Economic Instruments for Improved Water Resources Management in Egypt
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Munich Personal RePEc Archive Economic Instruments For Improved Water Resources Management In Egypt McCauley, David and Anderson, Robert and Bowen, Richard and Elassiouty, Ibrahim and Mahdy, Elsayed and Soliman, Ibrahim United States Agency for International Development/Egypt, nternational Resources Group, Ltd, Winrock International, Harvard Institute for International Development, Center for Naval Analysis Corporation; 30 April 2002 Online at https://mpra.ub.uni-muenchen.de/40581/ MPRA Paper No. 40581, posted 16 Aug 2013 15:53 UTC Contract No. PCE-I-00-96-00002-00 ECONOMIC INSTRUMENTS FOR IMPROVED WATER RESOURCES MANAGEMENT IN EGYPT Prepared by EPIQ Water Policy Reform Activity Agricultural Policy Reform Program Market-Based Incentives Team: Dr. David S. McCauley (Senior Water Resource Economist, Task Manager) Dr. Robert Anderson (Environmental Economics Consultant) Dr. Richard Bowen (Water Economics Consultant)) Dr. Ibrahim Elassiouty (EPIQ Water Management Specialist) Dr. Elsayed Mahdy (EPIQ Senior Water Resources Economist) Prof. Dr. Ibrahim Soliman (Agricultural Economics Consultant) Eng. Hisham Shehab (WPAU Civil Engineer) April 2002 Prepared for United States Agency for International Development/Egypt Environmental Policy and Institutional Strengthening Indefinite Quantity (EPIQ) Contract Partners: International Resources Group, Ltd.; Winrock International; and Harvard Institute for International Development Subcontractors: PADCO; Management Systems International; and Development Alternatives, Inc. Collaborating Institutions: Center for Naval Analysis Corporation; Conservation International; KNB Engineering and Applied Sciences, Inc.; Keller-Bliesner Engineering; Resource Management International, Inc.; Tellus Institute; Urban Institute; and World Resources Institute APRP Water Policy Program i Economic Incentives for Water Management Acknowledgments This report was prepared by a team assembled under the auspices of the EPIQ Water Policy Reform Program (EPIQ/WRRP), a joint activity of the Ministry of Water Resources and Irrigation (MWRI) and the United States Agency for International Development Egypt Mission (USAID/Egypt). It is carried out under the umbrella of the Agricultural Policy Reform Program (APRP), a program of cooperation between the Government of Egypt and USAID/Egypt. Implementation of EPIQ/WPRP is the joint responsibility of Winrock International, International Resources Group (IRG), and Nile Consultants through the Environmental Policy and Institutional Strengthening Indefinite Quantity (EPIQ) Contract, for which IRG serves as the lead organization. The work of the Market-Based Incentives (MBI) Team began in late August 2001 and two ∗ previous progress reports have been prepared. The team was comprised of the following individuals: Dr. David McCauley (EPIQ/WPRP Senior Water Resource Economist, Task Manager); Dr. Robert Anderson (EPIQ/WPRP Environmental Economist); Dr. Richard Bowen (EPIQ/WPRP Water Economist); Dr. Ibrahim Elassouty (EPIQ Water Management Specialist), Dr. Elsayed Mahdy (EPIQ/WPRP Senior Water Resources Economist); Eng. Hisham Shehab (WPAU Civil Engineer); and Dr. Ibrahim Soliman (Agricultural Economics Consultant). The EPIQ/WPRP MBI Team is greatly appreciative of all those who contributed to this report. Numerous officials, experts and farmers were interviewed by the team to gain an understanding of the potential applications of MBIs to improving water resources management in the country. Important inputs were received from a large number of MWRI staff, including especially Eng. Gamil Mahmoud, Chairman of the MWRI/WPRP Steering Committee and Head of the MWRI Water Policy Advisory Unit. The Team also gratefully acknowledges the guidance received from the EPIQ/WPRP and environmental program managers at USAID, especially Mr. Alan Davis, Dr. Wadie Fahim Mankarious, Dr. Ross Hagan and Dr. Nadine Y. El-Hakim. Finally, the entire effort has been carried out under the able direction of Mr. Andrew Tczap, EPIQ/WPRP Chief of Party. While desiring to give due credit to all those who have made this study possible, the team also would like to make clear that the views expressed herein are their own and do not represent those of the Government of Egypt or USAID. The MBI Team also takes full responsibility for any remaining weaknesses or inaccuracies in the report, and it looks forward to receiving the reactions of interested readers. ∗ David McCauley, September 2001. Exploring the Potential of Applying Economic Instruments to Water Resources Management in Egypt, EPIQ/WPRP; and David McCauley, November 2001. Economic Instruments for Improved Water Policy in Egypt: Summary Progress Report, EPIQ/WPRP (with supplementary note, December 2001). APRP Water Policy Program Economic Incentives for Water Management i List of Abbreviations and Acronyms AGOSD Alexandria General Organization for Sanitary Drainage APRP Agricultural Policy Reform Program AWGA Alexandria Water General Authority BCM Billion Cubic Meters C&C Command and Control DRI Drainage Research Institute EEAA Egyptian Environmental Affairs Agency EEPP Egyptian Environmental Policy Program EHD Environmental Health Department EMOHC Environmental Monitoring and Occupational Health Center EPIQ Environmental Policies & Institutional Strengthening Indefinite Quantity Contract GARPAD General Authority for Rehabilitation Projects and Agricultural Development GDP Gross Domestic Product GOE Government of Egypt GOFI General Organization for Industrialization GOGCWS General Organization for Greater Cairo Water Supply GOSD General Organization for Sanitary Drainage in Cairo HAD High Aswan Dam IAS Irrigation Advisory Service IIP Irrigation Improvement Project IMT Irrigation Management Transfer IRG International Resources Group, Ltd. M&E Monitoring and Evaluation MALR Ministry of Agriculture and Land Reclamation MCM Million Cubic Meters MHNCPU Ministry of Housing, New Communities and Public Utilities MHP Ministry of Health and Population MIMW Ministry of Industry and Mineral Wealth MOSEA Ministry of State for Environmental Affairs MWRI Ministry of Water Resources and Irrigation NAWQAM National Water Quality and Availability Management Project NOPWASD National Organization for Potable Water and Sanitary Drainage NRI Nile Research Institute NVDA New Valley Development Authority NWQCU National Water Quality Conservation Unit NWRC National Water Research Center O&M Operation and Maintenance PSU Policy Support Unit (of EEPP) RIGW Research Institute for Ground Water SWREI Soil, Water and Environmental Research Institute USAID United States Agency for International Development WPAU Water Policy Advisory Unit WPRP Water Policy Reform Program WUA Water User Association APRP Water Policy Program Economic Incentives for Water Management ii TABLE OF CONTENTS ACKNOWLEDGMENTS .........................................................................................................I LIST OF ABBREVIATIONS AND ACRONYMS................................................................. II EXECUTIVE SUMMARY....................................................................................................... 1 1 INTRODUCTION ................................................................................................................. 1 1.1 OVERVIEW......................................................................................................................... 1 1.2 BACKGROUND, PURPOSE AND SCOPE.................................................................................. 2 1.3 ORGANIZATION OF THE REPORT ......................................................................................... 3 2 WATER MANAGEMENT INSTITUTIONS AND POLICIES .......................................... 4 2.1 INTRODUCTION .................................................................................................................. 4 2.2 KEY GOVERNMENT INSTITUTIONS CHARGED WITH WATER MANAGEMENT.......................... 4 2.3 LEGAL FRAMEWORK FOR WATER MANAGEMENT................................................................ 8 2.3 PRINCIPAL WATER MANAGEMENT POLICIES AND PROGRAMS.............................................. 9 2.3.1 Nile Irrigation Management....................................................................................... 9 2.3.2 Nile Basin Drainage and Groundwater..................................................................... 11 2.3.3 Mega Projects .......................................................................................................... 12 2.3.4 Western Desert Groundwater .................................................................................. 13 3 PRINCIPAL WATER MANAGEMENT CHALLENGES................................................ 16 3.1 MANAGING WATER SUPPLIES........................................................................................... 16 3.1.1 Threat of Water Shortage ......................................................................................... 16 3.1.2 Service Delivery Problems in Municipal Water Supply Systems................................ 18 3.1.3 Irrigation Service Delivery Challenges..................................................................... 21 3.1.4 Insufficient Irrigation System Upkeep....................................................................... 22 3.1.5 High On-farm Water Use.......................................................................................... 22 3.1.6 Inadequate Farmer Contributions to Irrigation System Upkeep ................................ 23