Water supply and sanitation in Colombia

Colombia Colombia Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the... : Water and Sanitation

Data
Water coverage (broad definition)	93%
Sanitation coverage (broad definition)	86%
Continuity of supply	20 hours out of 24 (average 2003)
Average urban water use (l/c/d)	59 (2006)
Average urban water and sewer bill (US$/month)	11.40 (2006)
Share of household metering	n/a
Share of collected wastewater treated	25%
Annual investment in WSS	US$10/capita
Share of self-financing by utilities	26%
Share of tax-financing	n/a
Share of external financing	n/a
Institutions
Decentralization to municipalities	Full, since 1989
National water and sanitation company	None
Water and sanitation regulator	Yes (one single-sector, one multi-sector)
Responsibility for policy setting	Ministry of the Environment, Housing and Regional Development
Sector law	Yes (1994)
Number of urban service providers	More than 1,500
Number of rural service providers	More than 12,000

Water supply and sanitation in Colombia has been improved in many ways over the past decades. Between 1990 and 2004, access to sanitation

Sanitation

Sanitation is the hygienic means of promoting health through prevention of human contact with the hazards of wastes. Hazards can be either physical, microbiological, biological or chemical agents of disease. Wastes that can cause health problems are human and animal feces, solid wastes, domestic...

increased from 82% to 86%, but access to water increased only slightly from 92% to 93%.. In particular, coverage in rural areas lags behind. Furthermore, despite improvements, the quality of water and sanitation services remains inadequate. For example, only 72% of those receiving public services receive water of potable quality and in 2006 only 25% of the wastewater generated in the country underwent any kind of treatment.

Overview

A comprehensive sector policy, introduced in 1994, aims at increasing water and sanitation investments through targeted transfers to municipalities, improving service quality and efficiency by promoting private sector participation in the poorest parts of the country where utilities were not performing well, the establishment of autonomous regulatory agencies at the national level, increased cost recovery, and protecting the poorest through cross-subsidies in the form of area-based tariffs. This same policy has been pursued and refined by different consecutive governments.

Responsibilities in the sector are divided as follows:

The Vice-Ministry of Water and Sanitation, created in October 2006 within the Ministry of Environment, Housing and Territorial Development
Ministry of Environment, Housing and Territorial Development
The Ministry of Environment, Housing and Territorial Development , is the national executive ministry of the Government of Colombia charged with determining and regulating the standards and guidelines for the protection of the environment, the improvement and availability of potable water, and the...

is in charge of setting sector policy.
Regulation is the responsibility of two separate institutions at the national level, the Potable Water and Basic Sanitation Regulation Commission
Potable Water and Basic Sanitation Regulation Commission
The Potable Water and Basic Sanitation Regulation Commission is a regulatory agency of the Government of Colombia in charge of regulating the water supply and sanitation in Colombia, including the potable and public water distribution, sewage and waste management services...

(CRA) and the Superintendency of Residential Public Services (SSPD)
Superintendency of Residential Public Services (Colombia)
The Superintendency of Residential Public Services is a regulatory agency of the government of Colombia in charge of regulating and overseeing public utility service providers....

, a multi-sector regulatory agency.
Service provision is the responsibility of 1,500 water and sanitation service providers in urban areas and probably more than 12,000 communal organizations providing services in rural and peri-urban areas. While most urban service providers are public, in 2004 there were 125 private and 48 mixed public-private water companies in the country.

Cost recovery in the sector has improved substantially. Between 1990 and 2001, the average tariff for water and sanitation in Colombia

Colombia

Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...

increased from US$0.32/m3 to US$0.81/m3, equivalent to an increase of 153%. As a result 24% of investments were self-financed by utilities in 2004. Other features of the sector are the existence of some large, well-performing public companies; a strong and stable participation by the local private sector in service provision; and some well-performing community-based organizations in peri-urban areas.

Recently, the government of Álvaro Uribe

Álvaro Uribe

Alvaro Uribe Vélez was the 58th President of Colombia, from 2002 to 2010. In August 2010 he was appointed Vice-chairman of the UN panel investigating the Gaza flotilla raid....

has initiated a number of complementary policies to accelerate increases in access to water and sanitation services, such as the strengthening of the roles of departments

Departments of Colombia

Colombia is an unitary republic formed by thirty-two departments and a Capital District . Each department has a Governor and a Department Assembly , elected by popular vote for a four-year period. The governor cannot be re-elected in consecutive periods...

in the governance of the sector, a program for marginal urban neighborhoods and an increase in investments for wastewater treatment.

Access

		Urban (77% of the population)	Rural (23% of the population)	Total
Water	Broad definition	99%	71%	93%
Water	House connections	96%	51%	86%
Sanitation	Broad definition	96%	54%	86%
Sanitation	Sewerage	90%	20%	74%

In 2004, 93% of the population had access to an improved source of water and 86% had access to adequate sanitation. The rural population, which accounts for about 23% of the national total, has the lowest coverage rates, with only 71% having access to safe water and 54% to adequate sanitation. Coverage is lowest on the Atlantic Coast (Caribbean Region

Caribbean Region

The Caribbean Region or Caribbean Coast Region is a natural region of Colombia mainly composed of eight Departments located contiguous to the Caribbean. The area covers a total land area of including the San Andres Island Archipelago of San Andrés, Providencia and Santa Catalina in the Caribbean...

), in the Orinoquia, and in Amazonia.

Between 1990 and 2004, access to water increased only slightly from 92% to 93%, and access to sanitation increased from 82% to 86%.

Service quality

In addition to issues of service coverage, Colombia’s water and sanitation sector faces issues of service quality. However, service quality has improved considerably over the last fifteen years. The biggest cities tend to offer better service quality than smaller towns and rural areas.

Continuity of supply. The average duration of daily water service has increased from 15.36 hours in 1993 to 19.82 hours in 2003 at the national level. In the four biggest cities of the country, service is continuous. Nevertheless, rationing of water and interrupted sanitation are ordinary incidents in small towns and rural areas.

Drinking water quality. According to a survey of the Superintendencia de Servicios Públicos Domiciliarios (SSPD) or Superintendency for Residential Public Services in 2004, 72% of the users had water of potable quality. In some cases, the water supply

Water supply

Water supply is the provision of water by public utilities, commercial organisations, community endeavours or by individuals, usually via a system of pumps and pipes...

system’s pressure is not adequate, increasing the risk of bacterial contamination.

Sewerage. Sewage collection systems do not have sufficient hydraulic capacity to handle wastewater flows, especially in poor neighborhoods, which results in combined sewer overflow

Combined sewer overflow

A combined sewer is a type of sewer system that collects sanitary sewage and stormwater runoff in a single pipe system. Combined sewers can cause serious water pollution problems due to combined sewer overflows, which are caused by large variations in flow between dry and wet weather...

s and sanitary sewer overflow

Sanitary sewer overflow

Sanitary sewer overflow is a condition whereby untreated sewage is discharged into the environment prior to reaching treatment facilities thereby escaping wastewater treatment. When caused by rainfall it is also known as wet weather overflow. It is primarily meaningful in developed countries,...

s.

Wastewater treatment. In 2006, 25% of the wastewater generated in the country underwent some kind of treatment. The remaining 75% is discharged without any treatment, contaminating a significant part of the natural water resources.

History

The water and sanitation sector in Colombia underwent one cycle of centralization and decentralization within the past several decades. Since the enactment of a comprehensive new sector policy in 1994, various governments have pursued the same set of basic policies, including targeted transfers to municipalities, private sector participation, regulation, cost recovery and a system of cross-subsidies.

Centralization

In the first half of the 20th century, municipalities were responsible for the provision of basic water and sanitation services in Colombia. In 1950, similar to many other countries, a centralized system was adopted and the Instituto de Fomento Municipal (INSFOPAL) or Municipal Development Institute was created.
Empresas Departamentales de Acueducto y Alcantarillado (ACUAS) or Departmental Water and Sewerage Companies were created, consisting of the departments, the municipalities and INSFOPAL, which took care of managing and maintaining the infrastructure of the member communities. In that way, investment at the national level was channelled into this important area of public health.

In 1976, within the framework of a change in sector policies, the ACUAS were transformed into Empresas de Obras Sanitarias (EMPOS) or Sanitary Works Companies at the regional or municipal level,, which were put in charge of financing, planning, developing and managing public services in most municipalities.
However, some municipalities kept the responsibility for service provision at the local level and created municipal companies. The most notable case are the Empresas Públicas de Medellín

Empresas Públicas de Medellín

Empresas Públicas de Medellín was established 55 years ago as a residential public utilities company which, initially, only served the inhabitants of Medellin, its hometown...

(EPM), a municipally-owned multi-sector utility created in 1955.

At the national level, the water sector institutionally depended on the Ministry of Health.

Decentralization

In the 1980s, the sector was in crisis, characterized by low investment, poor cost recovery and poor service quality in most of the country. As a result, the government decided to break up INSFOPAL at the end of the 1980s and to devolve the responsibility for service provision back to the municipalities after four decades, except for some cases like the Valle de Cauca department, where the regional companies continued providing the services.

Furthermore, the institutional responsibility for the sector was transferred from the Ministry of Health to the Ministry of Economic Development. This change was not only an administrative change, but it introduced a different focus and perspective to the sector.

The comprehensive new sector policy of 1994

The two liberal governments of César Gaviria

César Gaviria

César Gaviria Trujillo is a Colombian politician and a Latin American statesman. He served as President of Colombia from 1990 to 1994, and Secretary General of the Organization of American States from 1994 until 2004.-Early life:...

(1990-1994) and Ernesto Samper

Ernesto Samper

Ernesto Samper Pizano is a Colombian politician. He served as the President of Colombia from August 7, 1994 to August 7, 1998, representing the Liberal Party. He was involved in the 8000 process scandal, which takes its name from the folio number assigned to it by the chief prosecutor's office...

(1994-1998) pursued a policy of economic opening and business modernization

Modernization theory

Modernization theory is a theory used to explain the process of modernization within societies. The theory looks at the internal factors of a country while assuming that, with assistance, "traditional" countries can be brought to development in the same manner more developed countries have...

. In the spirit of these policies, the government established a comprehensive new sector policy that aimed at increasing water and sanitation investments through targeted transfers to municipalities, improving service quality and efficiency by promoting private sector participation in the poorest parts of the country where public utilities were not performing well, the establishment of autonomous regulatory agencies at the national level, increased cost recovery, and protecting the poorest through cross-subsidies in the form of area-based tariffs.

The basis of this sector policy was established by Law 142 of July 1994, at the end of president César Gaviria

César Gaviria

’s term of office. With some modifications to that law in 2001, the same policy continues to be pursued to today despite several changes of governments.

In 1995, the first water and sanitation concession in Colombia was given to a mixed public-private company in the city of Cartagena

Cartagena, Colombia

Cartagena de Indias , is a large Caribbean beach resort city on the northern coast of Colombia in the Caribbean Coast Region and capital of Bolívar Department...

, followed by a second concession in Barranquilla

Barranquilla

Barranquilla is an industrial port city and municipality located in northern Colombia, near the Caribbean Sea. The capital of the Atlántico Department, it is the largest industrial city and port in the Colombian Caribbean region with a population of 1,148,506 as of 2005, which makes it Colombia's...

in 1996 and more concessions in the next years. In 2002, the government launched a program of business modernization to introduce private sector participation also in small and medium-sized municipalities, leading to significant improvements in quality and efficiency of service provision in some municipalities.

Drinking water use has decreased by 25% between 1996 and 2001. Tariff increases and the inclusion of low income users who did not have access to piped water before influenced this trend.

Recent events

The government of Álvaro Uribe

Álvaro Uribe

Alvaro Uribe Vélez was the 58th President of Colombia, from 2002 to 2010. In August 2010 he was appointed Vice-chairman of the UN panel investigating the Gaza flotilla raid....

wants to rapidly increase coverage, overtaking the Millennium Development Goals for the sector and to improve service quality, especially in small towns and rural areas, which have the highest requirement of service improvement.

At the end of 2006, a Vice-Ministry of Water and Sanitation was created. It has initiated four new programs:

Departmental Water and Sanitation Plans
Programa de Saneamiento para Asentamientos (SPA) or Sanitation Program for Settlements within the framework of an Integral Quarter Improvement Program
Municipal Waste Water Sanitation Program to increase the rate of treated municipal water
Hands Washing Program

The Departmental Water and Sanitation Plans program provides such services as planning and harmonizing resources and has regional systems of service provision at the level of each department of the country. The program will be first implemented in four departments which have some of the most difficult conditions: Sucre

Sucre

Sucre, also known historically as Charcas, La Plata and Chuquisaca is the constitutional capital of Bolivia and the capital of the department of Chuquisaca. Located in the south-central part of the country, Sucre lies at an elevation of 2750m...

, Córdoba, Magdalena

Magdalena

Magdalena is the original version of the name Magdalene , and is used in Czech, German, Dutch, Swedish, Spanish, Bulgarian, Polish, Slovak, Georgian, Slovene among other languages.Magdalena may also refer to:...

and La Guajira. The program also aims to overcome the sector’s fragmentation into many small utilities to benefit from economies of scale.

Responsibility for water supply and sanitation

The current responsibilities and policies in the water and sanitation sector in Colombia are primarily defined in the 1991 constitution and in Law 142 of 1994 (Ley de Servicios Públicos Domiciliarios or Public Housing Services Law)

Policy and regulation

The Vice-Ministry of Water and Sanitation, created in October 2006 within the Ministry of Environment, Housing and Territorial Development is in charge of setting sector policy. This sector policy is defined in the framework of national policy established by the Departamento Nacional de Planificación (DNP) or National Planning Department.

Responsibility for regulating water services is vested in two separate institutions at the national level. The Comisión de Regulación de Agua Potable y Saneamiento Básico (CRA) or Potable Water and Basic Sanitation Regulatory Commission defines criteria for efficient service provision and sets the rules for tariff revision, but is not in charge of controlling the application of these rules. The latter is the responsibility of the Superintendencia de Servicios Públicos Domiciliarios (SSPD) or Superintendency for Residential Public Services, a multi-sector regulatory agency.

The Government aims at improving the performance of the water and sanitation sector through: (1) strengthening the regulatory framework; (2) implementing technical assistance programs; (3) providing financial support to promote modernization and efficient management as well as to subsidize the poor; and (4) rationalizing the institutional framework at the national level to improve coordination in the sector. The government also supports private sector participation in the sector.

Service provision

Colombian municipalities are responsible for “ensuring that their inhabitants are given domestic services of water supply and sanitation in an efficient way by public companies”. Therefore, public utilities are directly responsible for service provision, except for some special cases defined in the law, in which municipalities can offer the services directly. In rural areas and some marginal urban areas, communal water boards also offer water supply services.

Over the last few years, the number of companies has increased and the direct service provision by municipalities has decreased. To simplify the process of changing suppliers' ownership structure, municipal utilities were transformed into public stock corporations, which allow private sector participation without a further change of the legal status. In 2006, 53% of all suppliers were public companies, the remainder being direct municipal suppliers (15%), private companies (12%), official companies, which are companies that are not specialized in water and sanitation (13%), mixed companies (6%) and authorized organisations (1%). Smaller utilities included, there are more than 1,500 water and sanitation service providers of in urban areas, and probably more than 12,000 communal organizations providing services in rural areas.

The sector is characterized by a high degree of fragmentation which makes it difficult to realize economies of scale

Economies of scale

Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...

, according to a World Bank study. To solve this problem, the creation of regional companies has been suggested.

Urban areas

Most Colombian cities - including the three largest ones, Bogota, Medellin and Cali - are served by public utilities. However, the private sector also plays an important role, including 125 private and 48 mixed public-private water companies in 2004 out of 1,500 urban service providers.

Public utilities

Some of Colombia's larger cities are home to well-performing public utilities, some of them providing multiple services, others being specialized in water and sanitation only. The Empresas Públicas de Medellín

Empresas Públicas de Medellín

Empresas Públicas de Medellín was established 55 years ago as a residential public utilities company which, initially, only served the inhabitants of Medellin, its hometown...

or Public Companies of Medellín

Medellín

Medellín , officially the Municipio de Medellín or Municipality of Medellín, is the second largest city in Colombia. It is in the Aburrá Valley, one of the more northerly of the Andes in South America. It has a population of 2.3 million...

, is a municipally-owned multi-sector utility in charge of water supply, sanitation, solid waste management, electricity generation and distribution as well as local telecommunications in Medellín and its surrounding areas.

Another multi-sector utility is the Empresas Municipales de Cali

Calì

Calì, also written in English as Cali, is an Italian surname, widespread mainly in the Ionian side of Sicily.For the surname Calì is assumed the origin of the Greek word kalos , or from its Sanskrit root kali, "time."The surname refers to:...

(Emcali), which provides fixed line local telecoms, Internet, potable water, sewage and electricity services to some 600,000 clients. EMCALI has suffered financially due to onerous payment obligations resulting from a Power Purchase Agreement signed in 1997 with an Independent Power Producer, TermoEmcali.

The capital of Colombia, Bogotá

Bogotá

Bogotá, Distrito Capital , from 1991 to 2000 called Santa Fé de Bogotá, is the capital, and largest city, of Colombia. It is also designated by the national constitution as the capital of the department of Cundinamarca, even though the city of Bogotá now comprises an independent Capital district...

, is served by a water and sanitation utility, the Empresa de Acueducto y Alcantarillado de Bogotá (EAAB).

Private sector participation

Private sector participation in Colombia's water and sanitation sector has been much more stable than in some other Latin American countries. In 2004, there were 125 private and 48 mixed public-private water companies in Colombia, including large, medium and small companies. Private sector involvement in the Colombian water sector began in 1995 in Cartagena

Cartagena, Colombia

Cartagena de Indias , is a large Caribbean beach resort city on the northern coast of Colombia in the Caribbean Coast Region and capital of Bolívar Department...

, with support from the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

. The most important examples are in Cartagena

Cartagena, Colombia

Cartagena de Indias , is a large Caribbean beach resort city on the northern coast of Colombia in the Caribbean Coast Region and capital of Bolívar Department...

, Barranquilla

Barranquilla

, Santa Marta

Santa Marta

Santa Marta is the capital city of the Colombian department of Magdalena in the Caribbean Region. It was founded in July 29, 1525 by the Spanish conqueror Rodrigo de Bastidas, which makes it the oldest remaining city in Colombia...

, Tunja

Tunja

Tunja is a city and municipality located in the central part of Colombia, in the region of "Alto Chicomocha". As of the 2005 Census it had 152,419 inhabitants. It is the capital of the Department of Boyacá and part of the subregion of the Central Boyacá Province. It is approximately 145 km...

, Montería

Montería

Montería is a municipality and city located in Northern Colombia and is the capital of the Department of Córdoba. The city is located away from the Caribbean, by the Sinú River. The city and region are famous for their distinct cultural heritages, which include a blend of indigenous Zenú Indians,...

, Palmira, Girardot

Girardot, Cundinamarca

Girardot is a municipality and town of Colombia in the department of Cundinamarca. It is home to a number of recreational and vacational spots, mainly visited by people from Bogotá, as it is located at less than three hours drive from the city but enjoys a tropical climate .Girardot is the second...

, and Riohacha

Riohacha

Riohacha, Rio Hacha or Rio de la Hacha , is a city in the Riohacha Municipality in the northern Caribbean Region of Colombia by the mouth of the Ranchería River and the Caribbean sea, capital city of the La Guajira Department. Founded by conquistador Nikolaus Federmann in 1535, Riohacha was named...

. Operators are to a large extent Colombian. Overall performance of utilities with private sector participation has improved, in some cases spectacularly, and some – such as Barranquilla – have had impressive successes in expanding coverage to the urban poor.

According to a World Bank report, the key to success of private sector participation in the Colombian water sector has been the development of homegrown solutions, and, at times, skillfully adapting models used elsewhere to the particular circumstances and culture of Colombia.

The World Bank's Private Participation in Infrastructure Database shows private investment commitments in water supply and sanitation of US$ 940 million from 1995–2006 through 51 transactions, including 27 classified as concessions, 22 as management and lease contracts, and 2 as greenfield projects.

Small towns and peri-urban areas

In some smaller towns and peri-urban areas, there are examples of successful provision of water supply and sanitation services by community organizations and regional companies, which in some cases set an example in terms of community empowerment, transparency and accountability.

An example of a regional association is Acuavalle S.A. ESP, which provides drinking water and sanitation to 582,000 inhabitants in 33 municipalities of the Valle del Cauca department

Valle del Cauca Department

Valle del Cauca is a department of Colombia. It is in the western side of the country, facing the Pacific Ocean, and it is considered one of the most important departments in the Republic of Colombia. Its capital is Santiago de Cali...

. It was founded as a non-profit public limited company in 1959. The shareholders of the company are the Valle del Cauca department, the ‘’Corporación Autónoma regional del valle del Cauce’’ and 33 municipalities, which are served by the utility.

Another example, is the Junta Administradora del Acueducto La Sirena en el Valle del Cauca (Water Board La Sirena) in the southwestern outskirts of Cali, which manages 778 residential connections, offering continuous service to some 4,200 users. It operates a sewerage system and a wastewater treatment plant. Water consumption is metered. The average monthly tariff is US$3.5 for 28m3. There is no social stratification, but special tariffs are applied to those users who consume more than 28m3. The annual cash surplus is about US$10,000 which is reinvested in preventive maintenance and in some cases in construction works. In this way, in the last 3 years a water capture facility was constructed in Quebrada Epaminondas, another one at Melendez River was improved, and a water tank with a capacity of 220m3 was constructed.

Another example is the Asociación Acueducto de Río Negro de Popayán, which was formed 10 years ago integrating 10 supply systems, supplying 7,000 residential connections. The association is preparing its own water treatment plant and preparing to install meters with the aid of the Colombian organization Asociados en Desarrollo Rural (ADR) or Associates in Rural Development and the United States Agency for International Development (USAID).

Rural areas

Coverage in rural areas is unusually low, given the level of economic development and sector development. Using a broad definition of access, based on the WHO

Who

Who may refer to:* Who , an English-language pronoun* who , a Unix command* Who?, one of the Five Ws in journalism- Art and entertainment :* Who? , a 1958 novel by Algis Budrys...

definition of an improved water source

Improved water source

According to the Joint Monitoring Program for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" water sources:* household connections* public standpipes* boreholes* protected dug wells...

, access in rural areas in Colombia was 71%, while it was 81% in Honduras

Water supply and sanitation in Honduras

Water supply and sanitation coverage in Honduras has increased significantly in the last decades. However, the sector is still characterized by poor service quality and poor efficiency in many places. Coverage gaps still remain, particularly in rural areas....

- a considerably poorer country - and 89% in Ecuador

Water supply and sanitation in Ecuador

Water supply and sanitation in Ecuador is characterized by a number of achievements and challenges. One key achievement is a significant increase in both access to an improved water source and adequate sanitation...

, also a poorer country than Colombia.

In addition to the armed conflict, there are other explanations for this situation: Municipalities tend to use their financial resources from the Sistema General de Participaciones or General Participation System (Law 715 of 2001) mainly in urban areas. Furthermore, there is no institution or program at the national level which offers technical assistance to the 12,000 rural community organizations. Law 142 of 1994 assigns that task to the departments, but these have not carried out the task in a satisfactory way so far.

The 2002 Inventario Sanitario Rural (ISR) or Rural Sanitary Register confirms that situation. Only 21% of the rural community organizations were considered able to carry out maintenance and only 10% to commercially operate the service. Only 32% issued bills and only 10% used metering. In 2005, the government defined guidelines for basic water supply and sanitation policy in rural areas to increase coverage and improve quality in those areas.

Innovative approaches

Since 1994 Colombia has pioneered many innovative approaches for basic service provision in general and for water supply and sanitation in particular.

Some of them were introduced at the national level, while others were initiated in one city or region. Notable innovations at the national level are the introduction of two autonomous economic regulatory agencies (one, CRA, to develop and fine-tune regulatory tools in the water and sanitation sector, and another one, SSPD, to implement them in across all basic services) in 1994; the introduction of socio-economic strata as a basis for spatially-differentiated tariffs, also in 1994; and the spatial aggregation of municipal service providers in small towns at the departmental level to benefit from economies of scale since 2006, with strong support from the national government.

A notable innovation initiated by a city or a region is the creation of mixed public-private enterprises for urban water supply that has begun in 1995 in Cartagena, followed by Barranquilla and other Northern and Central cities and towns. Another innovation is an association of community-based organizations (CBOs) providing water supply in rural and peri-urban areas in the departments of El Valle

Valle del Cauca Department

, Cauca

Cauca Department

Cauca is a Department of Colombia. Located in the south-western part of the country, facing the Pacific Ocean to the west, the Valle del Cauca Department to the north, Tolima Department to the northeast, Huila Department to the east and the Nariño Department to the south, covering a total area of...

and Risaralda

Risaralda Department

Risaralda is a department of Colombia. It is located in the western central region of the country and part of the Paisa Region. Its capital is Pereira.It was divided from the department of Caldas in 1966...

in Southwestern Colombia. It began in the late 1990s with the assistance of the Universidad del Valle in Cali

Calì

in order to protect and recover source watersheds and to strengthen the CBOs' capacity to administrate, operate and maintain their water systems.

In addition, Colombia boasts one of the oldest and largest multi-utilities in Latin America, Empresas Públicas de Medellín

Empresas Públicas de Medellín

Empresas Públicas de Medellín was established 55 years ago as a residential public utilities company which, initially, only served the inhabitants of Medellin, its hometown...

(EPM), created in 1955.

Efficiency

The average level of non-revenue water

Non-revenue water

Non revenue water is water that has been produced and is “lost” before it reaches the customer. Losses can be real losses or apparent losses . High levels of NRW are detrimental to the financial viability of water utilities, as well to the quality of water itself...

(physical and economic losses) in Colombia in 2006 is estimated to be 49%. This level is higher than the Latin American average (approximately 40%) and the regulatory goal of 30%. In the past, the national average of non-revenue water was estimated 40% in 2001, which is almost the same as in 1990. In the largest cities of the country, levels of non-revenue water are below the national average (40% in Bogotá, 35% in Medellín and 39% in Cali).

Tariffs

The Colombian tariff system is defined in the Ley de Servicios Públicos or Public Services Law from 1994. It is applied in public, mixed and private companies. The tariff system, which is unique in Latin America, has reached the following:

An important increase in water tariffs and water and sanitation companies’ capacity for self-financing;
Municipalities receive more financial resources for the sector;
Consequently, a significant increase in investment and in coverage;
Protection of the lower socio-economic classes through tariff differentiation.

The basic tariff is calculated on the basis of economic costs and according to a methodology defined at the national level by CRA (Law 287 of 2004). Therefore, tariffs in different municipalities do not differ due to local government’s decisions to raise tariffs or not, but only because of the different costs of the services.

In 2006, the average monthly tariff for residential customers was about US$6.80 for water supply and US$4.60 for sanitation services. The base tariff of each service provider has to be adjusted by law for different geographic areas, each assumed to correspond to a socio-economic classes, according to adjustment factors that are also specified by law. This system of area-based tariff is supposed to provide cross-subsidies from more affluent to poorer users.

Every municipality has defined geographic areas that each correspond to one of the six socio-economic classes. Class 1 represents the lowest income group while class 6 stands for the highest. As per 2007, the tariff adjustment factors are the following:

Class	Tariff adjustment factor
1	30%
2	60%
3	85%
4	100%
5	120%
6	120%

There are many more citizens who live in areas corresponding to classes 1–3 than those who live in the areas corresponding to classes 5 and 6. For example, in Bogotá 73% of the population live in zones of classes 1–3, whereas only 10% live in zones classified as 5 and 6. Consequently, the tariff system permanently causes deficits which require subsidies paid by the national government.

Between 1990 and 2001, the average tariff for water and sanitation in Colombia increased from US$0.32/m3 to US$0.81/m3, equivalent to an increase of 153%.

Investment

Between 1995 and 2003, US$3.4 billion (7,965 billion Colombian pesos) were invested in the sector, of which 16% were financed by the private sector. Since 1998, private financing increased from almost zero to become a significant share of the total investment. Furthermore, despite a drop in 2001, investment in the sector has increased since 1999.
The SSPD forecasts a total investment of US$2.2 billion (4,922 billion Colombian pesos) in the water and sanitation sector from 2007 to 2017

The Minister of Environment, Housing and Territorial Development announced in May 2008 that US$5.2 million (9.2 billion Colombian pesos) will be spent in order to facilitate the construction of facilities in areas without access to drinking water. The national government will control the destination of the resources and guarantees transparency in the whole spending process. According to the minister, Colombia should already have reached full drinking water coverage, given the past investments in the sector.

Financing

According to the ministry, the investments were mainly financed through three sources: self-financing, funding by the national government and charges for the extraction of petroleum and carbon.

A World Bank study estimates an investment of US$411m in 2004, which was financed as follows:

US$108m (26%) by companies through self-financing
US$249m (61%) by state funding through SGP
US$49m (12%) by Corporaciones Autónomas Regionales (CAR) or Regional Autonomous Corporations
US$5m (1%) by other sources

According to the report, the average annual transfers from the national government to the municipalities for water supply and sanitation (including solid waste) were about US$278m between 1998 and 2001. 86% of that funding was allocated through the SGP as defined in Law 715. A certain percentage of these resources was dedicated exclusively for water supply and sanitation. They mainly go to small municipalities that show low income levels. Nevertheless, many municipalities use funding through SGP dedicated for water supply and sanitation for other purposes.

The CAR receive property tax, electric power utilities, environmental charges for extracting water and charges for discharging waste water.

External cooperation

The main external cooperation partners for the Colombian water and sanitation sector are the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

, the Inter-American Development Bank

Inter-American Development Bank

The Inter-American Development Bank is the largest source of development financing for Latin America and the Caribbean...

(IDB) and the Andean Development Corporation (CAF).

World Bank

The World Bank supports the sector through dedicated water and sanitation projects, as well as through water and sanitation components in other, broader projects.

Dedicated water and sanitation projects:

Non-dedicated projects:

Inter-American Development Bank (IDB)

Potable Water and Sanitation Pereira

Andean Development Corporation (CAF)

CAF supports the sector through a USD 42.5 million loan to the Cesar Department in 2006 and a USD 58.1 million loan to the Empresas Aguas del Magdalena approved in 2007.

For an updated of CAF projects in the sector in Colombia see: CAF Colombia Agua

External links

Documents

Policy and regulation

Service providers

Overview

Access

Service quality

History

Centralization

Decentralization

The comprehensive new sector policy of 1994

Recent events

Responsibility for water supply and sanitation

Policy and regulation

Service provision

Urban areas

Public utilities

Private sector participation

Small towns and peri-urban areas

Rural areas

Innovative approaches

Efficiency

Tariffs

Investment

Financing

External cooperation

World Bank

Inter-American Development Bank (IDB)

Andean Development Corporation (CAF)

External links

See also