A model of costs and resources for rural and peri‐urban water supply and sanitation in the 1990s

This article develops a model of cost and financing strategies for rural and peri‐urban water supply and sanitation. It suggests that significant progress towards the World Summit for Children's goal of universal access to water supply and sanitation can be made if a combination of strategies is adopted. On the cost side, significant cost reductions should be possible through efficiency in resource use and reduction of system management costs. On the financing side, it suggests restructuring the financing of the sector with improved efficiency and greater cost recovery in urban services; full recovery of operation and maintenance costs; cost sharing through community contributions in kind such as local labour and financially in rural and peri‐urban water supply for basic levels of service depending on willingness and ability to pay and full cost recovery for higher levels of service; a high degree of cost recovery in rural and peri‐urban sanitation; development of institutional structures for both collection and management of revenues; development of alternate financing mechanisms such as rural credit schemes and revolving funds, adapted in specific country contexts, including the required institutional mechanisms; and additional allocations from governments and external support agencies. Additional government or external financing alone, while critical, will not of itself lead to effectiveness in the use of resources. Equally, cost recovery alone cannot lead to universal access and sustainable solutions. A composite set of actions is needed within which building capacities of institutions and people is necessary for sustainability.