Off-Grid Water Supply: Should It Be Mainstreamed? (SpringerBriefs on Case Studies of Sustainable Development) 9819940591, 9789819940592

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SpringerBriefs on Case Studies of Sustainable Development Pawan K. Sachdeva · Asit K. Biswas · Cecilia Tortajada · Ojasvee Arora · Eva Leneveu · Rehan Adamjee · Anuj Sharma

Off-Grid Water Supply Should It Be Mainstreamed?

SpringerBriefs on Case Studies of Sustainable Development Series Editors Asit K. Biswas, University of Glasgow, Glasgow, UK Cecilia Tortajada, School of Social and Environmental Sustainability, University of Glasgow, Glasgow, UK

The importance of sustainable development has been realized for at least 60 years, even though the vast majority of people erroneously think this concept originated with the Brundtland Commission report of 1987 on Our Common Future. In spite of at least six decades of existence, we only have some idea as to what is NOT sustainable development rather than what is. SpringerBriefs on Case Studies of Sustainable Development identify outstanding cases of truly successful sustainable development from different parts of the world and analyze enabling environments in depth to understand why they became so successful. The case studies will come from the works of public sector, private sector and/or civil society. These analyses could be used in other parts of the world with appropriate modifications to account for different prevailing conditions, as well as text books in universities for graduate courses on this topic. The series of short monographs focuses on case studies of sustainable development bridging between environmental responsibility, social cohesion, and economic efficiency. Featuring compact volumes of 50 to 125 pages (approx. 20,000—70,000 words), the series covers a wide range of content—from professional to academic— related to sustainable development. Members of the Editorial Advisory Board: Mark Kramer, Founder and Managing Director, FSG, Boston, MA, USA Bernard Yeung, Dean, NUS Business School, Singapore

Pawan K. Sachdeva · Asit K. Biswas · Cecilia Tortajada · Ojasvee Arora · Eva Leneveu · Rehan Adamjee · Anuj Sharma

Off-Grid Water Supply Should It Be Mainstreamed?

Pawan K. Sachdeva Water Management International Pte Ltd. Singapore, Singapore

Asit K. Biswas Water Management International Pte Ltd. Singapore, Singapore

Cecilia Tortajada School of Social and Environmental Sustainability University of Glasgow UK

Ojasvee Arora Energy Studies Institute National University of Singapore Singapore, Singapore

Eva Leneveu 1001fontaines Paris, France

Rehan Adamjee Harvard Business School and Harvard Kennedy School Cambridge, MA, USA

Anuj Sharma Piramal Water Private Limited Piramal Sarvajal Ahmedabad, India

ISSN 2196-7830 ISSN 2196-7849 (electronic) SpringerBriefs on Case Studies of Sustainable Development ISBN 978-981-99-4059-2 ISBN 978-981-99-4060-8 (eBook) https://doi.org/10.1007/978-981-99-4060-8 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023, corrected publication 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore Paper in this product is recyclable.

Foreword

As a civil servant, I have had the opportunity to work closely in the public health and water and sanitation sector at various levels of the Government. During the course of various official assignments, a major learning has been to recognize the importance of innovative solutions, success of decentralized approaches of implementation, community ownership, use of technology triggering efficiency and transparency etc. The experience of COVID-19 pandemic management highlights the strategy of integrating speed and scale with access and quality as has been in the case of vaccination and medical care. Inter-sectoral cross learnings would apply. I am privileged to introduce this book that deals with an important subject like ‘water.’ The book not only explores the remarkable initiatives of Sukoon Water in Pakistan, Piramal Sarvajal in India, and 1000 Fontaines in Cambodia but also highlights the successful efforts of Chamkerleu Water Supply as a micro-grid water utility in Cambodia. These stories of innovation and resilience hold valuable lessons for countries facing similar challenges. Access to clean drinking water is a basic right and a pressing global concern. Many a time, water utilities grapple with inadequate infrastructure, poor operation and maintenance, low returns, intermittent supply, etc. In such contexts, off-grid solutions offer a promising avenue to overcome these hurdles and ensure sustainable access to safe drinking water. These off-grid solutions can both substitute and augment existing infrastructure and supplement conventional supply systems, effectively extending the reach of water services. The experiences shared in the book demonstrate the transformative potential of off-grid water supply systems. These initiatives have successfully harnessed technological advancements, community engagement, and sustainable business models to bring potable water to underserved areas. Incentivizing off-grid solutions is crucial for promoting decentralized water supply systems. While the Sukoon Water, Piramal Sarvajal, 1000 Fontaines, and Chamkerleu Water Supply are all localized solutions, their application is indeed global. Their experience inspires us to explore and implement similar solutions. There are interesting revelations with regard to the quality, accountability, and responsiveness of these solutions including empowering local communities and providers

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reducing dependency on centralized infrastructure and embracing of innovative approaches. Currently, India is implementing what could be the world’s largest rural piped water supply programme—the Jal Jeevan Mission. The Mission is based on a community approach to water management and has a clearly defined quality, quantity and time framework integrated with participatory rural water supply strategy. A target of providing 194.5 million rural households with functional household tap connections, with assured and adequate water supply is an aspirational journey that is well on its way to meet all milestones and timelines. This incredible mission also demonstrates the strength of a mix of approaches including off-grid solutions and community management of water sources for sustainability. I congratulate the authors for a meticulously researched book. Each case is presented in accordance with the ‘Four Domain Framework’ namely, physical, operational, financial, and institutional. Policy makers and water utility professionals can identify transferable best practices, adapt them to local contexts, and accelerate progress towards achieving the United Nations’ Sustainable Development Goal of universal access to clean water and sanitation. Further, they have well targeted recommendations on policy framework, quality monitoring and financial sustainability. They also make a clear case for ‘counting’ or mainstreaming off-grid solutions for monitoring and evaluation purposes. I am sure these case stories would inspire policymakers, urban planners, and water management professionals to explore off-grid solutions, adopt innovative and inclusive approaches, and collaborate across borders to address the global water challenges. Ms. Roopa Mishra Joint Secretary SBM-Urban & Mission Director Ministry of Housing & Urban Affair New Delhi, India

The original version of this book was revised: The affiliation of the series editor has been corrected. The correction to this book can be found at https://doi.org/10.1007/978-981-99-4060-8_7

Preface

We live in a world where humans are striving to discover water on Mars. Yet, the same human enterprise cannot secure access to safe water for all on Earth. Unfortunately, governments in several countries have failed to provide universal water supply coverage to their people. Non-piped water solutions, also known as off-grid water supply solutions, are mainly private initiatives that have existed for an extended period to fill the gaps in access to adequate water of acceptable quality. To fulfil the vision of safe water access for all, there is an urgent need to mainstream off-grid water solutions to complement piped water solutions. To achieve this, there is a need for creative collaboration between all concerned entities, namely the government, private enterprise and philanthropic capital. Before I met Rehan Adamjee at the Singapore International Water Week in 2018, I was not as well-acquainted with the specifics of the off-grid water supply business model. Rehan, a young and motivated graduate of Stanford University, had returned to Pakistan to establish his own off-grid water supply company. What commenced as a cursory conversation between Rehan and myself eventually contributed to this book which comprises three off-grid water solution suppliers, namely, Sukoon Water in Pakistan, Piramal Sarvajal in India and 1001 Fontaines in Cambodia. This book also includes the case study of a Cambodia-based, privately owned micro-grid water supply utility. All four entities in this book provided valuable data and a dedicated focal point to collaborate with and contribute to the case study. Based on the case studies, recommendations are made to the public policymakers in the government, stand-alone entrepreneurs, off-grid supply solution platforms, and philanthropic and impact capital ventures. The case studies discussed in this book bring diverse experiences and insights into the context across different geographies. Rehan Adamjee from Sukoon in Pakistan, Anuj Sharma from Piramal Sarvajal in India, Eva Leneveu from 1001 Fontaines Paris for 1001 Fontaines’s operation in Cambodia, and Siemny Sim from Chamkarleu Water Supply in Cambodia, provided valuable data about their businesses and also helped develop the respective case studies through engaging and thought-provoking discussions on the content of the case studies. Ojasvee Arora extensively assessed vii

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the literature on off-grid water solutions and independently reviewed the case studies to provide her insights. Thus, this book translates a synthesis of diverse views into a credible analysis that represents the common perspective of all the authors; why and how off-grid solutions should be mainstreamed into public policy. As all the case studies were written in succession, the book took nearly three years to complete. Due to the COVID-19 pandemic, no physical meetings were possible. It would have been my greatest pleasure to travel to the respective destinations, view the infrastructure and interact with some of their customers. Fortunately, as a company advisor, I could previously visit the Chamkarleu Water Supply facility. However, some field surveys could not occur as its employees suffered from COVID19 at the time. We note that additional field surveys would have further validated our assessment. I am thankful to Anuj Sharma from Piramal Sarvajal, Frédéric Dubois from 1001 Fontaines, Siemny Sim from Chamkarleu Water Supply and practitioners in the water supply and public policy field for supporting the publication. Amit Mishra, Vijay Menon and Ruchi Agarwal, previous employees of Piramal Sarvajal, also provided valuable perspectives to this book. I also would like to thank Shikha Priyandarshini and Sarojini Sapru for agreeing to provide their feedback on the book. Over time, I have gradually improved my knowledge about the water sector. This journey of learning continues through this book which would not have been possible without the support of my wife Tanu and daughters Aarushi and Avni. Avni often jokes that if I could rename my daughters, I would have named them H2 and O because of my passion for water and related topics. Lastly, I am thankful to my mentor and guide, Prof. Asit K. Biswas, who supported my transition from public market investing to water policy. Prof. Asit and Prof. Cecilia Tortajada have been a source of constant encouragement and motivation for me to deepen my knowledge of the urban water sector. I am privileged to have them as co-authors of this book and guiding forces in my life. Singapore

Pawan K. Sachdeva

Categories of Drinking Water

Source: Adapted from WHO/UNICEF Joint Monitoring Programme for Water Supply, Sanitation and Hygiene (JMP, n.d.). Term

Description

Safely managed

Drinking water from an improved water source that is accessible on the premises, available when needed, and free from faecal and priority chemical contamination

Basic

Drinking water from an improved source, with round-trip collection time, including queuing, not more than 30 min

Limited

Drinking water from an improved source, with round-trip collection time, including queuing, exceeding 30 min

Unimproved

Drinking water from an unprotected dug well or unprotected spring

Surface water Drinking water directly from a river, dam, lake, pond, stream, canal, or irrigation canal Improved water

Sources assumed to pose a lower risk to health, such as piped water into a dwelling, yard, or plot; public tap or standpipe; tubewell; protected spring/dug well; or collected rainwater

ix

Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Structure of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 About This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 2 3 8 10

2 Sukoon Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Business Analysis Using the Four-Domain Framework . . . . . . . . . . . 2.2.1 Physical Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2 Operational Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.3 Financial Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.4 Institutional Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.1 Physical Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.2 Operational Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.3 Financial Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.4 Institutional Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 Summary Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13 13 16 16 16 19 21 21 21 21 22 23 23

3 Piramal Sarvajal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Business Analysis Using the Four-Domain Framework . . . . . . . . . . . 3.2.1 Physical Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.2 Operational Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.3 Financial Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.4 Institutional Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.1 Entrepreneur-Led Franchise Model . . . . . . . . . . . . . . . . . . . . . 3.3.2 CSR Partnership Business Model . . . . . . . . . . . . . . . . . . . . . . . 3.3.3 Government Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25 25 26 26 27 29 30 32 32 33 34 40 xi

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Contents

4 1001Fontaines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Teuk Saat 1001: 1001fontaines’ Cambodian Operations . . . . . . . . . . 4.2.1 Cambodia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.2 Teuk Saat 1001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Business Analysis Using the Four-Domain Framework: Teuk Saat 1001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 Physical Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.2 Operational Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.3 Financial Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.4 Institutional Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41 41 44 44 44

5 Chamkarleu Water Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Business Analysis Using the Four-Domain Framework: Chamkarleu Water Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.1 Physical Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 Operational Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.3 Financial Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.4 Institutional Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.1 Physical Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.2 Operational Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.3 Financial Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.4 Institutional Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Summary Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81 82

45 45 46 60 71 73 78

86 86 88 97 99 103 103 104 104 105 105 108

6 Discussion and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 Household Sources of Water Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Recommendations and Suggestions for Stakeholders . . . . . . . . . . . . 6.2.1 Government: Policy Choices Regarding Water Supply Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.2 Entrepreneurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.3 Off-Grid Solution Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.4 Philanthropic Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.5 Impact Investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109 109 115 116 119 121 121 122 123

Correction to: Off-Grid Water Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C1

List of Figures

Fig. 2.1

Fig. 2.2 Fig. 2.3 Fig. 2.4 Fig. 4.1 Fig. 4.2 Fig. 4.3 Fig. 4.4 Fig. 4.5 Fig. 4.6 Fig. 4.7 Fig. 4.8

Fig. 4.9 Fig. 4.10

Rehan Adamjee (far right), during the survey of Gulshan-e-Sikandarabad. Source Personal communication with Sukoon, 2020 . . . . . . . . . . . . . . . . . . . . . . . . Sukoon’s water treatment process. Source Personal communication with Sukoon, 2020 . . . . . . . . . . . . . . . . . . . . . . . . Average daily volume of water produced by Sukoon Water. Source Personal communication with Sukoon, 2020 . . . . . . . . . . Sukoon’s operating costs, excluding raw water. Source Personal communication with Sukoon . . . . . . . . . . . . . . . . . . . . . . 1001fontaines water jug. Source Personal communication with 1001fontaines, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tier I sites by raw water source. Source 1001f (2020c) . . . . . . . . Tier II sites by raw water source. Source 1001f (2020c) . . . . . . . Tier III sites by raw water source. Source 1001f (2020c) . . . . . . . Water treatment process—Filters and UV. Source Personal communication with 1001f (n.d.-b) . . . . . . . . . . . . . . . . . . . . . . . . Transportation vehicle for 20-L jug transportation. Source 1001f (n.d-b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jug transportation and public announcements. Source 1001f (n.d- b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of water jugs supplied under “Water in School Programme”. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age profile of water kiosks. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . Survival rate of water kiosks by age profile. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . .

15 17 19 20 43 46 46 47 48 50 51

52 54 55

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Fig. 4.11

Fig. 4.12

Fig. 4.13

Fig. 4.14

Fig. 4.15 Fig. 4.16

Fig. 4.17 Fig. 4.18 Fig. 4.19

Fig. 4.20

Fig. 4.21 Fig. 4.22

Fig. 4.23

Fig. 4.24

List of Figures

First- and second-year sales of the water kiosks opened between 2005 and 2021 (in L/day) (x-axis starting year of operation for water kiosk, y-axis average daily sales in litres per day in the first year of launch and second year of operations). Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ratio of water sales for the water kiosks launched after 2010 and before 2010, after periods of operation. On y-axis, ratio of average daily water sales for the water kiosks launched after 2010 to average daily water sales for the water kiosks launched before 2010. On y-axis: Number of years in operation since start of the business. Source Personal communication with 1001f (2021) . . . . . . . . . . . Average seasonal sales of water kiosks in 2011–2015 and 2016– 2020. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average HH penetration (LHS) and average daily sales for water kiosks, in litres (RHS). Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . Average seasonal water sales of cohort of closed sites. Source Personal communication with 1001f (2021) . . . . . . . . . . . 1001f’s mix of social programme expenses and corporate overhead, 2017–2020. Source Personal communication with 1001f, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sources of funding for 1001f (2017–2020). Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . Net funding flow (sources less expenses) for 1001f (USD). Source Personal communication with 1001f (2021) . . . . . . . . . . . 1001f’s Cambodia operation’s receipts as a % of 1001f’s total social expenses. Source Personal communication with 1001f, (2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating cost mix of Teuk Saat’s social franchise business. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average water sales by a water kiosk (L/day). Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . Frequency distribution of daily sales volume for water kiosks, 2020. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Frequency distribution of daily sales volume for water kiosks, 2015. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mix of volume of four different distribution methods. Source Personal communication with 1001f (2021) . . . . . . . . . . .

56

56

57

58 59

60 61 61

62

65 66

66

67 67

List of Figures

Fig. 4.25 Fig. 4.26 Fig. 4.27 Fig. 4.28

Fig. 4.29 Fig. 4.30 Fig. 5.1

Fig. 5.2

Fig. 5.3 Fig. 5.4

Fig. 5.5 Fig. 5.6 Fig. 5.7 Fig. 5.8 Fig. 5.9 Fig. 5.10 Fig. 5.11 Fig. 5.12 Fig. 5.13 Fig. 5.14

Frequency distribution of tariff for water kiosks (Dec 2020). Source Personal communication with 1001f (2021) . . . . . Cost for a typical water kiosk. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . HH Penetration % of the portfolio of Teuk Saat’s water kiosks. Source 1001f (2020b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Household penetration % versus annual net profit (USD) for the water kiosks in 2020. Source Personal communication with 1001f (2021) . . . . . . . . . . . . . . . . . . . . . . . . . Schematic of cash flow among 1001f, Teuk Saat, and water kiosks. Source Personal communication with 1001f (2021) . . . . Average unit price per20 L jugs at water kiosks (KHR). Source Personal communication with 1001f (2021) . . . . . . . . . . . Mix of piped water providers in Cambodia by number of water connections, 2020. Source MISTI 2020; personal communication with CWA, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . Frequency distribution of piped water connections of private water utilities. Source Personal communication with CWA, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CWS’s piped water network in Svay Teab Commune. Source Personal communication with CWS, 2021 . . . . . . . . . . . . Four communes covered by CWS: Svay Teab, Cheyyou, Speu, and Lvea Leu. Source Personal communication with CWS, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pond 1 in the early stages of digging, February 2019. Source Photo by Pawan K. Sachdeva . . . . . . . . . . . . . . . . . . . . . . . Pond 1 near completion, January 2020. Source Photo by Pawan K. Sachdeva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CWS connection mix. Source Personal communication with CWS, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CWS volume sales mix. Source Personal communication with CWS, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schematic of piped water infrastructure used by CWS. Source Personal communication with CWS, 2021 . . . . . . . . . . . . Thnal Baek Lech WTP. Source Photo by Pawan K. Sachdeva . . . Water consumed per connection per month (m3 ). Source Personal communication with CWS, 2021 . . . . . . . . . . . . . . . . . . Penetration (% of piped water connections) after five years. Source Personal communication with CWS, 2021 . . . . . . . Household well and electric motor, 2019. Source Photo by Pawan K. Sachdeva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross margins, EBITDA (earnings before interest, tax, depreciation, and amortization) margins, and EBIT (earnings before interest and tax) margins. Source Personal communication with CWS, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . .

xv

68 68 69

70 71 76

82

83 84

85 86 87 91 92 92 94 95 96 96

101

xvi

Fig. 5.15 Fig. 5.16 Fig. 5.17

Fig. 6.1

Fig. 6.2 Fig. 6.3

List of Figures

Total revenue to total fixed cost. Source Personal communication with CWS, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . Average capital cost of a piped water connection, 2016 to 2019. Source Personal communication with CWS, 2021 . . . . . Ratio of EBIT to total fixed assets (a proxy for return on invested capital). Source Personal communication with CWS, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Perceived Quality versus Convenience (title of the figure). The figure indicated the measure of perceived quality and convenience: bottled water, away from home; bottled water, home delivery; kiosk; tanker water, away from home; tanker water, home delivery; home-based filter for tap water; Intermittent piped water; and 24/7 piped water. Source Pawan Sachdeva . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total cost of delivered water, USD/m3 . Source Research by the authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unit cost versus volume of water sold by off-grid providers x-axis: daily volume throughput; y-axis: unit cost of water supply (without corporate overhead, in USD/m3 ). Source Research by the authors (excel sheet CostEconomics tab Charts) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101 102

102

110 114

116

List of Tables

Table 2.1 Table 2.2 Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7 Table 4.8 Table 4.9 Table 4.10 Table 4.11 Table 4.12 Table 4.13 Table 4.14 Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 5.5

Sukoon Water’s business plan (in 2016) . . . . . . . . . . . . . . . . . . . Quality tests (conducted 9/10/2017) of tanker water and the water produced by Sukoon Water . . . . . . . . . . . . . . . . . . Summary of 1001f’s operations (as of May 2021) . . . . . . . . . . . Raw water sources for Teuk Saat’s sites, 2020 . . . . . . . . . . . . . . Water quality report (excerpt) for a water kiosk which failed the quality test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Water quality report for a water kiosk which passed the quality test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Water kiosks’ average mix of channel of sales (by volume) . . . Regional mix of water kiosks . . . . . . . . . . . . . . . . . . . . . . . . . . . Classification of water kiosks by volume of water sold . . . . . . . Year-wise launch of sites by Teuk Saat and their survival rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Closed water kiosks—key statistics . . . . . . . . . . . . . . . . . . . . . . 1001f’s budget allocation for its Cambodian operations (in USD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Teuk Saat 1001’s business activities and their respective sources of finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Breakout of capital expenditure to start a water kiosk . . . . . . . . Profit and loss statement of the development segment of Teuk Saat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Teuk Saat 1001’s business activities and the stakeholder mapping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CWS piped network coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . CWS piped water infrastructure details . . . . . . . . . . . . . . . . . . . Assumed household penetration of CWS piped water connections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CWS’s profit and loss statement (in USD) . . . . . . . . . . . . . . . . . CWS’s balance sheet (in USD) . . . . . . . . . . . . . . . . . . . . . . . . . .

15 16 43 45 51 52 53 53 53 54 58 62 63 64 64 74 89 93 95 99 100

xvii

xviii

Table 6.1 Table 6.2

List of Tables

Cost components of home-based filter solution (all numbers in USD/m3 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost components of water supply solutions . . . . . . . . . . . . . . . .

113 114

Chapter 1

Introduction

1.1 Executive summary The UN’s Sustainable Development Goal 6.1, universal access to safe drinking water by 2030, is unlikely to be realized. So far, only 30 countries have universal access to safe drinking water. At present, arguably there is not a single city in the “developing” world which has universal access to piped water services. Despite this, off-grid water supply solutions—that is, solutions other than piped water—have not been mainstreamed in national water policy in the countries that lack universal access to safe water. The book highlights the importance of complementarity: the use of piped water plus off-grid solutions to achieve universal access to safe drinking water. This book provides insights into the business models of off-grid water suppliers through comprehensive case studies of three such providers in Cambodia, India, and Pakistan. All three case studies are developed using a consistent framework of analysis, the Four-Domain Framework (Biswas et al. 2021). Micro-grid water utilities are small piped water supply providers that have a similar scale of coverage to off-grid water service providers. Thus, a case study (using the same framework) of a micro-grid provider in Cambodia is also included. The case studies highlight the strengths and weaknesses of the business models of off-grid water suppliers, including comparisons to micro-grid water utilities. This book promotes the idea that off-grid and piped water solutions need to complement each other, depending on the temporal and the spatial context. To allow this, off-grid water supply solutions need to be recognized and mainstreamed in public policy. We argue that the core role of governments in water services is to ensure that the water quality supplied by piped or the off-grid water sources meets national standards (i.e. is safe for consumption). A stricter enforcement of water quality norms would ensure a level playing field for all types of water supply solution providers, including off-grid suppliers. While we argue for greater support from governments for off-grid water service providers, we also emphasize that the government should not interfere with the pricing of off-grid services, leaving it to market forces. Off-grid water solutions © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 P. K. Sachdeva et al., Off-Grid Water Supply, SpringerBriefs on Case Studies of Sustainable Development, https://doi.org/10.1007/978-981-99-4060-8_1

1

2

1 Introduction

are a result of the entrepreneurial spirit and have provided water supply solutions in situations where governments have failed to do so. The financial sustainability of off-grid providers should be protected to keep attracting entrepreneurial talent and thus provide water to a larger population. However, there may be cases where the services of off-grid players and micro-grid water utilities are not financially viable without external grant support. Philanthropic capital as well as impact investment funds are needed in cases where without viability-gap funding, the water supply solutions would not be financially sustainable. This book provides a set of concrete recommendations and suggestions for individual entrepreneurs, off-grid water solution businesses, and philanthropic and impact investing with respect to off-grid water supply services. Based on the primary research conducted for the four case studies, key recommendations are made for policymakers to mainstream off-grid water solutions in their policy spectrum as a step towards universal provision of safe water.

1.2 Structure of the Book This book has three main parts. Part I has two chapters. The first provides a detailed literature review of off-grid solutions, including their definition, why they are needed, and their advantages and disadvantages. It also provides information on the current status and recommended framework of water policies for off-grid water solutions. The second chapter outlines the work done in this book and how it differs from previous research on off-grid water solutions. Part II provides insights on off-grid water businesses through four detailed case studies—three on off-grid water suppliers and one on a micro-grid water utility. The first three are Pakistan-based Sukoon Water, India-based Piramal Sarvajal, and 1001fontaines in Cambodia. As micro-grid water utilities have similarities with offgrid water solutions, a detailed case study of a privately owned micro-grid water utility in Cambodia, Chamkarleu Water Supply, is also provided in this section. All four case studies are based on comprehensive information collected expressly for this project through primary research by the authors. We use the Four-Domain Framework—covering the physical, operational, financial, and institutional domains—to analyse the four case studies. A brief discussion of the framework is also provided in this chapter. The four-domain analysis helps clarify the strengths and weaknesses of individual off-grid suppliers and piped water businesses in a comprehensive manner. The case studies provide an analysis of the gaps in these four domains that need to be filled to enable operationally and financially sustainable off-grid solutions. Part III offers discussions and conclusions to gain deeper insights into the potential and limitations of off-grid water supply arrangements. The document aims to highlight varying facts and perspectives. It aims to foster dialogue among those concerned with water services, including policymakers, water utilities, off-grid water

1.3 Literature Review

3

suppliers, entrepreneurs, philanthropic organizations, and impact investors. It highlights specific water supply-related challenges in urban and rural areas, in relation to off-grid water supplies as well as the reality of formal water access for the less privileged.

1.3 Literature Review Based on literature from authoritative sources, this section provides insights into the current global status of household connectivity to piped water and off-grid water solutions. It also highlights the respective advantages and disadvantages of these two sources. Global access to piped water Water supply is an essential service, and access to clean and adequate water is a basic necessity (Raina et al. 2020). The provision of universal access to safe drinking water remains a significant challenge (Charles et al. 2020) that is apparent in many parts of the Global South (Prayoga et al. 2021).1 It is crucial that the economically disadvantaged are not excluded from these provisions (Bird and Busse 2006). In acknowledgement of the UN’s Sustainable Development Goals (SDGs), promulgated in 2015, governments in developing countries have set aspirational targets for access to clean drinking water. Target 6.1 of the SDGs calls for universal access to safe drinking water by 2030 (United Nations n.d.). However, countries are not on track to meet this target. Achieving universal access to safe drinking water would require four times the current rate of progress (JMP 2021). At the current rate, projections indicate 81% coverage by 2030, leaving 1.6 billion individuals without access to safely managed water (JMP 2021). Presently, nearly 2.1 billion people, or two-thirds of the world’s population, still lack adequate access to safe drinking water, and 771 million lack access to even basic water services (UNICEF 2021; World Bank 2019). Among those 771 million people who lack access to basic water services (they have to walk away from their premises to get water), 282 million have access to a limited water service, 367 million access unimproved sources, and 122 million collect drinking water from lakes, wells, rivers, and other surface water sources (UNICEF 2021). As of 2020, 30 countries have universal access (> 99%) to safe drinking water, and 54 have universal access (> 99%) to basic water services (JMP 2021). Nearly eight out of ten individuals who lack access to even basic water services live in rural areas, and more than 50% are in least developed countries (LDCs).2

1

The Global South refers broadly to the regions of Latin America, Asia, Africa, and Oceania. The LDCs are 46 low-income countries with significant structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets. The list of LDCs is reviewed every three years by the Committee for Development (UN Department of Economic and Social Affairs, n.d.).

2

4

1 Introduction

Global access to piped water has declined, from 85% in 2000 to 83% in 2015. In Sub-Saharan Africa, in the same period, it decreased from 67 to 56%; and in South Asia, from 71 to 66% (World Bank 2019). In a study by the World Resources Institute (WRI 2018) of 15 cities in the Global South, approximately two-thirds of households had access to piped water. However, the distribution was uneven and intermittent, as governments could not always provide continuous water service due to water and energy shortages. It is understood that piped water networks and water infrastructure systems have not kept pace with the rapidly growing population (Coutard and Rutherford 2015). This is largely due to growing urban populations: the peripheries of the city extend to include rapidly growing urban spaces and adjacent regions, while the reach of the water utility remains fixed. Most infrastructure and public services are limited to the central areas of the city. Moreover, urban service delivery is inherently complex in these regions due to various financial, institutional, and political challenges (World Bank 2019). In view of the potential impacts of climate change and environmental degradation, the problem of inadequate water access for large populations is likely to intensify. In such situations, the gap between delivery and demand is often met by the informal sector through off-grid water supply mechanisms (Raina et al. 2020), reducing the burden on utilities that may be overstrained (UNDP and World Bank 1998). Off-grid water solutions Off-grid water supply refers to the provision of water from a source other than the centralized or municipal piped network. Suppliers may include a range of water vendors who sell water to households through channels such as tankers, packaged or unpackaged water sold in bottles or jugs, water-dispensing units, pushcarts, or a private piped network (Snell 1998; Sansom 2006). These may be public establishments, private-sector organizations or initiatives operated by and for community members (Al’Afghani et al. 2019). Off-grid water systems have emerged in many cities of the Global South as a “disconnected patchwork of subsystems that vary in terms of quality, efficiency, cost, and accessibility, and comprise unique heterogeneous infrastructure configurations” (Prayoga et al. 2021, p. 2). Globally, over 600 million people depend on off-grid supply solutions with differing levels and quality of service. Just in the past 15 years, off-grid supplies have expanded to cover 277 million more people (World Bank 2019). Off-grid water systems cater to low-income groups and may increase local responsiveness and reduce inequality in water access (Prayoga et al. 2021). In the informal economy, water vendors serve as the primary source of water for the urban poor in the Global South (Kjellén and McGranahan 2006; Njiru 2004) as well as in parts of the Global North.3 Unregulated/private vendors often step in to fill gaps between demand

3

Water vendors: “informal or formal selling or onward distribution of utility water, or water from other sources by small-scale vendors for domestic use. e.g. water kiosks, water carriers, tanker trucks, households reselling water from available utility water connections” (SSWM, n.d.).

1.3 Literature Review

5

and supply (Raina et al. 2020; Portes and Haller 2010). A 2002 study commissioned by the Asian Development Bank (ADB) focused on small-scale private water providers in nine Asian cities4 to gain an understanding of the various sources the urban poor can access in the absence of a formal utility connection (Conan 2004). The study found that nearly 50% of the urban poor depended on some kind of off-grid water supply. The sources included small cooperatives, individuals working within the community, bottled water, and private water tankers (ADB 2007). Advantages of off-grid water supplies A lack of adequate piped water coverage can have various causes, depending on the setting. They may include a lack of political will, poor regulations and reforms, fragmented responsibilities, weak utility governance and inefficiencies, or utility budget constraints. Some piped water systems are not adequately accessible by all areas of a neighbourhood, particularly the poorer zones (ADB 2007). Areas with low population density or on the periphery of cities may also be excluded. Many informal settlements do not qualify for official utility services due to land-tenure issues and are denied access to the services altogether and live in fear of possible evictions (ADB 2007). Such spaces lie outside the coverage of formal water distribution networks (Allen et al. 2006). And the rare municipal piped networks that do reach these spaces may be poorly maintained or even defunct (UNDP and World Bank1998). Being inadequately served by formal utilities, low-income urban neighbourhoods depend on informal/off-grid services (Banerjee and Morella 2011; Pangare and Pangare 2008). Water kiosks, through accessible retailers’ networks and home deliveries, may serve as useful and efficient last-mile providers, particularly to the more isolated zones.5 Water kiosks appear to be more resilient in quality and service than piped water systems (1001fontaines 2020). Furthermore, many people with access to piped water do not receive water that is fit for direct consumption. Thus, they, too, may turn to off-grid water supplies. Energy shortages, infrastructure failures, and “municipal rationing” may make water distribution through piped systems uneven and intermittent. And low pressure may increase contamination, reducing water quality and safety. Thus piped water is not always reliable or safe for direct consumption (Bloomberg 2019). This problem is common in informal settlements, where water availability is less frequent and more intermittent. In some places, the quality of informally vended water is comparable or superior to the municipal/formal water supply (Collignon and Vézina 2000). For example, the city of Chennai, India, suffers from saline intrusions in the peri-urban spaces, making it hazardous to consume untreated water. Water sources in the cities of Bangladesh are contaminated by arsenic, requiring comprehensive and expensive treatment before consumption. Where off-grid water is supplied by NGOs (local or global), the water supplied is almost always treated, as such organizations work to improve the general health of the population (World Bank 2019). Lacking adequate 4

Cebu, Delhi, Dhaka, Ho Chi Minh, Jakarta, Kathmandu, Manila, Shanghai, and Ulaanbaatar. Water kiosks are decentralized water plants that distribute water from a dispensing machine or in bottles.

5

6

1 Introduction

and reliable water supply through formal piped services, people may turn to privatized water services (Bloomberg 2019). They may also prefer bottled water for drinking purposes, drawing a distinction between “drinking” water and piped water that is usable for other purposes, such as washing clothes (Matos de Queiroz et al. 2013). Informal suppliers are likely to offer more responsive, accessible, and flexible services (UNDP 2011). Customers may have a choice in the frequency and timing of deliveries, multiple payment or billing alternatives, and the opportunity to purchase water on credit (Kariuki and Schwartz 2005; Solo 2003). Private vendors may even deliver water to the customer’s doorstep, saving them a long journey to a long queue (ADB 2007). Furthermore, vendors living in the same community they serve may be able to build greater trust with their clients (Kariuki and Schwartz 2005) and be more willing to contribute their services in charitable ways, such as donating water to local schools (Solo 2003). Some informal water vendors even take on the responsibility for distributive justice, making sure that the water they deliver is affordable and safe for direct consumption (Wutich et al. 2016). Shortcomings of off-grid water supplies Piped water is usually the most affordable source of water in a city. Households without access to piped water services generally pay more per litre, as other sources of water tend to be pricier than government-subsidized services (Raina et al. 2020). Indeed, water from private vendors may cost 4 to 30 times as much per litre as municipal water (UNDP 2011; Olajuyigbe et al. 2012). Earlier studies suggested that private services may exploit low-income consumers to make larger profits (Cairncross and Kinnear 1992). However, later studies that considered their initial investments and operational costs suggest that water vendors make only modest profits (Kariuki and Schwartz 2005). This is largely because private vendors and off-grid sources of supply lack both the economies of scale and the subsidies of government networks. They usually serve a smaller number of households—typically between 50 and 3000 (World Bank 2019). Off-grid supplies receive no government subsidy, and providers shoulder all the capital and operating costs. Often, these costs are passed on to the customers through higher tariffs to allow full cost recovery. Thus, the higher cost per litre of water from private vendors is not necessarily due to any discrimination or intended exploitation (Raina et al. 2020). Zaroff and Okun (1984) conducted one of the earliest studies on the economics of water vending. They found that households in developing countries typically spent over 20% of their income on vended water, at prices up to 50 times the price of water from government sources/public utilities. This is a huge burden for lowincome households and neighbourhoods. But also, the same quantity of water may not be available to off-grid customers as to piped customers. Thus, it may be useful to compare the performance of private water vendors to that of the public utility from an equity perspective. The private water market is unregulated, so the risk of over-exploitation of water resources is higher, because extraction rates are not monitored. A study by Franceys and Gerlach (2012) of the water services sector of 11 metropolitan cities found that

1.3 Literature Review

7

oversight of the operations of the private water sector was severely constrained, especially with respect to pricing mechanisms and monitoring. Furthermore, in Indonesia, India, and Jordan, the private sector was involved with over-extraction of groundwater (Gerlach and Franceys 2012). In the urban water context, most private off-grid players operate within the informal sector, so they are not subject to the regulatory structures and quality standards that apply to the formal providers, which are typically government utilities and private companies that provide water supply services on a contractual basis (Allouche 2011; Allen et al. 2006). Furthermore, privatized off-grid services commonly operate at a small scale and at a range of regulatory and payment scales, so business disruption is common (World Bank 2019). Given the lack of regulation of the informal sector, customer rights are not always adequately protected. Governance in peri-urban spaces tends to be fragmented and weak. In the global context of a rapidly expanding peri-urban population, with fragmented and inadequate access to official institutions, many such areas will never receive centralized piped water (Allen et al. 2006). And although off-grid supply services have the power to provide water to the poor in socially just ways, they are vulnerable to service inefficiencies and have the potential for operational and interactional injustices. Interactional injustices in the informal sector may include discrimination or withholding of water services. Raina et al. (2020) studied inequality of access in the private water sector. Though it was not solely due to bias against low-income households, they still lacked adequate supply. Informal water vendors have been found to commit operational injustices, such as price gouging, unfair pricing, limiting quality of service, or reducing or terminating provision to less profitable areas or less wealthy customers (Collignon 1999; Whittington et al. 1991). Off-grid supply services also have trouble with regard to water quality and quantity. Given the lack of regulations and to a certain extent accountability, the quality (microbial and chemical content) of off-grid water is mostly unknown. With unregulated water sources or potentially contaminated water equipment, informally vended water may be of lower quality than water from municipal/formal sources (Olajuyigbe et al. 2012). There may be no guarantee that the water delivered is of acceptable quality, especially where it is supplied intermittently. Current status of water public policy (related to off-grid water solutions) Off-grid interventions typically receive little or no support from the state, whether in resources or policies (Allen et al. 2006). However, despite the decline in access to centralized piped systems, governments and urban utilities typically do not take the increasing number of off-grid households into account in their policymaking (World Bank 2019). Given the economic, social, and environmental constraints, access to safe and adequate piped water may not be possible for all regions, including isolated neighbourhoods and informal settlements (World Bank 2019). Key policy recommendations related to off-grid water solutions The COVID-19 pandemic has shown the importance of resilient water supply systems. Off-grid supply solutions can be scaled up and rolled out swiftly in times of

8

1 Introduction

global crisis (Prayoga et al. 2021). As shown by the studies cited above, a decentralized approach focused on safe drinking water may be more relevant than a centralized piped supply in certain contexts, particularly peri-urban spaces. Strategies may still be devised and roles defined, for how the municipal utilities may contribute (e.g. in terms of financing or risk-taking capacity). Thus, there may be a need to question the conventional emphasis on expanding piped water supplies and consider how off-grid provision may be improved through complementarity (World Bank 2019). Off-grid water solutions may be effective interim or complementary strategies for the short term, providing water access to low-income neighbourhoods that lack connection to official supplies. However, this would require addressing many administrative, institutional, and technical issues. These include land-tenure issues of informal settlements, water distribution and quality concerns, fragmented responsibilities of authorities, and other regulatory concerns (World Bank 2019). Existing policies may need review and revision to shift their focus from pipes to service delivery. Supporting capacity development of off-grid supplies by developing a targeted subsidy instrument may be a crucial step towards complementarity, as it will make off-grid solutions more affordable (World Bank 2019). ADB (2007) suggests that city development strategies should acknowledge the role of off-grid water solutions in urban water policies. Planners should consider these solutions’ contribution to economically weaker areas, which often lack access to a piped water supply. They also advise the establishment of a framework to govern their operation at the city level and encourage considering the potential to leverage the private sector and bring in complementarity between the public and private sectors by formalizing their respective roles in the water networks (World Bank 2019; ADB 2007), as this can contribute to an increase in water coverage for the poor. Such a collaboration would also help improve the off-grid suppliers’ level of technology to ensure compatibility with formal utilities (ADB 2007).

1.4 About This Book As we have seen, there is a significant amount of macro-level research on off-grid water supply services. But although some studies acknowledge the importance of private water vendors for urban water supply, most focus on case studies and anecdotal evidence, rather than primary data collected on a large scale (Kariuki and Schwartz 2005). Published research does not tell us much about the business and economic aspects of off-grid water services. This book aims to bridge that gap by providing a comprehensive business analysis of three off-grid water service providers—Sukoon Water in Pakistan, Piramal Sarvajal in India, and 1001fontaines in Cambodia—plus a micro-grid water utility, Chamkarleu Water Supply, also in Cambodia. We analyse the descriptive and diagnostic details of each water supplier’s business using a consistent framework of analysis that covers four domains. The physical domain refers to where the raw water comes from, where it goes after it is used, the

1.4 About This Book

9

sustainability of the source, and so on. The operational domain is about the structures and activities needed to make the water supply available, including the organizational structure as well as competitive considerations. In the financial domain, we look at the cost of delivery of water, as well its financial sustainability. The institutional domain covers the role of all formal institutions in protection of property rights, economic regulation, water quality enforcement, financing, and so on. In each case study, we consider the strengths and challenges of the water supplier in each of the four domains. These case studies provide insights into the strengths, weaknesses, and potentials of off-grid water services and what it takes to run a financially sustainable off-grid water business. All four case studies are based in Asia, because our lead author, Pawan K. Sachdeva, is based in Singapore and has either lived in or travelled to Pakistan, India, and Cambodia. Thus, he has a rich background context for all four case studies. Pawan met Rehan Adamjee, the founder of Sukoon Water, at Singapore International Water Week in 2018. There they had a conversation regarding the challenges Rehan was facing running his off-grid water operations in Karachi, Pakistan. Their initial casual conversation led to an engaging discussion on off-grid businesses in general and Rehan’s business in particular. And this led to the idea of writing a case study on Sukoon Water. The main motivation of this effort would be to offer policymakers, entrepreneurs, and impact investor’s deeper insights into the dos and don’ts of the off-grid water business. Pawan and Rehan began work on the case study in early 2019. Pawan then thought that since Sukoon was only a single example in a single country, it might be good to widen the scope of research geographically and also to cover larger operations. Pawan reached out to some off-grid water suppliers of a larger scale in India. Piramal Sarvajal was one of them, whereas Sukoon was only three years old, Piramal Sarvjal was a pioneer in off-grid solutions, and one of the largest and oldest off-grid water suppliers in India. In December 2020, Piramal Sarvajal agreed to join the research work initiated by this book, and it committed staff members as well as providing enterprise-level data and business insights. The case studies on Sukoon and Sarvajal were developed in 2020. Both Sukoon and Sarvajal operated in the urban areas. Pawan decided to include another off-grid platform that had significant scale, provided further geographical diversity, and more importantly served exclusively rural areas. 1001fontaines is an NGO, based in Paris, that provides off-grid solutions in four developing countries, including Cambodia. Its operations there had started in 2004 and since expanded to more than 250 rural locations. Pawan shared his ongoing draft research on Sukoon and Sarvajal with 1001fontaines. They agreed to be part of the research and also dedicated a staff member to the writing of a case study. The available literature compares off-grid water solutions with piped water businesses, which are usually large utilities with hundreds of thousands of customers. This book compares off-grid water solution providers with micro-water utilities, which have a much smaller customer base, perhaps 1000–5000 households. Micro-grid water utilities are similar to off-grid water service providers in that their customers are typically less than 10 km from the water source. It was decided to include a

10

1 Introduction

detailed case study of a micro-grid water provider to compare the business aspects of micro-grid and off-grid water solutions. As an advisor to the Cambodian Water Supply Association,6 Pawan has a deep involvement with the micro-grid water utilities in Cambodia. He approached the founder and CEO of Chamkarleu Water Supply, a Cambodian micro-grid water utility, to see whether a detailed case study could be written on it. Chamkarleu agreed to be part of the study and consented to transparently share all the data and details required for a business case study. Chamkarleu also provided diversity in the gender of the leadership, as it was started by a dynamic entrepreneur, Ms. Siemny. An in-depth analysis of Chamkarleu as a micro-grid utility and its comparison with off-grid businesses shows their relative strengths and weaknesses, and this is a unique feature of the present book. Each of the four businesses dedicated staff to co-write the case study on that business: Rehan Adamjee at Sukoon, Anuj Sharma at Piramal Sarvajal,7 Eva Leneveu at 1001fontaines, and Siemny Sim at Chamkarleu. All four agreed to transparently share all the facts and figures for a deep dive into their business. The case studies are further supported by interviews and online consultations with the rest of the management team of each business. The detailed data and the candid views of the management of these four companies provide unique and valuable insights into the business of off-grid water solutions and micro-water utilities. A limitation of this book is that due to COVID-19, ground-level surveys of end customers could not be done. A survey of residents in Chamkarleu’s coverage area was planned, to find out why consumers prefer 20 L jugs over piped water. But then almost all the members of the team commissioned to do this survey contracted COVID-19 at the same time. In subsequent studies on off-grid solutions, we plan to include consumer surveys, which may provide deeper insights into consumers’ behaviour and their perceptions of different water supply solutions. The book closes with a set of recommendations and suggestions for individual entrepreneurs, off-grid water solution businesses, philanthropic organizations, and impact investors with respect to off-grid water supply services.

References 1001 Fontaines (2020) Scaling up access to safe drinking water: the case for complementarity strategies and actions between bottled water and piped networks ADB (2007) Water for slums: small piped water networks deliver in the interim. Available at: https://www.adb.org/sites/default/files/publication/28856/water-brief-small-piped-water-net works-delivers-nobleed.pdf Allen A, Davila JD, Hofmann P (2006) Governance of water and sanitation services for the periurban poor: a framework for understand and action in metropolitan regions. In: Development planning unit, London, UK. http://discovery.ucl.ac.uk/52345/1/Allen_Davila_Hofmann_2006_ WSS_PUI_book.pdf 6

Information available at: http://www.cwa.org.kh/. Amit Mishra and Ruchi Agarwal, ex-employees of Sarvajal, were also an integral part of this case study.

7

References

11

Al’Afghani MM, Kohlitz J, Willetts J (2019) Not built to last: improving legal and institutional arrangements for community-based water and sanitation service delivery in Indonesia. Water Altern 12:285–303 Allouche J (2011) The role of informal service providers in post-conflict reconstruction and state building. In: Troell J, Weinthal E, Nakayama M (eds) Water and post conflict peacebuilding. Earthscan, London and New York, pp 34–42 Banerjee SG, Morella E (2011) Africa’s water and sanitation infrastructure: access, affordability, and alternatives. The World Bank, Washington, D.C. http://elibrary.worldbank.org/doi/book/ https://doi.org/10.1596/978-0-8213-8457-2 Biswas A, Sachdeva PK, Tortajada C (2021) Phnom Penh water story remarkable transformation of an urban water utility. Springer, Singapore Bird K, Busse S (2006) Pro-poor policy: an overview. Overseas Development Institute, United Kingdom Bloomberg (2019) The future of the city is thirsty. Available at: https://www.bloomberg.com/news/ articles/2019-08-14/the-urban-water-crisis-may-be-worse-than-it-looks Cairncross S, Kinnear J (1992) Elasticity of demand for water in Khartoum, Sudan. Soc Sci Med (1982) 34(2):183–189 Collignon B (1999) The potential and the limits of private water providers. World Bank, Washington, DC Collignon B, Vézina M (2000) Independent water and sanitation providers in African cities. World Bank, Washington, DC Conan H (2004) Small piped water networks: helping local entrepreneurs to invest. Asian Development Bank. http://www.adb.org/publications/small-piped-water-networks-helping-local-entrep reneurs-invest Coutard O, Rutherford J (2015) Beyond the networked city: infrastructure reconfigurations and urban change in the North and South. New York, NY, USA, Routledge. ISBN 978-1-138-79682-9 Charles KJ, Nowicki S, Bartram JK (2020) A framework for monitoring the safety of water services: from measurements to security. NPJ Clean Water 3:1–6 Franceys R, Gerlach E (2012) Regulating water and sanitation for the poor: economic regulation for public and private partnerships. Routledge http://yadda.icm.edu.pl/baztech/element/bwmeta1.element.baztech-196ebaae-dacc-4917-945e26e7296bf3d2 JMP (n.d.) Drinking water. Available at: https://washdata.org/monitoring/drinking-water JMP (2021) Progress on household drinking water, sanitation and hygiene (2000–2020). https:// washdata.org/sites/default/files/2021-07/jmp-2021-wash-households-highlights.pdf Kariuki RM, Schwartz J (2005) Small-scale private service providers of water supply and electricity: a review of incidence, structure, pricing, and operating characteristics. In: Policy research working papers. The World Bank, Washington, D.C. http://elibrary.worldbank.org/doi/abs/ https://doi.org/10.1596/1813-9450-3727 Kjellén M, McGranahan G (2006) Informal water vendors and the urban poor. IIED, London Matos de Queiroz JT, Doria MF, Rosenberg MW, Heller L, Zhouri A (2013) Perceptions of bottled water consumers in three Brazilian municipalities. J Water Health 11(3):520–531. https://doi. org/10.2166/wh.2013.222 Ministry of Jal Shakti (n.d a) Jal Jeevan mission. https://jaljeevanmission.gov.in/ Ministry of Jal Shakti (n.d b) Vision, mission, objectives and components under JJM. https://jaljee vanmission.gov.in/content/about-jjm#vision Ministry of Jal Shakti (n.d c) Tap water supply in households (HHs). https://ejalshakti.gov.in/jjm report/JJMIndia.aspx Njiru C (2004) Utility-small water enterprise partnerships: Serving informal urban settlements in Africa. Water Policy 6(5):443–452 Olajuyigbe AE, Rotowa OO, Adewumi IJ (2012) Water vending in Nigeria. Mediterranean J Soc Sci 3(1):229–239

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Pangare G, Pangare V (2008) Informal water vendors and service providers in Uganda: the ground reality. The Water Dialogues: Informal Water Vendors, Uganda. http://waterdialogues.org/doc uments/InformalWaterVendorsandServiceProvidersinUganda.pdf. Portes A, Haller W (2010) The informal economy. In: Smelser NJ, Swedberg R (eds) The handbook of economic sociology. Princeton University Press, Princeton, NJ, USA, pp 403–426 Prayoga R, Nastiti A, Schindler S, Kusumah SWD, Sutadian AD, Sundana EJ, Simatupang E, Wibowo A, Budiwantoro B, Sedighi M (2021) Perceptions of drinking water service of the ‘off-grid’ community in Cimahi, Indonesia. Water 13(10):1398. https://doi.org/10.3390/w13 101398 Raina A, Gurung Y, Suwal B (2020) Equity impacts of informal private water markets: case of Kathmandu Valley. Water Policy, pp 189–204 Sansom K (2006) Government engagement with non-state providers of water and sanitation services. Pub Adm Dev 26(3):207–217. https://doi.org/10.1002/pad.419 Solo TM (2003) Independent water entrepreneurs in Latin America - the other private sector in water services (English). Water and sanitation program. World Bank Group, Washington, D.C.. http://documents.worldbank.org/curated/en/786541468012040884/Independentwater-entrepreneurs-in-Latin-America-the-other-private-sector-in-water-services SSWM (n.d.) Water vendors. https://sswm.info/sswm-solutions-bop-markets/inclusive-innovationand-service-delivery/identifying-and-realizing/water-vendors Snell S (1998) Water and sanitation services for the urban poor: small-scale providers—typology and profiles. 33106. The World Bank. http://documents.worldbank.org/curated/en/1998/12/609 3452/water-sanitation-services-urban-poor-small-scale-providers-typology-profiles UNICEF (2021) Drinking water. https://data.unicef.org/topic/water-and-sanitation/drinking-water/ United Nations (n.d.) Sustainable development goals. https://www.un.org/sustainabledevelopment/ water-and-sanitation/ UN Department of Economic and Social Affairs (n.d.). Least Developed Countries (LDC’s) https:/ /www.un.org/development/desa/dpad/least-developed-country-category.html United Nations Development Programme (UNDP) (2011) Services and supply chains: the role of the domestic private sector in water service delivery in Tanzania. UNDP, New York United Nations Development Programme (UNDP) & World Bank (1998). Water and sanitation services for the urban poor. In: Small-scale providers: typology and profiles. Available at: https://documents1.worldbank.org/curated/en/878421468162548721/pdf/33106a0EN GLISH0global1typology.pdf Whittington D, Lauria DT, Mu X (1991) A study of water vending and willingness to pay for water in Onitsha, Nigeria. World Dev 19(2):179–198 World Bank (2019) City-wide inclusive water supply. Refocusing on off-grid solutions for addressing sustainable development goal 6.1 Wutich A, Beresford M, Carvajal C (2016) Can informal water vendors deliver on the promise of a human right to water? Results from Cochabamba, Bolivia. World Dev 79:14–24 Wutich A, Brewis A (2014) Food, water, and scarcity: toward a broader anthropology of resource insecurity. Curr Anthropol 55(4):444–468 WRI Ross Center for Sustainable Cities’ Water and Sanitation 15-City Study (2018) Zaroff B, Okun DA (1984) Water vending in developing countries. Aqua 5:289–295

For Further References https://iwaponline.com/wp/article/22/S1/189/63814/Equity-impacts-of-informal-private-watermarkets

Chapter 2

Sukoon Water

Abbreviations HH KWSB NGO TDS USDPKR WHO

Household Karachi Water Supply and Sewerage Board Non-governmental organization Total dissolved solids Foreign exchange rate of US dollars to Pakistani rupees (USD 1 = PKR 167 is used in this report) World Health Organization

2.1 Background Rehan’s entrepreneurial spirit had been stirred when he was an undergraduate at Stanford University, California, USA, leaving him keen to do something real and creative in the area of public service. The idea of doing something related to water and public health germinated in Rehan’s mind in his junior year. This was when he realized that people in informal urban communities were consuming water with high levels of faecal contamination, thereby exposing themselves, and particularly their children, to significant health risks. Rehan Adamjee observed that a large section of the population in Pakistan had to live in a permanent state of mental and physical unease, due to the lack of good-quality water supply services. After seven months in his first post-college job in Denver, Colorado, USA, Rehan Adamjee decided to return to his home country of Pakistan to start something of his own in the public health field. In 2016, Rehan founded Sukoon Water using grant money received through a fellowship in leadership and social innovation from the US-based Dalai Lama Foundation and support from this family. The objective of Sukoon, he decided, was “to reduce the burden of waterborne disease in Pakistan’s cities by increasing © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 P. K. Sachdeva et al., Off-Grid Water Supply, SpringerBriefs on Case Studies of Sustainable Development, https://doi.org/10.1007/978-981-99-4060-8_2

13

14

2 Sukoon Water

access to and ensuring consistent usage of safe drinking water”.1 Rehan aimed to create an organization of a scale that could provide safe drinking water throughout Pakistan. In preparation of business plans for Sukoon, Rehan did a survey of the off-grid water markets in an informal settlement called Gulshan-e-Sikandarabad, in Karachi (Fig. 2.1). Gulshan-e-Sikandarabad had an estimated population of 60,000. Average income there was estimated at PKR 21,000 (USD 1262 ) per household per month. The dominant sources of employment were the informal sector such as the oil and water tanker industry, and some formal-sector jobs around the community, such as in restaurants and shops. Interestingly, the area had piped water supply infrastructure, built by Karachi Water Supply and Sewerage Board (KWSB), the state-owned water utility of Karachi. However, there was no actual water running through the pipes. Tankers were the main source of water in the area. Tanker water was sold by shopkeepers at PKR 0.7/L (USD 4.19/m3 ).3 Many people also bought water directly from the tanker suppliers. Of the people who bought tanker water, about 88% did not boil it before drinking it. Certain shops were also selling bottled water, but it had high coliform numbers. It was common for children between the ages of 12 and 15 to fetch water from shops for their families. Overall, in Karachi, the market supply for drinking water in the low-income urban settlements consisted of NGOrun community water supply ventures, government filling stations, untreated tanker water, and small, community-based private-sector operators. These water sources did not consistently meet water quality standards, lacked robust mechanisms for distribution, and failed to address the problem of contaminated containers being used to collect water directly from water filling stations. It was clear to Rehan that the piped water system was inefficiently run, produced low-quality water, and was unlikely to cover even the urban population. He remained unconvinced of the efficacy of the efforts of the NGOs in setting up community-based water filling stations, for two reasons. First, the containers used to fetch water from the community-based stations were contaminated; and, second, users were expected to walk to these stations to fill their containers. He envisioned a system where people would not need to walk to a remote location to fetch water. He thought that if water could be made available closer to the consumer’s home, it would improve both the access to and the safety of the drinking water in the community. The business plan for Sukoon Water proposed a standardized model for delivering safe drinking water to low-income urban areas. The company would set up decentralized water treatment facilities, which it called Sukoon hubs, near low-income and peri-urban informal communities. It would distribute the treated water at communitybased centres called Sukoon WASH centres. The business plan was based on a 12 L water container, which could be easily carried by children 12–16 years old. The vision was to supply water that complied with WHO standards at an affordable price, to reduce the health burden for consumers. 1

Here, “safe” means “compliant with WHO’s guidelines for drinking water”. At the current exchange rate of USD 1 = PKR 167. 3 At the exchange rate of USD 1 = PKR 167. 2

2.1 Background

15

Fig. 2.1 Rehan Adamjee (far right), during the survey of Gulshan-e-Sikandarabad. Source Personal communication with Sukoon, 2020

Sukoon intended to set up plants in dense areas of Karachi (Table 2.1). The business plan included franchised operations for business expansion. Sukoon Water operated a facility to supply filtered water to Gulshan-eSikandarabad for a little less than two years, in 2016 to 2018. When the business shut down, in September 2018, it had daily water sales of 4000 L, down from a peak of 5000–6000 L. Next, we analyse the maiden site of Sukoon Water in Gulshan-e-Sikandarbad through the lens of the Four-Domain Framework. Table 2.1 Sukoon Water’s business plan (in 2016) Year

Number of plants

Population covered

Population covered per plant

Total coverage (% of Karachi’s urban population)

2018

2

15,000

7500

0.15%

2020

10

75,000

7500

0.75%

2025

70

500,000

7142

5%

Source Personal communication with Sukoon, 2020

16

2 Sukoon Water

Table 2.2 Quality tests (conducted 9/10/2017) of tanker water and the water produced by Sukoon Water Sample

TAMC

P. aeruginosa

Faecal coliform

Non-Faecal coliform

E. coli

Remarks

WHO guideline