Water supply and sanitation in Ecuador

Water supply and sanitation in Ecuador

Water supply and sanitation in Ecuador has reached a significant increase in coverage in the last years. However, the sector is characterized by (i) low coverage levels, particularly in rural areas; (ii) low service quality and efficiency; and (iii) limited cost recovery and a high level of dependence on financial transfers from national and sub-national governments. Furthermore, there are overlapping responsibilities both within the national government and between different levels of government.


In 2004, water supply coverage (house connections) stood at 82% in urban and 45% in rural areas [ Joint Monitoring Program WHO/UNICEF( [http://www.wssinfo.org/en/welcome.html JMP] /2006)] while sewer coverage in 2003 was 72% of urban and 53% of rural households. [ Joint Monitoring Program WHO/UNICEF Coverage Estimates Improved Sanitation Ecuador [http://www.wssinfo.org/pdf/country/ECU_san.pdf (JMP] /2006)]

"Source": Joint Monitoring Program WHO/UNICEF( [http://www.wssinfo.org/en/welcome.html JMP] /2006). Data for [http://www.wssinfo.org/pdf/country/ECU_san.pdf sanitation] based on the WHO World Health Survey 2003.

Coverage for both water and sanitation services tends to be lower in the costa and oriente than in the sierra. In addition, water supply coverage varies greatly by income, reaching about 90% for the top three income deciles in urban areas compared with levels of only about 60% for the bottom three income deciles.

Service quality

In general, water service quality is low in Ecuador. Water supply services are interrupted in 50% of the urban areas. Water pressure is well below standard, particularly in poor outlying areas. In 30% of the urban areas, there is no treatment of superficial potable water. 92% of wastewater is discharged without any kind of treatment.

According to a study of 2004 about sustainability, 38% of the systems in rural zones have collapsed, and 20% are seriously damaged. 29% are somewhat damaged and only 13% are considered sustainable. [es icon [http://www.oas.org/dsd/MinisterialMeeting/CRITERIOS%20Y%20ACCIONES%20EN%20PRO%20CUMPLIMIENTO%20ODM%20AGUA%20Y%20SANEAMIENTO.pdf OAS 2005] ]

History and Recent Developments

Between 1965 and 1992, the "Instituto Ecuatoriano de Obras Sanitarias" (IEOS) or Ecuadorian Institute for Sanitary Works had been responsible for water supply and sanitation services in Ecuador.

In 1992, the sector was decentralized due to a Decentralization Law and the sector's administration was assigned to MIDUVI, which was fusioned with IEOS. Many municipalities, in particular small and medium-sized ones, did not dispose of enough capacity for providing water supply and sanitation services. In 2001, the national government began to support those municipalities with technical assistance through PRAGUAS (see below). [ For more information about the institutional development of the sector in Ecuador, see es icon [http://www.eclac.org/DRNI/proyectos/samtac/actividades_nacionales/ecuador/1/taller1.pdf UN Economic Commission for Latin America and the Carribean] ]

Responsibility for water supply and sanitation

There are several contradictory policies on allocating the sector's resources within the country. There is no system for information, monitoring and assessment of the sector. Thus, an institutional chaos can be observed which doesn't define limits of responsibility between the institutions. [es icon Latinosan 2007 - Latinamerican Sanitation Conference: Report about Ecuador, p. 4-5]


Responsibility for establishing sectoral policy is legally vested in the [http://www.miduvi.gov.ec/agua%2c-saneamiento-y-residuos.aspx "Subsecretaría de Agua Potable, Saneamiento y Residuos Sólidos" (SPASyRS) or Subministry of Potable Water, Sanitation and Solid Waste] under the Ministry of Urban Development and Housing. However, there is no clear definition of roles and responsibilities between various national and sub-national actors, nor is there an independent regulator of water supply and sanitation services. Stakeholders in the sector include the [http://www.fondodesolidaridad.gov.ec/ "Fondo de Solidaridad" or Solidarity Fund] , the [http://www.bancoestado.com/paginas_e/Quienessomos/Obejtivos_Recursos.htm Ecuadorian State Bank] , the [http://www.fise.gov.ec/ "Fondo de Inversión Social de Emergencia" (FISE) or Emergency Social Investment Fund] and several governmental ministries at the national, provincial and municipal level, among others.

While Ecuador has a National Water and Sanitation Policy [ Política Nacional de Agua y Saneamiento under Executive Decree No. 2766 of 30 July, 2002 ] , it is set out in relatively vague terms and avoids a clear position on sensitive issues such as investment subsidies (by national and sub-national governments) and who should receive them. A draft plan for a [http://www.miduvi.gov.ec/LinkClick.aspx?fileticket=HkjJV52cNmc%3D&tabid=182&mid=607&forcedownload=true Water and Sanitation Sector Law] was prepared, but has not yet been presented to Congress, given unstable political conditions.

An Interinstitutional Committee for Water and Sanitation acts as a forum for interchanging experiences in collaboration with MIDUVI. [es icon Latinosan 2007 - Latinamerican Sanitation Conference: Report about Ecuador, p. 1]

Service Provision

In urban areas, municipalities are directly responsible for delivering the services. They can provide it themselves or through an autonomous municipal utility. In Guayaquil, the service was transferred to the private company [http://www.interagua.com.ec/ Interagua] under a concession in 2001. At the same time, the former municipal utility ECAPAG became the regulatory agency for the new private utility. [ ECAPAG [http://www.ecapag.gov.ec/SoloPortalECAPAG/portal.html] ]

In rural areas, more than 5,000 Potable Water Boards provide the services. Most of them are left to their fate in abandoned conditions, due to very low tariff levels, neglicgence of care of the water sources and lack of an institution helping water boards since the dissolution of IEOS in 1992. [es icon [http://www.oas.org/dsd/MinisterialMeeting/CRITERIOS%20Y%20ACCIONES%20EN%20PRO%20CUMPLIMIENTO%20ODM%20AGUA%20Y%20SANEAMIENTO.pdf OAS 2005] and
es icon [http://www.eclac.org/DRNI/proyectos/samtac/actividades_nacionales/ecuador/1/taller1.pdf UN Economic Commission for Latin America and the Carribean]


Potable water supply efficiency is usually measured through labour productivity and the level of unaccounted-for water.

Labour productivity in water supply and sanitation is generally difficult to guess in small municipalities, where the service is frequently carried out directly by municipal governments in conjunction with other services. Nevertheless, between 5 and 14 employees per 1000 connections are estimated in medium sized towns, a number well in excess of best regional practices (below 3 employees per 1000 connections).

Non-revenue water, which is the difference between produced and invoiced water is also difficult to guess, given low measuring levels in Ecuador. However, at the end of 2001 it was estimated at 65%, one of the highest levels in Latin America. [ es icon [http://www.oas.org/dsd/MinisterialMeeting/CRITERIOS%20Y%20ACCIONES%20EN%20PRO%20CUMPLIMIENTO%20ODM%20AGUA%20Y%20SANEAMIENTO.pdf OAS 2005] ]

Financial aspects

Tariffs, Cost Recovery and Affordability

A study commissioned by the government under financing by the World Bank concluded that nationwide, tariffs covered only about 2/3 of system operation and maintenance costs in 2001. National and sub-national (provincial and municipal) government transfers are required to cover the operation and maintenance gap and to finance coverage expansion. [es icon "Plan Nacional de Desarrollo del Sector de Agua Potable y Saneamiento Básico", G. Yepes, B. Gómez y E. Carvajal, October 2002, realized as part of the first stage of the Adaptable Program Loans of the PRAGUAS project]

Concerning the affordability of tariffs and ability to pay of user, in 1998 households that indicated expenses for water in the national living standards measurement survey, stated that on average they stood at 1,7% of their total expenses. This percentage is higher in urban areas (1.9%) than in rural communities with some basic infrastructure ("rural amanzanado" - 1.3%) and rural areas with scattered population ("rural disperso" - 0.9%). Within the poorest decile, this percentage is 1.9% on national average, but 3.3% in urban areas. The expenses include water which is bought from water tankers, but excludes expenses for sanitation. [ WHO, "Inequality in Access, Use, and Expenditure in Water in Latin American and the Caribbean: Ecuador" ("Desigualdades en el acceso, uso y gasto con el agua potable en American Latina y el Caribe: Ecuador" (PAHO, February 2001, based on the ECV 1998), p. 95 ]

Investment and financing

Financing for urban and rural water supply investments is provided by a multitude of national and sub-national actors under different terms and conditions. Some favour participation by users and municipalities, but the majority provide assistance without requiring any contributions ("assistencialismo") in a clientelistic manner, underestimating the importance of participation to reach sustainability of services. [es icon Latinosan 2007 - Latinamerican Sanitation Conference: Report about Ecuador, p. 1]

However, the government has recently taken a bold step to improve Ecuador’s incentive framework for water and sanitation investments by adopting an Executive Decree [ Decreto Ejecutivo No. 2562 published on 21 February, 2005 ] on national government transfers to municipalities earmarked to WSS investment under a special tax on telephone calls (Impuesto sobre Consumos Especiales, ICE). The level of the transfers is higher for poorer municipalities, and – most notably – higher for those that improve operator performance or choose to delegate service provision to autonomous operators. The system of sub-national transfers thus provides incentives to improve both performance and more sustainable institutional arrangements at the local level.

ImageSize = width:auto height:220 barincrement:40PlotArea = left:40 right:900 height:180 bottom:20AlignBars = late

DateFormat = x.yPeriod = from:0 till:6.5TimeAxis = orientation:verticalScaleMajor = gridcolor:tan1 increment:1 start:0

PlotData= color:blue width:15 bar:1990 from:start till:0.78 bar:1991 from:start till:0.77 bar:1992 from:start till:0.54 bar:1993 from:start till:1.33 bar:1994 from:start till:1.95 bar:1995 from:start till:2.10 bar:1996 from:start till:2.30 bar:1997 from:start till:2.32 bar:1998 from:start till:2.39 bar:1999 from:start till:1.71 bar:2000 from:start till:1.01 bar:2001 from:start till:3.94 bar:2002 from:start till:6.10 bar:2003 from:start till:4.90 bar:2004 from:start till:0.65 bar:2005 from:start till:1.02

TextData= pos:(60,200) fontsize:M text: Annual investment in water supply and sanitation per capita in constant US$ of 2006 (only at the municipal level)

From 1990 to 2005, US$409 million were invested in water supply and sanitation at the municipal level. As shown above, the funding reached its peak in 2002, when US$6.1 per capita were spent. However, the average investment p.a. was at only US$2.1 [The data were obtained directly from the municipalities, the PRAGUAS program and the "Fondo de Inversión Social de Emergencia" (FISE). Possible investments by the Ministry of Urban Development and Housing are not included. Data on population and deflators: [http://devdata.worldbank.org/query/ World Bank World Development Indicators database] ; All figures in constant US Dollars of 2006] Compared to other Latin American states like its neighboring countries Peru and Colombia, the investment level in Ecuador is low. ["See: Investment in water supply and sanitation in Latin America"]

External support

The Ecuadorian government receives external support from several donors in terms of investment and technical assistance in water supply and sanitation.

World Bank

In the last years, the World Bank has intensely participated in the development of key documents about Ecuadorian Policies, including national policy of water and sanitation in 2002 and the innovative decree about transfers to the water supply and sanitation sector of 2005 as well as the draft plan for a Water and Sanitation Sector Law.

The World Bank Group also contributed to the PRAGUAS project with a loan of US$48m, paid by the International Bank For Reconstruction And Development. [ [http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P095555: Worldbank: Rural and Small Towns Water Supply and Sanitation Project II (PRAGUAS)] ]

Rural and Small Towns Water Supply and Sanitation Project II (PRAGUAS)

Since 2001, the "Proyecto de Agua Potable y Saneamiento para Comunidades Rurales y Pequeños Municipios (PRAGUAS) or Rural and Small Towns Water Supply and Sanitation Project became the government's primary instrument to face the sector's challenges, influencing key options about policy (see above), extending coverage and giving incentives to improve quality, efficiency and cost recovery of the service. [ [http://siteresources.worldbank.org/INTWSS/Resources/ecuador.pdf PRAGUAS Summary] and [http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&theSitePK=523679&entityID=000094946_00092805302221&searchMenuPK=64187283&theSitePK=523679 PRAGUAS complete documents] ]

To satisfy requirements of quality, efficiency and cost recovery, PRAGUAS offers technical assistance and financial incentives to municipalities which are interested in delegating water supply and sanitation to autonomous operators, such as public or private utilities, cooperatives etc.

Referring to coverage, between 2001 and 2006 PRAGUAS I equipped 252,000 persons with new supply systems and 127,000 people with on-site sanitation (i.e. approximately 5% and 3% of the Ecuadorian rural population of 4.7m people). In small towns ("cabeceras cantonales"), where water service was interrupted, technical assistance was provided to improve the performance, separating service provision from direct provision by municipalities and increasing operative efficiency, to reach continuous sustainable service of good quality. In view of the fact that designs for more than 600,000 inhabitants (which is 13% of the Ecuadorian rural population) have already been prepared, a fast coverage expansion is expected within PRAGUAS II, which began in 2007 and will last until 2011.

During PRAGUAS I, among the country's 219 municipalities, 29 have decided to adopt new service models that are different from direct provision by municipalities. 14 have completed the transition process, exceeding the aim of APL-1 (Adaptable Program Loan) of five municipalities, which was established by the World Bank and the national government in 2000. An initial assessment shows that the first group of municipalities, which have delegated their water supply and sanitation services, like Cayambe (municipal company), Pedro Moncayo (municipal company, privately operated), Pujilí (municipal company), Guaranda (municipal company), Caluma (mixed company) and Echeandia (cooperative) have significally increased their operative efficiency and raised tariffs to at least cover their operation and maintenance costs.

The second stage, called APL-2/PRAGUAS II was approved by the World Bank's Board on July 25th 2006. PRAGUAS II is expected to provide the following benefits: i) support for consolidating the framework of incentives for investments in water supply and sanitation, as well as technical assistance to present a Water Law to the congress and the relevant regulations for its application; ii) A group of complementary activities to extend coverage under a demand-driven approach, enhancing hygiene benefits due to the new infrastructure and offering support to water boards aimed at strengthening the system's sustainability; iii) technical assistance and investment financing to improve qualitiy, efficiency and cost recovery of water supply and sanitation services and management of solid waste in small towns; and iv) a communication program to develop support for sector reform.

Until 2011, PRAGUAS II is expected to provide water supply and/or sanitation for 405,000 inhabitants in rural areas, such as the efficient water supply for 220,000 people in samll towns and sanitation managed by delegated operators for 120,000 persons. All service provision is done with a demand driven approach, respecting gender, interculturality and environmental care, thus aiming at an effective and sustainable use of the services.

Interamerican Development Bank (IDB)

The Interamerican Development Bank supported investments in the three largest cities of the country - Quito, Guayaquil and Cuenca - through ten programs with a total amount of US$400m. In 2006, the IDB approved a new loan in the amount of US$62.25m for the town of Cuenca. [ [http://www.iadb.org/projects/Project.cfm?project=EC-L1019&Language=English IDB Water Supply and Sanitation Program for Cuenca] ]

European Union

PASSE is a program of the Health Ministry for the provinces of the central sierra region, which has received a grant from the European Union. [ es icon [http://www.oas.org/dsd/MinisterialMeeting/CRITERIOS%20Y%20ACCIONES%20EN%20PRO%20CUMPLIMIENTO%20ODM%20AGUA%20Y%20SANEAMIENTO.pdf OAS 2005] ]


Since 2003, the Belgian government has supported the "Agua Potable Para la Sierra Norte" (APOSINO) or Potable Water for the Northern Sierra region program, which is a technical assistance program in the provinces of Imbabura and Carchi. [ [http://www.btcctb.org/showpage.asp?iPageID=1959&sLangCode=EN The APOSINO Program] ]

International Organization for Migration

The [http://www.iom.int/ International Organization for Migration (IOM)] carries out a development program in rural areas and small towns in the northern region of Ecuador, called Northern Border Development Program. The program is financed by [http://www.usaid.gov/ USAID] , which has invested US$63m from 2001 to 2007. [ [http://www.iom.int/jahia/Jahia/pid/449#md OIM Northern Border Development Program] ]


The humanitarian organization [http://www.careinternational.org/ CARE] is working in 15 Ecuadorian provinces, concentrating on rural areas and especially on projects close to the northern and the southern border. CARE works closely with the municipalities. In the last 10 years, CARE has contributed to significantly increasing water coverage under a sustainability-driven approach. [ Pedro Carrasco, CARE, Latinosan, November 2007 ]


External links

*es icon World Health Organization (WHO): Water Supply and Sanitation in America Assessment 2000 [http://www.cepis.ops-oms.org/eswww/eva2000/ecuador/informe.html Ecuador]
*es icon Ministry of Urban Development and Housing: Ministerio de Desarrollo Urbano y Vivienda - SUBSECRETARIA DE AGUA POTABLE, SANEAMIENTO Y RESIDUOS SÓLIDOS [http://www.miduvi.gov.ec/ MIDUVI Agua]
*es icon UN Economic Commission for Latin America and the Caribbean (ECLAC) Water management governance in Ecuador: [http://www.eclac.org/DRNI/proyectos/samtac/actividades_nacionales/ecuador/1/taller1.pdf ECLAC]
*es icon Drinking Water, Sanitation and Solid Waste Sector Information System: SISTEMA DE INFORMACIÓN SECTORIAL DE AGUA POTABLE, SANEAMIENTO Y RESIDUOS SÓLIDOS [ SISASAR]
*Article on the success of the water and sanitation concession in Guayaquil [http://www.iadb.org/idbamerica/index.cfm?thisid=2501 Guayaquil concession]

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