In 1950, Tegucigalpa had a population of about 70,000 and covered only a few square miles. Its current population is estimated at around one million, and still growing, and now covers more than 40 square miles. The city is served by three principal watershed and recharge areas, and each year the developed land spreads further into the watershed. With increased human impact on lands surrounding the watershed, erosion rates from the steep hillsides have also increased, reducing the storage capacity in one of the city’s main reservoirs.
As residents of Tegucigalpa are well aware, in order to keep water in reserve to make it through the long dry season, running water is not available continuously from the public water utility, also known as SANAA (Servicio Nacional de Aguas y Alcantarillas or National Services for Waters and Sewers). Water service is available for a few hours each day, depending on the neighborhood. The general rule is that wealthier neighborhoods enjoy better water pressure and longer hours of service each day than the poorer neighborhoods. Because the hours of water service can be very uncertain, people with more money have adapted by purchasing pumps and storage tanks and storing water for their household.
The quality of the water in the piped system is very poor. This is not surprising given the way in which water is rationed to the city’s neighborhoods. When a neighborhood is not receiving water service, the water pressure drops and outside contamination can be sucked into the pipelines. Because of the poor quality of the piped water, about half of the city’s residents also purchase bottled water from private companies for drinking (spending an estimated $8.50/month/person).
SANAA is also not able to provide running water to people living in the barrios, or urban slums, located high on the hill-slopes. The costs of pumping this water and maintaining pipelines in areas very susceptible to landslides would not be recovered through water sales. Instead, SANAA runs a service using water trucks. The water provided by these trucks is not nearly enough to meet demand, so again, people that can are also purchasing water from private water vendors. SANAA has no control over the water price when people buy it from the private water trucks, and one study I read put the average price at about $6/m3 (about 10 times the rate charged to residential customers with piped water connections).
It’s very important to note that SANAA is only charging customers about 20% of the true cost of the water service it provides.
So, to add this all up, only half of the water is accounted for, and of that, people are only paying 20% of the real cost of receiving that water. Consequently, even the city’s wealthiest residents, are obtaining water at subsidized prices. This drain on public funds is significant and estimated at 1-2% of GDP.
And, as if I couldn’t be writing a more grim description SANAA’s finances, there are also the unpaid bills. In March 2008, an estimated $5 million was owed to the utility. Considering the low water prices charged to customers, SANAA probably had little incentive to collect on these unpaid bills, but over the years they have added up. An estimated 20-30% of customers avoid paying their bill entirely, leading to a situation in which it is actually socially acceptable to cheat SANAA for their water service.
Given the poor water quality and unpredictability of the service, would people be willing to pay more? Probably not. A French consultant conducted a survey in 2004 in which 48% of people said they are not willing to pay more for their water service in Tegucigalpa.
So, what is the solution? It obviously isn’t simple. SANAA is not collecting enough revenue from water sales to improve and maintain the water system or protect the watersheds that serve Tegucigalpa. Currently SANAA customers are clearly not satisfied with the poor service they are getting, so it would be quite difficult to convince them to pay more than they are now. However, when I read the above blog and consider the individual, private investments that are being made in Tegucigalpa’s water system – the household rooftop storage tanks, bottled water and water from other private vendors – I am confident that there is enough money in Tegucigalpa to adequately fund the city’s water system.
Additionally, there is a finite amount of water available right now in Tegucigalpa. I wonder if people using the rooftop water storage tanks have considered this when they participated in the survey about their water bills? When those tanks are filling, that actually reduces the amount of public water available to the poorest people living in the barrios who don’t have the money (or the strong rooftops) to buy pumps and water tanks to store enough water to get them through the day.
Perhaps considering this last point would make people more willing to participate in water sector pricing reforms by SANAA, should they ever happen.