Marinilla, Colombia
Updated - Thursday 15 January 2004
Although decentralization alone will not improve cost recovery in the water sector, as an institutional framework, decentralization places more decision-making authority in the hands of those who bear the consequences of those decisions. It should come as no surprise, then, that demand-responsive approaches under a decentralized scheme tend to have a positive impact on cost recovery and sustainability. A large factor in this success, however, depends on the capacity at municipal level to assume management and financial responsibilities.
Marinilla, Colombia is located about 50km from Medellin, a major city, and has a population of 26,000, with an average growth rate of 3.5%. The population is well educated, with higher-than average incomes, and the level of social capital is high.
As a result of the 1994 Public Services Law, the Colombian federal government shifted from running the water sector to a regulatory and oversight role. The law devolved responsibility to local government, with the provision that local government also secure capital for investments. Until 1997, a regional agency, Acquantioquia, owned and operated the water services assets in Marinilla and several other municipalities. In 1997, Acquantioquia awarded a management contract to a domestic private sector firm, Conhydra for some of its municipalities, including Marinilla.
The people of Marinilla were actively involved in developing the management contract, and negotiations for services led to a relatively clear and transparent contract that defined the roles and responsibilities of the interested parties. While the municipality, which is run by a mayor and a city council, is responsible for planning objectives for financing, monitoring, operations, performance targets, and supervision, Conhydra has an incentive to improve service levels and billing structures, as well as reduce unaccounted-for-water, as the company's profit margin depends on it.
Conhydra's commitment to the community is high, and the company both hosts and attends regular meetings on formal and informal levels. It also provides regular information about the water system to consumers, and runs educational campaigns for hygiene and proper water use.
Since the start of Conhydra's management contract, an additional 3,500 people have been connected to the system; unaccounted for water has decreased; service levels and water quality have improved; existing infrastructure has been upgraded; and a longer-term investment plan is in the process of implementation. All connections are metered, and service is provided 24 hours a day to 99% of the population. This involvement has also resulted in a higher-than average cost recovery rate: 84% of the population pays their bills (Figure 9).
Figure 9 Comparative Profile
|
| Columbia | Marinilla |
| Gross revenues used for operating expenses | 90% | 79%, with the balance used to amortize previous loans and invest in infrastructure |
| Rate of collection | <70% | 84% (1999) |
| Unaccounted for water | 45% | 41% |
| Coverage | NA | 99%, 24 hours per day/7 days a week |
| Wastewater treatment | Neglected | 90% with sewerage system; treatment plants part of long-term planning objectives |
| Tariff | ·Covers <1/3of real costs
·Fixed fee + three levels of per-unit rates, and six socio-economic categories for residential/commercial/ ·Full cost recovery the onus of local governments by 2004 | ·Fixed charge: US$2.50/month ·Average price of water: US$0.15/m3 ·Average monthly bill (water and sewerage): US$8.25
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Source: http://www.ehproject.org/PDF/Strategic_Papers/LACDEC/Marinilla_Colombia.pdf
Revealingly, Marinilla developed a master plan to project its water needs - for both water supply and sanitation - using an outlook of 20 years with a base year of 1998. The municipality considered total investments required and developed two phases for water sector development. Total investments for this 20-year period, both to maintain and replace infrastructure, are estimated at US$5 million. Phase I places a focus on the downtown area, rehabilitating the water and sewerage networks, in addition to adding capacity at the drinking water facility. Further, although 90% of the population has access to sewerage networks, the community lacks a treatment facility, so sewage flows directly into a river outside the community. Phase I addresses this by financing a new treatment facility.
Funding for these projects is not reliant on user-finance; instead, Marinilla will rely on government transfers to the municipality (20% of all government support to municipalities is earmarked for water sector development as a result of the 1994 Public Services Law), a grant from CORNARE, Colombia's environmental protection agency, a grant from the Ministry of Economic Development, and a short-term loan from Conhydra, made possible as a result of the system's surplus revenues.
For further information
See: EHP
Contact: Fred Rosensweig
Environmental Health Project (EHP)
Email: rosensweigfj@ehproject.org
