Chapter 2. Sanitation and the Private Sector

Chapter 2. Sanitation and the Private Sector: Opportunities and Challenges

Sanitation has many similarities to water, chief among them their shared and mutual relationship to public health—access to and use of adequate sanitation is crucial to protecting the quality of drinking water. In addition to pollution of water sources through agriculture, livestock and other animals, poor FSM and sanitation is one of the largest contributors to poor quality drinking water, due primarily to contamination from microbiological pathogens prevalent in improperly managed wastewater or fecal sludge. The F Diagram that follows illustrates some key pathogenic pathways, and how different interventions (water, sanitation, and hygiene) contribute to creating a barrier between humans and environmental pathogens. As can be seen, in addition to hygiene, sanitation can provide a key protective barrier between humans and pathogens by blocking contamination pathways.

Routes of fecal disease transmission and protective barriers

Sanitation Clear water supply Hygiene

Fluids

Feces Fingers

Flies

Fields/ floors Food Future victim

Figure 2: F Diagram showing contamination pathways and barriers (Source: World Bank)

Although there are numerous similarities, and W&S are usually combined in many projects, there are some subtle differences between W&S with respect to how their markets work and what role government might play to support the growth of these markets. Some key differences are highlighted in the table below.

Element

Demand Patterns

Supply Patterns

Finance

Water

Demand is more urgent given that there are no substitute goods for water. People are at an immediate survival risk if water needs are not satisfied in some way. Given this fundamental survival need for water, demand is inelastic. Communal solutions are usually the most applicable; demand is therefore often aggregated and more uniform than sanitation across communities. Markets often segmented by types of communities, not individual households. Not a significant need for marketing around water services, demand is already fairly established. Given that water is a natural monopoly, private sector engagement is often in close coordination with the public sector. Finance is often more community oriented, with any outside financial services usually provided at the community level to water committees, utilities, etc.

Sanitation

Demand less urgent, given some prevalence of substitute sanitation options such as open defecation, etc. Despite public health risks and potential inconveniences, households can and have gone decades without adequate sanitation. Going without water for a significant amount of time is much more problematic. Demand is more elastic and individualized at the household level, with more variability in household preferences for sanitation options. Motivations for improved sanitation are often more subtle and diverse (e.g. status, hospitality, convenience, pride, property value, etc.), than for water, where demand is fairly urgent, intrinsic and survival-based. Market-segmentation by households is most appropriate given the individualized nature of sanitation decisions and preferences. Demand is often quite latent, necessitating marketing or other demand-creation strategies to encourage households to invest in

sanitation. More room for a range of private sector involvement given the diversity of potential sanitation goods and services theoretically available throughout the sanitation chain.

Outside of treatment, finance needs are generally more household-focused, as type of sanitation infrastructure, amount invested, etc. are householdlevel decisions. As such, financial challenges need to be resolved at the household level.