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Over the past 25 years, Uganda has experienced sustained economic growth, supported by a prudent macroeconomic framework and propelled by consistent policy reforms. Annual Gross Domestic Product (GDP) growth averaged 7.4 percent in the 2000s, compared with 6.5 in the 1990s. Economic growth has enabled substantial poverty reduction, with the proportion of people living in poverty more than halving from 56 percent in the 1992 to 23.3 percent in 2009. However, welfare improvements have not been shared equally; there is increasing urban rural inequality and inequality between regions. Revitalizing economic growth and tackling persistent poverty will require addressing a number of challenges. These include alleviating infrastructure bottlenecks; increasing agricultural productivity; managing land, water and other natural resources; addressing demographic challenges; and confronting governance issues. The development and management of water resources is intimately linked to Uganda's continued development ambitions. Water can be both a positive force-providing productive input to agriculture, industry, energy and tourism, and sustaining human and environmental health-as well as a destructive one-to which the devastating consequences of floods and droughts can attest. The National Water Resources Assessment (NWRA) estimates that Uganda's total renewable water resources are about 43 million cubic meters (MCM), less than was estimated in the Ministry of Water and Environment's (MWE's) Sector Investment Plan (SIP) in 2009. About 13 percent of this is sustainable groundwater (5.67 MCM) and the balance is surface water (37.41 MCM). About one half of all districts in Uganda experience annual rainfall deficits-the difference between evapotranspiration and rainfall-ranging from slightly above zero to 400 mm. The frequency of rainfall anomalies below normal (or long-term annual average) is significantly greater than the frequency of rainfall anomalies higher than normal. The Uganda water Country Assistance Strategy (CAS) aims to assist the Government of Uganda (GoU) in identifying priority actions for building on successful outcomes, tackling remaining challenges, and exploiting opportunities in Uganda's water sector. The objective of the water CAS is to define the World Bank's strategic role in supporting GoU to better manage and develop its water resources. The recommendations of the water CAS are complementary to the World Bank Uganda Country Assistance Strategy (CAS) 2011-15 priorities for Uganda and consistent with the country's development objectives as defined in the National Development Plan (NDP) and water and related sector plans and strategies, which form the foundation of the World Bank Uganda CAS.

Capacity Building --- Coastal Areas --- Cost Recovery --- Decision Making --- Desalination --- Food Security --- Municipalities --- Natural Resources --- Population Growth --- Public Health --- Regulatory Agencies --- River Basin Management --- Sewage Systems --- Surface Water --- Tariff Reform --- Town Water Supply and Sanitation --- Urban Areas --- Wastewater Treatment --- Water Conservation --- Water Law --- Water Pollution --- Water Resources --- Water Sector Reform --- Water Supply --- Water Supply and Sanitation --- Water Supply and Sanitation Governance and Institutions --- Water Use

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In public-private partnership transactions in the water sector, one of the alleged concerns is that there is little market competition at the auction stage. This paper casts light on a tradeoff between the competition effect at the auction level and potential economies of scale in service operation. If the authorities design a large-scale public-private partnership water transaction, it is expected to exploit operational scale economies. But the competition effect may have to be sacrificed. The paper shows a risk that the selection of the contract size could be a very restrictive condition that excludes many prospective bidders. Moreover, the paper quantifies the optimal size of public-private partnership contracts in the sector by estimating a cost function. The analysis shows that economies of scale exist but tend to diminish quickly as production increases. When the amount of water sold exceeds about 40 million m3, the statistical significance of economies of scale disappears. And there is no rationale for auctioning the water operation with annual water delivery of more than 400 million m3 under a single contract.

Competitive Bidding --- Industry --- Local Water --- Municipal Water --- Private Participation --- Sewerage Services --- Town Water Supply and Sanitation --- Urban Water Supply and Sanitation --- Water and Industry --- Water Conservation --- Water Districts --- Water Resources --- Water Sector --- Water Services --- Water Supply --- Water Supply and Sanitation --- Water Supply and Sanitation Governance and Institutions --- Water Utilities

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This paper assesses the impact of water supply variability on treaty cooperation between international bilateral river basin riparian states. Climate change is anticipated to change the variability of water supply, as well as its expected magnitude. Previous studies have focused mainly on water scarcity, measured in terms of mean precipitation or per capita water availability in the country, as a trigger for conflict or cooperation. The water variability measure used here captures both annual runoff variability and precipitation variability over periods of 30 and 100 years. The analysis used economic and international relations data to identify incentives for international cooperation in addressing water supply variability. The authors find that small-to-moderate increases in variability create an impetus for cooperation, although large increases in variability would reduce incentives for treaty cooperation. Stronger diplomatic and trade relations support cooperation, while uneven economic power inhibits cooperation. Various measures of democracy/governance suggest different impacts on cooperation across the basin riparians. The findings have policy implications in the context of preparedness for impacts of climate change on the water sector.

Allocation agreements --- Arid areas --- Climate change --- Climatic conditions --- Common Property Resource Development --- Drought Management --- Flow Regimes --- Hydrologic cycle --- Hydrological cycle --- Quality of water --- Riparian countries --- Riparian States --- River Basin --- River basins --- Rivers --- Rural Development --- Town Water Supply and Sanitation --- Water allocation --- Water and Industry --- Water availability --- Water resource --- Water Resources --- Water scarcity --- Water sector --- Water Supply --- Water Supply and Sanitation --- Water Supply and Sanitation Governance and Institutions

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Governments and developing agencies promote participatory approaches in solving common pool resource problems, such as in the water sector. Two main participatory approaches have been applied separately, namely negotiation and mediation. In this paper the authors apply the Role-Playing Game that is a component of the Companion Modeling approach, a negotiation procedure, and the Cooperative Game Theory (Shapley value and the Nucleolus solution concepts) that can be mirrored as a mediated mechanism to a water allocation problem in the Kat watershed in South Africa. While the absolute results of the two approaches differ, the negotiation and the cooperative game theory provide similar shares of the benefit allocated to the players from various cooperative arrangements. By evaluating the two approaches, the authors provide useful tips for future extension for both the Role-Playing Games and the Cooperative Game Theory applications.

Catchment --- Catchment Management --- Catchments --- Common Property Resource Development --- Domestic Water Consumption --- Environment --- Environmental Economics and Policies --- Flow --- Groundwater --- Industry --- Irrigation --- Lead --- Meters --- Natural Resources --- Rainfall --- Rural Development --- Sanitation and Sewerage --- Storage Capacity --- Surface Water --- Total Water Requirements --- Town Water Supply and Sanitation --- Wastewater Treatment --- Water --- Water and Industry --- Water Conservation --- Water Resources --- Water Rights --- Water Sector --- Water Sources --- Water Supply and Sanitation --- Water Supply and Sanitation Governance and Institutions --- Water Supply and Systems --- Water Use --- Watershed

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To design pro-poor concession arrangements in the water sector, policymakers must pay careful attention to how the proposed contract, and existing or proposed regulations, will affect private concessionaires' ability, obligations, and financial incentives to serve low-income households; The Bolivian government awarded a concession for water and sewer services in La Paz and El Alto in 1997. One goal of doing so was to expand in-house water and sewer service to low-income households. Komives uses the Aguas del Illimani case to explore how the design of typical concession agreements (with monopoly private service suppliers) can affect outcomes in poor neighborhoods. She finds that outcomes in services can be affected by the concession contracts, by the contract bid process, by sector regulations, and by regulatory arrangements. To increase the likelihood of improvements in low-income areas, policymakers should: Make contract objectives clear and easily measurable; Eliminate policy barriers to serving the poor (including property title requirements and service boundaries that exclude poor neighborhoods); Design financial incentives consistent with service expansion or improved objectives for low-income areas. Contracts are subject to negotiation, so expansion or connection mandates alone do not guarantee that concessionaires will serve poor areas. Provisions and standards that reduce service options (for example, requirements that eliminate all alternatives to in-house connections) or restrict the emergence of new service providers (for example, granting exclusivity in the service area) could do more harm than good. In two years of operation, Aguas del Illimani met its first expansion mandate and took many steps to facilitate the expansion of in-house water connections in low-income areas. The company and the Bolivian water regulator were willing to discuss and seek possible solutions to problems associated with servicing poor neighborhoods. It is too early to tell whether these gains will be sustainable or to predict how privatization will ultimately affect poor households in La Paz and El Alto. This paper - a product of Private Participation in Infrastructure, Private Sector Development Department - is part of a larger effort in the department to analyze and disseminate the principles of, and good practice for, improving service options for the poor through reforms for private participation in infrastructure. The author may be contacted at komives@email.unc.edu.

Concession Contracts --- Contract Objectives --- Cost Recovery --- Financial Incentives --- Industry --- Low-Income Households --- Private Companies --- Private Participation --- Public Utility --- Public Water --- Sanitation Service --- Sanitation Services --- Sanitation Solutions --- Service Providers --- Service Supplier --- Sewer Service --- Town Water Supply and Sanitation --- Urban Areas --- Urban Water Supply and Sanitation --- Utility Model --- Water --- Water and Industry --- Water Conservation --- Water Resources --- Water Sector --- Water Supply and Sanitation --- Water Supply and Sanitation Governance and Institutions --- Water Utilities