5. Challenges of water regulation in the Mekong region
Universal access to drinking safe water, sanitation and hygiene can provide benefits to health, well-being, the economy and the environment. However, the Mekong region faces a number of challenges, including financing the water infrastructure needed to meet the demands of growing economies and populations. This chapter explores the characteristics of good water and wastewater regulations before turning to priorities in Mekong countries: Cambodia, Lao People’s Democratic Republic, Myanmar, Thailand and Viet Nam. This chapter addresses issues such as financial sustainability, quality standards, law enforcement, public service obligations, delivery standards, risk management, incentives for more efficient water use in agriculture, public-private partnerships, water demand management, information gathering, licensing, public participation, dispute resolution and consumer protection.
Economic growth in the Mekong region is expected to stay solid in the medium term, although currently disrupted by the COVID-19 outbreak (OECD, 2020[1]). In line with the growing economies and populations, the region is experiencing an increasing demand for infrastructure. Indeed, from 2016 to 2040 inclusive, an estimated USD 605 billion in infrastructure investment will be needed in Viet Nam, USD 494 billion in Thailand, USD 224 billion in Myanmar and USD 87 billion in Cambodia (Oxford Economics and Global Infrastructure Hub, 2017[2]). Developing infrastructure, as well as expanding and upgrading existing infrastructure, will be critical in further driving growth and development in the Mekong region.
Although water has been an important component of many parts of daily life and the economy in the Mekong region, water infrastructure has not received much attention. Lack of financing and co-ordination among actors are key challenges for water infrastructure. All four Mekong countries reviewed in a 2017 report – Cambodia, Lao People’s Democratic Republic (hereafter “Lao PDR”), Thailand and Viet Nam – lacked financing to meet national water targets (UNESCO WWAP (United Nations World Water Assessment Programme), 2017[3]).
The water and wastewater services (WWS) sector has several common characteristics. It is a monopolistic sector, in general; it produces different information; and it generates externalities such as pollution. Regulators could play a role in addressing the following areas in order to ensure effective water regulations (OECD, 2015[4]):
Addressing “market failures” of WWS so the sector can fully meet public interest for all actors involved at the least cost.
Setting quality standards for drinking water and wastewater treatment to protect public health.
Promoting easy and transparent access to data. As service providers, water operators usually possess information that is rarely accessible to public authorities and customers.
Balancing the economic, social and environmental aspects of WWS, ensuring delivery in accordance with the principles of universality, continuity, quality of services, equality of access, affordability and transparency.
Enhancing co-ordination among actors. At the horizontal level, different ministries regulate various aspects of WWS. As an example, setting and monitoring water quality standards may fall under the purview of the health ministry, water pollution under environment, and regulation of tariffs and investment under economics or finance. At the vertical level, municipalities sometimes manage WWS delivery.
This chapter will discuss 19 points for countries in the Mekong region, covering a wide range of roles performed by WWS regulators, shown in Table 5.1.
Functions, roles and scope of activities
Water and wastewater regulators are usually part of a broad regulatory framework at national or sub-national level. These frameworks involve different line ministries, local authorities and non-governmental bodies such as consumer advocacy groups or associations of utility professionals. In general, there are four different regulatory models: government regulation; contracts, in which regulatory regimes are specified in legal instruments; independent regulation (in decision-making, management and financing); and outsourcing (for tariff reviews, benchmarking and dispute resolution) (OECD, 2015[4]; OECD, 2009[5]).
Government tools should clearly identify regulators’ functions, roles and scope of activities. This will help regulators fulfil their objectives effectively, and avoid overlap and incoherence. The OECD Survey on the Governance of Water Regulators, conducted from 2013 to 2014, sought to identify different functions exercised by 34 WWS regulators in 24 countries (OECD, 2015[4]). The survey found most regulators had four principal functions: economic regulation (tariff-setting and review of utilities’ investment plans); data collection and performance monitoring related to water services; enforcement of regulations and standards; and customer engagement and protection.
Of the 34 regulators, 33 have responsibility for tariff regulation. Some of them refer to a particular methodology or criteria defined by law to carry out this role. The most widely used is the cost-plus approach, but some regulators are shifting towards setting tariffs. In some cases, however, regulators set tariffs without access to investment or business plans. Greater transparency in this area could ensure tariffs are set appropriately, and asymmetry of information could be avoided.
Service delivery
Making service delivery information publicly available could improve transparency and accountability. Monitoring service delivery performance is the second most frequent function carried out by 32 regulators. For 27 regulators, this function is combined with gathering information and data. Survey results show that a number of regulators do not make performance information, such as costs and quality of services provided, available to the public. Some withhold information partially for reasons of confidentiality, particularly concerning financial information. Countries apply several mechanisms to ensure water regulators are accountable. These include requiring regulators to report to ministers or to the legislature; making operational policies and guidance material for compliance available to the public; enacting enforcement and decision review; and giving the right to appeal the decision of regulated entities, in particular through a judicial process.
Standards setting
Regulators need to allocate human, financial and organisational resources effectively and with integrity to maintain the rule of law and create a supportive environment for investment and inclusive growth. In all, 22 regulators reported defining technical and service standards, while 25 regulators reported engaging with customers, protecting consumers and resolving disputes. The survey revealed several approaches to dispute resolution, but the most dominant was the organisation of formal meetings between representatives of the regulator and operator. The next most popular choice was legal proceedings or court sessions with a judge.
In light of the typology and priorities reviewed in the previous section, this section discusses aspects of water regulation in Mekong countries, particularly in Cambodia, Lao PDR, Myanmar, Thailand and Viet Nam.
Ensuring financial sustainability in water tariff regulation
Lack of financing sources hampers scaling up of water and sanitation in rural areas. Total official financial flows of water and sanitation to developing countries have increased by 5% annually in the last decade (USD 14.3 billion in commitments on average per year in 2014-15) (OECD, 2017[6]), but financing levels are still not enough to meet the targets for drinking safe water and sanitation as climate risks are exacerbating the effects of projects on water and sanitation. While a huge amount of financing continues to flow for urban residents, most people in rural areas still lack access to basic sanitation. Expenditures for rural sanitation comprise less than 10% of total water, sanitation and hygiene (WASH) financing (WHO-UN Water, 2014[7]).
Although government budgets and expenditures for WASH are increasing, a substantial financing gap remains between budgets and plans. One critical gap is operation and maintenance (O&M), which is essential to ensure provision of sustainable and safe services. Tariffs do not cover the costs of O&M, and the quality of services and levels of coverage decline without other financing sources. Ensuring financial sustainability in water supply and sanitation in rural areas is therefore needed. For example, in Viet Nam, a limited number of households use piped water for domestic needs due to financial constraints. Many people in rural areas, especially poor households, find the connection fees (i.e. about VND 1 000 000 or USD 45 in 2013) too high for their monthly income (i.e. between VND 500 000 and VND 5 000 000) (Wilbers, Sebesvari and Renaud, 2014[8]; Vreugdenhil, Hoang and Offermans, 2012[9]).
Tariff regulation refers to several criteria related to the establishment of a tariff methodology, update of prices, supervision of tariff-setting, determination of a tariff by a consumer group and the establishment of caps on revenues or rate of return on investment. In Lao PDR, according to the 2009 water supply law, water regulators outline the tariff structures, tariff-setting process and tariff determination by end use and user category. For instance, the Vientiane state-owned water supply enterprise Nam Papa Nakhone Luang (NPNL) set a tariff of USD 0.11 per cubic metre of water (Park and Visvanathan, 2016[10]). According to their study, the NPNL tariff is still relatively low compared to the one set at USD 0.48 by the Provincial Waterworks Authority in Thailand and at USD 0.60 by the Korea Water Resources Corporation.
The low tariff set by NPNL is related to the policy that tariffs should at least cover O&M costs and be set at around 3-5% of household income. Such low tariff levels combined with poor revenue collection, high levels of non-revenue water and high operating costs, may put financial sustainability at stake. Indeed, as of late 2014, bi-annual tariff reviews and preparation for the annual performance reports of provincial water utilities, which are known as Nam Papa State Enterprises (NPSE), have become the focus of the country’s water regulators – the Water Supply Regulatory Committee and the Water Supply Regulatory Office. However, tariffs are still too low to allow utilities’ financial sustainability (WSP and World Bank, 2014[11]). In addition to the establishment of tariff methodology, the law also defines state responsibility to fund revenue deficits of business operators in rural areas.
Unlike in Lao PDR, regulations in Viet Nam do not clearly identify the regulator’s responsibility in terms of business operators’ revenues deficits. However, regulators play a more detailed role in tariff-setting. This includes the minimum pricing regulation, price calculation principles, national and regional-level pricing schemes, tariff-setting objectives, construction and development cost coverage, and financial autonomy of water supply companies.
In general, the Ministry of Finance sets a range of tariffs by considering the full-cost recovery principle, which includes the cost of water production, treatment and distribution. At the local level, tariffs are then set based on the agreement between the water supplier and the local authority. Even though tariffs cover basic operating costs, the rate is too low to support investment in asset maintenance (Trujillo, Hong and Whitley, 2015[12]; Pinto et al., 2018[13]). With such low tariffs, the Vietnamese water sector faces a challenge of financial sustainability. This is made worse by the declining tariff collection rate (especially in larger cities) and other budgetary constraints, such as the decreasing coverage rate for operating costs (World Bank, 2019[14]).
As in many developing countries, both Lao PDR and Viet Nam apply relatively low tariffs and the water sector is highly subsidised. These policies might not support effective demand management since they might discourage people from conserving water. Although increasing the tariff could possibly improve financial sustainability, political considerations often discourage this approach. In contrast to Lao PDR and Viet Nam, Myanmar and Thailand give only passing mention to tariff regulation in their legislation.
Water tariffs in Thailand are also low. For instance, the charge for raw water is based on a national tariff dating back to the 1940s, while wastewater services are free for most of the population. Adjusting these tariffs is challenging from both a technical and political point of view. The challenges include establishing customer registers and collection mechanisms, affordability issues for vulnerable customers and strategies to address the agricultural sector.
In Cambodia, the draft water supply and sanitation law addresses tariff regulation. The law will provide regulators with powers to approve or reject amendments to tariffs. The tariff itself should consider capital and recurrent costs of service provision, the efficiency of the water supply and sewerage service delivery, incentives to boost efficiency, customers’ willingness to pay, equity concerns and administrative simplicity. However, the National Strategic Development Plan (NSDP) 2014-18 highlights that the water tariffs of many public waterworks remain below the level of full-cost recovery, making it difficult to cover operational and investment expenses.
Strengthening the monitoring of quality standards for drinking water
In Cambodia, the Ministry of Health issued quality standards for drinking water in 2004, which cover 12 parameters in line with standards set by the World Health Organization (WHO). The Ministry of Industry, Mines and Energy, which regulates the Phnom Penh Water Supply Authority (PPWSA) and other water supply authorities, further adopted these standards (ADB, 2012[15]). However, the groundwater, which is the main source of drinking water for many Cambodian people, is contaminated with arsenic, posing a major public health threat. Improving the quality of drinking water might be challenging for three reasons. The legal framework related to water quality standards is weak; a regular groundwater quality monitoring system is absent; and sufficient equipment and human resources for appropriate water quality management are missing (WEPA, 2015[16]).
The Ministry of Health of Lao PDR set drinking water quality targets through Decree No. 953 issued in 2003. These targets are set to achieve an agreed level of water quality in rural areas and for service providers or constructors of rural water supplies. The parameters of drinking water quality consist of the maximum allowed values of substances (e.g. iron, manganese, arsenic, fluoride, nitrate and chlorine). Other indicators include pH, turbidity, conductivity, taste and odour, which are decided through consultation with different ministries, departments and water sector agencies. In the event that mining and other industrial activities increase risk to public health, these parameters should be tested using WHO guidelines.
Language issues and accessibility to reports undermine the capacity of Lao PDR to analyse water quality. In 2014, within the Minister’s Decision on Water Quality Standard for Management for Drinking and Domestic Use No. 561/MOH, the list of monitoring parameters in Lao PDR expanded from 12 to 23 indicators. The decree also mandates the National Centre of Environmental Health and Water Supply (Nam Saats) to monitor drinking water quality, sample water quality regularly and analyse samples in a laboratory. It mandates NPSEs to ensure compliance with the standard, but reports and manuscripts are mainly in the Lao language and difficult to access. This creates a barrier in understanding and analysing water quality issues in Lao PDR (Brindha, Pavelic and Sotoukee, 2019[17]).
The sole domestic source of water in Myanmar is vulnerable to pollution, and piped water is rare and not always clean. The water in Inle Lake – the country’s second largest lake and sole domestic source of water – is unfit to drink (WEPA, 2015[16]). Moreover, the unavailability of a piped supply system remains a challenge, limiting access to safe drinking water. Where a piped supply system is available, water is not necessarily clean (Van Meel et al., 2014[18]). Inland surface water is generally used for domestic, irrigation and industrial activities. However, surface water is vulnerable to pollution. Inle Lake has high levels of phosphate and nitrate, and the concentration of E. coli bacteria exceeds standards, due to agricultural fertilisers and discharge of untreated waste.
Lack of both funding and qualified staff undermine the protection of water quality in Thailand. Local governments provide drinking water, while the Ministry of Health monitors compliance with national standards. The ministry regularly tests water samples from rural and urban areas, but these practices may be hampered by funding constraints, inadequate numbers of skilled graduates and recruitment practices (WHO, 2015[19]).
Better co-ordination between ministries could improve water quality in Viet Nam. The Ministry of Health sets quality standards for clean water used for daily activities, such as drinking and personal hygiene. Customers and water supply units set clean water quality standards for other activities. With respect to health, Viet Nam adapts the WHO minimum standards for drinking water quality to the country’s conditions. This process involves various ministries, including Construction, and National Resources and Environment. However, while the Ministry of Health is the competent agency in setting quality standards, it is not directly involved in water sector discussions (World Bank, 2014[20]). This would suggest that better co-ordination between ministries, including Health, may help improve water quality.
The report also highlights that adequate water quality is generally not achieved at the distribution and household levels. This is largely due to quality control and monitoring that are limited to source and treatment plant outlets. In addition, reporting on drinking water quality indicators and compliance issues is still lacking. This is especially the case for distribution networks, where monitoring may not be enough to ensure that quality levels remain consistent with production quality (World Bank, 2014[20]).
Declining groundwater resources in Viet Nam are affecting water quality, requiring the government’s urgent attention. For instance, in Can Tho city in the Mekong Delta, groundwater levels are falling by up to half a metre each year (Wagner, Tran and Renaud, 2012[21]; Carrard, Foster and Willetts, 2019[22]). Moreover, groundwater pollution and salinity make reliable drinking water harder to find. This is particularly the case in rural areas where the groundwater contains pesticides that exceed the levels recommended by the European Commission (Chau et al., 2015[23]; Carrard, Foster and Willetts, 2019[22]).
Ensuring law enforcement in wastewater treatment
Three Mekong countries – Cambodia, Thailand and Viet Nam – have standards for wastewater treatment and discharges. Regulators set quality standards for wastewater treatment and discharges, and then monitor compliance with these standards. In Cambodia, the Ministry of Health sets wastewater quality standards. In Thailand, the National Environment Board prescribes quality standards for ambient water. In Viet Nam, the Ministry of Natural Resources and the provincial-level People’s Committees are the competent agencies.
Greater co-ordination for wastewater management among public authorities is needed in Myanmar. At the national level, different line ministries are involved in water management, covering the sectors of health, irrigation, mining, transport and industry. At the municipal level, local departments generally manage wastewater effluent standards for areas under their jurisdiction. Given the high number of public authorities involved, it is essential to strengthen co-ordination.
Wastewater is largely discharged without treatment into water sources in Myanmar. The Environmental Conservation Law approved in 2012 outlines an ambient water quality standard that encompasses surface water, marine water and groundwater in Myanmar. According to WEPA (2015[16]), water quality in Myanmar is mainly deteriorated by sewage, solid waste, and industrial and agrochemical waste. At the municipal level, particularly in rapidly industrialising cities, treatment is still complicated. Due to limited wastewater treatment facilities, wastewater discharges directly into ditches, streams, lakes and rivers (Van Meel et al., 2014[18]).
Enforcement of regulations in Cambodia is urgently needed. Inadequate institutional and legal frameworks for urban wastewater treatment remain a challenge in the country. Regulation of collection and disposal of septic effluent and sludge is reportedly inexistent. Moreover, despite legal and institutional frameworks, dumping of waste is still commonly unregulated in provincial towns (ADB, 2012[15]).
Ensuring that discharge of both untreated and treated wastewater meet the effluent standards is one of the major challenges in Thailand. The Minister of Science, Technology and Environment is habilitated to publish a notification in the Government Gazette that prescribes effluent standards. This is done with the advice of the Pollution Control Committee and is subject to approval by the National Environment Board. However, in practice, both untreated and treated wastewater discharged into the water source do not conform to the standard. On average, only 48% of establishments have obeyed the law on wastewater treatment (MONRE, 2019[24]). This has become one of the factors causing poor water quality in the downstream of Thailand’s main rivers. Other challenges include O&M of wastewater treatment facilities, such as limited staff capacity, lack of funds, and tariff-setting and collection (WEPA, 2015[16]).
Most municipal and industrial wastewater is discharged untreated in Viet Nam, which could explain the poor water quality of its rivers. National legislation prescribes that individuals or organisations must be licensed to discharge wastewater into water sources. The licence should be based on standards and technical regulation on wastewater quality, the function of water sources and the capacity to receive wastewater. Construction and renovation projects, including projects of public facilities in urban areas, must have separate systems for wastewater treatment and drainage that meet technical standards. However, industries treat only 10% of industrial wastewater, despite their legal obligations (2030 WRG, 2017[25]). This might explain the poor quality of water in the downstream of Viet Nam’s rivers, particularly the ones flowing through urban and industrial areas.
Addressing public service obligations and social regulation
The lack of studies on water use by community groups in Viet Nam may hamper effective planning. Viet Nam classifies water supply companies as public utilities and gives them financial autonomy to fulfil their obligations. Investment projects on construction of water supply works are required to consider socio-economic development, well-being, national defence, the protection of heritage and the natural environment as key objectives of resource exploitation. However, studies on these groups and other informal institutions are lacking, which could prevent regulators from fulfilling their social responsibilities.
Improving studies on informal institutions and considering socio-cultural practices could offer better strategies to manage water resources and provide opportunities for formal and informal institutions to interact more effectively. There are diverse socio-cultural values of water among different ethnic groups in Viet Nam. The Ha Nhi people, for example, typically leave waste besides bathing sites; this practice has resulted in increased pollution of water sources (Du et al., 2016[26]). Hygiene and sanitation services are largely region-specific, and shaped by the dominance of an ethnic group. Improper sanitation conditions, such as open pit-latrines and latrines without slabs, are found primarily in the northern mountains (10.7%), and the central highlands (9.4%). In the Mekong River Delta region, 36.5% of households use hanging latrines. Moreover, 16.5% of ethnic minority households use open pit-latrines and latrines without slabs in comparison to 1.5% of Kinh (UNICEF, 2018[27]).
Defining the standards of technical modalities and service delivery
Standards of technical modalities and level of service delivery are defined differently among countries. For instance, in Cambodia, the construction of waterworks is subject to a licence or permit. Before granting the licence or permit, the Ministry of Water Resources and Meteorology (MOWRAM) consults with local authorities and other agencies regarding water use and proposed waterworks. In addition, the law requires any person who drills or digs wells for professional or commercial purposes to submit a report to MOWRAM concerning the operation and technical specifications.
Differences in definitions could represent an obstacle to examining the urban-rural gap. In Cambodia, 58.3% of rural households have access to improved drinking water sources compared to 97.6% of households in Phnom Penh (Cambodia Socio-Economic Survey, 2017; Figure 5.1). Still, the term “improved drinking water sources” can be misleading because pollution and arsenic concentrations in groundwater are increasing. In all, 15.9% of rural households can access safely managed drinking water compared to 55.03% of urban households (JMP, 2019[28]). In this context, “safely managed drinking water” means that households can get improved water sources for drinking that are located on premises, available when needed and free from biological and chemical contamination such as arsenic (WHO-UNICEF, 2017[29]).
In Lao PDR, legislation contains provisions on environmental sustainability through its reference to policies, principles and best practices of the water infrastructure development cycle. It also mandates compliance of infrastructure with standards for construction, engineering, equipment and quality of supply. Furthermore, it specifies the roles of authorities in the technical approval of construction plans. For instance, the Ministry of Public Works and Transport manages technical approval of water supply infrastructure that serves more than 20 000 people. The provincial or municipal Public Works and Transport Department gives technical approval for water supply infrastructure serving fewer than 20 000 people.
In Myanmar, a government department, organisation or natural person needs approval of the Ministry of Transport for any construction project that could affect water resources. Conversely, in Thailand, legislation is limited to empowering the National Environment Board to seek an environmental impact assessment of projects.
Viet Nam’s regulations for the water infrastructure development cycle are more detailed. They establish guidelines for water supply planning (feasibility studies) that include investigation, survey and assessment of various elements. These elements encompass the socio-economic situation and natural conditions, the status of the water supply system, the quality of surface and underground water sources, as well as the socio-economic development and the technical infrastructure system in urban areas.
Viet Nam also mandates different actors to protect the water supply system in their communities and to maintain compatible technical standards for water supply equipment. These actors include water supply units, construction management, water users and administration at all levels. While water supply units maintain the stability of water services, they co-ordinate with traffic management agencies and local administrations in case of problems. Moreover, they are responsible for comprehensive investment up to connection points. This attempts to minimise non-revenue water, leaving customers to reach individual agreements with water supply units to install meters behind connection points. Service quality at connection points, which includes water pressure, continuity and water flow for daily activities, should be compatible with the technical standards set by competent bodies. Nonetheless, focus on professional commitment to quality service remains limited (World Bank, 2019[14]). Lastly, the regulation notes the need to renovate or upgrade projects. This suggests Viet Nam can maintain quality service by minimising water supply disruptions caused by oversized infrastructure.
Identifying and preventing risk to water availability
A comprehensive approach is needed to identify and minimise risks to water availability stemming from geography, climate change and natural disasters. In Cambodia, for instance, despite the government’s effort to enhance water sectors, climate risks affect national economic development and the country’s ability to supply clean water to rural people. Considering that Cambodia’s main agricultural produce is rice, the impact of climate change on food and agriculture is expected to get more severe. In 2018, 30.4% of the workforce was employed in agriculture, according to the World Bank World Development Indicators. That same year, agriculture, forestry and fishing contributed 22% of gross domestic product; a decline from 34.5% in 2011. Most rural households depend mainly on subsistence agriculture for their livelihoods. Rice, for example, accounts for 90% of total cultivated area and 80% of agricultural labour input. Meanwhile, disasters caused by climate emergencies such as frequent droughts hamper the supply of water for drinking and sanitation, putting the lives of millions of the most vulnerable at risk.
More efforts should be made to ensure people in rural areas have access to water. In Lao PDR, where 65% of people live in rural areas, 1.9 million persons lack access to improved water supply and 2.4 million lack access to improved sanitation service. This is due to a large disparity in access between areas close to good roads and those in remote locations (World Bank, 2014[30]). According to an annual survey, 83.9% of people had access to improved water sources for drinking water (Lao Statistics Bureau, 2018[31]). However, 78.3% of these people are in rural areas, 96.7% are in urban areas, and only 58.4% had access among the poorest quintile. In all, 73.8% of people have used improved sanitation, among whom 64.9% live in rural areas and 94.1% in urban settings. Risk identification will be useful for ensuring appropriate action and allocation of water in times of shortage.
The Netherlands is often acknowledged as a global reference for water management in terms of ensuring protection from floods and freshwater supply. The country set a sequence of priorities for freshwater supply during shortages that could serve as a reference point for the Mekong countries (Box 5.1).
In the Netherlands, the central government sets the standards for the supply of national freshwater. It also sets the “sequence of priorities” to determine the allocation of freshwater to specific categories in times of shortage. The sequence is applied in exceptional circumstances.
The country defined four user categories in the sequence of priorities. Category 1, the highest priority, comprises freshwater use for safety and prevention of irreversible damage. This includes ensuring stability of flood defence structures, settling and subsidence of peat bogs and moorland, and preserving nature dependent on soil conditions. Category 2 includes utilities, such as drinking water supply and power supply. Category 3 includes small-scale high-quality use, including temporary spraying of capital-intensive crops, and process water. Category 4 includes shipping, agriculture, nature (provided that irreversible damage does not occur), industry, water recreation and lake fishing. The sequence of priorities under categories 1 and 2 cannot be adjusted, while regional water managers can establish and specify the priority uses within categories 3 and 4 (Table 5.2).
Providing incentives in agriculture for more efficient water use
The creation of an association for farmers could help enhance the sustainability of irrigation systems in Cambodia. In line with the principle of setting incentives for the efficient use of water resources, Cambodian legislation established the Farmers’ Water User Community (FWUC). This association, which brings together all farmers with access to the same water resources, is intended to ensure an effective and sustainable management and operation of the irrigation system. Water management in Cambodia is dominated by large-scale irrigation systems that are costly, require high technical capacity and need state intervention. However, public participation remains limited in the consultation and decision-making of these large-scale projects (Sithirith, 2017[33]). The establishment of the FWUC could thus encourage collective action among Cambodian farmers to use water for irrigation in a sustainable manner. However, the same study says that, of the 525 irrigation schemes across the country, only 6.3% have an FWUC. Furthermore, only 2% of FWUC schemes are considered to be functioning well (i.e. the leaders or committee are active in the operation and management of irrigation). Moreover, less than half of FWUC farmers participate. This is due to distrust in the government among farmers, low participation rates among local government and lack of finance.
Attempts to improve water irrigation efficiency in Myanmar are hindered by many challenges. The country is promoting water conservation, in particular for agriculture, through measures such as crop pattern adjustment, water supply scheduling, land levelling, water pricing, canal lining and rehabilitation of irrigation facilities (WEPA, 2015[16]). By improving irrigation efficiency, these measures could further boost farmers’ productivity. However, the irrigation systems that function well are under pressure. State-owned systems are highly subsidised and the amount charged to farmers does not cover costs. A lack of incentives to conserve water adds to the problem (Van Meel et al., 2014[18]).
Despite increasing pressures on water security, Thailand does not include improved irrigation efficiency as a role for regulators. Losses and water-use inefficiencies are considered high. This is particularly true for the agricultural sector, which accounts for over 54% of all water distributed in 2017. Moreover, growing population and industrial expansion put greater pressure on water security. Thailand may need around 5 billion cubic metres of additional water to satisfy increasing demand by 2027 (Apipattanavis, Ketpratoom and Kladkempetch, 2018[34]).
Viet Nam addresses water irrigation in its regulations, but unmonitored use of groundwater and illegal connections undermine the policy. The country has an inspection programme for water resource assessment, a plan for rational exploitation of water resources, a strategy for a water reserve and a policy to combat water pollution and unplanned exploitation. It ensures the efficient use of water resources through public consultation and approval mechanisms for investment projects involving water transfers. However, over-exploitation of unmonitored groundwater resources and illegal connections remain challenging (2030 WRG, 2017[25]). Land subsidence and saline intrusion caused by over-exploitation of resources may lead to further decline in groundwater levels and quality.
Viet Nam could consider offering incentives for farmers to increase productivity during the dry season. With rapidly increasing industrial, urban and agricultural activities, demand for water in Viet Nam continues to rise. This can be a challenge given that water sources are vulnerable to stress. Indeed, agriculture in Viet Nam consumes 81% of surface water. Therefore, the country needs to strengthen water-use efficiency. Possible measures include switching from traditional agricultural practice to crop diversification. Improving rice quality could also increase the value per unit of water used, while reducing total agricultural water demand (World Bank, 2019[14]).
Improving private sector involvement
In Lao PDR, the law on water supply outlines policies on taxation and financing sources. Both domestic and foreign investors in water supply can access loans from domestic or international financial institutions in accordance with laws and regulations. To promote investment, state land leases or concessions are exempt from fees. The WSS sector is highly dependent on external financial sources, which makes long-term planning difficult. The availability of regular financial planning and spending is still limited (SWA, 2019[35]). Increased resources from taxes would help, but additional revenues would also be needed. Boosting private investment and increasing commercial revenues offer possible options. However, poor revenue collection, high level of non-revenue water, poor functionality and high operating costs may discourage private sector involvement.
Viet Nam has policies to promote investment efficiency, but it does not provide any incentive in this regard. An exception is for the investment in water resource development aimed at reducing supply disparities between urban and marginalised populations. For instance, the government offers co-financing, as well as tax exemption, in order to increase the participation of private providers in rural areas. However, access to these incentives is limited due to complex administrative procedures, including the need for provincial governments to complete part of the application (Willetts et al., 2017[36]; Carrard et al., 2019[37]).
Even though some policies do not provide financial incentives for effective investment, they do provide support mechanisms. A water supply rotation fund, for example, enables availability of preferential financial sources for investments on water supply development in small urban centres and densely populated neighbourhoods. Other mechanisms include investment phasing and scaling of infrastructure to be suitable for up to five years from the date of commission. They also require investment plans or feasibility studies to consider life cycle costs.
Private sector involvement in publicly financed infrastructure projects remains limited. Most private sector participation is concentrated in projects funded by international financial institutions (2030 WRG, 2017[25]). Moreover, several issues discourage the international private sector from investing in the national WWS sector. These include inadequate loan security and lack of guaranteed minimum returns, standard contracts and common procedures. Tackling these issues would help increase both national and international private sector participation.
Promoting innovative technologies through public-private partnership
Regulatory bodies can provide incentives or specific schemes to promote innovative technologies. For instance, in Cambodia, the government grants rewards or incentives for research and development (R&D) of new technologies and installations of modern equipment that aim to reduce waste, improve water quality and increase water-use efficiency.
Viet Nam uses investment and other mechanisms to encourage R&D and to apply technologies. Notably, this covers efficient water resource development, wastewater recycling, saline and brackish water transformation, efficient rainwater collection and use, artificial groundwater supply, source rehabilitation and management of externalities. Declining water quality and increasing water demand have prompted Viet Nam to introduce appropriate technology to improve water quality and to manage water supply sustainably. The Korea Smart Water Management (K-SWM) initiative, for example, aims to improve water management by integrating information and communication technology (Box 5.2).
Driven by growing uncertainty over future water availability and demand, and risks of floods and water scarcity due to climate change, the Korean Water Resources Corporation, or K-water, has developed Smart Water Management (SWM). By integrating information and communication technology (ICT), the SWM is intended to produce and use large volumes of data in real time. This would support water resources management at different scales, such as data management, flood prevention, detection of leakage and promotion of water-use efficiency by households.
Two major elements of K-SWM are the integrated dam management and the Smart City water project.
Integrated dam management combines water infrastructure and ICT. It anticipates water demand and availability in real time, allowing better risk management of floods and droughts. ICT also enables the provision of real-time data on water use, expected rainfalls and available room in reservoirs, making it easier to manage dams and water bodies.
Through ICT, the Smart City water project provides consumers with instant and reliable information on water use, and the quality and quantity of water supply. Such mechanisms may further help detect leakage and encourage tap water drinking. As water suppliers in Korea need to replace ageing infrastructure, additional financing sources are needed. Minimising non-revenue water by reducing leakage and increasing consumption, particularly for drinking purposes, provides a clear way to increase revenues from water tariffs, while keeping prices low. While K-water leads SWM, other water suppliers could supply ICT integration to help detect leakage and inform consumers about water quality as need arises from cities and households.
Several cities are piloting applications for domestic water users, including smart water meters that monitor water quality in real time. As users see value in improved service, they have more trust in the system and are more willing to drink tap water. Despite these benefits, K-SWM has significant initial transaction costs, especially stemming from the time spent by K-water staff to promote and roll out the project in pilot cities. In addition, local governments must pay for smart water meters. Thus, for K-SWM to be rolled out beyond pilot cities, the business model should allow recouping these costs by increasing efficiency or earning revenue.
The cost of too much, too little or too polluted water is a global issue that SWM could help minimise. As such, there is potential demand for SWM abroad. However, SWM relies extensively on ICT to maintain and operate the system. This might work in the Korean context, but could be difficult to deploy in developing countries. As a result, the potential diffusion of SWM abroad should take into account the target countries’ capacity to adapt and adjust innovation to local conditions.
Source: OECD (2017[6]), Enhancing Water Use Efficiency in Korea: Policy Issues and Recommendations, OECD Studies on Water, OECD Publishing, Paris.
The legislation also considers the modernisation and manufacture of water supply equipment. For instance, big cities such as Hanoi, Hai Phong and Ho Chi Minh City, as well as dynamic urban areas and industrial parks, apply modern technologies to the water supply system. In addition, the policy highlights the full use of domestic equipment, facilities and supplies to reduce investment cost, as well as use of synchronised technical equipment to simplify replacement.
In Thailand, the Metropolitan Waterworks Authority (MWA) has supported innovation by promoting water saving devices and establishing a mobile application for consumers and software that helps detect leaky pipes (MWA, 2018[38]). Conversely, regulations in Lao PDR and Myanmar put little focus on promoting innovative technologies.
Since applying innovative technology may require large amounts of investment, public-private partnerships could be one solution. These could support water start-ups and accelerate innovation (Box 5.3).
Founded in 2012, the Water Innovation Accelerator (WIN) is a virtual network-centred incubator model in Sweden. It aims to fast track water-related innovations through assistance, financing and access to market for small and medium-sized enterprises (SMEs). The network is made up of the private sector (SMEs and large corporations), the public sector (municipalities and public utilities) and academia (universities and research institutes). Participating innovation companies engage particularly in innovative solutions for drinking water, wastewater, infrastructure, measurements and energy. Through networking, these companies can get early feedback directly from the market. This allows them to adjust their focus and make the most of innovation to reach their full potential. As a non-profit organisation, WIN receives funding mainly from membership fees of partner organisations and the Swedish Agency for Economic and Regional Growth.
WIN organises regular meetings, allowing both innovation companies and other partners to share their experience and insights. The meetings also serve as matchmaking activities where members can find potential business models for commercialising their innovations. The matchmaking between participants is done through a “mingle map” developed by WIN management. Within the mingle map, a circle is drawn by dots, in which each dot represents participating organisations (Figure 5.1). Lines, which represent potential business opportunities identified by the WIN team, connect these dots. In general, at least two lines connect each organisation. During meetings, participants use the map to identify business opportunities that have been suggested to them.
Source: OECD Development Centre adapted from Gabrielsson et al. (2018[39]).
Gabrielsson et al. (2018[39]) show that most WIN participants find several value-added elements to develop their business. In less than two years, WIN has helped several SMEs to grow by giving them access to risk capital, test beds and a better understanding of solutions needed by the municipal or by multinational companies to develop their business (Gabrielsson et al., 2018[39]). The study also found that benefits for SMEs depend on the phase of the innovation process they are at. For instance, the acceleration process worked better for SMEs at the commercialisation stage than for those at an earlier stage of innovation. This suggests that WIN’s network-centred approach may be an effective way to support development and market uptake of water innovations.
Facilitating initiatives to reduce water demand
Regulators promote demand management through incentives or specific schemes to reduce water demand. Thailand has launched different activities targeted to students and the wider public. For instance, within the school environment, the Water Conservation Camp raises awareness of the value of water and water conservation among students in two river basin areas in Nonthaburi province (MWA, 2018[38]).
In Viet Nam, water stress or even severe water stress is expected in five river basins by 2030 (2030 WRG, 2017[25]), making it vital to reduce water demand. Lessening the water stress level from “severe” to “low” during the dry season by 2030 requires reducing annual demand by 2.5 billion cubic metres from the Mekong Basin alone (2030 WRG, 2017[25]). Reducing water demand from the remaining basins, which serve agricultural, industrial and municipal purposes, is also necessary. Interventions in each sector, or even a mix of interventions, may offer a path to achieve the required target.
Low awareness of protecting water resources and lack of commitment in reducing water use are examples of demand management challenges. In the Vietnamese society, water is perceived as a “limitless God-given resource” (Du et al., 2016[26]). Such attitudes are common primarily in urban areas, which have a high incidence of littering in public spaces and waterways. Indeed, the law on water resources highlights policies on communication and education, emphasising measures to protect water resources and to conserve water under the guidance of central and local governments. In this case, co-ordination between state agencies, mass-media agencies, and education and training institutions is essential. Moreover, political organisations, in co-ordination with state agencies in charge of water resources, may mobilise people to participate in water resource protection, as well as to monitor the protection and exploitation of water resources.
Better water demand management could offer several benefits. If water conservation can defer development of a new water source, the government could allocate the saved funds for other urgent matters. Demand management could also promote efficient use of water. From the customers’ side, reducing water consumption could lower water bills if charges are variable, depending on consumption rather than fixed (McIntosh, 2014[40]). Cambodia, Lao PDR and Myanmar, however, seem to be lagging behind in terms of demand management.
Analysing investment plans of water utilities
Information related to analysing water utilities’ investment plans or business plans seems to be lacking in Cambodia, Lao PDR, Myanmar and Thailand. On the contrary, in Viet Nam, investment in water supply units must comply with approved construction plans and include public consultation with the relevant communities to develop feasibility studies. This is in line with the principles of stability, safety, and resiliency, as well as the principle of economic and financial viability in the Asia-Pacific Economic Co-operation Guidebook on Quality of Water Infrastructure and Development. Viet Nam also requires water supply units to seek approval from People’s Committees on their annual and long-term water supply development plans in the respective service areas. Once these plans are approved, the units remain responsible for investments in distribution networks and customer-level connection. However, the high level of decentralisation may become a challenge due to different levels of competence in project development and implementation, as well as possible conflicts of interest (World Bank, 2019[14]).
Improving information gathering and data collection
Countries in the Mekong region face a difficulty in obtaining data from water utility records. Lack of data becomes an issue, for example, in cases of unmetered connections or unreliable meter readings (Nauges and Whittington, 2009[41]). When households are connected to unmetered piped-water networks, water utilities and households themselves struggle to obtain estimates of the volume of water used. Where connections are metered, readings can also sometimes be unreliable. For instance, with intermittent water supply, air that enters the pipes can be registered as water, providing inaccurate readings. Low water tariffs in many developing countries exacerbate this problem, giving little incentive for water utilities to improve the O&M of water meters.
Cambodia, Lao PDR and Viet Nam collect data from operators and research the market to identify trends and potential risks. Cambodia requires national, provincial and municipal institutions in the WWS sector to submit data on quantity, quality and other relevant information to MOWRAM. Data are freely available to all government agencies and the public, except for those classified as confidential. MOWRAM may charge for data requested for commercial purposes. In Lao PDR, legislation outlines the creation of the National Water Supply Data and Information System. The database aims to support the development, monitoring, assessment of implementation of policies, strategic plans and water supply operations.
Viet Nam has more detailed water resource management policies. These refer to investments on water resource observation; a surveillance, information and database system; information gathering on lists of river basins and water sources; information sharing with organisations and individuals; a water resource survey and master plan survey; and requirements for a water resource inventory and reporting every five years. Viet Nam charges organisations and individuals for their use of information on water resources. This policy might become a barrier for those willing to use the data, as well as limit information and data sharing among stakeholders.
In Cambodia and Myanmar, data comparability and accessibility issues remain challenging. In Cambodia, datasets on water supply and sanitation are incompatible (ADB, 2012[15]). This is due to infrequent data collection, differences in definitions, lack of co-ordination between agencies and lack of consensus on service indicators. In Myanmar, many data are lacking, and those available are difficult to access.
Developing capacity in licensing of water operators
In keeping with the NSDP 2014-18, the Cambodian Ministry of Industry and Handicraft licenses private water operators. As of 2015, Cambodia had about 300 water operators, of which only 147 are licensed. In response, the urban water supply sector has prioritised developing the capacities of the relevant agency in licensing and bringing all unlicensed operators under its supervision (WSP and World Bank, 2015[42]). In Lao PDR, the legislation defines requirements to establish water supply enterprises. It also outlines an investment mechanism policy and allocation of responsibility for construction approval among vertical actors. These include provincial and municipal jurisdictions, and the Ministry of Public Works and Transport.
In Viet Nam, a water supply unit may invest in or invite investment for activities associated with water supply. For areas without water supply units, legal provisions for bidding and specific conditions of each community dictate the criteria for selection of water supply units for investment.
Depending on the location of the projects, different actors select the water supply units in Viet Nam. For instance, the Ministry of Construction selects water supply units for urban centres or industrial parks needing water supply works of inter-provincial scale. Meanwhile, the Ministry of Agriculture and Rural Development selects such units for rural areas. The legislation also defines the conditions for consultancy units to elaborate water resource master plans, as well as the conditions for the transfer of rights to water supply service businesses. In Myanmar and Thailand, granting or approving licences to operate water systems is barely mentioned in legislation or policy.
Strengthening the supervision of contracts with utilities and private actors
Legislation in both Lao PDR and Viet Nam covers the supervision of contracts with utilities and private actors. Lao PDR specifies rights and obligations of concessionaires, as well as conditions for length and termination of contracts. Its legislation also requires water supply service providers to install sanitation infrastructure. It is understood that fire departments can use water for free. Similarly, the Vietnamese legislation defines rights and obligations of both water supply units and customers. In this way, it aims to meet the multi-dimensional needs of stakeholders. These can include protecting both parties against concerns such as market abuse, damage from externalities like pollution and conflicting information from different sources. These regulations, which affect both local authorities and water supply units, have not been adequately enforced (World Bank, 2019[14]). In addition, quality assurance services for local authorities and consumer protection have not been implemented. Consequently, all parties might be exposed to risk. For all these reasons, the regulations fall short on providing investment incentives. The legislation also provides details on the supervision of contracts between private actors and end users. For instance, water supply units connect customers through distribution networks to balance water-use demands, and charge them a water-use fee.
Monitoring utilities’ financing activities
While supervision of contracts with utilities or private actors can be identified within Viet Nam’s legislation, supervision of utilities’ financing activities seems to be lacking in this country. This function, which consists of monitoring the financial schemes of water utilities, can be identified in Lao PDR and Thailand. Lao PDR authorises the establishment of a fund to maintain, improve and develop the water supply infrastructure. The Water Supply Development Fund is financed through the state budget and assistance from domestic or foreign individuals and organisations, including service providers. In addition, the legislation defines policies on profit taxes, investors’ duties, access to sources of funds and exemption of fees on state land leases or concessions in accordance with the law on investment promotion. In Thailand, in accordance with the National Environmental Quality Act, the Environment Fund finances several activities related to water quality management. Interest from fixed deposits must be spent on Fund activities and not remitted to the Treasury. In addition, legislation defines the Fund’s responsibilities for different activities related to water quality management.
Increasing public participation
Regulators communicate decisions and other issues to the public, and may consult them regularly. For instance, in Cambodia, the PPWSA launches campaigns and maintains contact with communities to disseminate information related to services, such as procedures to obtain new connections; information related to water tariffs, subsidies, penalties for illegal water connection, non-payment of bills and water quality (Das et al., 2010[43]).
In Viet Nam, the Ministry of Construction encourages people and communities to help manage and oversee water supply activities. The legislation requires public consultation and approval of projects related to water resource exploitation and discharge of wastewater into water sources. Investment projects that involve water transfer are also subject to consultation with competent authorities, such as the People’s Committees and river basin organisations. In practice, however, civil society, research institutions and local communities have limited participation in the decision-making process (Grafton et al., 2019[44]). This might be due to factors such as lack of implementation guidelines and absence of targeted resources.
While customer engagement in Viet Nam focuses on water supply-related activities, Thai legislation emphasises individual rights and duties, as well as involvement of non-governmental bodies in environmental protection. However, the lack of understanding of wastewater problems and environmental protection among Thai communities are barriers to public participation (WEPA, 2015[16]). In Thailand, the MWA established the “Quality Water for Quality Life” project to build networks and get customer feedback. The initiative consists mainly of events where participants can learn about services related to plumbing, inspection and leakage repair, as well as the MWA mobile application and consumer satisfaction (MWA, 2018[38]). There is little mention of customer engagement within the legislation or policies of Lao PDR and Myanmar.
Managing dispute resolution and consumer protection
In Cambodia, the PPWSA receives consumer complaints related to issues such as water consumption, connection, metering and leakage. They are reported to relevant units and recorded by the data entry department (Das et al., 2010[43]).
In Lao PDR, service users can complain to authorities about either the quality or quantity of the water supply. Consumers may also receive compensation for losses resulting from water supply services as defined by law. Dispute resolution includes mediation or conciliation, administrative settlement, arbitration, court judgement and international charter resolution.
In Thailand, individuals have the right to compensation against damage from pollution. Citizens also have the right and duty to report on offenders if they witness any violation of laws related to pollution control or conservation of natural resources.
Viet Nam’s legislation stipulates more detailed rights for consumers. Legislation covers errors and damage compensation, water charge payments, water measuring equipment and settlement of complaints and reports of illegal acts. For instance, with regard to water charge payment, authorities may compensate consumers for excessive charges by water supply units. Consumers may also complain about inaccurate measurement and be compensated for inspection of equipment. One particular challenge related to compensation in Viet Nam’s water sector industry includes the absence of capacity and technical knowledge in quantifying losses (Grafton et al., 2019[44]).
Addressing water sector challenges through capacity building
Regulators provide advice and advocacy for reforming and improving the regulatory framework. However, among the Mekong countries, Viet Nam provides details on its policy. Three examples from the policy, established in 1998, relate to governance reform, financial policy renewal and human resource development.
First, governance reform targets restructuring of inappropriate organisations at central and local levels, and raises the role of local authorities at all levels in water supply management. Nonetheless, highly decentralised management might become a challenge once actors work together less often. The dual supervisory roles of central agencies and provincial People’s Committees, alongside unclear reporting mechanisms, might also reduce water governance efficiency (Grafton et al., 2019[44]).
Second, financial policy renewal outlines the mobilisation of multi-sectoral finance, tariff-setting for financial autonomy and cost coverage for wastewater drainage in urban areas.
Third, human resource development covers building capacity of all personnel in the water supply sector from management to technicians. It also encourages contributions from non-resident Vietnamese experts. However, the number of qualified staff in water resources management, particularly within the Ministry of Natural Resources and Environment (MONRE), remains limited. MONRE’s 2010 staff survey revealed that water sector experts account for only 0.4% of personnel (Du et al., 2016[26]). This includes staff skilled in specialised water management software. Given the small proportion of qualified staff in the water sector, the government must improve its human resources capacity to achieve its water-related goals and responsibilities. Improving human resources capacity could be done, among others, through the establishment of training centres. In Tokyo, Japan, for example, the Bureau of Waterworks established the largest waterworks training institution in the country (Box 5.4).
The Bureau of Waterworks, Tokyo [Japan] Metropolitan Government, created the Training and Development Centre in April 2005 – the largest centre in the country for training, and research and development (R&D) functions. The centre provides various facilities for experience-based training, including a simulation of water pipe laying sites. It allows trainees at the Bureau, other water utilities in Japan and overseas visitors to acquire on-site waterworks techniques and capabilities.
The Tokyo Waterworks prepares annual training programmes for staff. In addition to training and upskilling programmes, the Bureau ensures that accumulated knowledge is passed down effectively among staff. In July 2008, a system for experts was launched to securely disseminate information on the waterworks techniques accumulated to date. In this system, staff members with particularly high skills and extensive experience are certified as experts. These experts share their own experience and knowledge in documents, videos and other materials to be used by other staff. They are also expected to guide and advise other staff members from different work sites.
A knowledge management system has also been established by consolidating and using technical information to master the waterworks techniques (Figure 5.2). As part of this management system, a knowledge bank was developed and started operating in April 2007. The accumulated knowledge and data are stored in a database.
The Bureau of Waterworks conducts R&D in a wide range of areas, including leakage detection equipment and water meters, corrosion resistance of service/distribution pipes and water treatment technology. Additionally, it conducts collaborative research with private companies and universities to introduce advanced technologies and know-how. These achievements are used for various operations within the Bureau, and also help improve the technological capability of water utilities across the country.
Note: OJT = On-the-job training.
Source: (Bureau of Waterworks Tokyo Metropolitan Government, n.d.[45]), Water Supply in Tokyo, https://www.waterworks.metro.tokyo.jp/eng/business/supply/ (accessed on 16 March 2020).
Cambodia
In Cambodia, rural water systems lag behind those of Phnom Penh. Generally, the regulation of water systems is incomplete. Water tariffs are too low to support full cost-recovery of water system operations. A shortage of physical and human capital impairs proper management of drinking water sources, which leads to contamination, especially in rural areas. Weak enforcement undercuts already weak laws pertaining to water treatment. Meanwhile, weak institutions limit the ability of affected customers to seek recourse. Fewer than half of all private water supply operators are licensed.
Standard definitions are essential to improve access. Differences in definitions of terms and policies among jurisdictions have contributed to a drinking water access gap. Nearly all residents of Phnom Penh have drinking water piped into their dwellings. Elsewhere, less than 60% of residents have piped water, despite strong centralisation of waterworks planning and permits by MOWRAM. The variability of definitions also results in data inconsistencies, making any research difficult or suspect. On a positive note, data are centralised in one agency.
The government provides R&D grants for water conservation technologies. For those efforts to reach their full potential, Cambodia must promote water demand management initiatives, such as education programmes and FWUC. However, the credibility of institutions remains a barrier.
Lao PDR
Water regulations are well-defined in Lao PDR. Regulations on tariffs, drinking water quality, infrastructure development, and supervision of private water provision contracts, and utility financing activities exist in federal legislation or ministry decrees. Roles of ministries and the levels of government are well-delineated, allowing for co-operation without wasteful duplication. A robust National Data and Information System supports these functions. Water consumers enjoy considerable protection. Tariffs are well-stratified, but could be increased in all areas. Water supplier contracts are supervised, and suppliers are also responsible for supply sanitation. In the event of disputes, customers can file complaints to an agency where avenues for resolution are strong and widely available.
In contrast, Lao PDR lags in conservation. It does not promote demand management nor does it provide incentives for R&D into conservation technologies. Monitoring of service performance is lacking, and the term itself is not clearly defined. If monitoring results in an inability to detect and respond to issues such as pipe leakage, water may go to waste. Responsibilities for funding are clearly delegated to the Water Supply Development Fund. However, much of the funding for both potable water provision and sanitation is external. Tax and fee breaks on investment and operation encourage involvement, but poor revenue collection, along with high operating costs deter external investment.
With respect to water quality, the reporting structure is robust. However, reports are written in Lao and highly inaccessible. Thus, while analysis can be conducted internally, external analysis of the water quality of Lao PDR is difficult.
Myanmar
In Myanmar, quality standards for drinking water are poor, and drinking water is often contaminated. Institutional disorganisation and insufficient infrastructure in urban areas make it difficult to treat wastewater. In terms of conservation, government efforts are largely futile. State-owned irrigation systems do not recover costs, making maintenance or upgrades difficult. On a positive note, construction projects that may impact water resources require Ministry of Transport approval. Data and service monitoring is limited in scope, depth, access or a combination thereof. Notably, of all the Mekong countries surveyed, Myanmar has the most fields missing from its table (see Annex Table 5.A.3).
Thailand
Thailand’s legislation for water regulation is either weak or ignored. Tariffs have remained mostly unchanged since the 1940s and are far below the amount required to cover operational costs. Drinking water quality is subject to national standards, and testing is both extensive and reliable. There are areas for improvement, but more skilled labour is needed in these areas. Water contamination is common due to regulations being ignored. Likewise, environmental impact studies of construction projects are only undertaken upon request, putting water supplies at further risk of contamination.
Water demand management is compulsory in the education system. The MWA promotes the production of devices and services to control demand, but it does not seem to encourage changes in behaviour nor the adoption of these technologies.
The “Quality Water for Quality Life” initiative allows people to access information on both do-it-yourself and government repairs, as well as to provide user feedback. The initiative publicises rights and duties of environmental protection, but more public education is needed to make them understood. As of now, they are mostly ignored. Service delivery performance does not appear to be monitored in Thailand either, as is common in most Mekong countries. Customers have the right to seek compensation for damages caused by pollution and to report environmental law offenders. In contrast, they do not seem to provide a mechanism for compensation relating to service failures.
From a financial perspective, the Environmental Fund is responsible for water management. Strict criteria must be met to access money from the Fund. However, efforts should be made to enact incentives for further foreign investment in the Thai water sector.
Thailand appears to have appropriate water regulation given its legislative challenges. Stricter enforcement of legislation and devising foreign investment opportunities would allow Thailand to access foregone potential in that sector.
Viet Nam
Viet Nam possesses robust water regulations, in general. While its specific policies may not be applicable to every country, the depth and scope of Viet Nam’s regulations could be emulated. To do this, improved enforcement and human capital is critical.
Tariff regulations are detailed, and water supply companies have financial autonomy. However, as with every other Mekong country for which tariff data are available, tariff schedules fail to provide full cost recovery. The Ministry of Health sets quality standards for drinking water. Licensing and quality standards are in place for wastewater treatment, but most wastewater flows into streams untreated, harming downstream water quality. Socio-cultural differences among ethnic and religious groups hamper water quality preservation efforts in Viet Nam. The population does not universally understand the value of water and sanitation practices. Formal studies are required to determine the exact differences and how to successfully change behaviour.
Service quality standards are well defined, and any water infrastructure expansion requires feasibility studies. However, there are deficiencies in monitoring. In keeping with standards, maintenance is a collective effort and the country encourages routine renovation of systems. Individual water suppliers are responsible for metering. Consumers can seek compensation for overcharging, but technology to identify this practice is lacking. This harms both conservation efforts and consumers. Water conservation policies exist, but compliance is challenging. Many Vietnamese view water as a limitless resource bestowed upon them by God. Consequently, there is little concern for demand management. Policies exist, but illegal connections to water sources are common and groundwater contamination remains an ongoing issue. Rice, the main crop grown in Viet Nam, is extremely water-intensive, so authorities should pursue incentives to control agricultural water use. Legislation promotes the development of technologies to address high water demand and the declining quality of service. Licensing of water operators is mainly local, leading to system variations. Standardisation of infrastructure parts would improve maintenance in terms of both shorter downtimes and lower costs. Reducing or eliminating regulatory duplication would represent a significant step towards improved efficiency.
As a measure of efficiency, all investments in water infrastructure must be valid for five years after the date of their commissioning. A potential avenue for investment growth is expansion of investment incentives beyond projects to close the urban-rural gap. Water supply investments must comply with approved construction plans, and are subject to feasibility studies and public consultation before approval. In practice, public consultation is limited due to lack of interest. Improved enforcement of legitimate rights and obligations for both suppliers and consumers would encourage investment.
Water and wastewater regulators are usually part of a broad regulatory framework at national or sub-national level. These involve different line ministries, local authorities and non-governmental bodies such as consumer advocacy groups or associations of utilities. Out of 19 types of regulatory functions, all Mekong countries define technical or industry and service standards by type of function. However, they all seem to lack services for monitoring performance and managing audits on utilities.
In general, the five countries may need to address tariffs (which are too low to cover O&M), lack of data and limited human resource capacity. This suggests there is scope to improve regulation of the WWS sector in Mekong countries. Such reform could embrace the efforts of government, communities and societies to create a sense of ownership in the positive impacts of projects and policy tools. Complex challenges such as governance and financial sustainability are found throughout the Mekong region with respect to accessing water infrastructure. Universal access to drinking safe water, sanitation and hygiene can provide benefits across sectors, including health, well-being, economy and the environment.
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