CUBA WATER/WASTEWATER INFRASTRUCTURE ASSESSMENT COMMITTEE COLLABORATION OPPORTUNITIES FOR ENGINEERS & ECONOMISTS: A WORK-IN-PROGRESS TO: ASSOCIATION FOR.

CUBA WATER/WASTEWATERINFRASTRUCTUREASSESSMENT COMMITTEE

COLLABORATION OPPORTUNITIES FOR ENGINEERS & ECONOMISTS:A “WORK-IN-PROGRESS”

TO: ASSOCIATION FOR THE STUDY OF THE CUBAN ECONOMY (A.S.C.E.)MIAMI, FLORIDAAUGUST 7, 2008

BY: HELENA SOLO-GABRIELE, Ph.D., P.E. (ACE)ARMANDO I. PEREZ, Ph.D., P.E. (C-AACE)

AS ADVISED BY:JUAN BELT, Ph.D. (USAID)LUIS VELAZQUEZ (USAID)

DISCLAIMER

The opinions expressed in this The opinions expressed in this presentation are those of the authors presentation are those of the authors and do not necessarily represent the and do not necessarily represent the views of their employers or of their views of their employers or of their sponsoring engineering societies.sponsoring engineering societies.

Authors’ knowledge of Cuba is Authors’ knowledge of Cuba is based on limited information based on limited information available mostly on the Internet.available mostly on the Internet.

The advice provided by USAID staff The advice provided by USAID staff represents the staff’s own views and represents the staff’s own views and not necessarily that of the U.S. not necessarily that of the U.S. government.government.

OUTLINE OF PRESENTATION

Role of Committee before and during a Role of Committee before and during a political transition.political transition.

Cuba’s legal and institutional framework Cuba’s legal and institutional framework for the sector.for the sector.

Service delivery modes (including private Service delivery modes (including private operators) and structure of tariffs (user operators) and structure of tariffs (user fees).fees).

Water/wastewater issues in Havana Water/wastewater issues in Havana (sample).(sample).

Lessons learned from other countries.Lessons learned from other countries. Areas of potential collaboration with Areas of potential collaboration with

A.S.C.E.A.S.C.E. Contact information for Committee Contact information for Committee

members/ acknowledgements.members/ acknowledgements.

ROLE OF COMMITTEE BEFORE AND DURING A POLITICAL TRANSITION

WASHINGTON AGENCIES ONLY WASHINGTON AND HAVANA

COMMITTEE’S WORK

DATA INTEGRATION PHASE ANALYSIS PHASE ADVISORY PHASE

AD

VIC

E

AD

VIC

E

BEFORE TRANSITION TRANSITION… …

EXISTING LEGAL AND INSTITUTIONAL FRAMEWORK

MINISTRY OF SCIENCE, TECHNOLOGY AND ENVIRONMENT

MINISTRY OF PUBLIC HEALTH

MINISTRY OF CONSTRUCTION

NATIONAL INSTITUTE OF WATER RESOURCES

(INRH)

(WATER & WASTEWATER INFRASTRUCTURE: CAPITAL IMPROVEMENTS & OPERATIONS)

GOVERNMENT-OPERATED SERVICE AREAS

PRIVATELY-OPERATED SERVICE AREAS BY AGUAS DE BARCELONA:

HAVANA & VARADERO

REGULATORY FUNCTION?

MINISTRY OF ECONOMY AND

PLANNING

“Big Picture” Concurrency Planning and Coordination

Delegation Privatization Contracts for Operation

Environm

ental

Quality S

tandardsM

onito

ring

Dat

a

SUMMARY INFORMATION ON PRIVATIZED OPERATIONSWITH AGUAS DE BARCELONA (“AGBAR”)

HAVANA FACTS (a) :

“Aguas de la Habana”

JV of “Interagua” (“AgBar” subsidiary) & INRH

Capital = $8 Million US

Population = 1,272, 000

Clients = 376, 000

Started in 2000, 25 year duration

New water lab (2007)

(a)Source: “AgBar” Annual Report (2007) (numbers rounded)

VARADERO FACTS (b):

“Aguas de Varadero”

Similar JV of “AgBar” & INRH

Started circa 1995

(b) Source: University of Greenwich

“AGBAR” FACTS (c):

Spanish domicile

25% owned by Lyonnaise des Eaux

12% owned by Endesa Electricity Co.

Owns “Interagua”

(c) Source: University of Greenwich

CURRENT OR RECENT TARIFFS IN HAVANA V. PUERTO RICO & MIAMI-DADE COUNTY

PUERTO RICO

MIAMI-DADE COUNTY

RESIDENTIAL USER CLASS:

TARIFF: (b)

(PER CUBIC METER)

TARIFF: (c)

(PER CUBIC METER)

AVERAGE FOR WATER:

US $1.18 US $0.46

AVERAGE FOR WASTEWATER:

US $0.99 US $0.90

AVERAGE FOR WATER PLUS WASTEWATER:

US $2.17 US $1.36

CommentComment: Convertibility of peso to U.S. dollar is a complex issue.: Convertibility of peso to U.S. dollar is a complex issue.

(a)(a) Source: Article by EFE News Agency on Agbar (June 7, 2002) as cited in Wikipedia. Source: Article by EFE News Agency on Agbar (June 7, 2002) as cited in Wikipedia.(b)(b) Source: Puerto Rico Water and Sewer Authority (PRASA) (2007). Assumed average residential use and 5/8-inch meter. Source: Puerto Rico Water and Sewer Authority (PRASA) (2007). Assumed average residential use and 5/8-inch meter.(c)(c) Source: Miami-Dade Water and Sewer Department (MDWASD), 2008. Assumed 2.5 persons/household and 100 gal/person/day. Includes Source: Miami-Dade Water and Sewer Department (MDWASD), 2008. Assumed 2.5 persons/household and 100 gal/person/day. Includes

fixed charge and per volume charge. Assumed 5/8-inch meter.fixed charge and per volume charge. Assumed 5/8-inch meter.

HAVANA,CUBA

MAJOR USER CLASS:

TARIFF: (a)

(PER CUBIC METER)

RESIDENTIAL: 1 PESO (US $0.04)

HOTELS AND EMBASSIES:

US $1.00

COMPARISON OF SECTOR ACCOMPLISHMENT INDICATORS AMONG SELECTED COUNTRIES

(a) Comparison country chosen previously by economist Carmelo Mesa-Lago.

(b) Chosen for geographic proximity & similarity, tourism growth.

(c) Chosen for near-compliance to US Standards, lessons learned.

INDICATOR YARDSTICK

CUBA CHILE (a) COSTA RICA (a)

DOMINICAN REPUBLIC

(b)

PUERTO

RICO (c)

WATER: PERCENT POPULATION

SERVED

74 91 92 80 96

WATER: PERCENT FLOW

DISINFECTED

84 100 100 100 100

WATER: PERCENT “NON-REVENUE”

(LEAKS/LOSSES)

50 34 >50 40-65 40

WASTEWATER COLLECTION:

PERCENT POPULATION

SERVED

38 78 30 50 57

WASTEWATER: PERCENT FLOW

TREATED

19 16.70 4 49 100

(PAHO 2000)

RECEIVING WATER

OCEAN

RIV

ER

(AQ

UIF

ER

BE

LO

W R

IVE

R)

SourceWater

COMMUNITY WATER SUPPLY AND DISPOSAL

Collection

INDIVIDUAL WATER SUPPLY AND DISPOSAL

Distribution

WATERTREATMENT

PLANT

SEPTIC TANK

INDUSTRIAL WASTE

Effluent Disposal

INFLUENT WASTEWATERTREATMENT

PLANT

How Engineers View the Sanitary Infrastructure

47% Almendares-Vento Watershed– Almendares River (25 mi. long, shallow, contaminated)

– Vento Aquifer - located directly beneath the Almendares River

Source Water: Havana

Olivares-Rieumont et al. 2005

ALMENDARES RIVER

VENTO AQUIFER

COD = 32 to 291 mg/LEF >10, Pb, Cu, Cd, Zn

Water Treatment

Source water quality - poor

Treatment limited– Facilities for producing chlorine no

longer operational according to International Development Research Centre

– Chlorine metering systems in need of repair/replacement

Population self treating water– Boiling – Chlorine tablets

Potable Water Distribution Overall Cuba (PAHO 2000)

– 72% household connection– 21% easy access– 7% without access

Havana: Estimated hours of service per day (Cereijo ed. 1992) – 15% in good working condition– 70% provide water 2 to 4 hours per day– 15% carry water from collection tanks

Needs: repair leaks, replace valves, metering, back up power, surge surpressors on pumps, maintenance for chlorination systems (Alonso Hernandez)

Privatization in Havana and Varadero

($8M investment by AgBar, finanzas.com) 330 million m3/yr pumped (finanzas.com)

potential revenue of $300 M/yr

Wastewater Collection

38%, sewage collection 56%, latrines (Belt and Velazquez 2007)

Havana: Sewage collection system in disrepair (bulk over 80 years old) Cereijo ed. 1992

– 1913 designed for about 600,000 users– 1950s it serviced 1,000,000 million

(Scarpaci et al. 2002)

$30 Billion needed to renovate Havana’s sewer system (Chicago Tribune 2007)

1946, Sewer ConstructionU.Miami Photo Archive

Wastewater Treatment Estimate that 4% of wastewater

collected is treated (Wikipedia)

Havana: (Alonso Hernandez)

– Sedimentation Plant (Outfall to Playa El Chivo, population served = 950,000) Outfall in need of repair

– Biological Treatment Plant (Maria del Carmen, population served = 22,000) not operational untreated sewage to a tributary of the Almendares River

– 3 Other Collection Networks (population served 200,000), No treatment and problems with sewage pump stations

Effluent Disposal

Havana: Disposal to – Luyano: untreated sewage, oil refinery

waste, gas plant waste– Havana Bay: 4 slaughter houses, paint

plant, 2 thermal power plants, food processing factories

– Almendares: Raw sewage and industries near river

New wastewater treatment plant on Luyano River – – $24 Million to treat population of 62,000: ($20 Million from Cuba government, $4

Million from international partners, UNDP-GEF)

Luyano River

ALTERNATIVES:

CONSERVATION,

REUSE, TARIFFS

PROCESS FOR WATER “GAP ASSESSMENTS” INCLUDES ECONOMISTS

MAN-MADE DEMANDS

(POPULATION & INDUSTRY)

ECOLOGICAL DEMANDS

ASSESSMENTS OF PHYSICAL CONDITIONS

PUBLIC HEALTH STANDARDS

SOURCE ALTERNATIVES

TRANSMISSION ALTERNATIVES

TREATMENT ALTERNATIVES

STORAGE/ DISTRIBUTION ALTERNATIVES

COST ESTIMATES

PLANNING-LEVEL COST ESTIMATING

TOOLS (COST CURVES, ETC.)

(CANF, 1992; U.S. EPA, ETC.)

NON-MONETARY CRITERIA

PLAN SELECTION

AFFORDABILITY CRITERIA

PHASING PLAN

= Collaboration with Economists.

INTEGRATED WATER RESOURCES PLAN

(“IRP”)

(EXAMPLE: PUERTO RICO)

INSTITUTIONAL TRANSITION LESSONS LEARNED FROM OTHER COUNTRIES

Eastern Europe Transition:“Critical success factors” and relationship between tariffs and fluctuating affordability.(Infrastructure Department, Europe and Central Asia, World Bank, 2006)

Latin America:•Reform of politicized mode, regulatory agency for tariffs and quality, geographic regionalization of service.(Vivien Foster, Water Supply and Sanitation Board, World Bank, 2005)

•Analysis of departure of international operators, role of local operators, de-privatization trends.(Environmental Division, Inter-American Development Bank, 2007)

Puerto Rico:Integrated water resources (population/ecology balance), de-privatization, tariffs, geographic regions.(PR Department of Natural Resources, PR Aqueduct and Sewer Authority, various dates)

POTENTIAL FUTURE GEOGRAPHIC PLANNING/ SERVICE AREAS: BALANCING CRITERIA

ENGINEERS & PLANNERS:ENGINEERS & PLANNERS:

MATCH HYDROLOGIC MATCH HYDROLOGIC BOUNDARIES: RESOURCE BOUNDARIES: RESOURCE MANAGEMENT & REGULATION.MANAGEMENT & REGULATION.

ENCOMPASS ENTIRE PROVINCE(S): ENCOMPASS ENTIRE PROVINCE(S): MATCH GOVERNMENTS AND MATCH GOVERNMENTS AND DEMOGRAPHIC DATA.DEMOGRAPHIC DATA.

REGIONALIZE TREATMENT PLANTS: REGIONALIZE TREATMENT PLANTS: ECONOMY OF SCALEECONOMY OF SCALE, , CONCENTRATE SKILLED CONCENTRATE SKILLED OPERATORSOPERATORS..

ECONOMISTS:

• ECONOMY OF SCALE: ≥ 100,000 CONNECTIONS (YEPES, 1990).

• COMMERCIAL ATTRACTIVENESS: INCLUDE LARGE CITIES.

• SOLID REGULATORY AGENCY: TARIFFS & QUALITY (e.g., CHILE & COLOMBIA).

• OPTIMIZATION MODELS.

GEOGRAPHIC (TOPOGRAPHIC) SUB-REGIONS:BUILDING BLOCKS ALONG WITH PROVINCE BOUNDARIES FOR

BIGGER SERVICE AREAS

NOTE: Reproduced from “The Cuban Economy: Blueprint for Reconstruction”, The Endowment for Cuban American Studies of the Cuban American National Foundation (Editor: Dr. Manuel Cereijo), October 1992.

CONTACT INFORMATION FOR SPONSORING ORGANIZATIONS

CUBAN-AMERICAN ASSOCIATIONOF CIVIL ENGINEERS

(C-AACE)

PRESIDENT: PEDRO GIRALT, P.E.pg-gei@earthlink.net

LIAISON WITH COMMITTEE:MARIA F. PORRATA

mfporrata@marlinengineering.com

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT(USAID) AS ADVISOR

JUAN BELT, Ph.D.(DIRECTOR OF INFRASTRUCTURE & ENGINEERING)

jubelt@usaid.govLUIS VELAZQUEZ, P.E.

(SR. INFRASTRUCTURE ENGINEER)lvelazquez@usaid.gov

ASSOCIATION OF CUBAN ENGINEERS(ACE)

PRESIDENT:GERARDO (JERRY) FERNANDEZ, P.E.

fcgi@bellsouth.net

LIAISON WITH COMMITTEE:HELENA SOLO-GABRIELE, Ph.D., P.E.

hmsolo@miami.edu

C-AACE/ACE CUBA WATER/WASTEWATERINFRASTRUCTURE ASSESSMENT COMMITTEE

CO-CHAIR: HELENA SOLO-GABRIELE, Ph.D., P.E. (ACE)hmsolo@miami.edu

CO-CHAIR: ARMANDO I. PEREZ, Ph.D., P.E. (C-AACE)perezai@cdm.com

COMMITTEE’S CONTRIBUTING MEMBERS*

“FTP” site for sharing documents:ftp://soloshare@ftp.rsmas.miami.edu

*Special Acknowledgements to: University of Miami Library Cuban Heritage Collection staff, Manuel Cereijo, Rafael Robayna, Jose A. Gonzalez, Victor Pujals, and many others!

QUESTIONS?QUESTIONS?

CUBA WATER/WASTEWATERINFRASTRUCTUREASSESSMENT COMMITTEE

COLLABORATION OPPORTUNITIES FOR ENGINEERS & ECONOMISTS:A “WORK-IN-PROGRESS”

TO: ASSOCIATION FOR THE STUDY OF THE CUBAN ECONOMY (A.S.C.E.)MIAMI, FLORIDAAUGUST 7, 2008

BY: HELENA SOLO-GABRIELE, Ph.D., P.E. (ACE)ARMANDO I. PEREZ, Ph.D., P.E. (C-AACE)

AS ADVISED BY:JUAN BELT, Ph.D. (USAID)LUIS VELAZQUEZ (USAID)

WATER/WASTEWATER INFRASTRUCTURE COMMITTEE OBJECTIVES

Identify major issues of water Identify major issues of water quantity and water quality.quantity and water quality.

Assemble and interpret data.Assemble and interpret data. Help prepare the way for eventual Help prepare the way for eventual

funding of major improvements by:funding of major improvements by:– International agencies and lenders; International agencies and lenders;

and/orand/or– Private sectorPrivate sector

ABBREVIATED ORGANIZATION OF INRH

Source: INRH Website www.hidro.cu (June 2008).

Instituto Nacional de Recursos HidràulicosPresident: René Mesa Villafaña

Delegaciones Provinciales (14 + Isla de la Juventud)

Sistema Empresarial

Grupos Empresariales

Grupo Empresarial Aprovechamiento Recursos Hidràulicos(14 EARH)

Grupo Empresarial de Ingenieria y Logistica Hidràulica

Empresas Independientes

Empresa Mixta Aguas de la Habana:

Director: Jose María Tura Torres

Asociación Económica Internacional Aguas Varadero:

Director: Julio A Becerra Infante

HIERARCHIAL APPROACH TO WATER MANAGEMENT CYCLE

Potable Water Distribution

Treat Waterto prevent -acute illness -long-term illnessand improve -aesthetics

Identify/Protect Water Source

EffluentDisposal

WastewaterTreatment

WastewaterCollection

Source Water

Total water use (potential $1 to 4 billion/yr industry)– 5.2 billion m3 (Cereijo ed. 1992)– 1.6 billion m3/yr (11.5 M people at 100 gpd)

64% groundwater (Cereijo ed. 1992)

Susceptible to saltwater intrusion

NEEDS FOR HAVANA

Funds to:– Protect source water quality (two tiered

approach)• Minimize discharges• Dredging

– Repair/rebuild chlorine production plants– Repair/rebuild distribution system– Provide sanitary collection system– Treat wastewater– Dispose of effluent properly (ocean

outfalls?) Regulatory system to maintain sanitation

standards (e.g. drinking water standards, industrial wastewater standards, etc…) (Belt and Velazquez 2007)

potential $1 to 4 billion/yr industry

PRIVATIZATION/ RE-STATIZATION/ “BUSINESS-LIKE” OPERATIONS: PUERTO RICO

PRIVATIZATION STUDIES OF “PRASA”

INTERNATIONAL PRIVATE OPERATOR(ISLAND-WIDE)

“PRASA” SELF-MANAGEMENT

“PRASA” DE-CENTRALIZED MANAGEMENT BY 5 SERVICE AREAS,“BUSINESS-LIKE” OPERATIONS

PRIVATIZATION PROCUREMENTS

RE-STATIZATION (CONTRACT TERMINATION)

STUDIES (INTERNAL & PRIVATE SECTOR ASSISTANCE)

Comment: Privatization of the water/wastewater sector is not easy!

POTENTIAL COLLABORATION BETWEEN COMMITTEE AND A.S.C.E. Institutional issues (especially Institutional issues (especially

regulatory).regulatory). Boundaries of service areas based Boundaries of service areas based

on tradeoffs of economy of scale vs. on tradeoffs of economy of scale vs. manageability, sustainability, manageability, sustainability, commercial factors, etc.commercial factors, etc.

Timing of tariff increases to match Timing of tariff increases to match affordability improvements after affordability improvements after transition income dip.transition income dip.

Prioritization of capital improvements Prioritization of capital improvements to foster economic engines (ports, to foster economic engines (ports, airports, etc.) to accelerate growth.airports, etc.) to accelerate growth.