The following contribution to Topic 2 is from Reinilde in Kenya:

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Dear all,

My name is Reinilde Eppinga, WASH Advisor for SNV Kenya and look forward to engage more on sustainable cost recovery in the coming weeks.

Topic 2:
1) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?

In different cities in Kenya there are plans to expand sewerage coverage through both government investments as well as input from international organisations (WB etc.). These sewers tend to benefit people living in city centres although there are also cases in which low income areas are included in these systems and there is also inclusion of decentralised treatment systems. In addition there are efforts by government and non-government actors to look at the introduction of a sanitation levy or tax/ amount on top of the water bill by all residents to cater for onsite sanitation services. This tax will then mostly benefit people with low incomes. Only those with a sewer connection will pay a higher tax. Water and sanitation companies in Kenya, for example, have started introducing pro-poor units (slowly changing name to low income consumer units) that look specifically at how those with low incomes can access water and sanitation services. In Kenya, the Water Services Trust Fund also supports water companies in providing sanitation options and decentralised treatment systems for those not connected to the sewer and having improved sanitation facilities. These initiatives often are targeted to the under-reached. The same is true for public toilets in some areas.

2) Do you think that this is even a realistic and/or desirable expectation?

Those making decisions for countries and cities are and, in my opinion, should be able to be sensitive to how investments affect all those living in that specific area. There are often ways in which funds can be used to reach those with low incomes as well. This can be done in different ways through different actors as some of the examples above refer to. A first step is actually knowing the population to be served and having data available to support targeted interventions. Stimulating private sector solutions for different market segments also needs to be considered.

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)

There is a need for willingness of government and utility staff to consider and invest in the different and diverse needs of different groups in their service areas. Endorsement of the regulator to enable companies to charge a fee to enable provision of onsite sanitation services in addition to sewerage services by the companies is an example of awareness and willingness required to create a difference. Additionally there is also the need for up to date data of the targeted population and suitable technologies that can serve these different areas (e.g. pre-paid water meters, community water meters, faecal sludge management equipment suitable for low income areas, mobile transfer stations). Involvement of private sector actors can be key in creating sustainable solutions for those living in low income areas.

I am sorry I missed the first topic. Here a summerised input which provides some background to the above answers.

Topic 1:

In Kenya there is often a combination of water and sanitation company/county government owned trucks and privately owned exhauster truck companies that empty septic tanks and some pit latrines. There are often also informal, and increasingly more organised pit emptying groups, that empty pit latrines manually and with improved equipment like the gulper/rammer. These systems generally are financially sustainable as households pay the companies/emptiers for the services which they are able to grow over time. Toilet construction is done by households and organisations and generally not subsidized, individuals are upgrading their containment with time. Treatment plants though are in general poorly managed in Kenya and there are only a few examples of plants that are functional and for which the sewerage tax on top of the water bill is used for and sufficient to operate the plants sustainably.

Kenya is considering pilot of a sanitation levy/tax on top of the water bill to enable water and sanitation companies to work on ensuring faecal sludge from onsite sanitation facilities will also reach the treatment plant where it can then be co-treated, disposed and/or re-used. The tax will be partly used to cater for the transportation cost from mobile transfer stations to the treatment plant.

There is increased focus on the need to revive treatment plants, increase sewer networks and faecal sludge management transportation and collection systems as towns grow. Increased examples of re-use e.g. briquettes is providing a positive pull factor towards rehabilitation of treatment facilities as well as additional opportunity for private sector involvement and investment in the sector. Funds used for upgrading and expansion of large infrastructure are a combination of surplus from the companies, county and national level funding (including loans) as well as international organisations’ initiatives. Operational and maintenance costs paid from those paying for water services.

Kind regards,

Reinilde Eppinga
WASH Advisor
SNV Netherlands Development Organisation

www.snvworld.org/kenya

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My name is Chemisto Satya Ali working with SNV in Uganda. My responses to the questions below.

1. Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
The current use of taxes/transfers in sanitation in Uganda is contributing to reduced inequality in sanitation services in Uganda. The urbanization process in Uganda is characterized by uncoordinated planning and development leading to unrestricted sprawling of the major towns. According to National Development Plan II, planned urbanization is still low in most regions of Uganda ranging between 7% and 14.5%. Planned urbanization brings about better “urban systems that enhance productivity, liveability and sustainability”. The establishment of 4 Water and Sanitation Development Facilities (WSDFs) is addressing the inequality across the country. These facilities are heavily dependent on transfers. The question for me is whether the taxes/transfers in sanitation are sufficient to reduce the inequality in services? And the answer is NO.

2. Do you think that this is even a realistic and/or desirable expectation?
In the contemporary perspective in Uganda, this is not realistic. While this is a desirable expectation, it is not realistic to envisage a reduction in inequality of sanitation services. However, the gesture is good. First, Uganda’s proportion of taxes in the sanitation sector is so small (less than 0.1%) to the extent that it borders on insignificancy. So, transfers play a substantial role in sustaining the sub-sector. Secondly, the rate at which the population is growing far outstrips the provided budgets which are met by taxes and transfers. Uganda’s population is growing at just over 3% per annum. And according to the World Bank, Uganda’s rate of urbanization is over 13% and the population growth rates in urban centers is over 4.5% per year.

3. In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
The following consideration are critical:
a. Giving sanitation it’s due share in Uganda is critical, be it in taxes and/or transfers.
b. There is need to match and or incrementally sustaining the percentage of taxes/transfers earmarked for sanitation services to the population growth rates. With an increased proportion of taxes/transfers, investments can then be made at scale and the impact felt across rather than the piecemeal approach that currently prevails.
c. There is need for institutional shifts - Will creating independent entity for sanitation help us in Uganda realize a reduction in sanitation services? I think so. This idea for some time now has been mooted. However, implementing it has not materialized. It ought to be tried. Can Uganda learn from other countries that have made this attempt?

Regards,

Chemisto Satya Ali
Advisor, Rural Sanitation and Behavior Change Communication

SNV Netherlands Development Organisation
Plot 36 | Luthuli Rise Bugolobi | P.O. Box 8339 Kampala- Uganda
www.snv.org/country/uganda

At the Government level, it may be possible to adapt the financing of public spending to a decentralized sector, by adopting a sector financing policy to promote the efficiency of service providers, stimulate cost recovery mainly through the tariff, define a scheme of subsidies that allow the poorest citizens to have access to services.
Ensure the strengthening of national institutions so that they can effectively exercise the roles of rectory, regulation, and provision of technical assistance.

Best Regards,

Patricia Solórzano Leiva
SL WASH | CA
SNV Netherlands Development Organisation

Dear All,

My name is Patricia Solórzano, I’m working as SL – WASH – SNV | Honduras – Nicaragua in Central America. My contributions about the topic 2 are:

I want to share some context:

In Honduras, financing mechanisms for the water and sanitation sector are financed through a combination of three sources; The first source of financing comes from the fees charged by service providers based on volume, socioeconomic conditions or a combination of both. The second source of financing is taxes, which contribute to complement the operating costs and some investment costs that are covered by the rates. Tax revenues are generally transferred directly in the form of budget allocations granted by the national or municipal administration to service providers or institutions in the sector and, indirectly, through tax transfers made by the national government to municipal governments. The third source of financing for the sector, mainly for investments, is provided by external transfers, in the form of donations or credits granted by donors in favour of national and local institutions and service providers.

1) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
In the case of Honduras, not, if it is the way it is currently being done, where there is no clarity regarding the allocation of tax and transfer by sectors and regions in the country. There is also an important element and that there is no effective monitoring and follow-up system that records irregularities in the presentation of sanitation services by population strata.

2) Do you think that this is even a realistic and/or desirable expectation?
I consider it realistic if the Law is fulfilled, in the case of Honduras. In my opinion the regulations are defined, unfortunately there is no political will that this is complied with in accordance with the regulations, where the use of taxes and transfers should be oriented by consumption, sector, region, etc.

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
The issue of taxes and subsidies for the operation and maintenance of services must be defined, and the technical capacity of municipal units must be supported with reliable monitoring and follow-up systems that allow monitoring the reduction in the inequality gap. The rates reduced to large companies, lack of willingness or ability to pay by users are the main factors that affect sustainability in the area of sanitation, by achieving equity in services.

At the Government level, it may be possible to adapt the financing of public spending to a decentralized sector, by adopting a sector financing policy to promote the efficiency of service providers, stimulate cost recovery mainly through the tariff, define a scheme of subsidies that allow the poorest citizens to have access to services.
Ensure the strengthening of national institutions so that they can effectively exercise the roles of rectory, regulation, and provision of technical assistance.

Best Regards,

Contribution by Ika from Indonesia submitted by e-mail for Topic 2:

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Dear all,

I am Ika Yuniarti from Indonesia. I work for The Regional Development Planning Agency of Metro City Government.
My contributions for the discussion questions are as follows :

1. Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
Yes, the use of taxes and transfers can reduce inequality in sanitation service. In Indonesia, Special Allocation Funds (DAK) transferred directly to districts and municipalities from the central government to improve water and sanitation. It is to fund some program associated with poverty reduction to develop sanitation infrastructure for the poor families in slum areas.

2. Do you think that this is even a realistic and/or desirable expectation?
Yes, this is realistic. The central government has increased attention and transfers in sanitation. However, it seems that sanitation is low priority for most of local governments. Therefore, central government needs to develop a public expenditure framework for sanitation and also assist local governments to increase finance for sanitation.

3. In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
Strong regulation framework, subsidize for the poorest and raising awareness within communities.


Regards,
Ika Yuniarti

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The contribution by Lena from Indonesia for Topic 2 is below:

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Hi,

I am Lena Saptalena, WASH specialist from SNV Indonesia. My view on whether public funding in sanitation can contribute to greater equity/not:


1) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?

Yes and no.

Yes, as the case in other countries such as in Bangladesh (explained by Marc), here in Indonesia we also have a number of programs, funded by taxes and/or transfers, which is contributing to reducing inequality in sanitation services.

a. Taxes
• Source at the national level: APBN (national budget, collected from all Indonesians through taxes). Distributed through:
o Several ministries:
 Ministry of Public Works & Settlement: mostly for big infrastructures, such as faecal Sludge Treatment Plants (283 plants; Indonesia has 514 districts & cities, some such as Jakarta has more than one STPs, some others have none), 249 small-scale domestic Wastewater Treatment Plants (WWTPs), and city-scale WWTPs/sewerages (in 13 cities)
 Ministry of Home Affairs, Ministry of Health, Ministry of Religious Affairs: promoting/implementing Total Community Led Sanitation (STBM) programs

o Direct Transfer to Local Government and Village Fund
 Special Allocation Fund (DAK)
 Village Fund for villages in rural areas (Dana Desa): this maybe contributing to reducing inequality between urban and rural
 Village Fund for villages in urban areas (Dana Kelurahan): in SNV project city, Tasikmalaya, this is used to support Open Defecation Free (ODF) by providing toilets and for communal WWTPs construction. Normally villages that are declared as Slum areas (through Mayor’s Slum Decree) have more priorities to access this, but this is up to the city planning agency (Bappeda/ Bappelitbangda)  this maybe contributing to reducing inequality between the rich and the poor, BUT, just because a village is declared as slum it doesn’t mean that everyone there are poor. Majority are poorer than in other villages.


• Source at the province level: APBD Provinsi (province budget). It has a house improvement program. The fund can only be accessed by districts/cities that could meet several criteria, for example having Slum Decree (so, this is likely contributing in decreasing inequality between the rich and poor). Can be used to provide toilets. However, in case of West Java (where SNV project city, Tasikmalaya) is located, depletion is low because LGs could not meet some readiness criteria.

• Source at the district/city level: district’s budget (APBD Kabupaten) / city budget (APBD Kota). This comes from city’s taxes and revenues (PAD).
o In general, less than 1% is allocated for sanitation (most sanitation fund comes from the national level). And by sanitation, it covers 3 sectors:
 Solid waste
 Drainage
 Domestic wastewater  this is where most O&M budget to operate faecal sludge treatment plant comes from

In most cities, solid waste & drainage have biggest portions (have more priorities). So, the portion for domestic wastewater treatment is much less than 1% of the district/city budget. Also, it is not very easy to say how much the exact portions because:
• Some budgets for solid waste & domestic wastewater are mixed up. In many cases, treatment plants are located next to solid waste landfill. The operators who work at the treatment plants are also working at the landfill under UPTD (institutions that manage both).
• Budget structures are not so easy to categorized (in my personal opinion) because they are itemized. For example, I have seen cost structures at IPLT Duri Kosambi in Jakarta (operated by PD PAL). No categorization for labors, chemicals, utility etc costs. They are listed as long list of items. However, effort is currently being made to categorized them for easier assessment


b. Transfer

• Loans
o ADB and similar loans
• Grants:
o DFAT (Australian Government funded programs), such as KIAT: sAIIG (grants for city sewerage), PCSP (Palembang City Sanitation Project), Hibah Sanitasi (Sanitation Grants),..
 In case of sewerage, the scheme is through reimbursement. So, districts/ cities use APBD Kota or DAK budget first, then they got reimbursed. However, the beneficiaries pay nothing (they are free to connect to sewerage). Because of the pressure to get reimbursement (do not want to fail to receive reimbursement), sometimes LGs would select areas that are more willing to connect (if a community refuses the sewerage development, the LG moves it somewhere else). Therefore, perhaps not really reducing inequality because selection is not based on ability to connect/not. Could be improved through good sanitation social marketing programs.

o
• SNV
o Rural (completed) and urban sanitation (on-going) programs  capacity building programs for Local Government and relevant stakeholders. I think this contributes in reducing inequality by a lot because it puts a lot of emphasize on GESI (gender and social inclusion (increasing sanitation access for socially excluded groups such as the poor, people with disability, elderly, marginalized people and all other vulnerable groups)) as well as CVR (climate vulnerability & resilience) (to increase resilience of vulnerable groups in terms of climate risks affecting sanitation facilities/ infrastructure

• National Slum Upgrading Project (NSUP) and Cities without Slums (KOTAKU): programs that provide grants for slums to improve access in sanitation, water access, etc  definitely directed towards reducing inequality

• CSR: not really reducing inequality because amount is still small (sanitation is not attractive issues for companies) and companies would often refuse to do so for slums (not good visibility)



2) Do you think that this is even a realistic and/or desirable expectation?

Yes.

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)

• First, investment should be made more efficient. Many plants (>80% sludge treatment plants) are non-functioning due to mismanagement. I think it is hard to justify if we only build, neglect, and rebuild, especially for big investment. If this is improved (e.g. through allocation of “software costs”), there will be less waste and could be allocated for other needs, and focused/used for more vulnerable groups.

• I think sewerage and all other big investment should be allocated for more vulnerable groups and to reach more impact. For example, areas which have combination of high population density + no access to piped water supply + high occurrence of poor-sanitation related diseases. Some facts:

 80% population don’t have access to pipe water supply
 39% HHs (27 million HHs) use groundwater for drinking; 57% of them are the lowest 40% wealth quintiles.
 9.4 million Households (HHs) have groundwater wells less than 10 m from faecal sludge containment

Thank you.

Best regards,

Lena Ganda Saptalena
Senior WASH Specialist

SNV Netherlands Development Organisation
Jalan Kemang Timur Raya No 66 | Jakarta 12730 | Indonesia

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The text below is from Flaviana in Tanzania:

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My name is Flaviana Kifizi from Shinyanga WSSA in Tanzania. My response to the questions are as follows;

1. Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?

Currently Shinyanga has no proper sanitation services. Residents of Shinyanga have tap water in their houses with septic tanks mostly in urban area. In this situation, taxes and transfers will increase inequality in sanitation services because those with water services will be serviced while those without water services they won't be serviced.

2. Do you think that this is even a realistic and/or desirable expectation?
On my side, I thinks this is a realistic/desirable.

3. In your view, what would be required to ensure the use of taxes and transfers contribute to reducing inequalities in sanitation services? (or said otherwise: “how?”)
Put more effort in sanitation services in low-income areas. As here in Shinyanga we have constructed low-cost improved pit latrines in low-income areas. People in these areas can opt for this solution for sanitation services.

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This contribution is from Yerri in Indonesia:

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I continue my answer for the three question in topic 2. We also should consider and pay attention to political timespan matter. In some city, Metro city as well, there is city mayor election in every five year. I think this is critical zone. City mayor can change, government officer can change, policy can change, development can change, sanitation budget as well. So, allocation of money for sanitation issues can change. It will be little bit creepy when all of sanitation cost is only depend on government money. For the sustainability of sanitation cost, we should think about public participation, contribution, engagement, empowerment for these issues. So, sanitation program will not be disturbed by political changing. We can run sanitation program by using public financing.

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Note by moderator: This is from Horacia from Mozambique:

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Dear all, this is Horácio Quembo from Mozambique. Below my comments about the topics under discussion.

1) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
Yes and no at the same time. Yes, because we can see some investments in sanitation across the country. No, because the investments are centred in big towns, and capital cities and not in small and per urban areas of Mozambique (places with significant number of people). These We have to develop clear strategy to reduce the inequality. Our legal framework is clear but we have to do more in the implementation side.

2) Do you think that this is even a realistic and/or desirable expectation?
This is desired expectation for us. Investments are not respecting the entire sanitation value chain/cycle and the priorities are not clear.

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
For my country situation.
• We need the reinforcement and implementation of the legislation/regulations, etc;
o Creating enabling environment for the involvement of private sector and other stakeholders.
o Strengthening the mechanisms of people participation demanding and paying for better services, etc.
• We have to include sanitation in the priorities of country/towns plans;
o Allocating budget and other required resources, etc
• We have to develop a good perception of the importance/relevance of sanitation value chain and develop the willingness to invest on that.

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Note by moderator: This one is from Doroth in Tanzania for Topic 2:

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Hello,

My Name is Doroth from Arusha City. Greetings to all. I would like to contribute to this topic as follows;


1 ) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
With reference to different cities and towns in Tanzania this question could be a Yes Or No answer. This depends on the locality and community concern. In major cities such as Arusha, Mbeya and Mwanza the taxes and transfers in sanitation reduce inequality. This is because the majority of the community can accommodate the charges in their daily expenditure. therefore will be willing to pay and find somewhere they can access sanitation services in a proper and sustainable manner. In cities like this, the use of taxes it reduces inequality because every family gets access to sanitation services and pays according to what they use. They are being charged out of percentages used in consumed clean (tap) water. However, in small towns and at outskirts of major cities the situation is quite different. Most of these areas are not covered by the sanitation networks in general despite the facts that some of them are connected to tap water. in a situation like this, the use of taxes and transfers of sanitation increases inequality because they are the majority while the minority in major city are being serviced first.

2) Do you think that this is even a realistic and/or desirable expectation?
In my view, the use of taxes and transfers is very realistic but the expectation is not as what we see. According to the expenses and expertise needed in the provision of sanitation infrastructure and running cost there,s limited chances of getting initial capital outside taxes and transfers. On one hand, the uses of taxes should be there as a big investment. But on the other hand, to have desirable expection we need to change the priorities to whom we serve first. For example, instead of only taking into account major planned city areas, we could focus much more in the majority who live in unplanned settlements in the outskirts of cities and towns.

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
We can decide to subsidize initial cost on-site sanitation services or at least to what should be paid while emptying and transfer of faecal slug from those areas with no sanitation system. However, putting more efforts in public toilets would serve to reduce equality both financially and physically.

Regards.


TP. IR. Doroth Absalom
Urban Planner
Arusha City Council
BOX 3013
Arusha
+255 756 035 155

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Note by moderator: This one is from Fred in Tanzania for Topic 2:

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Hello!

My name is Fred Lyimo from Arusha WSSA in Tanzania.
1. Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
Yes,
However, most of the areas in Arusha are unplanned and in most of these unplanned areas (Like Ungalimited, matejoo, uswahilini) are occupied with low-income individuals. These areas lack proper sanitation services while the wealthy areas are more likely to have sewerage network as they are planned as a result the wealthy are being serviced before the poor

2. Do you think that this is even a realistic and/or desirable expectation?
Yes, the use of taxes and transfer can reduce sanitation service inequality, for instance through AfDB soft loan (USD 233mil) for service delivery improvement in Arusha is now improving the sanitation services in Arusha by increasing sewerage service coverage from 7.6% to 30% building new and big WSPs ( the sewerage network in Arusha covers mainly the CBD area with a total length of 49.106km, but now the AfDB project is on motion to increase the sewerage network by 400km including the peri-urban areas). Moreover, onsite toilets will also be built in public areas like markets, schools, bus-stands to reduce sanitation inequality. These developments will be repaid through government taxes although the tax base in TZ is narrow because of most of the revenue from taxes are collected from the formal sector (i.e. the public and private servants, formal businesses while the majority of individuals pay a little amount of tax resulted from VAT on products consumed etc.

3. In your view, what would be required to ensure the use of taxes and transfers contribute to reducing inequalities in sanitation services? (or said otherwise: “how?”)
Subsidize sanitation alternatives in the unplanned and low-income areas (such as pit latrines, cesspit emptier, onsite sanitation etc

Regards,
Fred

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Note by moderator: The following contribution came from Yerri Noer Kartiko in Indonesia:
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Metro Municipality Government runs desludging service in our city. The service is provided still under “on call” response or when a household was having a problem with the toilet and/or septic tank. The Government receives a certain amount of money after this service has been performed, after the people get a service. People pay retribution. On the other hand however, we do not have updated data regarding the condition of each toilet and septic tank in the entire area of the city. For the lond run, the tariff is perhaps not recovered with the cost of services given.

This is not a good condition. The Metro Government shall invest a lot of money for sanitation development. On the other hand and at the same time, The Government has a very limited resources, particularly in budget allocation for sanitation sector. Thus, The Government shall focus to public empowerment, public engagement and participation in development program.

The Government shall be careful to determine the tariff of retribution and applying public financing. The Government can invite public for open discussion to deal with this issue.

We can implement the principle of “polluter pays”. Every person shall be responsible to manage their waste themselves. When they cannot do this management, they shall give the responsible to a competent agency, by paying a certain cost as a compensation.

1. We calculate the total cost for financing of all componentss of our urban sanitation, such as: a. workforce cost; b. operational and intermittent maintenance cost for machines, vehicles and installation unit; c. management cost; d. ecological safety and security cost as well.

2. We calculate the total number of people who live in our city area.

3. The result of number 1 divided by the result of number 2. We have basic sanitation cost for each people.

4. We arrange the categorization customer, such as: private and government, kind of livelihood of people, level of daily or monthly income. Based on this categorization, we arrange the rule for subsidy system.

5 Metro Government issues the local rules related to sanitation, routine desludging system, and so on.

Yerri

Yerri Noer Kartiko
Environment Division in Metro City Local Government, Lampung Provinces, Indonesia.
Secretary of Environment Division

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