Water supply and sanitation in Colombia

A comprehensive sector policy, introduced in 1994, aimed at increasing water and sanitation investments through targeted transfers to municipalities, improving service quality and efficiency by promoting private sector participation in the poorest parts of the country where utilities were not performing well, the establishment of autonomous regulatory agencies at the national level, increased cost recovery, and protecting the poorest through cross-subsidies in the form of area-based tariffs. This same policy has been pursued and refined by different consecutive governments. Responsibilities in the sector are divided as follows: • The Vice-Ministry of Water and Sanitation, created in October 2006 within the Ministry of Environment, Housing and Territorial Development is in charge of setting sector policy. • Regulation is the responsibility of two separate institutions at the national level, the Potable Water and Basic Sanitation Regulation Commission (CRA) and the Superintendency of Residential Public Services (SSPD), a multi-sector regulatory agency. • Service provision is the responsibility of 1,500 water and sanitation service providers in urban areas and probably more than 12,000 communal organizations providing services in rural and peri-urban areas. Cost recovery in the sector has improved substantially. Between 1990 and 2001, the average tariff for water and sanitation in Colombia increased from US$0.32/m3 to US$0.81/m3, equivalent to an increase of 153%. As a result, 24% of investments were self-financed by utilities in 2004. Other features of the sector are the existence of some large, well-performing public companies; a strong and stable participation by the local private sector in service provision; and some well-performing community-based organizations in peri-urban areas. Recently, the government of Álvaro Uribe has initiated a number of complementary policies to accelerate increases in access to water and sanitation services, such as the strengthening of the roles of departments in the governance of the sector, a program for marginal urban neighborhoods and an increase in investments for wastewater treatment. ==Access==

In 2015, in Colombia 91% of the population had access to "improved" water, 97% and 74%, in urban and rural areas, respectively. In 2015, there were still around 4 million lacking access to "improved" water. Regarding sanitation, 81% of the population had access to "improved" sanitation, 85% and 68%, in urban and rural areas, respectively. ==Service quality==

In addition to issues of service coverage, Colombia’s water and sanitation sector faces issues of service quality. However, service quality has improved considerably over the last fifteen years. The biggest cities tend to offer better service quality than smaller towns and rural areas. , Antioquia Continuity of supply. The average duration of daily water service has increased from 15.36 hours in 1993 to 19.82 hours in 2003 at the national level. Drinking water quality. According to a survey of the Superintendencia de Servicios Públicos Domiciliarios (SSPD) or Superintendency for Residential Public Services in 2004, 72% of the users had water of potable quality. In some cases, the water supply system’s pressure is not adequate, increasing the risk of bacterial contamination. Sewerage. Sewage collection systems do not have sufficient hydraulic capacity to handle wastewater flows, especially in poor neighborhoods, which results in combined sewer overflows and sanitary sewer overflows. Wastewater treatment. In 2006, 25% of the wastewater generated in the country underwent some kind of treatment. The remaining 75% is discharged without any treatment, contaminating a significant part of the natural water resources. ==History==

The water and sanitation sector in Colombia underwent one cycle of centralization and decentralization within the past several decades. Since the enactment of a comprehensive new sector policy in 1994, various governments have pursued the same set of basic policies, including targeted transfers to municipalities, private sector participation, regulation, cost recovery and a system of cross-subsidies. Centralization (1950s to late 1980s) In the first half of the 20th century, municipalities were responsible for the provision of basic water and sanitation services in Colombia. In 1950, similar to many other countries, a centralized system was adopted and the Instituto de Fomento Municipal (INSFOPAL) or Municipal Development Institute was created. Empresas Departamentales de Acueducto y Alcantarillado (ACUAS) or Departmental Water and Sewerage Companies were created, consisting of the departments, the municipalities and INSFOPAL, which took care of managing and maintaining the infrastructure of the member communities. In that way, investment at the national level was channelled into this important area of public health. In 1976, within the framework of a change in sector policies, the ACUAS were transformed into Empresas de Obras Sanitarias (EMPOS) or Sanitary Works Companies at the regional or municipal level, which were put in charge of financing, planning, developing and managing public services in most municipalities. However, some municipalities kept the responsibility for service provision at the local level and created municipal companies. The most notable case are the Empresas Públicas de Medellín (EPM), a municipally owned multi-sector utility created in 1955. At the national level, the water sector institutionally depended on the Ministry of Health. Decentralization (late 1980s to 1993) In the 1980s, the sector was in crisis, characterized by low investment, poor cost recovery and poor service quality in most of the country. As a result, the government decided to break up INSFOPAL at the end of the 1980s and to devolve the responsibility for service provision back to the municipalities after four decades, except for some cases like the Valle de Cauca department, where the regional companies continued providing the services. Furthermore, the institutional responsibility for the sector was transferred from the Ministry of Health to the Ministry of Economic Development. This change was not only an administrative change, but it introduced a different focus and perspective to the sector. Creation of a Vice-Ministry for Water and Sanitation and Departmental Plans (since 2006) The government of Álvaro Uribe wants to rapidly increase coverage, overtaking the Millennium Development Goals for the sector and to improve service quality, especially in small towns and rural areas, which have the highest requirement of service improvement. At the end of 2006, a Vice-Ministry for Water and Sanitation was created. In about 2011, the responsibility for water supply and sanitation, and with it the Vice-Ministry, was transferred to the newly created Ministry of Housing, Cities and Territories. As of August 2012, the Vice-Ministry's website made no more reference to the Departmental Water and Sanitation Plans. The handwashing program, the SPA and SAVER were still in place. In addition, two new programs were started: • A "water culture" (Cultura del Agua) program that combats apathy and lack of interest concerning water utilities, promotes water reuse and the protection of watersheds, and fights water losses, illegal connections and the non-payment of water bills. • A "transparent water" program to ensure greater visibility and a wider implication of various stakeholders in water projects, especially during an early stage of implementation. ==Responsibility for water supply and sanitation==

The current responsibilities and policies in the water and sanitation sector in Colombia are primarily defined in the 1991 constitution and in Law 142 of 1994 (Ley de Servicios Públicos Domiciliarios or Public Housing Services Law) Therefore, public utilities are directly responsible for service provision, except for some special cases defined in the law, in which municipalities can offer the services directly. In rural areas and some marginal urban areas, communal water boards also offer water supply services. Smaller utilities included, there are more than 1,500 water and sanitation service providers of in urban areas, and probably more than 12,000 communal organizations providing services in rural areas. EMCALI has suffered financially due to onerous payment obligations resulting from a Power Purchase Agreement signed in 1997 with an Independent Power Producer, TermoEmcali. The capital of Colombia, Bogotá, is served by a water and sanitation utility, the Empresa de Acueducto y Alcantarillado de Bogotá (EAAB). Private sector participation Private sector participation in Colombia's water and sanitation sector has been much more stable than in some other Latin American countries. In 2004, there were 125 private and 48 mixed public-private water companies in Colombia, including large, medium and small companies. According to a World Bank report, the key to success of private sector participation in the Colombian water sector has been the development of homegrown solutions, and, at times, skillfully adapting models used elsewhere to the particular circumstances and culture of Colombia. The World Bank's Private Participation in Infrastructure Database shows private investment commitments in water supply and sanitation of US$940 million from 1995 to 2006 through 51 transactions, including 27 classified as concessions, 22 as management and lease contracts, and 2 as greenfield projects. Small towns and peri-urban areas In some smaller towns and peri-urban areas, there are examples of successful provision of water supply and sanitation services by community organizations and regional companies, which in some cases set an example in terms of community empowerment, transparency and accountability. An example of a regional association is Acuavalle S.A. ESP, which provides drinking water and sanitation to 582,000 inhabitants in 33 municipalities of the Valle del Cauca department. It was founded as a non-profit public limited company in 1959. The shareholders of the company are the Valle del Cauca department, the ‘’Corporación Autónoma regional del valle del Cauce’’ and 33 municipalities, which are served by the utility. Another example is the Asociación Acueducto de Río Negro de Popayán, which was formed 10 years ago integrating 10 supply systems, supplying 7,000 residential connections. The association is preparing its own water treatment plant and preparing to install meters with the aid of the Colombian organization Asociados en Desarrollo Rural (ADR) or Associates in Rural Development and the United States Agency for International Development (USAID). Rural areas Coverage in rural areas is unusually low, given the level of economic development and sector development. Using a broad definition of access, based on the WHO definition of an improved water source, access in rural areas in Colombia was 71%, while it was 81% in Honduras - a considerably poorer country - and 89% in Ecuador, also a poorer country than Colombia. In addition to the armed conflict, there are other explanations for this situation: Municipalities tend to use their financial resources from the Sistema General de Participaciones or General Participation System (Law 715 of 2001) mainly in urban areas. Furthermore, there is no institution or program at the national level which offers technical assistance to the 12,000 rural community organizations. Law 142 of 1994 assigns that task to the departments, but these have not carried out the task in a satisfactory way so far. The 2002 Inventario Sanitario Rural (ISR) or Rural Sanitary Register confirms that situation. Only 21% of the rural community organizations were considered able to carry out maintenance and only 10% to commercially operate the service. Only 32% issued bills and only 10% used metering. In 2005, the government defined guidelines for basic water supply and sanitation policy in rural areas to increase coverage and improve quality in those areas. In addition a GIS study published in 2014 documented that for many rural areas the time needed to drive to water testing labs than is longer than the sample is viable. ==Innovative approaches==

Since 1994 Colombia has pioneered many innovative approaches for basic service provision in general and for water supply and sanitation in particular. Some of them were introduced at the national level, while others were initiated in one city or region. Notable innovations at the national level are the introduction of two autonomous economic regulatory agencies (one, CRA, to develop and fine-tune regulatory tools in the water and sanitation sector, and another one, SSPD, to implement them in across all basic services) in 1994; the introduction of socio-economic strata as a basis for spatially differentiated tariffs, also in 1994; and the spatial aggregation of municipal service providers in small towns at the departmental level to benefit from economies of scale since 2006, with strong support from the national government. A notable innovation initiated by a city or a region is the creation of mixed public-private enterprises for urban water supply that has begun in 1995 in Cartagena, followed by Barranquilla and other Northern and Central cities and towns. Another innovation is an association of community-based organizations (CBOs) providing water supply in rural and peri-urban areas in the departments of El Valle, Cauca and Risaralda in Southwestern Colombia. It began in the late 1990s with the assistance of the Universidad del Valle in Cali in order to protect and recover source watersheds and to strengthen the CBOs' capacity to administrate, operate and maintain their water systems. In addition, Colombia boasts one of the oldest and largest multi-utilities in Latin America, Empresas Públicas de Medellín (EPM), created in 1955. ==Efficiency==

The average level of non-revenue water (physical and economic losses) in Colombia in 2006 is estimated to be 49%. In the largest cities of the country, levels of non-revenue water are below the national average (40% in Bogotá, 35% in Medellín and 39% in Cali). ==Financial aspects==

Tariffs The Colombian tariff system is defined in the Ley de Servicios Públicos or Public Services Law from 1994. It is applied in public, mixed and private companies. The tariff system aims at reconciling the achievement of cost recovery with the protection of the poor. The basic tariff is calculated on the basis of economic costs according to a methodology defined at the national level by CRA (Law 287 of 2004). Therefore, in principle, tariffs in different municipalities do not differ due to local government’s decisions to raise tariffs or not, but only because of the different costs of the services. The base tariff of each service provider has to be adjusted by law for different geographic areas within the city, each assumed to correspond to one socio-economic class, according to adjustment factors that are specified by law. This system of area-based tariffs is supposed to provide cross-subsidies from more affluent to poorer users. Every municipality has defined geographic areas that each correspond to one of the six socio-economic classes. Class 1 represents the lowest income group while class 6 stands for the highest. As per 2007, the tariff adjustment factors were the following: There are many more citizens who live in areas corresponding to classes 1–3 than those who live in the areas corresponding to classes 5 and 6. For example, in Bogotá 73% of the population live in zones of classes 1–3, whereas only 10% live in zones classified as 5 and 6. Consequently, the tariff system permanently causes deficits which require subsidies paid by the national government. Between 1990 and 2001, the average tariff for water and sanitation in Colombia increased from US$0.32/m3 to US$0.81/m3, equivalent to an increase of 153%. In February 2012 Bogota also introduced 6 cubic meters of free basic water per household for households in classes 1 and 2, covering more than 1.5 million households or 39% of all households. The annual cost is estimated at 60 billion Pesos (USD 33 million). Investment Between 1995 and 2003, US$3.4 billion (7,965 billion Colombian pesos) were invested in the sector, of which 16% were financed by the private sector. Since 1998, private financing increased from almost zero to become a significant share of the total investment. Furthermore, despite a drop in 2001, investment in the sector has increased since 1999. Legend = left:50 top:190 Colors = id:total value:blue legend:Total id:private value:red legend:Private ImageSize = width:auto height:230 barincrement:40 PlotArea = left:40 right:741 height:180 bottom:20 AlignBars = late DateFormat = yyyy Period = from:0 till:600 TimeAxis = orientation:vertical ScaleMajor = gridcolor:drabgreen increment:100 start:0 PlotData= color:blue width:15 bar:1995 from:start till:216 bar:1996 from:start till:234 bar:1997 from:start till:256 bar:1998 from:start till:245 bar:1999 from:start till:388 bar:2000 from:start till:594 bar:2001 from:start till:390 bar:2002 from:start till:479 bar:2003 from:start till:587 color:red bar:1995 from:start till:2 bar:1996 from:start till:2 bar:1997 from:start till:6 bar:1998 from:start till:51 bar:1999 from:start till:76 bar:2000 from:start till:108 bar:2001 from:start till:34 bar:2002 from:start till:111 bar:2003 from:start till:141 TextData= pos:(10,210) fontsize:M text: Annual investment in water supply and sanitation in million US$ The SSPD forecasts a total investment of US$2.2 billion (4,922 billion Colombian pesos The Minister of Environment, Housing and Territorial Development announced in May 2008 that US$5.2 million (9.2 billion Colombian pesos) will be spent in order to facilitate the construction of facilities in areas without access to drinking water. The national government will control the destination of the resources and guarantees transparency in the whole spending process. According to the minister, Colombia should already have reached full drinking water coverage, given the past investments in the sector. Financing According to the ministry, the investments were mainly financed through three sources: self-financing, funding by the national government and charges for the extraction of petroleum and carbon. A World Bank study estimates an investment of US$411m in 2004, which was financed as follows: • US$108m (26%) by companies through self-financing • US$249m (61%) by state funding through SGP • US$49m (12%) by Corporaciones Autónomas Regionales (CAR) or Regional Autonomous Corporations • US$5m (1%) by other sources They mainly go to small municipalities that show low income levels. The CAR receive property tax, electric power utilities, environmental charges for extracting water and charges for discharging waste water. ==External cooperation==

The main external cooperation partners for the Colombian water and sanitation sector are the World Bank, the Inter-American Development Bank (IDB) and the Andean Development Corporation (CAF). World Bank The World Bank supports the sector through dedicated water and sanitation projects, as well as through water and sanitation components in other, broader projects. Dedicated water and sanitation projects: • Bogotá Urban Services Project • Cartagena Water Supply, Sewerage and Environmental Management Project • La Guajira Water and Sanitation Infrastructure and Service Management Project • Water And Sanitation Sector Support Project First Phase APL • Water Sector Reform Assistance Project Non-dedicated projects: • Disaster Vulnerability Reduction First Phase APL • Rio Frio Carbon Offset Project • Amoya River Environmental Services • Sustainable Development Investment Project Inter-American Development Bank (IDB) • Potable Water and Sanitation Pereira Andean Development Corporation (CAF) CAF supports the sector through a USD 42.5 million loan to the Cesar Department in 2006 and a USD 58.1 million loan to the Empresas Aguas del Magdalena approved in 2007. ==See also==