To address the objectives of this thematic window within the context of BH, the proposed joint program must focus on 3 levels of stakeholders: the rights holders (the citizenry), the service providers (utilities), and the duty-bearers (governments). The general problems in the area of water supply require a program addressing the issues of public participation in decision making, capacities, and monitoring and analysing data at multiple levels. The following 3 objectives are designed to achieve this necessary synergy: 1. to improve the inclusion of citizens in decision-making processes; 2. to improve the economic governance of water utilities while sensitizing consumers to pay their bills; and 3. to increase the capacities of governments for evidence-based policy making and resource planning. The expected benefits will contribute to the achievement of BH UNDAF Outcome 2, “Improved access to and quality of basic education,health and social protection services”, and MDGs 1, 4,5,6 and 7.
Sustained economic growth, human development, and environmental integrity depend on the existence of a water system that delivers water services: (1) reliably over the long-term, (2) efficiently, (3) safely (i.e. with proper testing for contamination), and (4) to all citizens. BiH’s water system satisfies none of these criteria. Furthermore, according to the 2006 UNDP Human Development Report, lack of access to safe drinking water and sanitation constitutes a barrier to achieving several Millennium Development Goals. The water supply and sewerage system in Bosnia and Herzegovina is unsustainable over the long-term, it is characterized by gross inefficiencies, does not have the requisite controls in place to ensure that the water is uncontaminated, and does not reach the entire population. The causes of these problems are many. The long-term reliability of water service delivery is in jeopardy due to two related problems: financial and physical unsustainability. The former is caused by enormous quantities of non-revenue water (treated water that cannot be traced and charged due to leakage, illegal household connections, defective meters etc.), an inability to satisfy total demand due to incomplete coverage, and insufficient fee collection levels largely due to evasion, limited enforcement options for dealing with free riders, and flawed billing systems. In turn, this lack of funds leads to insufficient annual maintenance capital expenditures, which leads to deterioration of the capital infrastructure, further non-revenue water loss, and revenue declines from reduced water delivery volumes. Although water companies are subsidized by their associated municipalities (the level at which jurisdiction over water supply and sewerage service distribution lies; there is no centralized regulation) these subsidies are insufficient to cover losses and minimum maintenance capital expenditure requirements. The lack of efficiency stems from poor physical infrastructure and insufficient management and administrative capacities in both the water utility companies and their associated municipalities. The inefficiencies associated with the poor physical infrastructure are mainly manifested in two ways: leakage and an inability to monitor the system properly in order to: (i) detect abuse (illegal connections) and (ii) bill customers properly (which requires meters). Additionally, a dearth of qualified and educated personnel keeps the water companies and municipalities from addressing inefficiency problems. Data collection, planning, and budgeting is performed poorly by the water companies, and municipalities are unable to: (i) properly review water pricing proposals submitted by the utility companies; (ii) adequately target subsidies for water supply services, especially for vulnerable groups; and (iii) apply for financial support from higher level governments for the reconstruction of the infrastructure. Clearly, water utilities in BiH face significant challenges, and it is perhaps not surprising that over two-thirds operate in a loss position. As a result of all these weaknesses, water testing is not always up to proper safety standards. Finally not all of citizens are receiving equal level of services due to discrimination, the inadequate physical infrastructure, lack of funds needed for capital investment, and BiH’s mountainous terrain. Since the end of the conflict in 1995, large funds have been allocated to infrastructure reconstruction including water supply systems. However, it is only recently that development organizations like the World Bank and KfW are designing projects that are addressing the issues faced by utilities in Bosnia and Herzegovina to ensure their sustainability. The initiative proposed under this concept note will build on the experience the World Bank and KfW gained in technical work with utilities in Bosnia and Herzegovina. Still, an important factor that is not being addressed by these projects but essential in the sustainability of the utilities is the inclusion of citizens. In the post-war period of economic transition, citizens have not yet fully changed thei attitude and have not yet fully embraced their new responsibilities. Although efforts have been made towards improving participatory governance, and most municipalities have established participatory mechanisms, citizens have generally shown very little interest in participating in decision making processes. The situation is more challenging and complex for members of poor and marginalized populations, within which participation rates in such processes are particularly low because of educational barriers, greater physical distances from the municipal centres, lack of information, and an overall perception that they are neglected and have no influence on decision making processes. Clearly, a properly functioning and sustainable water system is important, BiH does not have one, and the citizens who suffer are either not encouraged to speak up or are not heard when they do. In order to rectify this bleak situation, a number of measures, consistent with national priorities articulated in the country’s Medium-term Development Strategy (MTDS), are required. Governance of the water utility sector must be improved in the interest of improving service delivery, and to this end, a special focus on increasing quality participation of the citizenry is needed. People suffering from exclusion due to a lack of proper water service provision must be engaged in the reform process in order to provide municipalities and utility companies with the information and data they need for evidence-based service delivery decisions. Ultimately, this will enable the municipalities to better serve their clients (the citizenry) through the utility companies. The policy and legal framework governing the sector must be based on criteria addressing economic viability, but also complemented by a safety net mechanism for the most vulnerable and socially excluded population groups.
Please refer to Annex A – Joint Programme Results Framework, for specific outputs and activities. In support of the overall programme objective of “securing access to safe water for all citizens in Bosnia-Herzegovina”, this joint programme comprises three inter-related outcomes. The programme is designed to achieve conceptual and operational synergy between its three components, which strengthen each other given that they are simultaneously means and ends to each other (Please refer to flowchart in Annex B to see the relationships). Through the achievement of the first outcome, the programme intends to foster inclusive participation in decisions relating to public utilities, empowering the poor, women, youth and the marginalized. The second outcome intends to improve the efficiency, access, affordability, and quality of services provided by utilities at municipal level. The third outcome will promote the core democratic governance principles of accountability and transparency at the national, sub-national and local levels by strengthening their capacities for evidence-based policy making and resource planning. Outcome 1: Strengthened inclusion of citizens in participative municipal governance The ability of citizens, particularly vulnerable groups, to participate in decision making at municipal level will be improved in 10 selected municipalities. Output 1.1: Municipal governance mechanisms improved to ensure quality participation of citizens and inclusion of vulnerable groups. Output 1.2: Increased capacities of vulnerable groups to influence municipal decision making processes Output 1.1 will directly address the failings of the existing participatory mechanisms to ensure active and quality participation of vulnerable groups in decision making while Output 1.2 will contribute to the improvement of citizens’ participation, especially vulnerable groups, by increasing their interest in participation and their direct involvement in activities of specific interest to them, in this case access to safe water. Outcome 2: Improved economic governance in water utility companies for better services to citizens in targeted municipalities The project will ensure reliable, safe and equitable access to water in the selected 10 under-developed municipalities. Output 2.1: Improved capacities of utilities to achieve financial sustainability Output 2.2: Improved infrastructure capacities for water supply services in low income municipalities Output 2.3: Improved capacities at municipal level for service delivery control Output 2.1 will address issues related to the management of public utilities and as such will contribute to the reduction of the utilities’ financial losses. Through the achievement of Output 2.2, the programme intends to increase the number of consumers served by the water utilities and to reduce the amount of water losses in the network. This output will also serve as an incentive for the achievement of Outputs 1.1, 1.2 and 2.1. Mechanisms for accountability of the utility companies towards the municipal authorities and citizens will be addressed under the Output 2.3. Outcome 3: Strengthened capacity of governments for evidence-based policy making and resource planning. The capacity of national, sub-national and local governments to undertake evidence-based policy making and resource planning will be developed to improve the efficacy, transparency, and accountability of responses to problems faced by vulnerable households in Bosnia and Herzegovina. This would be of importance to mitigate the social impact of utility prices increase. Output 3.1: Improved capacity of municipal decision-makers to assess and analyse the status of vulnerable groups, and plan social mitigation measures/policies accordingly Output 3.2: Improved capacity of national and sub-national policy makers to collect and analyse data to ensure socially equitable water service policies Output 3.1 will address the lack of capacities of municipalities to conduct surveys and analyse data required to properly define municipal policies and allocate resources. Linked with the achievement of Outputs 1.1 and 1.2, this will significantly contribute to the improvement of municipal governance. Output 3.2 intends to address the same challenges as Output 3.1 but at national and sub-national levels.
The water supply sector in Bosnia and Herzegovina is managed at the local level. There are no national or entity regulatory bodies responsible for the oversight of the water supply. In general, the utility companies are public municipal companies except in Sarajevo and Mostar, where more than just one municipality is covered by a single firm. These utilities were established by the municipalities as public companies, and are accountable to the municipalities and their respective municipal assemblies. The municipalities or cities are responsible for ensuring access to the water supply systems for all citizens in urban areas. The entity governments are not responsible for the water supply. However, they can increase financial transfers to underdeveloped municipalities to respond to urgent infrastructure needs, and they are also responsible for the implementation of social protection policies so that changes in water pricing do not affect negatively vulnerable families. On the basis of this framework, the joint programme is being designed to address specific needs at each level. UNICEF and UNDP will work in close cooperation in relation to the selection of the 10 municipalities for this programme. TORs and selection criteria will be developed jointly as part of a joint selection process. The minimum requirements are: previous involvement in other UNDP and/or UNICEF projects; demonstrated receptiveness to changes during previous projects; and functioning participatory decision making mechanisms. The municipalities will also have to demonstrate their willingness to participate financially in the programme. The discussions and negotiations on the detailed project design will be planned and undertaken jointly by UNDP and UNICEF in order to harmonise the project activities that will be subsequently implemented through coordination of two agencies. Outcome 1 of the project has a human-rights based approach focusing on the access of the excluded and vulnerable to improved social and utility services. Participation and influence in decision-making processes within local governance systems by the population in general, and vulnerable and excluded groups in particular, will be improved. A three-tiered approach is envisioned to this end. 1. Citizens’ capacities and skills to influence decision-making processes as they relate to water supply regulation and corresponding mitigation measures will be strengthened. The existing participatory mechanisms will be mapped and assessed for their efficiency and capacity gaps. Vulnerable communities and groups will be organized into permanent participatory action groups to undertake water supply and social protection needs mapping and develop community action plans to address quality and access to water supply, social protection, and the monitoring of implementation. Networking of the community participatory action groups in different regions will be ensured via exchange of information and feedback presentations on community action plans and impact assessment research. 2. To address weaknesses within the existing participatory mechanisms, the skills and capacities of the municipal administrations to support participation of citizens, particularly the vulnerable and excluded, will be increased through training on a human-rights based approach to policy and programme development. In order to influence attitudinal change and build the trust and efficient interaction of municipal governance and vulnerable populations, support will be provided to the organisation of forums and interactive events, during which municipalities, water utilities, and the community action groups will be able to exchange views and provide feedback on policies, measures and action plans developed by respective groups. This is ultimately to result in changing attitudes of municipal governance and citizens in relation to development and implementation of municipal programmes in the public interest, and in creation of standards and the formalisation of communication channels among municipalities, water utilities and citizens, including CSO representatives. 3. Additional opportunities to ensure participation of larger numbers of vulnerable and excluded groups in planning of water regulation and social protection will be ensured through action-research methodology applied within the Child Rights/Social Impact Assessment qualitative and quantitative methodologies that will solicit continued flow of information on coping mechanisms, impact of policy decisions and potential solutions, with special focus on inclusion of children and the social protection institutions servicing vulnerable populations. The results of Outcome 1 are closely interlinked with the achievement of results within Outcomes 2 and 3, as indicated in the project logframe. Outcome 2 addresses the needs of public utilities and looks at increasing their technical capacities in modern management practices as well as infrastructure capacities. It will concentrate on: 1. the provision of funds for capital expenditures in network reconstruction; 2. building the capacities of utilities in the management of water supplies; and 3. building stronger local capacities in service delivery control. Through this programme, assistance will be provided to water utilities for improving management practices including the development of modern billing system based on consumption and improved control system to identify and measure leakages in the network. Attention will also be put on fee collection and changing the attitude of citizens in regard to payment of water bills. Public campaigns will be organised to inform citizens about the challenges faced by their water utility companies, the need to introduce new water pricing, the importance of fee collection and the potential measures that the municipal and entity authorities can introduce to support low income and vulnerable families. These public campaigns will run in parallel with the activities under the Outcome 1 on the inclusion of marginalised groups in decision making. As an incentive to the capacity building training and its application, the programme will set up a fund for capital expenditures in network reconstruction. Municipalities will be encouraged to apply for these funds. The selection of projects will be based on the capacity of municipalities to demonstrate that they have applied these new techniques in the identification of priorities for network reconstruction and for the application of mitigation strategies addressing the impact of water price increases on vulnerable families. Municipalities will be requested to provide funding for the proposed projects calculated on the basis of the municipal revenue per capita and non-earmarked municipal budget. This approach is already working in UNDP’s area based development programmes in B-H. Many households that are not connected to the main water supply systems are supplied through small village water supply systems or individual wells/springs that do not use proper quality control mechanisms. In the interest of reducing this contamination/health risk, Output 2.3 of the programme will address this issue by educating residents of isolated communities about the importance of water quality testing and by expanding water testing service provision to cover such areas. To replicate the reforms in other municipalities, the programme will use the existing Bosnian Association of Water Utilities and the existing Bosnian Association of Municipalities. Outcome 3 will contribute to the increased capacities of policy and decision-makers at the municipal, cantonal, entity and state levels to develop evidence-based policies and resource plans for the development and regulation of the water supply. This capacity building will enable governments to select appropriate social protection and mitigation measures to respond to rights and needs of vulnerable populations. Outcome 3 results will be achieved through a three-pronged approach in which: 1. the capacities of municipal authorities to apply human rights and evidence-based approaches to social protection and water supply regulation will be increased and will benefit from the participation mechanisms established at municipal level. The municipalities will be enabled to undertake research and needs assessments in order to take a systematic approach to long-term planning, budgeting and monitoring of water regulation and social protection measures. This will also improve their ability to solicit support and funding from the accountable policy and budget institutions at higher levels. 2. The members of the municipal mechanisms to be created will be able to transfer lessons learned and know-how to peer municipalities, utility associations, social protection authorities, and advisory bodies in order to ensure a more unified system of water utility management and social protection targeting. Thus, they will strengthen their partnerships with upper-level authorities. 3. Capacities of the entity and state-level policy makers to develop evidence-based policies will be increased by availability of analysis, qualitative and quantitative data on water utilities and social protection obtained through municipal mapping and the Child Rights/Social Impact Assessments and creation of a national database that will map available data on social and economic development indicators. Outcome 3 will directly contribute to the evaluation of the current BiH MTDS measures and will provide evidence in support of development and monitoring of the National Development and Social Inclusion Strategies. Coordination will be ensured by the UN Coordination Officer based in the UN Resident Coordinator’s Office. The UN Coordination Officer is responsible for organizing inter-agency meetings to update on activities and codify technical recommendations to be reflected in the implementation process. Various stakeholders will be involved throughout the project. Outcomes 1 and 2 require the involvement of local level governments, local utilities, civil society, communities and the private sector, while Outcome 3 focuses more on work with national, sub-national and local authorities, especially those in charge of social protection, as well as professional bodies, if needed. Other key partners within this project will be national NGOs and BiH DEP. UNICEF and UNDP will work together on selecting the adequate pilot municipalities and will share know-how on the transfer of expertise and replication of the best practices. UNICEF and UNDP will cooperate with the municipal authorities and water supply management at community level while maintaining the dialogue and partnerships with entity bodies and the state-level development agencies to ensure sustainability and contribute to inclusion of the lessons learned from municipal work into nation-wide development and social protection strategies. Both UNDP and UNICEF have extensive partnerships established with governance systems at municipal, cantonal, entity and state-level institutions within their other development programmes. International cooperation as well as cooperation with donors has the purpose of strengthening the transfer of knowledge and experience, which is imperative for the successful completion of the project. Co-operation, among others, with the World Bank, the Swiss Cooperation Agency and KfW has marked the concept note development phase and it will be continued throughout the project’s implementation. In particular, the World Bank Urban Infrastructure and Services Delivery project will have synergistic effects with the proposed UNCT project and close cooperation between these two projects is foreseen. Through the achievements of the expected results under component 2, utilities and municipalities will be eligible to access EBRD loans for municipal infrastructure projects. The requirements set by EBRD are tariff adjustments towards sustainability, operational efficiency and distribution network improvements. Sustainability will be ensured by having municipal action plans in place, restored infrastructure, adequate water pricing and social protection policies developed as products of the programme’s implementation. Additionally, the focus on capacity building will leave a legacy of more able practitioners to continue to better serve citizens in the future. The municipal action plans will be multi-year plans for the improvement of access to quality water supply. The plans will be presented for approval to the municipal assemblies. The reconstruction investments in the water network will enable the utility company to decrease its losses while adequate pricing will decrease the burden of social policies from them. These measures will allow the utility companies to be financially sustainable. With social protection policies related to access to water in place, vulnerable families should be able to enjoy better services as the financial support given by the national, entity and local authorities will target them directly instead of being spread through the whole population as it is currently with social water pricing.
In-house monitoring and evaluation (M&E) of implementation progress will be coordinated through the Resident Coordinator’s Office, and performed on the basis of the project document, which specifies the Joint Programme implementation milestones. In-house M&E will be performed by the Joint Monitoring and Evaluation Team comprising representatives of all implementing agencies involved in the Joint Programme implementation. External Monitoring and Evaluation Missions (Mid-term and at the end of the Project cycle): The Resident Coordinator’s Office will organize two external M&E missions, consisting of an M&E expert and development economists specialized in pro-poor and area based development. The mission team will make field visits as well as conduct comprehensive stakeholder interviews to assess results. In addition to evaluation reports, the M&E missions will produce documents describing best practices and lessons-learned. Copies of the evaluation reports will be distributed to the donors and governments. The following are both qualitative and quantitative indicators relating to the programme outcomes. Outcome 1 Number of vulnerable groups’ representatives in decision making increased. This indicator will be measured via establishment of a baseline on existing participation mechanisms and through measuring the number of vulnerable group representatives included in the municipal participatory action groups at the start of the programme, mid-term and at the end. Participatory action groups produce and implement action and monitoring plans. This indicator will be measured by the number of action plans developed and put into action. All 10 municipalities have developed clear rules and regulations on participatory processes and have institutionalized them through municipal council decisions. This indicator will be verified through the documentation of the municipal council decisions on the participatory processes and the adoption of the new rules and regulations. Minimum 40 government officials in 10 municipalities trained on human-rights based approach to social protection and social protection system development . This indicator will be measured by training reports and the quality of the social protection system assessment and system’s development plans developed during the training, Outcome 2 Non-revenue water reduced by at least 15%. Quantities of non revenue water will be measured at the beginning and end of the programme by comparing the water produced to the water billed. The reduction of the non-revenue water should be the result of the reduction of water losses in the network and improved billing system. Fee collection increased by at least 10%. The indicator will be verified by measuring the level of payment by citizens at the beginning and end of the programme through the financial records available at the utilities. Number of new consumers increased by at least 10%. This indicator will be measured by controlling the utility companies’ records on registered consumers. Incidence of water-related illnesses reduced. The indicator will be verified by consulting the health centres’ records in the target municipalities. A baseline will be established at the beginning of the programme and change will be measure at middle and end of the programme. Outcome 3 Knowledge of a minimum of 60 national, sub-national and local authorities’ representatives on application of Child Rights Impact Assessment methodology and data collection increased. This indicator will be measured by the training reports and the extent of the outputs of civil servants in the design and implementation of the CRIA and in collection/systematization of data on social indicators at municipal and national level and are tested to measure the change. Burden of water pricing increase on household expenditures reduced as a result of adapted social support to vulnerable families. This indicator will be measured by surveys of vulnerable household coping mechanisms and income/expenditure conducted within CRIA/social impact assessment at the beginning, mid-term and end of the programme to measure the change. This indicator will be measured in the 10 targeted municipalities. Municipal councils have adopted data collection and analyses. This indicator will be monitored by the level of inclusion of the data and analysis in the municipal policies and strategies. The social protection data base in place using DevInfo This indicator will be measured by existence of update DevInfo database in adequate municipal institutions. Minimum 40 interested municipalities and water utilities are knowledgeable about the Project’s lessons learned and methodology and 50% are interested in replication. This indicator will be measured through feedback of interested municipalities and implementation proposals submitted. Baseline data and evaluation analysis is developed and is used for development and monitoring of the Social Inclusion and National Development Strategy documents by Directorate for Economic Planning of BiH. This indicator will be measured by the availability of the CRIA and social impact analysis data and reference to source of data made in the national and sub-national policy documents. National DevInfo data base to monitor data social and economic indicators for vulnerable populations established at national level. DevInfo WEB presentation established by selected national government institution. The main risks faced by the programme are: Insufficient participation of citizens, particularly members of vulnerable groups Ineffective application of the new learned techniques by the utilities. Weak municipal staff capacities Insufficient involvement of higher-level administrations in the programme Weak staffing capacities and infrastructure to collect/analyse data and evidence and maintain national database.
The UN Country Team (UNCT) in Bosnia and Herzegovina includes: ILO, IMF, IOM, UNDP, UNESCO, UNFPA, UNHCR, UNICEF, UNICTY, UNV, WHO and World Bank. Additionally, there are several non-resident members. The Millennium Development Goals, the BiH Government’s Medium Term Development Strategy (equivalent to a PRSP) and the increasingly important and relevant concept of social inclusion, are guiding principles for the agencies and are reflected in the three main outcomes of the UN Development Assistance Framework (2005 – 2008, to be extended to 2009). The Project will be implemented through coordination between UNDP and UNICEF under auspices of the UN Resident Coordinator. The UN Resident Coordinator Officer will assume responsibility for project coordination, monitoring and evaluation. A project management team will be established by UNDP and UNICEF. In addition, a Programme Management Committee (PMC) will be formed consisted of participating UN agencies, UN Resident Coordinator’s Office and implementing partners, which will ensure that the programme is implemented in line with coneptual and financial parameters provided by the Joint Programming document. The PMC will ensure that financial and programme reporting by the two agencies is consolidated and that activities implemented jointly are fully synchronised and coordinated. The project’s funds will be managed through pass-through funding modality. UNDP will act as administrative agent for the project with overall responsibility for compiling porgramme reports and ensuring that overall programme activities are planned and sequenced in line with the overall programme document. Aggregate expenditures of the UN agencies included in this proposal, UNDP and UNICEF, were $23,760,642(UNDP $18,464,663; UNICEF $5,295,979) in 2006 and preliminary $ 25,625,155 (UNDP $22,145,155; UNICEF $ 3,480,000) in 2007, which shows significant agencies’ delivery capacities.
