united mexican states state of oaxaca - world...

REPORT NO: 89251

UNITED MEXICAN STATES

STATE OF OAXACA

TECHNICAL ASSESSMENT OF THE

OAXACA WATER AND SANITATION SECTOR MODERNIZATION PROGRAM

Prepared by the World Bank

March, 2014

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The Technical Assessment of the Oaxaca Water and Sanitation Program (P145578) has been prepared by Charles Delfieux (Water and Sanitation Specialist and TTL of the Operation, LCSWS); Blanca Lopez (JPA, LCSWS); Ricardo Sandoval (Sr Institutional Specialist, consultant, LCSWS); Ricardo Miranda (Sr Water Engineer, consultant, LCSWS); Alvaro Campy (Sr Rural Water Supply and Sanitation Specialist, consultant, LCSWS); Luz Maria Gonzalez (Sr Economist, consultant, LCSWS); and Lisa Bhansali (Regional Adviser for Governance/Anti-corruption, LCSOS).

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ABBREVIATIONS AND ACRONYMS

ADOSAPACO Direct Administration of Drinking Water and Sewerage Works and Services of the City of Oaxaca

Administración Directa de Obras y Servicios de Agua Potable y Alcantarillado de la

Ciudad de Oaxaca

APAZU Program for Water Supply and Sanitation in Urban Areas (CONAGUA)

Programa de Agua Potable, Alcantarillado, y Saneamiento en las Zonas Urbanas

BANOBRAS National Bank of Public Works and Services Banco Nacional de Obras y Servicios Públicos

CEA State Water Commission Comisión Estatal del Agua

CDI National Commission for the Development of Indigenous People Comisión Nacional para el Desarrollo de los Pueblos Indígenas

CONAGUA National Water Commission Comisión Nacional del Agua

DLIs Disbursement Linked Indicators F/C Fraud and Corruption GoM Government of Mexico GoO Government of Oaxaca INEGI National Institute of Statistics and Geography

Instituto Nacional de Estadística y Geografía

IVA Independent Verification Agent LASEO Water and Sanitation Law of the State of Oaxaca

Ley de Agua y Saneamiento del Estado de Oaxaca

MAS Oaxaca Oaxaca Water and Sanitation Sector Modernization Program Programa de Modernización del sector Agua potable y Saneamiento

MDWD Municipal Drinking Water Departments

MOA Municipal Operating Agencies

OECD Organization for Economic Co-operation and Development PAP Program Action Plan PDO Program Development Objective PforR Program for Results

PGJ Attorney General’s Office for the State of Oaxaca Procuraduría General de Justicia del estado de Oaxaca

PGR Federal Attorney General Procuraduría General de la República

PROTAR Program for the Treatment of Wastewater (CONAGUA) Programa de Tratamiento de Aguas Residuales

PROSSAPYS

Program for the Construction and Rehabilitation of Water Supply and Sanitation Systems in Rural Areas (CONAGUA) Programa para la Construcción y Rehabilitación de Sistemas de Agua Potable y

Saneamiento en las Zonas Rurales

SAPAO Oaxaca Metropolitan Area Water Utility Servicios de Agua Potable y Alcantarillado de Oaxaca

SCTG State Comptroller General and Transparency’s Office Secretaría de la Contraloría y Transparencia Gubernamental

SEFIN Secretaría de Finanzas

(Secretariat of Finance) SIASAR Sistema de Información de Agua y Saneamiento Rural

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(Rural Water and Sanitation Information System) SINFRA Secretaría de Infraestructura

(Secretariat of Infrastructure) SoO State of Oaxaca TA Technical Assistance UFW Unaccounted for water WSS Water Supply and Sanitation WWTP Wastewater Treatment Plant ZMO Zona Metropolitana de Oaxaca

(Oaxaca Metropolitan Zone)

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UNITED MEXICAN STATES


TECHNICAL ASSESSMENT

Contents

I. PROGRAM DESCRIPTION ............................................................................................................................... 7

A. The Water Supply and Sanitation program of the State of Oaxaca ................................................................. 7

1. Strategic Plan for the Water Supply and Sanitation sector .......................................................................... 7

2. Vision to modernize the institutional framework of the Water Supply and Sanitation sector .................. 10

B. The WSS Sector Modernization Program ........................................................................................................ 12

1. Program scope ........................................................................................................................................... 12

2. Program activities ...................................................................................................................................... 13

3. Program costs and financing ...................................................................................................................... 19

4. Program beneficiaries ................................................................................................................................ 20

II. PROGRAM’S STRATEGIC RELEVANCE AND TECHNICAL SOUNDNESS ............................................................ 20

A. Strategic Relevance ........................................................................................................................................ 20

1. Oaxaca WSS strategic issues ...................................................................................................................... 20

2. Rationale for Program scope ...................................................................................................................... 22

3. Alignment of the Program with the Federal sector vision for WSS ........................................................... 23

B. Technical soundness ....................................................................................................................................... 23

1. Results Area 1: Modernization of the legal and regulation framework of the WSS sector in the State .... 23

2. Result Area 2: Improvement of water services in Oaxaca Metropolitan Area .......................................... 28

3. Result area 3: Improvement of water services in secondary towns .......................................................... 29

4. Results Area 4: Sustainability of water and sanitation services in rural areas ........................................... 33

5. Program preparedness ............................................................................................................................... 33

6. Chronogram of Program execution, results verification and disbursement .............................................. 34

C. Institutional and implementation arrangements ........................................................................................... 35

1. Sub-national on-lending arrangements ..................................................................................................... 35

2. Institutional and implementation arrangements of the Program ............................................................. 35

3. Institutional and implementation arrangements of the Technical Assistance Component ...................... 41

4. Fraud and Corruption Institutional Arrangements .................................................................................... 41

5. Legal structure of the MAS Oaxaca Program. ............................................................................................ 42

III. PROGRAM EXPENDITURE FRAMEWORK ...................................................................................................... 43

A. Oaxaca WSS sector financing ......................................................................................................................... 43

1. Sector’s financial scheme ........................................................................................................................... 43

2. WSS sector investment financing 2007-2012 ............................................................................................ 45

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B. Participation of sectorial investments in State finances ................................................................................. 51

IV. PROGRAM RESULT FRAMEWORK AND MONITORING & EVALUATION .................................................... 52

A. Program Results Framework .......................................................................................................................... 52

1. Program Development Objective Indicators .............................................................................................. 52

2. Intermediate Results Indicators ................................................................................................................. 52

3. Disbursement-Linked indicators ................................................................................................................ 55

4. Results Chain of the MAS Oaxaca Program ................................................................................................ 56

B. Program M&E Strengthening ......................................................................................................................... 57

C. Disbursement Arrangements and Verification Protocols ............................................................................... 57

V. PROGRAM ECONOMIC EVALUATION ........................................................................................................... 58

A. Rationale for Public Provision and Financing.................................................................................................. 58

B. Program’s Economic Impact ........................................................................................................................... 58

C. World Bank Added Value ................................................................................................................................ 58

D. Details of Economic Evaluation ...................................................................................................................... 59

1. Sample of municipalities ............................................................................................................................ 59

2. Methodology .............................................................................................................................................. 60

3. Benefits and costs ...................................................................................................................................... 61

4. Results ........................................................................................................................................................ 62

VI. INPUTS TO THE PROGRAM ACTION PLAN ................................................................................................ 65

Annex 1: Visión para la modernización del marco institucional del sector de Agua y Saneamiento ...................... 68

Annex 2: Financiamiento del sector de Agua y Saneamiento .................................................................................. 84

Annex 3: Results Framework ................................................................................................................................. 120

Annex 4: DLIs matrix .............................................................................................................................................. 123

Annex 5: Organizational charts ............................................................................................................................. 133

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MEXICO


TECHNICAL ASSESSMENT

1. Strategic Plan for the Water Supply and Sanitation sector

In 2012 the Government of Oaxaca (GoO) prepared a Strategic Plan (Plan Estrategico Sectorial) for the Water Supply and Sanitation sector as part of its State Development Plan (Plan Estatal de

Desarrollo) covering the period 2011-2016 corresponding to the six years of its administration. The objectives of the Strategic Plan for the WSS sector can be grouped under four pillars:

Expanding access to WSS services urban areas;

Improving water service quality and financial sustainability of water utilities;

Increasing wastewater treatment coverage;

Expanding access to WSS services rural areas. The table below presents the baseline and targets of the Strategic Plan.

Table 1: Targets of the Strategic Plan for the WSS sector

WSS Strategic Plan indicators Baseline Targets

2011 2012 2013 2014 2015 2016

Percentage of households with access to water services 70% 71% 73% 75% 78% 80%

Number of households receiving services from ADOSAPACO and CEA utilities 177,721 181,275 184,901 188,599 190,485 192,390

Percentage of urban localities served by water utilities 20% 23% 27% 33% 38% 45%

Commercial efficiency of CEA utilities 77% 80% 82% 84% 84% 85%

Physical efficiency of water utilities 53% 53% 55% 58% 63% 64%

Percentage of operating subsidies to CEA utilities 10% 10% 8% 6% 4% 0%

Percentage of households with access to sanitation services 71% 72% 74% 76% 78% 80%

Ratio volume of wastewater treated / wastewater treatment capacity 40% 42% 44% 45% 48% 80%

To achieve the above objectives the Plan sets an ambitious framework for investments:

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Table 2: Investment framework of the Strategic Plan for the WSS sector

(US$ millions) 2012 2013 2014 2015 2016 Total

Water Supply

Production and distribution infrastructure 40.0 68.4 85.0 77.3 90.2 360.8 Treatment infrastructure 2.2 4.1 3.5 4.9 4.5 19.3 Efficiency improvement 0.3 0.6 0.7 0.6 0.7 2.8 Studies 3.5 11.1 15.7 14.9 11.3 56.5

Total Water Supply 45.9 84.1 104.9 97.6 106.7 439.4

Sanitation

Collection infrastructure 23.2 42.2 49.8 52.3 47.2 214.6 Treatment infrastructure 20.1 20.7 25.5 22.8 34.0 123.1 Studies 2.7 3.6 5.1 3.9 5.4 20.7

Total Sanitation 45.9 66.5 80.4 79.0 86.6 358.4

Total investments 91.8 150.6 185.3 176.6 193.4 797.8

Federal financing 58.8 98.6 122.7 116.4 128.1 524.6 State financing 27.3 46.9 57.4 54.8 59.9 246.4 Municipal financing 5.7 5.1 5.2 5.4 5.4 26.8

Total financing 91.8 150.6 185.3 176.6 193.4 797.8

Implementing the Strategic Plan is requiring a significant increase of the annual sector investment financing from US$55 million (actual average annual sector investment financing over the period 2007-20121) to US$160 million. Financing of the Strategic Plan is deemed as very challenging as it would require tripling the funding and execution of the State sector resources in a context of limited counterpart financing and limited capacity to absorb such an increased amount of investments. To address financing and capacity constraints, the GoO has been directing an increase amount of its resources to the sector, in turn leveraging federal resources and is looking to modernize and strengthen its sector institutions.

Figure 1: Comparison past actual sector financing vs required financing by the WSS Sector Strategic Plan

1 Bank team analysis of the water sector financing

0.0

50.0

100.0

150.0

200.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Actual average annual sector investment financing (2007-2012)

Strategic Plan required average annual sector investment financing (2012-2016)

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Funding of the Strategic Plan is expected to be made of a mix of federal, state and municipal financing as presented below.

Table 3: Financing framework of the Strategic Plan for the WSS sector

(US$ millions) 2012 2013 2014 2015 2016 Total

Federal financing 58.8 98.6 122.7 116.4 128.1 524.6 State financing 27.3 46.9 57.4 54.8 59.9 246.4 Municipal financing 5.7 5.1 5.2 5.4 5.4 26.8

Total financing 91.8 150.6 185.3 176.6 193.4 797.8

Figure 2: Comparison past actual sector financing vs required financing by the WSS Sector Strategic Plan (2)

This federal, state and municipal financing of the WSS Sector Strategic Plan will be made through existing sector financing programs, the main ones being SHCP programs, CONAGUA programs (APAZU, PROSSAPYS, PROTAR), CDI program (PIBAI) in addition to the State’s own financing program as illustrated in the table below.

0

20

40

60

80

100

120

140

160

Actual average annual sector investmentfinancing (2007-2012)

Strategic Plan required average annualsector investment financing (2012-2016)

Federal financing (US$M) State financing (US$M) Municipal financing (US$M)

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Table 4: Main financing streams of the program of expenditure under the State's Strategic Plan

Strategic Plan for the WSS Sector

Main financing streams of the Oaxaca WSS Strategic Plan

State

financing

program

SHCP

program

CONAGUA

programs

CDI

program

APAZU PROTAR PROSSAPYS PIBAI

Expand access to WSS services in urban areas

Improve water service quality and financial sustainability of utilities

Increase wastewater treatment coverage

Expand access to WSS services in rural areas

Financing program funding the activities of the Oaxaca WSS sector program

In 2012, the GoO has substantially increased the resources directed to the WSS sector to US$78 million representing 150% of the average sector financing during the period 2007-2011. The GoO seeks to further increase the financing to the WSS sector in order to meet with the Strategic Plan’s objectives in a context of competitive access to state and to federal resources. In addition, the GoO aims at improving the performance and efficiency of its WSS program to more effectively turn investments into results in a WSS sector that has been traditionally one of the least performing in the country, as well aims at strengthening the capacity of the State to execute the anticipated increase of resources directed to its WSS sector.

2. Vision to modernize the institutional framework of the Water Supply and

Sanitation sector

The GoO, with the support of the Bank, has also developed a vision to modernize the institutional framework of its WSS sector in order to create a conducive institutional environment to improve the access, quality and sustainability of its WSS services. Key principles framing the modernization of the WSS institutional framework are the following:

1. Separate the key functions of the sector: (i) sectorial policy direction and stewardship (planning, financial resources allocation, technical assistance, monitoring of norm compliance), (ii) service provision, (iii) regulation;

2. Allocate the financial resources based on efficiency and equity criteria to reduce regional disparities and social inequalities, and set the right incentives to promote service quality and sustainability improvement;

3. Promote the legal autonomy and financial sustainability of the service providers.

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The vision encompasses three main elements: an institutional reform, a sector regulation policy and a sector financing policy. A complete note is attached in Annex 1. To concretize the above vision, the GoO is committing to (i) progressively transfer the operations of the water systems CEA currently manages to municipal autonomous service providers, (ii) introduce mechanism of results-based financial allocation to enhance the efficiency of the sector expenditures and promote the legal autonomy and the cost-recovery of water utilities, (iii) improve the quality and availability of information in the WSS sector to strengthen sector monitoring and planning based on equity criteria, as well as a first step towards sector regulation, (iv) revise the key legal and regulatory tools of the WSS sector in order to align them with this modernization vision.

Institutional reform

In the medium-term 2 , the institutional reform seeks to clarify, rationalize and organize roles and responsibilities of the WSS sector by reforming the functions played by CEA and by promoting legally autonomous models of service provision.

At sector level, the mandate and organization of CEA will be reoriented so it assumes a function of policy direction and stewardship of the WSS sector of Oaxaca defined as follows: (i) planning the use of and assigning the financial resources to the sector based on efficiency and equity criteria, (ii) delivering more efficient technical assistance to urban and rural service providers, and (iii) monitoring the compliance with norms relative to the execution of state programs, as well as with norms relative with the design, construction and service of water and sanitation systems. To concretize the above, CEA will progressively transfer the operations of the water and sanitation systems to autonomous service providers in the State, while its capacity in sector monitoring and planning will be strengthened. In urban areas, the institutional reform will seek the generalization of legally autonomous water utilities through various management models: (i) decentralized municipal or inter-municipal utility, (ii) decentralized state utility, (iii) concession with private operator. In rural and peri-urban areas, the sustainability of the services provided by the water committees and municipal agencies, under the responsibility and supervision of municipal governments, will be strengthened through enhanced mechanism of technical assistance. Sector regulation policy

Acknowledging the level of development of the WSS sector in Oaxaca, the establishment of a sector regulation system will follow a phased approach. In the medium-term, the focus will be on the regular collection by CEA of reliable data to allow the monitoring of the operational and financial performance and sustainability of the service providers in the State, as there is currently no information system in place in the sector. In that respect the service providers’ capacities to generate, process and utilize reliable information will be developed or consolidated through meter installation, information systems implementation and managerial improvement actions. In addition the CEA will introduce mechanism of result-based allocation of financial resources. In the long-term a mechanism of tariff regulation of the urban service providers will be established. Both the type of economic regulation of the WSS service and corresponding institutional arrangements will be

2 upcoming 4 years corresponding to the duration of the Program

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determined in due time, consistently with the federal legal framework for WSS service regulation under revision. Sector financing policy

Investments will continue being funded from grants coming from federal, state or municipal resources, with the objective to progressively move towards an assignation of the resources based on efficiency and equity criteria. Allocation of resources based on equity criteria will aim at reducing regional disparities and social inequalities, while the assignation of investment subsidies based on efficiency criteria will aim at promoting service quality and sustainability improvement by creating financial incentives to align management models with the revised sector law and to achieve cost-recovery. Revenues from service through tariff increase where needed shall ultimately cover the operating costs as service quality and efficiency improve supported by investments and technical assistance. In case the tariff approved by the municipality is not sufficient to ensure the financial sustainability of the service, the municipality shall provide direct subsidies targeting the poorest segment of the users.

1. Program scope

The areas of the Bank-supported portion of GoO’s WSS program have been strategically identified in order to use the Bank financing to incentivize and tackle key sector issues that GoO would not otherwise necessarily address without Bank support, and will focus on the two following:

Modernization of the sector institutional framework that is not traditionally supported by federal sector financing programs and that includes the consolidation of a strategic vision for the sector, and the related planning tools in order to provide a platform from which GoO can scale-up quality and sustainable urban and rural water supply and sanitation services for all.

Improving the service quality and financial sustainability of water utilities in urban areas receiving funding through federal financing programs (the main one being CONAGUA’s APAZU program), which generally focus on infrastructure delivery in a piecemeal fashion with no holistic vision for the service provider, rather than incentivizing service improvements.

The Program’s proposed scope has been delineated in such a way that it complements the features of other federal programs currently under implementation in Oaxaca. Given the limited funds available under the Bank Operation, it was judged most strategic to use them to support the two aforementioned pillars. The other pillars of the State WSS program, those intended to provide for expansion of access to WSS services in both urban and rural areas and for increased wastewater treatment coverage, continue to be addressed through complementary federal financing streams designed to support such infrastructure outcomes. The Bank Operation’s support to the first pillar of GoO’s WSS program is designed to have beneficial impacts on all sector activities throughout the State and across the rural and urban water and sanitation subsectors. Through the Bank’s support to the second pillar, activities will be concentrated in selected urban areas across the State (Oaxaca Metropolitan Area and 18 secondary towns), with the objective of creating a demonstrative effect of sustainable urban water provision such that GoO could subsequently scale up the approach and the results.

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The Bank-supported portion of GoO’s WSS program is called the WSS Sector Modernization Program (MAS

3 Oaxaca). Indicators and targets have been developed to monitor the results achieved under the

Program. The Program activities have been structured in four Result Areas:

Results Area 1: Modernization of the legal and regulatory framework of the WSS sector in the State;

Results Area 2: Improvement of water services in Oaxaca Metropolitan Area;

Results Area 3: Improvement of water services in secondary towns;

Results Area 4: Improvement of information in rural areas.

The Bank financing of the Program will be based on results achievement under a multi-year financing framework, and will strengthen the existing planning, execution, procurement, financial management, environmental and social management systems of the institutions involved in implementing Oaxaca’s WSS program, therefore seeking to progressively improve its performance and efficiency. The Bank operation will also finance a Technical Assistance component whose main objective will be to support the achievement of the Program’s objectives.

2. Program activities

a) Results Area 1: Modernization of the legal and regulatory framework of

the WSS sector in the State

The Program activities will consist of preparing revised versions of key legal and regulatory tools of the WSS sector legal and regulatory framework in order to align them with GoO’s vision to modernize the sector’s institutional framework, including:

Revision of the current State WSS Sector Law, preparation of a new State WSS Sector Law and its submission to the State Congress4;

Preparation and publication of the regulations of the State WSS Sector Law;

Preparation of standard regulations for municipal or inter-municipal WSS service provision;

Revision of the SAPAO law and its submission to the State Congress;

Revision and publication of the CEA organizational manual and internal regulations;

Revision and publication of the SAPAO organizational manual and internal regulations.

The revision of the State WSS Sector Law and its subsequent legal and regulatory tools aims at embodying the modernization of the institutional framework into the State’s legal framework. The activities under this Result Area 1 as well as the possible approval of the law by the State Congress are however not a pre-requisite for the achievement of objectives under the other Results Areas.

3 Modernizacion del sector Agua y Saneamiento de Oaxaca (MAS Oaxaca) 4 During the Program implementation, the current State WSS Sector Law that was published in 2005 will be reviewed in accordance with the guidelines annexed to the Operational Manual and submitted to the State Congress

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b) Results Area 2: Improvement of water services in the Oaxaca

Metropolitan Area

The Program activities financed through CONAGUA’s APAZU program will aim at improving the quality and efficiency of water supply service in a selected service area of the Oaxaca Metropolitan Area’s water utility (SAPAO) – namely the Chapultepec Sector which represents 20 percent of SAPAO’s total number of connections, serving 50,000 people, through:

Rehabilitation of the boreholes supplying the sector and construction of a controlled by-pass from the El Tequio aqueduct;

Construction of water treatment systems to improve the quality of water and eliminate iron and manganese;

Rehabilitation and construction of storage tanks and pumping stations;

Rehabilitation, hydraulic optimization and sectorization of the water network;

Rehabilitation of water connections;

Installation of macro-metering and pressure gauges;

Installation of micro-metering;

Updating of the network mapping and commercial system;

Studies, preparation of bidding documents, and works supervision.

As part of the activities supported by the Program in the sector, production capacity will be increased by around 50lps from 130lps to 180lps through the rehabilitation of the wells supplying the Chapultepec sector as well as through the construction of a controlled by-pass from the El Tequio aqueduct. In order to optimize the distribution and control the physical losses, the sector will be divided into three subsectors based on the macro-distribution analysis conducted by SAPAO technical personnel, namely the Santa Anita, Fundición and Hidalgo subsectors. A feeder line connecting the rehabilitated wells will be constructed and will convey water to a new water purification plant. Treated water will be pumped at the Trujano booster station to the three distribution tanks through new transmission lines. The figure below presents the proposed hydraulic distribution the Program intends to materialize.

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Figure 3: Hydraulic distribution of the Chapultepec Sector

Source: SAPAO In addition the Program will finance a series of actions that will aim at improving the physical and commercial efficiency in the sector, including the rehabilitation of water connections, the installation of micro-meters, the updating of the network mapping and commercial system. Macro-metering and pressure gauges will be installed to measure the performance indicators in the sector where currently no user benefits from a continuous service.

Table 5: Main performance indicators of the Chapultepec sector

Connections

with meters

Connections

without meter

Total number

of

connections

Micro-

metering

coverage

8.115 5.076 13.191 62%

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Volume

produced5

Volume

billed6

Physical

efficiency

Amount

billed7

Amount

collected8

Commercial

efficiency

Overall

efficiency

(m3) (m3) (%) ($) ($) (%) (%)

2,008,383 925,058 46 6,290,051 2,682,025 43 (49%, 2013) 20

Source: ADOSAPACO (January – December 2012 data)

c) Results area 3: Improvement of water service in secondary towns

The Program activities financed through CONAGUA’s APAZU program will aim at improving the quality of water services and the financial sustainability of the water utilities operating in 18 selected secondary towns9, located outside of the Oaxaca Metropolitan Area. The selected secondary towns are made up of those with a population above 15,000 habitants and/or where CEA currently operates the systems. The participating water utilities account for about 50 percent of the total State urban population outside of the Oaxaca Metropolitan Area, and total some 600,000 beneficiaries. Planning of the activities financed in each town will be based on available diagnostics and master plans and will be strengthened through the TA Component. Activities will be geared to the local conditions and needs, and could include the following:

Rehabilitation and extension of production, storage and pumping systems;

Rehabilitation, hydraulic optimization and sectorization of water networks;

Rehabilitation of water connections;

Installation of macro-metering and pressure gauges;

Installation of micro-metering;

Updating of the network mapping and commercial systems;

Improvement of the accounting systems;

Studies, preparation of bidding documents, and works supervision.

CEA will grant access to financial support to the target water utilities subject to them meeting certain conditions and results, as specified in a Results Agreement that will be signed with CEA during the first year of the Program. A standard Results Agreement will be included in the Program’s Operational Manual.

The selected water utilities are located in seven of the eight regions in which the State is divided: Valles Centrales, Sierra Norte, Papaloapan, Istmo, Sierra Sur, Costa and Mixteca.

5 Produced volume by wells and/or other interconnections with other aqueducts that enter the system 6 Billed volume of residential and non-residential users, including measured consumption and non-measured and billed consumption (fixed rate) 7 Amount billed for water and sanitation services 8 Amount of revenue from water and sanitation services registered without considering transfers, fines, recharges, connection rights or other income 9 Heroica Ciudad de Huajuapan de León, Loma Bonita, Miahuatlán de Porfirio Díaz, Ocotlán de Morelos, San Juan Bautista Tuxtepec, Heroica Ciudad de Tlaxiaco, Zimatlán de Álvarez, Asunción Ixtaltepec, Ciudad Ixtepec, El Espinal, Heroica Ciudad de Juchitán de Zaragoza, Matías Romero Avendaño, Salina Cruz, San Francisco Telixtlahuaca, Puerto Escondido, Santiago Pinotepa Nacional, Santo Domingo Tehuantepec, Santo Domingo Zanatepec

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Figure 4: Selected Water Utilities under the Program

Source: Prepared with information from INEGI, 2010 Population and Housing Census.

Table 6: Basic data of the selected 18 secondary towns under the Program

Name of locality Population HouseholdWater

coverage

Drainage

coverage

Institutional

model

Services

providedConnections

Estimated

population

served

Number of

employees

1 San Juan Bautista Tuxtepec 101,810 27,310 93% 96% autonomous municipal utility

water + sanitation

32,807 114,825146

2 Salina Cruz 76,596 21,636 91% 98% CEA water 23,699 82,94778

3 Heroica Ciudad de Juchitán de Zaragoza

74,825 17,646 94% 98% CEA water 20,526 71,84162

4 Heroica Ciudad de Huajuapan de León

53,043 12,841 88% 97% autonomous municipal utility

water + sanitation

14,552 50,93218

5 Santo Domingo Tehuantepec 42,082 10,758 95% 98% CEA water 12,451 43,57941

6 Loma Bonita 31,485 8,781 95% 97% autonomous municipal utility

water + sanitation

10,828 37,89822

7 Santiago Pinotepa Nacional 29,604 7,306 31% 91% CEA water 4,593 16,07615

8 Puerto Escondido 25,902 6,752 69% 97% CEA water + sanitation

13,800 48,30049

9 Ciudad Ixtepec 25,381 6,743 94% 97% CEA water 8,540 29,89035

10 Miahuatlán de Porfirio Díaz 23,940 5,578 56% 92% municipal dpt water + sanitation

4,072 14,252

11 Matías Romero Avendaño 18,944 5,373 76% 98% CEA water 6,730 23,55525

12 Heroica Ciudad de Tlaxiaco 17,543 4,412 81% 83% autonomous municipal utility

water + sanitation

4,648 16,26819

13 Ocotlán de Morelos 15,016 3,570 55% 77% municipal dpt water + sanitation

2,560 8,9601

14 Zimatlán de Álvarez 10,986 2,696 64% 88% municipal dpt water + sanitation

2,238 7,8335

15 San Francisco Telixtlahuaca 10,618 2,420 79% 76% CEA water 1,619 5,6674

16 El Espinal 7,823 2,145 89% 99% CEA water 2,934 10,26910

17 Santo Domingo Zanatepec 7,249 2,061 93% 94% CEA water 2,081 7,2845

18 Asunción Ixtaltepec 7,203 2,098 98% 99% CEA water 2,518 8,8139

Total 580,050 150,126 85% 96% 171,196 599,186 544

Municipality Water utilities

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Source: INEGI, 2010 Population and Housing Census, and CEA information (year 2012)10

d) Result Area 4: Sustainability of water and sanitation services in rural

areas

The Program activities will consist of establishing an information system on the sustainability of rural WSS service providers in the 1130 localities with populations of between 500 and 2,500 inhabitants, through:

The development and installation of the necessary IT infrastructure, and related training in the system’s use;

Data survey and collection activities.

Figure 5: Localities with populations between 500 and 2,500 inhabitants

Source: Prepared with information from INEGI, 2010 Population and Housing Census.

e) Activities not financed by the Program

The Program will not finance any activities considered likely to have a significant adverse impact on the environment or on affected people, as defined in OP 9.0, or that may require the procurement of goods, works or consultancy contracts above OPRC thresholds11 . The Bank will screen program execution during implementation to ensure that this continues to be the case. 10 The working ratio is calculated as the ratio between the revenues from water and sanitation services registered, not including transfers, fines, recharges, connection rights or other income, and the operating expenses, i.e. all those directly associated with necessary costs for granting and maintaining water, sewerage and sanitation services (when they exist). 11 Contract OPRC thresholds are defined as follows: US$50 million for works, US$30 million for goods, US$20 million for IT systems and non-consulting services, and US$15 for consulting services.

19

f) Technical Assistance Component activities

The TA Component will finance activities complementing the Program activities and supporting the achievement of its objectives. These activities consist of strategic support for services improvement and sector studies which the Program’s procurement systems do not allow or are not traditionally financed under the existing sector program, but which are regarded as critical to improve Program performance and to increase the likelihood of achieving its objectives:

Multi-annual strategic TA to CEA, SAPAO and participating water utilities in secondary towns through the contracting of a professional operator/consultancy firm to improve the planning of activities, to review the quality of associated bidding documents and related activities, and to improve the operational, commercial, social and environmental management of the operation of the water systems.

WSS sector studies designed to underpin the modernization of the sector institutional framework, including (i) the preparation of a Rural and an Urban Water Supply and Sanitation Strategy for the long-term development and organization of the sector, including a diagnosis of the rural WSS sector in Oaxaca, the definition of optimal institutional arrangements for promoting sustainable rural WSS provision in the State, the review of current approaches to urban sanitation and wastewater management in the State, the definition of optimal institutional, technological and financial arrangements for sustainable urban sanitation; (ii) the undertaking of a Public Expenditure Review of the Oaxaca WSS Sector to inform the aforementioned strategies; (iii) the design of pilot approaches to providing sustainable rural WSS implementation and support services.

The TA Component activities will also finance activities pertaining specifically to the management of the Operation, including the financing of (i) the Independent Verification Agent of the Program’s Results, (ii) the Operation’s financial audit, (iii) the MAS Oaxaca Operation coordinators, (iv) training and TA for the use of Bank fiduciary systems.

3. Program costs and financing

The total cost of the MAS Oaxaca Operation is US$ 93.5 million. Results Areas 1 and 4 of the Program are financed through the State’s own financing program, while Results Areas 2 and 3 are financed through the APAZU program of CONAGUA. The TA component will follow IPF policies. The table below summarizes the financing of the MAS Oaxaca Operation:

20

Table 7: Financing of the MAS Oaxaca Operation

MAS Oaxaca Program IBRD

CONAGUA

(APAZU

federal

counterpart)

TOTAL

Program

1. Modernization of the State’s sector legal and regulatory framework

4.5 M - 4.5 M

2. Improvement of water services in the Oaxaca Metropolitan Area

8.5 M 8.5 M 17 M

3. Improvement of water services in secondary towns 30 M 30 M 60 M

4. Improvement of information in rural areas 2 M - 2 M

TA Component 10 M - 10 M

Total (US$) 55 M 38.5 M 93.5 M

4. Program beneficiaries

While the MAS Oaxaca Operation supports the State-wide modernization of the WSS sector institutional framework, 50,000 people in the selected sector of SAPAO and 600,000 people served by the participating water utilities in the 18 selected secondary towns will benefit from water supply services improvements under the Operation.

1. Oaxaca WSS strategic issues

The institutional framework of the WSS sector in Oaxaca is characterized by the incomplete separation of sector functions, the lack of autonomy of urban service providers, and the lack of a strategic vision for sector stewardship. The State Water Commission (CEA), the leading institution for sector planning and financing in Oaxaca, contracts and supervises around 80 percent of the investments made in the sector, directly operates 15 urban water supply systems across the State, and provides some remunerated operational assistance to other service providers, mostly in urban areas. Its actions are therefore dispersed in various areas rather than focusing on policy direction and sector stewardship. In addition, the incomplete separation of functions between CEA’s role of sector planning/financing and operations of some of the State’s water supply systems, prevents a fair allocation of financial resources across all the State’s urban service providers. Other urban service providers in Oaxaca include: (i) the water utility of the Metropolitan Area of Oaxaca (ADOSAPACO12) whose legal status recently changed to become an autonomous State utility (SAPAO 13 ) and which serves close to 280,000 people; (ii) autonomous municipal utilities with boards chaired by the respective mayors; and (iii) municipal department operated WSS systems for the rest of the State’s urban localities. Their governance structure, which is generally associated with a lack of autonomy, generates a high politicization of the tariffs, of revenue collection 12 Administración Directa de Obras y Servicios de Agua Potable y Alcantarillado de la Ciudad de Oaxaca 13 Servicios de Agua Potable y Alcantarillado de Oaxaca. On October 31, 2013 the State congress approved the law creating SAPAO, an autonomous State water utility, replacing ADOSAPACO, a State department

21

from services and of staff appointments. In rural areas14, municipal agencies or user committees operate the water systems in 10,000 highly scattered localities15 for which there is, inter alia, no mechanism for technical assistance in place to provide support to system management or to facilitate access to federal funding programs.

Table 8: Population ranges of the State of Oaxaca

Population range in

terms of inhabitants Number of localities % Population %

From 1 to 99 6,186 59% 172,996 5% From 100 to 249 1,868 18% 302,406 8% From 250 to 499 1,137 11% 406,990 11% From 1 to 499 9,191 88% 882,392 23%

From 500 to 999 714 6.8% 497,624 13.1% From 1,000 to 1,499 243 2.3% 291,548 7.7% From 1,500 to 1,999 114 1.1% 198,394 5.2% From 2,000 to 2,499 59 0.6% 132,799 3.5%

Total rural localities 10,321 98.3% 2,002,757 52.7% Urban localities 175 1.7% 1,799,208 47.3%

Total 10,496 100.0% 3,801,965 100.0% Access to WSS services is among the lowest of Mexico. The State of Oaxaca has the third lowest drinking water coverage (79 percent)16 after Chiapas and Guerrero, and the lowest sanitation coverage (71 percent) in the country. This low service coverage contrasts with a relatively high availability of water resources, as Oaxaca is the State with the fifth largest underground water reserves of the country. Treatment of collected wastewater is another concern, as only 15 of the 139 treatment plants in the State are considered fully operational17. There is no strategic planning for the development of the sanitation sub-sector, in terms of institutional organization, selection of technologies, and financing policy. Quality of the WSS services is generally poor. Intermittent water supply is widespread. Generally, water service through a piped distribution system varies from a few hours of supply a day to once every couple of weeks. To compensate irregular water supply, users resort to buying costly water from trucks and to other coping mechanisms. As a consequence of a lack of systematic disinfection and of intermittent supply, the systems do not generally distribute safe potable water. The absence of a culture of professional management, including commercial management, is prevalent among the State’s water service providers, contributing to a downward spiral in the quality of their services. Financing of WSS service operations is largely subsidized, leading to political interference and further affecting the performance of the service providers. The combination of unprofessional management, lack of efficiency, low tariffs18, and collection rates, leads to highly subsidized service providers. Tariffs cover only 25 percent of operating costs in SAPAO and 75 percent in the systems operated in secondary towns19. The general reliance on subsidies increases the political dependence of the service providers, and

14 Defined as localities of 2,500 people or less 15 Oaxaca has 570 municipalities representing 23% of the total number of municipalities in the country. 16 CONAGUA, 2013 17 SAPAO and State Water Commission, 2013, based on a sample of utilities analyzed 18 ADOSAPACO had the lowest residential tariff among the 32 main cities of the country, CONAGUA 2012 19 Team analysis of the sector financing (2009-2012)

22

affects their performance as sufficient subsidies are not always available when needed. There is no tariff regulation, nor any other form of regulation of the providers and existing subsidies in the sector are not targeted to the poorest municipalities or to the poorest inhabitants within a municipality. Financing of WSS sector investments is unpredictable and depends on federal programs that do not incentivize service improvement. While all resources for investments in the sector are channeled through the State Secretariat of Finance (SEFIN), 96 percent of the sector investments are financed through federal programs (40 percent from programs of the Federal Water Commission, CONAGUA, 52 percent from programs of the Federal Ministry of Finance, SHCP, and 8 percent from programs of the National Commission for the Development of Indigenous People, CDI, respectively). Over the period 2007-2012 it is estimated that the sector benefited from an average of US$55 million of investments per year, having increased from US$32 million to US$78 million during this period. Allocation of resources from federal programs is not designed to incentivize service performance improvements: CEA and other State stakeholders plan for the use of funds on a yearly basis depending on the annual availability of the State counterpart financing required to leverage the federal programs, rather than based on a strategic vision of service improvement. The unpredictability of the available federal and state resources prevents rational medium-term investment planning both at the State and service provider levels. In addition, these federal programs only support activities that can be designed, procured and executed within a single calendar year, further complicating the ability of service providers to undertake multi-year planning and investment programs. There is a general lack of data on service levels and on provider performance. In urban areas only a few utilities have the tools and systems to measure key performance indicators, while in rural areas there is no mechanism to monitor service access and sustainability.

2. Rationale for Program scope

The boundaries of the portion of the State WSS program supported by the Program are highly relevant. Its two areas of focus have been strategically identified to use the Bank financing to incentivize and tackle key sector issues the GoO would not have necessarily addressed without Bank support the: (i) implementation of a modernized sector institutional framework that is not traditionally supported by federal sector financing programs, and that will include the consolidation of a strategic vision for the sector and the development of related planning tools will provide a platform from which GoO can scale-up quality and sustainable urban and rural water supply and sanitation services for all; and (ii) improvement of quality and financial sustainability of water services in urban areas that is funded through federal financing programs generally focusing on infrastructure delivery rather than incentivizing service improvement. Other pillars of the State WSS program include the expansion of access to WSS services in both urban and rural areas as well as the increase of the wastewater treatment coverage currently being addressed through financing programs for infrastructure development and rehabilitation, mainly the APAZU, PROTAR, PROSSAPYS, PIBAI, for which the need to create incentives through Bank financing is deemed less strategic. The improvement of quality and financial sustainability of water services in urban areas through the Program will be concentrated in selected geographic areas of the urban population segments (Oaxaca Metropolitan Area and secondary towns), with the objective of creating a demonstrative effect such that the GoO could scale up the approach and the results achieved at a later stage. In Oaxaca Metropolitan Area, activities will focus on the Chapultepec Sector identified by SAPAO as having an adequate size and hydraulic characteristics to achieve the expected results and to be the basis to replicate the approach to the rest of SAPAO’s service area. In the secondary towns, activities will focus on the water utilities operating in the secondary towns, whose population is above 15,000 habitants and/or where CEA currently operates the systems, thus encompassing the largest secondary urban centers

23

of the State as well as those affected by the reform of the mandate of CEA that will transfer progressively its operations to autonomous municipal service providers.

3. Alignment of the Program with the Federal sector vision for WSS

The Program’s approach and design are also aligned with the following strategic orientation that the incoming CONAGUA administration is now giving to the WSS sector: (i) a focus on strengthening service providers with regard to service quality improvement, especially continuity of supply and financial sustainability, through comprehensive support comprising investment and institutional strengthening; (ii) the promotion of legally autonomous WSS service providers; (iii) a thrust to improve the quality and the availability of data on the performance and sustainability of WSS service providers in urban and rural areas in order to strengthen planning and allow regulation; (iv) the introduction of results-based financing for utilities and for institutional reforms; and (v) a move towards multi-annual planning and financing.

The technical soundness of the Program was evaluated with regards to the: (i) appropriateness of the activities and the incentives to achieve the objectives of each of the Results Areas; (ii) adequacy between the schedule of implementation of the activities and the targets of the DLIs and other results indicators; and (iii) the cost efficiency of each of the Results Areas.

1. Results Area 1: Modernization of the legal and regulatory framework of the WSS

sector in the State

Under this Result Area, the Program is revising or preparing the legal and regulatory tools of the WSS sector legal framework regarded as key to materialize the modernization of the institutional framework of the WSS sector envisioned by the GoO:

At WSS sector level - (i) Revision of the State WSS sector law and its submission to the State Congress, (ii) Preparation and publication of the regulations of the State WSS Sector law.

At CEA level - Revision, adoption and publication of the CEA organizational manual and internal regulations.

At service providers level – (i) Preparation and publication of standard regulations for municipal or inter-municipal WSS service provision; (ii) Preparation and publication of a standard regulation for municipal or inter-municipal WSS service provision; (iii) Revision, adoption and publication of the SAPAO organizational manual and internal regulations; (iv) Revision of the SAPAO law and its submission to the State Congress.

The activities under the Results Area 1 are expected to be realized in two phases: during the first year, the CEA will lead the revision of the WSS Sector law in accordance with the sector vision and submit it to the State Congress; the law will bring the overarching framework for the modernization of the Sector legal and regulatory framework. Once the law has been approved by the State of the Congress, the rest of the activities of this Result Area will be undertaken aligned with the approved law, ideally during the second year of the Program. The Result Framework of the Program reflects this timeframe. The table below presents amendments envisaged to the current WSS Sector law that was enacted in 1993 and whose last amendment was approved in 2005.

24

Table 9: Current WSS sector law vs New WSS sector law

CURRENT PROVISIONS COMMENTS

Art. 3 ratifies the constitutional responsibility of municipalities to provide services through four types of models:

i. Municipal operators ii. Intermunicipal operators iii. CEA and state utilities formed by

agreement iv. Private operators under

concessions

Under the new law, municipalities will provide services still through four types of models:

i. Municipal autonomous utility ii. Intermunicipal autonomous utility iii. State autonomous utilities iv. Private operators under

concessions

Art. 4 establishes the “State Drinking Water and Sewerage System” which comprises:

i. Policy formulation ii. Action planning iii. Systems and works iv. Work administration v. Efficient water use vi. Planning and execution of water

treatment actions vii. Conservation of water sources viii. Recovery of “expenses and costs” ix. Creation of a comprehensive

financial program x. Joint public and social

responsibility for rational water use

xi. Creation of information program

This is a concept that appears in various laws and amendments in Mexico. It is difficult to understand what this “System” refers to, because it includes responsibilities (“policy formulation”) as well as infrastructure, functions (“work administration”), actions (“creation of a financial program,” “creation of an information program”) and policies (“efficient use,” “rational use”). An alternative version could create a state-level financial system for the sector that may establish conditions for utilities and local governments that wish to have state subsidies.

Art. 6 stipulates the duties of municipalities: provide services, participate in planning, and execute works (subsection IV).

CEA proposes that municipal utilities may not execute works; instead, these would be executed by CEA itself. This should be clarified because any utility must have the authority to execute works, even if they are minor. Moreover, the municipality is free and autonomous, and thus its local government may grant the decentralized utility the power to execute works.

Art. 7 stipulates the duties of the State Government: coordinate the “State System…”, coordinate with the Federal Government and municipalities, establish policies, request bids for provision of services when the

municipalities request them, oversee the effective, proper operation of services.

It already assigns duties that may be considered regulatory.

Stipulates the obligation to purify and treat water, the responsibilities for regulating connection to networks, cases considered to be in the public interest, and the responsibilities

These are standard contents in a water law; they would not change.

25


for expropriating or temporarily occupying the assets of individuals, etc. Art. 17 stipulates the entities that users may form: committees authorized by local government agreement to promote the construction and operation of systems; legal entities to be assigned the operation of systems by means of concessions or contracts; operating independently in subdivisions.

Art. 19 defines the characteristics and procedure for the creation of para-municipal utilities as agreed by the local government, sent to CEA so that the Governor can issue the decree for their creation.

Art. 22 assigns responsibilities to municipal utilities for carrying out public hydraulic works and forming intermunicipal agencies.

CEA wants public hydraulic works to be carried out primarily through the State.

Art. 23 assigns supervisory functions to the utility in the case of concessions.

This is a basic idea of regulation that may be expanded in the amended law.

Art. 24 assigns creditworthiness to utilities based on their assets.

Art. 25 states the responsibilities of the decentralized utility.

These functions are similar in all drinking water laws.

Arts. 26–28 stipulate what comprises the utility’s assets.

Similar to other drinking water laws.

Arts. 29–39 define a form of governance for decentralized operators, with a Governing Board, an Advisory Council, the duties of the director or administrator and of the Commissioner. The Board is headed by the mayor and members are from CEA, CONAGUA, one from the Advisory Council, and others as determined by the Board. The Advisory Council represents and informs users. Its members serve for one year.

Strictly speaking, it is the duty of each local government to define the way in which the service is structured, but here the law provides a model. In the amendment, an appropriate type of organization could be sought for each population range, as well as a government agency that balances the local government’s functions with citizen representation, if possible separating the mayor from the function of heading the agency’s Board. However, each local government could reformulate its governance structure. The concept of the citizen Advisory Council is interesting.

Art. 32 assigns to the Governing Board the responsibility of setting fees for the “sale of volumes of water.”

Other concepts of these fees need to be defined. It is also necessary to define how these relate to processes of authorizing laws regarding revenue. CEA proposes the need to clarify that fees do not constitute rights, so that they do not remain in the sphere of congressional approval. However, it is not clear how to formalize a regulatory process in order to avoid abuses by local governments,

26


utilities, and CEA itself. Art. 37 stipulates the powers of the director or administrator. He is the agency’s legal representative, authorizes recurrent expenses, and signs legal documents pertaining to ownership and administration.

The concept is interesting because it grants the director operational independence and clear legal and administrative powers, although the amendment should clarify how to regulate and establish incentives for management.

Arts. 40–46 establish intermunicipal agencies. Agreements by local governments and an agreement to coordinate them are required, as well as an agreement with CEA to join the “State System…”

It is not clear who holds the ownership of infrastructure (only art. 43 mentions that the assets of intermunicipal agencies will be distinct from those of municipalities), and what happens if the intermunicipalization agreement is reversed. It is stipulated that CEA should supervise and participate in these agreements. This would be maintained in the amended law.

Art. 45 establishes the composition of the intermunicipal governance agency. The presidency would be the responsibility of the mayor who is appointed or may be on a rotating basis, with the other mayors acting as vice-presidents. The Advisory Board would represent users from participating municipalities. The Commissioner would be appointed by CEA.

It is a highly deficient structure. It does not separate political function from operational function, and it creates potential conflicts among mayors. It gives the state an undue intervention through CEA in overseeing the acts of the agency through a commissioner appointed by the State. This model would need to be revised.

Arts. 47–59 stipulate the model, duties, organization and characteristics of CEA. They assign it the duties to operate services, as a regulation, for organizing and regulating the agencies. It is declared a decentralized public agency of the State Government with its own legal status and assets.

Art. 47 describes the objective of CEA in detail. It includes “carrying out services on a temporary basis” when the municipality “still lacks the capacity.”

Art. 49 defines 24 responsibilities of CEA, which “will operate on a decentralized basis.” It highlights subsection XXIII, “Form decentralized state utilities and organize them…” Decentralized state utilities would have the ability to construct hydraulic infrastructure.

CEA wants to be in charge of constructing infrastructure, limiting this possibility to utilities. Most of the responsibilities would be maintained. The addition of regulatory responsibilities to a CEA that would leave the operation, would be analyzed.

Arts. 50–52 establish CEA’s assets. Art. 56 defines CEA’s Administrative Council, headed by the State Governor or the person appointed by him.

It would be similar.

Art. 57 establishes the powers of CEA’s director. Similar to those of directors of

It would be similar.

27


utilities. It highlights the fact that he is considered the president of the Governing Boards of parastatal utilities. Arts. 60–71 deal with private and social sector participation in service provision. They state the objectives and forms (concessions and contracts). They state that local governments may grant full or partial concessions. CEA may grant concessions for intermunicipal services “after hearing the opinion of local governments.”

The legal consistency of the State’s responsibilities with regard to the concession of municipal services would need to be reviewed.

Arts. 72–94 define conditions for connecting to the network.

Similar to other drinking water laws, it would remain in the amended law. It is a model for municipal regulation that functions in a supplementary manner.

Arts. 95–103 stipulate the obligations of users. Neither the rights of users nor their means of having such rights upheld are clearly established. Disputes are presented to the agency itself; there is no guidance about presenting them to other authorities.

Arts. 104–117 define responsibilities, calculation criteria, composition, determination and application of quotas and fees.

No regulatory mechanism is established to ensure that service inefficiencies or operational or investment errors are not passed on to users.

Arts. 118–144 establish procedures for the “Inspection, Verification and Presumptive Assessment of Payment for Services.”

Similar to other drinking water laws; they would be revised but would remain similar.

Arts. 145–156 establish procedures and mechanisms for determining infractions and levying sanctions.

Similar to other laws

Arts. 157–163 determine users’ administrative appeals.

Similar to other laws (note: this only refers to appeals regarding administrative acts, not to means of submitting complaints or revision of service provision conditions).

In addition, there are some points not considered in the current law that are proposed to be considered under the revision of the law:

Clarify the separation between the government function (local government) and the operational function, reformulating models for Boards of Directors of the various operational models.

Insist on the responsibility to maintain and manage assets, as well as providing accountability for their conservation and expansion.

Add to the definition of quotas and fees a procedure that makes it possible to minimize the transfer of inefficiencies to the user and incorporate performance commitments, when utilities have a minimum level of development.

Clarify the sectoral financing model. Balance guarantees and remedies for users. Detail the composition and formation of the water information system.

28

Include labor incentives to improve the productivity of the sector’s workers. Support the effective financial decentralization of CEA and utilities (autonomy in the use of

resources).

2. Result Area 2: Improvement of water services in Oaxaca Metropolitan Area

The Program will appropriately finance a comprehensive set of activities that will improve the water service continuity and the efficiency in the targeted sector through investments that have been appraised by the Bank and through TA to enhance the quality of the bidding documents, to improve the operational, commercial, social and environmental management of the operations in the service area and to strengthen the supervision of the works. The target to provide a continuous supply in the whole sector and increase the commercial efficiency to 90% within the timeframe of the Operation is appraised as being achievable by the Bank and SAPAO given the appropriateness of the activities supported by the Program and taking into account that the intervention is focused on a sector that is clearly delimited and hydraulically isolated from the rest of SAPAO’s distribution system. The actions aimed at achieving this target have been designed taking into account the current operating conditions and the results of hydraulic modeling undertaken by SAPAO technical personnel. It is anticipated the progress throughout the Program’s period of implementation will be non-linear considering the scheduling of necessary works to achieve the objectives. Scheduling of the Program’s activities has been designed as follows:

During the Year 1 of the Program, SAPAO will prepare the bidding documents for the majority of the activities to be executed in the selected sector during the subsequent years of the Program, as already identified. In parallel SAPAO will realize a first set of rehabilitation activities and contract the Technical Assistance to support the improvement of its operational and commercial management.

During the Year 2 of the Program, SAPAO will construct the macro-distribution system of the sector. In parallel it will initiate the improvement of its operational and commercial processes with the support of the TA contract to optimize its production and distribution schemes, as well as to improve its commercial practices.

During the Years 3 and 4, it is estimated that the percentage of users benefiting from a continuous service will increase to 30% and 100% respectively (as per the methodology presented in the DLIs matrix), while the commercial efficiency will keep improving up to 90%, corresponding to good utilities practices.

The following results projections have been considered to estimate commercial efficiency improvement targets:

Table 10: Commercial efficiency improvement projections under the Program in the Chapultepec Sector

Baseline

(2013

data)

Year 1

2014

Year 2

2015

Year 3

2016

Year 4

2017

Commercial efficiency 49% 49% 55% 70% 90%

Estimated total cost associated with the activities to be executed under this Result Area has been prepared by SAPAO, appraised by the Bank team and is presented in the table below:

29

Table 11: Estimated cost of the activities under Result Area 2

Program activities Cost with IVA

(US$)

Year

1

Year

2

Year

3

Year

4

Rehabilitation of the wells 530,923 X Construction of a controlled by-pass from the El Tequio aqueduct 401,538 X

Construction of water treatment systems at Trujano 1,784,615 X

Construcion of pumping station at Trujano 401,538 X

Construction of storage tank (Hidalgo sector) 232,000 X Rehabilitation of storage tanks 267,692 X Rehabilitation and hydraulic optimization of the water network 5,355,630

X X

Sectorization of the water network 3,475,539

X X Rehabilitation of water connections 2,168,308

X X

Provision and installation of macro-metering 187,385 X Provision and installation of pressure gauges 21,415 X Provision and installation of micro-metering 433,662 X X X X Updating of the network mapping and commercial system 120,462 X

10% contingencies 1,538,071 Total 16,918,778

The activities of the Program will be executed during the four years of the Program following APAZU cycles. The TA will be in place throughout the duration of the Program.

3. Result area 3: Improvement of water services in secondary towns

Likewise the Results Area 2, the Program will finance a comprehensive set of investments and technical assistance to improve the continuity of water supply and the working ratio of the selected water utilities. The Technical Assistance will consist of supporting the operational, commercial, social and environmental management of the operations of the water systems in the selected towns, improve investment planning and the quality of the bidding documents and strengthen supervision of the works. The target is that, in all selected water utilities, users get water supply with an improved continuity and that the revenues from services are greater than their operating expenses20. It is anticipated the progress throughout the Program’s period of implementation will be non-linear considering the scheduling of necessary works to achieve the objectives. The schedule of disbursement reflects this non-linearity. It is estimated the targets of service improvements will be achieved in the following cities:

Year 2: Puerto Escondido, Juchitán, Ixtepec

Year 3: Puerto Escondido, Juchitán, Ixtepec, Matias Romero, Pinotepa Nacional, Tlaxiaco, Tehuantepec, Salina Cruz, Huajuapan

Year 4: Puerto Escondido, Juchitán, Ixtepec, Matias Romero, Pinotepa Nacional, Tlaxiaco, Tehuantepec, Salina Cruz, Huajuapan, Espinal, Ixtaltepec, Ocotlan, Miahuatlan, Zanatepec, Tuxtepec

Year 5: Puerto Escondido, Juchitán, Ixtepec, Matias Romero, Pinotepa Nacional, Tlaxiaco, Tehuantepec, Salina Cruz, Huajuapan, Espinal, Ixtaltepec, Ocotlan, Miahuatlan, Zanatepec, Tuxtepec, Telixtlahuaca, Loma Bonita, Zimatlan

20 As per the definition given in the DLIs matrix

30

In addition, during the Year 1 of the Program, CEA will realize program of interventions of rapid impact in order to strengthen the planning and preparation of the bidding documents of the activities to be executed in 2015 contributing to the achievement of the objectives of the Program. Meanwhile it will contract the Technical Assistance that will support CEA and the participating water utilities to prepare the portfolio of activities to be financed during the subsequent years 2016, 2017, 2018. The total costs of the Program activities of the Results Area 3 have been estimated using two different methodologies, as presented below. Firstly, the CEA has formulated an investment plan for the 18 systems, on the basis of the existing master plans carried out in the targeted cities and on a planning exercise conducted in coordination with the staff operating the 18 systems. As a result of this assessment, an investment of US$56.2 million (without contingency) was estimated as summarized in the table below:

Table 12: CEA’s Investment Plan for the 18 secondary towns

No. Locality

Secto

riz

ati

on

Ma

cro

-mete

rin

g

Well

s a

nd

wa

ter

inta

kes

Mic

ro-m

ete

rin

g

Co

mm

erc

ial

syst

em

s

Inst

itu

tio

na

l.

Str

en

gth

en

ing

Tra

inin

g

Stu

die

s

To

tal

1 Heroica Ciudad de Huajuapan de León 5,442 0 1,106 1,192 0 188 10 0 7,938

2 Loma Bonita 3,262 0 404 358 10 42 10 0 4,085

3 Miahuatlán de Porfirio Díaz 2,835 0 956 715 0 110 10 122 4,748

4 Ocotlán de Morelos 0 0 360 179 27 42 10 0 617

5 San Juan Bautista Tuxtepec 1,638 0 146 477 0 224 10 0 2,495

6 Heroica Ciudad de Tlaxiaco 3,376 15 535 596 31 110 10 0 4,672

7 Zimatlán de Álvarez 833 0 302 715 0 92 10 0 1,952

8 Asunción Ixtaltepec 928 15 10,712 358 0 110 10 0 12,133

9 Ciudad Ixtepec 0 19 111 177 0 92 10 10 418

10 El Espinal 4,295 1 795 298 72 96 10 0 5,567

11 Heroica Ciudad de Juchitán de Zaragoza 277 8 0 238 19 28 10 10 590

12 Matías Romero Avendaño 107 0 472 298 0 78 10 0 965

13 Salina Cruz 262 8 108 179 19 28 10 10 623

14 San Francisco Telixtlahuaca 77 13 185 358 23 28 10 10 703

15 Puerto Escondido 4,615 93 155 2,265 10 169 10 0 7,318

16 Santiago Pinotepa Nacional 154 8 77 238 23 28 10 10 548

17 Santo Domingo Tehuantepec 77 8 77 179 23 14 10 10 397

18 Santo Domingo Zanatepec 0 8 0 358 23 42 10 10 450

Total 28,177 198 16,499 9,179 280 1,517 177 191 56,218

Source: CEA, amounts in thousands of US$.

Secondly, the cost of the Results Area was estimated following the methodology published by CONAGUA, “Planning of actions to increase and control efficiency in drinking water systems”. Annex A of this methodology provides a catalogue of sample projects for increasing and controlling efficiency and their unit costs per connection. Based on this assessment, a total investment of US$50.7 million without contingency was estimated, and as summarized in the table below:

Table 13: Estimated cost of the activities under Result Area 3

Actions

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de

Po

rfi

rio D

íaz

Oco

tlá

n d

e

Mo

relo

s

Zim

atl

án

de

Álv

arez

Sa

lin

a C

ru

z

Ju

ch

itá

n d

e

Zarago

za

Sectorization of distribution network 4,498 1,485 1,995 637 558 351 307 3,268 2,885

Human resources training in physical efficiency 41 13 18 6 5 3 3 30 26

Macro-metering 251 84 37 28 0 56 46 74 56

Cadastre of hydraulic infrastructure and networks 175 58 78 25 22 14 12 127 112

Operational control 335 111 149 47 42 26 23 243 215

Leakage control 579 191 257 82 72 45 40 421 372

Subtotal physical efficiency actions 5,879 1,941 2,534 825 699 495 430 4,163 3,665

Human resources training in commercial efficiency 66 22 29 9 8 5 4 48 42

Registry of users 219 72 97 31 27 17 15 159 140

Micro-metering and consumption 1,141 377 506 162 142 89 78 829 732

Control of commercial losses 151 50 67 21 19 12 10 109 97

Billing and collection 205 68 91 29 25 16 14 149 132

Customer service 245 81 109 35 30 19 17 178 157

Commercial-accounting software 91 30 41 13 11 7 6 66 59

Rates 246 81 109 35 30 19 17 178 157

Subtotal commercial efficiency actions 2,363 780 1,048 335 293 184 161 1,717 1,516

Replacement of wells 877 292 130 97 0 195 162 260 195

Equipping of wells 401 134 59 45 0 89 74 119 89

Rehabilitation of wells 864 288 128 96 0 192 160 256 192

Subtotal actions in water intakes 2,142 714 317 238 0 476 397 635 476

Sum of Physical efficiency + Commercial

efficiency + Wells 10,384 3,435 3,899 1,398 992 1,155 988 6,514 5,657

32

Actions

Sa

nto

Do

min

go

Teh

ua

nte

pec

Ciu

da

d

Ixte

pec

Ma

tía

s

Ro

mer

o

El

Esp

ina

l

Asu

nció

n

Ixta

ltep

ec

Pin

ote

pa

Na

cio

na

l

Pu

erto

Esc

on

did

o

Sa

n F

ra

ncis

co

Teli

xtl

ah

ua

ca

Sa

nto

Do

min

go

Za

na

tep

ec

Total

Sectorization of distribution network 1,751 1,196 949 410 352 614 1,579 225 294 23,354

Human resources training in physical efficiency 16 11 9 4 3 6 14 2 3 212

Macro-metering 84 56 19 28 19 19 56 19 37 965

Cadastre of hydraulic infrastructure and networks 68 47 37 16 14 24 61 9 11 909

Operational control 130 89 71 31 26 46 118 17 22 1,739

Leakage control 226 154 122 53 45 79 203 29 38 3,008

Subtotal physical efficiency actions 2,274 1,552 1,206 541 459 786 2,032 301 405 30,187

Human resources training in commercial efficiency 26 17 14 6 5 9 23 3 4 340

Registry of users 85 58 46 20 17 30 77 11 14 1,135

Micro-metering and consumption 444 303 241 104 89 156 401 57 75 5,925

Control of commercial losses 59 40 32 14 12 21 53 8 10 782

Billing and collection 80 55 43 19 16 28 72 10 13 1,067

Customer service 95 65 52 22 19 33 86 12 16 1,273

Commercial-accounting software 36 24 19 8 7 12 32 5 6 474

Rates 96 65 52 22 19 33 86 12 16 1,275

Subtotal commercial efficiency actions 920 604 499 216 185 322 830 118 155 12,270

Replacement of wells 292 195 65 97 65 65 195 65 130 3,378

Equipping of wells 134 89 30 45 30 30 89 30 59 1,544

Rehabilitation of wells 288 192 64 96 64 64 192 64 128 3,330

Subtotal actions in water intakes 714 476 159 238 159 159 476 159 317 8,252

Sum Physical efficiency + Commercial efficiency

+ Wells 3,909 2,632 1,863 995 802 1,267 3,338 578 877 50,709

Source: Prepared by authors with information from CONAGUA; amounts in US$.

4. Results Area 4: Sustainability of water and sanitation services in rural areas

The Program will finance all activities required to set-up the RWSS information system, including the provision of IT infrastructure and equipment, as well as the data survey to feed the information system with all data required from the RWSS systems of the targeted segment. The system to be installed is the Sistema de Información de Agua y Saneamiento Rural, SIASAR, a platform already promoted by the World Bank in several countries of the region www.siasar.org. Four staff of CEA participated to a regional workshop on SIASAR organized in July 2013 where they learned from the implementation by other agencies. Oaxaca will benefit from the experience learned in other countries. It is expected the procurement of the IT infrastructure and equipment will be carried out in 2014 and 2015, while the data survey in 1130 rural localities with a population between 500 and 2,500 habitants will start in 2015. The Result Framework of the Program reflects this timeframe.

5. Program preparedness

The risk of delay in the implementation of the MAS Oaxaca Operation during the first year is deemed moderate:

A first set of activities proposed to be financed by the APAZU in 2014 supporting the objectives of Results Areas 2 and 3 of the Program has already been submitted by CEA and SAPAO and is currently being processed by CONAGUA. In the case of the Results Area 2, the above set of activities include the preparation of the majority of the bidding documents corresponding to the activities to be executed in the selected sector during the subsequent years of the Program. In the case of the Results Area 3, the preparation of the programs of interventions of immediate impacts in 2014 will include the preparation of the bidding documents for 2015.

The design of the two activities under Results Areas 1 and 4 expected to be initiated during the first year of the Program and contributing to the modernization of the sector institutional framework will directly benefit from the policy dialogue and technical support provided by the Bank during the preparation of the Operation.

As part of its Implementation Support Plan for the first year of the Operation, the Bank will specifically assist the GoO to finalize the bidding documents of the three important contracts financed by the TA Component expected to be launched during the first year. It is expected to finalize the corresponding bidding documents during the mission that will take place before the effectiveness of the loan.

http://www.siasar.org/

6. Chronogram of Program execution, results verification and disbursement

FY 20

Revision of the SAPAO law and its submission to the State Congress

Rural and Urban Water Supply and Sanitation Strategy

Contracting plan de accion impacto inmediato

Preparation plan de accion impacto inmediato

Preparation plan de acciones de mediano plazo

Estimated disbursements

PforR Program activities

TA component activities

USS$2.50 M

Preparation bidding documents for works

USS$1.00 M USS$2.00 M USS$2.00 M USS$2.50 MEstimated disbursements under the TA Component

USS$4.00 M USS$14.50 M USS$10.00 M USS$9.50 M

Bidding process Independent Verification Agent

Design of pilot approaches to providing sustainable rural WSS implementation and support

Data survey SIASAR

Results verification by the independent agent

Execution activities financed under APAZU

Public Expenditure Review of the Oaxaca WSS Sector

Bidding process strategic TA to CEA and participating water utilities

Strategic TA to CEA and participating water utilities in place

FY15

Intermediate Results 1 : Modernization of the State’s sector institutional framework

Bidding process strategic TA to SAPAO

Strategic TA to SAPAO in place

Revision of the State WSS sector law and its submission to the State CongressPreparation and publication of the regulations of the State WSS Sector law

Preparation and publication of standard regulations for municipal or inter-municipal WSS

Disbursement to BANOBRAS (advance and results-based disbursement)

Maximum disbursements under PforR Program (excluding advances)

Results reporting by CEA and SAPAO

Provision of IT infrastructure and equipment SIASAR

Execution activities financed under APAZU

Intermediate Results 4 : Improvement of information in rural areas and development of a pilot of technical assistance mechanism to rural WSS service providers

Program management

USS$7.00 M

FY 19

Intermediate Results 2 : Improvement of water services in the Oaxaca Metropolitan Area

Intermediate Results 3 : Improvement of water services in secondary towns

FY 16 FY 17 FY 18

Year 1: CY 2014 Year 2: CY 2015 Year 3: CY 2016 Year 4: CY 2017

FY14

Year 5: CY 2018 CY 2019

Revision, adoption and publication of the CEA organizational manual and internal

Revision, adoption and publication of the SAPAO organizational manual and internal

1. Sub-national on-lending arrangements

Subnational lending regulation in Mexico prevents International Financial Institutions (such as the World Bank) from lending directly to subnational entities in the country. The Bank is required to lend to a Government of Mexico-owned development bank so that it on-lends to the states or municipalities. BANOBRAS, as Mexico’s national development bank responsible for promoting and granting financing to state and municipal governments for the development of infrastructure projects, will be the borrower of this proposed loan, which in turn will on-lend to the SEFIN of the GoO. BANOBRAS is Mexico’s state-owned development bank mandated to promote and finance infrastructure, public services and regional development projects entered into by the federal and local governments as well as by state-owned companies. Its core business is made up of project finance and long-term loans to subnational entities (municipal and state governments), representing 55 percent of its credit portfolio. In addition to funding these sectors, it also offers services as agent bank, provides guarantees and technical assistance services, and manages trust funds. In 2011, the State of Oaxaca received over 2 billion Mexican pesos (around 150 million dollars) from BANOBRAS for infrastructure development and more than 100 municipalities in the State are being financed through the BANOBRAS-FAIS Program, totaling 614 million Mexican pesos (47 million dollars). The Bank has prior experience working with BANOBRAS at subnational level. In 2004, the Bank provided a US$108 million loan21 to the State of Guanajuato through BANOBRAS to achieve sustainable investments levels and efficient operations in various sectors, including water supply and sanitation, transport and low-income housing. Most recently, in 2010, BANOBRAS and the Bank agreed on a US$150 million loan22 for an urban transport project to be implemented in various Mexican cities.

2. Institutional and implementation arrangements of the Program

a) Institutional framework for Program implementation

Institutional arrangements for Program implementation are embedded within the existing institutional framework of the WSS sector of Oaxaca. Limited adjustments have been made to the existing structure to strengthen inter-institutional coordination, results reporting, and verification. The proposed Program implementation involves three government entities at the State level: the State Secretariat of Finance (SEFIN), the State Water Commission (CEA), the City of Oaxaca water utility (SAPAO), water utilities and municipalities in the selected secondary towns. Overall implementation and coordination will rest with SEFIN, while CEA and SAPAO will be the executing agencies responsible for the implementation of Program activities. The institutional arrangements under the Results Area 3 of the Program and the respective role of water utilities and municipalities can vary depending on the institutional models of the participating water

21“ Decentralized Infrastructure Reform and Development Loan Project” (P080149), 2004 22 “Urban Transport Transformation Project” (P107159), 2010

36

utilities: (i) CEA-operated utilities (11 out of 18), (ii) Municipal autonomous utilities (4 out of 18), (iii) Municipal Department utilities (3 out 18). The National Water Commission (CONAGUA) at the federal level will co-finance certain Program activities (those included in Result Areas 2 and 3, respectively aiming at improving water services in Oaxaca Metropolitan Area and secondary towns) through its financing program APAZU. At the municipal level, participating municipalities and municipal service providers of the 18 secondary towns will be involved in Program implementation too through collaboration with CEA to carry out service improvement activities under the Program in their areas of service. General description of the main implementing institutions is presented as follows:

SEFIN is GoO’s institution through which all the sector funds are channeled to the executing agencies in the sector (including CEA, SAPAO, municipal service providers and the municipalities)

CEA is a decentralized entity of the Secretariat of Infrastructure (SINFRA), responsible for sector coordination at state level by managing and/or executing federal and state resources for infrastructure development and water and sanitation service improvement in urban and rural areas. CEA coordinates, consolidates and processes all technical documentation needed to access federal programs on behalf of the municipalities and municipal service providers across the State. In addition to that, CEA currently operates 15 water systems23, serving around 330,000 inhabitants

SAPAO is a state-owned service provider in charge of providing water and sanitation

services to the City of Oaxaca and nine other municipalities in the Metropolitan Area. Currently it serves a total population of close to 280,000 inhabitants. It has recently become a decentralized entity, and as such, it has legal and budgetary autonomy

b) Implementation arrangements at the State level

Overall Implementation

SEFIN will be responsible for the overall implementation of the Program and for ensuring the coordination between the State institutions and BANOBRAS:

Allocating the loan funds received from BANOBRAS (advances and result-based disbursements) and APAZU funds received from CONAGUA to the executing agencies along existing budget mechanisms

Monitoring physical / financial execution and progress of Program activities and Program results achieved by CEA and SAPAO, and consolidating information

Coordinating with the Independent Verification Agent for results validation, and with BANOBRAS for disbursement requests

SEFIN will draw on their existing structures to implement the Program. However, in order to respond to the need to address the institutional coordination between the GoO and BANOBRAS 23 Salina Cruz, Heroica Ciudad de Juchitán de Zaragoza, Santo Domingo Tehuantepec, Ciudad Ixtepec, Matías Romero Avendaño, El Espinal, Asunción Ixtaltepec, Santiago Pinotepa Nacional, Puerto Escondido, San Francisco Telixtlahuaca, Santo Domingo Zanatepec.

37

pertaining to the implementation of the Bank loan, and to strengthen the results monitoring and reporting as well as the inter-institutional coordination of the Program activities, a Program General Coordinator leading the MAS Oaxaca Unit will be appointed within SEFIN. Executing agencies

The implementation of Program activities will be responsibility of CEA and SAPAO. As executing agencies, both entities will be responsible for:

Implementing the activities of the Program Action Plan

Planning, preparing technical specifications and terms of reference, bidding, signing and managing contract, and implementing Program activities under their respective Results Areas

Reporting to SEFIN physical and financial execution of the Program activities and results achieved under the Program

The implementation of Program activities will be the responsibility of CEA and SAPAO. As executing agencies, both entities will be responsible for:

Planning, preparing technical specifications and terms of reference, bidding, signing and managing contract, and implementing Program activities under their respective Results Areas

Implementing the activities of the Program Action Plan

Reporting to SEFIN physical and financial execution of the Program activities and results achieved under the Program

In carrying out its functions related to the Program, CEA and SAPAO will draw on its current structure, processes and procedures. Additionally, coordination and reporting functions will be strengthened in each of the two institutions through the appointment of:

A Program Technical Coordinator - In charge of overall coordination and monitoring of their respective activities, as well as of reporting to SEFIN on progress in the execution of said activities and results achieved. The Technical Coordinator will provide a full-time support to Program implementation. The Coordinator of CEA will work in close collaboration with the municipalities and/or municipal water utilities of the 18 secondary towns.

Administrative focal point - Responsible for the financial reporting of activities executed by the respective institutions to SEFIN. The Administrative focal point of CEA will be designated within the Área Administrativa, while the the focal point of SAPAO will be designated within the Dirección de Planeación.

Municipal Governments and water utilities

The implementation of the activities to improve water services in secondary towns (Result Area 3) will require a close collaboration between CEA, the municipalities and the water utilities. The institutional arrangements under the Results Area 3 of the Program and the respective role of water utilities and municipalities will however vary depending on the institutional models of the

38

participating water utilities: (i) CEA-operated utilities (11 out of 18), (ii) Municipal autonomous utilities (4 out of 18), (iii) Municipal Department utilities (3 out 18). The structure and relationships among the various implementing agencies is presented as follows:

Figure 6: Implementation Arrangements for the Program

The key role and responsibilities of each institution are summarized in the table below.

39

Table 14: Key role and responsibilities of state implementing institutions

Level Sector institutions Results Area 1 Results Area 2 Results Area 3 Results Area 4

Sta

te

SEFIN

channels and allocates Program funds24 to the executing agencies, CEA and SAPAO, following existing budget mechanisms and as defined in the Results Agreement

consolidates information on Program results and on physical and financial execution of Program activities coordinates with the Independent Verification Agent (IVA) for results verification and with BANOBRAS

for disbursement requests, financial reporting and audits under the Program

CEA

executes some Program activities

reports Program results, physical and financial execution to SEFIN

-

executes Program activities


approves tariff revision in CEA-operated utilities

transfers CEA-operated utilities to municipalities

signs Results Agreement with non CEA-operated utilities


reports Program results and financial execution to SEFIN

Oa

xaca

Met

ropo

lita

n

Are

a

SAPAO

executes some Program activities




- -

Sec

on

da

ry T

ow

ns

CEA operated

utilities

- -

benefits from the investments and institutional strengthening if meet certain conditions specified in a signed Results Agreement with CEA

- Municipal

autonomous utilities

Municipal Dpt

utilities

Municipalities - -

creates legally autonomous utilities where it does not exist

approves tariff revision in municipal utilities

-

c) Role of CONAGUA

At the federal level, CONAGUA is the government entity in charge of water resource management in the country. Its main function is to manage and preserve national water resources, including the development of the national water policy, the administration of rights for water use and wastewater discharge, the sector planning, and the management of investment in the Mexican water sector by allocating resources through a variety of programs. CONAGUA is organized at

24 Made up of State own resources, loan funds received from BANOBRAS (advances and result-based disbursements), and APAZU funds received from CONAGUA

40

two levels: (i) at national-level, through its headquarters in Mexico City, and (ii) at regional level, through 13 river basin organizations (Organismos de Cuenca), each of which is responsible for one of the 13 hydrological-administrative regions. As in other States, CONAGUA plays an important role in the WSS sector of Oaxaca, as an important sector financier through various financing streams, including:

Sustainability of Drinking Water and Sanitation Services in Rural Areas Program-

PROSSAPYS, aiming at increasing coverage of drinking water and sanitation by building infrastructure in rural communities with a population below 2,500 inhabitants. Co-financed by the Inter-American Development Bank.

Drinking Water and Sanitation in Urban Areas Program-APAZU, aiming at increasing coverage of drinking water and sanitation by building and rehabilitating infrastructure in localities with a population above 2,500 inhabitants.

Wastewater Treatment Program-PROTAR, aiming at supporting infrastructure financing

and operation and maintenance of wastewater treatment plants.

Water Utilities Efficiency Improvement Program-PROME, to improve efficiency in participating water utilities. Co-financed by the World Bank.

Water Rights Reimbursement Program-PRODDER, to allocate federal revenues obtained

from use of national water resources fees to service providers.

Results Areas 2 and 3 will be financed through the CONAGUA’s APAZU program. As this the case for CONAGUA’s other financing programs, APAZU consists of federal grants supplementing State counterpart financing – in the case of the Program, the State counterpart funding to leverage the APAZU program will come from the proceeds of the Bank loan and from GoO’s own resources.

d) Independent Verification Agent

The Independent Verification Agent (IVA) will be responsible for validating the results reported by the executing agencies, through SEFIN. The IVA will verify the outcomes reported through field inspections, reviews and assessments of calculations, as appropriate. After the assessment and verification, the IVA will report to SEFIN on its opinion on the actual achievement of results, including a detailed description of the inspections and the review’s findings. No State or Federal government agency has been identified as a particularly suitable IVA.

e) Results-based allocation of financial resources under the

Program

An important feature of the implementation of the Program is the scheme of financial incentives embedded into its design that the GoO intends to introduce at two levels:

SEFIN will annually assign the financial resources of the Program to its executing agencies CEA and SAPAO, as part of its annual budget allocation exercise, based on an annual Results Agreement, thus replicating the disbursement approach of the PforR financial instrument and transferring financial incentives to perform to CEA and SAPAO;

41

Under the Results Area 3, CEA will also sign Results Agreement with the selected municipal water utilities to grant financial support subject to them meeting certain conditions and results, as specified in a Results Agreement that will be signed with CEA during the first year of the Program in order to create incentives for information improvement, legal autonomy and cost-recovery.

The two standard Results Agreements between respectively SEFIN/CEA and SAPAO, and CEA/ selected municipal water utilities will be incorporated in the Operational Manual of the MAS Oaxaca Operation. The results-based allocation of financial resources by SEFIN and CEA in the WSS sector will be introduced under the MAS Oaxaca Operation as part of the modernization of the WSS sector institutional framework.

3. Institutional and implementation arrangements of the Technical

Assistance Component

SEFIN, through the MAS Oaxaca Unit, will be responsible for the general implementation of the Technical Assistance Component following the IPF policies, in coordination with CEA and SAPAO. Implementation of the TA Component will apply Bank procurement procedures and guidelines. SEFIN, CEA and SAPAO will be responsible for the bidding processes (including the preparation of the bidding documents and the signature of the contracts) for all the activities financed by the TA Component pertaining to the respective institution. The institutions will be supported throughout the bidding processes by an experienced consultant in Bank procurement. The MAS Oaxaca Unit will be responsible for the necessary coordination, publishing and updating of the Procurement Plan in SEPA and as a channel for any required information. The payments for all the activities financed by the TA Component will be processed by the Treasury, in case of those expenditures procured/incurred by CEA and SAPAO, and Administrative Unit of SEFIN in case of expenditures procured/incurred directly by SEFIN.

4. Fraud and Corruption Institutional Arrangements

The State of Oaxaca has a system in place that allows citizens and businesses to report Fraud and Corruption (F/C) through a variety of means. Complaints submitted to the state agencies and departments are submitted to the Comptroller General’s Office (for administrative investigations) and to the Attorney General’s Office (for criminal investigations). The technical, fiduciary, social and environmental assessments included an F/C analysis which confirmed that they are effective and functioning well. The Comptroller General’s office is also creating a mobile app, which will allow citizens to submit photographs of projects financed by the government (state or federal), that fall short of their objectives as well as to report allegations of F/C.

Administrative investigations involving F/C are carried out by the Comptroller General’s Office of the State of Oaxaca. All criminal investigations are handled by the Federal Delegate of the Attorney General’s Office for the State of Oaxaca (PGJ). The PGJ of Oaxaca reports to the Federal Attorney General (PGR), which is equipped with 6 attorney generals, 50 investigators, 80 police, and 50 law experts and has a significantly greater capacity to handle these investigations. In fact, the State Attorney General’s office does not exercise much time or many resources to fight corruption, but rather defers to the Federal AG’s office to coordinate on these issues with the Comptroller General’s Office. This is in part because 94% of Oaxaca’s funds come from the federal budget so any audit or investigation will likely need to be resolved at the federal level.

42

The Comptroller is able to debar companies for up to one year for sanctionable practices but they cannot impose monetary fines. Therefore, a 1-year debarment may not be sufficient for grave actions of F/C but may be referred to the PGJ, depending on the facts of the case. Companies may not be deterred from F/C if they view the loss (debarment for a year) as less harmful than the possible gain received by committing the sanctionable offense. The Comptroller identified geomapping of public works and projects as a potential feature that would help contribute to transparency efforts and further improve accountability for the rendering of these public services.

5. Legal structure of the MAS Oaxaca Program.

Since the Borrower of the loan is BANOBRAS and not the State of Oaxaca, several agreements will be in place to ensure that the responsibilities of the implementation of the Operation are transferred adequately, as follows:

Subsidiary Agreement between the GoO and BANOBRAS, to provide for the on-lending of the loan from BANOBRAS to the GoO;

Operation Agreement to be signed between the GoO and the Bank, to regulate the responsibilities of the GoO to implement the Program and the TA Component in accordance to the Loan Agreement, the Program Assessments and the Bank ACGs; and

Implementation Agreements to be signed between CEA and SAPAO detailing their obligation under the Program (and the TA Component if applicable).

43

The Oaxaca WSS sector’s financial scheme is complex and fragmented. Various entities participate in the sector’s financing while others execute the resources. The federal government plays a leading role in the sector’s financing, while the State government plays an important role in channeling and executing resources. The role of CEA as an agency to coordinate its financing and planning needs to be strengthened. In addition, information is not centralized and each agency handles partial figures in terms of the program it manages or the resources it channels. The methodology for inputting information is not unified and each entity inputs it differently. During the analysis of the sector financing, there were serious difficulties in obtaining information and in its consistency. The figures presented herein are those provided by SEFIN’s Budget Planning and Integration Department. This section presents a summary of the sector financing note in Annex 2 of this technical assessment.

1. Sector’s financial scheme

The resources allocated for financing the WSS sector undergo various stages from beginning to end. In each stage, the federal, state and municipal governments play different roles and the scale of their participation changes significantly. Moreover, the financing scheme and the governments’ participation are different, depending on whether the resources are allocated for investment or for operation and maintenance. The stages that the resources undergo are grouped in four categories: (a) financing, corresponding to the source of the resources; (b) transfer, corresponding to financial intermediation; (c) execution, corresponding to the use of the resource; and (d) end-use, corresponding to the purpose of the resources. (a) The WSS sector is financed with resources from the federal, state and municipal governments. These resources are managed through different programs administered by various entities at federal, state or municipal level.

Federal-level programs aimed at the WSS sector are varied, as are the entities that administer them. All resources from the federal government are aimed exclusively at investments. SHCP, CONAGUA, SEDESOL, CDI and CONAZA administer the following programs with funds from federal contributions, resource reallocation agreements, or funds from federal programs:

o SHCP (Secretariat of Finance and Public Credit [Secretaría de Hacienda y Crédito

Público]) administers FAFEF. FONDREG, FONDMET, FIES and AFEF

o CONAGUA (National Water Commission [Comisión Nacional del Agua]) administers PRODDER, PROSANEAR, Paso Ancho Project, APAZU, PROSSAPYS, Clean Water (Agua Limpia) and Water Culture (Cultura del Agua)

44

o SEDESOL (Secretariat of Social Development [Secretaría de Desarrollo Social]) administers FAIS and FISE

o CDI (National Commission for Indigenous Peoples’ Development [Comisión

Nacional para el Desarrollo de los Pueblos Indígenas]) administers PIBAI

o CONAZA (National Commission for Arid Zones [Comisión Nacional de las Zonas

Áridas]), an agency of SAGARPA, administers POH.

State and municipal resources stem from their own funds and from federal transfers. Federal transfers may be in the form of contributions (“Line 33”) or participation (“Line 23”). In accordance with the Fiscal Coordination Law, once funds from Line 33 reach the state, they become state resources. However, Line 23 resources are federal resources and are regulated by federal law. Line 23 resources consist of funds administered by SEDESOL, such as FISE, and by SHCP, such as FAFEB.

(b) Most resources are transferred through the State Secretariat of Finance (Secretaría de

Finanzas del Estado, SEFIN), which transfers them to agencies in charge of using the resources either to contract works or to operate and maintain the service. SEFIN transfers all federal resources (with the exception of a few CONAGUA programs), all state resources, and all federal, state or municipal counterpart funds required by the different programs. The small proportion of resources that are not transferred by SEFIN but rather by CONAGUA correspond to PRODDER and PROSANEAR and are transferred directly from CONAGUA to the municipalities for execution. (c) Resources are executed once the entity that transfers the resources delivers them to the entity that uses or executes them. An executing agency is understood as one that contracts the works and is responsible for their execution.

SEFIN transfers resources to the following entities for execution: Secretariat of Infrastructure (Secretaría de Infraestructura, SINFRA), State Water Commission (Comisión Estatal del

Agua, CEA) and municipalities.

o SINFRA carries out the necessary water and sanitation works under the infrastructure programs it promotes. SINFRA’s area of influence is the state as a whole.

o CEA is a decentralized public agency that executes investments not only in the 15 municipalities in which it coordinates water and sanitation service utilities, but also in all of the state’s municipalities.

CONAGUA is in charge of directly executing the resources of the PRODDER and PROSANEAR programs or transferring them to the municipalities.

When the municipalities and utilities have resources available, in addition to counterpart funds, they use and execute them directly.

(d) Resources may be allocated to investment or to operation and maintenance.

Investment resources come from the federal, state and municipal governments. Federal government resources are allocated exclusively to the financing of investments, while state government resources finance investments as well as operation and maintenance. Municipal resources may be used to finance investments and operation.

45

Operating costs are financed through: (i) revenue collected from fees charged by utilities; (ii) municipalities with their own resources; (iii) CEA, with state resources transferred by SEFIN and directed to the 15 utilities under its coordination; and (iv) SEFIN to SAPAO. Resources allocated to finance operation and maintenance stem primarily from the state government, with a very small amount from municipal governments and utilities.

The diagram below presents the path followed by the financial resources in each stage, as well as the entities and programs that participate in these stages.

Figure 7: Stages followed by financial resources allocated to the sector

2. WSS sector investment financing 2007-2012

In 2007–2012, an annual average of Mx 725 million was allocated to WSS sector investments. The diagram below shows the gradual growth in amounts allocated for investment. From 2007 to 2012, investment increased by an annual average of 19%. By 2012, the level was nearly 2.4 times the 2007 value.

46

Figure 8: Amounts allocated for investment, 2007–2013

Federal, state and municipal government participation in the financing, transfer and execution of resources varies significantly, as presented in the diagram and table below. The federal resources have contributed 52% to financing, and the state government or the municipalities execute the resources. In turn, the state resources have contributed 32% to financing, has transferred 100% of resources, and has used 93% of available funds for investments. Municipalities have contributed 16% to financing and 7% to execution.

Figure 9: Financing scheme of Water and Sanitation Sector investments

Table 15: Annual Investment (2007–2012 Average), Mx Millions

FINANCING (financial resources) TRANSFER EXECUTION

FEDERAL 377 3 - STATE 230 722 670 MUNICIPAL 118 - 54 TOTAL 725 725 725 FEDERAL 52% 0% 0% STATE 32% 100% 93% MUNICIPAL 16% 0% 7% TOTAL 100% 100% 100%

FEDERAL,52%

FEDERAL,0% FEDERAL,0%

ESTATAL,32%

ESTATAL,100%ESTATAL,93%

MPAL,16%MPAL,7%

INVERSION,100%

0%

20%

40%

60%

80%

100%

FINANC

IACION

TRASPA

SO

EJECUC

ION

DESTIN

O

Par cipaciondelGobiernoenelFinanciamientoSectorAguaySaneamientoOaxacaInversion(%)

47

a) Financing of the WSS sector investment

The WSS sector investment is financed through federal, state and municipal programs that are themselves made up of federal, state and municipal resources, knowing that state and municipal resources stem from their own funds and from federal transfers25. Each federal program has defined operating rules which, among other things, stipulate the allocation of resources and counterpart funds to be required by the state and municipal governments. In 2007-2012, of the total amount invested in the sector, federal government programs contributed 96% of investment financing; the remaining 4% came from state government programs. The programs that contributed most to the financing of sectorial investments were those administered by SHCP (52% of total resources of federal programs), followed by CONAGUA (40%), and CDI with PBAI (the remaining 8%). Adding the counterpart contributions from federal, state and municipal entities that participated in each program provides the total amount contributed by these entities to finance investments in 2007–2012: 52% financed by federal resources, 32% by the state resources, and the remaining 16% by municipal resources. The table below presents the detailed figures.

Table 16: Average WSS sector investments financing by programs 2007-2012 (%)

MX ‘000 % % FEDERAL PROGRAMS

CONAGUA 278,102 40% SHCP 365,541 52% CDI 53,470 8% SERMANAT - 0% TOTAL FEDERAL PROGRAMS 697,114 100% 96%

STATE PROGRAMS 27,595 4% MUNICIPAL PROGRAMS - 0% TOTAL SECTOR 724,708 100%

Table 17: Average WSS sector investments financing by programs and resources 2007-2012 (%)

Federal Resources

State Resources

Municipal Resources

Total Resources

FEDERAL PROGRAMS

CONAGUA 68% 12% 20% 100%

SHCP 40% 46% 14% 100% CDI 76% 6% 18% 100% SERMANAT 100% 0% 0% 100% TOTAL FEDERAL PROGRAMS 54% 29% 17% 100%

STATE PROGRAMS 0% 94% 6% 100% MUNICIPAL PROGRAMS 0% 0% 100% 0% TOTAL SECTOR 52% 32% 16% 100%

25 Such as FISE, FAIS, FEIS, FAFEB, Metropolitan Fund (Fondo Metropolitano) and Regional Program (Programa

Regional)

48

Federal Resources

State Resources

Municipal Resources

Total Resources

FEDERAL PROGRAM

CONAGUA

APAZU 57% 17% 26% 100% PROSSAPYS 69% 8% 23% 100% CLEAN WATER 57% 43% 0% 100% PROTAR 77% 10% 13% 100% PRODDER 100% 0% 0% 100% PASO ANCHO AND WATER

SUSTAINABILIITY 100% 0% 0% 100% TOTAL CONAGUA 68% 12% 20% 100% SHCP

FAFEB, PAFEF, AFEF 0% 83% 16% 100% FEIS, FAIS, FIEF, FISE 4% 70% 26% 100% FEIEF 0% 94% 6% 100% RG23: METROPOLITAN FUND,

REGIONAL FUND, MODERNIZATION FUND, REGIONAL PROGRAM 60% 2% 1% 64%

MICROREGIONS 66% 0% 34% 100% VARIOUS 13% 70% 17% 100%

TOTAL SHCP 40% 46% 14% 100% CDI 76% 6% 18% 100% SERMANAT 0% 0% 0% 0%

TOTAL: FEDERAL PROGRAMS 54% 29% 17% 100% STATE PROGRAMS 0% 94% 6% 100%

TOTAL 52% 32% 16% 100%

Table 18: Average WSS sector investments financing by programs and resources 2007-2012

(MX’000)

Federal Resources

State Resources

Municipal Resources

Total Resources

FEDERAL PROGRAMS

CONAGUA 188,468 33,001 56,633 278,102

SHCP 147,854 167,672 50,015 365,541 CDI 40,847 2,970 9,653 53,470 SERMANAT - - - - TOTAL FEDERAL PROGRAMS 377,170 203,643 116,301 697,114

STATE PROGRAMS 1 26,075 1,518 27,595 MUNICIPAL PROGRAMS - - - - TOTAL SECTOR 377,171 229,718 117,819 724,708

Federal Resources

State Resources

Municipal Resources

Total Resources

FEDERAL PROGRAMS

CONAGUA

APAZU 67,166 19,970 30,190 117,327 PROSSAPYS 69,593 8,090 22,586 100,269 CLEAN WATER 2,835 2,107 - 4,942 PROTAR 22,008 2,833 3,856 28,697 WATER CULTURE - - - - PRODDER 2,678 - - 2,678 PASO ANCHO AND WATER 24,188 - - 24,188

49

SUSTAINABILIITY

VARIOUS - - - - TOTAL CONAGUA 188,468 33,001 56,633 278,102 SHCP - - - -

FAFEB, PAFEF, AFEF 435 81,385 16,019 97,839 FEIS, FAIS, FIEF,FISE 4,609 78,609 29,361 112,579 FEIEF - 1,950 128 2,078 RG23: METROPOLITAN FUND,

REGIONAL FUND, MODERNIZATION FUND, REGIONAL PROGRAM 86,653 3,441 2,157 144,496

MICROREGIONS 3,476 - 1,802 5,278 REGIONAL FUND 52,245 - - - VARIOUS 438 2,286 548 3,272

TOTAL SHCP 147,854 167,672 50,015 365,541 CDI 40,847 2,970 9,653 53,470 SEDESOL - - - - SERMANAT - - - -

TOTAL FEDERAL PROGRAMS 377,170 203,643 116,301 697,114 STATE PROGRAMS 1 26,075 1,518 27,595 MUNICIPAL PROGRAMS - - - -

TOTAL 377,171 229,718 117,819 724,708

Table 19: Evolution of WSS sector investments by programs 2007-2012 (MX’000)

2007 2008 2009 2010 2011 2012 AVERAGE

FEDERAL PROGRAMS

CONAGUA

APAZU 114,358 196,197 163,681 100,534 66,962 62,231 117,327 PROSSAPYS 150,412 133,265 92,786 77,045 69,140 78,969 100,269 CLEAN WATER 7,714 5,143 3,453 3,669 4,960 4,716 4,942 PROTAR - - 95,117 38,394 19,423 19,249 28,697 WATER CULTURE

-

PRODDER 7,299 1,951 1,801 2,280 1,183 1,556 2,678 PASO ANCHO AND WATER

SUSTAINABILIITY - - - - - 145,126 24,188 VARIOUS

-

TOTAL CONAGUA 279,783 336,555 356,838 221,923 161,667 311,845 278,102 SHCP

-

FAEB, PAFEF, AFEF 1,904 54,635 67,909 115,618 176,669 170,298 97,839 FEIS, FAIS, FIEF, FISE 38,683 64,522 117,283 95,411 227,510 132,063 112,579 FEIEF 8,584 3,885 - - - - 2,078 RG23: METROPOLITAN FUND,

REGIONAL FUND, MODERNIZATION FUND, REGIONAL PROGRAM - 7,639 139,082 236,915 249,595 233,747 144,496

MICROREGIONS 31,665 - - - - - 5,278 REGIONAL FUND

-

VARIOUS 7,374 - 8,625 3,631 - - 3,272 TOTAL SHCP 88,210 130,682 332,899 451,575 653,774 536,108 365,541 CDI 31,939 11,388 49,422 41,658 75,260 111,155 53,470 SEDESOL

-

SERMANAT - - - - - - - TOTAL FEDERAL PROGRAMS 399,932 478,624 739,160 715,156 890,702 959,108 697,114 STATE PROGRAMS 23,320 11,205 3,581 29,478 42,569 55,415 27,595 MUNICIPAL PROGRAMS - - - - - - -

50

TOTAL 423,252 489,829 742,741 744,633 933,271

1,014,523 724,708

Figure 10: Evolution of WSS sector investments by resources 2007-2012 (MX’000 and %)

b) Transfer of the WSS sector investment

SEFIN is in charge of channeling and transferring the funds that finance federal and state programs and then transfers them to the entities that execute investments. The only funds not channeled through SEFIN are those corresponding to two CONAGUA programs (PRODDER and PROSANEAR), which are financed and transferred directly by CONAGUA. Of total investments, the amount administered by CONAGUA is less than 1%.

Table 20: Amount of investments by intermediary entity. Annual average 2007–2012

AVERAGE

(Mx millions) %

Channeled through SEFIN 722 100% Channeled through CONAGUA 3 0% Total Investments 725 100%

c) Execution of the WSS sector investment

In 2007-2012, the state government executed 92% of the resources, and the municipal government 8% respectively. During this period, CEA executed 78% of the resources and SINFRA 14%.

Table 21: Evolution of execution of WSS sector investments by entities 2007-2012 (MX’000 and %)

219 197

387

476

406

FEDERAL578

115161

210 202

386

ESTATAL,13

89132 MUNICIPAL,12

66

142 132

423490

743 745

933

TOTAL1,015

-

200

400

600

800

1,000

1,200

2,007 2,008 2,009 2,010 2,011 2,012

MilionM

X

FinanciaciondelasInversiones2007-2012millionMx

394

473

ESTATAL705

718

813

919

30 16

MUNICIPAL38 26

120 95

423490

743 745

933TOTAL1,015

-

200

400

600

800

1,000

1,200

2,007 2,008 2,009 2,010 2,011 2,012

MilionM

X

EJjecuciondelasInversiones2007-2012millionMx

93%97% ESTATAL,95% 96%

87%91%

7%3% MUNICIPAL,5% 4%

13%9%

0%

20%

40%

60%

80%

100%

2,007 2,008 2,009 2,010 2,011 2,012

EJjecuciondelasInversiones2007-2012(%)

52%

40%

52%

64%

43%

FEDERAL57%

27%

33%ESTATAL,28% 27%

41%

30%

21%

27%

MUNICIPAL,20%

9%

15%13%

0%

20%

40%

60%

80%

100%

2,007 2,008 2,009 2,010 2,011 2,012

FinanciaciondelasInversiones2007-2012(%)

EJECUTORTOTAL FEDERAL

CEA TOTAL MUNICIPAL TOTALADOSAPACO RESTO TOTAL ESTATAL

2,007 423,252 0% 87% 0% 0% 6% 93% 7% 100%2,008 489,829 0% 90% 0% 0% 6% 97% 3% 100%2,009 742,741 0% 94% 0% 0% 1% 95% 5% 100%2,010 744,633 0% 77% 9% 11% 20% 96% 4% 100%2,011 933,271 0% 60% 27% 0% 27% 87% 13% 100%2,012 1,014,523 0% 76% 7% 8% 15% 91% 9% 100%

AVERAGE 724,708 0% 78% 0% 0% 14% 93% 7% 100%

SINFRAESTATAL INVERSION SEGUN

EJECUTOR

51

Figure 11: Evolution of WSS sector investments execution 2007-2012 (MX’000 and %)

This section presents the importance of sectoral investments within the state’s total finances. The state’s total average revenue was Mx 44.5 billion in 2008–2012, of which 96% were from the federal government and 4% from the state’s own revenue. 82% of expenditures were allocated to current expenditures and the remaining 18% to investments.

Table 22: Proportion of sectoral investments in State's finances 2008-2012

Mx Million 2008 2009 2010 2011 2012* Average Annual growth

Revenue From Federal Govt. 39,432 40,464 42,097 45,045 45,545 42,517 3.70% Participation 10,531 9,275 11,171 11,795 13,109 11,176 5.60% Contributions 20,696 21,518 22,409 24,045 25,581 22,850 5.40% Various 8,205 9,671 8,517 9,205 6,855 8,491 -4.40% Own Resources 1,573 1,773 1,641 2,576 2,411 1,995 11.30% Total Revenue 41,005 42,237 43,738 47,621 47,956 44,511 4.00% Expenditures Current Expenditures 33,039 35,119 38,551 37,828 37,491 36,406 3.20% Investments 6,542 8,016 8,438 8,126 10,167 8,258 11.70% Total Expenditures 39,581 43,135 46,989 45,954 47,658 44,663 4.80% Fiscal Balance 1,424 -898 -3,251 1,667 298 (152) Source: HR Ratings and SHCP

* Federal revenue from SHCP; own source and expenditure from state budget, adjusting current expenditure for higher level of earmarked transfers

EJECUTORTOTAL FEDERAL

CEA TOTAL MUNICIPAL TOTALADOSAPACO RESTO TOTAL ESTATAL

2,007 423,252 - 368,337 - - 25,396 393,733 29,520 423,252 2,008 489,829 - 443,026 - - 30,406 473,432 16,397 489,829 2,009 742,741 - 695,935 - - 9,197 705,132 37,609 742,741 2,010 744,633 - 569,924 66,227 82,089 148,316 718,240 26,394 744,633 2,011 933,271 - 557,305 256,090 - 256,090 813,395 119,876 933,271 2,012 1,014,523 - 768,049 71,209 79,790 150,999 919,048 95,475 1,014,523

AVERAGE 724,708 - 567,096 103,401 670,497 54,212 724,708

SINFRAESTATAL INVERSION SEGUN

EJECUTOR

219 197

387

476

406

FEDERAL578

115161

210 202

386

ESTATAL,13

89132 MUNICIPAL,12

66

142 132

423490

743 745

933

TOTAL1,015

-

200

400

600

800

1,000

1,200

2,007 2,008 2,009 2,010 2,011 2,012

MilionM

X


394

473

ESTATAL705

718

813

919

30 16

MUNICIPAL38 26

120 95

423490

743 745

933TOTAL1,015

-

200

400

600

800

1,000

1,200

2,007 2,008 2,009 2,010 2,011 2,012

MilionM

X


93%97% ESTATAL,95% 96%

87%91%


13%9%

0%

20%

40%

60%

80%

100%

2,007 2,008 2,009 2,010 2,011 2,012


52%

40%

52%

64%

43%

FEDERAL57%

27%

33%ESTATAL,28% 27%

41%

30%

21%

27%

MUNICIPAL,20%

9%

15%13%

0%

20%

40%

60%

80%

100%

2,007 2,008 2,009 2,010 2,011 2,012


52

% 2008 2009 2010 2011 2012* Average Revenue From Federal Govt. 96% 96% 96% 95% 95% 96% Own Resources 4% 4% 4% 5% 5% 4% Total Revenue 100% 100% 100% 100% 100% 100% Expenditures Current Expenditures 83% 81% 82% 82% 79% 82% Investments 17% 19% 18% 18% 21% 18% Total Expenditures 100% 100% 100% 100% 100% 100%

The sector’s investments correspond on average to 2% of the total budget and 9.5% of total state investments.

% Sectoral investments in budget and investments 2008 2009 2010 2011 2012 Average

2008–2012 WSS investments 490 743 745 933 1,015 785 % of State budget 1.2% 1.8% 1.7% 2.0% 2.1% 1.8% % of State investments 7.5% 9.3% 8.8% 11.5% 10.0% 9.5%

The Bank has assisted GoO in developing indicators and targets to monitor the results achieved under the Program. Were defined (i) Program Development Objective Indicators, (ii) Intermediate Results Indicators, (iii) Disbursement-Linked Indicators. The completed table including baseline, yearly targets and verification protocol on the Results Framework and Monitoring is provided in Annex.

1. Program Development Objective Indicators

The MAS Oaxaca Program Development Objective (PDO) is to support the improvement of the

institutional framework of the water supply and sanitation sector of the State of Oaxaca, and the

improvement of the quality and sustainability of water supply service in selected urban areas.

The following indicators will be used to measure the achievement of the PDO:

PDO Indicator 1: Modernized institutional framework of the WSS sector

PDO Indicator 2: People in urban areas provided with sustainable and improved water service quality under the Program

2. Intermediate Results Indicators

The GoO and the Bank have agreed on intermediate results indicators to measure the progress achieved under four sets of Intermediate Results of the Operation (i.e. including the TA Component), as well as on the Disbursement-Linked Indicators (DLIs) that trigger the Bank disbursement under the PforR Program. The DLIs are part of the set of the intermediate results indicators, as summarized below.

53

Intermediate Results 1: Modernization of the legal and regulatory framework of the WSS sector

in the State

Intermediate Result Indicator 1-1: State Water and Sanitation Law submitted to Congress (DLI 1)

Intermediate Result Indicator 1-2: Rural and Urban Strategy and Public Expenditure Review for the WSS sector successfully completed

Intermediate Results 2: Improvement of water services in the Oaxaca Metropolitan Area

Intermediate Result Indicator 2-1: Percentage of active users with continuous service in the selected sector (DLI 2-1)

Intermediate Result Indicator 2-2: Commercial efficiency in the selected sector (DLI 2-2)

Intermediate Result Indicator 2-3: Percentage of samples tested complying with bacteriological, residual chlorine, iron, manganese, color parameters of the drinking water norm in the selected sector

Intermediate Results 3: Improvement of water services in secondary towns

Intermediate Result Indicator 3-1: Number of selected water utilities with an approved program of interventions of immediate impact (DLI 3-1)

Intermediate Result Indicator 3-2: Number of selected water utilities with improved service continuity (DLI 3-2)

Intermediate Result Indicator 3-3: Number of selected water utilities whose service revenue is greater than their operating costs (DLI 3-3)

Intermediate Results 4: Improvement of information in rural areas and development of pilot

approaches for rural WSS

Intermediate Result Indicator 4-1: Percentage of localities in priority segment with information integrated in Rural Water and Sanitation Information System (DLI 4-1)

Intermediate Result Indicator 4-2: Pilot approaches to providing sustainable rural WSS implementation and support services designed

Intermediate Results associated with PDO Indicator 1

The modernization of the institutional framework of the WSS sector under PDO Indicator 1 will be measured against three results: (i) Key legal and regulatory tools are prepared, i.e. the regulation of State Water and Sanitation Law prepared and published, the standard regulation for provision of municipal water supply and sanitation services prepared, the CEA and SAPAO internal regulation and organizational manual adopted and published, the SAPAO law submitted to Congress, (ii) The number of water utilities supported by the Program that are becoming legally autonomous (municipal, inter-municipal, State or privately-run utilities) during Program’s implementation, (iii) The tools for the WSS sector monitoring and planning are in place and being in use, including the tools to measure performance indicators in the selected sector of SAPAO and in the selected water utilities of the secondary towns, the Rural Water and Sanitation Information System, the Rural and Urban Strategy and Public Expenditure Review for the WSS sector.

54

To achieve the targets of the PDO Indicator 1, the following intermediate results will need to be achieved:

The submission of the revised State Water and Sanitation Law to Congress, a Program activity under Results Area 1, and a pre-requisite for the revision of the key legal and regulatory tools that will be developed based on the approved law (progress measured by Intermediate Result 1-1)

The operation of the tools to measure performance indicators in the selected sector of SAPAO and in the selected utilities of secondary towns, Program activities under Results Areas 2 and 3 (progress measured by Intermediate Results 2-1 and 3-1)

The setting-up of a Rural Water and Sanitation Information System, a Program activity under Result Area 4 (progress measured by Intermediate Result 4-1)

The successful completion of a Rural and Urban Strategy and Public Expenditure Review for the WSS sector, an activity of the TA Component (progress measured by Intermediate Result 1-2)

Intermediate Results associated with PDO Indicator 2

Under PDO Indicator 2, people in urban areas will be considered as provided with a sustainable improved water service quality under the Program if either (i) they receive from SAPAO in the selected sector a continuous water service and if the commercial efficiency in the selected sector is equal or above 90%, (ii) they receive services from the selected utilities in provincial towns with improved continuity and whose revenues from services are greater than their operating expenses. To achieve the targets of the PDO Indicator, the following intermediate results will need to be achieved:

In the selected sector of the Oaxaca Metropolitan Area: improvement of the continuity of the water supply and improvement of the efficiency through investments and routine TA financed under the Results Area 2 of the Program, and through strategic TA to strengthen the capacity and service management of SAPAO financed under the TA Component (progress measured by Intermediate Results 2-1 and 2-2)

In the selected sector secondary towns: improvement of the continuity of the water supply and improvement of the cost-recovery through investments and routine TA financed under the Results Area 3 of the Program and through strategic TA to strengthen the capacity and service management of CEA and participating utilities financed under the TA Component (progress measured by Intermediate Results 3-2 and 3-3)

The Results achieved under the Intermediate Indicator 4-2, Pilot approaches to providing

sustainable rural WSS implementation and support services designed are not directly linked to the PDO Indicators. This strategic activity that has emerged from the dialogue with the GoO during the preparation of the Operation and that will be addressed through the TA Component, aims at capitalizing best international practices to explore options to improve the sustainability of the WSS services in rural areas of the State. This pilot will set the basis for a potential scalable approach in the rural WSS sector the GoO may consider to implement in the future.

55

3. Disbursement-Linked indicators

The GoO and the Bank have also agreed on the Disbursement-Linked Indicators (DLIs) that will trigger the Bank disbursements under the Program. The DLIs are embedded in the Results Chain of the Operation. The DLIs and their associated amounts have been selected to signal and create financial incentives to achieve critical but measurable results during the implementation of the Program under the four Results Areas. All DLIs trigger disbursement against performance, however the nature of the results achieved under the various DLIs varies: DLI 1 triggers disbursement upon outputs reflecting legal and institutional reforms, DLIs 2-1 (partially), 3-1, 4-1 are linked to the delivery of outputs and systems, while DLIs 2-1 (partially), 2-2, 3-2, 3-3 trigger disbursements against water service improvement outcomes. Achieving all the targets of the DLI 1 requires an approval of the revised State WSS Law by the State Congress, a step that stands out of the control of the implementing agencies of the Program. While the GoO recognizes this clearly generates a risk of non-achievement of the DLI 1, it seeks to create financial incentives through this DLI to follow-up on the Law submission to the State Congress, thus increasing the likelihood of obtaining its approval. The completed DLI Matrix is provided in Annex.

4. Results Chain of the MAS Oaxaca Program

The Monitoring and Evaluation (M&E) system of Oaxaca’s WSS sector is regarded as weak due to a lack of measurement tools and of institutional culture for undertaking M&E. The Operation recognizes the issue and strengthening M&E is embedded into its design: (i) The installation of measurement tools needed to monitor the improvement of service quality and sustainability expected under Result Areas 2 and 3, as well as capacity-building to use them are part of the Program’s activities; (ii) Institutional capacity to monitor the results achieved under Result Areas 2, 3 and 4, and to consolidate the information, will be further strengthened through the appointment of the Program Coordinators; and (iii) The nature of the financial instrument used for the Program, under which disbursements require the proper reporting of the results achieved, is also expected to create additional incentives to improve M&E of the Program’s results. SEFIN will be responsible for consolidating the results reported by CEA (Results Areas 1, 3, 4) and SAPAO (Results Areas 1, 2), and for submitting them to BANOBRAS, after verification by the Independent Verification Agent (IVA), in order to request disbursements. The Program will also contribute to improving the M&E of the sector as a whole since, for the first time in Oaxaca, as it sets as an objective and will finance, under the Result Areas 2, 3 and 4, the improvement of the quality and availability of service performance and sustainability data in both the urban and rural areas.

Disbursements will be made on the basis of verified results, as measured by DLIs. The GoO will have to demonstrate through its regularly prepared financial statements that the total of the Program’s net expenditures are equal to or in excess of the amount of the Bank’s Program financing by the end of the Operation. The Program Financial Statements will be audited annually. Prior Results Financing is not considered necessary for this Operation, but it is expected to provide advances following effectiveness to ensure that the activities are implemented in a timely manner, and for up to US$ 11.25 million (25 percent of PforR financing, which is US$ 45 million). The amount of the advances and the specific DLIs to which the advance relates, will be indicated in each Withdrawal Application. The Disbursement Deadline Date will be six months after the closing date stated in the Loan Agreement. For each DLI, allocated amounts, baselines, yearly targets, conditions of achievement, advance payments, deadlines for achievement, and determination of the amount to be disbursed have been defined. Details on the disbursement modalities are provided in Annex. An independent third party will be contracted by GoO as an Independent Verification Agent (IVA) to verify Program results on a yearly basis, under Terms of Reference acceptable by the Bank. No State or Federal government agency has been identified as a particularly suitable IVA. The draft verification reports will be submitted for review by the IVA simultaneously to the GoO and the Bank, and neither party can modify such reports except for factual errors. The Program’s results will be consolidated and submitted by SEFIN to BANOBRAS, based on the results reported by CEA (for the DLIs under Results Areas 1, 3 and 4) and by SAPAO (for the DLIs under Results Areas 1 and 2) through the strengthened M&E system. The verification protocols for each DLI are presented in the Annex. The Bank will also review compliance with the DLI targets during implementation review missions, and for disbursement purposes, the Bank will make the final decision on whether DLIs have been achieved, as per BP 9.00.

58

This Program aims to modernize the WSS sector and improve the quality and sustainability of the water services in selected urban areas of the State, which has remain traditionally as one of the least performing among the country. The service is generally poorly provided in the municipalities, which additionally present high poverty levels. Public financing is the most appropriate source of financing, as it will be developing an innovative model of result-based financing for the WSS sector and water utilities, that CONAGUA is interested in introducing at large scale.

The Program was evaluated for a representative sample of sub-projects similar to those to be implemented under this Operation. Cost benefit analysis was used to measure net benefits generated from the Program sub-projects in the sample. The Program will impact positively socio-economic development, as it will generate more economic benefits than expected costs. From a financial point of view, the Program will be financially sustainable only when tariff system is adjusted to pay at minimum for operating costs. The expected economic benefits for the Program sub-projects of the sample are 70% higher than the associated costs, with net economic benefit of USD 31 million and 17 % expected return.

Table 23: Result of the Economic Analysis of the Program

Present Value of Flows (000 USD )

Costs Benefits Net Benefits IRR

Financial (including tariff increase)

13,043

23,708

10,665

Economic 44,094 75,313 31,218 17%

The distributive analysis, which estimates gains and losses for stakeholders shows that net expected benefits for the whole society are USD 20 million. This result is obtained from the difference between economic and financial benefits, and takes into account economic benefits such as savings that will occur when water is supplied adequately, and subtracts financial cost that customers will have when paying more to the water utilities due to service expansion and collection efficiency improvement. The Government will have net losses of USD 33 million corresponding to the transfer that is passing on to the municipalities to pay for the investment cost. Sensitivity and risk analyses show a robust Program with high probability of yielding positive economic returns.

The Bank has been supporting the reform agenda for inclusive growth in Oaxaca through strategic programmatic partnership since 2011; and after two years of implementation has shown positive results supporting a reform agenda for the modernization of the State’s public institutions and policies. The partnership between the Government of Oaxaca and the Bank has been on line with the priorities set by the Government to modernize the WSS sector that currently has a very

59

weak institutional framework, and low coverage and quality of services, which is among the lowest of Mexico. The financing of the sector is characterized by its complexity, weak planning, highly dependence on federal programs, and lack of incentive for service improvement. The Program is expected to improve performance, as it will finance works using the PforR approach to promote efficiency and create financial incentives for results achievement. The PforR instrument is an innovative financial instrument for Mexico, which the Government is eager to use and eventually replicate at a larger scale through CONAGUA. The Program will be complemented with technical assistance activities to support Program management activities as well as sector policies dialogue and studies to support long term WSS development. The Bank is very well positioned to help the State in developing the Program given its experience with the chosen financial mechanism for achieving efficiency gains, and for supporting technical assistance in the needed areas. Specifically the Bank has shown to be very effective in taking a long-term approach when working with the countries across the range of programs in a particular country, as well as measuring success by actual results rather than the amount of inputs, and encouraging recipient countries to take ownership of the reform process. All of these Bank’s strengths are crucial for implementing this specific Program in Oaxaca.

As mentioned before, the MAS Oaxaca Operation objective is to modernize the water supply and sanitation sector of the State of Oaxaca, and therefore increase reliability of the water services in the State. This objective will be attained through an integrated set of institutional reforms, institutional strengthening activities and investments in participating institutions through the PforR instrument complemented by the TA component, IPF policies following. On the basis of this objective, the economic analysis was carried out to assess the expected benefits and compare them with the expected costs of the Program. The evaluation was carried out for Results Areas 2 and 3, which correspond to 82% of the total MAS Oaxaca Operation cost. The benefits of the TA component were not quantified but the expected qualified benefits were mentioned. Results Area 2 was evaluated for all works to be implemented in Oaxaca Metropolitan Area; while Results Area 3 was evaluated for a sample of municipalities, whose water services were representative of the 18 selected secondary towns.

1. Sample of municipalities

The sample consisted of six municipalities in different regions and variable water coverage. All of them characterized for a poor quality of the service, high unaccounted for water, and low collection efficiency.

Table 24: Coverage and UFW rates of the municipalities of the sample

Coverage Non-Revenue Water

Region Population Without Program

With Program

Without Program

(estimated)

With Program

SAPAO (Chapultepec) Valle Central 51,661 98% 100% 40% 30%

LOMA BONITA Zona Papaloapan 31,485 95%

100% 40% 30%

60

HUAJAPAN La Mixteca 53,043 88% 100% 50% 30%

OCLATAN DE MORELOS Valle Central 15,016 55% 100% 50% 45%

SALINA CRUZ Itsmo 76,596 91% 100% 50% 45%

PUERTO ESCONDIDO Costa 59,811 87% 100% 50% 45%

JUCHITAN DE ZARAGOZA Itsmo 74,825 94% 100% 50% 45%

The investment required for each of the municipalities included works in water intake, distribution network, and efficiency gains, such as, reduction of unaccounted for water, increase of metering, improvement of collection efficiency, and improvement in billing systems. The costs are presented in the following table:

Table 25: Required Investments in the municipalities of the sample

USD (million)

Mx (million)

SAPAO (Chapultepec) 17.0 221.0

LOMA BONITA 4.1 53.2

HUAJAPAN 8.0 103.7

OCLATAN DE MORELOS 0.7 8.7

SALINA CRUZ 0.6 8.1

PUERTO ESCONDIDO 0.6 7.7

JUCHITAN DE ZARAGOZA 7.3 95.2

The cost of these works was increased by 10.7%26 to account for the TA activities, which are crucial to attain the expected benefits of the whole operation. Operating costs were based on actual costs of each of the utilities evaluated.

2. Methodology

Cost benefit analysis was used to measure net benefits generated from the sub-projects in the sample. Expected benefits and costs attributable to the sub-projects were measured by comparing two scenarios: with and without sub-project. Each sub-project was evaluated from two different perspectives: financial and economic. From a financial perspective, the sub-project was appraised measuring its costs and benefit at market prices as the utility in charge of providing the service pays for the sub-project and receives from it. From an economic perspective the evaluation was appraised converting the financial cash flow to economic cash flow eliminating the externalities caused by market distortions, such as taxes and subsidies. Financial analysis shows the gains to the utility providing the service; economic analysis goes farther and shows the 26 The cost of the TA activities corresponds to US$ 10 million, which equals to 10.7 percent of the total cost of the Program (US$ 93.5 million).

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gains to society. The evaluation is complemented by a distributive analysis, as well as sensitivity and risk analyses. The distributive analysis helps to determine winners and losers from the sub-project, including the fiscal analysis that measures the impact for the Government. In the financial analysis, a subsidy of 100% on investment is included as the Government of State will fund the total cost and the utilities only have to pay for the operating costs. In the economic analysis the total investment costs, regardless of who pays for them. This evaluation employed the coping costs approach to derive the costs of inadequate water. Coping costs were estimated as those incurred by the government and by the affected population. Costs incurred by the government corresponded to those associated with the distribution of water in water-trucks to the areas with no coverage or with very poor service. Costs associated with affected population consisted of a) costs of storing water; b) cost of buying bottle water for drinking purposes; and c) implicit costs related to the opportunity cost of time associated with water collection. Costs and Benefits are expressed at 2013 prices, and estimated over a 30 year-period. The discount rate used is 10 percent as a proxy of the opportunity cost in Mexico.

3. Benefits and costs

The Qualitative benefits expected with the TA component are as follows: (i) increase the likelihood of achieving the Program objectives; (ii) improve performance and sustainability of the Program; (iii) help designing the long term strategy of WSS sector; (iv) help in the design of pilot approaches to providing sustainable rural water supply and sanitation implementation and support services. The TA activities that will allow to obtain these benefits are basically the following: training of utilities’ staff; contract of a professional operator/consultancy firm to improve the planning of activities, review the quality of the bidding documents, strengthen the supervision of the works and improve the operational, commercial, social and environmental management of the water systems’ operations; Regarding the investments under the Program (i.e. works under Results Areas 2 and 3), benefits

were measured from financial and economic perspectives. From a financial perspective, benefits correspond to the increase in revenues that comes along with the expansion of the service and collection efficiency improvement. The economic benefits go beyond the increase of revenues and capture benefits to be received by the whole society. Some of them are not quantified and so the economic analysis fell short on presenting all expected benefits. This evaluation quantified the economic benefits as the savings attained when coping costs of inadequate water are reduced or eliminated. Among the important economic benefits not quantified is the reduction of economic losses in productive activities in the zone, such as tourism, agriculture, recreation, etc.

a) Financial benefits and costs

Financial benefits consisted of increase of revenue collected from tariffs, when service, billing, collection systems improve. Metering will play an important role on increasing revenues, as billing will be based on actual consumption. The financial analysis includes the 100% subsidy granted by the Government of the State on the investment cost. Only operating costs are included in the evaluation. Current tariffs were used and tested for financial viability.

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b) Economic benefits and costs

Economic benefits for works were estimated as the avoided costs that will come along with adequate water service. Without the Program, population in all Municipalities have to take measures to complement or to find water to supply its basic needs, and to make it usable for cooking and drinking purposes. The most common practices to either complementing insufficient water or finding water when there is no service, is through water trucks. For drinking and cooking water the most common practice is buying bottled water. Benefits were estimated for two groups of population: (i) with no coverage; and (ii) with coverage but not enough supply. There are additional benefits on efficiency improvement when water losses are reduced. (i) For households with no coverage, economic costs were estimated as: (a) time loss associated with daily collection of water. According to surveys in the field, the average time spent per person to wait for the truck, and then to fetch the water from the collection site to the house for cleaning or cooking, is about 30 minutes per day per household. The economic cost of time was valued as 30% of the estimated minimum wage rate of Mx 65 per day (US$0.63 per hour), as women and children are generally in charge of this chore; (b) containers to store water, which all the households have to use were estimated as Mx 300 for plastic containers with a lifetime of 2 years and each household has about three of those containers; and (c) transportation cost of water through water trucks was estimated as the cost of fuel and maintenance of the water trucks, and volume of water transported, according to information provided by SAPAO27. (ii) For households with coverage, economic costs associated with storing water in areas where water supply is not enough, were estimated as the cost of a water tank (Mx 1,100), plus a pump (Mx 2,500), during a lifetime of 10 and 5 years respectively. It was assumed that all households had to store water: those served with water trucks use plastic containers; and those served through the network use water tank and pump. The percentage of each varies according to city in the sample. In the Program situation is assumed that the need of storage is reduced gradually but not totally eliminated as some households may want to keep them. Economic costs associated with lack of potable water are associated with the cost of buying bottled water. The costs were calculated based on actual payments made by households, which correspond to Mx 25 for a 20 liters bottle, which lasts about 3 days for a typical household. It was assumed that about 60% of households buy water. In the Program situation, it is assumed that 20% of households will keep buying bottled water, as they may not rely on the utility.

4. Results

a) Financial results

Results of the financial analysis show that only when tariffs are adjusted, the sub-projects become viable and hence sustainable. When there is no increase on tariffs, the losses are as high as US$ million. When tariffs increase to cover at least operating costs, and all efficiency gains are attained, the Program is viable and financial sustainability is possible to attain.

27 The cost was calculated based on the average distance per trip needed to carry the water (24 km), the number of trips per day per truck(16); the fuel efficiency of the track (8km per liter of diesel), cost of diesel (Ms 11.48/liter); and volume of water transported. The maintenance cost was estimated as Mx 20,000 per vehicle per month, according to SAPAO’s records. Total transportation cost per cubic meter Mx 44/m3.

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Table 26: Results of the Financial Analysis of the Subprojects selected in the Sample


Costs Benefits Net Benefits

With increase in tariffs

SAPAO 8,470 8,864 394

LOMA BONITA 165 1,194 1,028

HUAJAPAN DE LEON 975 3,556 2,581

OCLATAN DE MORELOS 1,581 2,521 940

SALINA CRUZ 370 568 198

JUCHITAN DE ZARAGOZA 556 678 123

PUERTO ESCONDIDO 926 6,327 5,401

Total 13,043 23,708 10,665

b) Economic results

The economic results show that all sub-projects in the sample are economically viable, with net benefit of USD 31 million and return of 17%. Total benefits are 70% higher than the costs. Water investments in all municipalities show positive benefits and returns from 11% to 31%.

Table 27: Results of the economic analysis


Costs Benefits Net Benefits IRR

SAPAO 21,913 23,028 1,115 11%

LOMA BONITA 3,644 11,565 7,921 24%

HUAJAPAN DE LEON 7,677 18,777 11,100 22%

OCLATAN DE MORELOS 1,948 2,824 876 23%

SALINA CRUZ 855 2,128 1,273 27%

JUCHITAN DE ZARAGOZA 988 2,507 1,519 31%

PUERTO ESCONDIDO 7,069 14,484 7,415 19%

Total 44,094 75,313 31,218 17%

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Distributive Analysis. The differences between economic and financial flows are rents or monetary flows that occur to someone different than the utility. Winners and losers are identified following the economic and financial cost breakdown. This analysis is carried out using as base case financial scenario the one with tariff adjustments. For the sub-projects of the sample, the distribution analysis shows that net expected benefits for the whole society are USD 20 million. This result is obtained as the difference between economic and financial results. This way when customer wellbeing is estimated, economic benefits such as savings that will occur when water is supplied adequately, are subtracted the financial costs that customers will have when paying more to water operators when service is expanded and revenue collection is improved. Savings on transportation costs are the most important, as it corresponds to about 43% of total savings. Net fiscal impact for the Government will be a net loss of US$33M corresponding to the difference of higher taxes that will get with the subprojects in the sample minus the transfer that is passing on to the municipalities to pay for the investment costs.

Table 28: Distributive analysis

DISTRIBUTIVE ANALYSIS SAPAO LOMA BONITA

HUAJAPAN DE LEON

OCLATAN DE

MORELOS

SALINA CRUZ

JUCHITAN DE

ZARAGOZA

PUERTO ESCONDI

DO TOTAL

Fiscal Analysis

Taxes 2,182 525 1,024 86 80 76 940 4,913

Subsidy (16,730) (4,025) (7,853) (659) (613) (581) (7,204) (37,666)

Net fiscal impact (14,548) (3,500) (6,829) (573) (533) (505) (6,264) (32,753)

Population

Payments

Collected revenues (8,864) (1,194) (3,556) (2,521) (568) (678) (6,327) (23,708)

Total Payments (8,864) (1,194) (3,556) (2,521) (568) (678) (6,327) (23,708)

Benefits:

Transportation Cost of water rationed 13,296 5,301 10,462 2,520 2,128 2,507 5,978 42,191

time spent collecting water 304 304 304 304 - - 304 1,518

Cost of storing water 5,017 3,172 4,262 - - - 4,364 16,815

Cost of buying bottle water 4,412 2,789 3,749 - - - 3,838 14,789

Total economic benefit 23,028 11,565 18,777 2,824 2,128 2,507 14,484 75,313

Suppliers 1,105 22 127 206 48 72 121 1,701

Net benefit for population 15,269 10,393 15,348 509 1,608 1,901 8,278 51,605

NET BENEFIT 721 6,893 8,519 (64) 1,075 1,396 2,014 20,553

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Sensitivity Analysis. The sensitivity analysis allows comparing the base case scenario to additional scenarios changing one variable at a time. The break-even analysis allows identifying the value of the chosen variables that causes the sub-projects of the sample to exactly break even. The variables identified as the ones with the greatest effect on the sub-project’s outcome are: (i) investment and operating cost overrun; and (ii) Sub-project delays. Results show that cost increase has high impact on returns especially in SAPAO and Oclatan de Morelos, where 11% and 15% increase would make non-viable the investment. Sub-projects delays can be as much as 3 year and the sample of Program sub-projects would still show positive returns.

Risk Analysis. To enhance the accuracy of the financial and economic analysis, a risk analysis was carried out using Crystal Ball. This software works with Monte Carlo simulation sampling probability distribution for each of the variables selected and produced hundreds or thousands of possible outcomes. The results allow determining the probability of obtaining positive results with the Program. Results of the risk analysis show that there is a probability higher than 90 percent to obtain positive results.

The Bank and the GoO have agreed on a PAP to respond to the needs identified in the technical assessment to increase the likelihood of achieving the Program results:

The implementation of those activities to be financed by APAZU (under Results Areas 2 and 3) is subject to an annual budget cycle and is characterized by major delays which impact the performance and efficiency of this financing program.

The planning and executing capacity of CEA and SAPAO to improve the identification and prioritization of the activities required to achieve the Program objectives, as well as to control the quality of the bidding documents in a timely manner and to enhance the quality of the supervision of the corresponding investments.

The operational and commercial management of SAPAO and of the participating water utilities to achieve the service quality and sustainability improvement objectives of the Program.

Key corresponding activities identified to build capacity of the Program institutions and strengthen the Program systems, and embedded in the PAP, are:

Description of Measure DLI

Legal

Cov. Date Respons. Compliance Measure

Building the capacity of the Program’s institutions

1

Contract technical advisers with suitable experience to support: a) CEA and SAPAO in planning, in reviewing the quality of technical

documents, and in supervising Program activities. b) SAPAO and participating water utilities in provincial towns in their

operational, commercial, environmental and social management of water services.

Six months after

Program’s effectiveness

date

CEA/ SAPAO Order to proceed with contracts issued.

Strengthening the Program’s systems

2

Ensure the efficient management of the initiation of contracting procedures under APAZU:

a) The APAZU Expedientes Tecnicos contained in the Coordination Agreement between CONAGUA and CEA are signed in March of each year, as stipulated in APAZU’s operating rules.

b) SEFIN issues the official letters regarding budget sufficiency in order to initiate bidding procedures in a timely manner, as scheduled.

c) CEA and SAPAO will have the necessary bidding documents and sample contracts to begin the procedures for contracting, scheduled to be conducted each month according to the annual program of works and related services.

d) Once the Expedientes Tecnicos have been signed with CONAGUA, CEA and SAPAO will initiate the corresponding bidding procedures in a maximum period of 30 business days.

Each year of

Program execution

SEFIN/ CEA/

SAPAO

APAZU Expedientes Tecnicos signed in March of each year.

Report on the monitoring of contracting procedures conducted under the Program, indicating the scheduled date of the initiation of the procedure and the actual date of the initiation of the procedure.

ANNEXES

Annex 1: Visión para la modernización del marco institucional

Annex 2: Financiamiento del sector de Agua y Saneamiento

Annex 3: Results Framework

Annex 4: DLIs matrix

Annex 5: Organizational Charts

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1. Antecedentes

Como parte de su Programa de Modernización del Sector Agua y Saneamiento (MAS Oaxaca) el Gobierno de Oaxaca (GdO) emprende acciones en cuatro áreas:

La modernización del marco institucional del sector en el Estado. La mejora en la información, la calidad y la sostenibilidad de los servicios en la Zona

Metropolitana de Oaxaca. La mejora de la información, la calidad y la sostenibilidad de los servicios en un conjunto

de 18 ciudades intermedias del Estado. La mejora de la información y la sostenibilidad de los servicios en las localidades rurales

con población entre 500 y 2500 habitantes. Los principios de la modernización institucional son:

1. Separar las funciones de (i) rectoría (planificación, financiamiento, asistencia técnica y normativa), (ii) prestación de servicios, (iii) regulación.

2. Dar uso más equitativo y eficiente a los recursos, con el mayor impacto posible en la ampliación de la cobertura de los servicios, y orientado a reducir desigualdades regionales y entre estratos de población.

3. Fomentar la autonomía de gestión y la sostenibilidad financiera de los prestadores de servicios a fin de mejorar la calidad y la sostenibilidad de los servicios.

La modernización del marco institucional comprende tres componentes:

una visión integrada de la redistribución de responsabilidades entre los actores y los modelos de gestión de los prestadores (reforma institucional),

un uso de los recursos equitativo y eficiente (política financiera) así como la implementación de un marco de seguimiento que haga posible la evaluación

del desempeño de los prestadores de servicios y verificar el cumplimiento de las metas de inversión y de las normas, con el fin que en una segunda etapa, se permita la plena aplicación de un marco de regulación del desempeño (marco de seguimiento y de regulación).

Estas componentes se reflejarán en el nuevo marco legal y reglamentario de los servicios de agua y saneamiento del Estado de Oaxaca, así como en la implementación de nuevos procedimientos, cambios en las organizaciones, fortalecimiento de capacidades e instrumentación de sistemas de información.

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En el Recuadro 1 se sintetizan las componentes del marco institucional de los servicios de agua y saneamiento, a partir de los cuales es posible caracterizar y evaluar la gobernanza de los servicios de agua y saneamiento (Van Ginneken y Locussol, 2010).

Reforma institucional

Política financiera

Marco de seguimiento y

regulación

Modernización institucional

• Elementos del entorno institucional de la provisión de los servicios de agua y saneamiento

o Actores que desempeñan las funciones clave:

• Formulación de políticas

• Administración y desarrollo de la infraestructura y los activos

• Provisión de los servicios

• Financiamiento de los servicios y la infraestructura

• Regulación de los servicios

o Arreglo contractual o mandato que define la interacción de dichos actores (quién

proporciona qué servicio a quién, bajo qué condiciones y en qué marco de

responsabilidades y rendición de cuentas).

o Idoneidad de los procedimientos o instrumentos utilizados por cada actor para

desempeñar sus funciones.

• Políticas, arreglos institucionales y distribución de responsabilidades:

o Estructura del mercado y responsabilidades sobre el servicio

o Separación de las funciones clave, mandatos, arreglos contractuales e instrumentos o

procedimientos (marco de rendición de cuentas).

o Definición de estándares de servicio

o Políticas de recuperación de costos y tarificación

o Gestión del recurso hídrico y protección ambiental

o Autonomía de los operadores

o Sustitutos del servicio en red

o Funciones, mandato, nombramiento de los directivos y principios corporativos aplicables

a los proveedores de los servicios

• Forma en que son desempeñadas las funciones clave (calificación de las prácticas).

o Desarrollo de la infraestructura y los equipos

o Operación

o Financiamiento

o Regulación económica (tarifas, desempeño, inversiones).

Recuadro 1 Componentes del marco institucional de la prestación de los servicios de agua y saneamiento

(Van Ginneken y Locussol, 2010)

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La finalidad de evaluar y reformar el marco institucional de la prestación de los servicios es doble:

a) por una parte, propiciar que las políticas públicas del sector se lleven a efecto; b) por otra, que los servicios de agua y saneamiento sean proporcionados con calidad,

equidad y asequibilidad. Un marco institucional deficiente produce resultados insatisfactorios tanto en la efectividad de las políticas como en la calidad de los servicios de agua.

En el caso del sector del agua y saneamiento de Oaxaca, se han detectado deficiencias en la distribución de roles entre los actores, falta de claridad en los mandatos o relaciones contractuales (es decir, inconsistencias y duplicidades en las funciones, así como en la relación entre las metas esperadas y los recursos disponibles), así como en los procedimientos que se utilizan para cumplir las funciones clave.

2. Reforma Institucional

Con la reforma institucional se busca:

Que haya una separación y definición clara de las funciones y atribuciones de los participantes: la función de autoridad política en el Ayuntamiento, la función operativa en el organismo o comité y la función de supervisión o regulación en la autoridad que resulte más pertinente. Cuando los sistemas de agua y saneamiento tienen bien delimitada su autonomía operativa, bien definidas sus metas y cuentan con los recursos legales y financieros para lograrlas, es posible establecer una relación más clara de mandato con la autoridad municipal, que sin interferir en la operación diaria de los sistemas puede establecer condiciones, incentivos y penalizaciones que produzcan resultados más efectivos.

Que el operador cuente con claras facultades legales para usufructuar la infraestructura, cuya propiedad originaria es municipal, y se defina a quién compete la planificación, la gestión y el ejercicio de los recursos financieros para rehabilitar y ampliar dicha infraestructura.

Que exista claridad en la forma de gobierno, con objeto de que los órganos de gobierno ejerzan efectivamente sus funciones de orientación empresarial, vigilancia, representación legal, evaluación y sanción de los resultados directivos, sin interferir en las decisiones operativas del sistema.

Que existan mecanismos claros de transparencia, acceso a la información y rendición de cuentas para inducir una operación eficiente y eficaz de los sistemas operadores y las dependencias y entidades que participan en el desarrollo de los servicios de agua y saneamiento en Oaxaca.

La prestación de los servicios de agua potable, alcantarillado y saneamiento puede adoptar diferentes modelos, según se configure:

• La propiedad de los activos (pública, comunitaria o privada)

• La naturaleza del prestador (pública, mixta o privada).

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• La personalidad jurídica del prestador (sin personalidad, público o comercial –esto es, regido por derecho mercantil como en el caso de contratos de prestación de servicios).

La Figura 1 muestra los modelos usuales de organización de los servicios de agua y saneamiento.

VII. Figura 1 Modelos usuales de organización de los servicios de agua y saneamiento.

a. Situación actual

Actualmente los servicios de agua y saneamiento en Oaxaca pueden ser prestados bajo los siguientes modelos:

Comités o juntas: funcionan en las localidades rurales y colonias urbanas; deben formarse con autorización del Ayuntamiento por mayoría calificada, contar con un reglamento e informar a la autoridad municipal sobre sus cuotas, recaudación y gasto; sin embargo, muy pocos lo hacen. Deben ser también supervisados por la autoridad municipal de la cabecera o de las agencias de policía (figura administrativa que toman las localidades grandes que no son cabeceras municipales).

Prestación directa por el Ayuntamiento: en algunos municipios, el Ayuntamiento se hace cargo a través de sus oficinas en la cabecera municipal de administrar los servicios en la cabecera o en localidades cercanas.

Organismo público descentralizado del gobierno municipal (OPDM), con personalidad jurídica y patrimonio propio. Deben ser autorizados por acuerdo del Ayuntamiento y se hacen cargo del usufructo del patrimonio; aun cuando los equipos y activos formen parte de dicho patrimonio si así lo dispone el reglamento o acuerdo correspondiente, el Municipio nunca pierde la propiedad original de los mismos y los recupera si se llega a extinguir el OPDM. De acuerdo con la Ley de Agua Potable y Alcantarillado del Estado de Oaxaca (LAPAO), para constituirlos se requeriría una solicitud a la CEA, que lleva a cabo un trámite para que el Organismo sea reconocido como tal y su creación sea publicada en el Periódico Oficial.

Organismo público descentralizado del gobierno estatal (OPDE), que según la LAPAO requieren ser formados por autorización y con acta del Ayuntamiento, más la autorización de mayoría simple del Congreso del Estado, previa solicitud del Municipio y estudio técnico que demuestre que éste no puede hacerse cargo de los servicios.

Fideicomiso público (según la Ley para la Planeación y el Desarrollo Administrativo de los Servicios Públicos Municipales del Estado de Oaxaca, LPDASM). Actualmente en la zona turística de Huatulco, el fideicomiso federal FONATUR es propietario y operador de los sistemas de agua y saneamiento.

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En la Zona Metropolitana de la Ciudad de Oaxaca (ZMO), ADOSAPACO opera total o parcialmente los sistemas de agua y alcantarillado en 10 municipios, como organismo desconcentrado de SINFRA. Por su parte, la CEA opera principalmente las redes de agua potable en 15 sistemas, 4 de ellos en la ZMCO. Sin embargo, esta operación se hace de facto, ya que no se siguieron los procedimientos contemplados en la Ley para facultar al Estado a prestar estos servicios municipales.

De acuerdo con la LPDASPM y la LAPAO, los servicios municipales también pueden ser prestados, con autorización y bajo supervisión de los Ayuntamientos, bajo los siguientes modelos:

Contratos de prestación de servicios, celebrados por los ayuntamientos, por los OPDE o por convenio con la CEA.

Sistemas independientes. Concesión a personas físicas o morales, es decir, a particulares o a comités constituidos en

personas morales. Organismos intermunicipales por convenio entre los Ayuntamientos que los componen y/o

con la CEA. Mediante empresas de participación municipal (LPDASPM). La Figura 2 ilustra la organización actual del sector.

VIII. Figura 2 Organización institucional actual del sector

La Figura 3 muestra la distribución actual de las funciones.

Zona ruralCiudades Intermedias

ZonaMetropolitana

Oaxaca

ADOSAPACO CEA

SINFRA

OO OO OOOO

Mun. 1

OO

OO OO OOOO OO

OO OO OOOO OO Mun. 1 Mun. 1

OO Agen-cia

Mun. 1

OO

Comité

Comité

ComitéComité

Comité Comité

Comité

Comité

Mun. 1

OO Agen-cia

Comité

Comité Comité

ComitéComité

Comité Comité

Comité

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Función Estado Municipio OPD Comités

Política pública

CEA

Normativa

Ayuntamiento

Planificación OO Financiamiento Asistencia técnica Ejecución de programas de obra y mejora operativa

Ayuntamiento OO

Operación Comités Gestión comercial Construcción directa de obras

Regulación del desempeño

IX. Figura 3 Distribución actual de las funciones

La configuración actual presenta los siguientes problemas:

No existe claridad en la distribución de las funciones. La CEA norma el ejercicio de los recursos estatales, participa en la ejecución de recursos federales, opera 15 sistemas de abastecimiento de agua potable (incluyendo las funciones de recaudación), contrata y supervisa la ejecución de obra pública hidráulica y sanitaria, apoya la capacitación de los operadores y comités rurales, además de dar seguimiento al desempeño de los operadores municipales, de manera limitada e incipiente.

No existe formalidad legal en los modelos más importantes; el Estado presta servicios sin contar con los requisitos De Ley y la mayoría de los comités no han sido constituidos ni operan bajo una supervisión efectiva de los Ayuntamientos.

No existe ninguna forma de regulación del desempeño (las tarifas son aprobadas por los Ayuntamientos o el Consejo de la CEA, según el caso, sin una supervisión efectiva del Congreso y sin condiciones específicas de desempeño asociadas a los ingresos tarifarios y los programas de inversión).

Al estar a cargo de la operación de sistemas de distribución, la CEA no ejerce plenamente sus funciones normativas y de asignación del financiamiento, ya que cuenta con información de primera mano de sus propios sistemas, para los cuales gestiona plenamente los recursos y arma los expedientes, mientras que al resto los atiende sólo a petición del organismo o municipio.

Numerosas localidades y colonias urbanas funcionan con comités vecinales, no siempre establecidos de manera formal ni con supervisión del municipio.

b. Visión para la reforma institucional

La visión de un sector modernizado implica tender hacia un modelo de municipalización de los servicios, en el cual el Gobierno del Estado, a través de la CEA, pueda mantener participación en los órganos de gobierno de los sistemas operadores, continúe en su papel de proveedor de asistencia técnica, además de conservar la capacidad de ejecutar obras y acciones en los casos en que los propios municipios y organismos operadores se lo soliciten mediante los convenios respectivos.

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La redistribución de responsabilidades y modos de organización institucional incluye:

Al nivel sectorial, reorientar el papel de la CEA hacia una función de rectoría, que dejará gradualmente la operación de sistemas y se concentrará en funciones de (a) planificación y financiamiento para coordinar la aplicación de los recursos financieros del sector con enfoque de equidad y eficiencia, (b) asistencia técnica a los prestadores de servicios urbanos y rurales, y (c) normativa de la ejecución de los programas estatales y el cumplimiento de normas de diseño, construcción y servicio 28 . Conservaría también atribuciones para contratar y supervisar la ejecución de obras de infraestructura hidráulica y sanitaria, así como las acciones de mejora de los servicios subvencionadas con programas federalizados, que no sean convenidas y ejecutadas por los propios municipios u organismos descentralizados.

En las zonas urbanas, promover la constitución de organismos operadores autónomos, bajo diferentes opciones de modelos de gestión que propicien la separación de funciones y se ajusten a la escala más conveniente:

o Organismo operador municipal descentralizado, con personalidad jurídica y patrimonio propio, bajo la supervisión del Ayuntamiento.

o Organismo operador intermunicipal con personalidad jurídica y patrimonio propio, creado por convenio entre los municipios que lo componen y bajo la supervisión de un órgano de gobierno con participación municipal.

o Organismo operador paraestatal de carácter intermunicipal, con personalidad jurídica y patrimonio propio, creado por convenio de los municipios participantes con el Gobierno del Estado y adscrito al mismo.

En las zonas rurales, fortalecer los comités comunitarios mediante el apoyo técnico y de organización por parte de la CEA y bajo la responsabilidad y supervisión municipal.

La Figura 4 ilustra la visión objetivo de la organización del sector en Oaxaca.

En la nueva visión de la organización institucional del sector en Oaxaca se tendrá una delimitación más clara de los roles de rectoría, prestación de servicios y seguimiento y regulación.

La rectoría comprende la definición e implementación de la política pública estatal del sector, la planificación estatal, la implementación de procesos de asistencia técnica y la coordinación del financiamiento sectorial. Es una función que debe separarse de las responsabilidades operativas.

La ZMO, que por sí misma está siendo objeto de un programa de fortalecimiento y desarrollo intenso, se avizora como un OPDE adscrito a SINFRA, en cuyo Consejo de Administración participa la CEA. Está siendo analizada en el Congreso del Estado una ley que creará el Sistema de Agua Potable y Alcantarillado de Oaxaca (SAPAO), aglutinando localidades de toda la ZMO, incluyendo los 5 sistemas de dicha zona que actualmente opera la CEA.

28 Las funciones normativas relativas al uso y preservación del recurso agua corresponden a la Conagua y Profepa; la normativa de la calidad del agua potable, a la Secretaría de Salud; la normativa ambiental, a Semarnat y Profepa. Aquí se consideran sólo las funciones normativas que competen al ámbito estatal de acuerdo con el marco constitucional mexicano.

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X. Figura 4 Visión objetivo de la reorganización del sector

Los 11 sistemas municipales restantes operados por la CEA, en el corto plazo permanecerán bajo la responsabilidad de dicha entidad (durante la primera parte de la implementación del Programa, mientras se fortalecen sus capacidades de generar información y se resuelven sus problemas más importantes de calidad en el servicio y cobertura); se propone:

o Que en el corto plazo se separe la operación de los OO actualmente bajo responsabilidad de la CEA, para crear un OPDE que asuma de manera autónoma las funciones operativas. En su órgano de gobierno podría seguir participando la CEA.

o Que en un plazo máximo de 2 años se instrumente lo necesario para restablecerlos como OPDMs, excepto si los Ayuntamientos correspondientes solicitan que su operación siga siendo asumida por el OPDE. Una vez descentralizados, en su órgano de gobierno podría seguir participando la CEA, y participarían como organismos en los programas de financiamiento y asistencia técnica en igualdad de circunstancias que el resto de los OPDMs de las ciudades medias del Estado.

Se buscaría que las localidades urbanas mayores o ciudades medias contaran en el mediano plazo (fuera del periodo del Programa) con OPDMs, de carácter intermunicipal (OPDIM) en los casos que sea conveniente, implementando los incentivos que propicien la integración de los sistemas.

En los casos en que los Ayuntamientos así lo decidan, deberían existir las condiciones para propiciar la participación regulada del sector privado en la operación de los sistemas.

Las localidades rurales y periurbanas, así como los pequeños fraccionamientos, deberían seguir funcionando mediante comités, pero debidamente constituidos, de ser posible como personas morales con personalidad jurídica, reconocidas formalmente por los Ayuntamientos, como concesionarias de la prestación de los servicios, y con el soporte técnico de los propios

Zona ruralCiudades IntermediasOaxaca

EmpresaParaestatal ZMO

CEA

SINFRA

Mun. 1Unidad de Negocio Mun. 1 Mun. 1

OO

Mun. 1

OO

Comité

Comité

ComitéComité

Comité Comité

Comité

Comité

Organismointermunicipal

Comité

Comité Comité

ComitéComité

Comité Comité

Comité

EmpresaParaestatal resto

Unidad de Negocio

Unidad de Negocio

Unidad de Negocio

Unidad de Negocio

Unidad de Negocio

Unidad de Negocio

Residencia Residencia

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gobiernos municipales, cuando éstos tengan la capacidad y la escala necesarias, o de la CEA a través de sus Residencias Regionales (RR).

Cabe señalar que la LPDASPM contempla la posibilidad de operar los servicios municipales mediante modelos alternativos, como fideicomisos públicos, contratos de prestación de servicios o empresas de participación municipal. El nuevo marco legal y reglamentario deberá incluir las previsiones para facilitar la implementación de este tipo de modelos cuando

resulte viable desde los puntos de vista político, social y económico. La Figura 5 ilustra la transición propuesta en grandes rasgos.

Función Años 1-2 Años 3-4 Mediano plazo Largo plazo Definición de la política pública estatal

GdO, SEFIN, SINFRA, Congreso del Estado

Planificación CEA OO Mpales. ADOSAPACO / SAPAO

CEA (planificación estatal) OPDM / OPDIM / OPDE (planificación de los servicios municpales) SAPAO (planificación en la ZMO)

Asistencia técnica CEA (limitada) CEA (reforzada) CEA (Residencias reforzadas) Ayuntamientos Asociaciones o federaciones de comités

rurales, u otro modelo viable.

Financiamiento de capital (inversión)

Federal, estatal, municipal

Federal, estatal, municipal (optimizado) Desarrolladores inmobiliarios

Federal, estatal, municipal Desarrolladores inmobiliarios Tarifas Sector privado

Financiamiento de operación y mantenimiento

Subsidios estatales Tarifas (insuficientes)

Subsidios estatales y municipales (decrecientes) Tarifas (crecientes)

Subsidios directos focalizados Tarifas

Subsidios directos focalizados Tarifas

Prestación de servicios urbanos

SAPAO en ZMO. OPDE en 11 sistemas. Municipios, OO Mpales. y Comités (en modernización y transformación)

SAPAO en ZMO. 18 OPDM u

OPDIM (Programa MAS) Comités vecinales (en regularización)

SAPAO en ZMO 18+ OPDM (creciente, con OPDIM donde sea viable) Comités con personalidad jurídica

Ídem + CPS, fideicomisos públicos, empresas mixtas de participación municipal

Prestación de servicios rurales

Comités comunitarios (en fortalecimiento)

Comités comunitarios (formalizados, fortalecidos)

Comités comunitarios e inter-comunitarios

Regulación y control Fortalecer medición, mejorar coberturas y calidad

Monitoreo y seguimiento de metas (DLI’s) y del desempeño.

Incentivos al buen desempeño.

Regulación del desempeño asociada a autorizaciones tarifarias y de inversión.

XI. Figura 5 Transición institucional en los servicios de agua y saneamiento en Oaxaca

3. Política financiera

Busca alcanzar un uso equitativo y eficiente de los recursos financieros en los ámbitos de la operación y de la inversión:

Financiamiento de los costos de operación y mantenimiento por ingresos vía tarifas más, en algunos casos, con un subsidio que deberá aplicarse sólo de manera justificada y focalizada a los usuarios en condiciones económicas adversas.

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Financiamiento de las inversiones en infraestructuras principalmente a partir de subsidios de origen fiscal mediante los fondos y ramos federales, estatales y municipales. La aplicación de los recursos del programa deberá hacerse de manera coordinada y con criterios claros de equidad y eficiencia, vinculados a compromisos de cobertura, calidad de servicios y sostenibilidad financiera por parte de los operadores descentralizados y los ayuntamientos.


El financiamiento actual de los servicios de agua y saneamiento presenta problemas de suficiencia, pertinencia y claridad:

Actualmente la CEA integra las peticiones de los ayuntamientos y operadores para gestionar recursos federales y estatales.

No existe un registro ni coordina la aplicación de recursos de las fuentes que financian el sector mediante otros programas.

La CEA depende de SEFIN para acceder y ejecutar a los recursos, inclusive aquéllos provenientes de la recaudación de los OO que opera directamente.

Para los sistemas que dependen de la CEA, es el Consejo de ésta quien tiene las facultades para definir las tarifas. Para ADOSAPACO, las tarifas son propuestas por el Gobierno del Estado. Los Ayuntamientos también determinan las tarifas de los sistemas que manejan. En todos los casos, las tarifas son publicadas por el Congreso sin una revisión técnica de fondo; no se presentan problemas de inconformidad social debido a que la mayoría de las tarifas siguen siendo muy bajas. La mayor parte de los comités, fraccionamientos y colonias definen las cuotas que pagan a los responsables de la operación de los sistemas sobre la base de cobertura de los costos operativos; la supervisión de los Ayuntamientos sobre la recaudación en estos comités es muy limitada o inexistente.

La CEA lleva el registro de algunos indicadores de desempeño de los sistemas que controla, pero está en proceso de mejora de la calidad de los datos y la medición. La información no es pública.

b. Visión de una nueva política financiera

En el sistema financiero futuro del sector deberá existir una coordinación efectiva en la aplicación de recursos estatales. La asignación del presupuesto a los organismos operadores y municipios se debe hacer bajo criterios objetivos, ligados a un programa hídrico integral, que incluya de manera equilibrada acciones de infraestructura y mejora operativa.

Progresivamente, el modelo de asignación presupuestal considerará compromisos explícitos de parte de los operadores para generar resultados verificables con base en indicadores, bajo criterios de equidad, eficiencia, enfoque a la reducción de desigualdades e impacto efectivo en coberturas. Es decir, los recursos de inversión serán asignados de manera prioritaria en donde tengan más impacto en la ampliación de coberturas; asimismo, los recursos para fortalecimiento institucional se asignarán en donde más se requieran, pero también a quienes más lo merezcan: se darán incentivos financieros a los organismos que demuestren haber mejorado. Se establecerán esquemas de financiamiento basados en resultados entre el Gobierno del Estado y los OPDMs.

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Un objetivo fundamental de la reforma institucional es que los recursos sean utilizados de manera más eficiente y con resultados. Esto implica identificar, separar y racionalizar los flujos financieros destinados a cubrir los costos de inversión y los operativos. Se propone:

a) Inversión en infraestructura Se seguirá apoyando primordialmente en fuentes provenientes del presupuesto autorizado

a la CEA, con recursos de origen fiscal o de crédito externo, pero con una participación creciente de los municipios más fuertes en el financiamiento de las inversiones con base en sus propias fuentes fiscales (vgr. impuesto predial).

Una parte de la infraestructura es desarrollada normalmente mediante el cobro de derechos a desarrolladores inmobiliarios. Se revisará el marco legal del sector vivienda y fraccionamientos para ordenar el crecimiento de las ciudades y formalizar su contribución a la inversión en infraestructura.

b) Operación y mantenimiento Los ingresos tarifarios deberán cubrir, de manera creciente y progresiva, los costos de

operación y mantenimiento, los cuales deberán ser optimizados con apoyo en inversiones en mejoras operativas; los subsidios cruzados y directos serán también optimizados. Así, mientras los costos del servicio disminuyen mediante mejoras en eficiencia, los ingresos deberán aumentar debido a ajustes tarifarios, mejoras en la facturación y recaudación, incremento en cuentas conectadas y mejor medición. La diferencia entre la tarifa requerida para la sostenibilidad de cada sistema y la tarifa aprobada por el municipio deberá cubrirse mediante subdsidios directos, pero focalizados a los usuarios que realmente no tengan la posibilidad de pagar (Figura 6).

Esta política pública deberá reflejarse en el nuevo marco legal, bajo los siguientes principios:

La tarifa objetivo cubrirá, en el largo plazo, plenamente los costos de operación y mantenimiento; en caso de que los ayuntamientos decidan subsidiarla parcialmente, dichos subsidios deberán ser optimizados (no subsidiar la ineficiencia), focalizados (dirigidos a los usuarios en verdadera situación de desventaja económica) y cada vez menores.

En caso de existir subsidios cruzados, deberán ser transparentes y no regresivos. La definición de la tarifa debería quedar establecida en un procedimiento reglamentado, en el

que se estipulen los objetivos de suficiencia, eficiencia económica, estabilidad y gestión de la demanda.

Los subsidios deberían ser aprobados por el Congreso del Estado y aportados por las haciendas municipales.

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XII. Figura 6 Ilustración del proceso de racionalización financiera (operación y mantenimiento)

La aprobación de las tarifas, así como la de los programas de inversión con recursos estatales, deberá estar vinculada a metas verificables de mejora en el desempeño, garantizadas con participaciones municipales en su caso.

Por otra parte, se ha discutido la conveniencia de que la CEA concentre y coordine la aplicación de los recursos de inversión de origen estatal, con objeto de utilizarlos como una “palanca” que permita inducir a los organismos municipales y ayuntamientos a:

Adoptar procedimientos contables y de registro de indicadores que en el futuro hagan posible la implementación de mecanismos de regulación del desempeño.

Dar incentivos con base en el logro sobresaliente de resultados y, en su caso, penalizar el desempeño deficiente.

Apoyar la incorporación, capacitación y certificación de recursos humanos de calidad a los sistemas operadores.

Idealmente, la estructura programática de los recursos a ejercer por la CEA reflejará la política hídrica del Estado, en dos sentidos:

a) Asignando más recursos a los programas que reflejen las prioridades estatales, según el tema.

b) Enfocando las inversiones a las localidades, municipios o regiones con mayores rezagos de cobertura y calidad de servicios, mediante una fórmula de asignación predefinida.

De esta manera, el financiamiento constituiría una palanca de cambio fundamental, que puede iniciar con la aplicación de los recursos del programa MAS Oaxaca.

•Mejora de eficiencia

•Aumento tarifario•Mejora facturación•Mejora recaudación•Aumento # clientes•Aumento medición

1 2 3 4 5

Co

sto

de

l se

rvic

io

Año

Transferencias

Ingresos por operación/ y tarifa

•Focalizados, por municipio

Mejora en calidad de servicio

Tarifa aprobada Municipio(s)

SubsidiosTarifa dictaminada Regulador

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4. Marco de seguimiento y regulación

Los servicios públicos de agua, alcantarillado y saneamiento constituyen monopolios naturales de carácter local. En ausencia de un marco de regulación, existen posibilidades de que los operadores aprovechen su poder monopólico y exhiban conductas oportunistas, en el sentido de que se privilegian intereses de los responsables de la operación, alejados de los intereses de la colectividad en la que reside originariamente la autoridad, misma que se delega a los Ayuntamientos. La regulación busca introducir mecanismos para que la empresa monopólica (en este caso los sistemas operadores) se comporte como lo haría en un contexto competitivo, de manera que no se transfieran ineficiencias al usuario ni se afecte su bienestar.


Como en gran parte del país, en Oaxaca no existe un marco formal de seguimiento y regulación:

No se hace un seguimiento formal ni sistemático de los indicadores de desempeño de los operadores municipales. La CEA cuenta con información de los 15 sistemas que opera, pero la información no es pública; actualmente se llevan a cabo acciones para mejorar la calidad de la medición de los datos y la generación de información, que es aún muy deficiente e inconsistente. Del resto de los sistemas, algunos reportan sus indicadores a la base de datos de la Conagua, pero de manera inconsistente y variable. Otros han reportado indicadores al sistema “PIGOO” del IMTA, también en forma inconsistente. El INEGI cuenta también con datos recabados en los censos y conteos de población, así como en las encuestas económicas, pero normalmente están organizados por unidades geoestadísticas que no siempre coinciden con las localidades y organismos registrados por la CEA o la Conagua.

La aprobación de los programas de inversión y las tarifas no está vinculada a compromisos de desempeño. Los incrementos tarifarios son gestionados en el último trimestre de cada año y publicados al iniciar el siguiente. Los programas de inversión en infraestructura dependen casi totalmente de las inversiones federales o estatales, las cuales se sujetan a reglas de operación publicadas el primer trimestre de cada año. Así, el diseño de las tarifas no considera el posible beneficio derivado de una mejora en las eficiencias que reduzca los costos y permita ajustar las tarifas. Por otra parte, los derechos por aprovechamiento de aguas nacionales y descargas, así como los incrementos en el precio de la energía eléctrica y los combustibles, incluidos en los presupuestos federales de ingresos, también se conocen después de que las tarifas han sido aprobadas.

Tanto por la vía tarifaria como por la de los subsidios presupuestales, el financiamiento de los servicios de agua y saneamiento es insuficiente, inestable (variable sin una tendencia previsible año con año), en ocasiones impredecible en el corto plazo (por ejemplo en el caso de la devolución de derechos vía el programa PRODDER o las transferencias de recursos federales, cuya fecha de radicación no se conoce y suele ser tardía).

Los programas de subsidio son asignados a la demanda; es decir, que aquellos organismos que cuentan con mejores capacidades para generar expedientes y gestionar los recursos, incluyendo el pago de los derechos federales y el financiamiento de las obras durante el periodo de espera de la devolución de los mismos, son los que se llevan la mayor parte de los recursos. No existe una política clara de asignación diferenciada y

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equitativa, donde los municipios y organismos que requieran más recursos por su rezago en cobertura y calidad, o que merezcan recibir incentivos por su desempeño, tengan un acceso preferente a los subsidios.

Lo anterior indica la urgencia de establecer un sistema financiero del sector que aporte recursos suficientes, estables, en forma equitativa y focalizada a la reducción de los rezagos en cobertura y calidad. Esto implica revisar los procedimientos para la determinación de tarifas, pero también la implementación de mecanismos de seguimiento del desempeño y de incentivos y penalizaciones asociados a los mismos, mediante un marco de seguimiento y regulación claro.

b. Visión para un marco de seguimiento y regulación

El programa de modernización de los sistemas incluirá el fortalecimiento de sistemas contables y de registro de indicadores de desempeño, que permita dar seguimiento al cumplimiento de metas y resultados para el desembolso del crédito.

Progresivamente, se instrumentarán mecanismos que permitan el seguimiento y la mejora del desempeño de los operadores. El siguiente recuadro ilustra las principales formas de evaluación del desempeño (Berg, 2010).

En materia de regulación, se consideran los dos ámbitos usuales (Jouravlev, 2001):

• Comparación métrica parcial: productividad en aspectos específicos del organismo y en

ocasiones de manera agregada mediante sumas ponderadas

• Clasificación (ranking): calificaciones de desempeño basadas en indicadores de producción o

costos, donde se busca ubicar indicadores anómalos de un organismo contra otros similares, con

objeto de orientar a sus directivos para ubicar las razones de dicha anomalía

• Comparación contra una empresa modelo: “diseñada” dentro de las condiciones específicas de

un organismo, para evaluar qué tan lejos se encuentra de su propia condición ideal de operación.

• Comparación (benchmarking) por procesos: indicadores a lo largo de una cadena de producción

para ubicar diferencias en las diferentes etapas, utilizando datos de organismos similares pero

sin intención de establecer una clasificación, sino de detectar brechas en el desempeño de

procesos específicos y oportunidades de innovación.

• Comparación por encuestas de satisfacción de los usuarios: se refieren al resultado final de los

servicios como es percibido por la ciudadanía. No sólo considera estadísticas de reclamos o

aclaraciones asociadas a la cantidad, calidad y precio de los servicios, sino también las

percepciones en materia de imagen, confiabilidad, respuesta, cortesía y empatía del personal.

Recuadro 2 Principales formas de evaluación del desempeño (Berg, 2010)

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a) Regulación estructural. Se refiere a definir los modelos de organización que tendrán cabida en la prestación de los servicios de agua y saneamiento, así como la forma en que se separan las funciones.

b) Regulación de las conductas. Se enfocan en el seguimiento y sanción del desempeño de los operadores, ligado al control de los precios (tarifas) y de las inversiones.

La regulación estructural corresponde a lo expresado en el apartado “reforma institucional” de este documento.

Las principales formas de regulación de las conductas que podrían ser viables en Oaxaca en el mediano plazo son:

Inductivas: premiando con algún incentivo a los operadores que logren acercarse a un desempeño objetivo (“yardstick”), o bien a los que obtengan los mejores indicadores de desempeño entre un conjunto de operadores (“benchmarking”).

Por competencia: asignando los recursos presupuestales en función de los resultados obtenidos en ejercicios anteriores.

Dado que la situación actual de los operadores es en general precaria, se reconoce que la implementación de un marco de seguimiento y regulación deberá en todo caso hacerse por etapas (Tabla 1):

a) En la fase de inversión en mejoras para el desarrollo de los operadores, se implementará un proceso de fortalecimiento de los sistemas contables y de registro de indicadores de desempeño, con objeto de mejorar las capacidades de medición y la calidad de los servicios (años 1-2, periodo del Programa). Se establecerá un sistema de registro y medición de indicadores para dar seguimiento al cumplimiento de los indicadores de desembolso y detectar posibles desviaciones de las metas planteadas (años 1-4 del programa).

b) En el mediano plazo, se podrán establecer metas de mejora asociadas a la aplicación de los fondos estatales bajo un modelo basado en rangos-objetivo de mejora (por ejemplo, transfiriendo parte del recurso sujeto al logro de resultados y con una prima cuando se mejoran los indicadores de desempeño).

c) Una vez fortalecidos los sistemas y con las bases adecuadas para el registro de los indicadores, se podrán establecer:

a. Mecanismos de regulación más estrictos basados en indicadores de desempeño. b. Para la aprobación de tarifas: definición de la tarifa eficiente con base en los

indicadores de gestión.

XIII. Tabla 1 Etapas y características del marco de regulación propuesto

Etapa Acciones Seguimiento Regulación del

desempeño

Fortalecimiento (años 1-4)

Asignar recursos de inversión para fortalecer a los operadores

Asignar los recursos con base en el programa de fortalecimiento, con

Se fortalecerán las capacidades para medir y generar datos e

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Implementar procedimientos contables y de registro de indicadores

medición y control de los resultados para el cumplimiento del contrato del crédito y el logro de los desembolsos.

indicadores. Se creará la cultura de

medición de indicadores.

Desarrollo (posterior al programa MAS)

Implementar un sistema de medición y evaluación de indicadores

Se orientarán los programas de subsidio a la inversión con base en el rezago pendiente y los resultados de ejercicios anteriores.

Premiar con mayor subsidio a los operadores con desempeño sobresaliente

Operación sostenible

Minimizar los subsidios a la inversión

Implementar un sistema financiero en función del desempeño

Los operadores con mejor desempeño accederán a financiamiento más favorable.

El regulador verificará con base en los indicadores el cumplimiento de normas de desempeño.

La implementación de procedimientos para contar con indicadores es indispensable también para apoyar la evaluación y el rediseño de políticas.

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FINANCIAMIENTO DEL SECTOR DE AGUA Y SANEAMIENTO ESTADO DE OAXACA-MEXICO

December 2013

Table of Contents

A. RESUMEN EJECUTIVO .................................................................................................................... 87

A. INTRODUCCION ................................................................................................................................ 91

B. ESQUEMA DE FINANCIAMIENTO DEL SECTOR ...................................................................... 91 B.1. ETAPAS POR LAS QUE PASA EL RECURSO FINANCIERO DEL SECTOR ............................. 91 B.2. PARTICIPACION DE GOBIERNO FEDERAL, ESTATAL Y MUNICIPAL EN EL

FINANCIAMIENTO Y EJECUCION DE LA INVERSION ......................................................................... 94

C. MONTO DESTINADO AL FINANCIAMIENTO DE INVERSIONES DEL SECTOR DE AGUA Y SANEAMIENTO 2007-2012 ........................................................................................................... 97

C.1. PARTICIPACION DE LOS GOBIERNOS EN LA FINANCIACION Y LA EJECUCION

DURANTE EL PERIODO .................................................................................................................................. 97 C.2. RECURSOS DE INVERSION CLASFICADOS POR ENTIDADES FINANCIADORAS ........... 98 C.3. RECURSOS DE INVERSION CLASFICADOS POR ENTIDADES INTERMEDIARIAS DEL

RECURSO FINANCIERO ............................................................................................................................... 101 C.4. RECURSOS DE INVERSION ADOSAPACO ................................................................................... 101

D. MONTO APROBADO DE INVERSIONES DEL SECTOR DE AGUA Y SANEAMIENTO 2013 ........................................................................................................................................................ 102

E. PARTICIPACION DE LAS INVERSIONES DEL SECTOR EN LAS FINANZAS DEL ESTADO ................................................................................................................................................................... 103

ANEXOS................................................................................................................................................... 104 ANEXO 1. FORMA DE CONTABILIZACION DE LAS INVERSIONES PARA CADA ENTIDAD. 104 ANEXO 2. PROGRAMAS Y ENTIDADES QUE PARTICIPAN EN LA FINANCIACION Y

UTILIZACION RECURSOS EN EL SECTOR ............................................................................................ 106 ANEXO 3. DETALLE DE INVERSIONES ANUALES POR PROGRAMA Y ENTIDAD 2007-2012 ............................................................................................................................................................................... 110 ANEXO 4. DETALLE DE INVERSIONES ANUALES POR PROGRAMA Y ENTIDAD 2013 ...... 118

____________________________________________________________________________________________

lxxxvi

ABREVIATURAS

ADOSAPACO Administración Directa de Obras y Servicios de Agua

Potable y Alcantarillado de la Ciudad de Oaxaca APAZU Programa de Agua Potable, Alcantarillado, y

Saneamiento en las Zonas Urbanas CDI Comisión Nacional para el Desarrollo de los Pueblos

Indígenas CEA Comisión Estatal Agua CONAGUA Comisión Nacional de Agua FAFEF Fondo de Aportaciones para el Fortalecimiento de

Entidades Federativas FAIS Fondo de Aportaciones para la Infraestructura Social FISE Fondo de Aportaciones para la Infraestructura Estatal FONMET Fondo Metropolitano FONREG Fondo Regional PIBAI Programa de Infraestructura Básica para la Atención de

los Pueblos Indígenas PNE Programa Nacional de Emergencia POH Construcción de Pequeñas Obras Hidráulicas PRODDER Programa de Devolución de Derechos PROSANEAR Programa Federal de Saneamiento de Aguas Residuales PROSSAPYS Programa para la Construcción y Rehabilitación de

Sistemas de Agua Potable y Saneamiento en las Zonas Rurales

PROTAR Programa de Tratamiento de Aguas Residuales SEDESOL Secretaría de Desarrollo Social SEFIN Secretaría de Finanzas Estado de Oaxaca SINFRA Secretaría de Infraestructra Estado de Oaxaca

FINANCIAMIENTO DEL SECTOR DE AGUA Y SANEAMIENTO ESTADO DE OAXACA-MEXICO

A. Resumen Ejecutivo El esquema de financiamiento del sector es complejo y atomizado. Varias son las entidades que participan en la financiación del sector, y otras son las entidades que ejecutan el recurso. El Gobierno Federal ejerce un papel protagónico en la financiación del sector, mientras que el gobierno de Estado ejerce un papel importante en la canalización del recurso y en la ejecución del mismo, pero no en la dirección y planeamiento del sector. No existe una entidad coordinadora del sector en su financiación, planeación, ejecución . La información no se encuentra centralizada y cada dependencia maneja cifras parciales, en función del programa que maneja o de los recursos que canaliza. No está unificada la metodología del registro de la información y cada entidad la registra en forma diferente. La elaboración de este documento tuve serias dificultades en la consecución y con la consistencia de la información. Las cifras que acá se presentan corresponden a las suministradas por la SEFIN en el Departamento de Programación e Integración del Presupuesto El objetivo de este estudio es presentar el esquema de financiamiento del sector, el mecanismo de ejecución, y la magnitud de los recursos que se utilizan de acuerdo con su destino. Los principales resultados del estudio son: El financiamiento del sector de agua y saneamiento en el Estado de Oaxaca se hace

principalmente con recursos Federales, seguido por recurso del gobierno Estatal y luego de los gobiernos municipales.

La transferencia de recursos se hace en la mayor parte a través de la Secretaria de Finanzas del Estado (SEFIN), la cual canaliza los recursos federales, y las contrapartidas de los gobiernos estatal y municipales. Una mínima parte del recurso no pasa por SEFIN, sino que va directamente a la entidad ejecutora.

La ejecución de las obras de inversión se hace a través de la Secretaría de Infraestructura (SINFRA), Comisión Estatal del Agua (CEA) , y Municipios.

La inversión se financia con recursos del gobierno federal a través de: SHCP, CONAGUA, SEDESOL, CDI, CONAZA, y SEMANAT las cuales administran algunos programas con finalidad específica para el sector de agua y saneamiento. El gobierno estatal y gobierno municipal participan en la financiación a través de la contrapartida exigida por dichos programas, y otros programas administrados por ellos directamente. El esquema de financiamiento se presenta en el siguiente diagrama

____________________________________________________________________________________________

88

En el período 2007-2012, se han destinado a inversiones del sector de agua y saneamiento un promedio Mx 724 millones por año. La participación de los gobiernos federal, estatal, y municipal varía según su papel en la financiación, traspaso, y ejecución de los recursos. El Gobierno Federal ha participado con el 52% en la financiación, y los recursos los ejecuta el Gobierno Estatal ó los municipios. El Gobierno Estatal en cambio, ha participado con el 32% en la financiación, ha traspasado el 100% de los recursos, y ha ejecutado el 93% de los fondos disponibles en inversión. Los municipios han participado con 16% en la financiación y 7% en la ejecución Los montos de inversión han venido aumentando a una tasa anual del 19%, alcanzando un valor en el 2012 2.4 veces superior al registrado en el 2007. La participación de los gobiernos federal, estatal, y municipal en la financiación, y ejecución de los recursos ha tenido una tendencia creciente (Diagrama 2). La financiación de los gobiernos federal y estatal han crecido 21% en promedio anual en el período 2007-2012, y el monto se ha duplicado en el mismo período. Los recursos del gobierno municipal han aumentado 8% en promedio anual y el monto ha crecido un 50%. Con respecto a la ejecución de los fondos, tanto el gobierno estatal como municipal ha aumentado los recursos en forma importante, 18% y 26% respectivamente en promedio anual. El gobierno estatal duplicó el monto ejecutado y el gobierno municipal lo triplicó.

____________________________________________________________________________________________

89

Montos anuales de financiación y de ejecución del Gobierno federal, estatal , y municipal

(Millones Mx)

En términos porcentuales el gobierno federal ha mantenido su participación promedia de un poco mas del 50% en la financiación del sector. El gobierno estatal ha aumentado en 3 puntos su participación del 27% en el 2007 al 30% en el 2012. Mientras que los gobiernos municipales han disminuido del 21% al 13%. En cuanto a la ejecución de inversiones, el gobierno estatal y municipal han mantenido relativamente constante su contribución en 93% y 7% en promedio respectivamente. Participación porcentual del Gobierno federal, estatal, y municipal en la financiación y ejecución de las inversiones

(%)

Del total invertido en el sector, los programas del gobierno federal contribuyeron con el 96% de la financiación de las inversiones, y el restante 4% provino de programas del gobierno estatal. Los programas que mas aportaron al financiamiento de las inversiones del sector fueron los administrados por la SHCP con el 52% de los recursos totales de los programas federales, seguido por CONAGUA con el 40%, y el CDI con el PBAI con el 8% restante. Composición de los recursos de financiamiento por programa y procedencia del recurso

219 197

387

476

406

FEDERAL578

115161

210 202

386

ESTATAL,13

89132 MUNICIPAL,12

66

142 132

423490

743 745

933

TOTAL1,015

-

200

400

600

800

1,000

1,200

2,007 2,008 2,009 2,010 2,011 2,012

MilionM

X


394

473

ESTATAL705

718

813

919

30 16

MUNICIPAL38 26

120 95

423490

743 745

933TOTAL1,015

-

200

400

600

800

1,000

1,200

2,007 2,008 2,009 2,010 2,011 2,012

MilionM

X


93%97% ESTATAL,95% 96%

87%91%


13%9%

0%

20%

40%

60%

80%

100%

2,007 2,008 2,009 2,010 2,011 2,012


52%

40%

52%

64%

43%

FEDERAL57%

27%

33%ESTATAL,28% 27%

41%

30%

21%

27%

MUNICIPAL,20%

9%

15%13%

0%

20%

40%

60%

80%

100%

2,007 2,008 2,009 2,010 2,011 2,012


____________________________________________________________________________________________

90

. PROMEDIO ANUAL INVERSION POR PROGRAMA Período 2007-2012

Miles Mx % % PROGRAMAS FEDERALES

CONAGUA 278,102 40% SHCP 365,541 52% CDI 53,470 8% SERMANAT - 0% - - 0% TOTAL PROGRAMAS FEDERALES 697,114 100% 96%

PROGRAMAS ESTATALES 27,595 4% PROGRAMAS MUNICIPALES - 0% TOTAL SECTOR 724,708 100%

La importancia de las inversiones del sector en el total del presupuesto del Estado corresponde en promedio al 2%, y con respecto a las inversiones totales al 9.5%

% Inversiones del sector en el presupuesto y las inversiones 2008 2009 2010 2011 2012 Promedio

2008-2012 Inversiones WSS 490 743 745 933 1,015 785 % of budget of the state 1.2% 1.8% 1.7% 2.0% 2.1% 1.8% % de inversiones del State 7.5% 9.3% 8.8% 11.5% 10.0% 9.5%

PROGRAMASFEDERALES,96%

PROGRAMASESTATALES,4%

PROGRAMASMUNICIPALES,0%

RecursosdeInversionsegunprogramaGobiernoFederal,EstataloMunicipal

CONAGUA40%

SHCP52%

CDI8%

ProgramasFederalesCalsificadosporEn dad

____________________________________________________________________________________________

91

A. INTRODUCCION Este estudio hace parte del análisis financiero que se adelanta dentro del Programa de Modernización del Sector de Agua y Saneamiento que está preparando el Gobierno del Estado con apoyo del Banco Mundial. El objetivo del presente estudio es presentar no sólo los mecanismos de financiación y de utilización de los recursos destinados al sector de agua y saneamiento en el Estado de Oaxaca; sino también la magnitud de los mismos y su utilización en inversión y en operación. El período con el que se trabaja es de seis años abarcando desde 2007 al 2012, y el aprobado para el 2013 ajustado con la ejecución real a Septiembre. Las cifras que acá se presentan corresponden a las suministradas por la SEFIN en el Departamento de Programación e Integración del Presupuesto Este informe se divide en tres secciones, a saber: (a) esquema de financiamiento del de las inversiones del sector de agua y saneamiento; (b) montos de inversión de acuerdo con entidad en el periodo 2007-2012; y (c) monto de inversiones aprobado para 2013. En cada una de estas secciones se analiza en detalle el rol que desempeña las entidades del Gobierno Federal, Estatal, y Municipal en la financiación, el traspaso, y la ejecución de los recursos; así como los programas que se utilizan en la financiación del mismo.

B. ESQUEMA DE FINANCIAMIENTO DEL SECTOR

El esquema de financiamiento del sector es complejo y atomizado. Varias son las entidades que participan en la financiación d, y otras son las entidades que ejecutan el recurso. No existe una entidad coordinadora del sector en su financiación, planeación, ejecución. La información no se encuentra centralizada y cada dependencia maneja cifras parciales, en función del programa que maneja o de los recursos que canaliza. No está unificada la metodología del registro de la información y cada entidad la registra en forma diferente. La elaboración de este documento tuve serias dificultades en la consecución y con la consistencia de la información. Las cifras que acá se presentan corresponden a las suministradas por la SEFIN en el Departamento de Programación e Integración del Presupuesto (Ver Anexo 1 la forma como cada entidad registra las inversiones del sector)

B.1. ETAPAS POR LAS QUE PASA EL RECURSO FINANCIERO DEL SECTOR

El recurso destinado a financiar el sector de agua y saneamiento pasa por diferentes etapas desde su origen hasta destino; en cada etapa los Gobiernos Federal, Estatal y Municipal desempeñan diferentes roles y la magnitud de su participación cambia en forma importante. Adicionalmente, el esquema de financiación, y la participación de los Gobiernos es diferente según su destinación sea para inversión ó para operación y mantenimiento.

____________________________________________________________________________________________

92

Las etapas por las que pasa el recurso se agrupan en cuatro categorías: (a) financiación, correspondiente al origen del recurso; (b) traspaso, correspondiente a la intermediación financiera; (c) ejecución, correspondiente a la utilización del recurso; y (d) destino correspondiente al fin dado al recurso. El diagrama 1 presenta la ruta que sigue el recurso financiero en cada una de las etapas, así como las entidades y programas que participan en las mismas.

Diagrama 1: Etapas seguidas por el Recurso Financiero destinado al Sector, (e) La financiación del sector de agua y saneamiento se hace con recursos del Gobierno Federal, del Gobierno Estatal, y del Gobierno Municipal. Estos recursos se manejan a través de diferentes programas administrados por varias entidades a nivel federal, estatal, o municipal. Los programas a nivel federal destinados al sector de agua y saneamiento son variados, lo

mismo que las entidades que los administran. SHCP, CONAGUA, SEDESOL, CDI, y CONAZA administran los siguientes programas con fondos provenientes de : aportaciones federales (Ramo General 33), Convenios de reasignación de recursos, excedentes de ingresos federales, ó fondos de programas federales (Mayores detalles se presentan en el Anexo 2):

o SHCP: Secretaria de Hacienda y Crédito Público administra: FAFEF. FONDREG, FONDMET, FIES, AFEF

ORGANISMOSOPERADORES

FINANCIACION

CONAGUA

TRASPASO DESTINO

ADMINISTRACIONPROGRAMA

CONAGUA

SEFIN

MUNICIPIO

• SEFIN

• MUNICIPIO

• OO

RecursosPropios

Provenientestarifas

INVERSION

O&M

O&M

INVERSION

INVERSIONyO&M

EJECUCION

MUNICIPIO

• SINFRA

• CEA

• ADOSAPACO

• MUNICIPIOS

MUNICIPIO

• ADOSAPACO

• OOCEA:

CEAHasta2012.SEFINDesde2013

• RESTOOO

CEAyADOSAPACO

SHCP

SEDESOL

CDI

SEFIN

MUNICIPIO

• ADOSAPACO

• OperadoresCEA:

CEAHasta2012.

SEFINDesde2013

• RESTOOPERADORES

SINFRA,,CEA,ADOSAPACO,MUNICIPIOS

CONAZA

PROGRAMA

-PRODER-PROSANEAR-ProyectoPasoAncho

-APAZU-PROSAPyS-PROTAR-AguaLimpia-CulturadelAgua

-FAFEF,PAFEF-FONREG-FIES-FONMET-PEMEX-AFEF

-PIBAI

FAIS:FISE

-RAMO33Aportaciones

-RAMO28Participaciones-

PNE

RecursosPropias

-POH

GOBIERNOFEDERAL

GOBIERNOESTATAL

GOBIERNOMUNICIPAL

____________________________________________________________________________________________

93

o CONAGUA: Comisión Nacional del Agua administra: PRODDER, PROSANEAR, Proyecto Paso Ancho, APAZU, PROSSAPYS, Agua Limpia, y Cultura del Agua

o SEDESOL: Secretaría de Desarrollo Social administra el FAIS y el FISE o CDI: Comisión Nacional para el Desarrollo de los Pueblos Indígenas administra el

PIBAI o CONAZA: Comisión Nacional de las Zonas Áridas, dependiente de la SAGARPA

administra el POH. Los recursos estatales y municipales provienen de fondos propios y de las transferencias

federales. Las transferencias federales pueden ser aportaciones (Ramo 33), o participaciones (Ramo 23). De acuerdo con la ley de Coordinación Fiscal, los fondos del Ramo 33 una vez llegan al Estado, ellos se convierten en recursos del Estado. Los recursos del Ramo 23 en cambio son recursos federales y se regulan con ley Federal. Los recursos del Ramo 23 consisten de fondos administrados por SEDESOL, como el FISE, y por SHCP, como FAFEB.

(f) El traspaso de los recursos se hace en su mayor parte a través de la Secretaria de Finanzas del Estado (SEFIN) quien los trasfiere a las entidades encargadas de utilizar el recurso, bien sea para la contratación de obras o para la operación y mantenimiento del servicio. La SEFIN traspasa todos los recursos de origen federal (con excepción de algunos programas de CONAGUA), todos los recursos de origen Estatal, y todas las contrapartidas exigidas por los diferentes programas, sean ellas de origen federal, estatal, o municipal. La pequeña proporción de recursos que no son transferidos por la SEFIN, sino por la CONAGUA corresponden a PRODDER y PROSANEAR, los cuales son transferidos directamente de la CONAGUA a los Municipios para su ejecución. (g) La Ejecución del Recurso se hace una vez que la entidad que traspasa el recurso lo entrega a la entidad que utiliza o ejecuta el mismo. Por entidad ejecutora del recurso se entiende la entidad encargada de la contratación de la obra y la responsable por la ejecución de los trabajos. SEFIN trasfiere el recurso para su ejecución a las siguientes entidades: Secretaría de

Infraestructura (SINFRA), Comisión Estatal del Agua (CEA), y Municipios. o SINFRA como Secretaria de Infraestructura ejecuta las obras de agua y saneamiento

necesarias dentro de los programas de infraestructura que adelanta. El área de influencia de SINFRA es el Estado como un todo.

o CEA es un organismo público descentralizado que ejecuta inversiones no sólo en los 15 municipios en los cuales coordina los operadores del servicio de agua y saneamiento, sino también en todos los municipios del Estado.

CONAGUA se encarga de ejecutar directamente, o trasladarlos a los Municipios los recursos de los programas PRODDER y PROSANEAR.

Los Municipios y Organismos Operadores cuando tienen recursos disponibles y adicionales a los recursos de contrapartida, lo utilizan y ejecutan directamente.

(h) El destino del recurso puede ser a inversión ó a operación y mantenimiento.

____________________________________________________________________________________________

94

Los recursos para inversión provienen del gobierno federal, estatal, y municipal. Los recursos del Gobierno Federal se destinan exclusivamente a financiar inversiones; mientras que los recursos del gobierno estatal financian tanto inversiones, como operación y mantenimiento. Los recursos de origen municipal pueden financiar inversión y operación.

Los costos operativos se financian a través de: (i) el recaudo proveniente de tarifas cobrados por los organismos operadores; (ii) los municipios con recursos propios; (iii) la CEA, con recursos del Estado traspasados por la SEFIN, y que se dirigen a los 15 organismos operadores bajo su coordinación; y (iv) SEFIN, a través de SINFRA para ADOSAPACO. Los recursos destinados a financiar operación y mantenimiento provienen principalmente del gobierno estatal, y en una mínima parte de los gobiernos municipales y los organismos operadores.

B.2. PARTICIPACION DE GOBIERNO FEDERAL, ESTATAL Y MUNICIPAL EN EL FINANCIAMIENTO Y EJECUCION DE LA INVERSION

El gobierno Federal participa en la financiación de las inversiones a través de los programas específicos cuyo destino es la inversión en el sector de agua y saneamiento. Todo el recurso proveniente del Gobierno Federal se destina exclusivamente a las inversiones. Este recurso y las contrapartidas de los gobiernos estatal y municipales son canalizados y traspasados por la SEFIN a las entidades ejecutoras dentro del Gobierno del Estado (SINFRA, CEA, ADOSAPACO), y en una pequeña proporción a los municipios directamente. CONAGUA maneja directamente algunos recursos a través de sus programas PRODDER y PROSANEAR que no canaliza a través de la SEFIN y que entrega directamente a los municipios para su utilización final en la inversión. En el período 2007-2012, se han destinado a inversiones del sector de agua y saneamiento un promedio anual de Mx 725 millones. La participación de los gobiernos federal, estatal, y municipal en la financiación, traspaso, y ejecución de los recursos varía significativamente, tal como lo presenta el diagrama 2 (Mayores detalles se presentan en Anexo 3). El Gobierno Federal ha participado con el 52% en la financiación, y los recursos los ejecuta el Gobierno Estatal ó los municipios. El Gobierno Estatal en cambio, ha participado con el 32% en la financiación, ha traspasado el 100% de los recursos, y ha utilizado el 93% de los fondos disponibles en inversión. Los municipios han participado con 16% en la financiación y 7% en la ejecución

____________________________________________________________________________________________

95

Diagrama 2. Esquema de Financiamiento de las inversiones del Sector de Agua y Saneamiento .

Tabla . Inversión Anual (Promedio 2007-2012)

Millones Mx

FINANCIACION TRASPASO EJECUCION

FEDERAL 377 3 - ESTATAL 230 722 670 MPAL 118 - 54 TOTAL 725 725 725 FEDERAL 52% 0% 0% ESTATAL 32% 100% 93% MPAL 16% 0% 7% TOTAL 100% 100% 100%

FEDERAL,52%

FEDERAL,0% FEDERAL,0%

ESTATAL,32%

ESTATAL,100%ESTATAL,93%

MPAL,16%MPAL,7%

INVERSION,100%

0%

20%

40%

60%

80%

100%

FINANC

IACION

TRASPA

SO

EJECUC

ION

DESTIN

O

Par cipaciondelGobiernoenelFinanciamientoSectorAguaySaneamientoOaxacaInversion(%)

____________________________________________________________________________________________

96

Diagrama 2. Participación promedio del Gobierno Federal, Estatal y Municipal en la financiación y ejecución de

las inversiones (2007-2012)

El diagrama 3 muestra el crecimiento gradual que han tenido los montos destinados a inversión. En el período 2007-2012, la inversión aumentó 19% en promedio anual, y para el 2012 su nivel era casi 2.4 veces el valor del 2007. Diagrama 3. Montos destinados a Inversión período 2007-2013

FEDERAL,52%

ESTATAL,32%

MUNICIPAL,16%

En dadFinanciadora(Inversion)2007-2012

FEDERAL,0%

ESTATAL,100%

En dadTraspasaelrecurso(Inversion)2007-2012

FEDERAL,0%

ESTATAL,93%

MUNICIPAL,7%

En dadEjecutora(Inversion)2007-2012

____________________________________________________________________________________________

97

C. MONTO DESTINADO AL FINANCIAMIENTO DE INVERSIONES DEL SECTOR DE AGUA Y SANEAMIENTO 2007-2012

C.1. PARTICIPACION DE LOS GOBIERNOS EN LA FINANCIACION Y LA EJECUCION DURANTE EL PERIODO

La inversión en el sector ha sido de Mx 725 millones en promedio anual en el período 2007-2012. La participación de los gobiernos federal, estatal, y municipal en la financiación, y ejecución de los recursos ha tenido una tendencia creciente tal como se presenta en el Diagrama 3. La financiación del gobierno federal y estatal ha crecido 21% en promedio anual en el período 2007-2012, y el monto se ha duplicado en el mismo período. Los recursos del gobierno municipal han aumentado 8% en promedio anual y el monto ha crecido un 50%. Con respecto a la ejecución de los fondos, tanto el gobierno estatal como municipal ha aumentado los recursos en forma importante, 18% y 26% respectivamente en promedio anual. El gobierno estatal duplicó el monto ejecutado y el gobierno municipal lo triplicó. Diagrama 4a. Montos anuales de financiación y de ejecución del Gobierno federal, estatal , y municipal

(Millones Mx)

En términos porcentuales el gobierno federal ha mantenido su participación promedia de un poco mas del 50% en la financiación del sector. El gobierno estatal ha aumentado en 3 puntos su participación del 27% en el 2007 al 30% en el 2012. Mientras que los gobiernos municipales han disminuido del 21% al 13%. En cuanto a la ejecución de inversiones, el gobierno estatal y municipal han mantenido relativamente constante su contribución en 92% y 8% en promedio respectivamente. Diagrama 4b. Participación porcentual del Gobierno federal, estatal, y municipal en la financiación y ejecución de

las inversiones (%)

219 197

387

476

406

FEDERAL578

115161

210 202

386

ESTATAL,13

89132 MUNICIPAL,12

66

142 132

423490

743 745

933

TOTAL1,015

-

200

400

600

800

1,000

1,200

2,007 2,008 2,009 2,010 2,011 2,012

MilionM

X


394

473

ESTATAL705

718

813

919

30 16

MUNICIPAL38 26

120 95

423490

743 745

933TOTAL1,015

-

200

400

600

800

1,000

1,200

2,007 2,008 2,009 2,010 2,011 2,012

MilionM

X


____________________________________________________________________________________________

98

C.2. RECURSOS DE INVERSION CLASFICADOS POR ENTIDADES FINANCIADORAS Las entidades financiadoras son en el Gobierno federal: SHCP, CONAGUA, SEDESOL, CDI, CONAZA y SERMANAT, las cuales administran los siguientes fondos: SHCP: Secretaria de Hacienda y Crédito Público administra: FAFEF. FONDREG,

FONDMET, FIES, AFEF CONAGUA: Comisión Nacional del Agua administra: PRODDER, PROSANEAR,

Proyecto Paso Ancho, APAZU, PROSSAPYS, Agua Limpia, y Cutura del Agua, SEDESOL: Secretaría de Desarrollo Social administra el FAIS y el FISE CDI: Comisión Nacional para el Desarrollo de los Pueblos Indígenas administra el PIBAI CONAZA: Comisión Nacional de las Zonas Áridas, administra el POH. Los recursos estatales y municipales provienen de fondos propios y de las transferencias federales. Las transferencias federales pueden ser aportaciones (Ramo 33), o participaciones (Ramo 23). De acuerdo con la ley de Coordinación Fiscal, los fondos del Ramo 33 una vez llegan al Estado, ellos se convierten en recursos del Estado. Los recursos del Ramo 23 en cambio, son recursos federales y se regulan con ley Federal. Los recursos del Ramo 23 consisten de fondos administrados por SEDESOL, como el FISE, y por SHCP, como FAFEB. Los recursos del gobierno estatal se componen entonces no solo de recursos propios sino de recursos provenientes del gobierno federal a través de fondos tales como: FISE, FAIS, FEIS, FAFEB, Fondo Metropolitano, Programa Regional Cada uno de los programas del Gobierno federal tienen definidas reglas de operación, en las cuales se establece entre otras la destinación del recurso y las contrapartidas a ser exigidas de parte del gobierno estatal y los gobiernos municipales. Del total invertido en el sector, los programas del gobierno federal contribuyeron con el 96% de la financiación de las inversiones, y el restante 4% provino de programas del gobierno estatal. Los programas que mas aportaron al financiamiento de las inversiones del sector fueron los administrados por la SHCP con el 52% de los recursos totales de los programas federales, seguido por CONAGUA con el 40%, y el CDI con el PBAI con el 8% restante.

93%97% ESTATAL,95% 96%

87%91%


13%9%

0%

20%

40%

60%

80%

100%

2,007 2,008 2,009 2,010 2,011 2,012


52%

40%

52%

64%

43%

FEDERAL57%

27%

33%ESTATAL,28% 27%

41%

30%

21%

27%

MUNICIPAL,20%

9%

15%13%

0%

20%

40%

60%

80%

100%

2,007 2,008 2,009 2,010 2,011 2,012


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Diagrama 5. Composición de los recursos de financiamiento por programa y procedencia del recurso

Tabla 3. PROMEDIO ANUAL INVERSION POR PROGRAMA Período 2007-2013


CONAGUA 278,102 40% SHCP 365,541 52% CDI 53,470 8% SERMANAT - 0% - - 0% TOTAL PROGRAMAS FEDERALES 697,114 100% 96%


Cada uno de los programas del gobierno federal se componen de una mezcla de recursos de origen federal, estatal, y municipal, el monto de contrapartida que aporta cada entidad depende de las reglas definidas en cada programas. En el período 2007-2012, las contrapartidas de los programas federales consistieron en un 54% de recursos del gobierno federal, un 29% de recursos del gobierno estatal, y el 17% restante de gobiernos municipales. Los programas estatales consistieron en un 94% de recursos del gobierno estatal, y en un 6% de gobiernos municipales. Los programas municipales consistieron en su totalidad de recursos de los municipios (Diagrama 6). Agregando las contrapartidas de las entidades federales, estatales, y municipales que participaron en cada fondo, se obtiene el total aportado por ellas para el financiamiento de las inversiones en el periodo 2007-2012, esto es, 52% financiado por el gobierno federal, 32% por el gobierno estatal, y el restante 16% por los gobiernos municipales (Diagrama 6 y tablas . Mayores detalles se presentan en el Anexo 3).

Diagrama 6. Composición de fondos de acuerdo con programa y con entidad financiadora (Inversión)

PROGRAMASFEDERALES,96%

PROGRAMASESTATALES,4%

PROGRAMASMUNICIPALES,0%

RecursosdeInversionsegunprogramaGobiernoFederal,EstataloMunicipal

CONAGUA40%

SHCP52%

CDI8%

ProgramasFederalesCalsificadosporEn dad

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Tabla 4 MONTO DE INVERSION POR PROGRAMA SEGÚN CONTRAPARTIDA

PROMEDIO ANUAL 2007-2012. (Miles Mx)

Recursos Recursos Recursos Recursos

Federales Estatales Municipales totales

PROGRAMAS FEDERALES

CONAGUA 188,468 33,001 56,633 278,102

SHCP 147,854 167,672 50,015 365,541 CDI 40,847 2,970 9,653 53,470 SERMANAT - - - - TOTAL PROGRAMAS FEDERALES 377,170 203,643 116,301 697,114

PROGRAMAS ESTATALES 1 26,075 1,518 27,595 PROGRAMAS MUNICIPALES - - - - TOTAL SECTOR 377,171 229,718 117,819 724,708

Tabla 5. PARTICIPACION % DE RECURSOS SEGÚN PROGRAMA Y CONTRAPARTIDA

PROMEDIO ANUAL 2007-2012 (%)

Federales Estatales Municipales totales PROGRAMAS FEDERALES

CONAGUA 68% 12% 20% 100% SHCP 40% 46% 14% 100% CDI 76% 6% 18% 100% SERMANAT 100% 0% 0% 100% TOTAL PROGRAMAS FEDERALES 54% 29% 17% 100%

PROGRAMAS ESTATALES 0% 94% 6% 100% PROGRAMAS MUNICIPALES 0% 0% 100% 0% TOTAL SECTOR 52% 32% 16% 100%

CONTRAPARTIDAMUNICIPAL,100%

FinanciaciondeProgramasMunicipales

CONTRAPARTIDAFEDERAL,54%

CONTRAPARTIDAESTATAL,29%


FinanciaciondeProgramasFederales

CONTRAPARTIDAESTATAL,94%


FinanciaciondeProgramasEstatales

FEDERAL,52%

ESTATAL,32%

MUNICIPAL,16%

En dadFinanciadora(Inversion)2007-2012

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101

C.3. RECURSOS DE INVERSION CLASFICADOS POR ENTIDADES INTERMEDIARIAS DEL RECURSO FINANCIERO

La SEFIN es la encargada de canalizar y transferir los fondos que financian los programas federales y estatales y luego los transfiere a las entidades que ejecutan las inversiones. Los únicos fondos que no entran por la SEFIN son los correspondientes a dos programas de la CONAGUA (PRODDER y PROSANEAR) los cuales son financiados y transferidos directamente por CONAGUA. En el total de las inversiones el porcentaje administrado por CONAGUA es menos del 1%. Tabla 6. MONTO DE INVERSIONES SEGÚN ENTIDAD INTERMEDIADORA DEL RECURSO.

PROMEDIO ANUAL 2007-2013

PROMEDIO (millones Mx) %

CANALIZADOS A TRAVES SEFIN 722 100% CANALIZADOS DIRECTAMENTE CONAGUA 3 0% TOTAL INVERSION 725 100%

C.4. RECURSOS DE INVERSION ADOSAPACO Una vez SEFIN canaliza los recursos los transfiere a las siguientes entidades ejecutoras: SINFRA, CEA, Municipios. Por entidad ejecutora se entiende aquella que licita la obra y la contrata. SINFRA ejecuta inversiones de infraestructura en todos los municipios del Estado y algunas de estas inversiones se dirigen al sector de agua y alcantarillado. ADOSAPACO recibe los fondos de SINFRA y ejecuta las inversiones aprobadas para su área de cobertura La CEA, Comisión Estatal de Agua es ejecutor de inversión no sólo en los 15 municipios donde coordina los operadores del servicio de agua y saneamiento, sino también en los demás municipios del Estado.

INVERSIONES ADOSAPACO (miles Mx)

AUTORIZADO EJERCIDO EJERCIDO/AUTORIZADO

2,010 70,960 66,227 93% 2,011 266,984 256,090 96% 2,012 81,080 71,209 88% 2,013 38,189

.

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2,010 2,011 2,012

APAZU 25,598 - FAFEF 26,654 - 55,015

FONREGION - 98,494 55,015 FONMET - 33,687 9,513 RG23 - 123,909 - PNE 13,974 - - TOTAL 66,227 256,090 119,543

D. MONTO APROBADO DE INVERSIONES DEL SECTOR DE AGUA Y SANEAMIENTO 2013

Los montos de inversión aprobados para el 2013 equivalen a Mx 890 millones, de los cuales el 51% lo financia el Gobierno Federal, el 37% el Gobierno de Estado, y el 12% el Gobierno Municipal (mas detalles en el Anexo 4)

INVERSIONES 2013 (000 Mx) FINANCIACION TRASLADO EJECUCION FEDERAL 452,901 - - ESTATAL 326,339 889,580 814,170 MUNICIPAL 110,340 - 75,410 TOTAL 889,580 889,580 889,580 INVERSIONES 2013 (%) FINANCIACION TRASLADO EJECUCION FEDERAL 51% 0% 0% ESTATAL 37% 100% 92% MUNICIPAL 12% 0% 8% TOTAL 100% 100% 100%

El 96% de las inversiones se desarrollan a través de programas federales, de los cuales el 58% corresponden a programas de la SHCP, el 26% a CONAGUA, y el 17% restante a programas del CDI.

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E. PARTICIPACION DE LAS INVERSIONES DEL SECTOR EN LAS FINANZAS DEL ESTADO

En esta sección se presenta la importancia de las inversiones del sector en el total de las finanzas del Estado. El total de ingresos del Estado han sido Mx 44.5 mil millones en promedio en el período 2008-2012, de los cuales el 96% provienen del Gobierno Federal y el 4% corresponde a ingresos propios del Estado. El 82% de los gastos se han destinado a gastos corrientes y el 18% restante a inversión.

Millón Mx 2008 2009 2010 2011 2012* Promedio Crecimiento anual

Ingresos Proveniente Gob Federal 39,432 40,464 42,097 45,045 45,545 42,517 3.70% Participaciones 10,531 9,275 11,171 11,795 13,109 11,176 5.60% Aportaciones 20,696 21,518 22,409 24,045 25,581 22,850 5.40% Otros 8,205 9,671 8,517 9,205 6,855 8,491 -4.40% Recursos Propios 1,573 1,773 1,641 2,576 2,411 1,995 11.30% Total Ingresos 41,005 42,237 43,738 47,621 47,956 44,511 4.00% Gastos Gastos Corrientes 33,039 35,119 38,551 37,828 37,491 36,406 3.20% Inversiones 6,542 8,016 8,438 8,126 10,167 8,258 11.70% Total Gastos 39,581 43,135 46,989 45,954 47,658 44,663 4.80% Fiscal Balance 1,424 -898 -3,251 1,667 298 (152) Fuente: HR Ratings and SHCP

* federal revenue from SHCP; own source and expenditure from state budget adjusting current expenditure for higher level of earmarked transfers

% 2008 2009 2010 2011 2012* Promedio Ingresos Proveniente del Gob Federal 96% 96% 96% 95% 95% 96% Recursos Propios 4% 4% 4% 5% 5% 4% Total Ingresos 100% 100% 100% 100% 100% 100% Gastos Gastos Corrientes 83% 81% 82% 82% 79% 82% Inversiones 17% 19% 18% 18% 21% 18% Total Gastos 100% 100% 100% 100% 100% 100%

Las inversiones del sector corresponden en promedio al 2% del presupuesto total y al 9.5% del total de inversiones del Estado

% Inversiones del sector en el presupuesto y las inversiones 2008 2009 2010 2011 2012 Promedio

2008-2012 Inversiones WSS 490 743 745 933 1,015 785 % of budget of the state 1.2% 1.8% 1.7% 2.0% 2.1% 1.8% % de inversiones del State 7.5% 9.3% 8.8% 11.5% 10.0% 9.5%

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ANEXOS

Anexo 1. FORMA DE CONTABILIZACION DE LAS INVERSIONES PARA CADA ENTIDAD

ENTIDAD Registro de la

inversión Información Disponible Momento del registro

SEFIN Departamento Egresos

Inversión por fuente del recurso

La información se tiene por fuente de recurso sin importar el programa al que se destina dicho recurso

No incluye recursos administrados y ejecutados directamente por CONAGUA o los Municipios

Ejecución

SEFIN Departamento de Programación e integración del presupuesto

Inversión por programa y contrapartidas

Por programa y mezcla de recursos acordados entre las partes

Incluye recursos que no entran al Departamento de Egresos de la SEFIN pero que se acordaron con las partes

No incluye recursos que administra directamente CONAGUA

No coincide con la información del Depto de Egresos porque incluye todos los acuerdos de contrapartida entre las partes

Autorizada y ajustada con ejecución Enero-Diciembre

CONAGUA-Publicaciones Federales

Inversión por programa y contrapartida

Por programa y mezcla de recursos sin importar la fuente de origen del recurso

No incluye las inversiones realizadas directamente por los municipios

Autorizada Enero a Diciembre

CONAGUA Oficina Regional Oaxaca

Inversión por programa CONAGUA y contrapartida

Información para los programas de CONAGUA.

No incluye información de otros programas diferentes a CONAGUA

Las contrapartidas no las discrimina por fondo de origen

La información corresponde a los convenios firmados

Las diferencias entre lo que efectivamente se ejecuto y lo que se presenta en el convenio no se registra

Autorización y Ejecución Marzo a Marzo de cada ano

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105

La información corresponde a los

convenios firmados Los convenios se cierran en marzo

de cada ano

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106

Anexo 2. PROGRAMAS Y ENTIDADES QUE PARTICIPAN EN LA FINANCIACION Y UTILIZACION RECURSOS EN EL SECTOR

Recursos Federales. Los recursos federales consisten de: (i) participaciones federales, (ii) aportaciones federales, (iii) programas federales; (iv) convenios de reasignación de recursos; y (v) excedentes de ingresos federales. De los recursos federales que se transfieren a los Estados y Municipios, los siguientes se utilizan en el sector de agua y saneamiento. (i) Aportaciones federales (Ramo General33)

(a) Administrado por SEDESOL: el Fondo de Aportaciones para la Infraestructura Social (FAIS), que se establece con el fin de abatir los aspectos que denotan la marginación y el rezago social. Este fondo se distribuye por el Ejecutivo Federal considerando criterios de pobreza extrema a los Estados, y a los Municipios a través de la Secretaría de Finanzas de los Estados. Se divide en dos vertientes: Fondo para la Infraestructura Social Estatal (FISE), y Fondo para la Infraestructura Social Municipal (FISM). Con el propósito de potenciar el impacto social del FAIS, Banobras desarrolló una estructura financiera para ofrecer financiamientos pre-autorizados a Municipios utilizando como fuente de pago los recursos de este Fondo. La estructura considera la constitución de un fideicomiso al cual se afectan los recursos del FAIS que servirá como mecanismo de pago de los créditos que contraten los Estados y Municipios. Los recursos son depositados por la Tesorería de la Federación al Fideicomiso de manera directa.

(b) Administrado por SHCP: El Fondo de Aportaciones para el Fortalecimiento de las Entidades Federativas (FAFEF), anteriormente conocido como PAFEF -Programa de Apoyo al Fortalecimiento de las Entidades Federativas. Los recursos del FAFEF tienen por objeto fortalecer los presupuestos de las Entidades Federativas y las regiones que conforman. Las Entidades Federativas convienen con el Gobierno Federal la aplicación de los recursos, los que no pueden destinarse para gasto corriente o de operación. Se pueden utilizar en inversión en infraestructura física; en saneamiento financiero a través del pago de amortización de la deuda pública; apoyo al saneamiento de pensiones; a la modernización de los registros y sistemas de recaudación local y desarrollo de mecanismos impositivos.

(ii) Convenios de reasignación de los recursos.

Estos convenios se firman entre la SHCP con las Entidades Federativas, quienes administran los recursos

(a) FONREGION (Fondo Regional). Los recursos que se destinan a este fondo tienen el

carácter de subsidio federal y se destinan a programas y proyectos de inversión en infraestructura y su equipamiento con impacto en el Desarrollo Regional de los diez estados con menor grado de desarrollo medido por el índice de desarrollo humano, considerando la desviación de cada uno de ellos con respecto del índice o media nacional.

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107

(b) FONDO METROPOLITANO. Se dirige a programas, proyectos, obras de infraestructura que acrediten su beneficio económico y social, así como la evaluación de su impacto ambiental, en el ámbito territorial que conforma la Zona Metropolitana. La aplicación de los recursos deberá corresponder a los fines establecidos en el Presupuesto de Egresos de la Federación del ejercicio fiscal correspondiente, para apoyar la realización de estudios, planes, evaluaciones, programas, proyectos, acciones, obras de infraestructura, ya sean nuevos o en proceso, o para completar el financiamiento de aquellos que no hubiesen contado con los recursos necesarios para su ejecución.

(iii) Excedentes de ingresos federales. Se utilizan dos fondos: FEIS y FEIEF

FIES. Fideicomiso para la Infraestructura en los Estados. Estos recursos se destinan a inversión en programas y proyectos de infraestructura y equipamiento. FEIEF. Fondo de Estabilización de los Ingresos de las Entidades Federativas. Este fondo tiene como objetivo compensar la disminución en la recaudación federal participable con respecto a lo estimado en los Ingresos de la Federación del respectivo ejercicio fiscal. La aplicación de este fondo es análoga a la aplicación de las participaciones federales y se realiza conforme lo determinen las Entidades Federativas y los municipios.

(iv) Fondos de Programas Federales.

Las dependencias que ejercen los programas federales en el sector de agua y saneamiento y los fondos con los cuales ellas trabajan son las siguientes:

(a) CDI- Comisión Nacional para el Desarrollo de los Pueblos Indígenas. La CDI busca beneficiar personas que habitan en localidades indígenas. Son fondos con carácter de subsidios cuya naturaleza es federal y debe regirse por las disposiciones legales y normativas establecidas en el presupuesto. El fondo que administra y que utiliza en forma parcial para financiamiento de agua y saneamiento es el PIBAI- Programa de Infraestructura Básica para la Atención de los Pueblos Indígenas. El objetivo del programa es promover y ejecutar acciones para contribuir al abatimiento en materia de infraestructura básica (comunicación terrestre, electrificación, agua potable, drenaje, y saneamiento).

(b) SAGARPA. Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca, y Alimentación. En esta Secretaría se encuentra la CONAZA (Comisión Nacional de las Zonas Áridas ), encargada de la planeación, operación y dirección de políticas ha desarrollado cuatro programas orientados a promover el desarrollo de las zonas áridas del país mediante el uso, manejo y conservación del suelo, el agua y la cubierta vegetal con un enfoque preventivo y productivo. Estos programas son:

Conservación y Uso Sustentable de Suelo y Agua – COUSSA Proyecto Estratégico de Seguridad Alimentaria PESA Construcción de Pequeñas Obras Hidráulicas POH Proyecto Estratégico de Desarrollo de las Zonas Áridas PRODEZA

(c) FEDERACION NACIONAL DE MUNICIPIOS DE MEXICO FENAMM. Administran los

recursos federales del Fondo de Modernización para Municipios, el cual tiene como objetivo

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108

atender las necesidades de las localidades de alto nivel de marginación. Los recursos son aprobados dentro del Presupuesto de Egresos de la Federación son federales y transferidos por la SHCP.

(d) PEMEX. Petróleos Mexicanos, es una de las entidades de la Administración Pública

Paraestatal, cuyos presupuestos no forman parte del Presupuesto de Egresos de la Federación, a no ser que sea parte de los apoyos que recibe del Gobierno Federal. Participa con recursos para financiamiento de obras en sus áreas de influencia que han sufrido algún desastre y requiere mejoras en la infraestructura.

(e) CONAGUA. Comisión Nacional del Agua. Administra recursos federales que canaliza a través de los siguientes programas:

Agua Limpia. Tiene como objetivo apoyar la desinfección del agua en los sistemas formales de abastecimiento.

Agua Potable, Alcantarillado, y Saneamiento en Zonas Urbanas (APAZU). Tiene como objetivo impulsar acciones tendientes al mejoramiento e incremento de la prestación de los servicios de agua potable, alcantarillado y saneamiento para el beneficio de habitantes de comunidades urbanas, a través de del apoyo financiero y técnico a las entidades federativas y municipios y sus organismos operadores.

Agua Potable, Alcantarillado y Saneamiento en Zonas Rurales (PROSSAPYS). Tiene como objetivo apoyar el incremento de la cobertura de los servicios de agua potable, alcantarillado y saneamiento en localidades rurales, mediante la construcción y ampliación de su infraestructura.

Tratamiento de Aguas Residuales (PROTAR). Tiene como objetivo apoyar los prestadores del servicio de agua potable, alcantarillado y saneamiento para diseñar, construir, ampliar, y rehabilitar plantas de tratamiento de aguas residuales.

Cultura del Agua. Tiene como objetivo concertar acciones educativas y culturales en coordinación con las entidades federativas para difundir la importancia del recurso hídrico en el bienestar social, en el desarrollo económico y la preservación de la riqueza ecológica.

PROMAGUA. Modernización de Organismos Operadores de Agua A partir del 2013 para el Estado de Oaxaca.

PRODDER. Programa de Devolución de Derechos. Tiene como objetivo utilizar los recursos obtenidos por concepto de pago de derechos por el uso, aprovechamiento o explotación de aguas nacionales para el uso de agua potable, en infraestructura del sector en el área de servicio del respectivo operador. Estos recursos son administrados directamente por CONAGUA y ejecutados por el Municipio.

PROSANEAR. Programa Federal de Saneamiento de Aguas Residuales. Tiene como objetivo utilizar los recursos obtenidos por concepto de pago de los derechos por el uso o aprovechamiento de bienes de cuerpos receptores de las descargas de aguas residuales, en acciones en materia de saneamiento y tratamiento de aguas residuales en el área de servicio del respectivo operador. Estos recursos son administrados directamente por CONAGUA y ejecutados por el Municipio.

Los recursos Estatales provienen de los ingresos propios mas las transferencias de la Federación. Adicionalmente el Gobierno de Estado puede contraer préstamos y destinarlos bien sea a

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109

inversión ó a gastos operativos. Los recursos estatales se canalizan a través de SEFIN en el Programa Nacional de Emergencia (PNE). Los recursos Estatales destinados al sector de agua, alcantarillado y saneamiento se dirigen a financiar inversiones, y al financiamiento parcial de gastos operativos de ADOSAPACO con organismo desconcentrado dependiente de SINFRA, y de algunos de los municipios cuyas operadores del servicio son coordinadas por la CEA. Los recursos Municipales provienen de los ingresos propios, y de las participaciones federales. Estos recursos se utilizan como contrapartida de los aportes federales, ó como financiación directa del ayuntamiento en el sector de agua y saneamiento de su municipio.

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110

Anexo 3. DETALLE DE INVERSIONES ANUALES POR PROGRAMA Y ENTIDAD 2007-2012

Cuando se analiza solo los montos de inversión, los valores anuales corresponden en promedio a Mx 748 millones

TABLA A.3.1 RECURSOS DESTINADOS A INVERSION CLASIFICADOS POR ENTIDADES FINANCIADORA Miles Mx 2,007 2,008 2,009 2,010 2,011 2,012 PROMEDIO FEDERAL 219,168 196,888 387,357 476,496 405,523 577,596 377,171 ESTATAL 115,316 160,514 210,087 201,983 385,908 304,502 229,718 MUNICIPAL 88,769 132,427 145,297 66,154 141,840 132,425 117,819 TOTAL 423,252 489,829 742,741 744,633 933,271 1,014,523 724,708

TABLA A.3.2 RECURSOS DESTINADOS A INVERSION CLASIFICADOS POR ENTIDADES EJECUTORA (Miles Mx) Miles Mx 2,007 2,008 2,009 2,010 2,011 2,012 PROMEDIO FEDERAL - - - - - - - ESTATAL 393,733 473,432 705,132 718,240 813,395 919,048 670,497 MUNICIPAL 29,520 16,397 37,609 26,394 119,876 95,475 54,212 TOTAL 423,252 489,829 742,741 744633 933,271 1,014,523 724,708

La tabla A3.3 presenta el monto de inversiones ejecutadas en promedio anual por programa y entidad. El 96% de los recursos destinados a inversión en el sector provienen de programas federales, y el 4% de programas estatales. Los fondos con mayor participación en los programas federales son los administrados por la SHCP correspondientes al 53%, los fondos administrados por CONAGUA participan con el 38% de los programas federales, y el restante 9% lo administran CDI. Tabla A3.3 PROMEDIO ANUAL INVERSION POR PROGRAMA Período 2007-2012


CONAGUA 278,102 40% SHCP 365,541 52% CDI 53,470 8% TOTAL PROGRAMAS FEDERALES 697,114 100% 96%


En las reglas de operación de los programas se especifica la utilización del recurso y la contrapartida federal, estatal, y municipal. En promedio, los programas federales tienen 79% de contrapartida federal, 20% estatal, y 1% municipal. En los programas estatales el 63% corresponde a contrapartida estatal, y 37% municipal; y los programas municipales son en su totalidad financiados con recursos de los municipios. En total, el 70% fue financiado con recursos federales, el 24% con recursos estatales, y el 5% restante con recursos municipales.

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111

La composición varía dependiendo del fondo y la entidad que lo administra. Los fondos de CONAGUA están compuestos en un 99% por recursos federales, y el 1% municipales. Los de SHCP el 83% lo compone recursos federales y el 17% estatales. Los de CDI y CONAZA compuestos en su totalidad por recursos federales, mientras que los de SEDESOL tiene un 16% de recursos federales y el 84% estatales. Tabla A3.4 MONTO DE INVERSION POR PROGRAMA DE ACUERDO CON NIVEL DE RECURSOS (Miles Mx)

Recursos Recursos Recursos Recursos

Federales Estatales Municipales totales

PROGRAMAS FEDERALES

CONAGUA 188,468 33,001 56,633 278,102

SHCP 147,854 167,672 50,015 365,541 CDI 40,847 2,970 9,653 53,470 SERMANAT - - - - TOTAL PROGRAMAS FEDERALES 377,170 203,643 116,301 697,114

PROGRAMAS ESTATALES 1 26,075 1,518 27,595 PROGRAMAS MUNICIPALES - - - - TOTAL SECTOR 377,171 229,718 117,819 724,708

Tabla A3.5. PARTICIPACION % DE LOS RECURSOS SEGÚN PROGRAMA (Miles Mx) Federales Estatales Municipales totales PROGRAMAS FEDERALES

CONAGUA 68% 12% 20% 100% SHCP 40% 46% 14% 100% CDI 76% 6% 18% 100% SERMANAT 100% 0% 0% 100% TOTAL PROGRAMAS FEDERALES 54% 29% 17% 100%

PROGRAMAS ESTATALES 0% 94% 6% 100% PROGRAMAS MUNICIPALES 0% 0% 100% 0% TOTAL SECTOR 52% 32% 16% 100%

Los fondos que mas han contribuido con el financiamiento de las inversiones del sector han sido APAZU, PROSSAPYS, de CONAGUA; y FAFEF, FONDO REGIONAL, y del RG23, de la SHCP, los cuales cada uno han contribuido con MX 50 millones en promedio anual. La suma de las contribuciones de estos fondos es Mx 255 millones que corresponde al 55% de lo invertido totalmente en el sector. Tabla A3.6. INVERSION POR PROGRAMA Y FONDO ASOCIADO (Periodo 2007-2012)

PROMEDIO (Miles Mx)

Participación % Programa % Entidad

PROGRAMAS FEDERALES

CONAGUA

APAZU 117,327 42%

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112

PROSSAPYS 100,269 36% AGUA LIMPIA 4,942 2% PROTAR 28,697 10% CULTURA DEL AGUA - 0% PRODDER 2,678 1% PASO ANCHO (ESTUDIOS, PROGRAMA

SUSTENTABILIDAD) 24,188 9% OTROS - 0%

TOTAL CONAGUA 278,102 100% 38% SHCP -

FAFEB, PAFEF, AFEF 97,839 27% FEIS, FAIS, FIEF,FISE 112,579 31% FEIEF 2,078 1% RG23: FONDO METROPOLITANO,

FONDO MODERNIZACION, PROGRAMA REGIONAL 144,496 40%

MICROREGIONES 5,278 1% FONDO REGIONAL - 0% OTROS 3,272 1%

TOTAL SHCP 365,541 100% 50% CDI 53,470

7%

SEDESOL -

0% SERMANAT -

0%

TOTAL PROGRAMAS FEDERALES 697,114

96% PROGRAMA ESTATALES 27,595

4%

PROGRAMA MUNICIPALES -

0% TOTAL 724,708 100%

Tabla A3.7. FINANCIAMIENTO DE LAS INVERSIONES EN EL SECTOR POR ENTIDAD ADMINISTRADORA DE LOS FONDOS (Miles Mx)

2,007 2,008 2,009 2,010 2,011 2,012 PROMEDIO

CONAGUA

RECURSOS FEDERALES 171,517 183,862 213,430 184,740 102,085 275,177 188,468 CONTRAPARTIDA ESTADO 42,718 34,890 48,746 2,684 51,488 17,480 33,001 CONTRAPARTIDA MUNICIP 65,548 117,803 94,663 34,499 8,095 19,188 56,633 TOTAL CONAGUA 279,783 336,555 356,838 221,923 161,667 311,845 278,102

SHCP RECURSOS FEDERALES 23,482 5,000 139,332 262,588 243,230 213,495 147,854 CONTRAPARTIDA ESTADO 42,508 111,235 157,759 164,874 291,944 237,709 167,672 CONTRAPARTIDA MUNICIP 22,221 14,447 35,808 24,113 118,600 84,904 50,015 TOTAL SHCP 88,210 130,682 332,899 451,575 653,774 536,108 365,541

CDI RECURSOS FEDERALES 24,169 8,026 34,596 29,161 60,208 88,924 40,847 CONTRAPARTIDA ESTADO 6,770 3,185 - 4,956 - 2,913 2,970 CONTRAPARTIDA MUNICIP 1,000 178 14,827 7,542 15,052 19,318 9,653 TOTAL CDI 31,939 11,388 49,422 41,658 75,260 111,155 53,470

SEMANAT RECURSOS FEDERALES - - - - - - - CONTRAPARTIDA ESTADO - - - - - - - CONTRAPARTIDA MUNICIP - - - - - - - TOTAL SEMANAT - - - - - - -

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113

TOTAL GOB FEDERAL RECURSOS FEDERALES 219,168 196,888 387,357 476,488 405,523 577,596 377,170 CONTRAPARTIDA ESTADO 91,996 149,309 206,506 172,513 343,432 258,102 203,643 CONTRAPARTIDA MUNICIP 88,769 132,427 145,297 66,154 141,747 123,410 116,301 TOTAL GOB FEDERAL 399,932 478,624 739,160 715,156 890,702 959,108 697,114

GOBIERNO DEL ESTADO

RECURSOS FEDERALES - - - 8 - - 1 CONTRAPARTIDA ESTADO 23,320 11,205 3,581 29,470 42,476 46,400 26,075 CONTRAPARTIDA MUNICIP - - - - 93 9,015 1,518 TOTAL GOB ESTATAL 23,320 11,205 3,581 29,478 42,569 55,415 27,595

TOTAL RECURSOS SECTOR RECURSOS FEDERALES 219,168 196,888 387,357 476,496 405,523 577,596 377,171 RECURSOS GOB ESTADO 115,316 160,514 210,087 201,983 385,908 304,502 229,718 RECURSOS GOB MUNICIP 88,769 132,427 145,297 66,154 141,840 132,425 117,819

TOTAL SECTOR 423,252 489,829 742,741 744,633 933,271

1,014,523 724,708

Tabla A3.8. INVERSION POR PROGRAMA Y FONDO ASOCIADO (Mies Mx) 2,007 2,008 2,009 2,010 2,011 2,012 PROMEDIO PROGRAMAS FEDERALES

CONAGUA

APAZU 114,358 196,197 163,681 100,534 66,962 62,231 117,327

PROSSAPYS 150,412 133,265 92,786 77,045 69,140 78,969 100,269 AGUA LIMPIA 7,714 5,143 3,453 3,669 4,960 4,716 4,942 PROTAR - - 95,117 38,394 19,423 19,249 28,697 CULTURA DEL AGUA

-

PRODDER 7,299 1,951 1,801 2,280 1,183 1,556 2,678 PASO ANCHO Y

SUSTENABILIDAD HIDRICA - - - - - 145,126 24,188 OTROS

-


-

FAFEB, PAFEF, AFEF 1,904 54,635 67,909 115,618 176,669 170,298 97,839 FEIS, FAIS, FIEF,FISE 38,683 64,522 117,283 95,411 227,510 132,063 112,579 FEIEF 8,584 3,885 - - - - 2,078 RG23: FONDO

METROPOLITANO, FONDO REGIONAL, FONDO MODERNIZACION, PROGRAMA REGIONAL - 7,639 139,082 236,915 249,595 233,747 144,496

MICROREGIONES 31,665 - - - - - 5,278 FONDO REGIONAL

-

OTROS 7,374 - 8,625 3,631 - - 3,272 TOTAL SHCP 88,210 130,682 332,899 451,575 653,774 536,108 365,541 CDI 31,939 11,388 49,422 41,658 75,260 111,155 53,470 SEDESOL

-

SERMANAT - - - - - - - TOTAL PROGRAMAS FEDERALES 399,932 478,624 739,160 715,156 890,702 959,108 697,114 PROGRAMAS ESTATALES 23,320 11,205 3,581 29,478 42,569 55,415 27,595 PROGRAMAS MUNICIPALES - - - - - - -

TOTAL 423,252 489,829 742,741 744,633 933,271

1,014,523 724,708

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114

Tabla A3.8. INVERSION POR PROGRAMA Y FONDO ASOCIADO .RECURSOS FEDERALES

(Mies Mx) 2,007 2,008 2,009 2,010 2,011 2,012 PROMEDIO PROGRAMAS FEDERALES

CONAGUA

APAZU 65,192 94,335 80,524 80,129 34,829 47,987 67,166

PROSSAPYS 95,169 85,005 62,795 61,920 48,952 63,719 69,593 AGUA LIMPIA 3,857 2,571 1,726 2,016 3,525 3,315 2,835 PROTAR - - 66,582 38,394 13,596 13,474 22,008 CULTURA DEL AGUA - - - - - - - PRODDER 7,299 1,951 1,801 2,280 1,183 1,556 2,678 PASO ANCHO Y

SUSTENABILIDAD HIDRICA - - - - - 145,126 24,188 OTROS -

- - - - -


FAFEB, PAFEF, AFEF - - - 2,608 - - 435 FEIS, FAIS, FIEF,FISE - - 250 27,401 - - 4,609 FEIEF - - - - - - - RG23: FONDO

METROPOLITANO, FONDO REGIONAL, FONDO MODERNIZACION, PROGRAMA REGIONAL - - 136,059 229,555 106,424 47,877 86,653

MICROREGIONES 20,853 - - - - - 3,476 FONDO REGIONAL - 5,000 3,023 3,023 136,806 165,618 52,245 OTROS 2,628 - - - - - 438

TOTAL SHCP 23,482 5,000 139,332 262,588 243,230 213,495 147,854 CDI 24,169 8,026 34,596 29,161 60,208 88,924 40,847 SEDESOL - - - - - - - SERMANAT - - - - - - -

TOTAL PROGRAMAS FEDERALES 219,168 196,888 387,357 476,488 405,523 577,596 377,170 PROGRAMAS ESTATALES - - - 8 - - 1 PROGRAMAS MUNICIPALES - - -

- - -

TOTAL 219,168 196,888 387,357 476,496 405,523 577,596 377,171

Tabla A3.8. INVERSION POR PROGRAMA Y FONDO ASOCIADO .RECURSOS ESTATALES


CONAGUA

APAZU 22,775 21,909 34,925 - 30,346 9,867 19,970

PROSSAPYS 16,086 10,409 4,071 1,031 15,081 1,864 8,090 AGUA LIMPIA 3,857 2,571 1,726 1,653 1,435 1,400 2,107 PROTAR - - 8,024 - 4,625 4,350 2,833 CULTURA DEL AGUA - - - - - - - PRODDER - - - - - - - PASO ANCHO Y

SUSTENABILIDAD HIDRICA - - - - - - - OTROS -

- - - - -

TOTAL CONAGUA 42,718 34,890 48,746 2,684 51,488 17,480 33,001

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115

SHCP

FAFEB, PAFEF, AFEF 1,884 51,818 56,607 111,318 130,103 136,579 81,385

FEIS, FAIS, FIEF,FISE 30,848 52,893 93,028 49,926 161,841 83,121 78,609 FEIEF 7,817 3,885 - - - - 1,950 RG23: FONDO

METROPOLITANO, FONDO REGIONAL, FONDO MODERNIZACION, PROGRAMA REGIONAL - 2,639 - - - 18,009 3,441

MICROREGIONES - - - - - - - FONDO REGIONAL - - - - - - - OTROS 1,960 - 8,124 3,631 - - 2,286

TOTAL SHCP 42,508 111,235 157,759 164,874 291,944 237,709 167,672 CDI 6,770 3,185 - 4,956 - 2,913 2,970 SEDESOL - - - - - - - SERMANAT - - - - - - -

TOTAL PROGRAMAS FEDERALES 91,996 149,309 206,506 172,513 343,432 258,102 203,643 PROGRAMAS ESTATALES 23,320 11,205 3,581 29,470 42,476 46,400 26,075 PROGRAMAS MUNICIPALES - - -

- - -

TOTAL 115,316 160,514 210,087 201,983 385,908 304,502 229,718

Tabla A3.8. INVERSION POR PROGRAMA Y FONDO ASOCIADO .RECURSOS MUNICIPALES


CONAGUA

APAZU 26,390 79,952 48,231 20,405 1,787 4,376 30,190

PROSSAPYS 39,158 37,851 25,920 14,094 5,106 13,387 22,586 AGUA LIMPIA - - - - - - - PROTAR - - 20,512 - 1,202 1,425 3,856 CULTURA DEL AGUA - - - - - - - PRODDER - - - - - - - PASO ANCHO Y

SUSTENABILIDAD HIDRICA - - - - - - - OTROS -

- - - - -


FAFEB, PAFEF, AFEF 20 2,817 11,302 1,692 46,566 33,719 16,019 FEIS, FAIS, FIEF,FISE 7,835 11,629 24,004 18,084 65,670 48,942 29,361 FEIEF 767 - - - - - 128 RG23: FONDO

METROPOLITANO, FONDO REGIONAL, FONDO MODERNIZACION, PROGRAMA REGIONAL - - - 4,337 6,365 2,243 2,157

MICROREGIONES 10,812 - - - - - 1,802 FONDO REGIONAL - - - - - - - OTROS 2,786 - 501 - - - 548

TOTAL SHCP 22,221 14,447 35,808 24,113 118,600 84,904 50,015 CDI 1,000 178 14,827 7,542 15,052 19,318 9,653 SEDESOL - - - - - - - SERMANAT - - - - - - -

TOTAL PROGRAMAS FEDERALES 88,769 132,427 145,297 66,154 141,747 123,410 116,301 PROGRAMAS ESTATALES - - - - 93 9,015 1,518

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116

PROGRAMAS MUNICIPALES - - -

- - -

TOTAL 88,769 132,427 145,297 66,154 141,840 132,425 117,819

Tabla A3.8D. INVERSION POR PROGRAMA Y FONDO ASOCIADO CON CONTRAPARTIDAS.PROMEDIO 2007-2012 (Miles Mx)

TOTAL FEDERAL ESTATAL

MUNICIPAL PROGRAMAS FEDERALES

CONAGUA APAZU 117,327 67,166 19,970 30,190

PROSSAPYS 100,269 69,593 8,090 22,586 AGUA LIMPIA 4,942 2,835 2,107 - PROTAR 28,697 22,008 2,833 3,856 CULTURA DEL AGUA - - - - PRODDER 2,678 2,678 - - PASO ANCHO Y SUSTENABILIDAD

HIDRICA 24,188 24,188 - - OTROS - - - -

TOTAL CONAGUA 278,102 188,468 33,001 56,633 SHCP - - - -

FAFEB, PAFEF, AFEF 97,839 435 81,385 16,019 FEIS, FAIS, FIEF,FISE 112,579 4,609 78,609 29,361 FEIEF 2,078 - 1,950 128 RG23: FONDO METROPOLITANO,

FONDO REGIONAL, FONDO MODERNIZACION, PROGRAMA REGIONAL 144,496 86,653 3,441 2,157

MICROREGIONES 5,278 3,476 - 1,802 FONDO REGIONAL - 52,245 - - OTROS 3,272 438 2,286 548

TOTAL SHCP 365,541 147,854 167,672 50,015 CDI 53,470 40,847 2,970 9,653 SEDESOL - - - - SERMANAT - - - -

TOTAL PROGRAMAS FEDERALES 697,114 377,170 203,643 116,301 PROGRAMAS ESTATALES 27,595 1 26,075 1,518 PROGRAMAS MUNICIPALES - - - -

TOTAL 724,708 377,171 229,718 117,819

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Tabla A3.8E. PARTICIPACION DE LAS CONTRAPARTIDAS EN CADA FONDO DESTINADO A INVERSION EN EL SECTOR. PROMEDIO PARTICIPACION 2007-2012 (%)



CONAGUA APAZU 100% 57% 17% 26%

PROSSAPYS 100% 69% 8% 23% AGUA LIMPIA 100% 57% 43% 0% PROTAR 100% 77% 10% 13% PRODDER 100% 100% 0% 0% PASO ANCHO Y SUSTENABILIDAD

HIDRICA 100% 100% 0% 0% TOTAL CONAGUA 100% 68% 12% 20% SHCP

FAFEB, PAFEF, AFEF 100% 0% 83% 16% FEIS, FAIS, FIEF,FISE 100% 4% 70% 26% FEIEF 100% 0% 94% 6% RG23: FONDO METROPOLITANO,

FONDO REGIONAL, FONDO MODERNIZACION, PROGRAMA REGIONAL 64% 60% 2% 1%

MICROREGIONES 100% 66% 0% 34% OTROS 100% 13% 70% 17%

TOTAL SHCP 100% 40% 46% 14% CDI 100% 76% 6% 18% SERMANAT 0% 0% 0% 0%

TOTAL PROGRAMAS FEDERALES 100% 54% 29% 17% PROGRAMAS ESTATALES 100% 0% 94% 6%

TOTAL 100% 52% 32% 16%

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Anexo 4. DETALLE DE INVERSIONES ANUALES POR PROGRAMA Y ENTIDAD 2013 Tabla A4. PARTICIPACION DE LAS CONTRAPARTIDAS EN CADA FONDO DESTINADO A INVERSION EN EL SECTOR. 2013 (000 Mx)



CONAGUA APAZU 98,921 89,189 4,107 5,624

PROSSAPYS 103,931 100,909 - 3,022 AGUA LIMPIA - - - - PROTAR 18,838 18,838 - - - - - PRODDER - - - - PASO ANCHO Y SUSTENABILIDAD

HIDRICA - - - - - - - TOTAL CONAGUA 221,689 208,935 4,107 8,647 SHCP

FAFEB, PAFEF, AFEF 125,983 - 114,105 11,878 FEIS, FAIS, FIEF,FISE 206,804 - 171,241 35,563 FEIEF - - - - RG23: FONDO METROPOLITANO,

FONDO REGIONAL, FONDO MODERNIZACION, PROGRAMA REGIONAL 160,568 21,869 - -

MICROREGIONES - - - - 110,733 - 27,967 OTROS

- - -

TOTAL SHCP - 132,602 285,346 75,408 CDI 493,355 111,014 1,470 26,284 SERMANAT 138,768 350 - -

TOTAL PROGRAMAS FEDERALES

452,901 290,922 110,338 PROGRAMAS ESTATALES 350 - 35,416 2 PROGRAMAS ESTATALES 350 - - -

TOTAL 854,162 452,901 326,339 110,340

RESUMEN POR PROGRAMAS 2013 Million MX % PROGRAMAS FEDERALES

CONAGUA 221,689 26% SHCP 493,355 58% CDI 138,768 16% SERMANAT 350 0%

TOTAL PROGRAMAS FEDERALES 854,162 96% PROGRAMAS ESTATALES 35,419 4% PROGRAMAS MUNICIPALES - 0% TOTAL 889,580 100%

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119

INVERSIONES 2013 (000 Mx) FINANCIACION TRASLADO EJECUCION FEDERAL 452,901 - - ESTATAL 326,339 889,580 814,170 MUNICIPAL 110,340 - 75,410 TOTAL 889,580 889,580 889,580

INVERSIONES 2013 (%) FINANCIACION TRASLADO EJECUCION FEDERAL 51% 0% 0% ESTATAL 37% 100% 92% MUNICIPAL 12% 0% 8% TOTAL 100% 100% 100%

Program Development Objective (PDO): To support the improvement of the institutional framework of the water supply and sanitation sector of the

State of Oaxaca, and the improvement of the quality and sustainability of water supply service in selected urban areas

PDO Level Results Indicators

Co

re

DL

I Unit of

Measure Baseline

Target Values

Frequency Data Source/

Methodology

Responsi-

bility for

Data

Collection Year 1 Year 2 Year 3 Year 4 Year 5

PDO Indicator 1:

Modernized institutional framework of the WSS sector

-

n.a. -

Key legal and

regulatory tools

prepared29

- - -

Annual

IVA reports on DLIs 1, 2-1, 3-1 and 4-1, completion of IR 1-2, and legal status of the water utilities supported by the Program

CEA 0 water utilities

decentral-ized30

- 2 water utilities

decentral-ized

5 water utilities

decentral-ized

6 water utilities

decentralized

7 water utilities

decentral-ized

n.a. - - - Tools for the WSS sector31 in place and being used

-

PDO Indicator 2:

People in urban areas provided with sustainable and improved water service quality under the Program32

Number 0 0 100,000 300,000 550,000 650,000 Annual IVA reports on DLIs 2-1, 2-2, 3-2 and 3-3

CEA/ SAPAO

Beneficiaries

Direct Program beneficiaries Number 0 0 100,000 300,000 550,000 650,000 Annual IVA reports on DLIs 2-1, 2-2, 3-2 and 3-3

CEA/ SAPAO

Of whom are female % - 52 52 52 52 52 Annual CEA/ SAPAO

Water utilities that the Program is supporting

Number 0 19 19 19 19 19 Annual CEA/ SAPAO

29 Key legal and regulatory tools are considered prepared if the following conditions are met: Regulation of State Water and Sanitation Law prepared and published, standard regulation for provision of municipal water supply and sanitation services prepared, CEA and SAPAO internal regulation and organizational manual adopted and published, and SAPAO law submitted to Congress. 30 Number of water utilities becoming legally autonomous (municipal, inter-municipal, State or privately-run) during the Program’s implementation. 31 Tools for WSS sector monitoring and planning, including the tools to measure performance indicators in the selected sector of SAPAO, the tools to measure performance indicators in the selected water utilities, the Rural Water and Sanitation Information System, and the Rural and Urban Strategy and Public Expenditure Review for the WSS sector. 32 People in urban areas will be considered as provided with a sustainable and improved water service quality under the Program, if (i) they receive from SAPAO in the Chapultepec sector a continuous water service as defined under DLI 2-1 and if the commercial efficiency in the selected sector is equal to or above 90%, or (ii) they receive services from the selected utilities in provincial towns with improved continuity and whose revenues from services are greater than their operating expenses, as defined under the Intermediate Results Indicators and DLIs 2-1, 2-2, 3-2 and 3-3.

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121

Intermediate Results 1: Modernization of the legal and regulatory framework of the WSS sector in the State

Intermediate result indicator 1-1:

State Water and Sanitation Law submitted to Congress

- No Yes Yes Yes Yes Yes Annual IVA report on DLI 1 CEA


Rural and Urban Strategy and Public Expenditure Review for the WSS sector successfully completed

- No No No Yes Yes Yes Annual

Successful completion of the Strategy and of the Public Expenditure Review

CEA

Intermediate Results 2: Improvement of water services in Oaxaca Metropolitan Area


Percentage of active users with continuous service in the selected sector

% 0 0 0 30 100 100 Annual IVA report on DLI 2-1 SAPAO


Commercial efficiency in the selected sector



Percentage of samples tested complying with bacteriological, residual chlorine, iron, manganese, color parameters of the drinking water norm in the selected sector33

% 0 0 40 70 100 100 Annual Report on water quality testing SAPAO

Intermediate Results 3: Improvement of water services in provincial towns


Number of selected water utilities with an approved program of interventions of immediate impact

Number 0 9 18 18 18 18 Annual IVA report on DLI 3-1

CEA


Number of selected water utilities with improved service continuity


CEA


Number of selected water utilities whose service revenue is greater than their operating costs


CEA

33 The regulation applied to verify compliance with wáter quality standards is NOM-127-SSAI-1994. Sampling will be done in accordance with NOM-179-SSA1-1998 at pressure gauging points.

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122

Intermediate Results 1: Modernization of the legal and regulatory framework of the WSS sector in the State


State Water and Sanitation Law submitted to Congress

- No Yes Yes Yes Yes Yes Annual IVA report on DLI 1 CEA


Rural and Urban Strategy and Public Expenditure Review for the WSS sector successfully completed

- No No No Yes Yes Yes Annual

Successful completion of the Strategy and of the Public Expenditure Review

CEA

Intermediate Results 2: Improvement of water services in Oaxaca Metropolitan Area


Percentage of users with continuous service in the selected sector






Percentage of samples tested complying with bacteriological, residual chlorine, iron, manganese, color parameters of the drinking water norm in the selected sector34

% 0 0 40 70 100 100 Annual Report on water quality testing SAPAO

Intermediate Results 3: Improvement of water services in provincial towns




CEA




CEA


Number of selected water utilities whose service revenue is greater than their operating costs


CEA

34 The regulation applied to verify compliance with wáter quality standards is NOM-127-SSAI-1994. Sampling will be done in accordance with NOM-179-SSA1-1998 at pressure gauging points.

Matrix of Disbursement Indicators

DLI Total amount

allocated to DLI

% of total

financing Baseline

Time frame for achievement of DLI

Year 1

(2014)

Year 2

(2015)

Year 3

(2016)

Year 4

(2017)

Year 5

(2018)

Area 1. Modernization of the legal and regulatory

framework of the WSS sector in the State

DLI 1: Reform of legal and regulatory framework

Amount allocated: US$4.5 million 100%

- State Water and Sanitation Law submitted to Congress No Yes - - - -

Amount allocated: US$2 million

- Regulation of State Water and Sanitation Law prepared and published - Standard regulation for provision of municipal water and sanitation services prepared - Amendment of law creating SAPAO submitted to Congress - CEA’s internal regulation and organizational manual adopted and published - SAPAO’s internal regulation and organizational manual adopted and published

No - Yes - - -

Amount allocated: US$2.5 million

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124

Results Area 2. Improvement of water services in

Oaxaca Metropolitan Area

DLI 2-1: Improvement of service quality

Amount allocated: US$8.5 million 50%

- Preparation of the Expendientes Tecnicos for the rehabilitation and/or construction of the selected sector’s macro and micro distribution systems

No Yes - - - -


- Construction of the selected sector’s macro distribution No -

Component 1:Yes Component 2:Yes Component 3:Yes

- - -


- Percentage of active users with continuous service in the selected sector 0% 0% 0% 30% 100% -

Amount allocated: US$1.5 million US$1.5 million

DLI 2-2: Improvement of service sustainability


49% 49% 55% 70% 90% -

Amount allocated: US$1.5 million US$0.5 million US$0.5 million US$0.5 million

Results Area 3. Improvement of water services in

provincial towns

DLI 3-1: Improvement of information


0 9 18 - - -

Amount allocated: US$2 million 50% US$1 million US$1 million

DLI 3-2: Improvement of service quality Number of selected water utilities with improved service continuity

0 0 3 9 15 18

Amount allocated: US$14 million 50% US$3.5 million US$3.5 million US$3.5 million US$3.5 million

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125

DLI 3-3: Improvement of service sustainability Number of selected water utilities whose service revenue is greater than their operating expenses

0 0 3 9 15 18

Amount allocated: US$14 million 50% US$3.5 million US$3.5 million US$3.5 million US$3.5 million

Results Area 4. Improvement of information in

rural areas


Percentage of localities in selected segment with information integrated in SIASAR

0% 0% 25% 75% 100% -

Amount allocated: US$2 million 100% US$0.5 million US$1 million US$0.5 million

Total amount allocated to DLI: US$45 million US$4 million US$14.5 million US$10 million US$9.5 million US$7 million

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126

Table for Protocol to Verify Disbursement Indicators

DLI

Definition/description

of achievement of DLI

Scalability of

disbursement

(Yes/no)

Protocol to verify achievement of DLI

Source of data Verification

agent Procedure

Results area 1. Modernization

of legal and regulatory

framework of the State’s

WSS sector

DLI 1: Reform of legal and

regulatory framework

- State Water and Sanitation Law submitted to Congress

This target will be considered achieved if a proposal for a Oaxaca State Water and Sanitation Law has been submitted to the State Congress, meeting the guidelines included in Operational Manual of the DLI matrix.

No CEA AVI

Verification by IVA of the submission of the proposed Law to the State Congress, prepared in accordance with guidelines in Operational Manual.


As a prerequisite, the Oaxaca State Water and Sanitation Law will have to be previously approved by the State Congress, meeting the guidelines included in Operational Manual of the DLI matrix. This target will be considered achieved if the regulation of the State Water and Sanitation Law has been prepared and published, the standard regulation for provision of municipal water and sanitation services has been prepared, and CEA and SAPAO’s internal regulations and organizational manuals have been prepared, adopted and published, and a proposed amendment of the Law creating SAPAO has been submitted to the State Congress, meeting the guidelines included in Operational Manual of the DLI matrix.

Yes CEA/SAPAO AVI

Verification by IVA of the publication of the regulation of the State Water and Sanitation Law, of the preparation of the standard regulation for provision of municipal services, of the adoption and publication of CEA and SAPAO’s internal regulations and organization manuals, and of the submission of the proposed amendment of the law creating SAPAO to the State Congress in accordance with guidelines in Operational Manual.

____________________________________________________________________________________________

127

Results Area 2. Improvement

of services in Oaxaca

Metropolitan Area

DLI 2-1: Improvement of

service quality

- Preparation of the Expendientes Tecnicos for the rehabilitation and/or construction of the selected sector’s macro- and micro-distribution systems

The target will be considered achieved if all Expendientes Tecnicos are available for the following works and actions: - components of the macro-distribution system: redesign of electro-mechanical equipment in the 6 wells, interconnection lines from the wells to the Trujano water purification plant, the Trujano water purification plant, the Trujano pumping station, macro-metering in the Trujano pumping station, conveyance lines from the Trujano pumping station to storage tanks, storage tanks (new and reconditioned), macro-metering in storage tanks; - components of the micro-distribution system: feeder lines, reinforcement of distribution networks, section valves, pressure regulators, metering stations for the formation of hydrometric districts.

No SAPAO AVI

Review by IVA of the Expedientes Tecnicos, depending on the contractual scope of the service and engineering good practices. The Expendientes

Tecnicos should at least contain terms of reference, basic designs and bidding specifications in accordance with CONAGUA guidelines.

- Construction of the selected sector’s macro-distribution system

The target will be considered achieved if the components of the macro-distribution system were constructed according to the Expendientes Tecnicos and are fully operational. -Component 1: redesign of the electro-mechanical equipment in the 6 wells, interconnection lines from the wells to the Trujano water purification plant; -Component 2: Trujano water purification plant -Component 3: Trujano pumping station, macro-metering in the Trujano pumping station, conveyance lines from the Trujano pumping station to storage tanks, storage tanks (new and reconditioned), macro-metering in storage tanks.

Yes SAPAO AVI

Verification by IVA of the works described in each component, in operation and complying with applicable regulations.

- Percentage of active users with continuous service in the selected sector

IVA will define the location of 12 fixed pressure gauging points, which will be representative of pressure conditions in the selected sector, and will allocate all active users to each of these 12 points. All active users associated with a pressure gauging point will be considered to have continuous service if the pressure is ≥10 mca during 95% of the evaluation period. This target will be considered achieved if the percentage of active users with continuous service during the evaluation period is equal to or exceeds the target for each year.

Yes SAPAO AVI

Review by IVA of the report on pressure records by gauging point and on the calculation of the percentage of users with continuous service, prepared by SAPAO. Annual random field inspections by IVA to verify the proper operation of all pressure gauges and data loggers.

____________________________________________________________________________________________

128


service sustainability


Commercial efficiency will be defined as:

Where: - Revenue from services: all revenue from water, sewerage and sanitation services inputted in SAPAO’s commercial information system, not including transfers, fines, recharges, connection rights or other revenue during the evaluation period - Amount billed: all those amounts billed for water, sewerage and sanitation, inputted in SAPAO’s commercial information system, but not including fines, recharges, connection rights or other revenue during the evaluation period. The DLI 2-3 will be considered achieved if commercial efficiency during the evaluation period is equal to or exceeds the target for each year.

Yes SAPAO AVI

Review by IVA of the report on calculation of commercial efficiency prepared by SAPAO. Evaluation of billing and revenue records in the selected sector.

Results Area 3. Improvement

of water services in provincial

towns


information


The program of interventions with immediate impact should at least contain: - diagnostic of the water supply system and identification of priority measures to improve the continuity of water service and ensure the coverage of expenditures by service revenue; - Expendientes Tecnicos on identified priority measures; - Expendientes Tecnicos to ensure the operation of tools necessary for measuring performance indicators: (i) macro-meters in all supply sources, in accordance with NOM-012-SCFI-1994, (ii) a computerized commercial system that makes it possible to input and generate reports at least on users classified according to the fee structure, volumes and amounts billed, collected and overdue, (iii) a computerized accounting system that makes it possible to input and provide information on revenue and expenditure operations, by cost center and activity, in accordance with generally accepted accounting principles; - definition of the location of pressure gauging points needed for the calculation of performance indicators; - calculation procedures and tools of the system of basic performance indicators, with the respective training of relevant staff. The DLI 3-1 will be considered achieved if the number of selected water utilities with an immediate-impact action plan is equal to the year’s target.

Yes CEA AVI

Review by IVA of technical documents on identified interventions and their correspondence with the diagnostic and prioritization. IVA will also verify the functionality of the indicator tool and the preliminary results.

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service quality


IVA will define the location of fixed pressure-gauging points that will be representative of pressure conditions in the supply system of each of the selected water utilities. The DLI 3-2 will be considered achieved if: -Year 2, the number of selected water utilities supply service with a service pressure ≥3 mca at all gauging points during 50% of the evaluation period is equal to or exceeds the target; -Year 3, the number of selected water utilities supply service with a service pressure ≥3 mca at all gauging points during 60% of the evaluation period is equal to or exceeds the target; -Year 4, the number of selected water utilities supply service with a service pressure ≥3 mca at all gauging points during 70% of the evaluation period is equal to or exceeds the target; -Year 5, the number of selected water utilities supply service with a service pressure ≥3 mca at all gauging points during 80% of the evaluation period is equal to or exceeds the target.

Yes CEA AVI

Review by IVA of the report on pressure records by gauging point, prepared by CEA. Annual random field inspections by IVA to verify the proper operation of all pressure sensors and data loggers.


service sustainability

Number of selected water utilities whose service revenue is greater than their operating expenses

The following are defined: - Revenue from services: all revenue from water, sewerage and sanitation services, inputted in the water utility’s commercial information system, not including transfers, fines, recharges, connection rights or other revenue during the evaluation period. - Operating expenses: all expenses recorded in the water utility’s accounting system that are directly related to the provision of water, sewerage and sanitation services (when the latter exists). The following are considered: salaries and services of staff in charge of the operation and maintenance of the system’s entire hydraulic infrastructure; electricity costs of pumping equipment in wells and pumping stations; chemical reagents for water purification and treatment; materials, equipment and tools for the operation and maintenance of hydraulic infrastructure, and any type of expenditure directly related to activities for system operation, such as gasoline and repairs. Depreciations, interests or debt amortizations are not included. The DLI 3-3 will be considered achieved if the number of selected water utilities, whose revenue from services is greater than their operating expenses during the evaluation period, is equal to or exceeds the target for each year.

Yes CEA AVI

Review by IVA of the report on calculation of revenue from services and of the operating expenses of selected utilities, prepared by CEA. Annual random field inspections by IVA to verify the proper operation of commercial and accounting systems.

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Results Area 4. Establishment

of an information system for

rural areas


information


The selected segment is defined as the set of localities with a population of 500 to 2,500.

Information from a selected locality integrated in the Rural Water and Sanitation Information System (SIASAR) will be considered when it has data in all fields of said system’s data collection form. DLI 4-1 will be considered achieved if the percentage of localities in the selected segment whose information is integrated in the SIASAR is equal to or exceeds the target for each year.

Yes CEA AVI

Review by IVA of the report generated by SIASAR. Annual random field inspections by IVA to verify the reliability of data in at least 10% of localities surveyed each year.

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Table for Bank Disbursements

DLI Total amount

allocated to DLI

Percentage of which is

available for: Deadline for

achievement of

DLI

Minimum

value of DLI to

be achieved in

order to allow

disbursement

Maximum value

of DLI above

which no

additional

disbursement is

allowed

Determination of amount to be

disbursed in terms of the value

of the achieved and verified

DLI Prior

results

Advance

payments

Results Area 1. Modernization of institutional

framework

DLI 1: Reform of legal and regulatory

framework

- State Water and Sanitation Law submitted to Congress US$2 million - 25% Last day of

Year 5 n.a. n.a. 100% of disbursement for compliance


US$2.5 million - 25% Last day of Year 5 n.a. n.a.

20% of disbursement for compliance with each of the five measures

Results Area 2. Improvement of services in

Oaxaca Metropolitan Area


- Preparation of the Expendientes Tecnicos for the rehabilitation and/or construction of the selected sector’s macro- and micro-distribution systems

US$1 million - 25% Last day of Year 5 n.a. n.a. 100% of disbursement for

compliance with DLI

- Construction of the selected sector’s macro-distribution system

US$3 million - 25% Last day of Year 5 n.a. n.a.

US$1 million for each component of macro-distribution system

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- Percentage of active users with continuous service in the selected sector US$3 million - 25% Last day of

Year 5 n.a. 100%

(i) $1.5 million/30 for each percentage point between 0 and 30%, (ii) $1.5 million/70 for each percentage point between 31% and 100%

DLI 2-2: Improvement of service

sustainability

Commercial efficiency in the selected sector US$1.5 million - 25% Last day of

Year 5 n.a. 90%

(i) $0.5 million/6 for each percentage point between 49% and 55%, (ii) $0.5 million/15 for each percentage point between55% and 70%, (iii) $0.5 million/20 for each percentage point between 70% and 90%

Results Area 3. Improvement of services in

provincial towns


Number of water utilities with an approved program of interventions of immediate impact

US$2 million - 25% Last day of Year 5 n.a. 18 US$2 million/18 per each utility



US$14 million - 25% Last day of Year 5 n.a. 18

(i) $3.5 million/3 for each water utility between 0 and 3, (ii) $3.5 million/6 for each water utility between 4 and 15, (iii) $3.5 million/3 for each water utility between 16 and 18

DLI 3-3: Improvement of service

sustainability

Number of selected water utilities whose service revenue is greater than their operating expenses

US$14 million - 25% Last day of Year 5 n.a. 18

(i) $3.5 million/3 for each water utility between 0 and 3, (ii) $3.5 million/6 for each water utility between 4 and 15, (iii) $3.5 million/3 for each water utility between 16 and 18

Results Area 4. Improvement of information

in rural areas



US$2 million - 25% Last day of Year 5 n.a. 100% $20,000 each percentage point

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133

A) State Secretariat of Finance (SEFIN)

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134

B) State Water Commission (CEA)

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C) Oaxaca Metropolitan Area’s Water Utility (SAPAO)

united mexican states state of oaxaca - world...

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