BE_SECURE_SOW.docx

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C.1 INTRODUCTION

This Request for Proposals Statement of Work (SOW) pertains to a new Project supported by USAID/Philippines entitled “Water Security for Resilient Economic Growth and Stability” Project (Be Secure Project). The project approach is based on water security in the Philippines through strengthened resiliency to water-related climate change impacts and increased coverage and operational sustainability of domestic water supply services in communities of need. USAID/Philippines seeks the application of innovative, cost-effective approaches to implement Government of Philippines (GPH) policy initiatives in climate change adaptation and water sector reform in targeted regions. Be Secure will take an integrated sector and geographic approach, including technical assistance at multiple scales (national, provincial, river basin, municipality, community).

C.2 BACKGROUND AND PROBLEM STATEMENTBox 1 The Three Dimensions of Water Security (adapted from the Final Report of the University of the Philippines National Institute of Geological Sciences under the MDG-F 1656: Joint Programme on Strengthening the Philippines’ Institutional Capacity to Adapt to Climate Change) Water security depends on adequate management of three interrelated dimensions linking the supply of water resources in nature, access to and control of water through the human built environment, and the demand for water resources for communities and economies. Management of extreme hydrological events cuts across these aspects.

· Physical water sources (supply) – the quality and quantity of available water resources provided by nature, including spatial and temporal availability;

· Infrastructure/Services (access and control) – the human-built facilities required to extract, store, treat, and distribute water to where it is needed for all purposes, and to manage the impacts of water resources on humans, including the hardware and software to maintain and operate services; and

· Water use (demand) – the total amount of water needed to meet human and ecosystem needs, and the level of productivity and efficiency for these end uses of water.

C.2.1 Challenges

Water security in its broadest sense is critical to enabling broad-based sustainable development [footnoteRef:2].Water of sufficient quantity and quality is an essential input to economic growth, human health, food security, and the maintenance of critical ecosystem services. While water is essential for life, it also present risks to public safety and economic development, e.g. extreme hydrological events. Achieving water security is a balancing act – between supply and demand, among diverse economic sectors, ecosystems, and communities (Box 1). [2: The definition of water security has increasingly embraced a holistic view within the international water sector in the last decade. While there is no single accepted definition of the term, most of the current discourse focuses on a few commonly shared principles: (a)access to an appropriate quantity and quality of water to ensure human security in all its dimensions (physical, economic, social, political) and for multiple sectors (domestic, agricultural, industrial); (b) ecological sustainability of the resource over time at the appropriate geographic scale, i.e., watershed/river basin/aquifer; and (c) management of water-related risks under current and future socioeconomic and climate scenarios.]

In the Philippines, national abundance of water resources masks local scarcity. At the provincial level populations and economies grow, heightening demand and competition for limited supplies of clean water. Water quality is an increasingly serious problem as well with expanding productive activities in agriculture and industry leading to significant water pollution problems, as the great majority of waste does not undergo treatment before discharge into the environment. There is considerable under-investment by the Government in sanitation and sewerage, with only seven percent of the country’s total population connected to sewer systems and highly ineffective on-site sanitation facilities in most places.[footnoteRef:3] Domestic wastewater is the main source of bacterial contamination and nutrient loading, while industrial and agricultural point and non-point source pollution add a range of other chemical and toxic contaminants. Salinity is a growing problem in areas dependent on coastal groundwater as well, primarily caused by over-abstraction of aquifers, with some water utilities and private companies already closing wells over water quality concerns. Degraded water quality presents serious direct problems for both human and ecosystem health, rendering scarce remaining freshwater resources unsafe for use by humans. The annual economic losses caused by water pollution in the Philippines have been estimated at US$1.3 billion, including impacts associated with health costs, reduced fisheries production, and adverse impacts on tourism. [footnoteRef:4] [3: World Bank. 2003. Philippines Environment Monitor: Water Quality] [4: Ibid. ]

Beyond water resource, the Philippines faces challenges in delivering water supply services for domestic and productive uses. According to Joint Monitoring Program (WHO/UNICEF 2008) statistics, 92% of the population has access to safe drinking water, up from 85% in 2002, placing the Philippines among those countries declared to have met the water and sanitation MDGs. While this is high by international standards, 6.5 million Filipinos still lack access to improved drinking water supply even by these statistics, and other national analyses point to a higher number actually underserved (e.g., there are 18 million Filipinos without access to improved water supply according to the 2008 Annual Poverty Incidence Survey). Lack of access to improved water supply is actually only slightly better in urban areas compared with rural areas (although the disparity is much greater in sanitation). Regional and income disparities play a much greater role in defining who has access, with poorer, remote, and conflict-prone parts of the country experiencing lower coverage levels, as well as rapidly growing informal peri-urban areas within cities. Water supply service providers struggle to keep pace with rapid population growth and growing industrial demand for water. Where coverage does exist, analyses from the World Bank, the WHO and GPH’s own benchmarking show that the quality of services is often low, with frequent shutoffs, intermittent supply, and water quality that does not meet national health standards. The financial and operational sustainability of utilities and independent service providers alike is generally in question, especially for smaller systems managed by communities or Local Government Units (LGUs).

Climate change is already exacerbating these water security challenges, with evidence of longer dry El Niño summer conditions, more extreme rainfall events, increasing temperatures, salinity in coastal groundwater, and shifting cyclone paths (Box 2). When the availability of water resources for productive and domestic use no longer follows historically expected patterns, the economic and social consequences can be enormous, with risks to food security, industry, tourism, and other engines of economic growth. Indeed, disasters of all types in the Philippines cost an average of P15bn per year (~$350M) in direct damages, or more than 0.5% of the national GDP – a significant portion of which is associated with climate-related hazards.[footnoteRef:5] The World Bank has identified a disproportionate emphasis on post-disaster relief and short-term preparedness, such as forecasting and evacuation, rather than land use planning, facility siting and design, and other pre-event measures that can ameliorate vulnerable conditions over the long term as part of the problem. [footnoteRef:6] Climate change projections are providing new information about the future in which anticipatory risk reduction, preparedness and awareness are even more urgent than before. [5: A detailed breakdown of costs by hazard type is not available, but XXXX will seek out disaggregated data from EMDAT database, from WB study on Tropical Storm Ondoy, and/or from http://www.preventionweb.net/english/countries/statistics/?cid=135]] [6: Natural Disaster Risk Management in the Philippines: Enhancing Poverty Alleviation through Disaster Reduction: http://siteresources.worldbank.org/INTEAPREGTOPENVIRONMENT/Resources/PH_Disaster_Risk_Mgmt.pdf] Box 2 A Climate Wake Up Call in Mindanao Tropical storm Sendong (International name “Washi”) was not a particularly strong storm, but in December 2011, it brought a record-breaking 184mm of rainfall in just 24 hours to Cagayan de Oro in Mindanao, washing out settlement areas, destroying the city’s main piped water source, and resulting in more than 1,200 deaths. Flood warnings were issued but they were not heeded by local residents who believed they were safe because cyclone tracks in this area historically had changed course and headed north. The disaster in Cagayan de Oro is emblematic of the risks associated with climate change, wherein populations are ill prepared for more intense, frequent, or shifted hazards, like Sendong’s intense rains, associated flooding, and shifted course.

Though tragic, this experience presents a good opportunity to leverage the attention on issues of short-term disaster preparedness to improve overall resiliency to longer term climate change impacts throughout the Philippines.

In all cases, water security related to either the resource itself or the provision of water-related services remains elusive in the Philippines because of a series of underlying issues related to the enabling environment, institutional framework, governance processes, and technical capacity of public and private actors. Challenges include fragmented governance and an unclear institutional framework, inadequate regulatory controls and enforcement, weak capacity at the decentralized level for water management or service delivery, inadequate processes for stakeholder engagement in water sector planning and investment decision-making, lack of access to financing for investments in water supply development and distribution systems, and poorly collected, analyzed and shared water data. In all these, the predicted impacts of climate variability remains poorly understood making the first step to adaptation more challenging.

C.2.2 Current Efforts to Address Water Security

C.2.2.1 Government of the Philippines

Faced with this set of intersecting challenges, the Government of the Philippines (GPH) has undertaken a broad range of initiatives in the water sector (water resources management and water services delivery), climate change adaptation, and disaster risk reduction (DRR), the details of which are summarized in Attachment 2. In general, these efforts demonstrate that there has been considerable progress in developing overarching national policies and strategic frameworks in all three sectors. Work remains to translate these general documents into actionable plans leading to reforms in laws or institutional roles and responsibilities, and on the ground implementation.

C.2.2.2 US Government

For many years, USAID/Philippines and other agencies within the US government have been actively engaged in numerous development activities relevant to the Be Secure Project. The new Project will build on the important groundwork laid by these efforts. Some of the major ongoing activities in water supply and sanitation and disaster response and risk mitigation are described in Attachment 3, and summarized in Table 1 below:[footnoteRef:7] [7: To date, USAID/Philippines has not had a specific programmatic focus on either climate change resiliency or water resources management, although several programs have included selected elements that contribute to building water security through enhanced resilience and ecosystem sustainability. ]

Table 1 Sectors of USG Investment in WASH, Water Resources, and Climate Change Adaptation

USAID

X

Philippine Sanitation Alliance

X

Alliance for Mindanao Off-Grid Renewable Energy (AMORE)

X

X

Growth With Equity in Mindanao (GEM 3)

X

X

Development Grants Program (DGP)

X

X

C.2.2.3 Other Donors Other donors are active in the water sector (WASH and water resources management) and, increasingly, in the arena of climate change adaptation. The Be Secure Project will actively engage donors during Project implementation to maximize donor coordination. Table 2 summarizes the general areas of intervention of other major donors in each of the Be Secure Project’s focus programming sectors. More detailed information on recent and ongoing efforts is provided in Attachment 2.

Table 2 Sectors of Donor Investment in WASH, Water Resources, and Climate Change Adaptation* (Grants and Loans)

Multilateral Donors

IAEA

X

UN Agencies

UNICEF

X

X

X

Bilateral Donors

KOIKA

X

X

Spanish Cooperation

AusAID

X

X

* Information is based on a combination of donor self-reporting as of February 2012, and may not be complete.

C.2.3 Linkages to USAID Strategic Context

The U.S. Government’s overall goal is to see the Philippines become a more stable, prosperous, and well-governed nation. Be Secure contributes directly to this goal by ensuring water security in the country’s growth centers to sustain economic progress. In particular, this Project will complement USAID/Philippines Cities Development Initiatives that aims to promote the growth of cities that have the potential to take off and enable the Philippines achieve the goal of moving from a low growth path to a higher, sustained and more inclusive growth trajectory. Likewise, improving access to basic services in conflict affected areas supports stability and economic prosperity

Efforts to reduce impacts of climate-related disasters will also sustain economic gains to the extent that local investment planning takes into consideration climate variability and long-term water security. Also, increasing access to and improving the sustainability and resiliency of WASH services has clear positive impacts on human health by reducing the incidence of diarrheal disease, and enabling better and more consistent hygiene behaviors. Similarly, disaster risk reduction and increased climate resiliency of the Philippine economy and communities has a significant payoff in avoided health care costs over time.

Further, the Be Secure Project aligns with broader Agency priorities in both the climate change and water sectors:

Climate Change Adaptation The objective of USAID’s climate change adaptation programming is to assist developing countries in reducing the vulnerability of human and natural systems to the impacts of climate change to ensure a more secure and sustainable future. The three types of priority activities identified for USAID adaptation Projects relate to:

· Strengthened information and analysis to inform decision-making in areas sensitive to weather and climate;

· Improved governance and planning to address climate-related risks to development; and

· Piloting, implementation and evaluation of adaptation strategies.

The Be Secure Project is fully consistent with the USAID Climate Change Strategy, and will include some activities in each of these categories.

Water USAID is developing an official Water Strategy that should be released in 2012 which highlights important priorities in the sector, including support to and alignment with the three Presidential Initiatives of Global Health, Food Security, and Climate Change. The Be Secure Project’s integrated approach to water security is fully consistent with the Agency‘s emerging strategic direction in the sector. Within WASH, for example, the strategy emphasizes water services financial and operational sustainability, and within water resources management, there is an identified focus on climate resiliency in the management of water resources for all human and ecosystem needs.

C.3 PROGRAM TECHNICAL APPROACH

C.3.1 Rationale

The Philippines faces significant challenges in all dimensions of water security as well as in their interaction. In order for the Philippines to achieve resilient and sustainable water security, however, all three of these elements must be managed and a balance among them maintained while taking climate change into account. The level of human demand for water cannot exceed the amount of renewable water available in nature over the long term, and allocations across sectors and over time must begin to reflect this. The investment in infrastructure and services in response to water variability of physical water resources must be appropriate to effectively manage supply risks to human communities and economies associated with hydrologic variability (both too much or too little). Infrastructure planning likewise needs to be in balance with expected demands for water for different purposes, and end users of water need to adjust behaviors and technical approaches to reflect the level of water access that is feasible and economic.

Behind each of these challenges in the Philippines context are numerous factors – including some larger exogenous forces as well as several more direct drivers. The Project will strategically focus on a select number of target drivers that are in the more direct control of governments, communities, civil society, and the private sector. These drivers present real opportunities for USAID investment and collaborative action (including poor access to sustainable services as well as exposure to climate-related hazards, sensitivity to impacts, and limited capacity to adapt). Figure 1 graphically summarizes these relationships and presents the Theory of Change or development hypothesis underlying the Be Secure Project, including the specific entry points for USAID investment and action.

Figure 1 The Be Secure Project Theory of Change or = influence of contextual drivers on components of water security = focus areas of the Be Secure Project

Population Growth and Demographic Shifts Natural Geophysical and Meteorological Conditions Growing Climate Change Stress

Economic Growth Contextual (External) Drivers (outside manageable interest of the Water Secure Project)

C.3.2 Program ObjectivesComponents of Water Security

Human Water Use (Demand) Physical Water Resource (Supply) Infrastructure and Services (Access and Control)

Desired Ends

Water Security Sustainability Resiliency Direct Drivers (focus of the Water Secure Project) Enabling environment (including policy framework, regulatory regime, governance processes, financing)

Institutional framework and capacity

Management, operations and maintenance capacity

Data and information for decision-making Human water management behavior

The overall objective of the Be Secure Project is to improve water security for resilient economic growth and stability in the Philippines. This will be achieved through two interrelated components – one focusing on sustainable water supply and wastewater treatment service delivery, and the other focusing on increased resilience to climate-related water stress and hydrologic extremes. As mentioned above, the sub-Intermediate Results for each IR are focused on enabling environment, technical and institutional capacity, good governance, and local risk reduction.

The Results Framework for the Project is presented in Figure 2, outlining the two Intermediate Results, a series of sub-Intermediate Results, and the principal level(s) of intervention for each (national, subnational, or community).

Figure 2 The Be Secure Project Results FrameworkSub-IR 1.1. Strengthened enabling environment for sustainable water supply and wastewater treatment service delivery (N, C) Sub-IR 1.2. Strengthened water supply and wastewater treatment service providers for sustainable service delivery (R, C) Sub-IR 2.1. Strengthened water and climate data collection, analysis, and communication (N, R, C) OBJECTIVE: Water security improved for resilient economic growth and stability Sub-IR 2.2. Reduced hydrological risks at sub-national level (R, C) Intermediate Result 1: Increased sustainable access to water supply and sanitation services Intermediate Result 2: Increased resilience to climate-related water stress and hydrological extremes Sub-IR 2.3. Improved capacity for long-term water security at sub-national level (R) Level(s) of Intervention:

N = national (including central government or other country-wide efforts with broad reach) R = regional (sub-national) (including regional or provincial political jurisdictions, formal river basin/sub-basin/watershed institutions, and/or clusters of continuous municipalities or provinces in those watersheds) C = community (including city, municipality, small town, rural village or barangay levels)

C.3.3 Target Geographic Regions

The Be Secure Project will carry out activities at multiple geographic scales. Some interventions will occur at the national level, including those relating to the enabling policy or legal environment for WASH, water resources management and/or climate change adaptation. These activities will have broad-ranging impacts, affecting all of the Philippines. Other components of the Project will be site-based, working at the regional and local scales to achieve results.

For regional- and community-based activities, the Be Secure Project will work with the appropriate local government unit (i.e, cities/municipalities and/or province) as lead implementing agencies and attempt to the greatest extent possible to work on issues at watershed scale. Five priority watersheds have been identified for the Be Secure Project and are part of larger river basins, all of which are priorities by the GPH. [footnoteRef:8] The selection of key sites was based on an analysis of criteria including: access to and sustainability of water supply services; water resources stress; vulnerability to climate change impacts; and complementarity with USAID programs and GPH priorities, especially related to U.S. Partnership for Growth focus cities and ARMM peace and stability priority areas. [8: The GPH has identified 18 priority river basins in which to focus initial Integrated Water Resources Management (IWRM)and river basin based planning and action. ]

The mix of interventions in each watershed will vary depending on the relative importance of sustainable water services and long-term water security in each region. Table 3 summarizes the corresponding areas of programming emphasis expected for each site. Offerors shall bear in mind that within objectives the nature of activities shall reflect the different contexts of each location, e.g. water and wastewater treatment services efforts in sites 1 and 2 shall focus on larger scale financing and utility reform while water supply interventions in sites 4 and 5 shall focus on strengthening of generally smaller systems. Figure 3 illustrates the major river basin in which the key cities/municipalities, of interest are situated. In their proposals, Offerors should further refine the boundaries of each area in which they propose to work, especially with respect to the watershed areas.

Figure 3

Western Visayas

Misamis Oriental River Basin:

Cagayan de Oro

X

Maguindanao*

Basilan* n/a

X

The Be Secure Project Geographic Priorities and Programming Focus

** Climate change considerations will be integrated into the planning and design of water supply infrastructure and services in Cotabato City.

Figure 3 The Be Secure Project Geographic Priorities (by river basin/watershed location) (subwatershed boundaries are shown in inset boxes)

C.3.4 Program Funding Sources

To accomplish these objectives, the Be Secure Project brings together two sources of USAID funding, (a) Water Earmark, and (b) Climate Change Initiative Adaptation funds. Each funding source has specific requirements associated with it, which are described in detail in Attachment 5.

Within the total $20 million Be Secure Project budget, approximately $13 million is funded from the Global Climate Change Initiative’s Adaptation pillar, and approximately $7 million from water earmark funding (Program element 54 under Program sub-element 3.1.8). While all water earmark funds are more narrowly defined and must be directed to IR 1 activities, Climate Change Adaptation is a more cross-cutting dimension of water security, so that a small proportion of these funds may be devoted to specific climate change adaptation tasks in both sub-IRs of IR 1 if necessary, in addition to fully funding all activities under IR 2. Table 4 summarizes the approximate distribution of overall Project funding by IR and sub-IR, and across the two funding sources.

Table 4 Notional Funding Levels by Intermediate Result

Approximate Percentage of Total Budget

(under PE* 86) Water Earmark Funding (in $M) (under PE 54) Total by Sub-IR (in $M)

IR 1

IR 2

C.3.5 Expected Outcomes

The successful implementation of the 4-year Be Secure Project will produce the following outcomes:

1. Increased access to improved water supply and wastewater services

1. Reduced hydrological risks and climate change vulnerability at the sub-national level

1. Strengthened enabling environment for sustainable water and wastewater service delivery

1. Strengthened analysis, communication and use of water resources and climate data The above outcomes shall be measured by the following Agency standard indicators through these targets:

· 1.5 million people with access to improved drinking water supply as a result of USG assistance, at least 500,000 of whom will be from communities in conflict-affected areas in Mindanao

· 50 stakeholder groups with increased capacity to adapt to the negative impacts of climate change as a result of USG assistance

In addition to the USAID standard indicators, the above stated outcomes will also be measured by the following indicators:

· Number of people in target areas with access to improved drinking water supply as a result of USG assistance.

• Number of people in target areas with access to improved sanitation facilities as a result of

· USG assistance.

· Stakeholder satisfaction of information provided by PAG-ASA Regional Offices

· Change from baseline in risk to hydrological disasters at the Local Government Unit level

· Number of water and sanitation reform policies adopted by GPH

The table below summarizes the intermediate and sub-intermediate results and the desired outcomes that will be measured by standard and customized indicators:

Table 5 Intermediate Results and Indicators

Standard Indicators Other Indicators

IR 1

IR 1. Increased Sustainable access to water supply and sanitation services

1.5 million people with access to improved drinking water supply as a result of USG assistance, 400,000 of which will be from communities in conflict-affected areas in Mindanao

Sub-IR 1.1 Strengthened enabling environment for sustainable water service delivery

Number of water and sanitation reform policies adopted by GPH

Sub-IR 1.2 Strengthened water supply and wastewater service providers for sustainable service delivery

1) Number of people in target areas with access to improved drinking water supply as a result of USG assistance.

2) Number of people in target areas with access to improved sanitation facilities as a result of USG assistance.

IR 2

IR 2.1 Strengthened analysis, communication and use of water and climate data

Stakeholder satisfaction of information provided by PAG-ASA Regional Offices

IR 2.2 Increased resilience to climate-related water stress and hydrological extremes

Change from baseline in risk to hydrological disasters at the Local Government Unit level

IR 2.3 Improved capacity for long-term water security

C.3.6 Program Components As described above, the Be Secure Project will focus on two major Intermediate Results areas that together help support water security in selected sites in the Philippines. For each of these results, and series of results and tasks has been identified, described in more detail in Section C.3.7. The sub-IRs and Tasks for IR 1 and 2 are summarized as follows:

Intermediate Result 1: Increased sustainable access to water supply and sanitation services Sub-IR 1.1 Strengthened enabling environment for sustainable water service delivery Task 1.1.1: Strengthen government accountability for sustainable water services and water security Task 1.1.2: Strengthen regulatory framework for sustainable water services and water security Task 1.1.3: Mobilize financing for sustainable water supply and wastewater service delivery Task 1.1.4: Strengthen data and information management on water supply sector performance

Sub-IR 1.2 Strengthened water supply and wastewater service providers for sustainable service delivery Task 1.2.1: Increase capacity of water service providers for sustainable water and wastewater services Task 1.2.2: Introduction of integrated water and wastewater service delivery models at the watershed scale Task 1.2.3: Increase water supply and wastewater service provider capacity in disaster risk reduction and climate change adaptation

Intermediate Result 2: Increased resilience to climate-related water stress and hydrological extremes

Sub-IR 2.1 Strengthened analysis, communication and use of water resources and climate data Task 2.1.1: Improve analysis and sharing of water resources and climate data Task 2.1.2: Improve capacity of decision-makers to utilize water and climate data Sub-IR 2.2 Reduced hydrological risks and improved near term adaptation at the sub-national level Task 2.2.1: Improve understanding of areas at risk to climate-related stresses Task 2.2.2: Improve climate change and DRR inputs to planning at provincial or municipal scales Task 2.2.3: Reduce risks associated with impacts of hydrological extreme events Sub-IR 2.3 Improved capacity for long-term water resources security Task 2.3.1 Improve understanding of long term water security issues and options and mainstreaming of IWRM into water supply and wastewater treatment services, policy, planning and investment Task 2.3.2: Increase public awareness and support for sustainable use and consumption of water resources

C.3.7 Program Tasks

The Be Secure Project Objective:

Water security improved for resilient economic growth and stability

IR 1 Increased sustainable access to water supply and wastewater services

To support IR 1, the Be Secure Project shall undertake a series of activities that address sector reform in the national enabling environment, as well as in the provision of sustainable services at the local scale. To strengthen water security, activities under this IR must take a systemic and catalytic approach to addressing challenges within the entire value chain of water supply service provision, all the way from the source water supplying domestic water systems to the sustainable operations of the services themselves. The focus of attention will not be on building new facilities or directly delivering services with USAID funding, but rather on strengthening the institutional structure, governance, management, regulation, and operation of water service providers and the government agencies that support them in a way that catalyzes larger financial flows, and ensures the viability of high quality services over time.

Sanitation will not be a primary focus of the Be Secure Project, except in some cross-cutting activities at the national enabling environment scale, or as part of broad general water security and resiliency planning at the site-based scale, including at sites 1 and 2, which will be among the menu of interventions in ensuring water security given the high level of contamination of groundwater and other water sources in these areas.

Institutions at the national, regional, and local level shall be targeted under IR1. Key counterparts will include GPH agencies, LGUs, and service providers (public and private). While there are Level I water service providers that may need assistance, this Project shall primarily focus on Level III utilities in the urban areas of the program’s focus geographic sites, and Level II service providers in smaller towns and rural areas in target watersheds, especially in ARMM.[footnoteRef:9] [9: Level I system refers to a protected well or a developed spring with an outlet but without a distribution system. Level II system consists of a source, a reservoir, a piped distribution network, and communal faucets, generally suited for rural and urban fringe areas where houses are clustered densely. Level III system is composed of a source, a reservoir, a piped distribution network, and household taps; and is generally suited for densely populated urban areas. (DILG WATSAN, 2003)]

Sub-IR 1.1 Strengthened enabling environment for sustainable water service delivery

Task 1.1.1: Strengthen government accountability for sustainable water services and water security At the heart of inadequate service access and sustainability are problems of weak governance, fragmented institutions, and responsibility for providing universal water service coverage scattered across many different institutions. In the Philippines, there are proposals at the Executive Department and pending legislation in Congress that attempt to address these issues; some in a comprehensive manner, others in a more targeted fashion. With these efforts underway, the Project shall actively support the clear delineation of institutional roles, assignment of responsibilities, and authorities to perform various functions and meet responsibilities to public service delivery. Engagement with civil society shall also be promoted to track and advocate for more accountability of government officials in all aspects of the water sector performance. Efforts under this task should also help enhance coordination across different functional arms of the government to maximize efficiency and synergy.

Implementation under this task shall support the following desired results:

· Institutional roles clarified and revised responsibilities adopted for water supply and sanitation services

· Increased Government accountability to the public on issues related to sustainable water services and water security

Task 1.1.2: Strengthen regulatory framework for water service delivery and wastewater treatment service delivery and water security Achieving sustainable water supply and wastewater treatment service delivery in the context of overall water security requires the existence of a clear, independent, and transparent regulatory environment. In the arena of water supply delivery there are several important regulatory issues still pending in the Philippines, including those related to economic regulation. The Be Secure Project shall directly support on-going efforts to define and establish the appropriate regulatory model and initiate activities that strengthen the regulator. The Project shall also build upon efforts towards establishing industry standards for water supply and wastewater services and refine them for effective regulation.

Equitable, transparent, and sustainable allocation of water rights, water quality and potable water availability dictate the ability of utilities and other water service providers to deliver sustainable services over time to meet increasing needs for water. While critically important, the issue of water resource regulation goes beyond the water supply sector. Be Secure will therefore not seek to address this entirely but initiate activities that integrates improved water resource use, allocation and protection into the over-all regulatory reform effort

Implementation under this task shall support the following desired results:

· Laws and regulations developed, passed and adopted to create an independent regulatory authority for water, both economic and resource, supply and sanitation service delivery.

· Capacity of regulator increased to respond to stakeholder needs, including regulatory enforcement.

Task 1.1.3: Mobilized financing for sustainable water supply service delivery Lack of financing in the Philippines water sector remains one of the most important constraints to achieving total service coverage in the country, and to ensuring that services which are delivered remain sustainable over the long term. While government investment in the sector has increased in recent years, with a particular focus on bringing coverage to ‘waterless’ communities, there is still an enormous gap, estimated to be $400 million annually, between the levels of funding needed to address the existing and future costs of full coverage in urban and rural settings and the amount committed to in national budgets. Investment from the private sector or private capital markets remains limited, in large part due to regulatory incoherence.

Most of the barriers to catalyzing additional financial flows for water supply service delivery are legal, regulatory, or institutional. Many of the enabling environment reforms described in Task 1.1.2 are explicitly related to economic factors, and will facilitate resolution of the financing challenges facing service providers. While policy reforms are critical to sustain the flow of private financing for water and sanitation projects, the Be Secure Project will focus on building on existing relationships in the sector, including through:

· the Department of Public Works and Highways (DPWH);

· the Department of Interior and Local Government (DILG);

· the Local Government Unit Guarantee Corporation (LGUGC);

· the Banker’s Association of the Philippines;

· the Asian Development Bank; and

· large Water Districts that have previously accessed private capital (typically debt).

In addition, Be Secure will continue to support the utilization of the Development Credit Authority (DCA) Credit Guarantee with the LGU Guarantee Corporation.

Implementation under this task shall support the following desired results:

· Increased access to private financing expanded for water supply service providers and users;

· Increased access to credit for Level I and Level II water service providers in Project sites, including LGUs, cooperatives, communities, and small private sector providers;

· GPH policy on public and private sector investment that supports universal coverage beyond level I and level II systems.

Task 1.1.4: Strengthened data and information management on water supply sector performance Accurate, timely, and standardized data about performance is essential for sector-wide planning at the national and sub-national scales, and an essential enabler of water sector reform and good governance. Currently, however, there is a lack of comprehensive information about water supply service provider performance in the Philippines, and no systematic way to collect, manage, and continuously update existing databases. The lack of rigorous information constrains the ability of sector reformers to understand performance patterns of different levels of water supply service providers, and in gaining insights into the underlying structural causes for failures in performance and sustainability. Low-quality information impedes effective national regulatory oversight and private sector financial due diligence, resulting in mixed signals to investors and regulators in establishing effective incentives and/or sanctions to stimulate overall sector performance.

The Be Secure Project will work with appropriate GPH agencies to improve existing national water supply data platform by building on the current reporting and benchmarking protocols for the sector. This platform shall focus on making data available to support sector planning, development of investment strategies, enforcing regulatory standards and other uses that ultimately contribute to sector improvement. USAID’s investment will go beyond previous efforts by paying particular attention to building tools and approaches for the integration of systematic data collection and management at all scales.

Implementation under this task shall support the following desired results:

· A national information system for water service provider performance and sustainability monitoring and benchmarking system in place, customized for different levels of service provider.

Sub-IR 1.2 Increased access to, quality and sustainability of water supply services delivered at the local scale

While a reformed enabling environment provides the essential foundation to achieve full coverage of sustainable water supply services throughout the Philippines, ultimately the delivery of services is a local responsibility carried out through the combined efforts of local governments, communities, and water sector providers of all types. Activities under Sub-IR 1.2 will focus at this scale, targeting the specific priority sub-basins and communities identified above to support increased access to improved water supply services, and their improved quality and sustainability.[footnoteRef:10] [10: As mentioned in Section C.3.4, Sub-IR 1.2 work will be carried out in four of the five priority sub-basins of the project. ]

Several dimensions of service delivery improvement will be undertaken under this Sub-IR, addressing key challenges identified both at the level of the service provider itself, as well as at the intersection of drinking water supply system operations and the broader context of overall water security. All levels and types of services will be included in this work, ranging from larger, complex utilizes in the medium-sized cities, to independent community run services in more remote settings. Innovative models of technical support to weaker service providers to achieve improved performance and sustainability will be promoted, both directly through the Be Secure Project activities, as well as broader capacity building and mentoring of local water supply and sanitation implementing organizations.

A significant amount of the community-based work for Sub-IR 1.2 will occur in ARMM, where conflict situations complicate development programming from time to time. Provision of basic services like water supply in these contexts must be done with great care, including sensitivity to the unanticipated negative consequences of providing services to selected communities in areas where benefits are seen to disproportionately accrue to one group over another. The Be Secure Project shall ensure that implementation strategies will include a ‘Do No Harm’ approach and conflict sensitivity will be reflected in the work planning process for these areas.

Task 1.2.1: Increased capacity of water service providers for sustainable service delivery Significant attention must be paid to strengthening capacity of service providers, especially among smaller system operators including LGUs, cooperatives, communities, and independent private providers. Even among larger and more sophisticated utilities in towns and cities (e.g., in target geographic sites 1 and 2), strategic, technical, and financial capacity issues are the most common concerns expressed by government and operators alike. The current capability gaps among Level I, II, and III service providers are enormous, spanning a wide range of technical and managerial skill areas, including but not limited to: non-revenue water management; drinking water quality and treatment; strategic business planning; water and disaster risk management; energy efficiency; financial management; and sanitation and environmental protection. These capacity issues are a reflection of overall sector weakness and inefficiency that are linked to the overall reform agenda outlined under Sub-IR 1.1.

The Be Secure Project shall work with the GPH, and selected water districts, LGUs, and other water service providers to increase the capability in planning, financing, operations, and maintenance of water services and in selected sites (sites 1 and 2) wastewater services. With the end goal of increasing water supply and wastewater service coverage and improved wastewater services, the Project shall engage water service providers to develop business plans to increase coverage and deliver water that will serve a wider population of domestic and institutional users.

Implementation under this task shall support the following desired results:

· Service providers in target Project geographic areas with increased capacity to perform and provide sustainable water and sanitation services over time

· Increased coverage and/or improved water supply and wastewater service in target Project geographic areas;

· ARMM-specific information on water service delivery developed; and

· Sustainable water systems installed in selected rural health units, schools, and hospitals in focus sites in ARMM.

Task 1.2.2: Introduction of integrated water service delivery models at the watershed scale as a platform for ensuring water security The Philippines water supply service sector is characterized by a relatively small tier of high performing utilities and water districts, and more than a thousand systems operated by weaker water districts, LGUs, community water associations, cooperatives, or small private providers that are viewed by many as not currently providing a satisfactory level of services, or operating on a sustainable basis. Internationally, there are many models of effective clustering of smaller systems into single, unified service districts, whether or not the systems maintain any direct physical connection.

A recent study supported by WSP has taken an initial look at current experiences of integration of water districts in the Philippines, examining drivers, cost structures, and performance issues.[footnoteRef:11] This study found that certain motivating factors, including water resource constraints, access to financing, or strong local political will at the provincial and/or municipal level were the strongest motivators for consolidation. However, some of the particular examples included challenges such as political interference, poor service levels, and high marginal costs that impede widespread adoption of reform. Additional challenges include water quality management, such as point and non-point source pollution prevention and control, groundwater/aquifer protection and management, and water safety planning and implementation. A key element of integrated water service delivery is strengthening data and information gathering, analysis, management, and access to inform cooperative decision-making regarding allocation and sustainable use of trans-boundary water resources, typically at the provincial level. [11: The Water and Sanitation Program (WSP) is a multi-donor partnership administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services. The study referred to is the Economic Assessment of Sanitation Interventions in the Philippines: http://www.wsp.org/sites/wsp.org/files/publications/WSP-ESI-assessment-Philippines.pdf]

Consistent with overall Project goals to increase water security in its broadest sense, the initial pilots for integration shall include service providers that face operational sustainability problems, face water resource stress, and those water service providers with opportunities for partnership or consolidation.

Implementation under this task shall support the following desired results:

· At least three integrated service delivery models piloted in the target geographic areas; and

· Facilitation/development of legal agreements for the joint management of trans-boundary water resources.

Task 1.2.3: Increased water supply and wastewater service provider capacity in disaster risk reduction and climate change adaptation A key cross-cutting stressor on water security is climate variability. Despite its importance, building resiliency to the impacts of a changing climate on domestic water supply service delivery in the Philippines has received relatively little attention to date, and is far from being mainstreamed into standard practice in planning, designing, financing, and operating services at the local level.