Reform to Potable Water and Sewerage

closed

This Multilateral Investment Fund (MIF) operation seeks to implement a new institutional and legal framework for the nation's water supply and sanitation sector, complementing loan DR-0123, which supports reform at the operator level. The components are: (a) preparatory activities for implementation of the new framework; (b) establishment of the regulatory framework and agency; and (c) establishment of the oversight framework and agency. The first component funds activities prior to approval of the framework law by Congress, including: (a) organization of events to present the reform proposal to the sector and to promote public awareness; (b) preparation of provisional contracts for corporations participating in the loan; (c) development of implementing regulations for the framework law; and (d) studies on rate and investment policies. The second component supports specialized advisory services for consolidation of the regulatory agency, consisting of: (a) technical assistance for introduction of the regulatory framework, including establishment of rules and procedures to be applied by the regulatory agency (such as the conditions to be met by a company wanting to become a water supply and sanitation operator, issuance of operating licenses, quality parameters for water supply and sewerage, and sanctions to be imposed for breaches), the development of a procedures manual, and studies to provide basic information for the supervision of operators; (b) training of the regulatory agency's professional staff; and (c) priority studies on the subject of rate scales and crossed subsidies, update of technical standards, and support for the design provisions concerning user rights and duties, with user participation at public hearings. The third component three also provides technical assistance, training and studies, in this case, for establishment and strengthening of the oversight agency. Technical assistance will include: (a) design and introduction of a national water information system; (b) establishment of the rules and procedures to be applied by the oversight agency; (c) development of a procedures manual; and (d) establishment of policy-making, financing, and technical assistance mechanisms for the sector. Training focuses on instruction for the agency's professional staff in all areas essential to the oversight function. Priority studies required for the oversight agency's operation will focus on: (a) a plan of priorities for investment in the sector; and (b) a strategy for expanding water and sanitation services to marginal populations.