On both sides of the South China Sea, countries are piloting output-based aid (OBA) as a way to improve delivery of water services to the poor.

 

In the Philippines, a private concessionaire, the Manila Water Company, Inc. (MWCI), is administering a scheme to provide affordable piped water to approximately 20,000 low-income households in the eastern part of Metro Manila. 

 

In Vietnam, a nongovernmental organization, the East Meets West Foundation (EMWF), is implementing a project to provide safe drinking water to about 30,000 poor families in rural areas. 

 

So far, the two schemes have reached more than 22,700 households. Both are supported by grants from the Global Partnership on Output-Based Aid (GPOBA), a World Bank-administered global program, and both are using OBA, an approach that ties payments to the achievement of clearly specified results. 

 

 

To enable the partners in the two projects to share lessons learned, GPOBA organized a study tour of the Vietnam rural water project in April 2010 for a group of 11 government officials, water service operators and donors from the Philippines.

 

“This is the first time OBA practitioners from different countries have shared lessons directly in the field,” said Mario Suardi, a senior infrastructure specialist with GPOBA. “It was a great opportunity for them to see how OBA can work in different settings.”

 

The tour began with a meeting in Hanoi at which MinhChau Nguyen, EMWF country director for Vietnam, gave an overview of the project and how it works. 

 

John Pinfold from the Danish cooperation agency, DANIDA, explained how the Vietnamese government is interested in including OBA as a mechanism to channel funds to water service providers as part of a national program to improve rural water supply.

 

On day two of the tour, the group visited two project sites in Quang Nam Province, on the south central coast of Vietnam. 

“The visit provided very useful inputs to the delegates on how OBA is being applied to rural water operations,” said Nguyen. “And they saw for themselves the benefits of the project for poor households: easier and cheaper access to drinking water supply, time and labor savings, and the opportunity to organize the community.”

 

These results struck a chord with the Philippines officials, who have seen how the MWCI project in Metro Manila is helping to extend coverage to poor communities and enhance efficiency in payment collection and operation and maintenance. 

 

“I would recommend this kind of knowledge-sharing event to other OBA practitioners as it’s a great way to share experiences of what works and what doesn’t,” said Christopher (Rey) Ancheta, World Bank and GPOBA task team leader for the MWCI project.

 

On the final day of their trip, the Philippines officials met with the independent verification agent (IVA) for the EMWF project, Jan David Mueller-Vollmer of Environet. 

 

Each GPOBA scheme has an IVA who is responsible for verifying that the pre-agreed outputs (in this case, piped water connections for individual households) have been delivered and are of satisfactory quality.

 

Mueller-Vollmer explained how Environet conducts these verification missions, from selecting the sample to interviewing beneficiaries and controlling the quality of the works executed.
 

 

 

Prior to the study tour, several participants took part in an OBA workshop in Manila, led by the National Economic and Development Agency and the Department of Finance of the Philippines, with assistance from GPOBA and the World Bank country office.

 

“The workshop gave senior government officials, stakeholders, and development partners a chance to deepen their knowledge of OBA and to discuss progress on setting up a national OBA facility for the Philippines water sector,” explained Ancheta.

 

Among other things, participants were able to compare the differences between OBA water projects in urban and rural settings, and discuss lessons learned.

 

They welcomed the establishment of the national OBA facility, which they see as pro-poor and results-oriented. The process has the potential to minimize political interference, and thus improve governance. 

 

Some donors said they would like to scale-up OBA to other sectors such as power, health, and education.

 

Next steps for the national OBA facility will include securing a legal basis, drafting a business plan, and completing the first funding round. 

 

There will also be a communications campaign to inform municipalities, water associations, and other stakeholders about the facility and how the output-based approach can help them improve service delivery for the poor.