Colombia’s water sector regulator, CRA, is implementing a differentiated approach to secure inclusive access to sanitation in urban areas. The Source hears from its Expert Commissioner, Diego Polanía.
Colombia’s water sector regulator, the Regulatory Commission for Potable Water and Basic Sanitation (CRA – Comision de Regulacion de Agua Potable y Saneamiento Basico), is finalising a new regulatory approach to incentivise utilities to close gaps in service coverage and quality for water, sanitation and solid waste management. The goal is to ensure that all urban areas ultimately enjoy the same service standards, through progressive improvements in services over time, but Colombia’s government acknowledges the need for varying approaches in the interim.
“As a regulator, we cannot have a single uniform strategy,” says Diego Polanıa, CRA’s Expert Commissioner. “We need a differentiated approach that incentivises incremental improvements. If we insist on the same high regulatory standards and targets in all areas, we will never get to universal service access. We need to see what kind of technologies will best serve unplanned areas and under-served towns, and what kind of rules will ensure safe water and safe sanitation. This is a progressive approach to planning how to get from point zero to a common standard for all, no matter how long it takes.”
CRA is a special administrative entity of the Ministry of Housing, Cities and Territory, with administrative and technical autonomy, governed by Colombia’s constitution and legislation. Its mandate, spelled out in the 1994 Public Services Act, is to improve conditions for the provision of drinking water, sanitation and solid waste management services through promoting or stimulating competitive approaches. Its main work is to define tariff methodologies and set the technical rules and regulations with which all utilities must comply.
A separate entity, the Superintendency of Residential Public Services, is responsible for monitoring and enforcing those regulations.
The new approach is based on a message from CRA to utilities regarding the differentiated approach. “What we are saying is that, in most areas, we will keep tight control over how you provide services, but in unplanned urban areas and under-served towns we will cut you some slack, with a flexible approach, so you have an incentive to go there and progressively bring the same quality of service,” says Polanıa. He continues: “As a utility, you are the expert, the technical provider, capable of serving these areas. These are your areas of customer growth. Work out how best to serve them. Bring us a business plan and tell us how you will do it. Then we will hold you accountable to those commitments and the Superintendency of Residential Public Services will conduct surveillance according to that plan.”
“We need to be creative to change the rules, the schemes, the regulations, to ensure that everyone has water and sanitation,” he says. “Of course, it’s very challenging. In one place, it might take a hundred years. In another, it might take 10 or 15 years to overcome the challenges. The differences between places are huge.”
Gaps in urban sanitation services
Colombia is a diverse middle-income country, with extremes of affluence and poverty. By 2018, it had achieved 92.6% coverage for urban sewerage and 96% coverage for urban drinking water. Total national sewerage coverage was 88.2%, with an estimated 42.8% of wastewater being treated.
Polanıa explains that these high coverage percentages mask gaps and inequalities, and that reaching the last mile of service delivery is both challenging and expensive. The most significant urban service gaps are in informal settlements, poor municipalities, and remote areas.
“In some parts of the country, entire towns are not sewered. There, residents rely mainly on septic tanks and dry latrines. There is a significant problem with open dumping of sludge. Particularly along the Pacific Coast, the Llanos Oriental (Eastern Plains) and the Colombian Amazonia, untreated wastewater is discharged directly into rivers, resulting in water pollution,” he says.
The efforts of a number of actors are having to be focused to make progress addressing sanitation gaps. This starts with CRA itself.
“When CRA was established in 1994, its sanitation mandate was understood to refer exclusively to sewered sanitation,” explains Polanıa. “While this remains true in law, in practice public policy has evolved to make it possible for CRA to expand its scope to encompass non-sewered sanitation in some specific cases. This is now seen as an important and necessary part of achieving universal service coverage.”
It also includes municipalities that, as Polanıa explains, have the core mandate for ensuring that public services are provided to everyone. They do this through utilities, whether public or private, which all are regulated in the same way, but he points out that CRA has no jurisdiction over municipalities themselves.
“We can regulate utilities, but municipalities have a huge role here – they have to allocate funds, they have to plan the urban development, they have to legalise some of those neighbourhoods,” says Polanıa. “It is impossible to address service provision only through the utilities, but our mandate is only related to them – so that is why we have to be very articulate with the public policy to incentivise the municipalities. The programmes of the ministries and the presidency can touch the municipality, and the superintendency has the enforcement task. Everyone has to work together.”
As far as utilities are concerned, Polanıa explains that most residents in unplanned urban settlements rely on informal infrastructure and unregulated services. Utilities are allowed to provide sewered sanitation services in such areas, as long as this is feasible technically and that services comply with quality and continuity regulations. However, until 2017 public money could not be invested in informal settlements and even now can only be invested in certain circumstances.
A move to inclusivity
Two years ago, the central government launched a new programme called ‘Agua al Barrio’, or ‘water for the neighbourhood’. The programme includes sanitation services, because the law forbids utilities from providing water services without also addressing sanitation, to avoid creating environmental problems. The approach prioritises everyone’s human right to sanitation, provides ‘safe management’ throughout the entire sanitation service chain, recognises that sanitation contributes to a prosperous urban economy, and commits to a partnership approach to providing inclusive water and sanitation services across the cities.
Through the Agua al Barrio pilot programme, differentiated approaches are being used in 15 municipalities, including main cities such as Bogota and Medellın, but also poor municipalities such as Riohacha in Guajira and Yopal in the Llanos Orientales. The plan is for the pilot to benefit 348,000 people in 72 informal neighbourhoods by 2022.
“As the regulator, we are developing the rules to make these programmes successful,” says Polanıa. “We need to build some strong cases and say, OK, this can work – now we need to think about how we can bring investments here.”
Implementing differentiated targets
The need for a differentiated approach to service standards was first explicitly recognised as an interim measure in the government’s 2014-18 National Development Plan Law. Polanıa explains that CRA has been working to develop a pragmatic and flexible approach to regulations to support implementation of this policy: “We try not to have a one-size-fits-all approach, because that is not going to work. But we want a path of incremental improvement to reach the same end point for everyone.”
A key principle of the emerging regulatory framework for inclusive service access is to require each service provider to set their differentiated targets according to a detailed business plan, and for them to then be held accountable to those commitments through the Superintendency of Residential Public Services surveillance. For example, in regularised areas, providers have to achieve 100% coverage in a maximum of five years. In informal areas, the business plan can state that the provider can take an extended number of years to reach the 100% coverage standard. The only requirement is that they have to establish KPIs that commit to continuous improvement in coverage, quality and sustainability each year, explains Polanıa. The regulator, therefore, has an important role to play in understanding what is possible in different areas, and how those targets should evolve over time.
According to Polanıa, some of the utilities in Colombia have indicated that they need to ensure that, once they have implemented a differentiated plan with flexible standards, the superintendency – which monitors compliance – will not impose penalties for non-compliance with regular standards. This shows that it is crucial that the superintendency is well aligned with this differentiated approach, he says.
Incentivising service providers
With the prospect of implementing differentiated targets, the remaining task is to ensure utilities have an incentive to pursue them and extend services. Polanıa notes that expanding service areas gives the utility new customers, which is an incentive. In addition, utilities are allowed to cross-subsidise across areas while accessing financial subsidies from local government and financial incentives from central government.
“First and foremost, the utilities now have a mandate to reach peri-urban areas where there are no or poor services, and their reputation is important to them. This is the first incentive,” says Polanıa, adding: “Our task as the regulator is to set the rules to minimise the risk for them to work there.” •
Article provided through the IWA Regulating for Citywide Inclusive Sanitation Initiative. See: iwa-network.org/projects/regulating-for-citywide-inclusive-sanitation
Citywide Inclusive Sanitation
CRA is a signatory of the October 2019 Declaration of Cartagena, through which members of regulatory entities belonging to the Association of Drinking Water and Sanitation Regulatory Entities of the Americas (ADERASA) endorsed a range of activities to fulfil Sustainable Development Goal 6. Those with particular relevance for Citywide Inclusive Sanitation (CWIS) include:
– Contribute to the redesign of more efficient subsidy schemes for drinking water services and sanitation, using new knowledge and technologies that consider economic valuation and the social aspects of the service and the payment capacity of users, so that service sustainability is not threatened by a population that is growing rapidly, all this within the recognition of the human right to water and sanitation.
– Adopt alternative solutions that allow universal access to the supply of water and sanitation in the peri-urban and rural areas of Latin America and the Caribbean where the most vulnerable populations live, considering technical solutions and financing mechanisms that respond to the particularities of these populations and preserve the conditions of coverage, quality and continuity, in particular of community providers, and even where differential services are provided.