Paraguay water investments marred by poor execution, informal providers – World Bank

Investments to improve Paraguay’s water infrastructure and services are hampered by poor execution, divided governance and the existence of thousands of informal water utilities, according to a report from the World Bank.

While the report highlighted that service coverage underwent a marked increase over the last decade, the bank’s senior water specialist, María Catalina Ramírez, noted that “we see very strong inequities between certain social groups, as well as regional disparities.”

For instance, the World Bank points out that while 71% of homes in capital Asunción and Central department have access to high-quality potable water, in Boquerón department that figure drops to only 24%.

In terms of investments, the World Bank stated that public spending is “volatile” and budget execution does not reach 50% of funding resources, with less than US$8 spent per person in 2017.

One reason for this has been divided governance in water services, which are overseen by both the public works (MOPC) and health ministries, a situation that “often creates tensions,” Ramírez said, adding that there is no coordinated planning for overall investments.

The World Bank report also indicated that around 70% of homes receive potable water services from more than 5,000 informal utilities such as local NGOs and other private operators that do not have the relevant concessions or permits and that which often service small clusters of residents (100 to 300 homes).

Many of these informal providers have deficient infrastructure, lack of oversight and are deemed financially unsustainable by the bank.

Lastly, the report noted that the country would have to invest US$6bn by 2030 in order to meet the United Nations sustainable development targets in the sector, and that would mean multiplying the average annual investment seen between 2013 and 2017 (US$$51mn) by a factor of nine.