What are the benefits of investing in WSS?

This chapter identifies the types of investments that are required to deliver WSS and presents available evidence on the magnitude of the benefits that are generated from such services. Such benefits usually outstrip the costs of service provision and provide a strong basis for investing in the sector.

Water and sanitation services (WSS) generate substantial benefits for human health, the economy as a whole and the environment. Access to clean drinking water and sanitation reduces health risks and frees up time for education and other productive activities, as well as increases the productivity of the labour force. Safe wastewater disposal helps to improve the quality of surface waters with benefits for the environment (e.g. functioning of ecosystems; biodiversity), as well as for economic sectors that depend on water as a resource (e.g. fishing, agriculture, tourism).

For such benefits to be generated sustainably, investments in a whole range of services alongside the WSS value chain need to be carried out, ranging from protecting the raw material (freshwater resources) to building storage capacity or water transport networks, all the way to investments into collection, safe disposal, treatment or reuse of wastewater. Once built, the infrastructure needs to be adequately maintained and operated so as to provide sustainable, affordable and reliable access to water and sanitation services. New and recurrent investments in water and sanitation services are therefore critical in order to expand access to the services and maintain their ability to deliver benefits over time.

1.1. Identifying necessary investments in WSS

What investments are needed?

The report considers the investments needed to ensure sustainable provision of WSS services alongside the entire WSS "value chain", as shown in Figure 1.1.

Providing access is usually considered as the main entry point for the delivery of WSS. Access to water services can be provided via a well or a handpump or via a reticulated network system. When water is provided via a network, this can be done via a household connection (within the house or in the yard) or a public connection, referred to as standpipes or tap stands. Investments required can range from digging a well and maintaining it in good working order to building water transport and distribution networks with associated water treatment facilities.

To ensure that water is provided to the right standard (defined based on WHO guidelines on drinking water quality), water treatment is necessary to remove suspended solids, bacteria, algae, viruses, fungi, minerals and manmade chemical pollutants including fertilisers. Treatment is usually carried out off-site at the point of source, although it may also be required at point-of-use (i.e. at household level), as water may be contaminated during transport or storage. Examples of water treatment technologies include filtration, chlorination, flocculation, solar disinfection, boiling and pasteurising.

According to the WHO-UNICEF Joint Monitoring Program, "Sanitation is generally referred to as the provision of facilities and services for the safe disposal of human excreta. Sanitation also refers to the maintenance of hygienic conditions, through services such as garbage collection and wastewater disposal". Providing access to sanitation usually means investing in the first segment of the sanitation value chain, i.e. ensuring that humans are adequately separated from their excreta. There are two main types of facilities for collecting human excreta: on-site sanitation systems (such as dry- pit latrines or ventilated improved pit latrines) and network-based sanitation solutions, with or without treatment of the sewage collected.

Hygiene promotion is a key intervention to ensure that access to water and sanitation services can deliver benefits. They include provision of hand washing points, hygiene and health education and the encouragement of specific behaviours such as hand washing at critical times, keeping animals out of the kitchen, proper management of child excreta and proper storage of household drinking water.

Adequate investments are needed both downstream and upstream from providing access in order to ensure sustainable services. Investing in water resource management upstream is critical, so that sufficient water resources of adequate quality are available over time with limited negative impact on other alternative uses of water. Downstream from providing access, adequate investment in wastewater collection, safe storage or treatment and disposal is necessary so as to ensure that the impact of wastewater being released in the environment is adequately controlled and good quality of the water resources is maintained. Recycling and reuse of treated wastewater can also reduce the amounts of water consumed and generate by-products that can be used for agriculture or energy production.

WSS typically require significant capital investments up-front in long- lived assets, which can generate benefits over several decades if adequately maintained. The bulk of investments are underground (particularly piped networks), which means that monitoring asset condition is not an easy task. Relatively simple equipment, such as hand pumps, can also fall into disrepair if sustainable systems for ensuring ongoing repairs and maintenance are not in place. To maintain incentives for efficient service delivery, it is therefore critical to invest in adequate "sector software", alongside the hardware. At sector level, this could include improving overall sector governance, conducting tariff reforms or introducing incentives for performance improvements (see section 3.1 about the need to improve efficiency and reduce costs in order to shrink the sector's financing gap).

Who is responsible for investing?

Investors in water and sanitation services differ according to the type of services provided. For the most basic levels of service, such as a well, borehole or an on-site sanitation facility, households would be the prime investors. For anything beyond that, services are usually provided by a distinct "service provider". The organisation of...