and spur economic activities. Accessibility and Mobility through Transport There is a need for the construction of new roads and improvement of the existing road network to provide better access and linkage within and outside the Region as an alternate to existing arterial and local roads. The lack of good roads in the interior parts of the municipalities and provinces connecting to major arterial roads constrains the growth of agriculture and industry in the Region; it also limits the operations of transport services due to high maintenance cost and longer turnaround time. Traffic congestion is likewise becoming a problem in highly urbanized and urbanizing areas like Davao City and Tagum City. While the Region is physically connected with the adjoining regions in Mindanao, poor road condition in some major highways also hampers inter-regional economic activities. The expansion of agricultural activities in the resettlement and key production areas necessitates the opening and construction of alternative routes and farm-to-market roads.