Without PPP no 821250 Million liters of Water to meet SDG6
By Jan van Schoonhoven – The numbers are staggering; according to the United Nations latest count: 750 million people lack access to drinking water. Sustainable Development Goal number 6 strives for water for all; realizing that the challenge is enormous.
The problem is clear?
Under the guidance of the UN many organizations are discussing the magnitude of the problem and in many cases point to the private sector. A short internet survey brought up over 200 reports on the current challenges, the number of people, the financing gap, and the countries in need and the effect it has on people and economy; the same survey gave no real report on how to solve the issue. The challenge the world is facing today is not the problem of why water for all is important; enough is said about that. The real challenge is to discuss solutions and a shift of thinking of the main organizations to understand the magnitude of the challenge and ways to solve. The current approach is still much talking, small-scale solutions and concentrating on the problem.
What is the actual challenge?
Roughly needed are 821250000000 liters annual for the ambition ‘Water for All’. Looking at the timeframe of the SDG’s, 20 years; 6425000000000 liters or 4,339,025,959,982.6 gallons, not even taking into account the population growth For 750 Million people, a bare minimum of 3 liters of drinking water is needed per person per day. How to visualize: 700 times the water content of het Ijsselmeer of 4000 lake Ontario’s are needed.
What is we would only built water plants?
How do the math’s turn out: an average water plant produces, operational in Africa for example, produces 100 million liters a day. Looking at around 730 million to feed and have a long-term vision and look 20 years ahead; roughly 22500 water plants are necessary. What is the investment needed: A water plan of 750 million liters of water costs around 39 million US$ and again 39 million for maintenance over 20 years; total costs: 1755000 million US$ (1,755 trillion). The countries lacking sufficient drinking water around the world is around a 100, with 25 in immediate need. Each water plant will provide jobs for 100 people during the construction phase and during operation and maintenance it will create around 70 jobs locally and boost SME’s. The same goes for the energy plant as well, With building and adjoined energy pants, water plants we would create around a 3 million long lasting jobs and investment in local enterprises in the countries itself: the SDG’s ‘erase poverty’ and ‘energy for all’ are addressed as well.
But there is good news as well, is presented in a report of the World Health Organization (WHO). The total global economic losses associated with inadequate water supply and sanitation were estimated at US$ 260 billion annually, or 1.5% of Gross Domestic Product of the countries included in this study. The total economic benefits of meeting the MDG target amount to US$ 60 billion annually. The benefits are dominated by sanitation, accounting for US$ 54 billion. The three regions where benefits are greatest are Asia, East Europe and Africa.. Attaining universal sanitation will more than triple the benefits compared with current coverage, to US$ 220 billion annually. PPP and Water? Part of the solution is Public Private Partnerships (PPP). This mainly because water is a typical infrastructure asset that fits very smooth in a Public Private Partnership arrangement. Many examples are operational for years in almost every part of the world. Skipping the details of PPP, a PPP is a long-term contract of an infrastructure asset. This type of contract (life cycle contract) is designed to increase efficiency and output against reasonable cost. Last but not least, it’s a well-known and attractive contract for private investors. Unlock private investment, certainly in energy, has an excellent track record all over the world. The attractiveness of PPP in Water is three folded:
- The business model is easy and therefore interesting for private investors;
- The PPP’s in water focus on efficiency (stop leakage of water for example);
- It will significant reduce the costs (and price) of water by involving the private sector PPP’s are not the golden solution for all water problems.
Technical challenges present of course, energy, piping, distribution etc. is needed; but just focus on 1.755 Trillion US$. Certainly PPP is not always a solution in very area or very country, for example on Small Island; if there is not enough takeoff. Or the climate change, deserts with no salt water to produce drinking water and (political) border issues will present impossibilities. But again, is only 50% of the water can be produced by this type of PPP it as a major step ahead. A major political hurdle is the acceptance that water is not for free and has its prices, like electricity, fuel and food. Ignoring that fact makes all solutions unbankable and therefore not realistic The above is of course simplified but intended to focus on solutions and more apatite for Public Private Partnerships. The main theme; There’s no substitute for the three liters of water a day, without it people will starve. If the United Nations and the world accept that the solution is ‘only’ an annual 821250 million liters of water as the core of the problem, thing big is the only solution. Hope they had 5 minutes in New York to think about this.
Jan van Schoonhoven is Senior Advisor Infrastructure and PPP Netherlands Government and Former Executive Director UN PPP Centre of Excellence at UNECE.