Costing Sustainable Services training explored use of life-cycle cost approach in Ethiopia

Published on: 05/06/2012

The 30 participants explored questions such as; ‘What does it cost to keep services running over time? How can we balance short-term hardware investments in new infrastructure with long-term investments that keep taps running?’ The main objectives of the training were to help participants apply the LCCA in planning and implementation of their organisation’s water, sanitation and hygiene (WASH) activities and enable participants to support local government and communities in partner districts (woredas in Ethiopia) in the use of LCCA.

Context: Sustainability in Ethiopia

The life-cycle cost approach (LCCA) is a way to examine the cost of providing sustainable water and sanitation services and it can also improve the targeting of investments. The idea is not necessarily to reduce costs but to look at how to best invest available funds to ensure sustainability of service delivery. MWA Ethiopia Coordinator, Melkamu Jaleta, explains the rationale for his request to IRC to organise training on LCCA; 'Sustainability in Ethiopia is a big issue. When you visit schemes in Ethiopia that were built five or six years ago, you will find that a lot are not functional. Our commitment as MWA is not to provide water today to our beneficiaries but to everyone and forever. Forever is very hard and that is why LCCA can help us increase the sustainability of our programmes. We really want to encourage the members of the MWA Ethiopia to use this approach.'

 

Picture: participants at the training discuss how to use LCCA (credits Melkamu Jaleta and Alemitu Golda)

Ethiopia has made considerable progress in terms of extending access to safe water supplies. The current coverage rate of water supply is around 70 per cent according to official government data of 2011. In rural areas, coverage is about 62 per cent. John Butterworth co-facilitator of the training and director of IRC’s Ethiopia country programme said 'With coverage levels increasing, Ethiopia is becoming more and more concerned about the sustainability of water service delivery. At any given time around 30 per cent of all water systems in the country are not working. One way to address issues of sustainability is to examine how funds are currently being invested in the Ethiopian water sector. This training is an opportunity to start using the learning from the WASHCost project on the financing of sustainable service delivery in a new country and with new partners. The MWA brings together some very large Non-Governmental Organisations (NGOs) such as World Vision, WaterAid and CARE. Together, the MWA partners have a lot of capacity and influence.'

Affordability

To examine the current allocation of funds in Ethiopia, participants were asked to bring any cost information that they had to the training. Most organisations had a general overview of the costs of their own projects, which mostly consist of installing new water systems and building capacity before handing these over to communities. During the training, participants realised that this was only part of the picture of planning for sustainable services. Jeske Verhoeven co-facilitator of the training remarked ‘During one of the exercises on planning, participants realised that it was unclear to them what communities needed to spend to keep systems running and who or how eventual rehabilitation was financed. If you do not know how much communities need to spend to keep the system running that you have installed, it is hard to have an idea if a community is going to be able to afford this? If you do not know how or who will finance the replacement of the water system that you have installed today, what does this say about the sustainability of the water systems that you are constructing?’

The training made participants realise they needed to have a better understanding of the total costs of water service delivery since this affects the sustainability of their projects. One of the participants, Selamawit Tariku, a Sanitation and Hygiene Officer for GG&SO Catholic in Ethiopia remarked: ‘We need to start to have more awareness on what the costs of sustainable service delivery are so we can incorporate this in the planning of new and on-going projects. A lot of schemes are not functional due to minor maintenance or are not managed properly by communities but there is no budget for support. I now realise that it is very important for the sustainability of your project to include all cost components of the life-cycle costing not just installation costs.’ Melkamu Jaleta continues: ‘One of the main things people realised during the training is that we need to start to take on board operational expenditure and rehabilitation to improve sustainability.’

Way forward

During the action planning on the last day of the training most participating organisations defined the need to create more awareness on LCCA in their own organisations and more widely in the sector. Plans were made to start identifying missing cost information on operational expenditure and rehabilitation in order to improve budgets of on-going projects and future project proposals. Another outcome of the LCCA training was the idea to use the LCCA methodology to investigate the financing of the different service delivery models that have been defined as part of the new national water policy of Ethiopia of 2011. John Butterworth, co-facilitator of the training said ‘One of the main shortcomings of this training was that all examples on the use of LCCA were from other countries. IRC would be very interested to use LCCA to examine the financing of service delivery models in Ethiopia together with partners. The participants of this training were all NGO’s and therefore only represent a part of the sector. It would be great to discuss examples of the use of LCCA in Ethiopia with the government and donors.’

For more information on LCCA or if would like to organise a LCCA training for your own organisation or consortium please contact Jeske Verhoeven at Verhoeven@irc.nl. For information on IRC activities in Ethiopia please contact John Butterworth at butterworth@irc.nl.