A Critique on the Water for the Poor Project
Though this is recognized as a better setup than the traditional funding mechanism, OBA is sometimes criticized for its selection criteria, priority areas, and the overall process involved.
This article looks into the social, economic and political issues involved in the GPOBA-funded Water for the Poor project in Metro Manila, Philippines. In addition, the paper features some of the best practices and lessons learned from this project.
Overview of the Project
Manila Water, a private company that provides water and wastewater services to the eastern half of Metro Manila in the Philippines, is a recognized leader in the field of Corporate Social Responsibility (CSR). Its flagship program, Water for the Poor, aims to address the basic water needs of marginalized communities. More specifically, it aims to provide urban poor communities with regular and affordable supply of potable water.
Before, poor families usually had no piped-in water service connections so they sometimes had to walk several miles and queue for hours to fetch water from a public faucet or shallow well. Some resorted to buying water in containers from dubious water vendors who sell these containers at an unreasonably high price. Extra cash had to be spent for bottled mineral water for their daily drinking needs. Because of these conditions, low-income families were vulnerable to water-borne diseases and poor sanitary conditions.
The project entails providing the urban poor individual service pipes that are tapped to the mainlines and end at individual water meters. Manila Water charges all its customers a certain fee for the connection costs. Then, the customer has to shoulder the cost of installing distribution lines from the water meter to inside their houses. These costs are quite significant for marginalized communities, and this is often an impediment to the implementation of the project.
To resolve the problem of quite a substantial cash outlay for the connection charge and costs after the water meter, Manila Water sought the help of World Bank and GPOBA. Since the Water for the Poor project is consistent with GPOBAs ultimate goal of improving delivery of basic infrastructure and social services to the poor in developing countries ( HYPERLINK httpwww.gpoba.org www.gpoba.org), Manila Water became the first Philippine company to benefit from GPOBA. In 2007, World Bank approved the release of a 2.8 million grant to Manila Water, with an initial release of 1 million. The remainder of the amount will be disbursed in the second half of 2010. The grant was used to subsidize connection charges and a portion of after-the-meter costs, thus reducing cash outlay by more than 60 percent. The rest of the charges are payable over a period of two years.
Under the Grant Agreement, Manila Water advances all costs related to the project. Three months after the completion of the project, an independent auditor will verify if Manila Water was able to deliver all its commitments (e.g. number of water service connections, water pressure, water quality potability, customer satisfaction, etc.). Only with a positive recommendation from the auditor can Manila Water reimburse the funds used for the project (GPOBA Grant Agreement, 2007 5).
Prior to project implementation, Manila Water has to submit a number of requirements such as proof or certificate that the target community is below the national poverty level as well as community profile and demographics. Manila Waters technical personnel will then recommend the most appropriate water network design, pipe size and material. To successfully implement the project, Manila Water has to establish close links with the target communities and engage them in dialogues and consultations before, during and after project implementation. Upon completion of the project, Manila Water has to prove its sustainability by means of data on monthly consumption, collection efficiency and number of customer complaints.
Since 2007, Manila Water has completed Water for the Poor projects in 50 communities which benefited some 11,000 poor families. The second phase of the project will begin in late-2010.
Social, Economic, Political and Institutional Issues
Though OBA seems a more reasonable way for funding institutions to ensure that the money they are giving is put to good use, a number of issues have been raised regarding the OBA process in general. Similarly, the Water for the Poor project of Manila Water was faced with a number of criticisms.
OBA Selection Criteria
Some people find unclear the criteria used by World Bank GPOBA to choose Manila Water among other Filipino organizations, especially since Manila Water is a private company. They argue that grants should be given to struggling water service providers who want to expand and improve their service in their coverage area but are unable to do so because of lack of funds. On the other hand, Manila Water, they say, is a financially-viable and profitable company that can actually subsidize or lower connection charges for poor customers. Thus, it does not really need additional funds to finance Water for the Poor projects, especially if the company claims that it is part of its CSR initiatives.
For some people, OBA funds should be given to the public sector because they usually have limited funds and technical capacity to improve basic infrastructure and social services in their area. Yescombe notes
The state has a role to play in the provision of public infrastructurebecause the private sector cannot take account of externalities i.e. general economic and social benefits and therefore public-sector intervention is required. (2007 2)
By having Manila Water as the first Philippine company recipient of GPOBA funds, World Bank is seen to favor the private sector over government agencies.
Some government agencies suggested that World Bank should set up a national OBA facility to ensure a more transparent selection process and flow of funds. In this setup, a panel composed of top officials of relevant government institutions will screen all the projects and determine which ones are eligible for GPOBA funding. Through this, public and private organizations will have level playing field and equal chances of getting their proposed projects approved.
World Banks selection of Manila Water as the grant recipient is also criticized as being biased toward organizations that can pre-finance the project. For some people, GPOBA funds should be allocated to micro and small-scale water service providers who may not be able to advance the capital costs but are capable of delivering positive social results.
Conflict within the Communities
Though most stakeholders praised Manila Water for its efforts on poverty alleviation through the provision of safe and affordable drinking water to marginalized communities, a few raised some objections. People who used to make money by taking advantage of the poor such as vendors and shallow well owners selling overpriced water opposed the entry of Manila Water in low-income areas. Some of them even went as far as petitioning against the Water for the Poor project, but these attempts failed because most of the people wanted clean and affordable water.
Some militant non-government organizations (NGOs) likewise saw the project as another money-making scheme of a private company under the guise of a CSR initiative. Shiva paints this picture of water wars involving private companies and multi-lateral financing institutions
water wars are global wars, with diverse cultures and ecosystems, sharing the universal ethic of water as an ecological necessity, pitted against a corporate culture of privatization, greed, and enclosures of the water commons. On one side of these ecological contests and paradigm wars are millions of species and billions of people seeking enough water for sustenance. On the other side are a handful of global corporationsand assisted by global institutions like the World Bank(2002, 10)
These NGOs were also against Manila Waters takeover of poor areas that were then served by small-scale water service providers.
Another case of conflict within the community is when residents are divided as to who they should recognize as their leader who will represent them in transactions with Manila Water.
Political Pressure
Water provision can sometimes be highly politicized, especially nearing elections. (Dellapenna and Gupta 2009, 38). The poor are always seen by political aspirants as a huge voting population and so they must be able to get their support. Unfortunately, the Water for the Poor project was, at times, dragged into this issue.
Some local government officials put pressure on Manila Water to choose a community within their jurisdiction to be a beneficiary of the project instead of another community in a rivals area, even if the latter is more eligible and in greater need of assistance. Worse, people who hold public office may blackmail Manila Water by not approving excavation permits, for example, if it refuses to do as they wish.
In addition, a number of politicians use the Water for the Poor project to improve their image and hopefully get the peoples votes. They want their names to be boldly displayed at the project site as if they were the ones who financed the project.
Need for Sanitation
One of the more serious criticisms thrown at the Water for the Poor project is that it fails to address another basic human need sanitation. Some experts argue that for the model to be sustainable, it should be the complete package that is, water supply and sanitation. (Henze, 2007 34) They say that many water projects have taken off but have not been sustained because it left out the equally challenging problem of sanitation in poor communities.
Best Practice and Lessons Learned
Overall, the GPOBA-funded Water for the Poor project is a good model of sustainable water service delivery to marginalized communities. It was effective because of several reasons. First, Manila Water established close relations with the communities who, in turn, helped them disseminate information to their neighbors, implement the project smoothly, and served as the watchdog for illegal water-related activities in their area. The projects design was also good because it addressed most of the water needs of poor communities availability, affordability and quality.
On the other hand, there are also some areas that need further improvement. Menzies and Suardi (2009 4) report
Manila Water has observed that many beneficiary households have not modified water consumption patterns following connection they continue to use water in the same way as they had previously by filling water containers for use inside their homes. As a result, some of the planned benefits of an individual household connection to a potable water supply network are not materializing. Manila Water has proposed an alternative design that involves providing beneficiary households with the internal plumbing necessary to bring the water to a kitchen sink and toilet,
We have seen that OBA is the emerging trend among donor institutions to ensure that their funds are effectively and efficiently utilized. It is better than the traditional philanthropic giving because it is results-oriented, thus motivating the recipient to fulfill its commitments.
The Water for the Poor project, taken alone, will not be enough to solve all the problems that poor communities face. However, coupled with donor funds such as GPOBA, the project will be more sustainable and effective in addressing the water needs of the urban poor.
Another key success factor of the Water for the Poor and GPOBA project is the strong participation from the community which espoused a sense of ownership and accountability among the members. Though a few civil society organizations view the project as profit-making rather than customer service-oriented, it proved to be beneficial to both the poor communities and the company. For Manila Water, the project allowed the company to increase its customer base and address problems on illegal connections. On the other hand, community beneficiaries now enjoy 24-hour supply of clean, potable, affordable and sustainable water services, and live in a healthier environment.
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