How Efficient is the Supply of Water in Latin America?

Universal supply of water is one of the biggest challenges facing cities and, particularly, rural areas in Latin America. Water basins, hydrology, infrastructure and supply networks are fundamental in this cog of the mechanism that will improve the well-being of the population. A study carried out by CAF - development bank of Latin America - shows that the inefficient demand for water due to shortcomings in management and distribution is a priority issue in the region that must be dealt with.

The results of the study, carried out in 26 cities, show that just 46% have the infrastructure needed to meet the demand for water in urban areas. Nevertheless, the major problem does not appear to be lack of infrastructure, but rather the inefficient demand for water. Based on the figure of approximately 80 cubic meters per person per year (considered as efficient demand), the number of cities that could meet demand could be doubled (nine out of ten).

The non-revenue water (NRW) rate declared in the cities studied is over 40%. In some of the 26 cities studied, such as Barranquilla and Guayaquil, water loss exceeds 60% of total water, while only Santa Cruz, Bolivia, has low consumption and acceptable water loss. In general terms, water management in most cities is inefficient, with large losses and an ever-increasing demand per capita, well over what is considered as efficient demand.

"Greater loss of water and the increase in demand – generally brought about by inefficient management of infrastructure and networks in cities – is the main obstacle to water safety, which is vital for inclusion, productivity and resilience in the region. Therefore, it is essential to increase the efficiency and flexibility of networks so that distribution of water supplied to the city may be optimized, by introducing suitable regulatory incentives to reduce water loss in networks", said Jose Carrera, CAF’s Vice-President of Social Development.

There are clearly not enough incentives currently in place to reduce water loss. The main consequence of this is that the cost of operating inefficiency is passed on to consumers by charging them higher rates. According to the study, the annual billing cost in more than one-third of these cities (35%) is over US$ 100 per household, with 46% in the middle bracket (billed between US$ 50 and US$ 100) and 19% in the lower bracket (less than US$ 50). Comparing these figures with households’ per capita income, we can see that on average water rates account for approximately 8% of household income, which is relatively high when compared, for example, with some cities in the United States, where water rates account for just between 1% and 2% of household income.

The details of this report and proposals to improve supply and quality of service will be discussed at the Infrastructure for the Development of America Latina Conference to be held at the Hotel Alvear Icon in Buenos Aires on April 25 and 26. You will find the full conference program and the registration form here.