Egypt Sustainable Rural Sanitation Services (SSRS) Program for Results (PforR)
Innovative Governance Solutions to Enhance Sustainability of Service Delivery
By Norhan Sadik, Osama Hamad, Yogita Mumssen, Fadel Ndaw and Rama Krishnan Venkateswaran
Photo Credit: ESRISS Project
The Government of Egypt (GoE) launched the National Rural Sanitation Program (NRSP) in 2014 as a Presidential priority program to address the challenge of critically low sanitation coverage levels in particular in the Nile Delta area with huge health impacts on the poorest population: only 12 percent of rural Egypt currently has access to the sewage network. As one of the key partners of the GoE in the rural sanitation sector, the Bank is working to support the GoE to achieve its development priority to increase access to improved sanitation services - yet now with a different approach. Given the marked weak sector performance to date, including for example severe implementation delays of infrastructure construction lasting up to thirty years in some cases, the announcement of the NRSP was seen by the Bank as a real opportunity for the sector to move from an inefficient centralized approach to more decentralized service delivery.
While the traditional focus in the sector was on investments through Investment Project Financing, the Program for Results (PforR) instrument was considered the most appropriate instrument that would allow the Bank to support the GoE improve the design and implementation of the NRSP using country systems and, by directly linking the achievement of results to the disbursement of Bank funds, incentivize implementation of long-stalled institutional improvements essential for improved sanitation service delivery. The SSRS PforR was designed by drawing on the wealth of experience obtained from previous operations in the rural sanitation sector which suffered from slow project initiation and implementation as well as high costs. The PforR adopts an approach that seeks to build more sustainable and accountable service -providers through the implementation of innovative governance measures that will lead to the achievement of the three Program results areas: (i) improved sanitation access, (ii) improved operational systems and practices of WSCs, and (iii) strengthened national sector framework.
The separation of institutional roles and responsibilities for investment planning and construction from operation and maintenance has been a major contributor to the sector’s poor performance. The Program, therefore, follows the Government’s strategic choice to shift from a centralized model of service delivery to a decentralized model that empowers the local Water and Sanitation Companies (WSCs) to improve service provision by placing responsibility for investment planning and operation and maintenance with the WSCs. Whereas previously, the WSCs were institutionally beholden to central level organizations, under the Program, three Delta WSCs (Beheira, Dakahlia and Sharkeya) will assume full implementation responsibility from investment planning to implementation and operation and maintenance. Accordingly, the Program is centered on empowering the WSCs since they are the service delivery entities closest to the beneficiaries and as such are best suited to respond to citizens’ demands. The Program provides significant capacity building support to the WSCs in addition to training of the technical staff engaged in operation and maintenance. In this regard, the Water and Sanitation Program (WSP) administered by the World Bank will complement the PforR with an initial USD 3.5 million programmatic technical support program to strengthen the capacity of the Program implementing entities particularly the WSCs as they work to deliver improved sanitation services.
As part of these institutional reforms, the Government is for the first time implementing a system of Performance Based Capital Grants (PBCGs) through the Program. These will provide transparent and predictable financing to WSCs, enabling them to address their service delivery responsibilities effectively. Disbursement of the PBCGs are linked to an incentive-based regime of Annual Performance Assessments (APAs) that will be designed and implemented in a transparent manner. The APAs will assess the institutional performance of WSCs specifically in the Operational, Financial, Institutional, and Citizen Engagement dimensions of water and sanitation service delivery. Achieving the mandated threshold scores will enable the WSCs to be eligible and to receive the PBCG. A base grant entitlement will be provided to the WSCs based on their ability to meet a predetermined threshold and additional grant entitlements will be provided to the WSCs if they exceed a set threshold, thus rewarding better performance. To allow the WSCs to deliver on their annual performance targets stipulated in the APAs, they will receive technical support embodied in Performance Improvement Action Plans, similar to business plans, and would include measures to improve each WSC across the four areas of service delivery.
Accountability to citizens for greater voice and inclusion form a critical pillar of the Program. Citizen engagement through citizen report cards/ beneficiary feedback surveys, Grievance Redress Mechanisms, awareness campaigns, community outreach guidelines, and strengthened communications systems of WSCs, as well as the development of a strategy for serving the poor, are all incorporated in to the Program either through results-based incentives, required measures (e.g. covenants), or through capacity building programs. Overall, an important framework has been embedded in the operation to leverage client feedback, make WSCs performance and responsiveness information publically available to clients, the strengthen role of the regulator and independent verification underpinning these processes.
The Program also supports a number of policy and regulatory initiatives to provide a strong enabling framework for empowering the WSCs to become efficient and accountable service delivery institutions, including the strengthening of the capacity and role of the Egyptian Water and Wastewater Regulatory Agency (EWRA). Further, a new water and wastewater tariff is to be developed by the Ministry of Housing, Utilities and Urban Communities (MHUUC) in order to enhance financial sustainability of the sector. The MHUUC is also developing an updated national rural sanitation strategy that is consistent with the NRSP and the SSRS PforR, which will clarify the existing overlap of institutional roles and responsibilities that are currently deterring clear intuitional accountabilities.
Thus the SSRS Program contrasts with previous sector operations and reform efforts in several critical ways. It seeks to implement a unified approach that comprises decentralized services, utility reform, financial sustainability, and performance enhancement through the creation of incentives for investment and through strengthened accountability mechanisms including enhanced citizen engagement, and strengthened regulation, policy and institutions. This combination of incentives and accountability mechanisms embodied in the SSRS PforR are designed to address the previous project implementation challenges that have impeded the achievement of increased access to sustainable sanitation services for Egypt’s rural communities. Although many of the abovementioned aspects are to be implemented for the first time in Egypt, the Government is strongly committed to implementing the necessary institutional improvements, with the capacity building and institutional strengthening support from the Bank.
The Program is also unique in the way it was prepared. Unlike previous sector operations where task teams were comprised almost entirely of sector specialists, the SSRS was prepared through a collaborative effort between the Water and Governance practices. This approach of addressing a development challenge by bringing together skills and experience from two practice areas within the Bank. The task team brought together the technical and operational experience of the Water practice and the institutional development and public sector reform experience of the Governance practice to create a solution that was innovative and integrative.
Key Lessons Learned:
1. The Program adopted an innovative design that incentivized institutional performance and accountability and linked financing to service delivery results while piloting a more decentralized approach.
2. The task team for the preparation of the operation brought together Water and Governance specialists that resulted in the institutional development focus of the Program. The ability of the team to take a broad based approach instead of a siloed approach was instrumental in creating a seamless operational design for the operation.
3. The use of the PforR instrument enabled the Government and the Bank team to focus attention on results instead of getting bogged down on rules and procedures.