Costs of WASH Service Delivery - Introduction
The costs of water, sanitation and hygiene services include expenditure on construction of water and sanitation systems, operation and maintenance and eventual rehabilitation of infrastructure. It also includes training and support to service providers, cost of capital, and expenditures for monitoring, planning and policy making. They are often referred to as life-cycle costs; the costs of delivering water, sanitation and hygiene services indefinitely to a specific population in a particular geographic area.
Life-cycle costs are divided into six categories (see figure 1 below). These six categories are related to onetime expenditures on providing or upgrading a service, also known as capital expenditure (in green in figure 1) and recurrent expenditures (in blue in figure 1) on maintaining a service at its intended level.
Capital Expenditure (CapEx) is the costs of providing a water or sanitation service to users where there was no service before; or of substantially increasing the level of services received by users. It includes the capital invested in the first time construction of water and sanitation systems such as concrete structures, wells, pumps, pipes or toilets prior to implementation of the service. Capital expenditure can also include expenditures to improve or expand existing water or sanitation systems.
Recurrent expenditures consist of the following categories of expenditures:
Operations and minor maintenance expenditure (OpEx) covers the costs for operating and maintaining water and sanitation systems such as labour, fuel, electricity, chemicals, cleaning products for latrines etc.
Capital maintenance expenditure (CapManEx) is the cost of replacement or rehabilitation of water and sanitation infrastructure in order to keep service delivery on-going.
Cost of capital (CoC) is the expense of financing a programme or project and includes interest on loans and the cost of tying up scarce capital. In the case of private sector investment, the cost of capital includes what should be a ‘fair profit’, to be distributed as dividends.
Expenditure on direct support (ExpDS) includes expenditure on post-construction activities directed at local stakeholders, users or user groups. It is the costs of ensuring local government staff have the capacity and resources to repair broken systems and monitor service delivery.
Expenditure on indirect support (ExpIDS) includes government national level planning and policy making, plus developing and maintaining frameworks and institutional arrangements and capacity building for professionals and technicians. Expenditures on indirect support are not tied to a particular programme or project.
Examples
World Bank-RWSN Webinar life-cycle costing
In this webinar on life-cycle costing, Catarina Fonseca, IRC senior Programme Officer and the WASHCost project director, explains the life-cycle cost components. This webinar was part of the World Bank-RWSN Webinar 7, May 15 2012).
Cost benchmarks
Based on research from the WASHCost project, the one-time capital expenditure for preparing and installing a borehole and handpump (at 2011 prices) range from US$ 20 per person to just over US$ 60 per person (see table 1). For small piped schemes, including mechanised boreholes, benchmark costs range from US$ 30 to just over US$ 130 per person. For intermediate and larger schemes benchmark capital costs vary widely from US$ 20 to US$ 152 per person. Recurrent costs benchmarks range from US$ 3 to US$ 6 per person per year for boreholes and handpumps, and from US$ 3 to US$ 15 per person per year for piped schemes.
Table 1 Capital and recurrent expenditure benchmarks for water services
| Cost component | Primary formal water source in area of intervention | Cost range US$ (2011) [min-max] |
| Total capital expenditure (per person) | Borehole and handpump | 20-61 |
| Small schemes (serving less than 500 people) or medium schemes (serving between 500-5000 people) including: mechanised boreholes, single town schemes, multi-town schemes and mixed, piped supply. | 30-131 | |
| Intermediate (5,001-15,000 or larger: more than 15,001) | 20-152 | |
| Total recurrent expenditure (per person, per year) | Borehole and handpump | 3-6 |
| All piped schemes | 3-15 |
Source: IRC, 2012.
The costs as shown in table 1 (above) are based on the provision of a basic level of water service, as defined by WASHCost. A basic service implies that the following criteria have been realised by the majority of the population in the service area: People access a minimum of 20 litres per person per day, of acceptable quality (judged by user perception and country standards) from an improved source which functions at least 350 days a year without a serious breakdown, spending no more than 30 minutes per day per round trip (including waiting time).
Based on research from the WASHCost project, the cost of preparing and building a traditional pit latrine that can provide a basic level of service ranges from US$ 7-26 (at 2011 prices) (see table 2). The cost of a pit latrine with a concrete slab, or of a VIP latrine ranges from US$ 36 to more than US$ 350. The benchmark costs of pour-flush or septic-tank latrines range between US$ 90-360 (rounded). Recurrent expenditure range from US$ 1.5 for low-cost pit latrines per person per year to US$ 11.5 per person per year for the most expensive pour-flush or septic-tank latrines.
Table 2 Capital and recurrent expenditure benchmarks for sanitation services
| Cost component | Primary formal water source in area of intervention | Cost range US$ (2011) [min-max] |
| Total capital expenditure (per latrine) | Traditional pit latrine with an impermeable slab (made often from local materials) | 7-26 |
| Pit latrine with a concrete impermeable slab, or VIP type latrine with concrete superstructures (with ventilation pipe and screen to reduce odours and flies) | 36-358 | |
| Pour-flush or septic-tank latrine, often with a concrete or brick-lined pit/tank with sealed impermeable slab, inluding a flushable pan. | 92-358 | |
| Total capital expenditure (per person, per year) | Traditional pit latrine with an impermeable slab (made often from local materials) | 1.5-4.0 |
| VIP type latrines | 2.5-8.5 | |
| Pour-flush or septic-tank latrines | 3.5-11.5 |
Source: IRC, 2012.
