Water and Sanitation Program Andean Region Economic and Financial Evaluation of El Alto Pilot Project: Condominial Water and Sewerage Systems and Related Innovations

This paper undertakes the economic and financial valuation of the EAPP, a pilot project aimed at transferring the condominial water and sewerage system from Brazil to Bolivia and testing its applicability in the context of private sector participation in service provision. Since its inception in 1998, the EAPP has provided condominial water connections to 1,977 households in eight neighborhoods of El Alto, and condominial sewerage connections to 4,050 households in nine neighborhoods of El Alto. According to recent statistics, about 60% of these households live under the poverty line with an average daily income per capita of $0.80. The pilot project experimented with a number of different components including: • innovative engineering design of networks; • community participation in network construction and maintenance; • hygiene education to support the installation of household facilities; • micro-credit lines to finance the construction of bathrooms. The following overall conclusions can be reached about each of these project components. Engineering design. The purpose of the innovative engineering design is to reduce the length, diameter and depth of the network required by routing the distribution pipes across pavements and/or backyards. Analysis of the EAPP experience suggests that savings in the length and diameter of pipes are of the order of 10%-20%, while savings in the volume of soil excavation as a result of shallower trenches are around 45% for water and 75% for sewerage. These physical savings translate into overall financial savings of the order of 24% for the sewerage service and 40% for the water service when the condominial engineering design is implemented using conventional contractors. This is consistent with recent experience from Brasilia which suggests savings of 20% for condominial sewerage systems without community participation (Neder, 2001), Cost comparison Community participation. The purpose of the community participation is to further reduce connection costs by training local residents to construct and maintain their own condominial branches. Community participation reduced the network costs by a further 26% for the sewerage 229 276 139 208 139 172 0 50 100 150 200 250 300 Water Sewerage Conventional Engineering design only Engineering design plus community participation 3 service and 10% for the water service. Thus, the overall savings achievable by implementing the condominial engineering design with community labor come to around 50% for each of the two services. However, community participation also introduces costs of social intermediation for the water company of around $8 per connection, and …