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The Global Clean Water Challenge: How Micro-utilities Offer a Solution

Some 2.1 billion people globally lack safe drinking water, which is racking up huge costs in childhood mortality and illness, notes this opinion piece by Kurt Soderlund, CEO, and Venkatesh Raghavendra, vice president, of the Safe Water Network. But new coalitions are forming that already are clearing a path towards scalable solutions that can make a big difference.

As World Water Day (March 22) approaches, about 2.1 billion people around the world lack water that is accessible, available and safe to drink. Without clean water the results are disastrous: childhood mortality, chronic illness, and lost opportunity, especially for women and girls.

Solving the problem of clean water is vital for the future of several countries including India, China, Mexico and across sub-Sahara Africa. In recent decades, governments, multi-national agencies like the United Nations, implementing not-for-profits and philanthropic efforts have made progress, at times in collaboration with for-profit businesses, expanding the access to clean water. Yet these efforts are insufficient and often fragmented and uncoordinated. They are also vulnerable to changes in climate, population growth and urbanization.

The large majority of expenditures on water supply are spent on large government-supported infrastructure to urban centers, processing water from large sources like lakes and dams and piping to, or near, homes. In villages and rural areas there is the ubiquitous borehole and hand pump, where the water quality is untested. Insufficient attention is paid to providing clean water to those living in small towns, on the fringes of big cities and in urban slums. These are the fastest growing areas, where the need for clean water is among the greatest.

In the case of India, many of these communities have free water from local wells, rivers or the municipal supply. However, many of these sources provide unsafe water leaving families vulnerable. Out of necessity, low-income families earning less than $4 a day often spend about a fifth of their earnings on clean water supplied by tankers and other local vendors. This gap in service delivery contributes to a plethora of water-related diseases, many resulting in loss of life especially for children.

“In India, low-income families earning less than $4 a day often spend about a fifth of their earnings on clean water supplied by tankers and other local vendors.”

Meeting this need is the emergence of small water enterprises – locally adaptable micro-utilities that process and sell safe water at affordable rates. With support from local governments and administrative officials, they often involve small business and local entrepreneurs. Depending upon the quality of the source water, water processing varies from simple chlorination to six stage filtration process — sand, carbon, micron filter, reverse osmosis, ultraviolet filtration, chlorine and pH if required — ridding the water of contaminants such as unhealthy levels of fluoride and salinity. In all cases, there’s a focus on ensuring a sustainable value chain, with maintenance and service support paid from water revenues.

Small, Scalable Solutions

For our program in India, a local entrepreneur is typically chosen by the town or local governing council. Each filtration system serves a population of about 3,000-5,000 people depending on the density of the community. These systems are easily replicable in new locations but they need scale, of about 30 contiguous locations, to realize operational efficiencies for servicing and monitoring. On average each cluster with 30-plus stations creates about 60-100 jobs.

Across the district of Medak in the South Indian state of Telangana, groups of five to six women form self-help collectives to co-own and manage the water enterprises. The entrepreneur, whose initial investment is about $10,000, sources water, typically from bore wells they own. Safe Water Network invests three times that amount with philanthropic funding. The entrepreneurs pay a monthly fee of about $35 and cover small expenses for replacement parts. A sustainability fund, generated from the extra income from the water sales, is created to cover the costs of the more expensive replacement parts.

Consumers use RFID-enabled payment cards to access water. Filling up a 20-liter can costs about five Rupees (7 cents) in rural areas and about 10 Rupees in urban areas. Typically the price for a similar quantity of water, from a competing supplier like commercial tanker owners, is four to five times as much; even more, as much as 10 times, for bottled water. These small enterprises provide safe water at a price that is affordable to many low-income families while making a sound business case for the entrepreneurs, who earn about $3,000 per year.

Funding for the subsidies of the equipment and the operational costs of Safe Water Network comes from foundations and through corporate social responsibility funding. Our work in India benefits from support from Honeywell, Oracle, Macquarie and Pentair Foundation. This enables a not-for-profit business hybrid that promotes enterprises, creates jobs for those installing and servicing the machines and provides revenues to cover ongoing costs.

This creates a virtuous cycle: Families participate, using more, safe water, leading to a healthier population and improved livelihoods. Safe Water’s more than 250 water enterprises in India serve a population of about a million. In Ghana, our 85 systems serve a population of about 400,000; with government backing, we are developing an approach that enables piped water, now reaching nearly a thousand homes. These programs are transformative for the families in these communities.

“Funding for the subsidies of the equipment and the operational costs of Safe Water Network comes from foundations and through corporate social responsibility funding.”

Speaking of the non-profit and entrepreneur hybrid, Randall J. Hogan III, former chairman and CEO of Pentair, says “It has local ownership. If you have local ownership, and you train the entrepreneurs, and you educate them on water hygiene, it works. The cost effectiveness is amazing. There is no better leverage.”

Simple and Local

Not surprisingly, we are seeing the proliferation of these types of small water enterprises globally, adapting to local contexts. The enterprises are cost-effective, flexible, replicable and simple to maintain. Engineered to meet the water purity guidelines generally set by national governments, the quality of the water is better than what is typically supplied from commercial tankers. Since the spread of affordable sources of clean water can face opposition from owners of tankers and suppliers of bottled water, implementers take care in getting the support of elected political leaders and government officials at all levels.

With demonstrated success, greater attention needs to be placed on scaling-up the approach. In India alone more than 220,000 filtration systems will be required to serve the population in small towns and semi-urban areas. To unify efforts, Safe Water Network is joining up with like-minded implementers and stakeholders to establish a community of practice, focused on establishing performance and reporting standards, and working as a single voice to influence funders and policy makers in adopting the approach. With a push from USAID, in India we have launched alliance with other implementers.

Through these types of collaborations, we also anticipate greater efficiency of effort to advance training programs, conducive policies and better leverage advanced technologies. A common operating platform, for example, would enable easier, more cost-effective replication in new locations. Early efforts are underway to coordinate investment in Wi-Fi based digital meters, water quality measurement and financial transaction systems. This type of collaboration will better enable all implementers to improve how they monitor operations and ensure sound practices. This is a critical step towards reaching many millions more in need of safe water.

Ignatius Chithelen contributed to this article.

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