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EUWI meets Mr Borkey, responsible for the water supply and sanitation programme of the OECD

At Stockholm Water Week 2009-08-20, EUWI meets Mr Peter Börkey, responsible for the water supply and sanitation programme of the OECD: Organisation for Economic Co-operation and Development

The OECD has the secretariat function for the Environmental Action Plan (EAP) Task Force for Central and Eastern Europe. This task force is involved in the EUWI EECCA working group that covers the countries of the former Soviet Union.

Mr Börkey, what is the EU Water Initiative’s EECCA working group?

First, EECCA (Eastern European, Caucasus and Central Asia) is a group of 12 post Soviet countries: the Eastern European countries Russia, Belarus, Ukraine, Moldova, the Caucasus' countries Armenia, Azerbaijan, Georgia, and the Central Asian countries Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Following the break-up of the Soviet Union and the different political, economic and social development of these countries thereafter, they are gradually becoming more diverse, although there is usually a common interest in dialogue on relevant water issues.

Second, the EECCA working group consists of about 50 people, including 24 government representatives from both the water supply & sanitation sector (municipal infrastructure sectors); and from the environment side who are in charge of water resources management. Usually, there are two government representatives per country, plus donors, civil society representatives, and international organisations.

Third, the EECCA group has been working in strategic partnership with the OECD on water and sanitation issues and with the UNECE (United Nations Economic Commission for Europe) on water resources management for the last four years. The objectives are to bring policy makers to agree on a coherent set of policy measures through National policy Dialogues that are informed by sound analysis; The work on water and sanitation has focused on discussing the financial sustainability of the water sector through inclusive dialogue across sectoral boundaries involving Ministries of Finance, Water Supply and Sanitation, Social Affairs, and Environment.

What main challenges EECCA countries must face?

The UN official figures state that 90-95% of the EECCA population has access to water supply and sanitation. However, these figures account for some infrastructure that is in place, but may not function. Many people in the region do have a water tap in their dwellings, but due to the poor state of networks it provides poor quality water or no water at all.

Another issue is the fragmentation of the sector. The break-up of the Soviet Union resulted in the decentralisation of responsibility for water and sanitation to the local level. This has led to losses of economies of scale and the dilution of scarce capacity, financial and human resources. Add on top the language barrier. Most officials in the region do not speak English. In the EECCA EUWI we therefore translate everything into Russian  as well as other local languages.

“Many countries have approached us because they felt they needed to develop their capacity to develop strategic financial plans for the water sector, in order to improve their ability to effectively communicate with their Ministries of Finance in the framework of the budget process”

Can you tell us more about the practical value of EUWI Policy Dialogues?

Annual meetings of the EUWI EECCA Working Group are an opportunity to have a regional discussion, but most of the activities take place on a national level. The National Policy Dialogues are the main vehicle for co-operation with the countries. They are initiated upon demand from a partner country on a policy issue of relevance to the country. Analysis is developed to support these dialogue process and all relevant stakeholders in the sector are usually involved.

Many countries have approached the EECCA working group to help them develop strategic financial plans for water supply and sanitation that allow to achieve the water-related millennium development goals. Why? Because, as a consequence of decentralisation, they felt they had lost an overall view of the sector. As such, they were less able to convince Ministries of Finance to provide subsidies to the sector and to continue supporting this critical infrastructure.

Therefore, we bring together the Ministry of Finance in talks with water sector actors to look at what would happen if no reforms were undertaken. Financial needs and available resources are analysed, and ways to close the financing gap are considered, both by reducing and optimizing costs, and by increasing the supply of finance from the financial sources, e.g. from public budgets or official development assistance.

In some cases, closing the financing gap will require painful decisions, such as to prioritise development in certain regions, to focus on water supply rather than sanitation or to opt for low-cost technologies. The process takes about two years and involves a lot of dialogue meetings and costly analysis, supported by a variety of donors including the European Commission, and the EUWI finance working group.

Can you provide some clear examples of achievement?

In the late 1990s, the overall feeling was that water and sanitation issues should be fully financed by users, and that subsidies should not be provided. We spent a lot of time looking at affordability issues in households... and saw that in many of the poorer countries full cost recovery from tariffs was clearly not feasible. This has contributed to a much better recognition, particularly in the Ministries of Finance, that public subsidies are still needed in the sector.

Armenia is an extremely good example of cooperation. Following a request from the Presidential office for a cost-analysis to provide 100% of the rural populations in Armenia with a minimum level of water supply, we used strategic financial planning methodology to allow the Armenian government to look at different options. At the end of the day, they came to a consensus on what was financially feasible, and translated that into a law on minimal rural water supply standards.

We have developed a financial modelling tool called 'Feasible' to transfer knowledge and experience from a region of the world to another.”

We have too been developing a water supply and sanitation financing strategy in Moldova where the President had also put water very high on the political agenda. Yet, the first draft of the policy stating the wish to conform to the Water Framework Directive by 2020 was disconnected from financial reality. So our job was to inject some realism into the plans, focusing on more modest medium-term objectives, like bringing water to rural areas and rehabilitating the existing infrastructure.

The financial modelling tool called 'Feasible', that we developed for the EECCA region is now being adapted to and applied in some African countries and other world regions. So, there is a real transfer of knowledge and experience from the EECCA region to others.

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Celine Dondeynaz
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19 January 2010

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