The costs of delay in infrastructure investments: A comparison of 2001 and 2014 household water supply coping costs in the Kathmandu Valley, Nepal

Abstract

In 2001, we conducted a survey of 1500 randomly sampled households in Kathmandu to determine the costs people were incurring to cope with Kathmandu's poor quality, unreliable piped water supply system. From 2001 until 2014, there was little additional public investment in the municipal water supply system. In the summer of 2014, we attempted to reinterview all 1500 households in our 2001 sample to determine how they had managed to deal with the growing water shortage and the deteriorating condition of the piped water infrastructure in Kathmandu and to compare their coping costs in 2014 with those we first estimated in 2001. Average household coping costs more than doubled in real terms over the period from 2001 to 2014, from US$5 to US$12 per month (measured in 2014 prices). The composition of household coping costs changed from 2001 to 2014, as households responded to the deteriorating condition of the piped water infrastructure by drilling more private wells, purchasing water from both tanker truck and bottled water vendors, and installing more storage tanks. These investments and expenditures resulted in a decline in the time households spend collecting water from outside the home. Our analysis suggests that the significant increase in coping costs between 2001 and 2014 may provide an opportunity for the municipal water utility to substantially increase water tariffs if the quantity and quality of piped services can be improved. However, the capital investments made by some households in private wells, pumping and treatment systems, and storage tanks in response to the delay in infrastructure investment may lock them into current patterns of water use, at least in the short run, and thus make it difficult to predict how they would respond to tariff increases for improved piped water services.

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