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Upgrading domestic-plus systems in rural Senegal: An incremental Income-Cost (I-C) analysis

Ralph P. Hall
School of Public and International Affairs, Urban Affairs and Planning Program, Virginia Tech, Blacksburg, VA, USA; rphall@vt.edu

Eric A. Vance
Laboratory for Interdisciplinary Statistical Analysis (LISA), Department of Statistics, Virginia Tech, Blacksburg, VA, USA; ervance@vt.edu

Emily van Houweling
Josef Korbel School of International Studies, University of Denver, Denver, CO, USA; emily.vanhouweling@du.edu

ABSTRACT: There is growing evidence that rural and peri-urban households depend on water not only for basic domestic needs but also for a wide variety of livelihood activities. In recognition of this reality, an alternative approach to water service planning, known as multiple-use water services (MUS), has emerged to design water services around households╩╝ multiple water needs. The benefits of MUS are diverse and include improved health, food security, income generation, and women’s empowerment. A common argument put forth by WASH sector professionals in favour of upgrading existing water systems is that productive water uses allow for income generation that, in turn, enhances the ability to pay for services. However, there has been limited rigorous research to assess whether the additional income generated from productive use activities justifies water service upgrading costs. This paper describes an income-cost (I-C) analysis based on survey data and EPANET models for 47 domestic-plus water systems in rural Senegal to assess whether the theoretical financial benefits to households from additional piped-water-based productive activities would be greater than the estimated system upgrade costs. The paper provides a transparent methodology for performing an I-C analysis. We find that the potential incremental income earned by upgrading the existing domestic-plus systems to provide intermediate-level MUS would be equivalent to the funds needed to recover the system upgrade costs in just over one year. Thus, hypothetically, water could pay for water. A sensitivity analysis shows that even with a 55% reduction in household income earned per cubic meter of water, the incremental income is still greater than the upgrade costs over a ten-year period for the majority of the systems.

KEYWORDS: Domestic-plus systems, intermediate-level MUS, multiple-use water services, rural water supply, incremental I-C analysis, Senegal