Risks that can impair development effectiveness in the urban water supply sector are multidimensional, says a new report  by the Asian Development Bank (ADB). This highlights the sector’s vulnerability to risks in the absence of appropriate mitigating measures.
Evaluation lessons in the report are drawn from actual independent evaluation, self-evaluation, and ADB’s Evaluation Information System. The report complements ADB’s 2009 Guidance Note on Urban Water Supply Sector Risk Assessment.
Risks in the urban water sector can emanate from (i) capacity weaknesses in policy making, regulation, partnerships, sector planning, and management; (ii) unresponsive systems (water resource management, financial management, and procurement); (iii) poor governance, which hampers stakeholder participation, transparency, and accountability; and (iv) weak project design, management, and evaluation, among others. Financial management systems and operating environment that are unable to provide returns on invested capital and adequate revenue streams for facility maintenance can seriously undermine new investments, jeopardize service quality, and threaten the viability of sector operations. Lack of stakeholder commitment to sector improvements can also seriously compromise sustainability. Overall, fragile links in the chain of policy, planning, financial management, project management, and results-based evaluation can work against development effectiveness.
Various lessons drawn from the experience of ADB in the urban water supply sector call attention to the diversity and varying complexity of risks, along with measures pursued by various developing member countries (DMCs) to address these risks. A careful understanding of the risk environment is a must, with due regard to specific contexts in which risks occur, the arrangements that can mitigate these risks, and the extent to which stakeholders and stakeholder alliances can affect policy, planning, and implementation processes. Where sector reforms are required, assessing roadblocks to collaboration as well as potential areas for engagement is crucial. Differences in stakeholder responses and the interplay of institutional, organizational, and capacity-related factors often shape development outcomes.
 Bestari, N. … [et al.] (2011). Learning lessons : urban water supply sector. (ADB independent evaluation). Manila, Philippines, Asian Development Bank. vi, 25. p. Download full report