detailed economic analysis for project 1detailed economic analysis for project 1 . urban water...

Urban Water Supply and Wastewater Management Investment Program (RRP FIJ 49001-002)

DETAILED ECONOMIC ANALYSIS

FOR PROJECT 1


Economic Analysis September 2016

Contents

Abbreviations ............................................................................................................................. i

1 Context of the economic analysis .................................................................................... 1

1.1 Background ............................................................................................................. 1

1.2 Macroeconomic context.......................................................................................... 1

2.1 Water supply ............................................................................................................ 2

2.2 Wastewater .............................................................................................................. 4

3 Economic rationale ............................................................................................................ 4

3.1 Current situation...................................................................................................... 4

3.1.1 Institutional arrangements ...................................................................................... 4

3.1.2 Water supply .......................................................................................................... 5

3.1.3 Wastewater ............................................................................................................ 5

3.2 Economic rationale for the project ......................................................................... 6

4 Least cost analysis of project options ............................................................................. 8

4.1 Water supply ............................................................................................................ 8

4.2 Regional Wastewater Transportation System & Treatment ................................. 9

5 Major assumptions and methodology ............................................................................ 11

6 Economic costs and benefits.......................................................................................... 11

6.1 Economic pricing .................................................................................................. 11

6.2 Water supply investments (Project 1) .................................................................. 12

6.2.1 Costs ................................................................................................................... 12

6.2.2 Benefits ................................................................................................................ 13

6.3 Wastewater investments (Project 2)..................................................................... 15

6.3.1 Costs ................................................................................................................... 15

6.3.2 Benefits ................................................................................................................ 16

7 Results of the economic analysis ................................................................................... 18



7.3 Overall program - combined water supply and wastewater investments.......... 20

8 Sensitivity analysis .......................................................................................................... 21



8.3 Overall program - combined water supply and wastewater investments.......... 22

9 Risk analysis .................................................................................................................... 22

10 Analysis of distribution of benefits ............................................................................. 23

10.1 Water supply (Project 1)........................................................................................ 23

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10.2 Wastewater (Project 2) .......................................................................................... 24

11 Poverty impact of the project ...................................................................................... 25

11.1 Poverty impact ....................................................................................................... 25

11.2 Affordability ........................................................................................................... 25

Bibliography ............................................................................................................................ 27

Abbreviations

ADB Asian Development Bank

EIRR Economic internal rate of return

EP Equivalent persons

FEA Fiji Electricity Authority

F$ Fiji dollar

HIES Household income and expenditure survey

Lpcd litres per capita per day

ML/d Megalitres per day

NPV Net present value

NRW Non-revenue water

SBR Sequencing batch reactors

TA Technical Assistance

WAF Water Authority of Fiji

WHO World Health Organization

WTP Water treatment plant

WWTP Wastewater treatment plant


1 Context of the economic analysis

1.1 Background

The economic analysis for the Urban Water Supply and Wastewater Management Project followed the Guidelines for the Economic Analysis of Projects1 and Handbook for the Economic Analysis of Water Supply Projects2 of the Asian Development Bank (ADB). The Water Authority of Fiji (WAF) has recently completed the updating of a master plan for investments in water and wastewater for the Greater Suva Area (GSA)3. The population of the GSA was 274,356 in 2013, and is expected to grow to just over 380,000 by 2033. The economic analysis has been undertaken for Project 1, Project 2, and for the overall program under a multitranche financing facility being established for a broader program of support for the implementation of the National Development Plan’s water supply and sanitation (WSS) road map and WAF master plan. Project 1 focuses on investments in water supply, while Project 2 focuses on investments in wastewater.

The economic analysis was carried out during a visit to Fiji from 9 February to 27 March 2015, and updated during the Fact Finding Mission from 25 to 29 July 2016.

1.2 Macroeconomic context

Fiji is an island nation in the South Pacific Ocean, with an estimated population of 894,500 in 2011, a land area of 18,270 square kilometres, and an exclusive economic zone of just under 1.3 million square kilometres. Per capita GDP was estimated at F$9,500 in 2014. Fiji has experienced a period of sustained economic growth in recent years (following the decline in 2009 associated with the global financial crisis), and this is expected to continue through until 2017 and beyond. Annual growth in GDP is expected to be in the 4 percent to 5 percent range over the period 2013 to 2015, with growth forecast at 3 percent for 2016 and 2017. Manufacturing accounts for around 14 percent of GDP, agriculture 9 percent, and accommodation and food services 6 percent. Tourism is the most significant industry, with other important industries being sugar, bottled water, fish products, timber products, garments, and gold.

Inflation averaged just under 4 percent over the period 2009 to 2014. Gross official reserves were estimated to be equivalent to 4.4 months of retained imports in 2013. Central government debt was equivalent to 50 percent of GDP in 2014, with external debt accounting for just over a quarter of this. The Government’s fiscal deficit was projected to be equivalent to 2 percent of GDP in 2014.

Indicators of the state of human development in Fiji reveal a generally positive picture. Life expectancy at birth was estimated to be 69.7 years in 2012, the infant mortality rate was estimated to be 19.1 per thousand live births in 2012, the maternal mortality rate was estimated to be 59 per one hundred thousand live births in 2013, and the primary school gross enrolment ratio was estimated to be 104.5 percent in 2011. Estimates of the proportion of the population with access to safe water and to sanitation stood at 96.3 and 87.2 percent respectively in 2012 (up from 91.2 and 74.2 percent respectively in 2000)4. At the same time,

the proportion of the population below the national basic needs poverty line remains relatively high (at an estimated 28.1 percent in 2013/14)5.

1 ADB. 1997. Guidelines for the Economic Analysis of Projects. Manila.

2 ADB. 1999. Handbook for the Economic Analysis of Water Supply Projects. Manila.

3 WAF. 2015. Water and Waste Water Master Plan. Greater Suva Area. Suva.

4 Data on human development indicators sourced from ADB, Country Partnership Strategy: Fiji 2014-2018,

November 2014. 5 Fiji Bureau of Statistics, 2013/14 Household Income and Expenditure Survey - Preliminary Results, December

2015.

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2 Analysis of demand

2.1 Water supply

The WAF Water and Waste Water Master Plan for the Greater Suva Area contains demand projections for water supply, under a range of scenarios:

Scenario 1: Reducing non-revenue water (NRW) level to 20 percent by the Year 2016 Scenario 2: Reducing NRW level to 20 percent by the Year 2018 Scenario 3: Reducing NRW level to 20 percent by the Year 2023 Scenario 4: Reducing NRW level to 20 percent by the Year 2028 Scenario 5: Intensive Demand Management Scenario with NRW Reduction (to 27 percent ultimate).

These scenarios have a strong focus on reductions in NRW, and apply a common set of population projections. Scenario 5 is the only scenario addressing demand management. It assumes that average domestic consumption is reduced to 180 litres per capita per day (lpcd) by 2033 through intensive demand management, and that the NRW level is also reduced to 27 percent over the same period.

For the purposes of the economic analysis, it is assumed that in the “with project” scenario progress will be made both in relation to reducing NRW and in relation to reducing average domestic consumption through demand management in line with Scenario 5. The demand projections in Table 1 below are therefore based on a variant of Scenario 5 in the WAF master plan.

Table 1: Greater Suva Area water supply – demand projections “with project”

LPCD = litres per capita per day, ML/d = mega litres per day, WTP = waste treatment plant (Source: adapted from WAF master plan)

The demand projections indicate that the current level of treated water production (assuming this can be sustained) is sufficient to meet demand on an average day until at least 2033, but even now is insufficient to meet Peak Day Demand. The shortfall in average treated water production to meet maximum day demand is expected to exceed 30 megalitres per day (ML/d) by 2033 (in accordance with the demand projections included in the WAF Master

Description Units 2013 2018 2023 2028 2033

Study Area Population No. 274,356 297,258 322,395 350,005 380,349

Population Served No. 260,638 286,854 315,947 346,505 380,349

New population served outside GSA - 10,000 20,000 20,000

Unaccounted-for-Water (Existing Connections) % 51% 45% 40% 35% 30%

Unaccounted-for-Water (Future Connections) % 20% 20% 20% 20%

Conversion of NRW to metered usage % 25% 25% 25% 25%

Government Consumption % 7.3% 7.3% 7.3% 7.3% 7.3%

Average Domestic Consumption Lpcd 202 210 200 190 180

Domestic Consumption ML/d 52.6 60.2 65.2 69.6 72.1

Additional Allowance for NRW --> metered ML/d 4.1 6.9 9.2 11.3

Commercial Consumption ML/d 17.1 18.5 20.0 21.8 23.6

Government Consumption ML/d 3.8 4.4 4.7 5.1 5.2

Total Metered Consumption ML/d 73.5 87.2 96.8 105.7 112.2

Unaccounted-for-Water (Existing Connections) ML/d 76.5 60.2 49.0 39.6 31.5

Unaccounted-for-Water (Future Connections) ML/d - 3.4 5.8 8.0 9.7

Average Day Demand (ADD) ML/d 150.0 150.7 151.7 153.3 153.4

Raw Water Demand for ADD (+8%) ML/d 162.0 162.8 163.8 165.6 165.6

Peak Day Demand (PDD) 1.25 x metered only ML/d 168.4 172.5 175.9 179.7 181.4

Raw Water Demand for PDD (+8%) ML/d 181.9 186.3 190.0 194.1 195.9

Current Average Water Production ML/d 151.0 151.0 151.0 151.0 151.0

WTP Shortfall ML/d 17.4 21.5 24.9 28.7 30.4

Raw Water Shortfall ML/d 18.8 23.3 26.9 31.0 32.8

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Plan), and to exceed 40 ML/d within 25-30 years6. There is also a significant risk that without additional investment the current average level of treated water production will not be sustained as the system is running continuously at 100 percent capacity with no redundancy for maintenance, and equipment failure is likely from time to time.

In addition to addressing water demand within the Greater Suva Area, the project is designed to provide capacity to serve an estimated 20,000 people in the expansion areas of Viria, Vunidawa and Korovou.

The demand projections for the Greater Suva Area and the inclusion of the expansion areas support the planned augmentation of water production capacity by 40 ML/d, with the design providing for future expansion. There is also the longer term risk of increasing saline

intrusion up the Rewa River and Waimanu River tributary, which may affect the quality of water at WAF’s current water intakes, as well as the risk of more severe droughts associated with climate change which will impact on the viability of current sources of supply.

Table 2: Greater Suva Area water supply – demand projections “without project”

Source: adapted from WAF master plan

The “without project” scenario assumes that there will be no additional investment in capacity augmentation, or demand management over the project period, but some progress with NRW reduction. Given that water production is currently running continuously at 100 percent capacity, and even at this level is just sufficient to meet average day demand (with no redundancy available for an adequate maintenance regime), production at this capacity is not considered sustainable. The “without project” demand scenario reflected in Table 2 assumes that production capacity will decline by 40 percent over the period to 2033. For the

purposes of valuation of economic costs and benefits, it is assumed that this decline in capacity translates into a reduction of 25 percent in per capita water availability for domestic consumers (from 202 lpcd in 2013 to 152 lpcd in 2033) with an unchanged population served. The amount of water available for commercial and government users also declines by 25 percent.

The reductions in the amount of water available to domestic, commercial and government

users under the “without project” scenario are valued in the economic analysis.

6 MWH, Rewa Water Supply Scheme, Preliminary Design Report, December 2015.



Population Served No. 260,638 260,638 260,638 260,638 260,638

New Customers outside GSA

Unaccounted-for-Water (Existing Connections) % 51% 45% 39% 39% 39%

Unaccounted-for-Water (Future Connections) % 45% 39% 39% 39%

Conversion of NRW to metered usage %

Average Domestic Consumption Lpcd 202 186 172 162 152

Domestic Consumption ML/d 52.6 48.5 44.8 42.2 39.5

Additional Allowance for NRW --> metered ML/d - - - -

Commercial Consumption ML/d 17.1 16.0 14.9 13.8 12.8

Government Consumption ML/d 3.8 3.5 3.3 3.1 2.9

Total Metered Consumption ML/d 73.5 68.0 63.0 59.1 55.1

Unaccounted-for-Water (Existing Connections) ML/d 76.5 60.2 47.0 47.0 47.0

Unaccounted-for-Water (Decline) ML/d - -4.5 -6.7 -9.2 -11.8

Average Day Demand (ADD) ML/d 150.0 123.6 103.3 96.9 90.4

Raw Water Demand for ADD (+8%) ML/d 162.0 133.5 111.6 104.7 97.6

Peak Day Demand (PDD) 1.25 x metered only ML/d 168.4 140.6 119.1 111.7 104.2

Raw Water Demand for PDD (+8%) ML/d 181.9 151.8 128.6 120.6 112.5

Average Water Production Capacity ML/d 151.0 125.0 105.0 98.0 90.6

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2.2 Wastewater

Table 3 illustrates the “with project” and “without project” scenarios in relation to the wastewater system.

Under the “with project” scenario, capacity of the Kinoya WWTP is expanded from 105,000

equivalent persons (EP) to 155,000 EP in 2021 and 277,000 EP in 2024. Consolidation work by WAF through a planned contract to refurbish and re-commission sequencing batching reactor (SBR) units which are not currently operative, scheduled for 2017, is necessary to maintain capacity at that time at 105,000 EP. The capacity expansion to 277,000 EP allows for 20,400 new connections, and investments costs associated with 4,500 of these connections are included in Project 2.

Table 3: GSA sewerage system – projections “with project” and “without project”

(Source: adapted from WAF master plan)

Under the “without project” scenario, planned investment by WAF to re-commission SBR units proceeds in 2017, but other infrastructure supporting the before project capacity (105,000 EP) deteriorates significantly due to a lack of supporting investment and a lack of redundancy to support asset maintenance, reducing before project capacity by 40% over the period to 2033.

3 Economic rationale

3.1 Current situation

3.1.1 Institutional arrangements

WAF was established as a commercial statutory authority under the WAF Promulgation of 2007, and assumed responsibility for water and wastewater services in urban areas of Fiji as well as rural water supply schemes on 1 January 2010.

While established as a commercial statutory authority, in practice WAF continues to operate through grants provided under the national government budget, and revenues collected are

paid into the consolidated fund. The tariff for water and wastewater services is controlled directly by the Fiji Commerce Commission, the competition and commerce regulator in Fiji.

The Department of Environment of the Government of Fiji is WAF’s environmental regulator and issues operating licences (Waste Discharge Permits) for its water and wastewater operations.



"With project" scenario

Population served with water supply (GSA) No. 260,638 292,450 315,947 346,505 380,349

Kinoya capacity EP 105,000 105,000 155,000 277,000 277,000

Potential connections No. 21,000 21,000 31,000 55,400 55,400

Potential connections attributable to project No. 10,000 10,400

New connections under project No. 4,500

Cumulative new connections with additional investment No. 9,000 19,000 20,400

"Without project" scenario

Population served with water supply (GSA) No. 260,638 260,638 260,638 260,638 260,638

Kinoya capacity (nominal) EP 105,000 105,000 105,000 105,000 105,000

Potential connections No. 21,000 21,000 21,000 21,000 21,000

Effective service levels - before project capacity

(connections)

No. 21,000 18,975 16,294 13,993 12,016

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3.1.2 Water supply

The Suva/Nausori water supply system serves approximately 95 percent of the population of the Greater Suva Area. Demand for water is increasing due to population growth. The increasing demand for water, combined with aging water infrastructure, has resulted in a number of problems in sourcing, treating and distributing water to consumers.

The existing system has capacity to deliver approximately 150ML/d from two separate water treatment plants (WTP) at Waila and Tamavua, under normal operating conditions. The

headworks are vulnerable to supply interruptions especially during prolonged dry periods when levels in the Waimanu River are low. Intermittent supplies can also occur during flood conditions when highly turbid raw water reduces the treatment process efficiency and a higher proportion of water is required to backflush the sand filters. The WTP can experience interruptions in supply due to mechanical breakdowns, and this can lead to extended

interruptions or reductions in supply.

In addition to capacity constraints, the system suffers from a high level of NRW due to a combination of technical and metering issues. There is little focus on demand management, and the Government set tariff is well below the cost of production.

3.1.3 Wastewater

Reticulated wastewater services are available to around 36 percent of the population in the Suva/Nausori corridor. Other households have on-site wastewater facilities, including many with septic tank systems. Septic tank systems pose several problems, including environmental pollution from seepages to local waterways.

The reticulated network services most of Suva City (largely commercial and industrial users) and other pocket areas towards Nausori (largely residential users). Many areas adjacent to the existing network are unsewered, including commercial/industrial areas, residential subdivisions and informal settlements. Demand for sewerage connection is high in these areas due to development restrictions imposed on unsewered properties.

There are five WWTPs servicing the GSA. The major plant at Kinoya services over 90

percent of connected customers, while four plants service small areas and have little scope for expansion.

It is feasible to connect a large portion of users that are currently unsewered, particularly in areas near the existing or future networks. The identified backlog areas include various commercial/industrial users and formal residential subdivisions. There are a number of informal settlements adjacent to the backlog areas that will benefit through provision of a convenient point of sewer connection. Internal sewerage reticulation may ultimately be provided via community lead infrastructure programs (funded by others) or through the Department of Housing’s ongoing program of upgrading informal settlements.

There are a number of operation and maintenance constraints in the existing wastewater network and treatment processes. The most common breakdowns are due to mechanical

and/or electrical problems, and breakdown times are affected by response times and availability of spare parts.

The limited capacity of the network can result in sewage overflow, particularly in wet weather. The area around the Kinoya WWTP is most affected, resulting in overflows to the nearby creek and impacting on nearby residential customers. Management of liquid trade waste delivered by tanker to Kinoya WWTP is a significant issue, impacting on effluent quality.

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The WAF Promulgation 2007 has been amended to impose penalties on consumers who do not connect once wastewater reticulation is provided, though this provision does not appear to be enforced.

3.2 Economic rationale for the project

The economic rationale for the proposed investments in water supply, reticulated sewerage and wastewater treatment centres on:

a. Improving water security by developing a new water source and diversifying water

treatment capacity.

The current treated water production capacity of 151 ML/day is operating continuously at full capacity, precluding an effective maintenance regime. This capacity is barely sufficient to

meet average day demand, and incapable of meeting peak day demand. There is no capacity to cater for population growth in the GSA. Water production is dependent on two major intakes on the Waimanu River. There is little scope to draw more from this river, and development is encroaching on these catchments. The additional water production capacity to be developed under the project (40 ML/day) will boost and diversify water production, securing supplies for existing customers in the GSA whilst enabling future expansion of WAF’s water supply network to service a number of outlying village areas that are currently without reliable water supply. It is calibrated to supplement project activities designed to reduce NRW and to pursue demand management. Health benefits are also associated with improved water security.

b. Addressing issues with the reliability and quality of water supply.

The project will align water production capacity more closely with peak day demand, rather than average day demand as at present. This will provide some redundancy to meet maintenance requirements, and facilitate a more systematic approach to both plant operations and maintenance. Breakdowns in the system, intermittent and under supply, should be reduced as a result. The economic analysis assumes that without the project the current water production capacity (overloaded as it is) would decline due to the inability to properly maintain a system running continuously at full capacity. Under current operating conditions water production assets are deteriorating, with their economic life declining more rapidly than originally planned. Health benefits are also associated with improvements in the reliability and quality of water supply.

c. Reducing NRW.

NRW is currently estimated at 51 percent of treated water production, and this will be reduced to 27 percent by 2033 under the project. The economic analysis assumes that some progress will be made in reducing NRW in the “without” project scenario, but only to a level of 39 percent. NRW derives from a combination of technical (leakage) and non-technical (metering) factors. Addressing technical aspects of NRW through leakage detection and other activities will provide more water for sale, potentially at a much lower cost than

alternative means of boosting supply such as further investment in production capacity. It will significantly improve the efficiency of existing and planned production capacity. Addressing non-technical aspects of NRW through measures such as repairing and replacing meters, and metering illegal connections, will improve cost recovery.

d. Demand management.

Per capita water use is relatively high, and there is a perception that there is a lot of

wastage. Public education and promotion of more water efficient technologies and equipment should assist in better management of water use. However, progress with

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demand management is likely to be constrained unless the low water tariff is also addressed (in combination with other measures to assist WAF in operating on a more commercial basis). There is considerable scope to increase the average tariff rate, while at the same time protecting poor households and other vulnerable groups through judicious adjustments

to the increasing block tariff scale. Demand management measures take pressure off the need to expand production capacity, and this has been accounted for in calibrating the expansion planned under the project.

e. Catering for suppressed and unmet demand in the water supply system, and for

projected growth in demand.

Water supply coverage is high in the GSA at something like 95 percent. The project will

provide capacity to increase the coverage level where feasible. Some areas currently supplied have intermittent supply and there are interruptions in supply from time to time. This means that there is suppressed demand in the system – consumers would use more water if it was available. The project will relieve suppressed demand, though it is noted that suppressed demand will gradually decline over time as demand management influences water usage.

The project also provides for projected growth in population and economic activity in the GSA over the period to 2033. In this regard, it is noted that the project focuses on the development of water production capacity (as well as NRW and demand management measures). There is little investment included in the project in relation to the water distribution network, and the economic analysis assumes that additional investment in

distribution proceeds in parallel with the project (both the costs of this additional investment and the benefits in terms of growth in connections are reflected in the economic analysis).

f. Securing existing capacity in wastewater treatment, and extending that capacity in

line with projected growth in demand.

The capacity of the Kinoya WWTP is estimated to be 105,000 EP, assuming that WAF’s planned investment to re-commission SBR units proceeds in 2017. The current capacity of the Kinoya WWTP is overloaded. The asset is deteriorating, with its economic life declining more rapidly than originally planned. The economic analysis assumes that without the project the capacity of the Kinoya WWTP would decline significantly. In this scenario planned investment by WAF to re-commission SBR units would proceed in 2017, but other infrastructure supporting the before project capacity (105,000 EP) would deteriorate

significantly due to a lack of supporting investment and a lack of redundancy to support asset maintenance.

g. Extending coverage of sewer connection.

Project 2 provides capacity for an additional 4,500 sewer connections in backlog areas. However, the major focus of Project 2 remains on augmenting treatment capacity at the Kinoya WWTP, and in upgrading the main pumping stations in the reticulation network.

Other backlog areas remain to be addressed, as well as sewer connections related to growth in population and economic activity. The economic analysis assumes that additional investment in sewerage reticulation proceeds in parallel with the project (both the costs of this additional investment and the benefits in terms of growth in connections are reflected in the economic analysis).

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4 Least cost analysis of project options

The least cost analysis is undertaken on the basis of a comparison of the present value of economic costs (both capital costs, and costs of operation and maintenance), of technically viable project options.

4.1 Water supply

The project options considered in the least cost analysis are:

Option 1

Establishment of a new raw water intake and WTP with initial capacity of 40 ML/day (expandable to 80 ML/day) on the Rewa River.

Option 2

Establishment of a new raw water intake on the Rewa River, with the development of additional water treatment capacity (40 ML/day expandable to 80 ML/day) at the existing Waila WTP.

A number of other locations have been considered for a raw water source on the Rewa River, but dismissed on technical grounds due to the level of risk from salinity intrusion and/or contamination from potential mining development.

The two options involve the same raw water intake. They involve investment in the same level of water treatment capacity (one on the Rewa River and one through expansion at the existing Waila WTP). The initial capital cost of developing water treatment capacity at the two alternative locations is assessed to be similar, as land acquisition is required to expand Waila and the expansion is similar technically to developing a new treatment plant on the

Rewa River. The major difference between the options is that Option 1 involves pumping treated water to connect with the existing network, while Option 2 involves pumping raw water a similar distance for treatment at Waila. O&M costs associated with pumping raw water are higher than those for treated water due to the need for more frequent cleaning of filters and maintenance of pumps, and the higher volume of water to be pumped. The life of electrical and mechanical equipment is also lower when raw water is pumped, resulting in higher capital costs overall.

It is also noted that Option 1 has the additional benefit of providing potential to connect to water supply currently unserved villages in the vicinity of the WTP and along the pipeline from the treatment plant to its connection with the existing network. This is not possible with Option 2 as it involves pumping raw water.

The net present value (NPV) of the two options at a range of discount rates is shown in Table 4.

Table 4: Least cost analysis of water supply augmentation options (PV in 2016 F$ m)

Discount rate 8% 12% 16%

Option 1: Intake and WTP on Rewa River F$181 m F$147m F$124 m

Option 2: Intake on Rewa River, with treatment at expanded Waila WTP

F$190 m F$152 m F$127 m

Source: consultant

Option 1, development of a new raw water intake and WTP with initial capacity of 40 ML/day (expandable to 80 ML/day) on the Rewa River, is the least cost option. This is the option selected for the project.

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Sovi Dam

The Government of Fiji also commissioned a feasibility study of a dam on the Sovi River7, with the dual purpose of supplying water to the Greater Suva Area by gravity feed and generating electricity. The capital cost of the project in economic terms is estimated to be

F$757 million, with annual operating and maintenance costs of F$11.8 million. F$54 million of the capital cost and F$0.8 million of the annual operating and maintenance costs relate directly to power generation.

In relation to water supply, the project is designed to replace much of the existing infrastructure (intakes and WTP).

Benefits of the project in relation to water supply are identified as:

• Saving pumping costs and other O&M costs associated with the existing water supply system.

• Improving system reliability through moving to gravity feeding.

• Health benefits due to improved water quality.

• Providing capacity for growth in connections to the water supply network.

This project has not been included in the least cost analysis as it is very different in objectives and scope from the options linked to the Rewa River resource (described above). Those options focus on augmenting the existing system, while the Sovi project would replace much of the existing infrastructure. The capital cost of the Sovi project is roughly 4 times the cost of the Rewa options, and 30 percent of the economic value of the benefits of the project relates directly to power generation.

It appears that the Sovi project is not being actively pursued by Government at this stage, and it is perhaps best viewed as a longer term option should run-of-river raw water options become exhausted.

4.2 Regional Wastewater Transportation System & Treatment

The project options considered in the least cost analysis are:

Option 1

A “centralised” strategy, which assumes that all sewerage, except sewerage from part of the Nausori catchment, will be diverted to and treated at the existing plant in Kinoya. The Kinoya sewerage treatment plant would be upgraded accordingly.

Option 2

A “decentralised” strategy, which envisages utilising the existing plant at Kinoya, together with new plants to be located in growth areas at the extremities of Suva’s sewerage system, at Waila and Lami.

The centralised and decentralised options are considered separately for Waila and Lami.

Least cost analysis of these options was undertaken in the feasibility study prepared in 2000 for an earlier Suva-Nausori water supply and sewerage project8. The analysis conducted at that time, in 1999 prices, is considered to remain valid. This analysis is comparative only and costs do not include all works required such as reticulation or other infrastructure that is the same for both options.

7Entura, Hydro Tasmania, Sovi Multipurpose Dam Project: Feasibility Study - Final Report, 28 November 2014. Four potential dam projects were considered initially (Sovi River, Upper Waimanu River, and two options on the Navua River), with the Sovi project being selected for further detailed study.

8ADB, Suva-Nausori Water Supply and Sewerage Project, Fiji (TA FIJ-3005), Feasibility Study Volume 1: Main

Report and Volume 2: Appendices, March 2000.

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One significant element in O&M costs, with the potential to influence the least cost analysis, is the cost of electricity. There are differences in electricity costs between the two options, with the centralised option involving more pumping and therefore higher electricity costs than the decentralised option. However, despite a large increase in electricity prices in 2010,

there has been no real increase in electricity prices over the period 1999 to 2015. Thus, changes in electricity prices since the earlier feasibility study have not affected the case for the centralised option as the least cost option.

Table 5a: Least cost analysis of wastewater treatment strategy (PV in 1999 F$ m)

Waila Lami

Discount rate 8% 12% 16% 8% 12% 16%

Option 1: centralised strategy

F$ 25.22 m F$19.10 m F$15.31 m F$22.53 m F$ 17.36 m F$14.11 m

Option 2: decentralised strategy

F$30.08 m F$22.73 m F$18.37 m F$27.41 m F$21.12 m F$17.22 m

Source: ADB, Suva-Nausori Water Supply and Sewerage Project, Fiji (TA FIJ-3005), Feasibility Study Volume 1: Main Report and Volume 2: Appendices, March 2000.

This analysis finds that the centralised strategy, which assumes that all sewerage except sewerage from Nausori will be diverted to and treated at the existing plant in Kinoya (with the Kinoya sewerage treatment plant being upgraded accordingly), is least cost.

As it has been several years since these treatment options were studied in detail, WAF has also recently completed a review of the centralized and decentralized options in the context

of refining the master plan for Kinoya WWTP and the much smaller Nadali WWTP.

Three growth scenarios were identified to service future growth:

• Scenario 1 - all future growth areas discharged to Kinoya WWTP

• Scenario 2 - future growth areas in Nausori discharged to Nadali WWTP, future

growth in Waila and Nakasi areas discharged to Kinoya WWTP

• Scenario 3 - future growth in Nausori, Waila and Nakasi discharged to Nadali WWTP

Table 5b: Least cost analysis of wastewater transportation network and treatment

strategy (PV in 2015 F$ m)

Scenario Discount Rate

8% 12%

Scenario 1: centralised strategy (all future growth areas to Kinoya WWTP)

F$618.5 m F$480.7 m

Scenario 2: decentralised strategy (future growth in Nausori to Nadali WWTP)

F$656.5 m F$515.9 m

Scenario 3: decentralised strategy (future growth in Nausori, Waila & Nakasi to Nadali WWTP)

F$674.8 m F$529.4m

Source: ADB, Fiji Urban Water Supply and Wastewater Management Project (TA-8526 FIJ) Urban Development

Planning and Institutional Capacity Building, Kinoya – Nadali Master Plan Wastewater Treatment Report (Hunter H2O Pty Ltd, Final Draft, November 2015)

This review confirmed that the previous strategy of centralizing wastewater treatment at Kinoya WWTP is still the preferred long-term strategy for the GSA based on a consideration of wastewater transportation network and treatment infrastructure construction costs, long-

11

term operating costs, effluent discharge requirements, the availability of suitable land for new WWTPs and environmental / social impacts. This option (scenario 1) is the option selected for the project.

WAF has engaged a separate consultant to confirm the preferred treatment technology for

the Kinoya WWTP based on a consideration of construction and operating costs, operational complexity and effluent discharge requirements (both existing and potential future requirements).

5 Major assumptions and methodology

The following general assumptions have been adopted in the economic analysis:

• Prices reflect current (July 2016) cost estimates and costs.

• Each project component is assumed to have a useful economic life of 40 years after construction for civil works, and 15 years for electrical and mechanical components.

Replacements have been included every 15 years for electrical and mechanical components. The residual value of civil works is assumed to be 0 after 40 years, while allowance is made for residual values for electrical and mechanical components at the end of the analysis period.

• The economic opportunity cost of capital used in the economic analysis is assumed to be the standard 12 percent per year.

• The average household size is 5 persons. Average water consumption was estimated to be 202 litres per capita per day (lpcd) in 2013.

• Wastewater generation is estimated at 80 percent of water consumption.

• Capital costs include physical contingencies (10 percent) but exclude price contingencies and interest during construction.

• All economic costs, in particular of imported tradeable inputs, are net of duties and taxes.

• The economic opportunity cost of raw water provided to the project is assumed to be zero. There are no competing uses of the raw water such as irrigation in the Suva– Nausori area.

• An exchange rate of F$2.00 per USD 1.00 has been employed in converting foreign exchange costs to their local currency equivalent.

The analysis is presented in the domestic currency (Fiji dollars) using the domestic price numeraire.

Separate economic analyses were undertaken for water supply investments and wastewater investments, and for the overall program combining water supply and wastewater investments.

6 Economic costs and benefits

6.1 Economic pricing

The project costs presented in the financial analysis have been adjusted as follows:

• Removing taxes and duties.

• Using constant prices of July 2016, and removing price contingencies (while

retaining physical contingencies).

• Applying a shadow exchange rate factor of 1.014 for foreign costs (the reciprocal of a standard conversion factor of 0.986).

• Applying a shadow wage rate of 0.86 for unskilled labour.

12

The shadow exchange rate factor and shadow wage rate were sourced from the economic analysis associated with ADB Project 48141-001: Transport Infrastructure Investment Sector Project (approved 5 December 2014). These shadow prices were reviewed and considered appropriate.

The shadow exchange rate factor is close to unity, reflecting the fact that the Fiji currency is freely traded.

The shadow wage rate for unskilled labour reflects a degree of unemployment and underemployment of unskilled labour. There are no formal unemployment statistics in Fiji, though employment statistics show that there were 131,583 people in paid employment in 20119 (equivalent to only 15 percent of the population, while 39 percent of the population at

the time of the 2007 Census were considered to be economically active), with 78,072 of these being wage earners and the remainder in salaried employment. This is an indication of a degree of unemployment and underemployment of unskilled labour. In 2013/14 it was estimated that 36.7 percent of the rural population and 19.8 percent of the urban population were living below the basic needs poverty line10; again indicating a degree of unemployment and underemployment of unskilled labour. A national minimum wage of F$2.00 per hour was set in 2014, which for the purposes of the economic analysis indicates some distortion in the market for unskilled labour.

For the purposes of the economic analysis, it is assumed that electricity prices (a major element of the costs of operation and maintenance of water supply and wastewater systems) are not subsidised and will change more or less in line with the general price level over the

timeframe of the analysis11, and hence do not require any adjustment.

Electricity prices are regulated by the Fiji Commerce Commission subject to the Commerce (Control of Prices for Supply of Electricity and Ancillary Services) Order 2012. In its determination on electricity tariff rates dated 11 December 2012, the Commission noted that it cannot approve a rate lower than a competitive market rate or a rate that subsidises the end users power bill as it will lead to misuse and wastage of resources. WAF pays for electricity at the same rate as commercial users with similar requirements.

6.2 Water supply investments (Project 1)

6.2.1 Costs

Capital cost

Capital costs are phased in accordance with the implementation schedule for the project12, with provision for replacement of mechanical and electrical components every fifteen years. Additional investment costs associated with distribution of water (beyond those included in the project) are provided for, as these investments are necessary to achieve the planned

growth in connections. These additional costs are assumed to amount to F$4,000 per connection.

Operating and maintenance costs

These costs are provided for over the life of the project, and include pumping costs, labour costs and overheads.

9 Source: Fiji Bureau of Statistics.

10 Fiji Bureau of Statistics, 2013/14 Household Income and Expenditure Survey - Preliminary Results, December

2015. 11

In this regard, the Commerce Commission notes that renewable sources (mainly hydro) now account for three quarters of Fiji’s energy requirements. 12

Power supply upgrades are omitted from the analysis. This cost must be met by WAF initially, but are reimbursed by FEA after a period of seven years continuous usage at agreed levels.

13

6.2.2 Benefits

Non-incremental

Non-incremental benefits relate to the existing supply of water (with project outputs replacing existing water production or supply), and are valued in terms of costs avoided. Non-incremental benefits of the project include:

• Cost savings in meeting the demand of households currently unserved, at present satisfied demand levels (valued at the avoided costs of alternative supplies).

Households not currently connected to WAF water supplies obtain water from a range of alternative sources including roof catchments, wells, tanker deliveries, and direct from rivers

and streams. There are costs associated with these alternative sources, and these costs will be avoided as households connect to WAF supplies. This benefit is valued at F$31 per m3 (the current cost of deliveries by water tanker) for a two month period during which there are typically shortages of water.

• Avoided cost of decline in service level without project (valued at average production cost).

In the without project scenario, it is assumed that the current water production capacity is eroded over time (by 40 percent by 2033) as it is being operated continuously at full capacity

without any redundancy for routine and periodic maintenance. The effect of this would be to reduce the amount of water available to customers (offset to some extent by progress with reduction of NRW in the “without project” scenario. This cost is avoided under the project, and WAF’s average unit cost of water production (F$1.54 per m313) is used as a proxy to value this benefit.

Incremental

Incremental benefits relate to additions to the supply of water as a result of the project, and are valued at willingness to pay. Incremental benefits of the project include:

• Demand for improved services – domestic consumers (valued at willingness to pay)

Domestic consumers experience a number of problems with their water supply, including intermittent and interrupted supplies. The project is designed to alleviate these concerns. Demand for improved services is valued at willingness to pay. Survey based estimates reveal a willingness to pay amounting to F$12.57 per quarter for an improved service.

• Supressed demand – commercial (valued at willingness to pay)

Current production capacity is insufficient to meet peak demand. Commercial / government consumers are therefore getting less water than they desire. This suppressed demand is valued at willingness to pay. Willingness to pay for commercial / government users is based on the estimated cost of securing water from private tanker operators (at an estimated cost of F$10 per m3).

• Growth in connections14 (valued at willingness to pay)

13

References for this estimate are the Draft Report of the WAF Tariff and Finance Strategic Review and Action Plan, September 2016 (Table 22), and ADB, TA4270-FIJ: Capacity Building in Water and Sewerage Services, Volume 7 - Tariff Review, prepared by Kellogg Brown and Root Pty Ltd, October 2007. 14

In the economic analysis of water projects, the benefits associated with growth in connections are often included as suppressed demand. In this case, it is considered useful to separate the suppressed demand and other demand for improved services associated with existing connections and those currently unserved, from demand associated with new customers connected over the life of the project as result of growth in population and economic activity. Both suppressed demand and growth are valued at willingness to pay.

14

The project caters for growth in domestic and commercial/government connections through to 2033, and this growth is valued at willingness to pay. Willingness to pay estimates are based on the Draft Report of the 2016 Tariff Review cited previously, assuming the projected tariff required to cover all operating and capital expenditure requirements as a proxy.

• Additional NRW – nontechnical (valued at willingness to pay)

In economic analysis, nontechnical NRW (that associated with connections that are

unmetered or with faulty meters) is treated as a benefit as the water is assumed to be being put to productive use. Additional nontechnical NRW resulting from the project is valued at willingness to pay as above.

Table 6 presents these benefits in conceptual form.

Table 6: Summary of water outputs and inputs as the basis for economic valuation

Non-incremental

(relating to existing water supplies)

Incremental (relating to additional supplies)

Outputs � Connecting existing households in GSA and expansion areas not currently served by WAF

� System security improved (redundancy for maintenance)

(valuation at adjusted supply price i.e. cost of alternative supplies, or opportunity cost)

� Catering for future growth in domestic and commercial connections

� Addressing suppressed demand and improving service reliability

� NRW non-technical increases as capacity increases

(valuation at adjusted demand price or willingness to pay)

Inputs � Diversion of water from other uses

(no diversion of water from other uses in this case)

� Expansion in supply by 40 ML/day associated with new intake and WTP

� Reductions in NRW technical (opportunity cost of water assumed to be zero in this case)

Health and health-related benefits

Health and health-related benefits are not measured in the economic analysis of the water investments due to possible double-counting with other benefits. However, they should be taken into consideration in interpreting the results.

The project will have an impact on the health of community through lessening reliance on untreated sources of water supply, and through improving the quality and reliability of the treated supply. The Ministry of Health15 reports growth in the number of typhoid cases from 0 in the year 2000 to more than 400 in each of the years 2008 to 2013 (with cases in the Central Division approaching 200 in 2013).The incidence of leptospirosis in Fiji has increased from 65 cases in 2000 to 396 cases in 2012 and 215 cases in 2013. There were 25,805 cases of diarrhoea notified to health authorities in Fiji in 2013, though actual incidence is likely to be considerably higher as many cases are not referred to health authorities.

An assessment16 by the World Health Organization (WHO) of the costs and benefits of improvements in water supply and sanitation at the global level estimates high benefit-cost

ratios for these investments. This study considered the costs and benefits of five levels of

15

Ministry of Health Annual Report 2013. 16

Evaluation of the Costs and Benefits of Water and Sanitation Improvements at the Global Level, Guy Hutton and Laurence Haller, World Health Organization WHO/SDE/WSH/04.04, Geneva, 2004.

15

intervention, ranging from basic measures aimed at increasing the coverage of “improved” services to investments designed to achieve access for all to a regulated piped water supply and sewage connection into their houses17. The study provided results for a range of geographical regions, including for Pacific Island countries (including Fiji) as a group.

The health and health-related benefits of investment in water and sanitation considered in the study were:

� health sector benefit due to avoided illness � patient expenses avoided due to avoided illness � value of deaths avoided � value of time savings due to access to water and sanitation

� value of productive days gained of those with avoided illness � value of days of school attendance gained of those with avoided illness � value of child days gained of those with avoided illness.

The study noted five different routes of infection for water-related diseases: water-borne diseases (e.g. cholera, typhoid), water-washed diseases (e.g. trachoma), water-based diseases (e.g. schistosomiasis), water-related vector-borne diseases (e.g. malaria, filariasis and dengue), and water-dispersed infections (e.g. legionellosis). In assessing the benefits of investments in water and sanitation, the study focused on water-borne and water-washed diseases, as these are responsible for the greatest proportion of the direct-effect water and sanitation-related disease burden. In terms of burden of disease, water-borne and water-washed diseases consist mainly of infectious diarrhoea. The impact on this disease burden

from investments in water and sanitation was measured using the following indicators:

� reduction in incidence rates of infectious diarrhoea (number of cases reduced per year)

� reduction in mortality rates from infectious diarrhoea (number of deaths avoided per year).

Benefit-cost ratios associated with interventions at the higher end of the scale (i.e. those building towards universal access to regulated piped water supply and household sewage connection) for Pacific Island countries were estimated to be in a range of 1.5 to 4 even under a high cost and low benefit scenario. Benefit-cost ratios in the base case were estimated to be significantly higher.

6.3 Wastewater investments (Project 2)

6.3.1 Costs

Capital cost

Capital costs are phased in accordance with the implementation schedule for the project,

with provision for replacement of mechanical and electrical components every fifteen years. Additional investment costs associated with reticulation of sewerage (beyond those included in the project) are provided for, as these investments are necessary to fully utilise the expansion in treatment capacity provided for by the project. It is assumed that the expansion in treatment capacity provided for by the project is fully utilised by 2025, and that the

17

The interventions addressed in the study were: Intervention 1: Halving the proportion of people without access to improved water sources. Intervention 2: Halving the proportion of people without access to improved water sources and sanitation. Intervention 3: Everyone has access to improved water and improved sanitation services. Intervention 4: Intervention 3 + everyone has a minimum of water disinfected at the point of use. Intervention 5: Everyone has access to a regulated piped water supply & sewage connection in their houses.

16

average cost of reticulating sewerage to growth areas and additional backlog areas is F$ 5,000 per plot.

Operating and maintenance costs

These costs are provided for over the life of the project, and include pumping costs, labour

costs and overheads.

6.3.2 Benefits

• Avoided cost of septic tanks for new connections (capital, and operation and maintenance)

Households not connected to the sewerage system rely on alternative wastewater disposal systems, mainly septic tanks. These alternative systems have costs, which will be avoided with connection to the sewerage system. This benefit is valued at the annualised cost of

installing septic tanks meeting the requirements of the building code (estimated to be F$5,200 over 15 years, or F$347 per annum), together with the cost of pumping out and desludging septic tanks (estimated to be F$520 every three years, or F$174 per annum).

• Increase in land values18

The economic rationale for the higher value of properties connected to sewer is that this permits more intensive use of the property through higher density of development. Benefits from connection to sewer is estimated by comparing land values for properties which are

assumed to be alike in all other respects, except that one property is connected to sewer

and one is not. This idea follows hedonic pricing19 as it compares prices of land with and without same characteristics. However, this is at best a crude form. Ideally a more complete form of hedonic pricing applies regression analysis to price separately a bundle of characteristics (including physical attributes of the property and availability of public services) that make up a property value should be used.

New subdivisions (including Housing Authority and private)

In the absence of sewerage the minimum plot size possible for development is 800 square metres, as only 20 percent of the land area can be built on (i.e. a plot ratio of 0.2:1). With sewerage, smaller plot sizes can be developed as up to 100 percent of the land area can be built upon (i.e. a plot ratio of 1:1).

The Housing Authority advises that sewered plots of 250 square metres sell for

approximately F$25,000 (and approximately F$50,000 for plots of 500 square metres). The value of privately developed sewered plots of 600 square metres and more varies with location, but F$70,000 is a guide at the lower end. The value of unsewered plots of 800 square metres is affected by the restriction on the plot ratio, and is estimated to be approximately F$40,000.

With sewerage 800 square metres of land can produce three 250 square metre lots valued

at F$75,000, while without sewerage the plot is valued at F$40,000, an increase of F$35,000.

18

This analysis draws on similar analysis included in ADB, Suva-Nausori Water Supply and Sewerage Project, Fiji (TA FIJ-3005), Feasibility Study Volume 1: Main Report, March 2000, section 12.4.7. 19

For an explanation of hedonic pricing, and its application in the water sector, see Anselin, Lozano-Gracia, Deichmann and Lall, Valuing Access to Water – A Spatial Hedonic Approach Applied to Indian Cities, Policy Research Working Paper No. 4533, The World Bank, Development Research Group, Sustainable Rural and Urban Development Team, February 2008. See also Dendup and Tshering, Demand for Piped Drinking Water and a Formal Sewer System in Bhutan, South Asian Network for Development and Environmental Economics (SANDEE) Working Paper No. 97-15, July 2015.

17

For the purposes of the economic analysis the incremental economic value of sewerage is estimated to be F$16,000, with the balance of the increase in land value attributable to the cost of providing additional services to the second and third smaller plots.

Backlog sewerage connections

Project 2 will have a strong emphasis on addressing the backlog of sewerage connections in areas currently served with water supply.

Addressing backlog sewerage connections is likely to result in marked changes in the density and type of land use. Further, this comes at lower costs than new subdivisions because the necessary infrastructure in terms of roads, electricity, water supply and telecommunications is already in place.

Sewering these areas would allow for increases in plot ratios (from 0.2:1 to 1:1 for residential land, and from 1:1 to 3.5:1 or more for land zoned commercial). Provision for higher density land use and possible zoning changes has the potential to increase land values by 50 percent or more, according to information provided by real estate agencies and property valuers. Assuming an average land value of F$40,000 for unsewered sections, provision of sewerage to backlog areas is estimated to have an incremental economic value of F$20,000 per connection.

Averaging the incremental economic value of sewerage for new sub-divisions and backlog sewerage connections works out at F$18,000 per new sewerage connection. A figure of F$12,000 is used in the economic analysis, in recognition that part of this difference is may be due to unidentified factors other than connection to sewerage.

• Avoided cost of decline in service level without project

In the without project scenario, it is assumed that the current wastewater treatment capacity

is eroded over time as it is currently operated at full capacity without any redundancy for routine and periodic maintenance. Planned investment by WAF to re-commission SBR units proceeds in 2017, but other infrastructure supporting the before project capacity deteriorates significantly due to a lack of supporting investment and a lack of redundancy to support asset maintenance. For the purposes of the economic analysis, the impact of this erosion in capacity is reflected in a decline in the number of connections the treatment plant can

service (by 40 percent by 2033). This cost is avoided under the project, and in the absence of other indicators is valued at the annualised cost of septic tank systems.

Health and environmental benefits

Health and environmental benefits are not measured in the economic analysis of the wastewater investments due to possible double counting with other benefits. However, they should be taken into consideration in interpreting the results.

Health and environmental benefits that flow directly to property owners as a result of connection to sewer are assumed to be captured in the increased land values addressed above. However, in addition to these direct benefits to property owners, investment in improved sanitation will have significant health and environmental benefits for the broader community in the Suva-Nausori area. This will occur through replacing ineffective septic systems, through improving the reliability of the sewerage system, and through improving the quality of treated effluent discharged by the wastewater treatment plant.

Poorly functioning septic systems are a health hazard in an area such as Suva-Nausori which is densely settled and subject to extended periods of heavy rainfall. Sewers which are subject to breakage or overflow in periods of wet weather, and a sewerage treatment system unable to cope with the demands placed on it, are also a health hazard.

18

It is not possible to link these potential health hazards directly with the incidence of disease. However, the Ministry of Health20 reports growth in the number of typhoid cases from 0 in the year 2000 to more than 400 in each of the years 2008 to 2013 (with cases in the Central Division approaching 200 in 2013).The incidence of leptospirosis has increased from 65

cases in 2000 to 396 cases in 2012 and 215 cases in 2013. There were 25,805 cases of diarrhoea notified to health authorities in 2013.

Similarly, poorly functioning septic systems, sewers which are subject to breakage or overflow, and a sewerage treatment system unable to cope with demand pose a major risk to the environment. Streams, estuaries and inshore waters in the Suva-Nausori area are a source of livelihoods for the community. Pollution of these waterways from untreated or

poorly treated effluent is a major cost to the economy, and accidents such as a major break in a sewer line in December 2014 can result in closure of waterways for fishing and recreational activities for extended periods. The quality of the treated effluent currently being discharged into Laucala Bay is poor, and does not meet local environmental standards.

7 Results of the economic analysis


A summary of the discounted cash flow analysis for the economic analysis of investments under the project in water supply is provided in Table 7. Table 7: Economic analysis of water supply investments

Year Costs Benefits Net Capital O&M Total Non-

incremental Incremental Total Benefits

(F$m) (F$m) (F$m) (F$m) (F$m) (F$m) (F$m) 1 5.31 0.00 5.31 0.00 0.00 0.00 -5.31 2 14.72 0.00 14.72 0.00 0.00 0.00 -14.72 3 39.64 0.00 39.64 0.00 0.00 0.00 -39.64 4 61.75 0.00 61.75 0.00 0.00 0.00 -61.75 5 63.75 0.00 63.75 0.00 0.00 0.00 -63.75 6 35.48 0.00 35.48 5.98 9.88 15.86 -19.62 7 41.37 4.92 46.29 8.61 12.71 21.32 -24.97 8 8.84 4.92 13.76 11.07 13.42 24.48 10.73 9 8.71 4.92 13.63 13.59 14.05 27.64 14.01 10 8.80 4.92 13.72 16.10 14.73 30.83 17.11 11 4.89 4.92 9.81 16.63 15.41 32.05 22.24 12 4.98 4.92 9.90 17.13 16.14 33.26 23.36 13 5.07 4.92 9.99 17.61 16.90 34.51 24.52 14 5.22 4.92 10.13 18.13 17.56 35.69 25.56 15 5.31 4.92 10.23 18.64 18.22 36.86 26.62 16 5.41 4.92 10.33 19.07 18.92 37.99 27.66 17 5.51 4.92 10.43 19.49 19.68 39.17 28.74 18 5.62 4.92 10.54 19.90 20.43 40.32 29.78 19 0.00 4.92 4.92 19.90 20.43 40.32 35.40 20 0.00 4.92 4.92 19.90 20.43 40.32 35.40 21 13.90 4.92 18.82 19.90 20.43 40.32 21.51 22 0.00 4.92 4.92 19.90 20.43 40.32 35.40 23 0.00 4.92 4.92 19.90 20.43 40.32 35.40 24 0.00 4.92 4.92 19.90 20.43 40.32 35.40 25 0.00 4.92 4.92 19.90 20.43 40.32 35.40 26 0.00 4.92 4.92 19.90 20.43 40.32 35.40 27 0.00 4.92 4.92 19.90 20.43 40.32 35.40 28 0.00 4.92 4.92 19.90 20.43 40.32 35.40 29 0.00 4.92 4.92 19.90 20.43 40.32 35.40

20

Ministry of Health Annual Report 2013.

19

Year Costs Benefits Net Capital O&M Total Non-

incremental Incremental Total Benefits

(F$m) (F$m) (F$m) (F$m) (F$m) (F$m) (F$m) 30 0.00 4.92 4.92 19.90 20.43 40.32 35.40 31 0.00 4.92 4.92 19.90 20.43 40.32 35.40 32 0.00 4.92 4.92 19.90 20.43 40.32 35.40 33 0.00 4.92 4.92 19.90 20.43 40.32 35.40 34 0.00 4.92 4.92 19.90 20.43 40.32 35.40 35 0.00 4.92 4.92 19.90 20.43 40.32 35.40 36 13.90 4.92 18.82 19.90 20.43 40.32 21.51 37 0.00 4.92 4.92 19.90 20.43 40.32 35.40 38 0.00 4.92 4.92 19.90 20.43 40.32 35.40 39 0.00 4.92 4.92 19.90 20.43 40.32 35.40 40 0.00 4.92 4.92 19.90 20.43 40.32 35.40 41 -9.27 4.92 -4.35 19.90 20.43 40.32 44.67 NPV @

12% -51.68

EIRR 8.5% (Source: Consultant)

The NPV of the water supply investments at a discount rate of 12 percent is F$-51.68 million. The economic internal rate of return (EIRR) is 8.5 percent.


A summary of the discounted cash flow analysis for the economic analysis of investments under the project in the wastewater system is provided in Table 8. Table 8: Economic analysis of investments in the wastewater system

Year Costs Benefits Net Capital O&M Total Avoided

costs Land

values Total Benefits

(F$m) (F$m) (F$m) (F$m) (F$m) (F$m) (F$m) 1 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3 8.50 0.00 8.50 0.00 0.00 0.00 -8.50 4 45.62 0.00 45.62 1.35 0.00 1.35 -44.27 5 63.99 0.00 63.99 1.64 0.00 1.64 -62.35 6 62.54 0.00 62.54 3.48 36.00 39.48 -23.06 7 45.07 1.78 46.85 5.31 36.00 41.31 -5.54 8 30.39 1.78 32.17 7.13 36.00 43.13 10.96 9 10.00 1.78 11.78 8.43 24.00 32.43 20.65 10 10.00 1.78 11.78 9.72 24.00 33.72 21.94 11 10.00 1.78 11.78 11.00 24.00 35.00 23.22 12 10.00 1.78 11.78 12.27 24.00 36.27 24.49 13 10.00 1.78 11.78 13.54 24.00 37.54 25.76 14 7.00 1.78 8.78 14.49 16.80 31.29 22.51 15 0.00 1.78 1.78 14.70 0.00 14.70 12.92 16 0.00 1.78 1.78 14.90 0.00 14.90 13.12 17 0.00 1.78 1.78 15.10 0.00 15.10 13.32 18 0.00 1.78 1.78 15.30 0.00 15.30 13.52 19 0.00 1.78 1.78 15.30 0.00 15.30 13.52 20 0.00 1.78 1.78 15.30 0.00 15.30 13.52 21 71.24 1.78 73.02 15.30 0.00 15.30 -57.72 22 0.00 1.78 1.78 15.30 0.00 15.30 13.52 23 0.00 1.78 1.78 15.30 0.00 15.30 13.52 24 0.00 1.78 1.78 15.30 0.00 15.30 13.52 25 0.00 1.78 1.78 15.30 0.00 15.30 13.52 26 0.00 1.78 1.78 15.30 0.00 15.30 13.52 27 0.00 1.78 1.78 15.30 0.00 15.30 13.52 28 0.00 1.78 1.78 15.30 0.00 15.30 13.52 29 0.00 1.78 1.78 15.30 0.00 15.30 13.52

20

Year Costs Benefits Net Capital O&M Total Avoided

costs Land

values Total Benefits

(F$m) (F$m) (F$m) (F$m) (F$m) (F$m) (F$m) 30 0.00 1.78 1.78 15.30 0.00 15.30 13.52 31 0.00 1.78 1.78 15.30 0.00 15.30 13.52 32 0.00 1.78 1.78 15.30 0.00 15.30 13.52 33 0.00 1.78 1.78 15.30 0.00 15.30 13.52 34 0.00 1.78 1.78 15.30 0.00 15.30 13.52 35 0.00 1.78 1.78 15.30 0.00 15.30 13.52 36 71.24 1.78 73.02 15.30 0.00 15.30 -57.72 37 0.00 1.78 1.78 15.30 0.00 15.30 13.52 38 0.00 1.78 1.78 15.30 0.00 15.30 13.52 39 0.00 1.78 1.78 15.30 0.00 15.30 13.52 40 0.00 1.78 1.78 15.30 0.00 15.30 13.52 41 -47.49 1.78 -45.71 15.30 0.00 15.30 61.01 NPV @

12% -26.93

EIRR 7.7% (Source: Consultant)

The NPV of the investments in the sewerage system at a discount rate of 12 percent is F$ -26.93 million. The EIRR is 7.7ercent.

7.3 Overall program - combined water supply and wastewater investments

A summary of the discounted cash flow analysis for the economic analysis of combined

investments under the project in the water supply and sewerage systems is provided in Table 9.

Table 9. Economic analysis of overall program

Year Costs Benefits Net Capital O&M Total Total Benefits (F$m) (F$m) (F$m) (F$m) (F$m)

1 5.31 0.00 5.31 0.00 -5.31 2 14.72 0.00 14.72 0.00 -14.72 3 48.14 0.00 48.14 0.00 -48.14 4 107.37 0.00 107.37 1.35 -106.02 5 127.75 0.00 127.75 1.64 -126.11 6 98.02 0.00 98.02 55.34 -42.68 7 86.45 6.70 93.15 62.63 -30.52 8 39.23 6.70 45.93 67.62 21.69 9 18.71 6.70 25.41 60.07 34.66 10 18.80 6.70 25.50 64.55 39.05 11 14.89 6.70 21.59 67.05 45.46 12 14.98 6.70 21.68 69.54 47.86 13 15.07 6.70 21.77 72.05 50.27 14 12.22 6.70 18.92 66.98 48.06 15 5.31 6.70 12.01 51.56 39.54 16 5.41 6.70 12.11 52.90 40.78 17 5.51 6.70 12.22 54.28 42.06 18 5.62 6.70 12.32 55.62 43.30 19 0.00 6.70 6.70 55.62 48.92 20 0.00 6.70 6.70 55.62 48.92 21 85.14 6.70 91.84 55.62 -36.22 22 0.00 6.70 6.70 55.62 48.92 23 0.00 6.70 6.70 55.62 48.92 24 0.00 6.70 6.70 55.62 48.92 25 0.00 6.70 6.70 55.62 48.92 26 0.00 6.70 6.70 55.62 48.92 27 0.00 6.70 6.70 55.62 48.92 28 0.00 6.70 6.70 55.62 48.92 29 0.00 6.70 6.70 55.62 48.92

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Year Costs Benefits Net Capital O&M Total Total Benefits (F$m) (F$m) (F$m) (F$m) (F$m)

30 0.00 6.70 6.70 55.62 48.92 31 0.00 6.70 6.70 55.62 48.92 32 0.00 6.70 6.70 55.62 48.92 33 0.00 6.70 6.70 55.62 48.92 34 0.00 6.70 6.70 55.62 48.92 35 0.00 6.70 6.70 55.62 48.92 36 85.14 6.70 91.84 55.62 -36.22 37 0.00 6.70 6.70 55.62 48.92 38 0.00 6.70 6.70 55.62 48.92 39 0.00 6.70 6.70 55.62 48.92 40 0.00 6.70 6.70 55.62 48.92 41 -56.76 6.70 -50.06 55.62 105.68 NPV @ 12% -78.60 EIRR 8.3%

(Source: Consultant)

The NPV of the combined investments in the water supply and wastewater systems at a discount rate of 12 percent is F$-78.60million. The EIRR is 8.3 percent. The existence of significant but unquantified health and environmental benefits should be taken into account in interpreting these results.

8 Sensitivity analysis

Sensitivity analysis considers the impact on the level of economic returns from project investments of changes in key elements of the economic analysis. The scenarios considered in the sensitivity analysis were a 10 percent increase in capital costs, a 10 percent increase

in the costs of operation and maintenance, and a 10 percent reduction in project benefits.


Results of the sensitivity analysis for water supply investments under the project are provided in Table 10 below. In this case the EIRR in the base case is below the threshold level, and is sensitive to increases in capital costs and reductions in project benefits, but less sensitive to increases in the costs of operation and maintenance.

Table 10: Sensitivity analysis – water supply

Change NPV (F$ m)

EIRR Switching value

Base case -$51.68 8.5% Increase in capital costs 10% -$69.29 7.7% not applicable Increase in O&M costs 10% -$53.72 8.4% not applicable Decrease in benefits 10% -$66.16 7.4% not applicable



Results of the sensitivity analysis for wastewater investments under the project are provided

in Table 11 below. In this case the EIRR in the base case is below the threshold level, and is sensitive to increases in capital costs and reductions in project benefits, but less sensitive to increases in the costs of operation and maintenance.

Table 11: Sensitivity analysis – wastewater

Change NPV (F$ m)


Base case -$26.93 7.7% Increase in capital costs 10% -$42.83 5.9% 11% Increase in O&M costs 10% -$27.66 7.6% >100%

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Decrease in benefits -10% -$40.87 5.6% 10%


8.3 Overall program - combined water supply and wastewater investments

Results of the sensitivity analysis for water supply and wastewater investments combined are provided in Table 12 below. In this case the EIRR in the base case is below the threshold level, and is sensitive to increases in capital costs and reductions in project benefits, but less sensitive to increases in the costs of operation and maintenance.

Table 12: Sensitivity analysis – combined (water supply and wastewater investments)

Change NPV (F$ m)


Base case -$78.60 8.3% Increase in capital costs 10% -$112.12 7.1% not applicable Increase in O&M costs 10% -$81.38 8.1% not applicable Decrease in benefits -10% -$107.03 6.9% not applicable


9 Risk analysis

Risks identified in relation to the economic viability of the project, mitigating action planned in relation to these risks, and remaining uncertainty, include:

• The risk that investments planned by WAF in relation to the Kinoya WWTP (including re-commissioning of SBR plants) will not proceed. These investments provide a platform for

investments included in the project.

To address this risk, support is being provided to WAF in contracting out these works and progress is being monitored closely. After mitigating action, the likelihood of this risk event occurring is considered to be low, the consequences should it occur are considered to be moderate, giving an overall risk level of low.

• The risk that additional investments required to distribute water supply and reticulate sewerage (utilising the additional capacity developed by the project) will not occur or will be delayed.

To address this risk, the project is being closely integrated with the WAF Masterplan under which the additional investments will be implemented. After mitigating action, the likelihood of this risk event occurring is considered to be low, the consequences should it occur are considered to be moderate, giving an overall risk level of low.

• The environmental risk that investments in the augmentation of water production utilising the Rewa River will be affected by salinity incursion, flooding and/or contamination from a proposed mine at Namosi.

To address these risks, the site for the raw water intake has been moved further upstream and water quality monitoring processes will be strengthened under the project. After mitigating action, the likelihood of this risk event occurring is considered to be low, the consequences should it occur are considered to be major, giving an overall risk level of medium.

• The risk that land issues will emerge in relation to the raw water intake, new WTP and reservoir, disrupting project implementation.

This will be addressed in the resettlement plan. WAF has also undertaken advance

consultation with landowners and obtained in-principal approval for the required land acquisitions. After mitigating action, the likelihood of this risk event occurring is considered to

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be low, the consequences should it occur are considered to be moderate, giving an overall risk level of low.

• The risk that lack of progress with the corporatisation of WAF will undermine the effective management of project implementation, and project operation and maintenance.

To address this risk, the project provides for a Project Management Unit during project implementation and major civil works contracts will provide for a period of operation and

maintenance as well as construction. Uncertainty remains in relation to the pace and extent of corporatisation, which is subject to Government decision-making, and which is critical to issues such as tariff revision. Technical support for continuation of state-owned enterprise reforms at WAF is included in the project. After mitigating action, the likelihood of this risk event occurring is considered to be moderate, the consequences should it occur are considered to be moderate, giving an overall risk level of medium.

• The risk that high connection fees will discourage new connections to water supply and sewerage services, undermining the impact of the project.

Ideally, connection fees would be addressed in the context of a broader tariff review. However, given the potential delays in reforming tariffs, WAF could review connection fees as a matter of priority. After mitigating action in the form of a WAF review of connection fees, the likelihood of this risk event occurring is considered to be low, the consequences should it occur are considered to be moderate, giving an overall risk level of low.

10 Analysis of distribution of benefits

10.1 Water supply (Project 1)

The present value of benefits from the investments in water supply over the life of the project (at a discount rate of 12 percent), and the main beneficiaries, are identified in Table 13 below.

The key economic benefits in descending order of magnitude are:

• Growth in connections

• Avoided cost of decline in service level without project (valued at average production cost).

• Cost savings in meeting the demand of households currently unserved, at present satisfied demand levels (valued at the avoided costs of alternative supplies).

Table 13: Water supply investments – benefits and beneficiaries

Benefit Present value Beneficiaries

F$ m Share

Non—incremental

Avoided cost – alternative supplies

34.50 23.8% The key beneficiaries will be the households currently unserved who will connect to the augmented water supply system. The utility (WAF) will benefit from an expanded customer base.

Avoided cost – decline in service level without project (domestic)

25.92 17.9% Households will benefit through avoiding a decline in service, while the utility will benefit from more efficient utilisation of assets.

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F$ m Share

Avoided cost – decline in service level without project (commercial / government)

9.89 6.8% Commercial and government customers will benefit through avoiding a decline in service, while the utility will benefit from more efficient utilisation of assets.

Incremental

Demand for improved service – domestic

12.90 8.9% Households currently connected to water supply will benefit from less interruption to supply and intermittent supply.

Suppressed demand - commercial

16.00 11.1% Commercial and government customers will benefit from less interruption to supply and intermittent supply.

Growth in connections – domestic

30.23 20.9% Key beneficiaries include the economy (through the project facilitating growth), the utility through an expanded customer base, and households newly connecting to an improved water supply system.

Growth in connections – commercial / government

8.01 5.5% Key beneficiaries include the economy (through the project facilitating growth), the utility through an expanded customer base, and commercial and government customers newly connecting to an improved water supply system.

Additional NRW – nontechnical

7.32 5.1% Some NRW nontechnical will accompany augmentation of supply (despite NRW reduction measures) and this is treated as an economic benefit to those using the water without being metered.

Total 144.78 100.0%

Source: Consultant

10.2 Wastewater (Project 2)

The present value of benefits from the investments in wastewater over the life of the project (at a discount rate of 12 percent), and the main beneficiaries, are identified in Table 14 below. The key economic benefits in descending order of magnitude are: • Increase in land values. • Avoided cost of alternative systems such as septic tanks. Table 14: Wastewater investments – benefits and beneficiaries


F$ m Share

Avoided cost – septic tanks 34.56 24.8% Beneficiaries include households connecting to the sewer network in backlog and growth areas, and the environment through less pollution of waterways.

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Increase in land values 87.44 62.7% Key beneficiaries include landowners and developers benefitting from increased land values, and the economy through facilitation of growth.

Avoided cost – decline in service level without project

17.49 12.5% Households and commercial/government customers will benefit through avoiding a decline in service, while the utility will benefit from more efficient utilisation of assets.

Total 139.48 100.0%


11 Poverty impact of the project

11.1 Poverty impact

Preliminary findings from the 2013/14 Household Income and Expenditure Survey (HIES) for Fiji estimated that 19.8 percent of the urban population were living below the basic needs poverty line, and that 35.8 percent of Fiji’s poor lived in urban areas.

Safe water and waste disposal are basic services required by all; services vital to the health and well-being of the community. Improving these services in the Greater Suva Area will benefit the poor, both directly through improving the capacity of water supply and wastewater treatment systems to reach more households, and less directly through creating a healthier environment.

The concept of poverty is closely related to the concept of affordability, as considered below.

11.2 Affordability

Affordability relates to the ability of households to pay for an acceptable minimum level of service. As such, “affordable” services differ from “low cost” services. The concept of affordability is closely related to the concept of poverty, as the affordability of utility services is one of many indicators used to measure poverty.

Benchmarking by international financial institutions and other agencies provides a range of “rules of thumb” for assessing affordability. It is generally considered more meaningful to relate expenditures on water and wastewater to total household expenditures rather than household incomes as estimates of expenditures tend to be more accurate. Benchmarks used range from 2.5 percent to 5 percent of household expenditures, with 5 percent commonly being used.21

The 2008/09 HIES22 for Fiji estimates that the median household income23 in urban areas in

2008 was F$17,037. Expenditure on water per household amounted to F$107 in that year, or 0.6 percent of median household income. Comparing with estimated household expenditure (which was lower but not much lower than incomes), expenditure on water also accounted for 0.6 percent. This indicates that water is very affordable in Fiji.

Fiji uses an increasing block tariff for water, with the first 50 cubic metres per quarter charged at only 15.3 cents per cubic metre, and the second 50 cubic metres per quarter

charged at 43.9 cents per cubic metre. Average household usage per quarter is 91 cubic metres, resulting in a quarterly bill of F$25.65 (or F$102.60 per year), consistent with the

21

See EBRD, Can poor consumers pay for energy and water? An affordability analysis for transition countries, Samuel Fankhauser and Sladjana Tepic, Working paper no. 92, May 2005, page 5.

22 Preliminary results from the 2013/14 HIES do not include information at this level of detail.

23 Median household income is lower than mean household income. It is considered a more meaningful measure of “average” incomes, as the mean is boosted by a small number of very high income earners.

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HIES data. A recent initiative by the Government involves the provision of the first 23 cubic metres of water per quarter free to households meeting an income test.

The wastewater service is charged at a flat 20 cents per cubic metre of water consumed. The average quarterly bill for a household connected to both water and sewer is F$43.85 (or

F$175.40). The average bill for water and wastewater services in 2015 amounts to just under 1.1 percent of household expenditure in 2008.

While urban household incomes and expenditures are thought to have grown since 2008, the water tariff has not changed. Water and wastewater charges have therefore become even more affordable for the average household since 2008.

While quarterly bills appear very affordable for average households, and there appears

scope to raise average tariffs (including by narrowing the band for which the lowest rate is charged in the increasing block tariff), connection fees are perceived as a barrier to connection to both water and wastewater services. The connection fee for water (in addition to an application fee of F$21.95) ranges from F$345 to F$1,200 depending on the location of the water main. Connecting to sewerage (in addition to an application fee of F$15.24) is the responsibility of the householder and costs for plumbing services associated with the connection can be F$1,000 or more. Measures could be developed to subsidise connection charges or to spread the cost over a longer period, to promote connection to water and wastewater services and to make them more affordable.

The above analysis of affordability in relation to water and wastewater services focuses on average incomes and expenditures for urban areas in Fiji. It has to be borne in mind that

preliminary results from the 2013/14 Household Income and Expenditure Survey for Fiji estimated that 19.8 percent of the urban population were living below the basic needs poverty line, and that 35.8 percent of Fiji’s poor lived in urban areas. Incomes for the lowest income quintile of the population were only 30 percent of average incomes24 (data provided in the HIES is calculated on the basis of adult equivalents – counting children 0-14 years as half an adult). The HIES also reveals almost 10 percent of Fiji households, and just over 5 percent of urban households, had annual incomes less than F$5,000 in 2008/09. Further, the Gini coefficient on a population basis increased from 0.416 in 2002/03 to 0.439 in 2008/09, indicating a moderate and increasing level of income inequality.

The HIES does not provide information on the proportion of household income or expenditure spent by poor families and other vulnerable groups on water and wastewater

services. International experience indicates that affordability in relation to water tariffs is often an issue for poor households and other vulnerable groups, even when water is clearly affordable for average households.

The increasing block tariff (with a low tariff of 15.3 cents per cubic metre for low volume users), combined with the recent initiative to provide 23 cubic metres per quarter of “free water” subject to an income test (a test which is not very restrictive, involving a threshold

income of F$30,000 per annum per household), provide a degree of assurance to poor families and other vulnerable groups in relation to the affordability of water and wastewater services.

24

These more detailed results are from the 2008/09 HIES. Preliminary results from the 2013/14 HIES do not provide results at this level of detail.

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Bibliography

ADB, Country Partnership Strategy: Fiji 2014-2018, November 2014. ADB, Transport Infrastructure Investment Sector Project: Report and Recommendation to the President, November 2014. ADB, Guidelines for the Economic Analysis of Projects, February 1997. ADB, Handbook for the Economic Analysis of Water Supply Projects, 1999. ADB, Cost-Benefit Analysis for Development: A Practical Guide, 2013. ADB, ERD Technical Note No. 11, Anneli Lagman-Martin, Shadow Exchange Rates for Project Economic Analysis: Toward Improving Practice at the Asian Development Bank, February 2004. ADB, ERD Technical Note No. 23, Herath Gunatilake, Jui-Chen Yang, Subhrendu Pattanayak, and Kyeong Ae Choe, Good Practices for Estimating Reliable Willingness-to-Pay Values in the Water Supply and Sanitation Sector, December 2007. ADB, Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to the Republic of the Fiji Islands for the Suva-Nausori Water Supply and Sewerage Project, November 2003. ADB, TA4270-FIJ: Capacity Building in Water and Sewerage Services, Volume 7 – Tariff Review, prepared by Kellogg Brown and Root Pty Ltd, October 2007. ADB, Report and Recommendation of the President to the Board of Directors. Proposed Supplementary Loan, Republic of the Fiji Islands: Suva-Nausori Water Supply and Sewerage Project, November 2009. ADB, Suva-Nausori Water Supply and Sewerage Project, Fiji (TA FIJ-3005), Feasibility Study Volume 1: Main Report and Volume 2: Appendices, March 2000. Dornan, Matthew and Jotzo, Frank, Electricity Generation in Fiji: Assessing the Impact of Renewable Technologies on Costs and Financial Risks, Resource Management in Asia-Pacific Program, Crawford School of Economics and Government, The Australian National University, February 2011. Dornan, Matthew, Reform despite politics? The political economy of power sector reform in Fiji 1996-2013, Development Policy Centre, Crawford School of Public Policy, Australian National University, Canberra, Australia, 2013. EBRD, Can poor consumers pay for energy and water? An affordability analysis for transition countries, Samuel Fankhauser and Sladjana Tepic, Working paper no. 92, May 2005. Water Authority of Fiji, Draft Report on Tariff and Finance Strategic Review and Action Plan, September 2016 Fiji Bureau of Statistics, Report on the 2008-09 Household Income and Expenditure Survey for Fiji, July 2011. Fiji Bureau of Statistics, 2013/14 Household Income and Expenditure Survey - Preliminary Results, December 2015. IMF, 2014 Article IV Consultation – Staff Report, IMF Country Report No. 14/321, November 2014. Ministry of Finance, Economic and Fiscal Update: Supplement to the 2015 Budget Address, 21 November 2014. USAID, WASH Field Report No. 306, Guidelines for Conducting Willingness-to-pay Studies for Improved Water Services in Developing Countries, October 1988. Water Authority of Fiji, Water and Waste Water Master Plan – Greater Suva Area, November 2014.

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