1

Chapter I

Cairo Water and Wastewater Economic Benefit Assessment

Executive Summary

The United States Agency for International Development (USAID) supported major improvements

in the water and wastewater infrastructure of greater Cairo. Planning for the USAID investments began in

the late 1970s. The projects financed by the investments began in 1981 and continued through 1996. The

objective of this report was to assess the economic benefits of these investments. The executive summary

highlights the findings of the research.

The Investments in the Water and Wastewater Networks

The USAID investments were part of a multi-national effort to upgrade the water and wastewater

networks of greater Cairo. In the late 1970s, the Cairo networks were under substantial stress. Water

treatment plants were operated in excess of their rated capacity, but were unable to keep up with a growing

user population. A significant portion of the urban population experienced low water pressure and frequent

water cutoffs as a result of network inadequacies. Thirty-six percent of the urban population of 7.5 million

did not have in-home water connections. Sixty-four percent of the urban population was without sewer

service. In sewered areas, overloaded equipment and insufficient maintenance led to chronic sewer

overflows and flooding.

The USAID water investments focused on improvements within the central 63 meter pressure zone.

This zone serviced the central part of the Cairo governorate. The zone had a population of 3.4 million in

1987. The goal of the investments was to bring the 63 meter zone up to existing engineering standards for

urban water supply. These standards would allow the system to provide reliable, all day water supply for

those connected to the water system. They would also allow new users to be connected to the network.

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people lived within a kilometer of these chronically flooded areas. CS I eliminated chronic flooding in 84

percent of the affected areas.

CS II extended the sewer network into previously unsewered neighborhoods. The CS II projects

began in 1987 and were scheduled to be completed in 1996. In 1994, approximately 1.9 million people lived

within the boundaries of the planned project areas.

Qualitative Impacts of Water and Wastewater Services

The benefits assessment began with a qualitative phase of research. The purpose of this phase was

to understand how water and wastewater services affected the economic well-being of Cairo residents. At

the outset of this research it was not clear whether Cairo residents perceived any past or present problems

with water and wastewater services. It also was not clear whether water and wastewater services were

properly construed as economic goods. Cairo residents might have perceived water and wastewater services

as goods that were owed to them as basic entitlements. Perceptions such as these would influence the

benefit assessment design.

The research design issues were clarified through a series of 15 focus groups conducted in July and

August, 1994. Focus group participants were drawn from a cross-section of socioeconomic backgrounds

and a range of water and wastewater conditions. Discussion guides were developed to identify the relevant

issues for each group. Discussions were conducted in Arabic by a professional moderator. Simultaneous

oral translations were available to the English speaking researchers. Full written translations were also

produced and are documented in appendix E in Volume II of this report.

A portion of the focus group participants were drawn from areas thought to have unreliable water

service. Participants from these areas were well aware of the deficiencies in their water service. Participants

spent considerable effort and time to overcome the vagaries of their water supply. One respondent described

her situation in the following way,

1The abbreviation LE is used to denote Egyptian pounds.

4

"We store water at night when the pressure is strong. We use stored water because of thecutoffs. We use barrels and jerrycans. The bathtub in my house never gets empty. Wealways keep enough storage to reduce the risk when water gets cut."

Participants reported that they used pumps to draw water from the network when pressure was low. People

were aware of the economic tradeoffs involved in using pumps to obtain water:

"The pump increases my electricity bill...A profit from here when you get water, and a lossfrom there when you pay for electricity. You come at the end of the month and find yourbill is around 25 LE1. I have to sacrifice in electricity to get water."

In addition, there was an awareness that water pressure, even when low, could be managed within an

apartment building. Women reported that they spent time and effort coordinating water use within their

apartment buildings. Arguments resulted when coordination failed or when it was ignored.

Water supply was a continuing struggle for households without an in-home connection to the water

network. Recently connected participants had vivid memories of their efforts to obtain water before they

got an in-home connection. One women recalled that,

"...(l)aundry day was terrible. I used to store water. We used to fetch water around 13 timeson that day, me and my daughter. Can you imagine the suffering?...The bastilla [watercontainer] was big and used to give us headaches. This affected our bodies later. My bodyused to get very tired."

These recollections paralleled the experiences of those who remained outside of the water network. One

women described her daily experience in the following way,

"...we fetch water from surrounding areas...The distance is very long and carrying water isdifficult. It is around half an hour’s walk plus the embarrassment and humiliation we gothrough when residents of connected houses treat us bad."

Those without an in-home water connection obtained water from public taps, from nearby connected

residences, from local businesses, and from taps located in mosques. Canal water was never used for general

household purposes since people viewed it as heavily polluted. Routine payments for access to network

connections were not uncommon. The following quotation illustrates:

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"I bring water from the street behind me, a 15 minute walk. I pay money each month, threeLE, to one of the houses...This payment is for six to seven trips a day...sometimes they letme use more..."

Participants were aware of the economic tradeoffs involved in water supply. Some had gone to the expense

of installing local water pipes and connecting clandestinely to the water network. Others purchased water

from water transporters.

It was more difficult to find participants experiencing on-going problems with sewer flooding and

sewer overflows. Sewer overflows were still occurring, but they seemed occasional and less severe than

suggested by previous reports. Participants recalled past overflows in vivid terms, as illustrated by the

following statement:

"For more than 20 years we suffered. Sewer water was this high in the street; flies, dirt,diseases and some unbearable things. We wrote complaints and used to get the guy fromthe municipality by ourselves. We collected money to give him and still nobody didanything. We often bought lorries of sand to fill the street to reduce the smell."

Other respondents had similar recollections. They remembered the smells, insects, soiling, property damage,

and disease. Residents were aware that sewers had been repaired and rehabilitated. The following comment

describes the current situation:

"...It is heaven compared to the old sewer system in which we lived for 20 years. Now theyare using new pipes that are lubricated with a certain material. We now clean thestreets...Some people have gardens in front of their houses. The area has become very, verybeautiful."

Households in unsewered areas used underground sewage vaults to dispose of their wastewater.

Each building was serviced by one or more vaults. These vaults were made of porous material so that liquids

percolated into the surrounding earth. Vacuum tank trucks were used to evacuate liquid when the vaults

became full. The frequency of evacuation varied with soil conditions, the depth of groundwater, and the

amount of wastewater produced by the connected households. Respondents were well aware of the vault

technology and its costs:

"We have a toilet that is connected to a vault. We empty it every four days. It costs us tenLE for each cleaning visit. The cleaning is done using a tank truck. We got the vault builtourselves by purchasing the cement and bricks and hiring the laborers. The vault is the mostimportant thing in our houses..."

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Arguments over the cost and use of the vaults were common. Households in the same building had to

cooperate to control the amounts of wastewater and the cost of evacuating the vaults. One participant

recalled that

"Paying for emptying the vault created a lot of problems. We had ten apartments in thehouse. I could pay five LE immediately but my neighbor could not. We fought and let thevault overflow for two or three days until we collected the money for the tank truck."

Another participant remembered similar difficulties,

"Before we got sewers, vaults used to overflow, especially for those who could not affordto empty them. It was similar to having a canal in front of your house. We put bricks andwood to pass, a lot of mosquitos. We bought a bottle of insecticide every three days. Thearea was dirty and your soul felt tired...the smell was terrible."

Participants agreed that the cost of the vaults was a major budgetary item. As one respondent concluded,

"If we did not have to pay for the vaults, we would have used the money to buy meat."

The qualitative work demonstrated that Cairo residents were aware of water and wastewater services,

that the services were important, and that the services were economic goods. The findings provided a strong

foundation for developing questionnaires to support the quantitative analysis and benefits assessment.

Quantitative Impacts of Water and Wastewater Services

Four questionnaires were developed to measure impacts and assess benefits. Each questionnaire

aimed at valuing a different type of water and sewer service. The four services valued were (1) reliable, all

day water service, (2) the opportunity to connect to the water network, (3) elimination of sewer overflows,

and (4) an in-home connection to the sewer network. The questionnaires were administered in a stratified

cluster sample of 3,918 Cairo households. Separate strata within the stratified sample were designed to

administer each of the four questionnaires.

Respondents to the survey were selected from either the senior male or senior female in a household.

Responses were split evenly between male and female respondents. The mean age of respondents was 43

years. Fifty-six percent had completed a primary education and 15 percent had completed a university

degree. The mean household size was 5.1 people with a mean of 3.6 persons under 14 years of age.

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Respondents within the water reliability stratum were selected from neighborhoods in Cairo that had

poor water service. These neighborhoods had water service conditions that were similar to those in the 63

meter zone before the USAID projects were completed. In this stratum, 90 percent of responding households

experienced low water pressure and cutoffs. Sixty-seven percent of respondents experienced cutoffs more

than once per week and the mean duration of the last cutoff was eight hours. Seventeen percent of

respondents were able to maintain water pressure and avoid water service interruptions by using pumps and

storage tanks. The mean cost of operating the pumps and tanks was 6.3 LE per household per month.

Ninety-eight percent of respondents paid a cash amount for water service and two percent paid for

water as part of a rental payment. The mean cash payment was 5.2 LE per household per month. The mean

addition to rent to pay for water service was 4.7 LE per household per month. Though commonly perceived

as water service payments, water service fees included surcharges for sewer service as well. However, water

service charges differed by only 1.3 LE per month between households connected and not connected to the

sewer network. Eighty-one percent of the households within this stratum had both water and sewer service.

These households paid a mean of 5.5 LE per household per month. The remaining 19 percent with network

water service but no network sewer service paid a mean of 4.2 LE per household per month.

Respondents in the water connection stratum were selected from neighborhoods outside the water

network. Households in this stratum spent a mean of 28 hours and four LE per household per month to

obtain water. Common water sources were hand pumps, the network connections of local property owners,

municipal taps, and taps located in mosques. Seventy-one percent of respondents in this stratum purchased

no water but spent a mean of 34 hours per household per month obtaining water. Twenty percent purchased

some water. These households spent a mean of 26 hours and a mean of 23 LE per household per month to

obtain water.

The sewer connection stratum was drawn from neighborhoods without access to the sewer network.

Sewer vaults in these neighborhoods were associated with problems similar to those mentioned in the focus

groups. Seventy-five percent of respondents said that the vaults were frequently a source of mosquitos and

2The term "direct" is used to distinguish explicit payments for water and sewer services from implicitpayments made in the form of higher housing prices or higher rents. The hedonic analysis described belowindicated that housing prices were higher in neighborhoods served by the water and sewer networks.

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flies. Sixty percent mentioned frequent problems with vault odors and 45 percent said that they were a

frequent cause of arguments between neighbors. About a third of respondents reported frequent problems

with vaults leading to wet streets, soiling of clothing, and property damage due to leakage.

The costs of maintaining and evacuating the sewage vaults varied across respondents. Thirty-six

percent of respondents experienced no vault related costs in the 12 months prior to the interview. Eleven

percent paid more than 58 LE for vault cleaning in the month prior to the interview. Thirty-nine percent paid

a mean of 17 LE for vault cleaning during the same period. The sample mean was 14 LE for vault cleaning

during the month prior to the interview.

The results indicated that households not connected to the water and sewer networks paid more in

direct charges for water and wastewater services than connected households. Households in the water

reliability stratum with water and sewer paid direct charges of 5.5 LE per household per month.2 Households

outside the networks had direct water and wastewater costs that averaged 18 LE and 28 hours of labor per

household per month. Outside the network, households with the fewest resources appeared to pay higher

direct costs for services that were poorer in quality.

Household Level Benefits

Household level benefits were measured using a direct questioning (DQ) approach. DQ is a form

of contingent valuation where respondents are asked to accept or reject an infrastructure project offered at

a specified cost per household. Accept and reject responses are used to estimate mean benefits per household

for the specified type of project. Each of the four questionnaires administered in the survey contained a DQ

valuation scenario to value one of four types of projects. The projects were aimed at providing one of four

different services: (1) reliable, all day water service, (2) the opportunity to connect to a water network

3A fifth project to prevent sewer overflows through maintenance was evaluated by a portion of therespondents in the sewer overflows stratum. Results for this project were similar to the summary measurespresented here. All projects and results are discussed fully in subsequent chapters of this report.

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Figure 1.1. Household Level Benefits1995 Egyptian Pounds per Household per Month

9.5

24.7

6.4

21.7

ReliabilityWater Connection

OverflowsSewer Connection

0

5

10

15

20

25

installed within the respondent’s neighborhood, (3) elimination of sewer overflows, and (4) in-home sewer

network connections.3

F igure 1 .1 shows

mean household level benefits

for each of the four services

evaluated using the DQ

approach. The benefit of

eliminating sewer overflows

was 6.4 LE per household per

month. This service had the

smallest per household benefit

out of the four services

evaluated. The largest per

household benefit was for the opportunity to connect to the water network installed within the respondent’s

neighborhood (denoted "Water Connection" in Figure 1.1). This service had a mean benefit of 24.7 LE per

household per month. The mean benefit of a sewer connection was 21.7 LE per household per month, three

Egyptian pounds less per month than the benefit of a water connection. The mean benefit of reliable water

service was 9.5 LE per household per month.

The statistical properties of the mean benefit estimates were good. Each was significantly different

from zero. The upper and lower endpoints of the 95 percent confidence interval were within 12 percent of

the mean benefit estimate for each of the evaluated services.

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The relative sizes of the benefit estimates were consistent with the qualitative results. Focus group

participants said that water was essential to their daily lives and that wastewater disposal was almost as

important. These two services had the largest quantitative benefit estimates. Consistent with the qualitative

reports, a water connection was slightly more valuable than a sewer connection. An additional comparison

is possible if one thinks of a sewer connection as providing (1) wastewater disposal and (2) the elimination

of local wastewater overflows from sewage vaults. If these are the two primary services from a sewer

connection, then the benefit of a sewer connection should be approximately equal to (1) the cost savings from

not having to evacuate the sewage vaults and (2) the benefits of eliminating overflows. The mean cost of

vault evacuation was 14 LE per household per month and the benefit of eliminating overflows was 6.4 LE

per household per month. These latter quantities sum to 20.4 LE per household per month--only 1.3 LE less

than the mean sewer connection benefit of 21.7 LE per household per month.

In addition to their statistical and quantitative properties, the DQ results appeared to be based on

reasoned decisions. Respondents routinely commented on how their daily lives would be affected by the

projects. Depending on the project, 23 to 46 percent of respondents asked questions about the project. Most

of these questions showed that respondents were concerned about the cost of getting the project in their

neighborhoods. Eleven to 18 percent of respondents found it difficult to make the decision without

consulting with others in their household. This seemed to indicate that these respondents took the decision

seriously enough to go to the effort of consulting with others in their household.

Respondents’ debriefing comments also indicated that their decisions were economic decisions.

That is, these decisions appeared to be constrained by household budgets and opportunity costs. A

respondent accepting the water reliability project said,

"I wish we could get the project instead of having to buy a water pump for 300 LE. Iwouldn’t have to pay all the money for the pump. I’d only pay a small portion if I gotconnected."

Another respondent explained a reject decision in the following way:

"I cannot pay 7.50 LE per week. My income is only 200 LE per month. We pay 100 LEfor different installations and bills and use the other 100 LE for living expenses."

4Appendix D in Volume II of this report lists a portion of the debriefing responses roughly translatedinto English. A full listing of debriefing responses in Arabic is available from the authors.

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The detailed and specific reasoning illustrated in these responses was typical of respondents’ debriefing

comments.4

A hedonic analysis of housing prices provided additional evidence of the benefits of network water

and sewer services. The hedonic analysis used statistical methods to compare housing prices in areas served

by the networks with housing prices in areas outside the water and sewer networks. The hedonic analysis

was used to produce household level benefit measures for in-home water and sewer connections. The

hedonic measures were formulated in terms of ranges rather than single point estimates. The hedonic

measures for the benefits of a water connection ranged from 26.5 to 79.8 LE per household per month.

Those for an in-home sewer connection ranged from 19.5 to 58.5 LE per household per month. Both of these

ranges tended to be higher than the DQ estimates. Hence, compared to the hedonic results, the DQ measures

resulted in conservative measures of economic benefit.

USAID Investment Benefits

The total benefits of the USAID investments were computed using a present value formulation. The

present value formulation was used since the USAID investments were equipment items with a long useful

life. The present value approach provided a consistent method for adding up benefits across all the

households affected within a given time period and across the useful life of the capital investment. Benefits

in each year were summed across the households affected by that year’s investment impacts. Impacts were

measured in terms of the four services: reliable, all day water service, the opportunity to connect to the water

network, elimination of sewer overflows, and an in-home sewer connection. Benefits that accrued in the past

were compounded forward to 1995. Benefits forecast in the future were discounted to 1995 to reflect

investment opportunity costs. The present value formulation summarized total investment benefits as a

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single dollar amount denominated at the 1995 price level. This sum represented benefits aggregated across

the life of the capital investments.

The estimated impacts on household services were based upon the engineering parameters contained

in planning and pre-project documents. These engineering parameters were especially important in the

analysis of water projects. Engineering parameters provided estimates of daily household water

requirements. These were used to convert the total quantities of water distributed into the number of

households benefiting from improved water service. Where possible, design parameters were supplemented

by post-project studies and survey research results.

Baseline benefit assessment scenarios were developed for both the water and wastewater

investments. The baseline scenario was intended as a best, conservative assessment of impacts and benefits.

Alternatives to the baseline parameter values were identified in the course of developing the baseline

impacts. These alternatives were analyzed as sensitivity analyses.

Figure 1.2 lists the baseline total benefit measures for the USAID investments in water and

wastewater. The benefits of the increases in treatment capacity brought about by Cairo Water I were $680

million. The benefits of the subsequent network improvements supported by Cairo Water II were $450

million. Total benefits in the baseline scenario were therefore $1,130 million. In the sensitivity analyses,

all but one of the substantive alternatives to the baseline scenario resulted in total benefit measures that were

within ten percent of the baseline measure of $1,130 million. The one outlier scenario resulted in a total

5The phase specific benefits are not independent. In water, part of the network improvements ofCairo Water II were aimed as enabling the distribution of treatment capacity made available by Cairo WaterI. In sewer, the expansion of the network supported by Cairo Sewerage II may not have been feasiblewithout the repair and rehabilitation completed by Cairo Sewerage I.

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Figure 1.2. USAID Investment BenefitsPresent Value of Benefits in Millions of 1995 $US

Total Phase I Phase II

1,130

680

450

1,250

540710

Water Wastewater

0

200

400

600

800

1,000

1,200

1,400

benefit measure that was 47

percent larger than the

baseline.

The ne twork

rehabilitation benefits of Cairo

Sewerage I were $540 million.

The benefits of network

expans ion and sewer

connections supported by

Cairo Sewerage II were $710

million. Total baseline benefits were $1,250 million. In the sensitivity analyses, the substantive alternatives

to the baseline scenario resulted in total benefits that were within 14 percent of the baseline measure of

$1,250 million.5

Implications

The investment benefits were substantial whether measured in quantitative or qualitative terms. The

investments were part of an overall upgrade in the water and sewer networks. During this upgrade, the

percent of households connected to the water network rose from 64 percent in 1976 to more than 90 percent

in 1995. Connections to the sewer network rose from 46 percent in 1976 to close to 90 percent in 1995.

Sewer flooding was eliminated across much of the city. The reliability of water service improved

substantially.

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The research showed that households were well aware of the water and sewer service improvements

supported by the investments. Respondents in the qualitative research were particularly articulate about how

the changes in water and sewer services had affected their daily lives. They were eloquent in describing

dramatic quality of life impacts of adequate water and sewer service.

The survey research and quantitative analysis demonstrated that households were willing to pay to

maintain the improvements. Respondents understood that maintenance was necessary to ensure that the

water and sewer networks functioned properly. They understood that maintenance was costly. They were

willing to pay for projects that would maintain an adequate level of services. However, they are not willing

to pay for unfulfilled promises. Payments would need to be accompanied by reliable service.

There are five important implications for network management, operation, and planning:

1. Documentation and publication of network impacts needs to be more routine. Thebenefits of past investments were substantial yet there was little documentation ofthese benefits. It is important that the story of these investments be understood bythe development community and those involved in planning further investments.

2. The benefit estimates developed here may be used to provide approximate, firstround benefit estimates for similar investment projects in other Egyptian cities.Adjustments would need to be made for differences in water and wastewaterconditions in these cities. Research in Mansoura suggested that household levelbenefits may be about 25 percent smaller in a smaller, less congested Egyptian city.

3. The questionnaires and quantitative methods developed in this research may be usedto evaluate the benefits of similar investments in Egypt. The questionnaires wereeasily adapted to the conditions found in Mansoura. Similar adaptations could bemade for other Egyptian cities. Use of the developed questionnaires and methodswould provide precise benefit estimates at a relatively low cost in time and money.

4. The system of water and sewer tariffs in Cairo should be dropped and replaced withvalue oriented pricing. Respondents complained that among their neighbors therewere some that paid the same monthly charge, but used much more water or gotbetter service. They viewed equal charges for unequal service as unfair. Analystshave also observed that the tariffs do not provide enough revenue for the adequatemaintenance and growth of the networks. The tariff system should be replacedwith a pricing system that reflects the value of services supplied to households, andthe cost of supplying these services.

5. The networks should adopt a more user oriented, client driven approach tomaintaining and improving the water and wastewater networks. Focus group andsurvey research was effective in understanding the strengths and weaknesses of thesystems from the users’ points of view. These methods should be used to design

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system improvements that take advantage of people’s needs and behaviors. Forinstance, focus group and test marketing would be an important input into designingeffective conservation and leakage prevention strategies.

Organization of the Report

The main volume is a non-technical report of the research and results. Chapter II presents the

impacts of the USAID investments on the water and wastewater services obtained by households. The

analysis used published research and project planning documents to describe the service conditions

experienced by households and to detail the types of projects supported by the investments. Chapter III

discusses alternative methods for estimating investment benefits. Qualitative research was used to assess

the feasibility of applying the methods and to select the methods most appropriate to the conditions found

in Cairo. Chapter IV documents the development of the survey questionnaires and describes the data

collection procedures. Chapter V presents the survey results and household level benefit estimates. Chapter

VI discusses the total benefits associated with the USAID investments.

The main report is accompanied by the appendices in Volume II. The appendices detail key results

and materials developed in the course of the research. Appendices A through E document the data obtained

in the Cairo and Mansoura surveys, detail statistical features of the value data, and provide transcripts of the

focus groups. The last two appendices contain the final Cairo survey questionnaires. Appendix F lists the

English language versions of the final questionnaires. Appendix G lists the Arabic language translations of

the final questionnaires. The Arabic versions were the questionnaires used in the field research.

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Chapter II

The Impacts of USAID Investments in Water and Wastewater Services

A first step in benefits assessment is to link specific investments to the impacts experienced by a

set of beneficiaries. For contracting and construction purposes, such investments are described in financial

and engineering terms. However, for benefits assessment, investments need to be described in terms of their

impacts on the end users. With 90 percent of the water processed by the Cairo water network destined for

residential use (GOGCWS, 1994), the primary end users of water investment services are households in

greater Cairo. Households are also, as described below, the primary beneficiaries of the non-treatment,

wastewater investments considered in this study.

This chapter describes how Cairo households may have been affected by USAID investments in

water and wastewater. The description is difficult to construct. Project design documents tend to focus on

the actions necessary to bring the networks up to conventional engineering standards. These studies focus

on the design characteristics of the physical and mechanical investments. There is no single source that

adequately describes the pre-project baseline and the post-project conditions as experienced by households.

The impact description developed in this chapter draws on technical documents, academic publications, and

expert judgement to construct a picture of conditions experienced by households "with" and "without" the

investments. The objective is to describe the project impacts as they affected households in greater Cairo.

The impacts of USAID investments are examined in two separate sections. The first section

describes the water network, USAID water investments, and water investment impacts. The second section

describes the wastewater network, USAID wastewater investments, and wastewater investment impacts.

Each section begins by describing the baseline conditions existing in the water and wastewater networks

prior to USAID investments. Once the baseline network conditions are established, the projects supported

by USAID investments are described. The impact on services to end users is then considered. The chapter

concludes with a summary of the impacts and services to be valued by the benefits assessment.

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The water and wastewater investments affected water and wastewater services in two ways. First,

they improved the quality of services for those households already connected to or served by the networks.

In the water project areas, USAID investments brought the water system closer to reliable, all day water

service. Within the sewer network, USAID investments reduced the frequency of routine sewer flooding

in sewered neighborhoods across Cairo. Second, the investments supported the extension of service to

households that were previously without water or sewers. USAID's investments in water processing

increased the amount of water available for distribution and supported water connections for additional

households. USAID supported sewer installation and building connection projects brought sewer services

to densely populated districts that were previously without sewer services.

Water Investments and Household Impacts

The first efforts to construct a water distribution network in Cairo were made by a private company

in 1865. The system expanded through the French and British colonial periods, but not at a rate sufficient

to catch up with the growing user population. The water company was nationalized in 1957 after Egyptian

national independence. It became the General Organization for Greater Cairo Water Supply (GOGCWS).

GOGCWS continues to function as a governmental agency. GOGCWS has responsibility for maintaining

and extending the water treatment and distribution network in the greater Cairo metropolitan area.

Table 2.1 compares major features of the GOGCWS water network in 1994 with the features of

water networks in other large urban areas. GOGCWS provides the major source of piped water for a service

area population of approximately nine million people. The distribution service area covers approximately

800 square kilometers and the system processes approximately 3.4 million cubic meters per day (cmd).

GOGCWS has an administrative and operation staff of 12.5 thousand people. It collects revenue through

lump sum administrative charges rather than quantity based prices. In 1994, administrative charges yielded

average revenue of approximately $37 per thousand cubic meters of processed water.

6 The table represents the population of the urban kisms of greater Cairo. The census definition ofgreater Cairo also includes some rural areas adjacent to the urban area.

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Table 2.1. Features of the Cairo Water Network and the Networks of Other Urban Areasa

Urban Area

Service AreaPopulation(millions)b

ServiceArea(km2)

WaterProcessed(million

cmd)

Staff (1000s)

AverageRevenue

($/1,000 m3)

GOGCWS 9 800 3.4 12.5 37

Seoul 11 605 4.9 3.7 108

Karachi 9 500 1.6 12.0 75

Manila 8 1,488 2.5 8.6 129

Jakarta 8 286 0.9 2.9 246

Bangkok 6 710 2.9 5.6 157

a. GOGCWS (1994). b. Service area populations are estimates. They are provided only to represent the approximate relative

size of the different service populations.

The Nile river divides greater Cairo and its water system into two major subsystems. The largest

subsystem is on the east bank of the Nile. The east bank subsystem serves the urban populations within the

governorates of Cairo and Kalyoubia. A largely independent subsystem on the west bank of the Nile serves

the Giza governorate.

Table 2.2 describes population characteristics as well as water and sewer connection rates within

greater Cairo and the three governorates as of the last census in 1986. The 1986 population was

approximately eight million.6 Twenty-nine percent of buildings were not connected to the water network

and 31 percent were not connected to sewer. Therefore, more than two million people within greater Cairo

may have been without a connection to the water network in 1986. About the same number lacked a sewer

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Table 2.2. Population Characteristics and Water Services, Urban Areas of Greater Cairo Governoratesa

AdministrativeUnits

1986Population(millions)

BuildingConnection Rates Average

HouseholdSize(#)

Schooling

Water(%)

Sewer(%)

IlliteracyRate(%)

UniversityDegree

(%)

Greater Cairo 8.0 71 69 4.4 32 7

Cairo Governorate 5.4 76 76 4.4 31 7

Giza Governorate 1.9 60 53 4.5 33 7

KalyoubiaGovernorate 0.7 70 70 6.0 40 2

a. CAPMAS (1986). The data covers only urban areas of the governorates. It does not cover rural areasand villages.

connection. The average household size was 4.4 persons. The illiteracy rate was 32 percent. Seven percent

had obtained a university degree.

Population characteristics and connection rates varied substantially across the three governorates.

The Cairo governorate encompasses the older areas of the modern city. About 68 percent of the metropolitan

population resided in the Cairo governorate in 1986. Connection rates, on average, were higher in the Cairo

governorate than they were in the metropolitan area as a whole. Household size and schooling

characteristics, in the Cairo governorate were almost identical to those of the greater urban area.

The Kalyoubia governorate lies just north of the Cairo governorate on the east bank of the Nile. The

urban population of Kalyoubia was approximately 700 thousand people. More than 200 thousand people

in urban Kalyoubia lacked a water network connection in 1986. About the same number were without a

sewer network connection. Average household size was higher than in the other governorates. The illiteracy

rate in Kalyoubia was the highest of the three governorates.

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The Giza governorate lies on the east bank of the Nile. About 24 percent of the metropolitan

population lived in Giza in 1986. Connection rates to sewer and water were the lowest of the three

governorates. More than 700 thousand people were without a water network connection in Giza in 1986.

About the same number were not connected to the sewer network. The illiteracy rate in Giza was higher than

in greater Cairo. The percentage of the population of Giza with university degrees was identical to that of

the urban area as a whole.

Water Network Conditions Before the USAID Investments

The Cairo water network is a large and complex system of water intake and treatment plants,

reservoirs to store treated water during hours of low use, and a distribution network that connects buildings

and households to the treatment and reservoir systems. One measure of the adequacy of services within the

network is the portion of the population connected to the systems. However, a connection to the network

is only useful if it contains water at sufficient pressure to create a water flow. Water pressure and water

flows are managed within a network by creating a dynamic and spatial balance between (1) the capacity to

treat and process intake water, (2) the capacity to store treated water during slack use periods for use during

hours of peak demand, and (3) a distribution network of sufficient structural integrity to sustain required

pressures without undue leakage and rupture. Technical reports indicate that each of these elements was out

of balance in the period prior to investments by USAID and other donors.

Table 2.3 illustrates the stresses on the Cairo water network in the time period between the 1976 and

1986 censuses. The population of greater Cairo grew by 31 percent from 7.5 million to 9.8 million people.

The distribution network expanded with the population increase. The number of buildings connected to the

system increased by 44 percent from 1976 to 1986. This increase in connections outpaced the construction

of new buildings so that the connection rate rose from 64 to 70 percent. However, the increase in connection

rate was not large enough to offset the increase in the number of buildings. Therefore, the absolute number

22

Table 2.3. Population and Water Connections for Urban and Rural Areas of Greater Cairo, 1976-86

Area and Description 1976 1986Change1976-86

(%)

Greater Cairo: Cairo, Giza, and Kalyoubia

Populationa (millions) 7.5 9.8 31

Buildings connected to network (1000s) 244b 351c 44

Buildings not connected to network (1000s) 137b 153c 12

Connection rate (%) 64 70 -

East Bank: Cairo and Kalyoubia

Buildings connected to network (1000s) 211b 276c 31

Buildings not connected to network (1000s) 109b 103c (5)

Connection rate (%) 66 73 -

West Bank: Gizad

Connected to network (1000s) 32b 75c 134

Not connected to network (1000s) 28b 50c 78

Connection rate (%) 53 60 -

a. CAPMAS (1976, 1986).b. Taylor-Binnie (1977b).c. CAPMAS (1986).d. Includes only the urban kisms of the Giza governorate.

of buildings without a water network connection increased from 137 thousand to 153 thousand during the

ten year period.

7Consistently measured data for 1976 and 1987 were available only for the five plants listed in Table2.4.

23

Table 2.4 illustrates the imbalance between user needs and water treatment capacities.7 In 1976, five

primary treatment plants on the east bank processed an average of 1,750 cmd. This level of production

exceeded design capacity by 68 percent. These operating levels meant, in part, that maintenance and repairs

Table 2.4. Network Water Treatment and Storage Capacities, 1976-87

Facility

1976 1987

Designa,c

Capacity(1000 cmd)

Waterb,d Processed

(1000 cmd)

Overagef

(%)

Designa,e

Capacity(1000 cmd)

Waterb,e

Processed (1000 cmd)

Overagef

(%)

Treatment, 5 Plants, East Bank 1040 1750 68 1580 1763 12

Mostorod Plant and Wells 170 195 15 575 724 26

Ameria Plant and Wells 440 970 120 420 439 5

Rod El Farag 300 410 37 300g 300g 0

Roda Plant 110 145 32 175 182 4

Maadi Plant 20 30 50 110 118 7

were delayed, raising the risk of future breakdowns. By 1987, after expansions at the Mostorod treatment

plant and changes in operating procedures, water processing was more in line with design capacities. Actual

water quantities processed, however, remained higher than design capacities by 12 percent.

Technical reports indicate that conditions in the overall system were similar to those illustrated for

the five treatment plants in Table 2.4. The water system contained no excess capacity to cope with

breakdowns or to permit scheduled maintenance (ES-Parsons, 1979). Much of the existing treatment system

was in need of maintenance, rehabilitation, or replacement (ES-Parsons, 1979). The transmission and

distribution system was also in need of repair. In 1976, 60 percent of Cairo’s transmission and distribution

24

pipes were more than five years old and 12 percent were greater than 40 years of age. Excessive leakage and

ruptures in the distribution system were routine (ES-Parsons, 1979).

Storage capacity to meet peak demands and fire fighting requirements was also out of balance with

user needs. The daily storage available during the late 1970s was 206 thousand cubic meters. ES-Parsons

(1979) estimated that 570 thousand cubic meters were needed to bring the system up to minimum

engineering standards. After considering works-in-progress of 87 thousand cubic meters, this meant that

the network had only 50 percent of the storage indicated by engineering standards (ES-Parsons, 1979).

Water pressures within the network were also below the minimums necessary to provide adequate

service. Many Cairo households experienced regular pressure drops and complete cut-offs in service.

Taylor-Binnie found that, "It was understood that during the summer months, many areas suffered reduced

water pressures, and some restriction of supplies which indicates that production was not satisfying demand

at least for part of the year" (1977, pp. 3-8). The ES-Parsons report concluded that, "actual operating

pressures often fall to less than one third of design pressure levels during the summer peak demand periods.

Because of this, the reservoirs do not fill and water is not adequately supplied" (1979, pp. 2-4). In the least

economically advantaged parts of the city, the network water supply was intermittent at best. As a result,

many households connected to the water system were not able to get adequate water from their taps during

peak demand hours (AMBRIC, 1987).

Water Service to Connected Households

Low water pressure resulted in routine service interruptions for households connected to the water

network. This meant, in part, that households adapted their schedules and activities to the availability of

water. Water intensive chores such as laundry were often done at inconvenient times when sufficient water

was available, often late at night. Water was also recycled from one activity to another until it was so dirty

it could only be disposed of. Low water pressure also created conflicts between neighbors in a building. It

was common for pressure to be so low that opening one household’s tap would mean no service for another

25

household. Neighbors sought to coordinate water use in order to complete their activities. However,

conflicts would result when neighbors were unwilling or unable to cooperate.

Households also stored water during off peak hours for use at other times. Tecke et al. observed in

the Manshiet Nassar area that, "low pressure and cuts in service are frequent enough that households need

to supplement from other sources and to store water" (1994, p. 38). Storage containers ranged from

traditional clay vessels to plastic jerrycans to bathtubs. Wealthier households installed rooftop tanks that

filled when water pressure was high and provided water when system pressure fell. Small electric pumps

were installed to pump water out of the network pipes when pressures fell (Tecke et al., 1994). Pumps

assisted individual households in obtaining water but they also created potential problems. First, they

further reduced water pressure and water availability for households without pumps. Second, they

accentuated the low pressures in the network, allowing inflows from untreated ground water.

The network conditions appear to have had two primary effects on households connected to the

network. First, water was available for only a portion of the day and typically at inconvenient hours (ES

Parsons, 1979). This meant that households experienced the costs of shifting activities to inconvenient times

as well as the costs of storing water for peak periods (Tecke et al., 1994). Storage activities were distributed

to the population at large rather than having the network specialize in storage and take advantage of

economies of scale. Second, the chemical and biological quality of the water distributed may have declined

due to the infiltration of untreated groundwater. This decline in quality may have either (1) had health

impacts on households who consumed the water or (2) increased the cost of consumption for those who

drank bottled instead of piped water in order to avoid adverse consequences.

Water Conditions for Households Not Connected to the Network

Households without an in-home connection to the network obtained water from a network

connection outside the home, from shallow wells, or from canals. (Nadim et al., 1980). Given Cairo’s

8The weighted average for 1,361 households surveyed by Nadim et al., 1980, was 149 liters per day.

26

dense settlement pattern and crowded streets, each of these sources appears to have had its associated

difficulties.

The water network was the primary source of water for households without in-home connections.

A survey of unconnected neighborhoods in the late 1970s found that 85 percent of responding households

used some water source connected to the network (Nadim et al., 1980). Network connections outside the

home included public or private taps. Public taps were provided as part of the network design and were a

planned element in the provision of water to Cairo residents. Mosques also provided public taps. A small

fee was sometimes charged at a public tap. Public taps were typically crowded. Crowding meant time

waiting in queues and muddy conditions from spilt water. Arguments were common as people worked to

get to the tap and return home to continue their chores. Such arguments added to the inconvenience and

unpleasantness of obtaining water (Nadim et al., 1980).

If a public tap was not available, it was common for a member of an unconnected household to ask

for access to a private tap. By custom, neighboring connected households and businesses usually responded

favorably. Households and businesses with private taps sometimes provided a publicly accessible tap or hose

outside their homes for use by their unconnected neighbors. A typical unconnected household accessing

public or private taps outside the home used approximately 150 liters of water per day.8

Shallow wells were another source of water for unconnected households who lived in areas where

it was possible to put in a well (Nadim et al., 1980). These areas were typically on the urban fringe where

the dense settlements of the city gave way to agricultural land. The wells were typically no more than one

or two meters deep. Water was pumped out with a simple hand pump attached to a narrow steel shaft. Water

from these shallow wells was chemically harder than the network water. This hardness made it acceptable

for only limited uses. These uses included washing utensils, floors, and vegetables; rinsing soap from

laundry; and bathing. Households preferred not to use well water for cooking since it lent an unpleasant taste

9An accurate estimate of effort would account for the amount of time and effort that women spentdisposing of wastewater. In unsewered areas, wastewater was typically carried away from a dwelling anddumped in a vacant lot or a drainage canal.

27

to food and tea. Well water was also unacceptable for washing hair since its chemical properties made hair

coarse and dry (Nadim et al., 1980).

Agricultural canals provided a less used water source. This source was usually only available in

outlying and newly developed areas. In these less densely settled areas, canal water appears to have been

acceptable for washing laundry and utensils (Nadim et al., 1980). However, as an area became more densely

settled, small canals appear to have been filled in and larger ones became repositories for both solid and

liquid wastes. Interviews indicated that "residents feel disgusted at the idea of drinking such water" (Nadim

et al., 1980, p. 71). A sample of outlying neighborhoods in greater Cairo showed that only two percent of

the respondents made occasional use of canals for laundry and only five percent occasionally washed

household utensils there.

Canal and well water were often used at or near the source. Laundry and other items for washing

had to be carried from home to the canal or well. Water from network connections was usually transported

from the source for use in the home. Female household members bore the primary responsibility for these

physically and psychologically demanding chores (Nadim et al., 1980). To get water from an outside source,

women carried one or more containers to the water source. Common containers included 20 liter tins or

plastic jerrycans. A 20 liter container full of water weighed more than 20 kilograms. Surveys estimated

that the walk to and from the water source took an average of 20 minutes (Nadim et al., 1980; DHS, 1988).

To fulfill household needs, women typically made several trips to a water source each day. Nadim el al.

(1980) estimated that the average number of trips per day was as high as seven per household. This meant

that, on average, women in a household spent more than two hours per day getting water and as much as 70

minutes per day carrying a container weighing more than 20 kilograms.9

10Water vendors is the typical English term applied to these entrepreneurs, but it is a misnomer. Theservice actually provided by these vendors is transportation and delivery. This latter interpretation isreinforced by the illegality of reselling network water.

28

Vended water was an alternative to women and girls transporting water. Water vendors obtained

water from a network source and then transported the water to households in unconnected areas.10 Twenty

liter plastic jerrycans were the typical container for vended water. Horse and donkey carts were the typical

means of transportation. The cost of vended water prevented many unconnected households from using this

alternative (Nadim et al., 1980; Tecke et al., 1994).

The extent to which unconnected households were affected by network conditions would have

depended on the water source used by households. For households using an outside network connection, the

effects were likely to have been similar to those experienced by connected households. As with network

connections inside a home, network water sources outside the home were vulnerable to low pressure and

water cutoffs. Therefore, unconnected households using outside taps would have experienced

inconveniences and possible health effects similar to those of connected households. The inconveniences

may have been compounded by the hours wasted going outside the home to get water only to find that water

was unavailable due to low pressure or cutoffs.

Households using well, canal, or vended water would not have experienced the effects of low

pressure and water cutoffs. Network conditions would have affected these households by delaying

connection of their neighborhood due to inadequate network capacity. It is likely that some neighborhoods

went unconnected due to the lack of processing capacity in the network. Had additional capacity been

available, there may have been additional buildings added to the network. A building connection would

provide four types of benefits for unconnected households. First, in-home connections eliminate the

inconvenience of obtaining water outside the home. Second, they reduce the health risks of using

contaminated water. Water may be contaminated at the source or become contaminated en route from the

source to the home or during storage. Third, in-home connections may reduce the money cost of obtaining

29

water. Fourth, reduced labor and money costs make water available for uses other than those essential to

minimal human needs.

USAID Water Network Investments

The imbalance between the network capacity and the needs of the Cairo residents led to extensive

discussions between the government of Egypt (GOE) and international funding agencies beginning in the

late 1970s. The first substantive outcome was a system-wide analysis and master plan proposal for network

improvements (ES-Parsons, 1979). The plan identified the existing engineering and institutional deficiencies.

It proposed significant capital improvements to allow the network to meet water needs in Cairo to the year

2000. The plan served as the technical foundation for negotiations between the GOE and individual funding

agencies. It also served as the coordinating nexus for a multinational effort to upgrade the water system.

The initial phase of investments included funding from the Arab Fund, Japanese, West German, and United

States international assistance agencies (Sanyu Consultants Inc., 1980).

The first phase of USAID investments was called Cairo Water I (CW I). CW I began in 1978. CW

I supported a portfolio of efforts aimed at improving the water network. These efforts included the

development of master planning documents, institutional improvements, and capital investment. CW I was

completed in 1986.

USAID capital investments focused on the Rod El Farag service area in the central 63 meter pressure

zone. The central 63 meter zone was the core network area in the Cairo governorate. It encompassed the

central business and tourist districts of Cairo. The 1986 census reported a population of 3.14 million people

in the area. There were three treatment plants that processed water for the 63 meter zone. These were the

11The Rod El Farag service area consists of the following kisms; Sharabia (50 percent), Shoubra,Boulaq, Daher, Bab El Sharia, Darb El Ahmer, Kasr El Nil, Sayeda Zeinab, Manshiet Nasser (20 percent),Mousky, Sahel, Rod El Farag, Ezbekeya, El Wayli (25 percent), Gamalia, Abdin, Zamalek, Khalifa (72percent), Masr El Khadima, and El Zawia El Hambra. Numbers in parentheses indicate the portion of aparticular kism within the 63 meter zone.

30

Rod El Farag, Roda, and Ameria treatment plants. The Rod El Farag plant served about 64 percent of the

63 meter zone population11.

The central 63 meter zone requires 63 meters of pressure to provide regular water service to users.

However, in the 1970s, operating pressures in the central 63 meter zone were routinely 21 meters or less

during peak demand periods. These low pressures led to the service interruptions and cutoffs common to

other parts of the network (ES-Parsons, 1979).

The primary capital investment project in CW I was the rehabilitation and expansion of the Rod El

Farag water treatment plant. The existing plant had a design capacity of 300,000 cmd. The project was

designed to add sufficient facilities to increase capacity to 750,000 cmd (CH2M Hill, 1990). The

improvements were operational beginning in 1987.

With the additional capacity provided by CW I, water pressure within the Rod El Farag service area

was maintained at approximately 48 meters. Further increases were not possible due to the depreciated

condition of the water transmission network. Without improvements in the distribution network, additional

pressure presented too great a risk of network failures and loss of water through broken lines. With this

limitation, the Rod El Farag treatment plant operated at an average output of 630 thousand cmd, 85 percent

of its post-investment rated capacity of 750,000 cmd (CH2M Hill, 1990).

The second phase of USAID investments was developed in Cairo Water II (CW II). CW II included

funds for planning, institutional improvements, and capital investment. The primary capital investments

were directed to improving the distribution network, increasing storage capacity, and providing additional

delivered water to support water services in the Rod El Farag service area. The CW II capital improvements

had three objectives. The first objective was to rehabilitate the transmission network within the Rod El Farag

service area so that it could withstand the design pressures. Work toward this goal began in 1990 and

31

continued through 1994. The second objective was to increase storage capacity in order to meet peak

demands. Four enclosed water storage reservoirs with a total capacity of 120,000 cubic meters were begun

in 1992 and completed in 1995. The third objective was to improve water availability in the Rod El Farag

service area by constructing a transmission main from the newly completed Fostat water treatment plant.

This main had a capacity of 200,000 cmd. The transmission line was begun in 1991 and completed in 1994.

The overall objective of CW II was to make the Rod El Farag service area capable of operating at

its fully rated capacity. The planned result was reliable, all day water service for the existing population of

connected households and enough surplus capacity to fully service the unconnected households and new

connections until the year 2010 (CH2M Hill, 1990).

Water Investment Impact Hypotheses

There appear to be two types of primary impacts of the capital investments funded by CW I and CW

II. First, there was an increase in the reliability of water service. Low pressure and cutoffs characterized

the routine service level before CW I. After CW II, the network was intended to operate at its full pressure

and capacity rating. The intent was reliable, all day service on a routine basis.

The increase in service quality--hours of service--would have affected all network connections in

the investment service area. Hence, service quality would have increased for all households using the water

network. This would have included both households with an in-home connection and unconnected

households using public or private taps as their source of water. However, in the 63 meter zone, the network

was probably the only source of water. The settlement density and pavements would make large numbers

of conventional shallow wells infeasible. Solid and liquid wastes in such a densely populated area would

make any canals or drains too polluted for all but the most desperate human use.

The second impact of CW I and CW II investments was to extend water services to unconnected

households. The increase in water processing capacity based on population needs would have resulted in

32

sufficient capacity to connect buildings to the network that were previously unconnected. Hence, there was

the potential for providing in-home connections for unconnected households.

The investments therefore had two sets of possible impacts: (1) additional connections for previously

unconnected households and (2) a more reliable water supply for all households in the 63 meter zone. The

first impact reduces the effort, money costs, and adverse health effects of obtaining water outside the home

as well as making water available for non-essential uses. The second impact reduces the inconvenience and

health effects of an intermittent water supply. The first two hypotheses of this study are that these two

impacts had value to the Cairo residents affected by them. Hypothesis H1 is that an in-home connection to

the water network is valued by unconnected Cairo households. Hypothesis H2 is that a reliable, all day water

supply is valued by Cairo households.

Wastewater Investments and Household Impacts

The present wastewater network in greater Cairo is operated by the General Organization for

Sewerage and Sanitary Drainage (GOSSD). GOSSD is an agency within the government of Egypt. GOSSD

manages a wastewater collection network that serves approximately 82 percent of the population (AMBRIC,

1991). The system of five wastewater treatment plants have a combined secondary treatment capacity of

2,310,000 cmd and an additional primary treatment capacity of 400,000 cmd (AMBRIC, 1993).

The Nile divides the overall network into two subsystems. The west bank subsystem serves the

Cairo and Kalyoubia governorates. The east bank subsystem serves the Giza governorate. In 1986, the

sewer network connection rate was 71 percent of the buildings in the Cairo governorate, 70 percent in

Kalyoubia, and 53 percent in Giza.

The Wastewater Network Before USAID Investments

The first elements of the sewer network were constructed in 1914. The original system consisted

of a collection system and treatment plant designed to serve a population of one million. It initially served

33

a population of 700,000 people. Rapid deterioration of the original collector required the construction of a

second collector and pumping station in 1929. By this time, the Giza governorate on the Nile’s west bank

was growing rapidly and in need of sewerage services. In the late 1930s, a separate collection system,

pumping station, and treatment plant were constructed to serve a portion of the residents in Giza.

The wastewater network failed to keep pace with rapid urban development. By the 1960s, the

network was severely overloaded, especially on the east bank. This led to a period of rapid construction

during the mid-1960s. In this period, a series of six new pumping stations and two new treatment plants

were constructed to shore up the existing system. A siphon crossing under the Nile was also constructed in

order to convey sewage from the east bank to the treatment plants on the west bank.

By the mid-1970s, the wastewater conveyance and treatment system was only large enough to

provide sewer connections for 45 percent of the buildings in greater Cairo. Technical reports showed that

the network was seriously inadequate for even this connection rate. Throughout the city it was routine for

sewer mains to overflow and for pumping stations to break down. Maintenance was difficult and dangerous.

The depreciated condition of the treatment plants meant that most sewage was discharged with little or no

treatment (Taylor-Binnie, 1977a).

Sewer overflows and flooding in sewered areas were a routine and serious threat (AMBRIC, 1981).

Technical reports indicated that flooding would increase in frequency and severity due to the overloading

and depreciated state of the system. Extensive rehabilitation and expansion were necessary to prevent further

failure of the system (Taylor-Binnie, 1977a).

A network connection rate of 45 percent meant that about four million people were without sewer

service in greater Cairo in 1976. Table 2.5 shows that 1976 connection rates were similar on both sides of

the Nile. As international funds came into the system in the 1980s, the percentage of buildings connected

on the east bank grew rapidly. By 1986, the connection rate was 66 percent in greater Cairo and 71 percent

on the east bank. The absolute number of unconnected buildings declined by 20 percent in greater Cairo and

by 38 percent in the east bank communities. The west bank system had more difficulties. From 1976 to

34

Table 2.5. Population and Sewer Connections, Urban and Rural Areas of Greater Cairo, 1976-86

Area and Description 1976 1986Change1976-86

(%)

Greater Cairo: Cairo, Giza, and Kalyoubia

Populationa (1000s) 7.5 9.8 31

Buildings connected to network (1000s) 170b 335c 97

Buildings not connected to network (1000s) 210b 169c (20)

Connection rate (%) 45 66 -

East Bank: Cairo and Kalyoubia

Buildings connected to network (1000s) 144b 269c 87

Buildings not connected to network (1000s) 176b 110c (38)

Connection rate (%) 45 71 -

West Bank: Gizad

Connected to network (1000s) 26b 66c 154

Not connected to network (1000s) 34b 59c 74

Connection rate (%) 43 53 -

a. CAPMAS (1976, 1986).b. Taylor-Binnie (1977a).c. CAPMAS (1986).d. Includes only the urban kisms of the Giza governorate.

1986, the connection rate increased from 43 percent to 53 percent. However, the absolute number of

unconnected buildings increased by 74 percent.

35

Wastewater Conditions for Connected Households

By the 1980s, the wastewater network was too small and too depreciated to effectively remove

sewage from settled areas and treat it before discharge. As a consequence, sewers throughout Cairo routinely

overflowed into the streets. Furthermore, the situation was deteriorating. An investigation of the cause of

sewage flooding incidents concluded that,

"The gradually increasing wastewater loading on the already inadequate system will resultin more serious and widespread flooding if major rehabilitation and expansion of thesecondary system is not undertaken immediately...Unless a massive and sustained effort ismade to increase the capacity of and to rehabilitate these sewers, flooding incidents willinevitably increase in number and extent, and become progressively a more serious hazardto public health (AMBRIC, 1981, pp. 1 and 6)."

USAID commissioned a study in 1987 to determine whether projects to reduce sewage flooding had

been effective (EQI, 1988). The study design included interviews with Cairo residents which asked them

to recall pre-project sewage flooding conditions in their neighborhoods. These interviews provide some of

the best descriptions available of pre-project sewage flooding conditions and the costs sewage flooding

imposes on households.

Households most commonly complained of the local environmental conditions associated with

sewage flooding. They spoke of foul odors, flies and mosquitos, diseases, dirty streets, and the need to place

stepping stones and planks in the street to cross areas flooded by sewage. Mud and potholes from sewage

floods also impeded traffic. The dirt and mud also made it difficult to keep children clean and healthy when

they played outdoors. Residents attributed diseases such as eye infections, diarrheal fever, and rheumatism

to contact with sewage in the environment. In addition, sewage floods may have polluted potable water

sources.

Sewer overflows and flooding were not confined to the streets. Half of the residents interviewed

said that their homes or businesses had been damaged by sewage. Sewage flooding that entered homes

sometimes caused conflict between neighbors. For example, when women tried to sweep flooding sewage

away from their homes, it flowed into other houses. At times sewage flooding would force the residents of

36

ground floor apartments to abandon their homes. Sewage flooding also affected business activity. Half of

all shop owners interviewed said they had closed their shops because of sewage flooding. Financial losses

due to damaged merchandise were also a problem.

Households also incurred monetary costs associated with sewage flooding incidents. For example,

they would sometimes pay laborers to clean overflowing sewers only to find that the flooding would begin

again after a few hours. Households also banded together as blocks and neighborhoods to have sand or other

debris deposited on flooded streets in order to raise the level of the street above the overflowing manholes.

This practice reduced flooding for a time, but it amplified the consequences of future flooding. As street

levels rose, ground floor apartments and shops became more susceptible to flooding (EQI, 1988).

Overall, network flooding appears to have caused substantial inconvenience and costs for Cairo

residents. First, there were inconveniences caused by odors, flooded streets, interrupted travel and

commerce, and the soiling of buildings, clothes, and children. Second, there were adverse health

consequences and perceptions of ill health. Third, inconveniences and disease resulted in money and time

costs. These included cleaning and repair costs, replacement of damaged property and merchandise, lost

sales, and the losses associated with ill health, disease, and death.

Wastewater Conditions for Households Not Connected to the Network

Residents outside the sewer network service area had two primary means of disposing of wastewater.

A small percentage of buildings were situated so that a drain pipe could be extended from the building to

a canal or sewer main. However, the most common method of disposal was by means of a septic holding

tank called a vault. During the 1980s, the percentage of households using vaults in unconnected

neighborhoods ranged from 78 and 100 percent, depending on the neighborhood (Nadim et al., 1980; Oldham

et al., 1987; DHS, 1988).

Vaults served as holding tanks and had no drain field. They were usually located under the street

in front of a building and had a covered opening to allow access for cleaning. Vault capacities ranged from

37

one-half to 12 cubic meters. They were constructed from a range of materials including steel drums,

unmortared brick, mortared brick, and concrete. They generally served all apartments in a building.

Households within a building paid a private or public operator to evacuate the contents of a vault

and dispose of the evacuated material. Dense settlement, water and waste saturated soils, and small vault

capacities created the need for frequent evacuation. Pump trucks that evacuated the vaults had standard

service areas. Where the streets were too narrow or rough for a truck to gain access, a horse or donkey cart

was used. When carts had to be used, vaults were evacuated with buckets and shovels.

It was common for vaults to overflow. Vault overflows occurred when households were unable to

pay to empty the vault (Oldham et al., 1987). Administrative delays were also common in the publicly

supplied service areas (Nadim et al., 1980). When evacuation was infrequent, pressures increased on the

liquid material in the vault. It was not uncommon for the liquid material to flow out into the street when the

vault cover was removed for evacuation.

Overflows and flooding were common enough to make the alleys and streets of unconnected areas

dirty and difficult to navigate. Nadim et al. (1980) described residents placing stepping stones in the street

in order to provide a dry footpath across ponds of standing sewage. Overflows and traffic left streets uneven

and potholed. Sewage sometimes flooded into buildings. It contributed to unpleasant odors, soiling, insects,

and disease. Children playing in the streets became dirty from contact with sewage. Seepage from vaults

polluted the water obtained from shallow wells (AMBRIC, 1987).

Maintaining and evacuating vaults was costly. Oldham et al. (1987) reported average annual costs

of evacuation of 56 (in 1985 prices) Egyptian pounds in Zenein and 87 (in 1985 prices) Egyptian pounds in

Mounira Gedida. These costs represented five percent of average annual income for households in the study

areas. In both areas, some households (two percent in Zenein and 16 percent in Mounira Gedida) paid more

than 240 (in 1985 prices) pounds per year. Vault evacuation also created foul odors and took time. To save

on evacuation costs, women spent time and effort to carry non-sewage wastewater, grey water, away from

38

the home for disposal in drains and canals. They also spent time and effort to enforce sanctions against

neighbors who let their vaults overflow.

The lack of treatment capacity in the network meant that evacuated vault materials were disposed

of by other means. A small percentage was dumped on city streets. Another 12 percent was disposed of

by dumping it on vacant land. More than 70 percent of vault material was disposed of in canals, drains, or

rivers (AMBRIC, 1987).

In summary, the situation in the unconnected areas appears to have been worse than in the

overloaded sewer network areas. Vault overflows were common. The overflows created odors and streets

that were routinely damp and puddled. The pump trucks removed wastewater from one residential area, but

disposed of it in another. Residents paid relatively high fees for vault evacuation and waste disposal. There

appear to be three primary implications for residents of unconnected areas. First, households had to live with

daily inconveniences that included odors, flooded streets, interrupted travel and commerce, and the soiling

of buildings, clothes, and children. Second, households probably experienced adverse health consequences

and perceptions of ill health. Third, the inconveniences and disease had money and time costs. These costs

included vault evacuation fees, cleaning and repair costs, replacement of damaged property and merchandise,

lost sales, and the losses associated with ill health, disease, and death.

USAID Wastewater Infrastructure Investments

The condition of the wastewater network in Cairo in the 1970s led to discussions between GOSSD

and foreign aid donors. The discussions included both short term rehabilitation projects to prevent

additional system failures as well as long term investments to meet the needs of a growing city. An initial

planning document was completed in 1977 (Taylor-Binnie, 1977). The inventory document reviewed the

conditions of wastewater infrastructure and services, recommended immediate rehabilitation projects, and

suggested remedial measures that would allow the network to operate at its full capacity. It also outlined

the system requirements necessary to serve Cairo’s projected population through the year 2000.

39

The inventory provided the foundation for a coordinated, multinational investment strategy aimed

at rehabilitating and expanding Cairo’s wastewater infrastructure. By the late 1970s, the governments of the

United States, Britain, and Japan developed the final protocols for wastewater projects in Cairo that would

augment those already underway or planned by GOSSD. The USAID wastewater investments were to be

coordinated by AMBRIC, a consortium of British and American contractors.

The first phase of USAID investments began in 1979. These were called Cairo Sewerage I (CS I).

CS I efforts included analysis of the wastewater system, development of a master plan for rehabilitating and

expanding the wastewater system throughout Cairo, and capital investments to implement the master plan.

CS I activities emphasized projects necessary to meet Cairo’s wastewater needs into the early 1990s.

USAID funding during CS I supported planning, engineering design, personnel training, and capital

investments. Capital investments were targeted at rehabilitating and expanding the wastewater conveyance

network and wastewater treatment capacity. A key USAID funded project investigated the cause of 107

sewage flooding incidents in Cairo and recommended operational and capital investment measures to

alleviate the flooding (AMBRIC, 1981). Implementation of these projects was shared by AMBRIC and

GOSSD. USAID also supported a pilot sewer cleaning program to improve the operation of sewers.

AMBRIC directly supervised some sewer cleaning projects while other projects were implemented by

GOSSD with personnel trained by AMBRIC.

CS I also supported capital investments to improve sewage conveyance and increase wastewater

treatment capacity. These included rehabilitation of 53 pumping stations and associated infrastructure,

rehabilitation of 39 ejector stations, construction of 11 new pumping stations, and rehabilitation of the Zenein

wastewater treatment plant.

A second phase of USAID wastewater investments was initiated in 1984. These were called Cairo

Sewerage II (CS II). CS II focused on improving the wastewater system on the west bank of the Nile. CS

II investments included projects to improve and expand wastewater conveyance and treatment infrastructure,

40

projects to extend sewers into developing areas without sewers, and training activities to improve the

management of the system.

CS II also funded 62 projects in Giza aimed at providing sewer services to unsewered areas. In 58

of these areas, the projects installed sewers and connected all buildings to the sewer system. The remaining

four projects constructed culverts to support the new household connections. In most cases, sewer

connections replaced vaults for household sewage disposal. The projects also covered open drains and

canals. As of October, 1994, projects were complete in 29 areas. Completion of the remaining projects is

expected by 1996.

In summary, USAID funded projects during CS I and CS II focused on three primary objectives, (1)

increasing sewage conveyance capacity, (2) extending sewer connections to unsewered areas in the Giza

governorate, and (3) increasing wastewater treatment capacity. As previously stated, this study addresses

the benefits of the first two types of investments. It does not address the benefits of improved wastewater

treatment.

Wastewater Investment Impact Hypotheses

There were three key sets of network impacts funded by CS I and CS II. First, the capital

investments aimed at rehabilitation prevented the deterioration and general failure of the network. Second,

the network expansion funded extension of the network into previously unconnected areas. Third, expanded

capacity for primary and secondary treatment reduced the impact of wastewater on the local, aquatic, and

downstream environment. This third impact, however, is beyond the scope of this study.

The primary impact of rehabilitation was to effectively remove sewage and wastewater from the

settled areas of greater Cairo. A key result was the reduction in sewer flooding along with its associated

inconvenience, cost, and adverse health effects. The third hypothesis of this study, H3, of this study is that

households value reduced sewer flooding.

41

Expansion of the network into unconnected areas reduced inconvenience, costs, and the negative

environmental and health impacts of the vault disposal system. The fourth hypothesis, H4, of this study is

that this expansion had value to the residents of unconnected areas.

Infrastructure Services to be Evaluated

There are four valuation hypotheses that summarize the research problem for this study. These

hypotheses are that the following services had significant value to Cairo households:

H1. Provision of water network services to households previously unconnected to the water

network.

H2. A water supply that was available at serviceable pressure throughout the day.

H3. Reduced sewer flooding within greater Cairo.

H4. Installation of sewer network connections for households previously unconnected to thesewer network.

The next two chapters describe the methods that were used to detect and measure the economic values. The

fifth chapter describes the valuation results at a household level. The sixth chapter applies the valuation

results to identifiable portions of the USAID investments.

42

43

Chapter III

Benefit Valuation Methods

This chapter discusses the methods and procedures used to estimate the economic values associated

with water and wastewater services in Cairo. These economic values represent tradeoffs. People make

tradeoffs as they budget their limited resources across basic needs, wants, and personal goals. The key

economic resources available to satisfy needs and achieve goals are time, labor, and money. People typically

find that their resources are not enough to satisfy all their needs and wants. They therefore have to forgo the

purchase of one good in order to obtain more of some other good. These tradeoffs form the foundation of

economic values. Tradeoffs tell us about the compromises that people find acceptable given their limited

resources.

Economists typically measure tradeoffs in money units. Money provides a common measurement

unit. With this common unit, the values or tradeoffs that people place on one set of goods can be compared

with the values that they place on another set of goods. The benefits assessment goal is to value a set of

impacts so that they can be compared against the costs of the investment required to produce them.

Valuation Methods

Benefits assessment begins with a problem: the problem of measuring economic tradeoffs. Market

prices provide an important means of measuring economic values. A market price measures the amount of

money that the last buyer sacrificed in order to obtain the last unit purchased of a good or service. This is

exactly the tradeoff that benefits assessment requires. Unfortunately, markets typically fail to provide

economically meaningful prices for the good or service that is being studied in a benefits assessment. This

failure is certainly present in the Cairo case. There are fees and charges for the water and wastewater

services provided by the Cairo networks. However, these charges and fees are not prices, but instead reflect

44

administrative decisions. They do not reflect the economic values that Cairo households associate with water

and wastewater services. Administrative charges are not directly helpful in assessing economic benefits.

Economists have developed three primary methods to address the problem of valuing programs and

services outside of smoothly functioning markets. The first method uses direct questioning. The direct

questioning method constructs a market situation where a household’s economic decisions may be recorded

and analyzed. This method obtains value information directly from households and other potentially affected

parties.

The second method uses market prices in markets for similar, substitute services as proxies for the

missing value. For instance, the prices that households pay for sewerage vault evacuation and sewage

disposal in Cairo provide evidence about the value households place on wastewater disposal. The prices of

these substitute services can be measured and used to infer something about the value of network services.

These inferences are limited by differences in quality and kind between network and non-network services.

The third method, the hedonic method, analyzes how the value of housing varies with housing

characteristics. The market for housing prices a house in accordance with its features. These features

include characteristics such as the number of rooms, proximity to transportation, and the availability of water

and sewer services. The hedonic method measures how each of these features contribute to the value of a

dwelling. It estimates the values of characteristics that are implicit in housing market prices. For this reason,

the hedonic method is also referred to as the implicit price approach (Freeman, 1994).

The research design included a role for each of the three valuation methods. At an early stage of the

research, it was clear that the Cairo setting was well suited to the direct questioning method. The research

design placed primary emphasis on obtaining results from direct questioning. The substitute service and

hedonic approaches were used to obtain cross-checks on the core results.

45

Direct Questioning Method

The direct questioning method (DQM) obtains value information directly from households. This

method constructs a market-like setting where an individual can trade money payments for a proposed

service or program. The trade proposed by the research may be similar to that of an ordinary market for food

or other consumer products. It can also be constructed to be similar to a political market for a community

program. In the community decision form, an individual may be asked to accept or reject--vote for or vote

against--a community program. The program is described so that it has both a beneficial service as well as

a money cost. In either the ordinary market or community good setting, the DQM confronts an individual

with a tradeoff--to accept or to reject the perceived benefits and costs of the proposed good or program.

These accept-reject responses are used to estimate a value function that represents a schedule of tradeoffs

acceptable to a sample of respondents.

The DQM is one form of contingent valuation. Other forms of contingent valuation have been

described as willingness to pay methods, contingent behavior, stated behavior, and constructed markets (cf.,

Carson, 1991; Cummings, et al., 1986; Hoehn, 1989). These methods share a similar objective: to construct

a situation in which individuals can exchange a prospective payment for a proposed improvement.

Applications range from the value of life-saving medical services to the benefits of water quality (Mitchell

and Carson, 1989). Recent applications have demonstrated the method’s potential in valuing water supply

and wastewater improvements (Whittington et al. 1990, Whittington et al. 1991, and Briscoe et al. 1990).

The DQM is a distinct form of contingent valuation. With some types of contingent valuation, there

is little effort to determine whether people are familiar with the goods to be valued and whether they view

these goods within an economic decision context. There may be little effort to construct a reasonable

economic choice context or to test the reliability of the questionnaire. In contrast, the DQM takes special

care to assess people’s familiarity with the goods to be valued and their ability to make economic tradeoffs

concerning those goods. The DQM also makes a substantial effort to reduce errors in communication

between the researcher and respondents. The valuation question is posed in a manner that is consistent with

46

people’s beliefs about how such a decision might be made. The DQM also incorporates a multi-stage

process of questionnaire development and reliability testing. Overall, it treats questionnaire development

and data collection as one of the key parts of the research process.

The central objective of the DQM is to construct a choice situation where a respondent can make

a well-considered, economic decision. The choice situation clarifies what the individual has without the

proposed program, describes what the individual gains with the proposed program, and presents the program

cost and method of payment. It describes the alternative decisions that are possible and asks the individual

for a choice. The narrative and questioning process are developed to avoid biasing the individual’s response

toward one decision or the other. Once the decision is made, follow up questions are used to determine

whether the choice was a well-founded economic decision.

The DQM is adaptable to mail, telephone, and in-person questionnaires. The structure of the DQM

is similar regardless of the means of application. The specific portion of a questionnaire implementing the

DQM is referred to as the valuation scenario. The valuation scenario has five key sections. These sections

are:

A. A description of baseline conditions. This describes what the respondent haswithout the proposed program. In the present case, this describes conditionswithout water, an unreliable water supply, sewer overflows, or wastewater disposalwithout access to a sewer network.

B. A description of the post-program conditions. This describes the improvements therespondent obtains with the program. It includes a statement about the cost therespondent will pay if the program is implemented. With water and wastewater,meaningful improvements include an in-home connection to the water network,reliable, all day water pressure or service, reductions in sewer overflows, and theneighborhood installation of in-home connections to the sewer network.

C. A description of the choice context. This segment addresses ancillary factors thatmay affect an economic decision. For instance, a respondent may want clarificationor additional information. Questions within the choice context may prompt therespondent to ask for clarification or more information. The narrative is structuredso that it reminds the respondent that there may be other ways of obtaining a similarservice. It may also legitimize either a positive or negative decision by reviewingthe reasons respondents may be for or against the proposal.

D. A section describing the decision setting for the individual. This section describesthe choices that are open to the individual. It permits the individual to state

47

preferences for or against a program by stating a maximum acceptable payment forthe program, by voting for or against the program at a given cost, or by some othermeans. To avoid confusion on the part of the individual, the decision setting isusually set up so that it is familiar to the individual. Familiarity allows theindividual to focus his or her thoughts on the decision to be made rather than ontrying to figure out the decision setting.

E. A debriefing section. This is a set of questions that assess the quality of theindividual’s decision. Questions may try to identify communication orinterpretation errors that may have influenced the decision. They may also assesswhether the decision was a budget constrained, economic choice or whether itreflected some non-economic sentiment.

The valuation scenario presents these five sections in terms and idioms that are meaningful to the individuals

responding to the questionnaire. This typically means that technical terms need to be translated into lay

terms and local idioms. It means that the translation needs to be tested and refined to ensure that the

questionnaire communicates clearly and effectively with respondents.

Direct questioning in Cairo presented special challenges for the translation process. There were, of

course, the general language and cultural hurdles to overcome in constructing a questionnaire. But there

were also translation and culture issues associated with the specific issues addressed by the research. For

instance, it was not clear whether the typical Cairo resident gave much thought at all to water supply and

wastewater disposal. If they were unfamiliar with water and wastewater issues or unwilling to think about

these issues in economic terms, a reliable direct questioning survey would be infeasible. If Cairo residents

were familiar with these issues, nothing was known about how they perceived and talked about water and

wastewater conditions. Thus, the first step in the research was to:

S1. Determine how Cairo residents from different socioeconomic groups perceive waterand wastewater issues and identify the language that they used to discuss theseissues.

Completing this first step would provide lay terms and idioms necessary for a prototype questionnaire

narrative.

A second issue was whether Cairo residents viewed water and wastewater alternatives as economic

decisions. Cairo residents might see the provision of these services as either given by nature or as the

obligation of a governmental authority. They might not view water and wastewater services as something

48

they should have to pay for. Respondents might reject the legitimacy of asking for payments in return for

water and wastewater improvements. A second preliminary step in the research was to:

S2. Determine whether Cairo respondents viewed water and wastewater decisions aseconomic decisions. That is, determine whether these decisions are subject to ahousehold’s budget constraint and to tradeoffs among other goods and services.

A third issue was to find a decision setting for the provision of post-program services and payment

obligations. Many economic exchanges and tradeoffs are, at their most fundamental level, rather simple.

They involve a single buyer and a single seller. Water and wastewater decisions are more complex. They

may involve a single provider, but they usually involve a community of buyers, a community that obtains

the same service at the same cost. To be acceptable to respondents, the DQM describes a decision setting

that is consistent with the way a community typically makes decisions involving such goods. For instance,

applications of DQM in the United States often place the decision within a referendum setting. These so-

called referendum formats ask respondents to accept or reject, or to vote for or vote against, the proposed

program. In Egypt, there were apparently no previous DQM experiments. There was no previous work

to suggest whether households were able to effectively evaluate decisions with a community-wide impact.

Hence, a third step was to:

S3. Learn whether households are familiar with decisions that involve communityorganization and impacts and, if so, identify a decision setting appropriate for waterand wastewater services in Cairo.

DQM Feasibility for Cairo Water and Wastewater Services

The research design included a preliminary phase of focus group research to address the issues

described in S1 through S3. Focus groups were conducted during July and August, 1994. The preliminary

research objectives were to (1) assess the feasibility of an effective direct questioning application and (2)

provide the language and cultural data necessary to develop prototype questionnaires.

Thirteen focus groups were conducted with Cairo residents during the preliminary phase of scoping

research. Groups were recruited to represent different water and wastewater conditions and different

12Market researchers in Cairo categorize Cairo neighborhoods into five socioeconomic categoriesbased on expenditure and income related characteristics. Focus groups were recruited to represent all butthe highest expenditure group.

13The focus groups were organized and conducted by RADA Research of Heliopolis, Cairo, Egypt.

14 Transcripts for each focus group discussion are reported in the appendices.

49

socioeconomic conditions.12 Focus group discussions were led by a professional, Arabic speaking

moderator.13 Simultaneous English translation was available in an adjoining room for the English speaking

researchers.

The moderator directed the discussion using a detailed discussion guide for each group. The guides

addressed each of the issues S1 through S3 as well as other data needs. Eleven groups were conducted with

female heads of household since women bear most of the responsibility for water and wastewater activities.

Two groups were conducted with male heads of household. Eleven groups contained between seven and

nine participants. One group contained six and one group contained four participants.14

Respondent's Perception of Water and Wastewater Issues

The focus groups provided a strong foundation of evidence to assess the feasibility of the DQM.

Regarding S1, the discussions gave a detailed picture of everyday involvement in water and wastewater

issues. Where water and wastewater conditions were poor, residents spent considerable time and effort

dealing with water and wastewater problems. Where water and wastewater conditions were better, residents

retained a clear memory of their former difficulties with water and wastewater. The following was a typical

statement by a resident living outside the water network:

"...we fetch water from the surrounding areas...The distance is very long and carrying wateris difficult. It is around half an hour's walk plus the embarrassment and humiliation we gothrough when residents of connected houses treat us bad."

Participants’ comments revealed the special terms and idioms that are used to describe activities and

technologies. A bastilla was once made only out of clay, but the term was used interchangeably for clay,

50

plastic, and metal containers used to carry water. The following comments indicated that residents used steel

drums and a traditional clay zeer to store water:

"I bring water from the street behind me, a 15 minute walk. I pay money each month, threeLE, to one of the houses...This payment is for six to seven trips a day...sometimes they letme use more...I carry the bastilla on my head for six or seven trips to fill the barrel and thezeer."

"My wife goes to the water tap in the morning and fills a bastilla that she uses to fill thezeer. This takes three to four trips to get water for drinking. Preparing breakfast for the kidsto go to school, filling the washing machine to do the laundry, this is five or six trips. Wehave electricity but no sewer and water. She goes again to get water to wash thekitchenware she used. We also clean floors. The most important thing is that she goesaround 20 times. It is 30 to 40 meters from our door to the tap."

For households living in connected areas, the memory of living without water was clear, as the following

comment indicated:

"Laundry day was terrible. I used to store water. We used to fetch water around 13 timeson that day, me and my daughter. Can you imagine the suffering...The bastilla was big andused to give us headaches. This affected our bodies later, my body used to get very tired."

The memory of living without sewers was also detailed. Respondents recalled the high cost, the

environmental and health problems caused by sewer vault overflows, and the constraints that vault capacity

and costs placed on water use:

"Paying the charge for emptying the vault created a lot of problems. We had ten apartmentsin the house. I could pay five LE immediately but my neighbor could not. We fought andlet the vault overflow for two or three days until we collected the money for the tank truck."

"Before we got sewers, vaults used to overflow, especially for those who could not affordto empty them. It was similar to having a canal in front of your house. We put bricks andwood to pass, a lot of mosquitos. We bought a bottle of insecticide every three days. Thearea was dirty and your soul felt tired...the smell was terrible."

"Two years ago, in 1992, we got connected...Before that my life was terrible. Our buildinghas four floors so vaults used to get filled a lot...This one washes her clothes and the otherdoes the same. We used to empty water from ours every three days and collected moneyfor that purpose. I used to pay all my salary to the tank truck."

Respondents also recalled the effects of sewer overflows:

"For more than 20 years we suffered. Sewer water was this high in the street; flies, dirt,diseases, and some unbearable things. We wrote complaints and used to get the guy fromthe municipality by ourselves. We collected money to give him and still nobody didanything. We often bought lorries of sand to fill the street to reduce the smell."

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Respondents from areas that were recently sewered were keenly aware of improvements in maintenance.

The following comments were indicative:

"...now we don't pay anything for sewer, not even for repair. It is heaven compared to theold sewer system in which we lived 20 years. Now they are using new pipes that arelubricated with a certain material. We now clean the streets...Some people have gardens infront of their houses. The area has become very, very beautiful."

"...the sewer still gets blocked, but once in a year, not every day like before. The foreigngovernment, we don't know who, repaired the sewers. The engineers are foreign but someEgyptians also work with them. The one who gets tired and works is the Egyptian, and theone who just stands and looks is the foreigner...24 hours a day, work for three to fourmonths until they finished the work."

A routine, problem solving attitude was also evident among participants. This comment by a resident of an

area with low water pressure illustrated this attitude:

"We store water at night when the pressure is very strong. We use stored water because ofthe cutoffs. We use barrels and jerrycans. The bathtub in my house never gets empty. Wealways keep enough storage to reduce the risk when water gets cut."

Residents have a detailed knowledge of water and wastewater technology. Some also involved themselves

in construction and maintenance. This comment by a woman showed detailed knowledge of sewage vaults:

"We have a toilet that is connected to a vault. We empty it every four days. It costs us tenLE for each cleaning visit. The cleaning is done using a tank truck. We got the vault builtourselves by purchasing the cement and bricks and hiring the laborers. The vault is the mostimportant thing in our houses, more important than food and drink because it is better tohave your own toilet than using another's."

Water and Wastewater Services as Economic Goods

The qualitative research answered question S2 by showing that water and wastewater services were

economic goods. Cairo households made routine decisions about tradeoffs between water and wastewater,

effort and fatigue, money, and the well-being of their households. The following comments illustrated their

reasoning:

"I buy water because it is a half an hour walk to get water. I buy it three or four times. It isvery difficult to walk, especially if you have kids. You don't know whether to carry yourkid or to carry the water. I don't leave my kids alone at home because kids are very naughtyand can harm each other. I buy two or 2.5 LE worth on the laundry days. Usually one LEworth is enough for me."

52

"The pump increases my electricity bill...A profit from here, when you get water, and a lossfrom here, when you pay for electricity. You come at the end of the month and find your billis around 25 LE. I have to sacrifice in electricity to get water."

"The ten LE we pay now is considered to be a high price by most of us. We share it. If wedid not have to pay for vaults, we would have used the money to buy meat."

The discussions revealed similar logic regarding the possibility of paying for improvements:

"My ability to pay is five to ten LE per month. I can save it from my house budget bysacrificing a half kilo of meat."

"City sewer will be cleaner, cheaper, and more convenient than our current situation. I willstop worrying about a lot of things such as emptying the vault."

"If it will be more expensive than the current situation, I will not pay for it."

Community Impacts and Organization

Answers regarding community decision making, questions S3, came indirectly as participants

discussed how they tried to solve their water and wastewater problems. As presented above, these solutions

were often the result of individual effort. However, it was also clear that households commonly obtained

the benefits of community projects and programs:

"We collected money from each other and hired workers to connect us to the water systemwithout the government's knowledge...The connection cost us 200 LE which we paidhappily because we really wanted to have sweet water. I collected the 200 LE from theresidents and we hired laborers to do the job...They dig, put in pipes, and water ran into ourkitchens."

"We use a pump to increase water pressure for four apartments. When I open the water Itake it all away from my neighbor and problems start to occur. She knocks on my door andasks me to turn off the water until she finishes what she is doing. We used to yell at eachother and fight...As time passed we learned to cooperate...if there is no cooperation neitherof us can finish her work."

"We make a collective fund, a gamiyya, when we have a specific thing that we want to do.For example, when we have house repairs or anything else. We do most of the things byself effort and on our own account."

In addition to addressing DQM feasibility, the focus group discussions confirmed the descriptions

of water and wastewater conditions found by previous work and presented in Chapter II. The primary

sources of water in unconnected areas were taps outside the home that were connected to the network.

53

Shallow wells provided an alternative source of low quality water for some household living near the edge

of the city. None of the participants reported using canal water. Canals were viewed as a part of the

wastewater problem:

"We never go to the canal because it is highly contaminated. Its smell is very strong. If Imay be excused for what I will say, you can't pass the canal without closing your nose, sohow are we going to use such water? People who clean sewage vaults empty their trucksin the canal. This is done not once, but several times a day. We see it every day..."

"We have three different canals that pass through our area. Everybody has privatewastewater pipes opened into those canals and this causes us a lot of problems."

An aspect of water and wastewater not reported in previous work was that women in unsewered areas spent

a significant amount of time getting rid of grey water from washing and other household chores. For many

households, the vault was too expensive to use for disposal of grey water. In unconnected areas, women

in lower income households both brought the water in and then carried the wastewater out:

"I throw it away in the canal. I carry it back out. It's a 20 minute return walk...I don't usewastewater to flush the toilet because this fills the vault."

Finally, participants were aware that changes in baseline conditions were possible. Respondents typically

thought that conditions could be better or worse. Participants were aware of different conditions through

their own household’s experience, through visits with other family members, through friendships, and

through business contacts.

Conclusions Regarding DQM Feasibility

The qualitative results provided a strong economic foundation for an effective DQM application.

Cairo residents have a detailed knowledge of water and wastewater problems from the user’s point of view.

They view water and wastewater as economic goods. They routinely make economic tradeoffs to obtain

these goods. They are familiar with the community impacts of these goods. They make community efforts

to obtain them, either through private means or through the network agencies.

54

With the feasibility DQM established, the research moved to develop prototype valuation scenarios

and questionnaires. These are discussed after reviewing the data requirements of the two supporting

valuation methods.

Substitute Service Method

The qualitative research made it clear that Cairo residents do not passively accept the level of

services offered by the water and sewer networks. They actively seek ways to augment the level of service

or substitute for its absence. The existence and use of substitutes provides information about acceptable

levels of tradeoffs. The information is partial, however. The available substitutes are not perfect substitutes

for network services. For instance, vaults provide a substitute means of wastewater disposal but have

environmental, time, and social costs that residents are keenly aware of. Thus, vaults are not likely to be

worth as much as a sewer network connection. Though it is an error to base a benefit assessment on

imperfect substitutes, the substitute service method can provide supporting evidence. The method can be

used to establish the cost savings stemming from network improvements. For instance, obtaining either

water or wastewater services outside of the networks is more costly to the individual than obtaining the

services from a network connection. The cost savings of switching to the network from a more expensive,

poor quality option represents a portion of the benefits of obtaining a network connection.

Cost savings are a lower bound on network improvement benefits. The amount that households pay

for substitute services is usually not the maximum payment that they could be forced to pay. There is usually

at least a small difference between the amount a household actually pays for a substitute service and the

maximum payment that a household would accept and still take the service. Economists refer to the

difference between actual costs and the maximum acceptable payment as "consumer surplus." Consumer

surplus is a measure of the economic gain that a household obtains from a service relative to whatever else

could have been purchased with the same amount of money.

55

The lower bound estimate provided by cost savings can be improved by adding consumer surplus

to cost savings. However, the result is still a lower bound since the available substitutes provide services

that are poorer in quality relative to those of the networks. A vault is dirty, causes fights, and has a small

capacity. A bastilla of water is small, inconvenient to use, and has high costs in terms of both money and

effort. These negative attributes mean that the benefits of the substitute are less than the benefits of the

network service. Network service benefits exceed cost savings plus consumer surplus. The substitute

service, cost savings approach provides a floor under a benefit estimate. It supports a benefit estimate by

putting a lower bound on a valid benefit assessment.

Cost savings estimates are feasible for in-home sewer and water connections. For sewer

connections, the cost savings estimates come from the cost savings associated with the replacement of vaults

with network connections. Connected households no longer have to pay the cost of evacuating and

maintaining the vaults. Evacuation is the removal of liquids. Maintenance is occasional cleaning to remove

solids. Both of these efforts have money and time costs. Money costs can be estimated from survey

questions on the expenditures associated with evacuation and cleaning. Time costs can be measured in an

analogous manner. Time estimates can then be converted to money using the prevailing wage rate for

unskilled labor.

Two estimates of cost savings can be computed for in-home sewer connections. First, the money

cost associated with vault maintenance and cleaning is the smallest estimate of cost savings. A second,

larger, lower bound can be estimated by summing money costs and the money value of the time costs

associated with vault evacuation and maintenance. However, converting time to money terms is problematic.

It is advisable to analyze the sensitivity of the cost savings estimate to different assumptions about the wage

rate. The approach taken in this report is to report only the first, smaller lower bound.

The cost savings obtained from a sewer connection are likely to be small relative to a full economic

benefit estimate. Sewer connections do yield a costs savings. They also reduce odors, soiling, biological

and chemical contamination, the constant management of a constrained capacity, and conflicts between

56

neighbors. A correct economic benefit measure accounts for costs savings as well as the other services

obtained from a network connection.

A similar measure of money and time savings is possible as a lower bound on the benefits of an in-

home water connection. One cost savings measure is the money paid by households for vended water. The

time cost is the amount of household labor required to supply a household with water. Time cost can then

be converted to money using an unskilled labor wage rate. It is particularly important to examine the

sensitivity of cost savings to the wage rate used in conversion. Unlike vaults where money costs dominate

household time costs, unconnected households typically obtain water through their own labor rather than

purchasing vended water. Therefore, time costs are likely to be the dominant portion of overall cost savings.

The conversion rate is therefore likely to have a significant impact on the cost savings estimate for in-home

water connections.

The cost savings approach does not appear to be a useful method in the cases of water reliability and

sewer overflows. An unreliable water supply has both money and time costs. The primary money cost is

the purchase of pumps and storage containers. Time costs involve the time associated with storage activities,

maintenance activities, and the time inefficiencies of shifting activities from a preferred to a less preferred

time. There are a large number of sources of costs, but each cost is rather small and difficult to measure.

Measuring the costs of overflows would involve a similar effort of identifying and measuring a large number

of small costs. Estimating these costs was likely to involve more error than information. Hence, the research

design did not estimate the cost savings of water reliability and sewer overflows.

Hedonic Method

Housing markets are sensitive to the features of a dwelling. Valuable features include elements such

as square footage and the presence of special rooms such as living rooms, kitchens, and bathrooms.

Functional features such as availability of electricity, sewer, and water add value to the market price of a

dwelling. A dwelling also accesses a particular location and the services available at that location. Thus,

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the market factors locational attributes such as noise, environmental quality, and access to services into the

price of a dwelling.

The hedonic method partitions the market price of a dwelling into the contribution from each of its

features. The partitioning is typically accomplished using a linear statistical model. The dependent variable

is the market value of the dwelling. The independent variables are measures of the different features of the

dwelling. For instance, dwelling size may be measured by the number of rooms, square footage, or by an

indicator variable identifying a dwelling as large or small. Other features are also measured by a suitable

specification of continuous and indicator variables.

Each variable in the statistical model has a coefficient. This coefficient describes how a small

change in the variable affects the dwelling price. As such, the coefficient measures the marginal value, the

implicit price, of the housing feature. The coefficients permit the analyst to put a price on a dwelling’s

features.

The hedonic method works best where housing markets function smoothly. In such markets, there

is sufficient turnover of property so that housing values reflect current dwelling features. Therefore, buyers

have good information about the alternatives and recent prices and buyers and sellers base their negotiations

on measurable dwelling characteristics. Also, in smoothly functioning markets, there exist housing

regulations that support the competitive determination of dwelling prices and credit markets are open so that

buyers of equivalent wealth have access to equivalent credit.

In Cairo, housing markets do not mirror the ideal economic model of smoothly functioning markets.

A substantial portion of the rental market is restricted by price controls. To ration access, dwelling owners

require substantial one-time payments as a substitute for monthly rent. This introduces the research problem

of measuring and amortizing a lump-sum payment. Amortization is made more difficult by the absence of

an open and liquid mortgage market. It is not clear that equivalent buyers face the same price of credit, the

same interest rates. Differences in access to credit create additional statistical noise in the distribution of

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housing values. This noise makes it more difficult to measure the correct implicit prices and introduces

error into the measurement process.

The market for owner-occupied housing functions more smoothly than the rental market in Cairo.

In this market, there are no obvious price constraints. Housing values should therefore reflect the tradeoffs

that market participants are willing to make. Credit restrictions are similar to what exists in the rental

market. Thus, the potential for statistically noisy housing prices remains. Despite this noise, the owner

occupied market represents the best opportunity to apply the hedonic approach.

The research design included a hedonic analysis of owner occupied housing. There were three types

of data collected for this analysis. The first was data on the value of housing. The second set of data was

information on well-defined housing characteristics. These characteristics included items such as the number

of rooms, the number of bathrooms, whether the dwelling was connected to network sewer and water, and

other such clearly defined features. The third set of data included features that were less well defined or

more subjective. These included the quality of water service, whether sewer overflows were common, and

whether the household dumped their wastewater in the local area. These less well-defined characteristics

are more difficult to measure empirically. Thus, they introduce additional measurement error into the

analysis and may result in weaker statistical results. The survey of Cairo households obtained each of these

three types of data.

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Chapter IV

Questionnaire Development and Data Collection Procedures

This chapter reviews the questionnaire development process and survey procedures. The

questionnaire development process was designed to address the difficulties arising from cultural differences,

the lack of previous valuation research in Egypt, and the demands of the direct questioning method. Key

stages of the process were the development of an initial set of trial questionnaires, extensive pretesting, and

the development of final prototypes. At the end of the process, the questionnaires and field protocols were

finalized through survey sample trials under field conditions.

The questionnaire was designed to obtain data for each of the three valuation methods. The direct

questioning method required the development of valuation scenarios. The substitute service method required

information about baseline service levels and costs within and outside of the areas served by the water and

wastewater networks. The hedonic method needed information about housing values, housing

characteristics, and households’ socioeconomic characteristics.

The final questionnaires were administered in a stratified cluster sample of households residing in

greater Cairo. Within each survey stratum, primary sampling units were selected randomly using a

geographical information system. The geographical information system integrated the locations of USAID

assisted projects, governmental and administrative boundaries, census data on housing and population, and

satellite data on the present and past boundaries of urban settlement. The final survey was administered

through in-person interviews with approximately 4,000 households.

Initial Questionnaires

Questionnaire development began after the 13 focus groups were completed in August, 1995. The

focus groups demonstrated that respondents had a detailed knowledge of water and wastewater services. The

groups also identified the special terms and idioms participants used to discuss water and wastewater

15Chapter II summarizes the analysis of USAID investments and the services supported by theseinvestments.

16RADA Research of Heliopolis, Cairo, Egypt, was the local contractor for questionnairedevelopment, survey field work, and data processing.

17The content of the questionnaires and the confidentiality statements were approved by theUniversity Committee on Research Involving Human Subjects at Michigan State University.

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services. Initial questionnaires were developed by adapting standard questionnaire formats to the Cairo

setting. The focus group results regarding local vocabulary, idioms, and knowledge were especially

important in developing the initial questionnaires.

The questionnaires were structured to provide the data needed to value the services associated with

USAID investments.15 These services were (1) reliable, all day water service for households already

connected to the water network, (2) access to the water network for in-home connections, (3) elimination

of sewer overflows and (d) in-home connections to the sewer network. A separate questionnaire was

developed to value each of these four different services.

Each questionnaire contained four separate data collection modules. Each module focused on a

different type of information. The first module introduced the interviewer to the respondent and determined

whether the respondent was eligible to complete the questionnaire. The second module elicited baseline

information about a household’s water and wastewater services. The third module was the direct questioning

valuation scenario. The fourth module obtained data on health status, housing, and socioeconomic

characteristics of the household.

The first data collection module began by introducing the interviewer as an employee of RADA

Research, a private market research organization.16 It explained that RADA was conducting research about

water and sewer services. It stated the time requirements for completing the questionnaire. It assured

respondents that all information and responses were completely confidential.17 It also contained items to be

filled in by the interviewer such as the name of the interviewer, the date, and the starting time of the

interview.

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The first module also determined the eligibility of the responding individual and household. It

defined the term household for the individual and explained that the individual should answer the questions

as a member of his or her household. It screened out individuals who were employed by market research

agencies or the water and sewer agencies. It also contained questions to determine the network connection

status of the household.

The second data collection module asked for detailed information about a household’s existing

water and wastewater services. The content of this module varied with each of the four questionnaires. In

the questionnaire aimed at valuing access to the water network, the module elicited information about the

household’s sources of water and the time and money costs of obtaining water. In the water reliability and

sewer overflow questionnaires, the module focused on the cost of piped water, hours of service, and the

frequency of neighborhood sewer overflows. In the questionnaire targeted at valuing in-home sewer

connections, the module obtained data on sewage vault evacuation frequency, the time and money costs of

evacuation, and the neighborhood environmental effects of vault overflows.

The third module was the direct questioning valuation scenario. The initial valuation scenarios

included each of the standard elements of direct questioning. These elements were a description of baseline

conditions, a description of post-program conditions, a statement about the choice context (including

references to substitutes services), a description of the decision setting, and a debriefing section.

The initial valuation scenarios valued each of the four water and wastewater services from two

perspectives. Respondents were asked either to pay to (1) improve a poor service or (2) avoid losing an

existing service. For instance, to value a reduction in sewer overflows, respondents could be asked to pay

for a program that reduces sewer overflows or to pay for a program that prevents an increase in sewer

overflows. The particular question asked of a respondent was determined by the existing conditions in a

respondent’s neighborhood. Respondents in neighborhoods where overflows were common were asked to

accept or to reject a maintenance program to eliminate sewer overflows. Respondents in neighborhoods

without overflows were asked to accept or to reject a maintenance program that would prevent the certain

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deterioration of sewers and consequent sewer overflows. The questionnaire structure was set up to channel

the interview to the appropriate valuation scenario given the respondent’s existing type and level of service.

The final data collection module contained questions that were common to each of the four

questionnaires. These questions elicited health status information for children in the household, housing

values, housing characteristics data, and the socioeconomic characteristics of the household.

Each of the four modules presented somewhat different issues for questionnaire development. In

modules two and four, question and response categories needed testing to determine appropriate quantities,

frequencies, times, and money cost ranges. In module four, there was the difficulty of eliciting market-

clearing housing values in a market where government rent controls affected a large share of dwellings.

Housing value questions needed to be developed that would identify and elicit market clearing values rather

than regulated rental prices.

Module three, the direct questioning module, needed testing and refinement to make certain that

respondents understood the scenario information and questions, viewed the programs as plausible, and

answered the behavioral questions in a manner consistent with economic choices. Program descriptions were

developed to both (1) provide a service a household had gone without and (2) prevent the loss of a network

service where a household already had access to that service. Programs to provide a service were intuitively

straightforward to describe. The network agencies would lay the pipes to bring water or sewer to the

neighborhood, or do the rehabilitation necessary to provide reliable, all day water service or eliminate sewer

flooding.

Describing programs to prevent the loss of a service seemed initially more problematic. It was not

clear whether respondents would view the prevent-loss scenario as implausible. However, the focus groups

provided an important insight: respondents knew that network services deteriorated without maintenance.

Participants were also aware that sewer and water networks in some areas of greater Cairo did not function

properly due to lack of maintenance. Building on these comments, the prevent-loss narratives used lack of

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maintenance to explain a forecast loss of a service. The scenario text explained that without maintenance,

the existing service level would be lost.

Initial Valuation Scenarios

The programs to provide improved service and to prevent the loss of an existing service were

incorporated into each initial valuation scenario. The services to be valued and their respective programs

were:

� Water network installation services were valued by means of either:

� A program to install water network in neighborhood or

� A maintenance program to prevent loss of water service in neighborhood.

� Water reliability services were valued by means of either:

� A maintenance and rehabilitation program to provide reliable, all day waterservice or

� A maintenance and rehabilitation program to prevent loss of reliable, allday water service.

� Sewer overflow (dis)services were valued by means of either:

� A maintenance and rehabilitation program to eliminate sewer overflows inrespondent’s neighborhood.

� A maintenance and rehabilitation program to prevent sewer overflows inrespondent’s neighborhood.

� Sewer network connection services were valued by means of either:

� A program to install in-building sewer connections in respondent’sneighborhood or

� A maintenance and rehabilitation program to prevent loss of sewer servicesin respondent’s neighborhood.

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Pretesting the Initial Questionnaires

The first phase of pretesting was conducted between August 24, 1994 and October 3, 1994. The

initial pretests were conducted as in-person interviews. The interviews were completed in the offices of

RADA Research. Respondents were recruited to represent the different socioeconomic and network

conditions found in greater Cairo. Respondents were provided with transportation to the interview location

at RADA’s offices. They were paid a reasonable fee for their time and effort. Interviewers were selected

from RADA’s professional field staff. Prior to working with the respondents, interviewers were trained in

the specific protocols developed for each of the four questionnaires.

The initial phase of questionnaire development included 135 pretest interviews. Thirty-seven of

these were completed with a version of the water connection questionnaire, 48 were with a version of the

water reliability questionnaire, 34 were with a version of the sewer overflow questionnaire, and 16 were with

a version of the sewer connection questionnaire.

Each interview was attended by the respondent, a professional interviewer, and an Arabic speaking

observer. The interviewer conducted the interview according to the field protocols, subject to several

modifications. These modifications accounted for the office setting and the probing and debriefing

objectives of the pretests. Interviewers were instructed to be especially sensitive to potential

misinterpretations or misunderstandings on the part of the respondent. When such difficulties arose, or in

parts of the questionnaire where difficulties were expected, interviewers were asked to probe the respondent

for an explanation about the respondent’s understanding of a difficult question. For example, one difficulty

arose with respondents who did not have in-home water connections. These respondents were asked about

their sources of water. Skip patterns within the questionnaire were based on water source responses.

Interviewers noticed that these skip patterns sometimes led to inappropriate sections of the questionnaire.

Probing revealed that respondents classified water sources differently than the classifications used in the

questionnaires. Once the problem was revealed, data categories were modified to parallel the idioms used

by respondents. Skip patterns were adjusted accordingly.

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The observer attended the interview to take detailed notes on the interviewers’ performance and the

respondents’ verbal and non-verbal responses. Observers (1) noted whether the interviewer administered

the questionnaire clearly and according to the protocols, (2) determined whether interviewers correctly

followed the skip patterns, and (3) watched for any miscues and behaviors that might affect the quality of

the interview. Special attention was focused on the valuation scenario. Observers were asked to note:

� Whether the interviewer presented the scenario slowly enough so that therespondent could hear and understand the text.

� Whether major points were emphasized with appropriate pauses and intonation.

� Whether respondents were attentive, distracted, or bored by the scenario. Cues toattentiveness included statements made by the respondent and body language suchas blank stares or gazing out the window.

� The questions asked by respondents and the thought process verbalized in thedebriefing sections of the questionnaire. Observers were asked to judge whether therespondent understood the important elements of the scenario and responded to thescenario with reasoned responses.

The number of pretests conducted on a given day depended on the number of respondents recruited

and the difficulties encountered in the interview. Typically, the interviewing schedule began in mid-morning

and continued through the early afternoon. After each day’s pretests, the interviewer, the observer, and a

lead research staff member met to discuss the difficulties and successes of that day’s versions of the

questionnaires. In these discussions, problems were raised, possible solutions were posed, and the previous

day’s solutions were evaluated and refined. The research staff developed the next version of each

questionnaire guided by these discussions.

Prototype Questionnaires

Pretesting resulted in significant changes throughout the questionnaires. The non-valuation questions

were modified to communicate more clearly with respondents and to elicit data in categories that were

meaningful to respondents. Methods were developed to elicit meaningful water purchase prices, sewer

evacuation costs, housing values, and housing characteristics.

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Relatively minor changes in the non-valuation questions were found to result in significant

improvements in respondents’ understanding. For instance, in obtaining housing values, respondents who

owned their apartment were initially asked,

How much would an apartment just like yours cost in your neighborhood today?

A common response was, “There are no apartments for sale in my heta.” The question was then changed toask,

If you could buy an apartment just like yours in your heta today, how much would it cost?

This latter phrasing had more success, but there remained respondents who replied that there were no

apartments for sale. The final questionnaire asked the question in two stages. The first stage was,

If you could buy an apartment just like yours in your neighborhood today, how much wouldit cost?

If a respondent was unable to provide the expected type of response, a follow-up question asked,

Suppose an apartment just like yours was for sale in this neighborhood. In your opinion,how much would it cost?

The two stage approach clarified the question for almost all respondents.

Pretesting also led to changes in the valuation scenarios. Initially, the scenarios grew in length as

text was added to address respondents’ questions regarding the proposed programs and costs. As pretesting

progressed, however, the scenarios were edited to use briefer and more direct statements. The baseline and

post-program effects were described more precisely. Area and time dimensions were added as program

descriptors. The sewer network installation program was described as affecting the neighborhood within 500

meters of the respondent’s dwelling. The maintenance programs were to last for five years with a

neighborhood-wide option to renew at the end of the five year period. To control possible free rider

18Explicit contracting was dropped in later versions of the questionnaire. Explicit contractingappeared to confuse respondents. No evidence of free riding was observed during the interviews or in thedebriefing sessions.

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problems, certain versions of the scenarios experimented with a contract to be signed with the respondent.18

In addition, a section was added to the valuation scenarios in order to legitimize either a favorable or

unfavorable response to the proposed program and associated cost.

These changes resulted in scenarios that appeared plausible and intelligible to most respondents.

Respondents’ comments during later pretests indicated that they (1) understood the projects, (2) found the

choice context and decision setting plausible, and (3) considered budget constraints and substitutes when

making their decisions to accept or reject the proposed programs. Consistent with the evidence from the

focus groups, respondents appeared to make reasoned, economic tradeoffs in considering their water and

wastewater decisions. Debriefing comments by respondents provide evidence of such responses:

� “I will save time. I can find a job to help my husband. It will be nice if I can findwater at home that I can use to do my house work.”

� “The amount you are asking for is too much. For me to pay 20 LE per month is toomuch. We have a lot of other expenses and private lessons to pay for.”

� “If we get connected to water we will not have to carry water and we will becomfortable. My kids are too little and I don’t have anyone to help me fillwater...Water will be cleaner and we will not have to save water in bastillas.”

Despite this progress in refining the questionnaires, two issues remained unresolved at the end of

the first phase of pretesting. First, a portion of the pretest respondents seemed to become bored and

distracted as they listened to the program descriptions. Their indifference seemed due to the long and

detailed valuation scenario. As pretesting proceeded, the program descriptions had grown in length to

address program features about which some respondents had inquired. However, the length imposed

additional burdens on the attention of some respondents who had no interest in the details addressed in the

additional text.

Second, some interviewers viewed the long narrative as a challenge to their reading and interviewing

abilities. To get through the text without losing a respondent’s attention, interviewers would read the

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narrative as quickly as possible--despite instructions and training to the contrary. With the added speed,

important pauses and intonation were left out. The absence of narrative texture reduced the attention and

comprehension of some respondents. As the respondent’s attention waned, important details were sometimes

lost. The following dialogue exemplifies the resulting miscommunication:

Respondent: “25 LE for what period?”

Interviewer: “For five years.”

Respondent: “Every month?”

Interviewer: “No, every two months.”

Respondent: “I don’t mind, but do I need to pay for water consumption as I donow?”

Interviewer: “Yes, the cost of the project is in addition to what you pay now forwater consumption.”

A final set of questionnaire prototypes were developed to address these difficulties. The first step

toward these final prototypes was to break the valuation scenario narrative into four self-contained segments.

Each segment contained passages of text that conveyed a related set of ideas. The first segment addressed

the possibility of improved service. This segment served as a transition from the non-valuation questions

in the questionnaire. The second segment described the services that a household could expect with the

program. This second segment clarified exactly what services and costs the respondent could expect. The

third segment listed possible reasons to be for or against the proposed program. The segment therefore

legitimized either a favorable or unfavorable response to the proposed program and cost. The fourth segment

described the decision setting and elicited a respondent’s decision. This fourth section was the core of the

valuation scenario. A debriefing section followed the fourth segment.

Several types of editorial interventions were used to emphasize related set of ideas and to restrain

the pace of the interview. One type of intervention was to include questions that asked the respondent to

consider the personal implications of a portion of the narrative. For example, after the first segment, the

respondent was asked an open-ended question regarding how an improved level of service would affect his

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or her household’s daily life and pattern of activities. This type of open-ended question required the

interviewer to stop reading and wait for the respondent's reaction. The pause in the narrative allowed the

respondent to assimilate the idea of improved service. The question encouraged a respondent to anticipate

how the improved service might affect his or her daily life. Open-ended reflection and feedback by the

respondent was also encouraged after the second segment. Here respondents were asked if they wanted any

additional information about the proposed program. If respondents answered affirmatively, the interviewer

asked a specific probing question to determine the type of information that the respondent wanted.

Additional interventions regulated the pace of the narrative with visual and mechanical cues. For

instance, long segments of continuous text were broken up. Before revision the longest segment of

continuous text was 450 words. After revision, the longest segment was 185 words in length. In place of

continuous text, longer segments were arranged as covering phrases following by bullet points. This visual

form forced slight, but apparently meaningful pauses into the oral narrative of the interviewer. In addition,

blank space was used to separate different text segments. As a result, though shorter in content, the valuation

scenarios grew to cover six pages rather than two. The mechanics of turning these additional pages also

added pauses between separate segments of text.

A final change in the scenarios addressed the payment period for project costs. Pretests revealed two

general types of household budgeting periods. One type of household budgeted on a monthly basis. The

primary income earner in this type of household typically worked for a governmental agency, governmental

corporation, or large private corporation. These workers and their household based their expenditures on

a monthly salary. A second type of household budgeted on a daily or weekly basis. The primary income

earner in this type of household typically did day labor work.

There seemed to be no easy compromise for stating the payment period for project costs. Daily and

weekly payment periods were thought to lack plausibility for monthly budget households. Day labor

households had difficulty in scaling down monthly costs to a more familiar time interval such as a week or

day. The issue was solved by not stating a specific payment period. Rather, project costs were stated as

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average weekly costs per household in the affected neighborhood. The scenario focused on the cost to be

experienced by the household rather than how often a payment would be made. This approach conveyed the

relevant budgeting information without raising plausibility issues regarding the payment period for either

monthly budget or day labor households. Day labor households were immediately familiar with thinking

about weekly costs. Monthly budget households were capable of easily scaling up weekly costs to their

monthly budget periods.

Pretesting the Questionnaire Prototypes

A second phase of one-on-one pretesting was conducted from December, 1994, to January, 1995.

This second phase of pretesting included 35 in-office interviews. Thirteen pretests were completed with the

water connection prototype, nine pretests were completed with the water reliability prototype, six pretests

were conducted with the sewer flooding prototype, and seven pretests were completed with the sewer

connection prototype. The second phase of pretesting brought the total number of one-on-one pretests to 170

interviews.

The second phase verified the economically reasonable behavior observed during the first phase of

pretests. In addition, the modifications to the valuation scenario resulted in a significant decrease in the

number of miscues and misunderstandings between the interviewers and respondents. The valuation

scenarios were now communicated in a conversational style. This style emphasized key points appropriately

and invited respondents to assimilate the communicated information. Respondents’ degree of interest

appeared to be much greater in the second phase of pretesting than in the first phase. The weekly time

interval for project costs was understood and assimilated by respondents without observable difficulties.

Major issues of communication and understanding did not arise with the final questionnaire

prototypes. This absence of difficulties meant that the second phase of pretesting focused on relatively minor

wording changes and clarifications in the text. In addition, the valuation questions based on preventing the

loss of in-home water service and sewer service became unnecessary in light of the planned sampling

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procedures. These two prevent-loss programs were eliminated from the final questionnaires. This latter

change resulted in four final questionnaire prototypes to value four types of services using six types of

programs. These service and program types were:

� Water network installation services were valued by:

� A program to install water network in neighborhood.

� Water reliability services were valued by either:

� A maintenance and rehabilitation program to provide reliable, all day waterservice, or

� A maintenance and rehabilitation program to prevent loss of reliable, allday water service.

� Sewer overflow (dis)services were valued by either:

� A maintenance and rehabilitation program to eliminate sewer overflows inthe respondent’s neighborhood, or

� A maintenance and rehabilitation program to prevent sewer overflows inthe respondent’s neighborhood.

� Sewer network connection services were valued by:

� A program to install in-building sewer connections in the respondent’sneighborhood.

Survey Sample Pretest of Questionnaires

The survey sample pretest applied the final questionnaire prototypes under conditions similar to the

final survey. The pretest survey administered the questionnaires using the professional interviewer teams

normally employed by RADA Research. Interviews were completed under the field conditions of the

planned final survey -- at the door of a respondent’s apartment or in the adjoining hallway.

RADA’s standard field procedures used teams of ten to 15 trained interviewers to conduct the

interviews at each primary sampling unit. Each team was supervised by one or two field managers. It was

the field manager’s responsibility to make certain that sampling and interviewing protocols were

implemented accurately. The field manager was in charge of locating the primary sampling unit and

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transporting the team to the interview site. The entire team was transported as a group in transportation

provided by RADA Research. The field managers selected households to be interviewed using

randomization protocols. They also verified that the selected households were contacted by the interviewers

and that the full questionnaire was completed by an eligible respondent. After filling the sampling quota,

the field manager transported the team to the next primary sample unit and the process began again.

The interviewers in each team received several hours of training in the administration of each

questionnaire. Prior to the training sessions, interviewers were given the questionnaire and instructed to

review it in preparation for training. During the training sessions, each question in each questionnaire was

reviewed. Interviewers were encouraged to ask questions, provide feedback, and raise questions regarding

administration. Questions that respondents might raise were anticipated and instructions for appropriate

answers given. The purpose of the open-ended debriefing questions was also discussed. A training

videotape was developed to illustrate good and bad interviewing procedures. The videotape was shown at

the training sessions and discussed in detail. It was especially useful in demonstrating the conversational

style to be used in presenting the valuation scenario. Following the group sessions, interviewers paired off

to practice the questionnaires. Each member of the pair took turns interviewing and playing the role of the

respondents. After these trial sessions, the group sessions reconvened and any remaining questions were

discussed. The interviewers were then considered ready for the field pretest.

The pretest interviews were conducted during March and April, 1995. Approximately 50 interviews

were conducted with each of the four prototype questionnaires. Difficulties with each questionnaire were

identified during the course of fieldwork. Daily debriefing sessions were held with the interviewers after

they returned to RADA’s main office. No major changes resulted from these discussions, but minor wording

changes were made. Skip patterns within the questionnaire were also altered so that the interview was

directed to the most pertinent set of conditional questions. Most importantly, the pretest survey and

debriefing sessions resulted in an improved set of interviewer instructions and field protocols. These latter

instructions included details such as the following:

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� Economically independent households living in a single room of a multiple roomapartment were to be treated as living in a separate apartment.

� Respondents asking whether a rehabilitation project would interrupt water or sewerservices were to be told that the interruption in service would last for a few hours,but not for days or months.

� Respondents who asked whether the project was under serious consideration weretold that, “The project is being seriously considered. However, we cannot promisethat the project will be implemented.” This statement seemed consistent with boththe context of the direct question and the prospects of a local project beingimplemented.

� Landlords asking about who was responsible for payment were told that, “Eachhousehold will be legally responsible for payment. It will be a contract with thegovernment and subject to normal governmental rules and penalties.”

� Respondents who raised questions about whether the maintenance projects wouldbe successful were told, “All maintenance projects are not the same. The projectwe are talking about would aim specifically at (improved water service or reducedsewer overflows). If the project does not work, you will not have to pay for it.”

The field pretest phase ended with the final modifications to the four questionnaires. These

modifications transformed the final prototypes into the final, field ready questionnaires.

Main Survey Design

The main survey sample obtained the data necessary for both the core direct questioning value and

supporting value estimates. The survey was designed to obtain completed interviews with 1,000 households

for each questionnaire.

Each questionnaire targeted a different segment of the greater Cairo population. The water

connection questionnaire addressed households that did not have in-home connections to the water network.

The water reliability questionnaire targeted households that had water service similar to the water service

in USAID project areas before the completion of those projects. The sewer flooding questionnaire was

aimed at sewered areas in greater Cairo. The sewer connection questionnaire targeted households in

neighborhoods outside the sewer network.

19 The GIS system used in the project was the Geographic Resources Analysis Support System,GRASS, from the Environmental Division of the U.S. Army Construction Engineering Research Laboratory.

20Shiakhas are the smallest administrative units for which census data was publicly available. Theaverage area of 1986 shiakhas was about one square kilometer in Cairo and 2.4 square kilometers in Giza.

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The valuation and questionnaire objectives were addressed by designing a stratified, cluster sample

of the greater Cairo population. The sampling goal was to identify 40 primary sampling units (PSUs) for

each questionnaire. Twenty-five household interviews would then be completed at each PSU. This sampling

strategy confronted a key difficulty: locating the appropriate subpopulations. Census block maps were not

available. The latest publicly available maps of Cairo neighborhoods were completed in the 1968. Only a

small portion of the urban areas outside the sewer and water networks appeared on these maps. Much of the

urban area of interest for sampling appeared on these old maps as agricultural land.

The difficulties in drawing the sample of PSUs were overcome by developing a geographic

information system (GIS).19 Landscape maps (Ministry of Housing and Reconstruction, 1968) for 1968

provided a standardized geographic coordinate grid for greater Cairo. Administrative unit boundaries for

shiakhas20 were overlaid on the coordinate system provided by the landscape maps. The urban boundaries

of greater Cairo for 1986 and 1994 were identified using spectral analysis of commercially available satellite

images (SPOT Image, 1995). Urban area populations, sewer network connection rates, and water network

connection rates by administrative unit were entered into the GIS using data from the Census of Population

and Housing for 1986 (CAPMAS, 1986). Population growth rate estimates were obtained from the Social

Science Center at the American University in Cairo and entered in the data base (Tawila, 1995). USAID

supported project boundaries (CH2M Hill, 1990; AMBRIC, 1981), the location of sewer flooding incidents

(AMBIRC, 1981), and the boundaries of the sewer network (AMBRIC, 1981) were also entered into the GIS.

The GIS was used to identify potential PSUs. Potential PSU locations were identified by the smallest

geographical units distinguishable using the GIS data base. These units were ten by ten meter polygons

within the developed urban area of Cairo. Data necessary for identifying subsample characteristics were

associated with each polygons. These data included census population densities for 1986, location relative

21The definitions of sewered and unsewered areas were updated to account for the USAID supportedsewer installation projects.

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to administrative units, water connection rates, whether the point was located in an unsewered area, and

whether it was within one of the USAID project areas.

A list of candidate PSUs was selected for each questionnaire since each questionnaire was aimed at

a different subpopulation. Candidate lists for each sample were restricted to geographic areas that had the

characteristics appropriate for the valuation scenarios contained in a questionnaire. The water connection

sample was limited to shiakhas with water network connection rates of less than 40 percent. The water

reliability sample was restricted to shiakhas that had water service conditions similar to the pre-project

conditions in USAID project areas. The sewer flooding sample was restricted to points serviced by the sewer

network since only these areas had sewers that flooded.21 The sewer connection sample was restricted to

areas outside of the sewer network.

The PSUs for each questionnaire were selected once the appropriate restrictions were imposed on

the selection of potential PSUs. The probability of selecting a PSU from the list of potential PSUs was

proportional to its population density as estimated from the 1986 census. Service characteristics for the water

reliability and sewer overflow questionnaires were verified by interviewers during survey implementation.

Each PSU for the water and sewer connection questionnaires was individually field checked. Each PSU

candidate was located by a field team using a portable global positioning unit. Once the field team located

the exact position of the candidate PSU, they verified that the location had the appropriate service

characteristics for the intended questionnaire. Ineligible locations were replaced by a subsequent draw of

randomly selected PSU candidates. The selection and field checking of points continued until sufficient

eligible primary sampling units were identified for each questionnaire.

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