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Water Financing Partnership Facility

RETA 6498: Knowledge and Innovation Support for ADB’s Water Financing
Program

PILOT AND DEMONSTRATION ACTIVITY


Final Report

June 2017

Timor-Leste: Using Output Based Aid


(OBA) to Increase Access to
Domestic Sanitation through
Investment in Piped Sanitation in
Urban Manatuto

Prepared by Jan David Mueller-Vollmer

The Pilot and Demonstration Activity Report is a document of the proposer. The views expressed herein do not
necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in
nature. In preparing any country program or strategy, financing any project, or by making any designation of or
reference to a particular territory or geographic area in this document, the Asian Development Bank does not
intend to make any judgments as to the legal or other status of any territory or area.
Contents
GLOSSARY OF KEY TERMS AND ACRONYMS ........................................................................................... 4
EXECUTIVE SUMMARY ............................................................................................................................ 8
A. PREFACE .............................................................................................................................................. 9
A.1. Background .................................................................................................................................. 9
A.2. Design Objectives ........................................................................................................................ 9
A.3. Activities to Date........................................................................................................................ 10
A.4. On OBA Subsidies....................................................................................................................... 11
B. PROJECT FACT SHEET ........................................................................................................................ 13
C. GUIDE TO DESIGN AND COSTING MODEL ........................................................................................ 17
D. STRATEGIC CONTEXT AND RATIONALE ............................................................................................ 19
D.1. Country and Sector Data ........................................................................................................... 19
D.2. National Basic Sanitation Policy ................................................................................................ 19
D.3. Responsible Institutions ............................................................................................................ 20
D.4. Existing Urban Sanitation in Manatuto ..................................................................................... 21
D.4.1. Drainage Infrastructure ...................................................................................................... 21
D.4.2. On-site Sanitation ............................................................................................................... 22
D.4.3. Collection and Disposal of On-site Septic Pit Waste .......................................................... 23
D.4.4. Timor-Leste Experience with Sanitation............................................................................. 24
D.5. Rationale for a Sanitation Subsidy ............................................................................................. 24
D.6. Higher Level Objectives ............................................................................................................. 25
D.7. Provisional Project Performance and Outcome Indicators ....................................................... 25
E. PROJECT DESCRIPTION ...................................................................................................................... 26
E.1. Target Population and Project Area ........................................................................................... 26
E.2. Assessment of Target Population Access to Sanitation ............................................................. 27
E.3. Public Buildings in the Project Area (Outputs 3a and 3b) .......................................................... 29
E.4. Criteria used in Developing Technical Options .......................................................................... 30
E.5. Project Components .................................................................................................................. 31
E.5.1 Decentralized Networks (proposed for all Outputs in PDA) ................................................ 31
E.5.2. Simplified Sewer Networks (Output 1a and Output 2a) ..................................................... 32
E.5.3. Direct Connection to Modified Main Sewer (Outputs 1b, 2b, 3a, and 3b) ......................... 36
E.5.4. Interventions at the Household Level (Output 1a, 1b, 2a, and 2b) .................................... 37
E.5.5. Decentralized Wastewater Treatment Systems (DEWATS) ................................................ 38
E.5.6. Provision of Toilets .............................................................................................................. 42
E.6. Targeting of Beneficiary Households and Institutions ............................................................... 42
E.7. Affordability, Willingness to Pay, and Subsidy Levels ................................................................ 44
E.8. Relationship between Reported Income and Willingness to Pay .............................................. 46
E.9. Cost of Basic Needs Poverty Indicator ..................................................................................... 47
E.10. Contributions by Beneficiary Households ................................................................................ 47
E.11. Donor Subsidy for DEWATS (USDoD Humanitarian Mission) .................................................. 48
F. OBA Outputs...................................................................................................................................... 48
G. OBA Financing Structure: ................................................................................................................. 51
H. PROJECT COSTING ............................................................................................................................ 52
H.1 Summary of Project Costs, Outputs, and Allocations ................................................................. 52
H.2. Unit Costs per Output ................................................................................................................ 53
H.3. Total Participation Levels per Output........................................................................................ 54
I. IMPLEMENTATION ............................................................................................................................. 54
I.1. Milestones for Project Implementation...................................................................................... 54
I.2. Institutional and Implementation Arrangements ....................................................................... 56
I.2.1. Implementing Agency .......................................................................................................... 56
I.2.2. Executing Agency ................................................................................................................. 57
I.2.3. Project Implementation Unit ............................................................................................... 57
I.2.4. Social and Environmental Assessment ................................................................................ 57
I.2.5. Grant Agreements ................................................................................................................ 57
I.2.6. Independent Verification Agent........................................................................................... 58
I.2.7. Project Steering Committee ................................................................................................. 58
I.2.8. Mid-Term Review ................................................................................................................. 58
References Consulted: ...................................................................................................................... 60

APPENDICES
Appendix I – Introduction to the Proposed PDA (PowerPoint Presentation)
Appendix II – Financial and Technical Spreadsheet Model of Proposed PDA

LIST OF TABLES
Table 1 - Proposed Project Area and breakdown of Beneficiary Households by Suco and Aldeai
Table 2 - Sanitation Practices in Manatuto Town
Table 3 - Survey Results on Willingness to Pay
Table 4 - Upper and Lower Poverty Line Thresholds
Table 5 - Domestic Beneficiary HH Connections by Suco
Table 6 - Institutions Connected by Suco
Table 7 - Summary of Key Project Metrics
Table 8 - Unit Costs per Output by Participant
Table 9 - Total Participation Levels per Output
Table 10 - Tentative Schedule of Key Milestones
Table 11 - Timeframe for Establishment of New Connections
LIST OF FIGURES
Figure 1 - Example of the combined irrigation and storm water drainage canal network in Manatuto
Figure 2 – Example of Canal in Dili
Figure 3 - Location of Proposed Project Area within Timor-Leste
Figure 4 - Proposed Project Area of Urban Manatuto
Figure 5 - Conventional Sewer (right) vs. Simplified Sewer (left)
Figure 6 - Example of Interceptor Chamber in a Simplified Network
Figure 7 – Conventional vs. Simplified Manhole
Figure 8 – Cross-section of Inspection Clean-out Shaft
Figure 9 - Plastic Inspection Shaft
Figure 10 – Example of Kitchen Grease Trap and Sink Strainer
Figure 11 – Example of P-Trap
Figure 12 – Schematic cross section of Imhoff (Settling Tank – DEWAT Stage 2)
Figure 13 – Schematic Cross Section of Anaerobic Filter (DAWAT Stage 3)
Figure 14 - Cross Section of Constructed Wetlands (DEWAT Stage 4)
Figure 15 - Proposed Default Toilet Provision

GLOSSARY OF KEY TERMS AND ACRONYMS

AC Access Chamber – Chambers used at the HH premises to access the collection pipes in case of blockages
(sanitary napkins, food residue, plastic articles, etc). When located in areas along the network not on the
premises of the individual HH or at the junction between the individual HH and the network, these may
also be referred to as Inspection Chambers (See glossary entry for Inspection Chambers). These two terms
are sometimes used interchangeably. Clean-out is yet another term used for access chamber on the HH
premises or in the network and may also refer to the specific opening where the pipe is accessed. In this
report, Access Chambers and Inspection Chambers refer to chambers designed for “flow through”,
meaning they do not trap any waste.

ADB Asian Development Bank

Aldeia Sub-village or hamlet. There are 2,225 Aldeias in Timor-Leste

BESIK Be’e Saneamentu no Ijiene iha Komunidade = AusAID Rural Water Supply and Sanitation Project

CapEx Capital Expenditures

Clean-out See AC

CLTS Community Led Total Sanitation

Conventional A network of pipes designed to carry sewage which is designed using the conventional technical standards
sewerage laid down in international standard codes of practice

CWWTP Centralized Wastewater Treatment Plant


DAA/OS Departamento de Abastecimento de Água (DNSA)/ Oficial de Saneamento (DNSB) = Department of Water
Supply (DNSA)/ Sanitation Officer (DNSB) (Municipality level)

DED Detailed Engineering Design

DEWATS Decentralized Wastewater Treatment Systems

DNSB Direcção Nacional de Saneamento Básico = National Directorate for Basic Sanitation

DNSA Direcção Nacional de Serviços de Água = National Directorate for Water Services

DGAS Directorate General of Water and Sanitation

Eligible An output which is eligible for payment of a subsidy by under the terms to be described in the
output Commitment Paper/Project Implementation Manual

GA Grant Agreement – the agreement to be forged between any party providing a subsidy and the Service
Provider to be the recipient of the subsidy

GoTL Government of Timor-Leste

GPOBA World Bank Global Partnership on Output-Based Aid

HHs Households

IC Interceptor Chamber – A chamber generally (but not always) located beyond the HH premises used by the
sanitation service provider to access the collection pipes in case of blockages. Interceptor chambers
usually are designed with some hydraulic residence time to allow solids to settle and need to be
periodically emptied. There are some geographical differences in terminology pertaining to Interceptor
Chambers. In some countries, an access chamber is also referred to as an interceptor chamber despite
having no hydraulic residence time.

Inspection Chambers installed at points along the sanitary collection network to access the collection pipes in case
Chamber of blockages and for regular cleaning. Manholes are a type of inspection chamber. An inspection chamber
located on the HH premises (where pipes are smaller) is called an Access Chamber (see AC)

IVA Independent Verification Agent


JICA Japan International Cooperation Assistance

MDB Mulit-lateral Development Bank

MF Ministry of Finance

MOPTC Ministério das Obras Públicas, Transportes e Comunicações = Ministry of Public Works, Transport, and
Communications

MTR Mid-Term Review


NGO Non-Government Organization

OBA Output-based Aid

O&M Operations & Maintenance


ODF Open Defecation Free
Onsite Sanitation services provided on the house plot via septic tank which requires periodically to be emptied
sanitation and/or desludged in order to provide effective protection from faecal-related disease transmission.

PDA Pilot Demonstration Activity

PIM Project Implementation Manual

PIU Project Implementation Unit

PNSB National Basic Sanitation Policy/Política Nacional de Saneamento Básico

PPTA Project Preparatory Technical Assistance

RDTL Democratic Republic of Timor-Leste (translated from Portuguese)


RWSSP Rural Water Supply and Sanitation Program

Sanitation In the context of water supply and sanitation, the World Health Organization (WHO) defines sanitation
as a group of methods used to collect human excreta and urine as well as community waste water in a
hygienic way, where human and community health is not altered1. The RDTL’s National Policy on Basic
Sanitation defines basic sanitation as the access to adequate sanitation facilities including a latrine for
defecation, handwashing facility, safe waste disposal, and drainage to eliminate standing water.
SBGs Sanitation Business Groups

SC Steering Committee

SDA Service Delivery Assessment

Simplified Simplified sewerage, also called condominial sewerage or shallow sewerage, conveys wastewater, and is
sewerage designed from hydraulic first principles, rather than by using the very conservative design features and
network rules of thumb that have accrued with conventional sewerage. Generally, results in smaller sewers laid at
shallower gradients, thus significantly reducing construction and pumping costs.
SC Steering Committee

Suco Lowest level administrative unit equal to town or village. There are 442 in Timor-Leste

USDoD United States Department of Defence

Working A connection to a sewer which effectively and continuously removes wastewater from the house plot and
connection conveys it away from the neighbourhood with no nuisance

USDoD United States Department of Defence

Working A connection to a sewer or onsite sanitation which effectively and continuously separates humans from
service excreta and aims at eliminating or limiting to the maximum reasonable environmental contamination or
nuisance.

WSS Water Supply and Sanitation

1
Technology for Water Supply and Sanitation in Developing Countries. Geneva: World Health Organization;
1987. [PubMed]
WtP Willingness to Pay
EXECUTIVE SUMMARY

This report presents the design of a Pilot Demonstration Activity (PDA) aimed at improving access to
sanitation services in Urban Manatuto, Timor-Leste. Project scoping and conceptual design work has
been commissioned by the ADB on behalf of the Ministry of Public Works Transport and
Communications (MOPTC), with a grant from the ADB, under the District Capitals Water Supply Project.

The project is premised on the leveraging of contributions via performance based mechanisms known as
Output-Based Aid (OBA). Under an OBA financing framework, subsidizing parties generally provide their
reimbursement only after agreed to outputs have been pre-financed by the government (GoTL) and
successfully delivered by the Service Provider (in this case the DNSB within the MOPTC). Using the OBA
structure can help to lower financial barriers to allow a demonstration project to be implemented and
can incentive donor contributions by lowering risks to donors of investment losses.

In all, 1,315 households and 27 institutions (9,667 individual beneficiaries) will be served in the project
area comprising four sucos in urban Manatuto. Customers will be connected to multiple stand-alone
decentralized sewerage collection networks, piloting the use of simplified, decentralized, low cost piped
sanitation networks, each equipped with decentralized treatment systems (DEWATS). In addition, the
project will provide subsidized improvement of on-site sanitation at vulnerable households through
construction of toilets, and at vulnerable institutions with rehabilitation of septic tanks. This approach to
improved access to sanitation is of particular interest, as use of DEWATS combined with low-cost piped
sanitary sewers represent a solution to sanitation that is both easily scalable in capacity (up and down)
and widely applicable to smaller and medium sized towns in Timor-Leste.

Total project costs, including project preparation and implementation, are estimated to be USD 2.92 mil,
of which the GoTL commitment lies at USD 1.23 mil, the donor contribution lies at USD 1.64 mil, and
customers/beneficiaries will contribute 0.05 mil in connection fees. The average investment per person
served will be $302.

A 54-month total project cycle is proposed for this PDA – (i) 12 months to build commitments, complete
project preparation, and select PIU and IVA, (ii) 36 months for mobilization of PIU and IVA, bidding and
selection of design and construction contractors, construction of the networks and DEWATS, connection
of customers, and training of the sanitation operators. (iii) 12 months for continued training of the
sanitation operation staff. Next stages of project preparation are expected to include:

i. Finalizing technical and financial design,


ii. Completing economic, social and environmental assessment (incl. resettlement issues), and
iii. Reaching consensus and obtaining commitment from key stakeholders (GoTL, local authorities,
and donors) on oversight structure, as well as the mechanics and protocols dictating project
procurement, implementation, and funds disbursements that all signing parties will be bound
to.

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A. PREFACE
A.1. Background
The Ministry of Public Works Transport and Communications (MOPTC), with an $11 million grant from
the ADB, is implementing the District Capitals Water Supply Project. The project expands access to a safe
and reliable 24-hour water supply to a large proportion of households in Manatuto and Pante Macassar
towns. The Phase I Water Supply Project in Manatuto (total cost of $4.7 mil), was completed in
November of 2016, ultimately supplying water to 1,017 households in urban Manatuto. Additional
households will be connected in subsequent phases of the project, as well as on an on-going basis over
the next two years (an estimated 300 households).

To fully leverage the benefits of improved water supply and manage the resulting domestic wastewater
generated by households now receiving a reliable piped water supply, the National Directorate of Basic
Sanitation (DNSB) proposes an Output-based Aid (OBA) Pilot Demonstration Activity (PDA) to deliver
improved sanitation to low-income communities using explicit performance-based subsidies to attract
donors and investors. Historically in Timor-Leste, sanitation projects have focused on improvements in
human hygiene at the household level or construction of toilets with soak pits (The Community Led
Total Sanitation program is probably the most widely recognized example). Under this OBA modality
having an urban focus, sanitation is defined beyond toilet, to include complete household waste water
management. The main elements of the proposed sewerage system include household connections for
combined collection of both human excreta and greywater (kitchen plus bathing) liquid waste, and
conveyance of this combined waste stream via buried pipes to another location away from the
households for treatment and discharge. In communicating with potential project beneficiaries and local
officials, it will be important to emphasize that the proposed PDA represents a new approach to urban
sanitation in the Democratic Republic of Timor-Leste (RDTL) based on the construction of a piped
sewerage systems installed beneath the existing water supply lines, although toilets will also be
provided in some cases.

The sanitation facilities proposed will provide safe disposal of both excreta and greywater to reduce the
burden of exposure to water-borne disease among the population in urban Manatuto. Although the
project will ensure support in the form of subsidies to all qualified low income and vulnerable
households, the resulting PDA design will improve provision of sanitation services to the inhabitants of
all households in the project area, reducing exposure risks to the entire community. This is a key
consideration, since any unserved households in a given community pose risks not only to themselves
but also to the surrounding community.

A.2. Design Objectives


The principal objective of the PDA is to implement an urban sanitation OBA pilot project in the
municipality of Manatuto town, using simplified, decentralized, low cost piped sanitation networks.

The PDA will generate potentially replicable, appropriate technical approaches and harness innovative
financial structural elements to encourage investment. The PDA model may then be drawn from in the
design of future household sewage (sanitation) management projects in other communities in Timor-

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Leste, serving as a catalyst for further investment in the sector, as this could mark the first application of
certain technologies not yet adopted anywhere in Timor-Leste, such as:

• Immediate dispatching of domestic wastewater off-site from the household via sanitary sewers,
eliminating use of leach pits and drastically reducing on-site exposure risks of the beneficiaries
to waterborne diseases,
• Simultaneous management of grey water and human excreta,
• Use of low-cost sewer networks and connections,
• Treatment or disposal of these wastewater streams using low-cost technologies
• Use of design and components that minimize operation and maintenance burdens placed on the
operator.

A.3. Activities to Date


The ADB has been actively supporting the Directorate General of Water and Sanitation (DGAS) in its
mission to develop and implement programs to bring WSS services to the population. Coordination
between the DGAS Sanitation Directorate (DNSB) and ADB leading to this PDA began in 2014, and
focused specifically on exploring the potential advantages of applying an output based finance
mechanism to address the sanitation needs in urban Manatuto arising among newly connected
households under the ADB funded Phase I Water Supply Project. In July/August 2016, Consultant was
engaged by the ADB to complete an initial scoping and inception mission to develop a PDA project
design, which incorporates a transparent and workable OBA mechanism and structure.

Activities completed during the inception mission included:

• Consultations with key stakeholders,


• Stakeholder workshop introducing the proposed project objectives and providing an
introduction to the use of OBA mechanisms to support investments in WSS infrastructure,
• Multiple site visits to the proposed project site in Manatuto and meetings with local officials,
• Refinement of project scope,
• An on-site socio-economic survey supporting an assessment of sanitation needs and vulnerable
households to be targeted by the pilot in Manatuto.
• Early discussions with potential subsidizing entities, most prominently, the US Department of
Defense Navy SeaBees humanitarian mission in the RDTL.

A mix of output/investment components are proposed, focused on use of technical approaches


exhibiting low capital expenditures (CapEx) and low operation and maintenance (O&M) requirements
that best suit local needs, context, and development goals. The approach included the following steps:

• Assess sanitation needs to be addressed in the target area


• Develop categories of beneficiaries by existing sanitation situation (private or shared toilet,
condition of existing facilities, adequacy of existing facilities, etc.)
• Formulate criteria for assessing and selecting among of sanitation options
• Develop packages of technical options that best meet the needs of each category of beneficiary
identified
• Perform preliminary calculation of costs of these options

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• In a collaborative process with DNSB, refine assumptions and confirm interest in the proposed
project components
• Complete preliminary design and costing of outputs

The resulting Inception Report (on file at the ADB and DNSB) summarizes the initial findings and
observations made by the Consulting team during its 4-week mission from July 17, 2016 through August
12, 2016, as well as providing the results of the survey supporting assessment of sanitation needs
completed at the time.

Following the initial mission, a draft Technical and Financial OBA Model of the proposed PDA using OBA
mechanisms was generated. An additional mission of one-week duration was completed by the
Consultant from December 11 through Dec 16, 2017 to present the Draft OBA Model work-up to the
staff of the DNSB, and to refine model input values with actual data with DNSB staff to ensure accurate
technical assumptions and costing. During this mission, the Consultant also reviewed implementation
challenges with the stakeholders so that these could be incorporated into the final project design.

Lastly, under guidance of the DNSB, Consultant presented the proposed project to the Vice-Minister of
MOPTC, beginning the process of enlisting commitment for financing of the proposed PDA. This
presentation (Appendix II) provides a useful summary of all aspects of the proposed OBA PDA and
should be consulted in conjunction with this report.

The results of the December mission have been incorporated into this PDA Final Design Report and
associated technical and financial model.

Key Project Outputs to date:

• Inception Report
• Presentation/Training on using Output-Based Aid to propel Sanitation Investments (Included in
Inception Report Annexes)
• Socio Economic Survey supporting Assessment of Sanitation Needs of the Target Population
(Presented in Inception Report)
• Technical and Financial Spreadsheet Model of Proposed PDA (Appendix I)
• PowerPoint Introduction to Proposed PDA (Appendix II)
• Final Report

A.4. On OBA Subsidies


A subsidy serves as a key concept in the design of OBA schemes. For the World Bank’s GPOBA program,
for example, a subsidy is generally defined as the difference, in quantitative terms, between the ability
or willingness of a beneficiary, such as a household, to pay for the provision of a product or service (e.g.
toilet or connection to a sewerage network) and the actual cost of the provision of that product or
service to a non-disadvantaged household. The implication being that poor or vulnerable beneficiaries
are unable to pay for the full cost of the service on their own, and therefore they or their community are
unable to capture the potential human health or economic gains from the provision of that service. An
OBA subsidy is intended to compensate for the financial gap that must be overcome by a National

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Government or Service Provider (such as DNSB) to allow services to be provided to vulnerable or poor
segments of the population in order for a proposed investment to be viable.
There are many reasons why national governments, donors and MDBs have been increasingly adopting
performance based mechanisms such as OBA in financing projects. These include:
• Potential to maximize results with limited resources
• Encourages efficiency and innovation
• Increases accountability and reduces risk for subsidizing donor
• Allows leveraging of public resources with donor funding or private financing
• Builds confidence of the donor or financing agency in the project (good marketing tool)
• Supports transparency and competition
• Acts as incentive to mobilize private sector finance
Under an OBA financing framework, subsidizing parties generally provide their reimbursement only after
pre-defined outputs have been delivered by the Service Provider or their contracted implementing
agents. Budgeted government investments in basic infrastructure for essential services (such as the
construction of the main sanitary collection network), may have trouble attracting OBA donor subsidies
(as these are seen as the basic responsibility of the state), whereas improvements such as connections
of disadvantaged households/communities to the network, or investments in treatment and disposal
infrastructure to reduce human exposure risks of the community as a whole, tend to be more attractive
propositions to potential donors.
In interviews during the scoping mission, stakeholders emphasized that in Timor-Leste, the term subsidy
often implies a complete handout by the government or donor, in which some product or service is
provided in full, at no cost to the beneficiary. Under OBA financing arrangements in the WSS sectors,
subsidies by donors typically range between 30% and 60% of total project costs (historically, the World
Bank’s GPOBA program has averaged 44% subsidy levels in the WSS sector). For this reason, there is
potential for misunderstanding, particularly at the local level, when introducing the OBA PDA structured
project to beneficiaries or GoTL partners, who may come to expect complete coverage of the full cost of
the project via the subsidy. Contributions in cash or in-kind by individual HHs, local municipalities, and
government investment units are considered critical to help pursued prospective donors that there exist
sufficient demands for the service they would subsidize.
In the proposed OBA design documentation, financial or in-kind participation by any party is referred to
as a contribution. A contribution made by a donating entity to leverage investment contributions by
other entities is known as a subsidy. The subsidy will be precisely quantified in the final design, upon
economic analysis and agreed commitment by participating contributors.

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B. PROJECT FACT SHEET
PROJECT FACT SHEET

Scope: Improving access to sanitation services in Urban Manatuto by implementing an urban sanitation
OBA pilot project, using simplified, decentralized, low cost piped sanitation networks, each equipped with
decentralized treatment units (DEWATS). The project will connect households and institutions in the
project area to the sewerage collection network, as well improve on-site sanitation at vulnerable
households through construction of toilets, and at vulnerable institutions with rehabilitation of septic tanks.

Total project cost: $ 2.92m

Total donor contributions sought (cash plus in-kind): $ 1.64m

• Construction of DEWATS (provided in-kind by USDOD, no cash contributions) $ 1.28m


• Rehabilitation/replacement of toilets (domestic) and septic tanks (institutions) $ 0.147m
• Project Preparation (ADB) $ 0.108m
• Independent Verification Agent (ADB) $ 0.108m

Additional funding sources: $1.28m

• GoTL Capex contribution to construction $ 0.915m


o Communication campaign $ 0.048m
• GoTL contribution to Project Implementation Unit $ 0.263m
• Customer (beneficiary) contributions $ 0.049m

GoTL funds to be dedicated by Ministry of Finance prior to mobilization (terms to be set in MOA) $1.28m

Outputs:

• Domestic sewer connections 1,315


• Institutional sewer connections 18-27
• Construction of decentralized sanitation networks serving 4 sucos in Manatuto 4-6 networks
• Construction of DEWATS (Decentralized Wastewater Treatment Units) 4-6 units

Expected beneficiaries: 9,667

• Average investment per person served: $302


• Average donor subsidy per person served: $170
• Average GoTL contribution per person served: $127

Targeting:

Urban Manatuto - beneficiaries to include all 1,017 households who received new connections under the
ADB funded Phase I Water Supply Project in Manatuto town (plus the approximately 300 additional
expected in the next 2 years – approximately 1,315 projected HHs in all), as well as institutions in the project
area, reducing exposure risks to the entire community.
• All beneficiaries will receive some level of donor subsidy, as construction of the network and
DEWATS is projected to be subsidized, which will serve all connected beneficiaries.
• Poor and vulnerable households or institutions will benefit from additional site-specific subsidies to
cover costs of toilet repair/replacement (in the case of domestic HH connections) or septic tank
repair replacement (in the case of institutional connections).
• Extremely poor or vulnerable beneficiaries will also receive a waiver from needing to pay the cost
of connection ($35).

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Preparation and Facilitation
• ADB to serve as lead in project preparation and project facilitator (oversight of PIU)

Implementation:
• PIU responsible for implementation with oversight by ADB and Steering Committee
• Composition of Steering Committee to be established in next stages of PPTA by GoTL and donors.

Financial Management:
• The Ministry of Finance will take fiduciary responsibility for the project. Arrangements will be
finalized subject to review by the facilitating donor (ADB).

Project Account:
• Project escrow account to be established. Account funds to cover operation of PIU, payment of
Contractors, plus one-year handover (equipment, training) to selected Manatuto sanitation
operator. Executor of escrow account to be determined in Project Implementation Manual (PIM).

OBA financing structure:

The objective of the proposed financing structure is to incentivize prospective donors to provide cash or in-
kind subsidies to the pilot project by lowering investment risks to these donors. A structure including full
dedication of funds and pre-financing by the GoTL is proposed to help reduce the risks of non-delivery of
the GoTL funded components of the project (construction of sewerage networks and establishment of a
functional system operator) and ensure sufficient cash flow during implementation.

• GoTL Tranche #1 due prior to mobilization of PIU 33.33%2


• GoTL Tranche #2 due at 33% of project completion 33.33%
• GoTL Tranche #3 due at 66% of project completion 33.33%

Conditions of Donor Participation

• GoTL to document availability of dedicated funds prior to project begin as indicated in MOU.
• Donor #1 to reimburse GoTL on a quarterly basis upon completion of outputs as verified as
satisfactory by the IVA.
• Donor #2 to begin construction of DEWATS only after 50% of networks (including all main network
lines) and 33% of connections have been completed and verified as satisfactory by IVA.

Independent Verification Agent

There is to be a quarterly review and verification of project progress, identification of emerging impediments,
and generation of corrective recommendations to ensure project sustainability, by an independent
verification agent (IVA) reporting jointly to the MoF and donors. The IVA should be an international qualified
IVA specialist paid for by the ADB to ensure impartiality. Note that although the relative subsidy paid by
Donor #1 is only a small portion of the total project cost (6.2%), verification of these outputs and of the

2
The basis for the three tranche payments is to be calculated as the sum of all GoTL cash contributions (i.e. the in-
kind contribution of Donor #2 for DEWATS is not included). Thus, the GoTL is committing to pre-finance both its cap-
ex contribution (which constitutes its co-funding of the project), as well as the contribution of beneficiary customers
(connection fees) and donors (subsidies). The GoTL WSS operator will then recover these last two fees directly from
customers. Functionally, the GoTL is therefore pre-financing the cash contributions of Donor#1 plus the customer
contributions, as well as co-funding its contribution. Under the proposed structure to be further specified in the
Commitment Paper, the GoTL is pre-financing the fees that are to be collected from the HHs, regardless of the
ultimate destination of the funds within the GoTL. That way, the donor is assured of the availability of the funds at the
project on-set, a pre-requisite for its subsidy disbursement. From the standpoint of creating a functional WSS
operator, however, it would be ideal if GoTL reforms could pass sooner rather than later to allow the operator to retain
the collected fees, as this speaks to the long-term viability of the service provider.

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overall project implementation progress by the IVA is essential to reduce risks for Donor #2 (who is
contributing over 50% of total project costs).

Project time frame

• Preparation/PIM completed, MOU signed, PIU tendered through Dec, 2017


• Funds dedicated, tranche #1 disbursed, PIU established by Apr, 2018
• Construction of networks and connections through Jul, 2020
• Construction of DEWATS Jul, 2019–Oct, 2020
• Continued training of local Manatuto sanitation operator through Jul, 2021

OBA Disbursement upon Outputs:

Output 1a: “Provision of Toilets and Connection to Decentralized Simplified Sewers with off-site
DEWATS treatment of wastewater”

• 50% of the per-household subsidy will be paid to the GoTL after completion and commissioning of
the connection, toilet, network and treatment systems (where relevant) provided eligible
households have applied for a connection and commenced payment of the connection fee

• The remaining 50% will be paid to the GoTL in after 6 months upon demonstrable evidence of
satisfactory service provision and payment of water sewage bills (usually as part of the overall bill
received from the join water/sewerage provider) by beneficiary customers.

Output 1b: “Provision of Toilets and Direct Connection to Decentralized Main Sewers Network with off-
site DEWATS treatment of wastewater”

• 50% of the per-household subsidy will be paid to the GoTL after completion and commissioning of
the connection, toilet, network and treatment systems (where relevant) provided eligible
households have applied for a connection and commenced payment of the connection fee

• The remaining 50% will be paid to the GoTL after 6 months upon demonstrable evidence of
satisfactory service provision and payment of sewage bills (usually as part of the overall bill
received from the join water/sewerage provider)by beneficiary customers.

Output 2a: “Connection to Decentralized Simplified Sewers with off-site DEWATS treatment of
wastewater”

• 50% of the per-household subsidy will be paid to the GoTL after completion and commissioning of
the connection, network and treatment systems (where relevant) provided eligible households have
applied for a connection and commenced payment of the connection fee

• The remaining 50% will be paid to the GoTL after 6 months upon demonstrable evidence of
satisfactory service provision and payment of water supply and sewage bills by beneficiary
customers.

Output 2b: “Connection to Decentralized Main Sewers Network with off-site DEWATS treatment of
wastewater”

• 50% of the per-household subsidy will be paid to the GoTL after completion and commissioning
of the connection, network and treatment systems (where relevant) provided eligible households
have applied for a connection and commenced payment of the connection fee

• The remaining 50% will be paid to the GoTL after 6 months upon demonstrable evidence of

15
satisfactory service provision and payment of water supply and sewage bills by beneficiary
customers.

Output 3a: “Institutional Connection to Decentralized Sewers”:

• 50% of the per institution subsidy will be paid to the GoTL after completion and commissioning of
the connection, network and treatment systems (where relevant) provided eligible institutions
have applied for a connection and commenced payment of the connection fee.

• The remaining 50% will be paid to the GoTL after 6 months upon demonstrable evidence of
satisfactory service provision and payment of water supply and sewage bills by beneficiary
customers.

Output 3b: “Institutional Connection to Decentralized Sewers AND Provision of On-site sanitation
improvements”:
• 50% of the per-institution subsidy will be paid to the GoTL after completion and commissioning of
the connection and any on-site improvements (repair/replacement septic tanks), network and
treatment systems (where relevant) provided eligible institutions have applied for a connection
and commenced payment of the connection fee.

• The remaining 50% will be paid to the GoTL after 6 months upon demonstrable evidence of
satisfactory service provision and payment of water supply and sewage bills by beneficiary
customers.

Procurement steps and responsibilities:

• Contracting to complete PPTA components (Further Steps in Technical and Economic Feasibility
and Design, DEWATS Siting and Land Availability, Commitment Paper, Project Implementation
Manual, Social and Environmental Assessment, Grant Agreement) – ADB Executed
• Competitive tendering of IVA (ADB-executed).
• Competitive tendering of PIU (ADB-executed in coordination with Steering Committee)
• Development of tender documentation and competitive tendering of detailed engineering design
(ADB-executed)
• Development of tender documentation and competitive tendering of construction contractors (PIU-
executed)
• Selection of entity to carry out Communications Campaign (to be determined)

Environmental and Social Safeguards Compliance: To be completed.

• DEWATS locations to be assessed in terms of impact on local population, an possible resettlement


or remuneration for land purchase.
• DEWATS to be developed in compliance with applicable RDTL standards (where RDTL standards
do not exist yet, suitable international standards to be selected by the project steering committee),
which have been reviewed and will allow appropriate level of treatment prior to discharging.
• Connecting urban Manatuto HHs and institutions to a piped sanitation network will greatly improve
the current environmental situation. The risks of human exposure to pathogens from poor treated
or contained domestic wastewater at HHs and in communities will be substantially reduced, and
marks an improvement to the current situation.
• Poor and vulnerable beneficiaries in project target population to be identified and to receive
subsidies (Note that Consultant has defined subsidies on a provisional basis only at this stage of
PDA design. Final subsidy levels and qualifying thresholds of subsidy recipients will depend on
the outcome of final agreements reached between project donors and the members of the RDTL
Steering Committee overseeing this PDA).

16
Establishment of Steering Committee (SC):

• GoTL - Ministry of Finance and Ministry of Public Works, Transport, and Communications to set up
a Steering Committee to monitor progress of implementation of the project. The composition of the
SC to be finalized during completion of Grant Agreement and Project Implementation Manual. SC
members to include representatives of MF, MOPTC/DGAS, local authorities, Ministry of Health,
ADB, and other project donors. MOPTC has made a preliminary commitment to support the
proposed PDA in December of 2016.

Rates of Return (ERR, FIRR): To be calculated in next phase of project preparation

C. GUIDE TO DESIGN AND COSTING MODEL


The accompanying Excel based Technical and Financial Model (Appendix II) constitutes the principal
focal point of outputs resulting from this PDA design activity. The file includes 12 sheets. A brief
introduction to each sheet is provided below:

MAIN PAGE – Proposed OBA Scheme (Sheet 1) – This sheet provides summary of the proposed project
and breaks down the key investment metrics under the OBA structure in 5 tables. A total of six output
types are proposed3:

• Table 1 – Shows the distribution of HHs in each Suco and Aldeia to be included in the project
for each of the four domestic HHs Output types proposed.
• Table 2 – Shows the distribution of institutional connections (note that these numbers are
provisional only- pending site-by-site assessment of site conditions).
• Table 3 – Breaks down the Unit cost per output by total contribution of each of the project
contributors (donors and investors).
• Table 4 – Shows the total investment in each output type for each of the contributors.
• Table 5 – Summarized total proposed investment in each suco for each output type.

NEW CONNECTIONS (Sheet 2) - This table shows a proposed schedule for establishing sanitary
connections over a presumed three-year project period from 2019 through 2021. This schedule will be
refined to reflect monthly progress in the next phases of project design.

CAP-EX (Sheet 3) - This table shows the capital expenditure associated with the proposed schedule for
project progress shown in Sheet 2.

CASHFLOW (Sheet 4) - The tables in Sheet 4 show the anticipated cash flow of the Service
Provider/Project Implementation Unit (PIU), given the assumed project implementation schedule of
Sheets 2 and 3 (years 2019-2021). Note that the contribution of the USDOD constitutes an in-kind donor
subsidy (no cash) including completely independent sourcing and construction of the DEWATS,
therefore these costs cancel themselves out in the cash flow projections.

3
To allocate costs accurately, OBA outputs are defined as the sum of infrastructural components received by a
given beneficiary (customer) type, rather than a specific piece of infrastructure. Thus, each of the six output types
is associated with the class of beneficiaries to receive an output that is comprised of multiple components (e.g.
connections to network, toilets, treatment facilities, etc.).

17
DEWATS Preliminary Design (Sheet 5) - This sheet provides a preliminary design for the proposed
DEWATS’ units. This preliminary design is generated to support costing. Actual assumptions and design
parameters may change with detailed engineering design. For the purposes of the preliminary design, it
has been assumed that a total of 4 DEWATS installations will be required to serve the four sucos
included in the project, although the distribution of the beneficiaries served by each DEWATS
installation may not necessarily correspond to the 4 sucos.4 Each of the four DEWATS installations is to
be comprised of two anaerobic filter units (each with its own constructed wetland) operating in parallel.
The four stages of each DEWATS installation include: (i) The sump plus pump to collect and dispatch the
inflow from the sanitary sewer network, (ii) Imhoff settling tanks to separate solids, (iii) anaerobic filter
units, (iv) and constructed wetlands.

DEWATS Plant Cost (Sheet 6) - This sheet uses the design parameters entered into sheet 5 to estimate
DEWATS construction costs. Costs of materials and other assumptions have been reviewed and refined
in coordination with DNSB staff. The cost of the DEWATS is distributed equally among all four of the
beneficiary types (Outputs).

Connection to Simplified Sewer (Sheet 7) - This sheet provides the assumptions, preliminary design, and
costing used in the two (of the four) Outputs 1a and 2a proposed under the OBA scheme, comprised of a
Connection to a Simplified Sewer.

Direct Connection to Main Sewer (Sheet 8) - This sheet provides the assumptions, preliminary design,
and costing used in Outputs 1b and 2b proposed under the OBA scheme, comprised of a Direct
Connection to a Sewer.

Install Toilet - Local Materials (Sheet 9) - This sheet provides the assumptions, preliminary design, and
costing for the toilet to be installed in Outputs 1a and 1b proposed under the OBA scheme using local
materials (per DNSB Rural Toilet Design Option #4 publication 25/09/15). It is proposed that this toilet
be offered to disadvantaged and vulnerable beneficiaries at no cost.

Install Toilet - Concrete Construction (Sheet 10) - This sheet provides the assumptions, preliminary
design, and costing for the toilet to be installed in Outputs 1a and 1b proposed under the OBA scheme.
It is proposed that this toilet be offered as an option to non-vulnerable customers who wish to pay an
additional fee (approximately $150) to have a concrete toilet. The $150 represents the difference
between the estimated cost of the toilet built using local materials (per DNSB Rural Toilet Design Option
#4 publication 25/09/15) and the toilet build using concrete.

Septic Tank Costs (Sheet 11) - This sheet provides the preliminary design and costing for the septic tank
to be provided to beneficiaries under Output 3b.

4
Final DEWATS sizing and locations will be guided by the distribution of HHs and what we learn from subsequent
ground surveys and topography. Suco boundaries carry little significance in and of themselves in configuring the
optimal mix of DEWATS sizes and locations in urban Manatuto, as HHs are often not clustered by suco. Of course,
the political aspect of suco boundaries need to be respected, but one should start with the optimal mix from a
cost/performance standpoint and the go from there in discussing with the sucos and local authorities to arrive at
acceptable sizing and location of DEWATS.

18
Population Data (Sheet 12) - This table in this sheet supports population data for the model. Population
densities have yet to be obtained. This information will be supplemented on a localized level in the
detailed design phase of the project.

D. STRATEGIC CONTEXT AND RATIONALE

D.1. Country and Sector Data


An extensive overview of the state of WSS sectors in the RDTL can be found in recent report completed
by the World Bank in 2015, Service Delivery Assessment - Water Supply and Sanitation in Timor-Leste -
Turning Finance into Services for the Future, and so will not be repeated here. It provides useful
information on socio-economic indicators, coverage, financial trends, and the institutional framework.
Other background information on the project area can also be found in the preparatory documentation
completed for the Phase I Water Supply Project (urban Manatuto) component of the ADB financed
District Capitals Water Supply Project.

D.2. National Basic Sanitation Policy


The National Basic Sanitation Policy/Política Nacional de Saneamento Básico (PNSB) has been developed
in a joint effort by the Ministry of Infrastructure (which is now referred to Ministry of Public Works,
Transport and Communications) and Ministry of Health with financial and technical support from the
Rural Water Supply and Sanitation Program (RWSSP) and was launched in 2012. The stated purpose of
this PNSB is “to provide guidance and define rules and responsibilities for sanitation investment and
activities for all ministries and sector stakeholders. The objective is, “To reduce death and disease and
bring about social, economic, educational and environmental gains for all through the safe elimination
of harmful waste from the environment and the practice of healthy behaviors.”

The Policy was designed to provide guidance in 5 areas:


1. Provide a broad framework for safe disposal of excreta and wastewater from domestic,
institutional and public settings, the management of storm-water drainage and solid wastes,
and the promotion of hygienic behaviors by women, men, and children.
2. Cover sanitation throughout Timor-Leste, including both urban and rural areas.
3. Cover all aspects of environmental sanitation in all areas, with a particular focus on safe excreta
containment and disposal because human feces are the primary source of diarrheal pathogens.
4. Provide broad guidelines and support the state entities, including its central and local
governments, in the formulation of sanitation strategies, investment plans, programs, projects,
guidelines and bylaws.
5. Utilize and be complemented by the National Water Supply Policy in order to provide guidance
on improving access to water supply.

Notably, the PNSB calls for action to be taken in the following areas to propel improvements in basic
sanitation:

a. Development of a strategy to achieve the PNSB objectives;


b. Multi-year investment plans formulated to finance the strategy;

19
c. Integrated planning of excreta disposal, wastewater, drainage, and solid waste services by all
local governments;
d. Multi-year budgets approved to support relevant ministerial execution;
e. Implementation programs designed to achieve the policy and strategy objectives;
f. Use of behavior change approaches that target women, men, and children to improve
awareness, healthy behavior, and improved sanitation outcomes;
g. Capacity development programs build new capacity and strengthen existing capacity;
h. Formulation, promotion and enforcement of local government guidelines, rules and regulations;
i. Effective coordination bodies mandated to align policy, integrate programs, and coordinate
implementation;
j. Provision of incentives and credit options for the supply of sanitation and hygiene goods and
services to poor households in rural and urban areas;
k. Establishment of performance monitoring systems and annual strategic reviews.

A key objective of this PDA is to test low-cost sanitation solutions suited for the medium-sized and
smaller towns in the RDTL. The timeframe for implementation of the PDA will likely precede the
development and approval of the multi-year investment plans for sanitation called for in the PNSB. Thus
the PDA will not have the benefit of clear contextual guidance that would have been provided from
multi-year investment plans. However, the experience gained can serve to provide the DNSB with an
opportunity to field test the approaches proposed here first in order to be able to generate a more
targeted multi-year investment plan.

D.3. Responsible Institutions


Sanitation services in Timor-Leste are the responsibility of DNSB, within the MOPTC. Institutionally it sits
under the General Directorate of Water and Sanitation (DGAS), whose mission is to ‘…ensure the
general guidance and integrated coordination of all the central services, within MOPTC, with
responsibilities in the water quality and distribution, basic sanitation and treatment of domestic and
industrial wastewater and solid waste’.

The DNSB is comprised of three departments: the Department of Municipal Sanitation, the Department
of Planning and Design, and the Department for Dili Municipality. Each Municipality, including
Manatuto, has also been assigned a focal point housed in the Municipal Water Department office.

The DNSB will require substantial fortification to its capacity in order to play a lead role to manage
contracts during construction and to carry out operations and maintenance of the proposed sanitation
system. A 2015 World Bank Water and Sanitation Program Report on the WSS sectors in Timor-Leste5
points to (i) weaknesses in institutional capacity, (ii) the absence of technical support services, (iii) issues
with accountability, and (iv) insufficient incentives for sustaining services, as being the key bottlenecks
to progress in the sector. Also noted are a lack of funding to pay for operations and maintenance, and
erratic support and communication from the national level to municipality offices. Budgetary and
administrative constraints, the lack of agency autonomy, and the lack of sanitation staff at municipal

5
“Service Delivery Assessment - Water Supply and Sanitation in Timor-Leste - Turning Finance into Services for the
Future”, The Word Bank, Water and Sanitation Program (in collaboration with multiple partners), April, 2015.

20
level all feature prominently. The sanitation sector has a shortage of human resources, especially skilled
technical staff.

Development of sufficient capacity in these areas will stretch well beyond the anticipated timeframe of
the projected OBA PDA of 2017-2021. In the meantime, the establishment of a Project Implementation
Unit (PIU) similar to that created for the implementation of the recently completed ADB’s Manatuto
Water Supply Project Service Provider likely presents the most feasible structure for implementation of
the proposed PDA project. At the same time, there is the potential for the proposed PDA to serve as an
accelerator and model for the retooling of the DNSB, the MOPTC, and other entities at the national level
to prepare themselves for addressing the RDTL’s growing urban sanitation needs going forward in each
of its municipalities. The MOPTC and DNSB will benefit by identifying and initiating training of qualified
candidates early on in the investment cycle to ensure that a sufficient skill base is available to fill
anticipated positions in the development, management, operations, and maintenance of urban
sanitation infrastructure.

D.4. Existing Urban Sanitation in Manatuto


D.4.1. Drainage Infrastructure

Many streets in urban Manatuto have a combined irrigation and storm water drainage canal network,
open and covered along some stretches. The direction of flow in the network is from south to north,
finally emptying to the sea. Households use the water supply from these open channels to irrigate their
gardens and small croplands. Additionally, the canals serve as a storm water drainage system in the
rainy season. An unintended consequence of this design has been that the drainage network also
doubles as a receiving canal for grey water from
cooking, bathing, possibly some human sewage,
and run off of animal waste from yards (See Fig
1).

Another unintended consequence of having


open draining canals in the town of Manatuto is
that they can receive a mix of organic and
inorganic solid waste. Although use of open
and closed combined storm water and
greywater drainage canals represent a useful
interim solution to drainage and wastewater
management, in the long run these can
contribute to transmission of waterborne
FIGURE 2 - EXAMPLE OF THE COMBINED IRRIGATION AND STORM disease vectors, which can negatively impact
WATER DRAINAGE CANAL NETWORK IN MANATUTO human morbidity and mortality rates. This
example of an open drainage canal in Dili along
the waterfront (Fig 2) shows the likely outcome if the town of Manatuto follows a similar path in
management of sewerage and grey water. The canal contains a mix of grey water, solid waste, and
likely some amount of leached human excreta which accumulate in the canal prior to emptying
untreated to the adjacent sea. The canals often back up, as in the photo, and can also overflow in the
rainy season, increasing risks of incubation and transmission if water borne diseases.

21
Prior surveys performed as party of PPTA
of the ADB funded District Water Supply
Project (04 Volume 3 SA B Social Impact
Analysis) have noted that in Manatuto
town, where there is a higher population
density, septic pits fill within four years
because there are several families using
the one facility. People use their
neighbor’s toilet rather than practicing
open defecation, though there were
descriptions of people without toilets
using the sea to defecate. Survey
participants also noted that toilets get
damaged quickly in Manatuto. The report FIGURE 3 – EXAMPLE OF CANAL IN DILI
also noted those living close to a paddy field,
direct their waste water to the paddy field. Those that have a drainage ditch in front of their house,
direct it there and the sea is used for those close to the sea. Those households without an obvious
drainage option, have water pooling in their yard which creates mosquito breeding grounds and
problems with neighbors when the waste water encroaches on their property.

D.4.2. On-site Sanitation

Information on the current state of sanitation in the project area in Manatuto was collected from three
principal sources, the socio-economic survey administered during the scooping mission in July/August of
2016, the socio-economic studies performed as part of the PPTA for the ADB funded Manatuto Water
Supply Project, and via physical observations and interviews with local municipal officials completed on
site. This information has been used to guide the design and costing of the connections to the sanitary
sewers.

Of the Households (HHs) surveyed in Manatuto in the socio-economic survey performed in July/August
scoping mission for this PDA, 26% were found to have their kitchen/cooking area located inside of their
dwelling and the remaining 74% did their cooking in a designated area outside of the dwelling. 5% HHs
had a bathing facility inside the house. Of the remaining 95%, 91% bathed in an external bathing
structure, and 4% bathed in the open (river, sea). 83% had their own toilet on the premises that they
used, 9% used their neighbor’s toilet, 7% used a public facility, and 1% surveyed relied on open
defecation. And of the 83% with their own toilet, 75% had an outdoor toilet and 8% had an indoor
toilet.

22
And finally, concerning the destination of grey water, 37% of HHs had grey water flow directed to the
leach pits on the premises via closed drains or pipes. In 26% of HHs the grey water was discharged
directly to open drains (usually running parallel to the side of the road, however in one case it did flow
to a leach pit via open drains), and in 37% of HHs there was no drainage of any kind employed.

To supplement survey data, the Consultant performed multiple walks through project neighborhoods
with DNSB staff to note common practices employed for management of wastewaters from HH’s.
Current approaches of managing wastewaters from bathrooms (human excreta), cooking, and bathing
consist exclusively of on-site systems mostly of rudimentary design. As in the rest of Timor-Leste, there
are no piped sanitary sewers, wastewater treatment facilities, or wastewater dispatch systems (such as
marine outfalls) in urban Manatuto.

Based on interviews with residents, survey results, and observations made walking through the project
area, residents of urban Manatuto tend to rely on dug leach pits, often unlined, adjacent to their
houses. As leach pits fill and begin to overflow, a new leach pit is dug by residents adjacent to the old
leach put, and the old leach pit covered and abandoned. During the rainy season, accumulated
rainwater can lead to localized flooding or pooling of water over leach pits, causing pools of
contaminated water to develop. These pools create a risk of direct human exposure to waterborne
pathogens which thrive in the leach pit overflow. Furthermore, as contaminated pools or localized
flooding occur, these pathogens can easily be transported in the runoff to neighboring households,
adjacent communities, or receiving waters. Even during the dry season, the current practices can create
a risk of exposure and transmission of waterborne diseases stemming from lack of sufficient
infrastructure for management of household wastewater streams. In particular, pooling of grey water
from bathing, cooking, and cleaning was visible next to some houses.

To summarize, the quality of on-site sanitation and desludging services presents neither an immediate
nor sustainable solution to management of human waste, resulting in both localized and widespread
public health nuisances.

D.4.3. Collection and Disposal of On-site Septic Pit Waste

Filled leach pits in Manatuto are generally not emptied. When pits fill, a new pit is dug nearby and the
old put is covered. There also are no septic haul trucks (gully bowsers) serving the population in
Manatuto - the closest being in Dili. Nor are there any disposal or treatment facilities in Manatuto such
as the sewage treatment facility serving Dili (See Fig. 21). Consultant was told by officials in Manatuto
that, in the rare cases where HHs in Manatuto town do use a contractor to empty septic pits, it is
unclear where the full trucks are then emptied. Over time, leach pits used as a solution for disposing of
human excreta will increasingly contaminate soils and groundwater. The current trajectory will likely not
be sustainable in the long run as available land becomes increasingly scarce and the extent of
contamination of soil and groundwater in Manatuto town increases. This, in turn, will further raise risks
of human exposure to waterborne pathogens which lead to increased morbidity and mortality. Beyond
human health, there are also other impacts which result from poor sanitation, including economic
productivity, quality of life, local fisheries, and tourism potential. With provision of reliable water supply,
introduction of improved methods for management of domestic wastewater becomes urgent.

23
D.4.4. Timor-Leste Experience with Sanitation

Prior investments in improved sanitation in Timor-Leste have focused largely on rural communities. One
of the most recognized initiatives, the Community Led Total Sanitation (CLTS), has been mainstreamed
in Timor-Leste since 2012 and has demonstrated successes in changing the sanitation behaviors of rural
communities to achieve improved sanitation. The program relies on a combination of sanitation
awareness training and provision of resources to allow rural households to source and construct their
own low lost latrines. Four municipalities, namely Aileu, Ermera, Bobonaro and Liquiça, are close to
achieving open defecation free (ODF) areas with more than 80% of the families having access to toilets.
Most of the toilets built during CLTS campaigns are pit latrines that have 1 – 2 years life span.6

Interestingly, a proposed revision to the next phase of the CLTS program, dubbed SMART Incentive
approach, shares basic structural elements with an OBA methodology by incentivizing investments with
subsidies paid upon completion of works. Under the proposed program, Sanitation Business Groups
(SBGs) will serve as the service provider, receiving reimbursement for cash outlays based on outputs
(latrines installed).

D.5. Rationale for a Sanitation Subsidy


Typically, utilities in other Asian economies rely on national government fiscal allocations to build out
sanitation collection and treatment networks, but tend to pass on the cost of the household connections
to the consumers. In previous OBA structured projects investing in WSS in the region (World Bank
GPOBA funded projects in Indonesia, Vietnam, Sri Lanka – see www.gpoba.org), the subsidized portion
of the project has generally been calculated based on the marginal cost of connecting a new HH, while
the utility has relied on a combination of budgeted national disbursements, grants, and loans to build
out the actual network and any treatment or disposal facilities.

As the proposed project area in Manatuto currently has no sanitation management infrastructure in
place, investments in piped sanitation to achieve improved sanitation objectives will need to include
both construction of a piped sanitation network and treatment/disposal infrastructure, as well as the
construction of plumbing and connections to each beneficiary household. The proposed project would
be the first example of piped sanitation incorporating simplified decentralized sewer networks,
combined with DEWATS in Timor-Leste (There is currently a project under construction in urban Dili
which will includes conventional piped sanitary sewers). This solution for improved sanitation is of
particular interest, as use of DEWATS combined with low-cost piped sanitary sewers represent a
replicable technical approach. This is both easily scalable in capacity (up and down) and widely
applicable to smaller and medium sized towns in Timor-Leste.

Using the OBA structure can help to lower financial barriers to allow a demonstration project to be
implemented. Because the proposed project in Manatuto is starting with no infrastructure in place, it is
proposed by the Consultant that OBA subsidies be identified to cover portions of the actual network
construction and/or treatment and disposal infrastructure, as well as toilets for poor and vulnerable
HHs. The rationale is that this represents the first example of this mix of approaches in the RDTL, and
therefore might otherwise experience resistance to achieve full financial backing from the GoTL for a

6
Scaling-up Rural Sanitation Using Smart Incentive Approach, PP Presentation, 2016 (DNSB, GoTL)

24
pilot project. Additionally, it is proposed by the Consultant that beneficiaries included in the project area
receive a subsidy to cover a portion of the marginal cost of connection to this network and provision of a
new or repaired toilet and structure, where needed.

The prevailing assumption is that, in the long run, the costs of managing on-site leach pits are
considerably higher than the one-off costs of gaining a sewer connection. Dwindling availability of
unused land in HH plots coupled with the unregulated management of on-site sanitation results in high
levels of contamination of the environment and cross contamination into the water supply system.

D.6. Higher Level Objectives


The project has a strong poverty and environment focus. It aims to improve the quality of life of direct
beneficiaries and the wider Manatuto community by protecting public health from the spread of fecal-
oral disease. It will also enhance the environment of the four sucos comprising urban Manatuto and is
anticipated to have knock-on effects on productivity and the economy. The project fits well with
development objectives laid out in the National Strategic Development Plan 2011 – 2030. It has been
estimated that to achieve RDTL 2020 targets for urban and rural sanitation of 76% coverage, an average
of US$16.4 million per year on capital expenditures will be needed, plus US$2 million to finance
operation and maintenance of sanitation infrastructure.7 The proposed PDA will also pilot technical
approaches and finance mechanisms that have the potential to be replicated in other cities, towns, and
villages in Timor-Leste.

D.7. Provisional Project Performance and Outcome Indicators


Key project performance indicators will be finalized in the Project Implementation Manual, and are
expected to include:
• The number of households that are connected to new sewerage networks with treatment in the
defined project area.
• The number of institutions that are connected to new sewerage networks with treatment in the
defined projects area.
• Kilograms of BOD5 equivalent of domestic wastewater that is no longer discharged on-site in
communities, but rather is dispatched away from dwellings and subjected to treatment prior to
disposal.

Key outcome indicators will be finalized in the Project Implementation Manual, and are expected to
include:
• Reduction of the pollution load due to domestic wastewater discharges at HHs and consequent
improvement to the surrounding environment and reduced risk of exposure to disease vectors.
• Creation of effective and efficient sanitation service providers capable of planning, financing,
designing, constructing and managing piped sanitation at the community level.
• Participation of urban Manatuto households as sanitation customers of DNSB.

7
World Bank, Water Supply and Sanitation in Timor-Leste - Turning Finance into Services for the Future, 2015

25
E. PROJECT DESCRIPTION
E.1. Target Population and Project Area
The proposed PDA seeks to include all of the 1,315 beneficiary HHs receiving piped water through Phase
I of the ADB financed Water Supply Project in Manatuto (1,015 connections complete at the time of this
Inception Report) in order to address the increase in domestic wastewater volumes that will now be
generated. Future phases of the PDA might then seek to include additional households being supplied
with piped water under Phase II of the ADB financed water supply project. The target population
consists of all of the 9,6678 people living in the 1,315 HHs in the project area distributed over the four
Sucos described above (based on the 2010 Census) as well as the estimated 890 people within the 27
institutions found in the project area. An average number of 6.9 people per HH is assumed for the
project area. Figures 3 and 4 below show the project area proposed.

Figure 3 - Location of Proposed Project Area within Timor-Leste

*From ADB District Capitals Urban Water Supply Project (Manatuto Water Supply Improvement Project Report, KECC/JKC)

8
Note that this number 9,667 of people is slightly higher than the 9,509 people believed to be in the proposed
project area at the time that the survey was completed in July of 2016, due to revised data obtained after the
survey was conducted. Survey results are given based on the original assumption of 9,509 people. Similarly, The
figures in Table 1 stem from a Baseline Survey that was conducted of the project area in 2014 and included 1371
HHs. For now, 1315 is the assumed number of HHs for the proposed PDA. This figure will be refined in subsequent
stages of project preparation.

26
Figure 4 - Proposed Project Area of Urban Manatuto
(Sanitation OBA PDA to Include Households in “1st Priority” Zone of 4 Sucos)

*from DCS Water Supply Improvement Plan for Manatuto, Chapter 7

E.2. Assessment of Target Population Access to Sanitation


Table 1 below shows the proposed project area of urban Manatuto from a West facing vantage point,
plus a breakdown of beneficiaries.

Table 1 – Proposed Project Area and breakdown of Beneficiary Households by Suco and Aldeia

27
A socio-economic survey on sanitation in the project area was completed by the Consultant during the
PDA mission in July/August of 2016 to support the assessment of the Manatuto population’s access to
sanitation. The survey sought to fill socio-economic data gaps, verify existing data, and get a more
complete understanding of the existing sanitation infrastructure and social-economic situation of the
target population on the ground in the prospective project area in Manatuto town. Survey results have
been used to quantify the level and type of contribution for each beneficiary household and to inform
the development of eligibility criteria for selecting pilot project participants. The Socio-economic Survey
on Sanitation can be found in the Project Inception Report.

Of the HHs surveyed in Manatuto, 26% were found to have their kitchen/cooking area located inside of
their dwelling and the remaining 74% did their cooking in a designated area outside of their dwelling.
About 5% HHs had a bathing facility inside the house. Of the remaining 95%, 91% HHs bathed in an
external bathing structure, and 4% bathed in the open (river, sea).

Regarding on-site toilets, 83% had their own toilet on the premises that they used, 9% used their
neighbor’s toilet, 7% used a public facility, and 1HH surveyed relied on open defecation. And of the 83%
with their own toilet, 75% had an outdoor toilet and 8% had an indoor toilet.

In 37% of HHs grey water flow was directed to the leach pits on the premises via closed drains or pipes.
In 26 % of HHs the grey water was discharged directly to open drains (usually running parallel to the side
of the road, however in one case it did flow to a leach pit via open drains), and in 37% of HHs there was
no drainage of any kind employed.

The Social Impact Analysis completed as part of the PPTA for the Manatuto District Town Water Supply
Rehabilitation Project, also gathered information on household sanitation facilities in Manatuto. In that
survey, approximately 62% of HHs in Manatuto reported that they defecate in their own household latrine
with a further 24% using a neighbor’s facility. Only 11% reported practicing open defecation possibly due
to the high population density in the township area. About 80% in Manatuto who do not have a latrine
reported that they did not have one because of the cost involved. When they were asked to estimate the
cost of building a latrine, 60% of respondents either did not know or could not answer the question. As
for perceived costs, 11% responded that it would cost between $300 and $500. Table 2 below summarizes
responses from surveyed participants.

Table 2 - Sanitation Practices in Manatuto Town


Manatuto
Characteristics
n %
Place of defecation 219 100%
Own family latrine 136 62
Neighbor’s latrine 52 24
Communal latrine 6 3
Open defecation 24 11
Other 1 0
Type of Latrine 186 100%
Simple pit latrine 14 8
Offset pit latrine 62 33
Pour flush latrine 106 57
Western style bowl 4 2
Reason why do not have a latrine 82 100%
Financial 66 80

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Satisfied with current practices - -
No water 4 5
Use a neighbors’ latrine 5 6
Not enough space 5 6
Other 2 3
Estimate of cost of Latrine (from N=87
those who do not have one)
Don’t know/no answer 52 60%
$100 5 6%
$150-$250 19 22%
$300-$500 10 11%
Source: Manatuto District Town Water Supply Rehabilitation Project,
Supplementary Appendix B Social Impact Analysis

E.3. Public Buildings in the Project Area (Outputs 3a and 3b)


In addition to the 1,315 HHs in the project area proposed for connection to the sanitary network, there
are 27 public and community buildings (10 schools, 3 churches, 11 municipal offices/community centers,
1 hospital, and 2 training centers).

The average combined daily occupancy of these institutional buildings has been estimated for this stage
of the PDA to be 890 people and will need to be refined in the detailed design stage of the project. Of
these 27 sites, 18 are located in Suco Aiteas (with an estimated combined average daily occupancy 660
people), 6 are located in Suco Sau (with an estimated combined average daily occupancy of 180 people),
2 institutions are located in Suco Ailili (with an estimated combined average daily occupancy 130), and 1
institutions is located in Suco Ma’bat (with an estimated average daily occupancy of 30). It is believed
that each of these locations is equipped with one or more septic tanks to accommodate the
wastewaters generated. Specific information on the design, condition, and capacity of the septic tanks
will need to be gathered in next project phases on a site-by-site basis for each of these institutions.

As there currently is no domestic wastewater collection network in Manatuto, it is safe to assume that
all of the effluent leaving the septic tanks from these institutions is discharging to on-site leach fields,
potentially contributing to risks of human exposure via contaminated surface water (in times of rain or
flooding) or groundwater by the community. For the proposed PDA, there are three options for
addressing these 27 sites9:

i. Not to disturb the existing septic treatment infrastructure (thus not addressing any potential risk
posed by contaminated groundwater or surface water from discharged effluent from the septic
tanks),
ii. Dispatch the effluent from the existing septic treatment infrastructure to the proposed
collection network,

9
The proposed sanitary sewer system significantly lowers risk of exposure to pathogens in human wastewater
when compared to either combined stormwater/wastewater systems or leach fields, as each of these can cause
raw sewerage to accumulate on streets, yards, etc. in rain or flooding events. The proposed sanitary sewer will
isolate domestic and institutional wastewater flows from the source through to the treatment (DEWATS). Also,
wastewater pipes will be buried beneath water supply pipes to minimize risk of any contamination in case of
sanitary pipe breaches.

29
iii. Repair/replace the existing septic treatment infrastructure and dispatch the effluent from the
new septic treatment infrastructure to the proposed collection network. Collecting the
wastewater from the institution directly to the proposed collection network without use of
septic tanks is not advised (except for low occupancy sites). Also, it should be noted that in
most cases, if connected, these institutions would need to connect to a main sewer rather than
a simplified (shallow) sewer network.

Generally, when a municipality invests in a wastewater collection network and treatment facilities such
as those proposed under this PDA, the marginal cost of connecting existing septic tanks is recovered by
the benefits in terms of reduced health risks and reduced risk of contamination of surface waters and
groundwater. From the standpoint of waste loadings, a normally functioning septic tank would be
expected to remove about 25% of the organic loading (measured as BOD5), so the effluent stemming
from these 27 sites would have a BOD5 strength of about 75% of the starting BOD5. The volume of
wastewater, on the other hand, would not be reduced by the septic tank before it is discharged to the
collection network. If we assume that most of the 27 institutions will eventually be connected to the
proposed system, then the net impact on the design specifications of the collection network and the
DEWATS will consist of an increase in flow equivalent to about 594 people, thus increasing the total
combined design capacity of the proposed piped sanitation systems from 9,073 people to 9,667, or
about 6% overall (pending detailed study of the occupancy of these 27 locations), although this number
will be significantly higher in sucos containing more institutions, and lower in those with fewer
institutions.

E.4. Criteria used in Developing Technical Options


Criteria for development of technical options were established over multiple consultations with DNSB,
local Manatuto officials and key stakeholders during the PDA scoping mission, and include the following:

1) Should address both domestic blackwater and greywater - Any solution should manage both
human excreta and domestic grey water, as the current practice of discharging greywater to
adjacent draining canals is recognized as problematic due to its potential to serve as an
incubator and propagator of waterborne disease.
2) Achieve measurable improvement to status quo
• Reduce exposure to pathogens and health risks
• Lower morbidity/mortality
• Improve living standards and productivity
3) Use community-based, inclusive approach - The solution should not simply transfer the risk of
exposure to human sewage to other households or communities, rather a municipal and
community-based approach should be designed, which recognizes that all households in a
community must be included.
4) Focus on appropriate design, avoid over-design
5) Minimize Cap-ex and O&M costs
6) Use modest level of sophistication of O&M
7) Incorporate willingness-to-pay constraints

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8) Address poor and disadvantaged HHs in project area
9) Leverage knowledge base of past experiences and emerging trends
10) Assess potential for capture and reuse of any beneficial by-products
• Use of treated sludge for fertilizer
• Production of methane gas as a supplementary fuel source
• Reuse of treated effluent for agriculture
11) Consider replicability and scalability to other towns in the RDTL

E.5. Project Components


There is currently no sanitation collection network or treatment infrastructure in Manatuto. To deliver
improved sanitation to the 1,315 beneficiary HHs, a piped sanitation collection and treatment system is
proposed, characterized by a technical design stressing use of appropriate, low-cost elements and
avoiding overdesign. The purpose of the proposed system is to collect, convey and treat domestic
greywater (kitchen and bathing) and blackwater (excreta and urine), to eliminate the risk of exposure to
human waste and improve environmental conditions and human health of the target community. The
system includes:

1. Use of 4 to 6 Decentralized Wastewater Collection Networks for the project area, serving 100 to
400 households each

2. Use of Simplified Networks and Shallow Sewers wherever possible

3. Use of Modified Collection Networks for Direct Connections rather than conventional sanitary
sewers

4. Use of low-cost wastewater treatment units to treat the wastewater collected from each
decentralized network – DEWATS – Decentralized Wastewater Treatment Systems (each
network gets a pair of co-located DEWATS running in parallel)

5. Interventions at the Household Level to facilitate use of low-cost networks.

With the use of low-cost technologies avoiding overdesign, we


can expect up to a 50% reduction in both Cap-Ex and O&M costs
relative to conventional sewers with centralized treatment.

E.5.1 Decentralized Networks (proposed for all Outputs in PDA)


Decentralized sewerage collection networks are designed to serve a limited area with a limited number
of connections, in order to be able to take advantage of lower cost design features and simpler

31
operation and maintenance. As a rule of thumb, decentralized collection networks generally
accommodate a wastewater flow not exceeding 500m3 per day total, the equivalent of about 4,500
people. Some of the advantages of decentralized networks include:

• Ability to use shallow sanitary sewers (shallower pipes cost less in labor and materials)
• Ability to use smaller diameter pipes in the main lines
• Ability to avoid use of pumping stations that would be otherwise be needed in a larger network
• Ability to employ low cost wastewater treatment plants (DEWATS)
• Easier access to sewers by the operator
• Lower operation and maintenance costs (on a per customer basis)

As a result of these advantages, it is often cheaper to construct multiple decentralized


collection/treatment networks to serve a larger project area, than a single centralized collection and
treatment network. Economies of scale tend to justify use of centralized networks only in larger,
densely populated urban areas with high population. The proposed PDA will rely solely on use of
decentralized networks.

E.5.2. Simplified Sewer Networks (Output 1a and Output 2a)


The proposed PDA will make use of two different sewer design types. The first type is the Simplified
Sewer. Simplified sewer networks allow for flexible design, lower cost per connection, and are generally
characterized by the following features:

• Avoidance of over-design. Focus on appropriate design.


• Shared, shallow mini-networks serving a housing cluster (110 mm pipe, where possible)
• Avoidance of pipes beneath trafficked roads
• Sanitary pipes buried in yards, footpaths, and common areas
• Use of smaller pipes laid at shallow depth and lower gradient
- 0.65 m depth in yards, footpaths, and common areas
- 1.5 m depth if street with light vehicular traffic
- Slope determined by tractive force to push solids vs min. vel.
- Flow based on a minimum tractive tension of 1 N/m2 (1 Pa) at peak flow.
- Min flow 1.5 lit/min and slope of 0.5% to 0.6 %
• No extensions laid to end of block. Last upstream connection becomes the start of network.
• Design lifespan of 20 years for a simplified network vs. 50 years for a conventional network
• Promotion of self-cleaning
• Minimization of trunks
• Avoidance of conventional manholes. Instead:
- Use of inspection/"clean out" shafts instead of manholes
- Use of concrete chamber at ∆ slope or ∆ diameter in place of manhole
• Costs compete with on-site options (50% to 80% cheaper than conventional gravity sewer)

Heavy emphasis must be placed on the appropriate detailed engineering design and construction to
match local conditions. Simplified sewerage networks require a customized approach and some level of
field-testing prior to full build-out. The guiding design principle is to always install a simplified sewer by

32
default unless it is not possible for any number of technical/design reasons (including distribution of
HHs, level of traffic on roads, availability of footpaths and yards to lay shallow sewers, etc) or
government preferences and possible inconsistencies or conflicts with urban development
plans/trajectories.

Design Considerations

• Represents a design approach as well as a mix of technologies


• Engineering design not yet standardized, but several examples available
• Applications have varied from country to country
• Conceptually, same as conventional sewerage, but without unnecessarily conservative design
standards
• Better adapted local situation.
• Regular maintenance is mandatory to ensure optimal system performance (sewer clean-outs
and desludging of Interceptor Chambers (IC) and DEWAT settled solids).

Some examples of elements used in simplified networks and modified conventional networks are
shown below. Figure 5 below compares the configuration of a conventional sewer with that of a
simplified sewer. Figure 6 shows a common Interceptor Chamber serving a simplified network
branch. Figure 7 compares a conventional to a simplified manhole. Figure 8 shows a cross section
of a simple clean out shaft that can replace manholes, lowering costs in both simplified and
modified networks. Figure 9 shows a simple plastic inspection shaft that is appropriate for use in
very small, shallow community networks (as opposed to concrete installations).

Fig. 5 - Conventional Sewer (right) vs. Simplified Sewer (left)

33
Fig. 6 - Example of Interceptor Chamber in a Simplified Network

Fig. 7 – Conventional vs. Simplified Manhole

34
Fig. 8 – Cross-section of Inspection Clean-out Shaft

Fig. 9 - Plastic Inspection Shaft

35
E.5.3. Direct Connection to Modified Main Sewer (Outputs 1b, 2b, 3a, and 3b)
The second type sewer proposed for the PDA is the modified main sewer, which will receive direct
connections from households (Outputs 1b and 2b) and institutions (Outputs 3a and 3b), as well as
inflows from the trunk lines of the simplified sewers (Outputs 1a and 2a) described in the previous
section. This type of sewer will more closely resemble conventional sewers, but with the caveat that
overdesign and overly conservative assumptions that might apply to larger urban centers are avoided,
hence the sewer is referred to as modified.

Although use of sewerage system designs matching the density and size of the community served might
seem self-evident at first glance, there is unfortunately a long precedent of applying overly conservative,
excessive designs developed for application in larger metropolitan areas to much smaller peri-urban and
town settings in Asia and elsewhere in the world, resulting in unnecessarily high CapEx and O&M costs
as well overcomplicated O&M burdens. The result of this has been either avoidance of piped sanitation
as a sanitation solution in smaller urban settings of up to 100,000 people or overly zealous application of
systems with excessive investment or operational costs which put debilitating strains on financial
resources of the investing government or service provider. It is only recently that modified (or
appropriate) sewer designs are gaining in prominence. Direct Connections to Main Sanitary Sewer (160
mm) will be used in areas where HHs could not be served by Simplified Sewers due to local conditions
such as lack of pathways the do not receive heavy traffic or inability of neighbors to agree in use of yards
to serve as location for common sewer lines. Key characteristics of modified main sewer design
component as understood for this PDA include:

• Avoidance of overdesign and conservative assumptions. Simplified sewers (previous section)


represent a subset of modified sewer designs.
• Departs from conventional sewerage network designs to reduce materials and costs
• Proposed for use in any HH connections where sewer lines cannot be placed along side of roads
or in yards and footpaths.
• Main pipes laid at somewhat reduced depth (1 m to 3 m) reflecting proximity of DEWAT and
only peri-urban traffic levels in Manatuto town
• Will receive wastewater flows from the simplified network branches
• Relies on gravity flow. In-line pumping station likely avoided due to proximity of DEWATS and
minimal terrain slope.
• Use of Clean-out access tubes rather than manholes, where possible
• And if manholes are necessary, simplified alternatives to conventional manholes to be used
where possible, including:
o Greater distances between manholes
o Smaller manhole design
o Where possible, use of concrete chamber to accommodate point of change of slope or
diameter in place of conventional manhole
o Increased spacing between manholes nearer to upstream end of network branches

36
o Use of lighter manhole covers in low traffic areas (between 80 and 175 kg rather than
285 kg for conventional cover

Interceptor Chambers vs Access Chambers/Inspection Chambers

• Interceptor Chambers (IC’s) are generally (but not always) located beyond the HH
premises and are used by the sanitation Service Provider to access the collection pipes
in case of blockages. Interceptor chambers usually are designed with some hydraulic
residence time to buffer flows and allow solids to settle, if needed, and must be
periodically cleaned.

• Access Chambers (AC’s) are used on the HH premises (usually in the yard) to access the
collection pipes in case of blockages (sanitary tissues, plastic articles, etc). When
located in areas along the network not on the premises of the individual HH or at the
junction of the individual HH and the network, these are usually referred to as
Inspection Chambers (See glossary entry for Inspection Chambers).

• Direct connections to a main sewer usually require only ACs. Connections to simplified
sewer may require ACs and IC.

• In simplified sewerage networks, shared IC’s can be installed to save costs

• As pipe sizes and depth decrease, ICs become necessary. With larger, deeper pipes, ICs
are not needed, as waste can flow through to the main sanitary line without risk of
blockages.

• Detailed design and local preferences and conditions will determine where ACs or ICs
are needed. It is possible to design a network without the need for ICs.

• Cost trade-off: As pipe depth decreases, need for IC’s increases but cost of laying pipe
decreases
E.5.4. Interventions at the Household Level (Output 1a, 1b, 2a, and 2b)
All domestic beneficiary types will receive plumbing services needed to connect all sources of grey water
(bathing and food preparation) and black water (urine and excreta). Although in most countries, the WSS
customer is usually responsible for covering the cost of plumbing work on their own premises up to the
street connection to the network, an exception to this convention has been proposed for domestic
customers under the Manatuto PDA. The justification for this is that this is the first exposure by the target
population to piped sanitation, and it is recognized that the cost of plumbing on-site plumbing may serve
as a prohibitive disincentive to the target group of beneficiaries to participating.

The purpose of these interventions is to collect and dispatch domestic greywater (kitchen and bathing)
and blackwater (excreta and urine) to the network. A combination of plumbing features and fittings are
proposed that will minimize the risk of blockages and malfunction of the sewer network. Thus, each
beneficiary HH will receive:
a. House plumbing connections + kitchen grease trap (Fig. 10)
b. P-Traps and solids traps at bathing and kitchen (cooking area) sources to prevent sewer pipes
from clogging on HH premises and in simplified networks (Fig. 11).
c. Access Chambers (ACs) for flow junctions, as needed
d. For poor HHs, provision of toilet and structure (Outputs 1a and 1b)

37
- HHs may receive DNSB Rural Toilet Design#4 at no cost OR
- HHs may pay $150 to upgrade to a concrete toilet structure
e. All plumbing from fixtures on the premises to ACs or Interceptor Chambers (ICs)
f. All piping from AC or IC (depending on which is installed) to network collection point

Figure 10 - Example of Kitchen (cooking area) Grease Trap and Sink Strainer

Figure 11 - Example of P-Trap


(P-Traps have system-wide impact beyond technical performance by preventing odors that negatively
impact customer perception. Should be used at all sources (cooking, bathing, toilet))

E.5.5. Decentralized Wastewater Treatment Systems (DEWATS)


A treatment plant that serves a decentralized (standalone) sewerage collection network is known as a
Decentralized Wastewater Treatment System (DEWATS). By contrast, Centralized Wastewater
Treatment Plants (CWWTPs) serve larger networks, having multiple branches in larger urban areas with
dense populations. Data gathered in the socio-economic survey presented in the Inception Report on
income and willingness to pay among the population in the proposed project area suggest that it would
be neither financially feasible nor technically advantageous to adopt a centralized system for urban

38
Manatuto. The proposed approach for wastewater treatment under this PDA initially includes the
construction of 4 to 6 DEWATS in the project area to receive wastewater collected from each of the
decentralized networks, however, after further site survey and design feasibility during subsequent
project preparatory activities it may turn out that a mix of some smaller and some larger DEWATS might
be preferred in terms of cost and performance. Additionally, the actual sites selected for DEWATS will
need to be selected and approved in a consensus process with full participation and approval by local
communities, local authorities, sucos, DNSB, and donors. Possible land use and resettlement issues
should be addressed in the social and environmental assessments to be completed during subsequent
stages of project preparatory activities. Use of DEWATS is consistent with the decentralized, low cost,
simplified design approach for the networks that is being proposed. Both the initial capital expenditure
and subsequent operation and maintenance costs are generally between 50% and 70% higher for
centralized treatment systems that for decentralized systems.
DEWATS is an approach, rather than just a specific technical hardware package. DEWATS provides
treatment for wastewater flows from 1 - 500 m3 per day and is based on a set of treatment principles
focused on reliability, longevity, tolerance towards inflow fluctuation, and most importantly, low
sophistication of control and maintenance.

Field visits to the project neighborhoods in Manatuto and conversations with local officials revealed that
some of the community sub-divisions experience land constraints that could limit the siting of DEWATS
directly in these neighborhoods. As DEWATS can typically be designed to handle anywhere from 1
m3/day to 500 m3/day of wastewater, there is a great deal of flexibility that can be applied in selecting
the optimal size/number mix of networks with DEWATS to meet a community’s need. For example, it
may be possible for two or more communities (or sucos) to share a single DEWAT to make optimal use
of a larger available land plot, provided that maximum design capacity of the DEWATS is not exceeded.
Alternatively, the possibility may also exist for one community (or suco) to accommodate multiple
smaller DEWATS at smaller sites requiring less land in order to meet its treatment needs. Final numbers
and locations of DEWATS units is to be determined in further design stages of the project.

Features of Decentralized Wastewater Treatment Systems (DEWATS)

Purpose: To treat all wastewater from each decentralized network (simplified and main) in Manatuto

Principles of DEWAT Design:


• An approach, as much as a technical hardware package
• Designed to serve smaller communities
• Can be more appropriate than CWWTP for smaller communities
• Range of applicability 1 - 500 m3/day
• Can treat both domestic and industrial WW sources
• Based on principles that minimize O&M burden and cost
• Target reliability, longevity, tolerance to inflow fluctuations
• Work without technical energy, no off switch
• Target permanent, continuous operation
PDA DEWAT Design specifications:
• DEWATS should accommodate inflow of 330 mg/l BOD5 and treat to 15 mg/lit BOD5 prior to
discharge

39
• Each DEWATS will serve between 100 and 400 HHs
• Construction of 4 to 6 DEWATS are needed
• Each DEWATS site will consist of two complete DEWATS operating in parallel (in essence,
sharing the incoming wastewater load)
• Siting of DEWAT locations will depend on distribution of HHs in the 4 Sucos, local geography,
and community consensus on selection of locations

The proposed DEWATS design is based on proven design elements used globally for over two decades,
and consistes of 4 stages of treatment:
(i) Stage 1 - Collection Sump – Pump to receive all inflows from the network and dispatch these
to the next stage (settling tanks)
(ii) Stage 2 - Imhoff style solids settling tank
(iii) Stage 3 - Anaerobic Filter Units
(iv) Stage 4 - Constructed wetlands

Design parameters for each stage of treatment plus preliminary costing of the DEWATS are supplied in
the accompanying Excel spreadsheet model for this PDA (Appendix II - sheets 5 and 6). The combined
treatment of the settling tanks (Stage 2) and anaerobic filter (Stage 3) will reduce the incoming BOD5
from 330 mg/l to 60 mg/l. The constructed wetlands (ponds) will further reduce BOD5 from 60 mg/l to
15 mg/l.

Figures 12, 13, and 14 show cross sections of equipment assoiated with key treatment stages.

Figure 12 – Schematic Cross Section of Imhoff (Settling Tank – DEWAT Stage 2)

40
Figure 13 – Schematic Cross Section of Anaerobic Filter (DAWAT Stage 3)

Figure 14 - Cross Section of Constructed Wetlands (DEWAT Stage 4)

The approximate footprint for each of the DEWATS proposed (each accepting a flow of 248 m3/day),
including all 4 stages plus additional 50% free space for access to the installations and a small staff office
is 1,512 m3. As a rule of thumb, each 1 m3/day of domestic wastewater requires a total DEWATS
footprint area of 6.1 m2. Notional area requirements of each component at a typical DEWATS site are
shown below.
FOOTPRINT OF EACH DEWAT LOCATION m2 m2/m3/d inflow
TOTAL AREA PER DEWAT location (each having 2 parallel DEWAT installations) 1,512 6.1
Sump and Pumping Installation (one sump to serve the 2 parallel DEWATS) 8 0.03
Imhoffe Settling Tanks (Total of both parallel tanks) 123 0.5
Anaerobic Filter Units (Total of both parallel anaerobic filters each having 4 units) 257 1.0
Constructed Wetland (horizontal flow) 621 2.5
Sub-total of installations (4 stages) 1008 4.1
Free space for access to installations + optional staff office (add 50% to footprint) 504 2.0

41
E.5.6. Provision of Toilets
Without functional toilets, a connection to a piped wastewater collection network serves no purpose.
Therefore, this PDA proposes the provision of new toilets or repair of toilets for HHs that are lacking a
functioning toilet (if needed) wherever a domestic sewer connection is to be made, in order to allow all
members of the community to enjoy the benefits of improved hygienic conditions in their community.

Under the proposed project design, it is assumed that if a household has no toilet with structure, or has a
toilet and structure that is in such poor condition that the necessary plumbing cannot be performed on it to
allow the toilet to be connected to the sanitary collection network, that this household should qualify for
support from the project for repair or provision of a toilet structure and unit. Note that the toilet to be
provided by the project will be of a low-cost design using local materials (per DNSB Rural Toilet Design
Option #4 publication 25/09/15, but with no leach pit. See Fig 15 below). This design is still appropriate
for the peri-urban density found in Manatuto and will come at a total cost of approximately $250 to the
project. Those HHs lacking a toilet and wishing to install a higher quality (concrete) toilet structure can
opt to pay approximately $150 to the project for the construction of a concrete toilet structure (the
difference between the cost of a structure made of local materials and a concrete structure).

Figure 15 - Proposed Default Toilet Provision

E.6. Targeting of Beneficiary Households and Institutions


The GoTL operates several programs that provide a social safety net system for various types of qualifying
households that are assessed to be poor or vulnerable, granting access to subsidies for cash
disbursements, basic goods and services. Recipients include veterans, women-led HHs, and others who
qualify as being poor. The final qualifying criteria for receiving subsidies will be determined by the project
Steering Committee. Prior to project implementation, a comprehensive list of all poor and vulnerable HHs
(name, address, nature of vulnerable status) in the project area will be developed, approved by the
Steering Committee, and entered into project planning maps for use in communication and HH Output
determination.

42
Four types of beneficiaries are proposed for domestic HHs.
1) Those HHs receiving a toilet replacement or a new toilet and to be connected to Simplified Sewer
(Output 1a)
2) Those HHs receiving a toilet replacement or a new toilet and to be connected to a Main Sewer
(Output 1b)
3) Those HHs who do not need a toilet replacement or new toilet and are to be connected to
Simplified Sewer (Output 2a), and
4) Those HHs who do not need a toilet replacement or new toilet and are to be connected to a Main
Sewer (Output 2b)

Also, depending on the outcome of an assessment of the existing septic tanks and leach fields in place at
the 27 institutions in the project area, a third class of Outputs beneficiary is proposed (Output 3) that
would consist of those institutions to be connected to the planned sanitary sewer. The two types of
institutional beneficiaries proposed are:

1) Institutions to be connected to the sanitary sewer being built under the PDA (Output 3a)
2) Institutions to be connected to the sanitary sewer being built under the PDA which would also
receive some level of support for repair of replacement of existing septic tank (Output 3b)

Depending on the type of institution and condition of toilets and structures at each site, local municipal
officials, Suco chiefs, and DNSB representatives will need to determine what level of support each
institution might receive, on a case by case basis based on qualifying criteria that need to be developed
in the PIM. Note that all connections made to the sewer, whether by domestic HHs or by institutions, will
be benefitting from the proposed subsidy contributed by the US Department of Defense Navy SeaBees
humanitarian mission in the RDTL who have suggested they are prepared to assume full responsibility for
the construction of the DEWATS in all four project Sucos. This constitutes approximately 50% of the total
cost of the proposed PDA.

All domestic beneficiary types (Output 1a, Output 1b, Output 2a, and Output 2b) will receive plumbing
services needed to connect all sources of grey water (bathing and food preparation) and black water (urine
and excreta). Although in most countries, the WSS customer is usually responsible for covering the cost
of plumbing work on their own premises up to the street connection to the network, an exception to this
convention has been proposed for domestic customers under the Manatuto PDA. The justification for
this is that this is the first exposure by the target population to piped sanitation, and it is recognized that
the cost of plumbing on-site plumbing may serve as a prohibitive disincentive to the target group of
beneficiaries to participating and may also need to include not only wastewater plumbing but also water
supply plumbing, where this is lacking. This issue of the need and the extent to which to include plumbing
on the HH premises will be considered in next phases of the project PPTA.

Thus, under this project, the standard connection fee paid by the customer will include the plumbing work
needed on the HH premises up to the street connection to the network. A standard connection fee
(customer contribution) of $35 has been proposed based on the results of the Willingness to Pay
Assessment performed for this project in July/August of 2016 (see next section of this report). However,
depending on the vulnerability classification of the HH, the standard connection fee may be waved or
reduced. It will be up to the DNSB to collaborate with the Suco chiefs and Municipal officials to set the
thresholds used to determine which customers should receive partial or full waver of the standard
connection fee.

43
Beneficiary HHs falling under Output 1a and Output 1b will receive a full subsidy from the project to cover
the cost of repair or replacement of their toilet or structure. Those beneficiary HHs falling under Output
2a or Output 2b will not qualify for this subsidy (i.e. will not receive a new toilet or toilet repairs paid for
by the project), however they may opt to pay the project for the construction of a new toilet at the full
cost of the toilet ($250 for a toilet made of local materials and $400 for concrete structure).

It is also proposed that a small number of additional criteria be put in place to minimize the risk of
delivering subsidies to non-poor households. Further discussions will need take place during stakeholder
sessions in the development of the PIM, to account for the range of HH and institutional incomes that
may be encountered.

E.7. Affordability, Willingness to Pay, and Subsidy Levels


Information on Willingness to Pay (WtP) for improved sanitation facilities is useful for assessing the
economic viability of projects, setting affordable tariffs, assessing financial sustainability, and last but
not least, designing socially equitable subsidies. The OBA mechanism to be employed under this PDA
relies on contributions from various parties to complement the nominal contributions made by
beneficiary HHs for improved sanitation.

Survey results of the survey completed to assess of the target population access to sanitation were used
to inform the development of eligibility criteria for selecting pilot project participants and to quantify
the level of contribution for each beneficiary household. The survey sought to fill socio-economic data
gaps, verify existing data, and get a more complete understanding of the existing sanitation
infrastructure and social-economic situation of the target population on the ground in the prospective
project area in Manatuto town.

Surveyed households were asked about their WtP for both an initial connection fee to the sanitary
sewer and for their WtP monthly tariff for connection to piped sanitation above and beyond any tariff
that they would be paying for water supply. The respondents’ survey sample data was then used to
estimate the mean and average willingness to pay for improved sanitation services. Results are
summarized below (Table 3).

Table 3 - Survey Results on Willingness to Pay

44
Willingness to
Pay for Monthly Willingness to Pay for
Sanitary Sewer Connection (USD)
Fee (USD)
Suco Sau (n = 30)
Mean 1.43 17.16
Median 1.5 15
Suco Ailili (n = 19)
Mean 1.43 15
Median 1.5 15
Suco Aiteas (n = 41)
Mean 1.37 16.09
Median 1.5 15
Suco Ma'bat (n = 10)
Mean 2.35 15
Median 2.5 15

Average of the 4 Suco


Mean 1.65 15.81
Median 1.75 15
of all Households Sampled
Mean 1.47 15.05
Median 1.5 15

Estimates show a strong and positive willingness-to-pay for piped sanitation improvements on a
monthly basis, but a more muted willingness-to-pay for the initial connection fee.

Of the 100 HHs surveyed, only 2 HHs were unwilling to pay a monthly tariff of any amount to enjoy
improved sanitation via connection to a piped sanitation system. Furthermore, 28, or just over one
quarter, of the 100 HH’s surveyed were willing to pay only the lowest of survey question categories of
under USD 0.5 monthly.

Similarly, of the 100 HHs surveyed, only 1 HH was unwilling to pay the one-time connection fee to
received improved sanitation via connection to a piped sanitation system. However, unlike the case for
paying a monthly tariff, which showed a distribution along different price categories, fully 93 of the HH’s
were only willing to pay an initial connection fee falling into the lowest category of USD 10 – USD 20.

The mean average and median amount that surveyed households in Manatuto are willing to pay for a
one-time connection fee to avail themselves of piped sanitation improvements is USD 15.05 and USD 15,
respectively. And the mean average and median average monthly amount that Manatuto households
are willing to pay for piped sanitation improvements in the form of a tariff is USD 1.47 and 1.5 USD,
respectively.

Among three of the four Sucos (Sau, Ailili, and Ma’bat) there were no statistically significant differences
in WtP for monthly sanitary connection tariffs, with all three Sucos having an identical median of USD
1.5, and range of the mean average between USD 1.37 and USD 1.43. HH’s in Suco Ma’bat, however,
indicated a significantly higher willingness to pay for monthly sanitary connection tariffs, a median of 2.5
(67% higher than the other three Sucos) and a mean average of 2.35 (57% higher than the other three
Sucos).

Interestingly, this effect of Suco Ma’at having a higher WtP for a monthly sanitation tariff did not apply
to WtP for the initial connection fee for piped sanitation. In fact, the variation of averages among the
four Sucos in this case from lowest (Suco Ma’bat) to highest (Suco Sau) was only 17%. And HH’s in Suco

45
Ma’bat (together with Suco Ailili) demonstrated the lowest WtP for the one-time connection fee among
the 4 Sucos in this case.

E.8. Relationship between Reported Income and Willingness to Pay


As a general rule, the World Bank has established that combined monthly HH fees paid for water plus
sanitation should not exceed 5% of monthly HH income. Latest census data for the project area in
Manatuto released after the scoping mission for this report will need to be considered in futures stages
of project preparation of this PDA and by the DNSB as it develops its applicable tariffs for piped
sanitation services.

The prior Contingent Valuation Study for Water Supply and Solid Waste Management Services in Dili
completed by DHI under an ADB contract showed a strong statistically significant difference in WtP
between poor and non-poor groups for water supply in Dili. This effect was not witnessed in our survey
concerning WtP for improved sanitation. Of the 100 HHs surveyed, 7 HHs reported themselves to
belong to the lowest income category used in the survey (USD 30 – USD 50 per month). And 13 HHs
reported themselves belonging to the next highest income category (USD 60 – USD 90). For these 20
HHs in the two lowest self-reported income categories, the mean average WtP for the one-time
sanitation connection fee was USD 14.25, which is just slightly lower (5%) than the mean average of 15
for the entire set of 100 HHs. And the mean average WtP for the monthly tariff for improved sanitation
was USD 1.47, which is no different than the overall mean average of USD 1.47 for the entire set of 100
HHs.

These results suggest that income category of the HH in Manatuto is not a significant predictive factor in
determining WtP for a monthly tariff for improved sanitation, and has only a minor effect on WtP for the
one-time connection fee.

Prior surveys performed as party of PPTA of the ADB funded District Water Supply Project (04 Volume 3
SA B Social Impact Analysis) have noted it is unlikely that the economic situation of poor households in
Manatuto is going to improve significantly enough that the tariff charged will cover all of the costs of
replacement, operation and maintenance of a water supply system and that it is likely that there will
need to be some level of government subsidy for operation and maintenance costs in the foreseeable
future.

While the WtP established by a survey such as the one completed by the Consultant in Manatuto can
provide a valuable reference point in setting fees and tariffs associated with the proposed piped
sanitation system for urban Manatuto, caution must be exercised not to conclude that the results speak
to some sort of definitive “actual” WtP that should be applied. For a variety of reasons, the WtP of HHs
in urban Manatuto may in fact differ on average, as well as for any given HH. Some reasons include:

• Survey respondents may not report the actual WtP that they hold in their heads for either
the one-time connection fee or monthly tariff when responding to the survey, in hopes that
an underreported value may help to increase the subsidy that they might receive from the
State or donor agency.

• The perceived value of benefits derived from improved sanitation among survey
respondents is likely to increase after completion of construction of the system and

46
connection of the HH. As a result, the WtP of the HH declared at the time of the survey may
underestimate the WtP of that HH upon completion of the connection. This effect has been
well-established among OBA project beneficiary HHs in other countries that have relied on
HH contributions as part of an OBA financing mechanism for improved sanitation.

• Manatuto municipal officials also alerted the Consultant to a local phenomenon concerning
a sort of peer influence that they had observed in the case of the on-going ADB financed
water supply project. The attitude of HHs towards the system being installed, and the
enthusiasm among individual beneficiary HHs, actually increased during construction as HHs
observed their neighbors being connected. Prior to begin of construction, the opinion of the
HH may have reflected some skepticism and reluctance to pay for the connection, whereas
upon connection of neighboring HHs, the primary consideration then became how to not be
left behind (along the lines of “I want what my neighbor has”.).

E.9. Cost of Basic Needs Poverty Indicator


Updated data and definitions of poverty will need to be obtained in next staged of the PPTA. The PPTA
materials from the ADB funded Phase Water Supply Project used a 2007 study of cost of basic needs
poverty line, adjusted to the consumer price index (CPI) to separate poor from non-poor groups.
Poverty lines were determined nationally and regionally by urban or rural settlement types. Table 4
below shows the upper and lower poverty lines at the national level and in center urban areas at
2007 and 2015 levels.

Table 4 – Upper and Lower Poverty Line Thresholds

Lower Poverty Line Upper Poverty Line


Daily Monthly Daily Monthly
National (2007) $0.71 $21.53 $0.88 $26.68
National (2015) $1.10 $33.32 $1.36 $41.29
Center Urban (2007) $0.84 $25.50 $1.16 $35.03
Center Urban (2015) $1.30 $39.46 $1.79 $54.21

Source: NDS, Source: Timor-Leste, Poverty in a Young Nation”, 2007.

E.10. Contributions by Beneficiary Households


The proposed contribution per HH for connection to the sanitary sewer is USD 35. The results of the
survey completed in Manatuto under the OBA PDA, coupled with the statistical information on income
and affordability, indicate that the contribution that can be expected for most HHs in the project area
will need to be modest, covering only a fraction of the actual connection fee incurred by the operator.
Survey results revealed a WtP for the one-time sewerage connection of about USD 15 and a WtP for a
monthly tariff for sanitation improvements of USD 1.5. The capital costs associated with the
construction of a piped sewerage network in Manatuto, including connections to the HHs in the project
area, range between $1,472 and $2,167 per domestic HH. If one were to use the figures for WtP derived
from the survey, the per-customer contribution of USD 15 would constitute a contribution of just over

47
1% of the total cost. However, it is important in this case to differentiate between the full capital cost of
constructing a new sanitation network where there were none before, and the marginal cost of
connecting a HH to the sanitation network. The capital cost of constructing a new sanitation network is
typically not a cost that is born by the HHs directly, but rather a cost that is covered through general
investment funds for infrastructure (these costs are frequently covered in the form of bonds or long
term loans that municipalities or states acquire).

When the initial capital cost of the construction of the network plus treatment is subtracted from the
marginal cost of each additional connection to the network, one is left with a marginal cost of
connection by a HH to the sanitation network ranging between USD200 and USD400. This would mean
that the proposed in-kind contribution of USD 35 per HH beneficiary will be on the order of 3.75% to 7%
of the total connection cost - a number that is very much in line with costs required of beneficiary HHs in
other OBA projects in the region addressing WSS. For example, the in-kind contribution under the World
Bank’s GPOBA project focusing on improved access to sanitation in urban Colombo is $30 per HH. The
total cost of the various outputs in Colombo, Sri Lanka, range between $233 and $1,689, which implies a
percentage contribution of each HH ranging between 1.8% and 14%. The lowest cost output includes
only costs associated with the actual connection, whereas the higher costing outputs require build-outs
of the network or construction of pumping stations or DEWATs.

An economic and financial analysis including a comparison of the status quo versus investing in the
proposed sanitation system will be included in the next phase of project preparation.

E.11. Donor Subsidy for DEWATS (USDoD Humanitarian Mission)


The United States Naval Construction Forces/Sea Bees (US Department of Defense), who have an active
humanitarian donor mission in Timor-Leste, expressed an interest in assuming complete responsibility
for the construction of the wastewater treatment facilities (either CWWTP or DEWATs) in Manatuto that
would be part of the proposed project. Consultant held multiple meetings with US Navy Sea Bees staff
and completed a joint site visit to Manatuto with the Consultant and DNSB on August 8, 2016. The US
Department of Defense would be willing to contribute to the detailed engineering design and supply of
all materials and labor associated with the WWTP/DEWATS. A detailed memorandum detailing the
outcome of the collaborative discussions between the US Navy and the Consultant has been forwarded
to the ADB TTL for this project.

F. OBA Outputs
In an output-based project finance structure, an “output” represents an endpoint of a combination of
project components that are delivered that meet the ultimate objective of the project. In the case of
this PDA, the output represents the sum of components delivered to the beneficiary (HH or institution),
and is therefore defined in terms of the connection to the network. OBA outputs should not be
confused with the project components to be generated in support of the output (i.e. construction of
sewerage network, construction of DEWATS, plumbing and pipework, installation of equipment, etc).

The OBA outputs, on which subsidies will be provided to the GoTL upon verification of successful
implementation, include:

48
Output 1 (domestic connection): Installation or repair of toilets AND domestic HH connection to
a decentralized piped sewerage network with off-site DEWAT treatment of wastewater

Output 2 (domestic connection): Domestic HH direct connection to a decentralized piped


sewerage network with off-site DEWAT treatment of wastewater, and

Output 3 (institution/community connection)10: Connection of institution to the proposed


decentralized sewerage network AND/OR improvements to the performance and operation of
on-site sanitation systems for some of the 27 identified institutional/community buildings
located in the project area, through the construction or rehabilitation of on-site septic tank and
soakage pits, and improvements to regular desludging services.

Wastewater from all connections under this PDA will be delivered to


Decentralized Wastewater Treatment Facilities (DEWATS) for
treatment prior to disposal. The USDoD humanitarian mission in TL has
preliminarily agreed to donate these DEWATS in full.

Outputs are further delineated into the following sub-outputs:

Output 1a: “Provision of Toilets and Connection to Decentralized Simplified Sewers with off-site
DEWAT treatment of wastewater” – This sub-output includes those domestic HHs to be
connected to a simplified sewer network which also have been determined to have a toilet and
structure that are in need of repair or replacement.

Output 1b: “Provision of Toilets and Direct Connection to Decentralized Main Sewers Network
with off-site DEWAT treatment of wastewater” – This sub-output includes those domestic HHs to
be connected to a main sewer network which also have been determined to have a toilet and
structure that are in need of repair or replacement.

Output 2a: “Connection to Decentralized Simplified Sewers with off-site DEWAT treatment of
wastewater” – This sub-output includes those domestic HHs to be connected to a simplified
sewer network which have acceptable existing toilets and structures not in need of replacement
or repair. Differences between simplified and main sewer networks are described at length
later in this report, as these constitute central design features of the proposed PDA.

Output 2b: “Connection to Decentralized Main Sewers Network with off-site DEWAT treatment
of wastewater” – This sub-output includes those domestic HHs to be connected to a main sewer
network which have acceptable existing toilets and structures not in need of replacement or
repair. Differences between simplified and main sewer networks are described at length later in
this report, as these constitute central design features of the proposed PDA.

10
Details of Output 3 are pending assessment of the condition of existing on-site sanitation at the institutional
buildings to be connected.

49
Output 3a: “Institutional Connection to Decentralized Sewers”: If the on-site assessment at the
institution/community center of the existing septic tanks and leach fields determined that the
system is satisfactory and does not pose a threat to public health, the output will consist only of
the connection of the institution’s septic tank(s) to the decentralized network.

Output 3b: “Institutional Connection to Decentralized Sewers AND Provision of On-site


sanitation improvements”: If the on-site assessment at the institution/community center of the
existing septic tanks and leach fields determined that the system is in need of repair or
replacement and poses a threat to public health, the output will consist of the institution’s
connection to the decentralized sewer network and improvements to the performance and
operation of on-site sanitation systems (through the construction or rehabilitation of toilets, on-
site septic tank and soakage pits).11

The estimated numbers of each output type in each project area are indicative and will rely on refined
estimations during further stages of project preparation. The determination of the specific output that
will be provided to a household will depend on the result of detailed on-site assessments via foot
surveys, observations, and interviews to be completed in the next stages of project design that will need
to be performed at each domestic or institutional connection address in the four project sucos.

The pilot leaves the flexibility to the DNSB/PIU and local officials to adapt to the particular situations
encountered during implementation, within the framework to be set in the Project Implementation
Manual. Table 5 below shows the number of domestic beneficiary HH connections proposed by suco.
Table 6 below shows institutional connections proposed by suco.

Table 5 - Domestic Beneficiary HH Connections by Suco


Suco / Aldeia Households Output 1a Output 1b Output 2a Output 2b

Install/replace
Install/replace TOILETS, Direct Connection to
Estimated TOILETS, Connect to Connect to SIMPLIFIED
Direct Connection to MAIN SEWER,
Connections* SIMPLIFIED SEWER, SEWER, DEWATS
MAIN SEWER, DEWATS DEWATS
DEWATS

A Suco Sau 405 87 22 237 59


1 Sau 305 66 16 178 45
2 Obrato (East of Bridge) 100 22 5 58 15
B Suco Ailili 200 32 22 88 58
1 I'un 100 16 11 44 29
2 Belebato 100 16 11 44 29
C Suco Aiteas 560 91 60 245 164
1 Uma Sau 130 21 14 57 38
2 Be'Uac 300 49 32 131 88
3 Carlilo 130 21 14 57 38
D Suco Ma'bat 150 24 16 66 44
1 Ma'bat 75 12 8 33 22
2 Soraha 75 12 8 33 22
TOTAL* 1315 235 120 635 325
*Actual total HH connections to date under the Phase I Water Supply Project number 1,015 HH, an additional 300 HHs to be connected over the next 2 years.
Figures reflect anticipated connections after 2 years

11
Currently there are no desludging service providers in Manatuto. It is worth considering in the next stages of the
PPTA if this output should include establishment of local desludging services for provision of regular desludging
services by a licensed gully bowser company.

50
Table 6 – Institutions Connected by Suco
Suco Name of Institution Estimated Output 3a Output 3b Not an Output
REPAIR/REPLACE
CONNECT Institution to Septic Tank, CONNECT
Sanitary Sewer, Institution to Sanitary No Action Taken, No
Connections at
Average Occupancy DEWATS (figures Sewer, DEWATS connection made to
Institution
indicate average daily (figures indicate Sewer
occupancy)* average daily
occupancy)*
Number of Institutions in Output Type (to be refined in next design phase of project) 9 9 9

Suco Sau Sub-total 6 160 53 53 53


Suco Ailili Sub-total 2 120 40 40 40
Suco Aiteas Sub-total 18 580 193 193 193
Suco Ma'bat Sub-total 1 30 10 10 10
27 890 297 297 297
*The load contributions from schools, churches, government offices, and other community locations producing wastewater are estimated in terms of average daily occupancy

G. OBA Financing Structure:


The objective of the proposed financing structure is to incentivize prospective donors to provide cash or
in-kind subsidies to the pilot project, by lowering investment risks to these donors. The greatest risk to
donors is that the GoTL executing partner is unable to deliver on its commitment to complete the network
and connections or install a functioning operator or ensure sustainability of the system after construction
and connection customers. Because the bulk of the donor subsidies under the proposed PDA take the
form of an in-kind contribution consisting of construction of infrastructure (DEWATS) that must be
completed concurrently with the sewerage collection network (supported by the GoTL), a model is
proposed that helps to reduce the risks of substandard delivery of the network and accompanying
services. The proposed OBA structure relies on a combination of measures, including:

(i) A pre-financing and co-funding commitment by the GoTL to be paid in 3 tranches: (1) one-
third prior to project mobilization (tranche #1), (2) one-third at 33% project completion
(tranche #2), and (3) one-third at 66% project completion (tranche #3).

(ii) The total size of the GoTL commitment (the basis for the three tranche payments) is to be
calculated as the sum of all cash contributions of donors and the GoTL (i.e. the in-kind
contribution of Donor #2 is not included). Thus, the GoTL is committing to pre-finance both
its contribution, as well as the contribution of beneficiary customers (connection fees) and
donors (subsidies). The GoTL WSS operator (DNSB) will then recover these two fees directly
from customers and donors.

(iii) Funds are to be deposited by the GoTL into an escrow account established jointly by the
Executing Agency and lead facilitating donor such as the ADB. 12 The purpose of the
establishment of an account managed by the lead facilitating donor is to insulate the project

12
The proposed escrow account represents an initial recommendation by the Consultant. Crafting the details of
such an arrangement (or any alternatives to it for guaranteeing availability of funds on the part of the GoTL to
satisfy the OBA donors) and getting all parties to sign on, comprises one of the principal tasks in the next phase of
the PPTA (Commitment Paper and Project Implementation Manual). It is a process that takes place in full
coordination with, and guidance of, the relevant GoTL institutions and often requires multiple iterations for
consensus to be reached by all parties.

51
from payment delays or obstructions, thereby offering reassurance to the subsidizing parties
that the network feeding into the DEWATS will be completed on schedule. This structure is
deemed useful for this pilot, since the largest subsidy in the proposed project takes the form
of in-kind construction of the DEWATS component of the project.

(iv) An Independent Verification Agent (IVA) is to provide quarterly review and verification of
project progress, identification of emerging impediments, and generation of corrective
recommendations to ensure project sustainability, paid for by the lead donor.

H. PROJECT COSTING
H.1 Summary of Project Costs, Outputs, and Allocations

This pilot is expected to be funded entirely by a combination of GoTL and donor contributions. No loans
are sought at this time. Table 7 summarizes key project metrics.

Table 7 – Summary of Key Project Metrics

52
Budget Summary
Total Household (HH) Connections 1315
Total Institutional Connections TOTAL
Total People Served (domestic + institutions) 9667
Total Investment per person $ 301.74
Donor subsidy per person $ 169.99
GoTL contribution per person $ 126.75

Investment by Suco USD %


Suco Sau $ 698,287 29%
Suco Ailili $ 364,809 15%
Suco Aiteas $ 1,063,847 45%
Suco Ma'bat $ 263,185 11%
Sub-Total $ 2,390,129 100%

Investment by Contributor USD %


Customer contribution (connection fee)
$ 49,034.66 2.05%
GoTL $ 914,535.75 38.26%
OBA Donor #1 $ 146,544.32 6.13%
OBA Donor #2 - US DOD (Navy SeaBees) OBA
contribution (in-kind DEWAT materials and
construction) $ 1,280,639 53.55%
Sub-Total 1 $ 2,390,129 100%

Preparation and Implementation Costs


Service Provider (DGAS/DNSB) PIU - GoTL $ 262,914 11%
Overhead (5%)
Design Review and Tendering (4%)
Site Supervision (2%)
Communication Campaign - GoTL $ 47,803 2%
Sub-Total 2 $ 2,700,846
Project Preparation Fees (Donor) $ 108,034 4%
Independent Verification Agent (Donor) $ 108,034 4%
GRAND TOTAL $ 2,916,913

H.2. Unit Costs per Output

53
Table 8 below shows unit costs for each output type. For outputs 1 and 2, one unit is defined as a HH
connection. For Output 3, one unit is defined as a connection to an institutional building.

Table 8 – Unit Costs per Output by Participant


` Output 1a Output 1b Output 2a Output 2b Output 3a Output 3b
REPAIR/REPLACE
CONNECT Institution to Septic Tank,
Install/replace
Install/replace TOILETS, Sanitary Sewer, CONNECT Institution
TOILETS, Direct Connect to SIMPLIFIED Direct Connection to
Connect to SIMPLIFIED DEWATS (figure shows to Sanitary Sewer,
Connection to MAIN SEWER, DEWATS MAIN SEWER, DEWATS
SEWER, DEWATS avg cost to connect one DEWATS (figures
SEWER, DEWATS
institution) show average cost
per institution)
Average cost/unit $ 1,863 $ 2,185 $ 1,491 $ 1,812 $ 7,548 $ 9,629
Customer
contribution $ 35 $ 35 $ 35 $ 35 $ 167 $ 167
GoTL contribution $ 540 $ 862 $ 528 $ 849 $ 4,055 $ 4,055
OBA Donor #1 $ 360 $ 360 $ - $ - $ - $ 2,081
OBA Donor #2 - US
DOD (Navy
SeaBees)
contribution (in-kind
construction) $ 928 $ 928 $ 928 $ 928 $ 3,326 $ 3,326

H.3. Total Participation Levels per Output


Table 9 below shows total costs for each output type. For outputs 1 and 2, the total cost is the sum of
HH connections. For Output 3, the total cost is the sum of institutional connections.

Table 9 – Total Participation Levels per Output


Output 1a Output 1b Output 2a Output 2b Output 3a Output 3b
REPAIR/REPLACE Total %
Install/replace Septic Tank,
Install/replace TOILETS, CONNECT Institutions to
TOILETS, Direct Connect to SIMPLIFIED Direct Connection to CONNECT
Connect to SIMPLIFIED Sanitary Sewer,
Connection to MAIN SEWER, DEWATS MAIN SEWER, DEWATS Institutions to
SEWER, DEWATS DEWATS
SEWER, DEWATS Sanitary Sewer,
DEWATS
Total cost per
Output Type $ 437,696.86 $ 262,498 $ 946,700 $ 588,645 $ 67,931 $ 86,657 $ 2,390,129 100%
Customer
contribution
(connection fee) $ 8,222 $ 4,205 $ 22,229 $ 11,370 $ 1,504.83 $ 1,504.83 $ 49,035 2.1%
GoTL $ 126,846 $ 103,569 $ 335,333 $ 275,798 $ 36,495 $ 36,495 $ 914,536 38.3%
OBA Donor #1 $ 84,564 $ 43,254 $ - $ - $ - $ 18,726.32 $ 146,544 6.1%
OBA donor #2 - US
DOD (Navy
SeaBees)
contribution (in-kind $ 218,067 $ 111,540 $ 589,589 $ 301,571 $ 29,935.62 $ 29,935.62 $ 1,280,639 53.6%

I. IMPLEMENTATION
Details of implementation will be further developed and finalized in the next stages of project preparation
supported by the ADB (to be confirmed), in close coordination with the DNSB, MF, and donors. The
following section represents a skeletal draft intended as a starting point for these discussions. The
definitive implementation reference for all parties will be the Commitment Paper/Project Implementation
Manual.

I.1. Milestones for Project Implementation

54
A 54-month total project cycle is proposed for this PDA – (i) 12 months to build commitments, complete
project preparation, and select PIU and IVA, (ii) 36 months for mobilization of PIU and IVA, bidding and
selection of design and construction contractors, construction of the networks and DEWATS, connection
of customers, and training of the sanitation operators. (iii) 12 months for continued training of the
sanitation operation staff. A tentative schedule of key project milestones is shown in Table 10Error!
Reference source not found. below.

Monthly construction schedules including specific components of infrastructure (Network pipe laying,
DEWAT construction, HH connections, HH plumbing, HH toilets, septic tank construction, institution
connections) will be derived in the next stages of project preparation.

Table 10: Tentative Schedule of Key Milestones

Milestones Tentative schedule


for completion

Project Preparatory Activities


Donor funding commitment for further PPTA components Jul, 2017
Further Conceptual Design of Decentralized Networks (number and location of networks, Sep, 2017
HHs, institutions) and DEWATS (number, size, location, preliminary design)
Financial and Economic Analysis Completed and Technical Model Updated Oct, 2017
Commitment Paper completed Oct, 2017
Commitment and no-objection from donors signed Nov, 2017
Project Implementation Manual and Procurement Protocols Completed Dec, 2017
ADB, GoTL, and Donors’ internal approval process completed Mar, 2018
OBA Grant Agreement signed Mar, 2018
Steering Committee formed, convenes Apr, 2018
Confirmation of qualifying criteria for new or repaired toilet recipients. Finalization of location May, 2018
of HH recipients of toilets and approval by Steering Committee.
Confirmation of qualifying criteria for institutions to receive new or repaired septic tanks. May, 2018
Finalization of list of recipient institutions and approval by Steering Committee.
Development of TOR for Detailed Engineering Design of Network by ADB May, 2018
Procurement and Completion of Environmental and Social Assessments (including siting of Jul, 2018
DEWATS, land use, and possible resettlement issues)
ADB procures, appoints the IVA Jul, 2018
PIU tendered. Bidding and selection by ADB with GoTL approval Jul, 2018
Project Implementation Unit (PIU) Mobilization and Procurement Phase
Project Accounts established, Tranche #1 of 3 disbursed by GoTL Aug, 2018
PIU mobilized Sept, 2018
Community Communication Campaign is launched at the local press and at community level Sept, 2018
through posters and community meetings
Procurement of Firm to Complete Detailed Engineering Design of network and to coordinate Nov, 2018
with the USDoD on the DEWATS design.
Detailed Engineering Design of network in close coordination with the USDoD on the Mar, 2019
DEWATS design. USDoD to complete its Detailed Engineering Design of DEWATS in parallel
and in close coordination with the selected contractor.
Construction of New Sewerage Collection Networks, Toilets, and DEWATS:
Comments/Approval of DED by Steering Committee. Mar, 2019
Procurement notice and request for proposal issued for construction of collection networks, Apr, 2019
toilets, and septic tanks (DEWATS to be installed by Donor#2 US DoD Humanitarian Mission
in TL, no tender required).
Tranche #2 of 3 disbursed by GoTL Apr, 2019
Construction Contractors selected, mobilized May, 2019
Construction of Networks and HH connections (plus plumbing) commences Jun, 2019
On-site Repair/Installation of Toilets commences Jul, 2019

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On-site Repair/Installation of Septic Tanks commences Aug, 2019
Tranche #3 of 3 disbursed by GoTL Aug, 2019
Construction of DEWATS commences Q1, 2020
Mid Term Review - based on progress reports submitted by PIU to Steering Committee and Q2, 2020
IVA certification reports submitted to ADB.
Project implementation of all components except DEWATS ends (no new customers added) Q1 of 2021
Commissioning of DEWATS Q2 2021
Subsidy Disbursements End Q3 2021
Training of Manatuto Sanitation Operation Staff Q1 2022

Table 11 shows a prospective schedule for new connections by Suco. A detailed project implementation
program will be generated at the next stage of project of project preparation.

Table 11 – Timeframe for Establishment of New Connections

New Connections - RESIDENTIAL AND INSTITUTIONAL CUSTOMERS Total 2019 2020 2021

Suco Sau Total - 162 365 405


Output 1a Install Toilets and Connect to Simplified Sewer 87 44 44
Output 1b Install Toilets and Direct Connection to Main Sewer 22 11 11
Output 2a Connect to Simplified Sewer 237 118 118
Output 2b Direct Connection to Main Sewer 59 30 30
Output 3a Connect Institution to Sanitary Sewer 2.000 2.00
Output 3b Repair/replace septic tank, connect institution to sanitary sewer 2.000 2.00

Suco Ailili Total 60 160 200


Output 1a Install Toilets and Connect to Simplified Sewer 32 16 16
Output 1b Install Toilets and Direct Connection to Main Sewer 22 11 11
Output 2a Connect to Simplified Sewer 88 44 44
Output 2b Direct Connection to Main Sewer 58 29 29
Output 3a Connect Institution to Sanitary Sewer 0.667 0.67
Output 3b Repair/replace septic tank, connect institution to sanitary sewer 0.667 0.67

Suco Aiteas Total 168 448 560


Output 1a Install Toilets and Connect to Simplified Sewer 91 45 45
Output 1b Install Toilets and Direct Connection to Main Sewer 60 30 30
Output 2a Connect to Simplified Sewer 245 123 123
Output 2b Direct Connection to Main Sewer 164 82 82
Output 3a Connect Institution to Sanitary Sewer 6.00 3.00 3.00
Output 3b Repair/replace septic tank, connect institution to sanitary sewer 6.00 3.00 3.00

Ma'bat Total 45 120 150


Output 1a Install Toilets and Connect to Simplified Sewer 24 12 12
Output 1b Install Toilets and Direct Connection to Main Sewer 16 8 8
Output 2a Connect to Simplified Sewer 66 33 33
Output 2b Direct Connection to Main Sewer 44 22 22
Output 3a Connect Institution to Sanitary Sewer 0.33 0.33
Output 3b Repair/replace septic tank, connect institution to sanitary sewer 0.33 0.33

Total Total 435 1,093 1,315


Output 1a Install Toilets and Connect to Simplified Sewer 235 117 117 -
Output 1b Install Toilets and Direct Connection to Main Sewer 120 - 60 60
Output 2a Connect to Simplified Sewer 635 318 318 -
Output 2b Direct Connection to Main Sewer 325 - 162 162
Output 3a Connect Institution to Sanitary Sewer 9 - 3 6
Output 3b Repair/replace septic tank, connect institution to sanitary sewer 9 - 3 6

Total new domestic HH connections 1,315 - 435 658 223


Total new institutional connections 18 - 6 12

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I.2. Institutional and Implementation Arrangements

I.2.1. Implementing Agency


The DGAS is the proposed implementing agency for the project. The DNSB (within the DGAS) will be
responsible for day to day oversight and participation in the project on behalf of the DGAS. The
DGAS/DNSB will work with Manatuto local authorities to support the PIU in developing a detailed
implementation plan for new connections to poor households in the project area which will be presented
to the Steering Committee for approval.

I.2.2. Executing Agency


The executing agency has yet to be determined. Likely candidates include the Ministry of Finance or
Ministry of Commerce, Industry and Environment.

I.2.3. Project Implementation Unit


A Project Implementation Unit (PIU) shall be established, reporting to the DGAS and ADB. The PIU will be
responsible for the daily implementation of the PDA. It is proposed that the ADB WSS unit share oversight
over the PIU on behalf of the project donors. The detail of the oversight of the PIU will need to be further
developed in the next stages of project preparation. Provisionally, the PIU would be comprised of a Project
Manager/Sanitation Specialist, Finance Manager/Administrator, and Social Outreach Specialists, and will
hire international and local consultants, as needed. Appropriate entities will also need to be selected to
ensure compliance with GoTL and ADB environmental and social requirements (and ADB Safeguards
policy) of the PDA throughout detailed design, the bidding process, contract process, construction, and
implementation.

I.2.4. Social and Environmental Assessment


Social and Environmental Assessments to be completed by participating donors and GoTL agencies as
needed during subsequent stages of project preparation. Social and environmental guidelines for the
implementation of the project are to be incorporated into the PIM, as agreed to by participating parties.
Of particular interest in this PDA design will be the question of addressing property rights in laying of pipes
in communities serviced by decentralized networks as well as land availability for DEWATS and possible
resettlement of beneficiaries located on potential DEWAT sites. Resettlement matters should be flagged
and addressed early on in the process PPTA.

I.2.5. Grant Agreements


As the facilitating donor, ADB will lead the development of Grant Agreements between the donors and
appropriate GoTL authorities (co-signatories provisionally assumed to include Ministry of Finance,
MOPTC, or other). Key components of the Grant Agreements will include:

• Funding commitment levels of all parties


• Timing and conditions for disbursements by all parties
• Procedures for payment applications submitted by DGAS to PIU/ADB once outputs have been

57
certified. This will be laid out in more detail in the Project Implementation Manual.
• Roles and responsibilities of the parties:
o Executing Agency: tracking of all funds (co-financing, pre-financing and disbursement of
subsidies once approved by PIU/ADB?)
o DGAS: overall sector coordination through the Steering Committee and co-financing of
networks
o Other to be determined: coordination of Local Authorities, ensuring accountability, and
identification of the organization to follow-up on OBA framework set-up

I.2.6. Independent Verification Agent


ADB will hire an Independent Verification Agent (Terms of Reference to be included in the Project
Implementation Manual). The IVA will have financial, technical and social development expertise. The
mandate of the IVA is to confirm delivery of outputs under the project prior to payment of subsidies to
the GoTL by the donors. DGAS will submit periodic requests for payment on a quarterly cycle. Each
request for payment will detail the households gaining sewer connections and the households and
institutions receiving enhanced on-site sanitation for which subsidies are eligible. These requests for
payment will be verified by the IVA within one month of submission. The IVA will also be tasked with
identifying and flagging any existing or emerging issues during implementation that could impact the
success, timeliness, budget, or sustainability of the project. Areas to be reviewed by the IVA include
technical quality of construction works, compliance with environmental and social safeguards, overall
project implementation progress, and timeliness of execution.

I.2.7. Project Steering Committee


A Steering Committee will be set up at Ministerial level as set for the in the Project Implementation
Manual. The Steering Committee, chaired by DGAS, will review progress during the pilot project and
provide continuity for supporting and strengthening the institutional framework post ADB support.
Members of the Steering Committee to be determined in the next stages of project preparation. It is
suggested that the role of the Steering Committee include, among other items:

• Review and approval of proposed definitions of poor and vulnerable beneficiaries, and threshold
levels determining subsidy amounts to be given to various types of beneficiaries.
• Review of project investments against the payment schedule with a view to identifying, reporting
and addressing any delays.
• Review of the delivery of project outputs against the payment schedule. This will be undertaken
in addition to the work of the IVA and any progress reporting by DNSB.
• Review of the effectiveness of the institutional arrangements.

I.2.8. Mid-Term Review


A Mid-Term Review (MTR) will be undertaken with a view to assessing the efficiency and effectiveness of
project implementation. The MTR will be referenced in the Grant Agreement. Its purpose is to perform a
thorough assessment of the operation to determine whether the project is on track to achieve its
development objective, and whether there is a need to make changes or suggest a restructuring. This
review will appraise all aspects of the project, including but not limited to:

58
1) Progress compared to plan;
2) Targeting of poor households
3) Customer satisfaction with Outputs
4) Opportunities improvements going forward
5) Review of unit costs and the size of subsidy per output, with a view to revising/refining the level
of subsidy where needed
6) The financial performance of DNSB and the adequacy of the sewerage tariff structure and levels
in comparison with the objectives and commitment made during preparation;
7) The effectiveness of the roles of the members of the Steering Committee
8) Adequacy of co-financing mobilized and made available by GoTL
9) Assess interest of the parties towards the approach, in particular its OBA elements and probe for
potential interest in scaling up or replicating the approach

59
References Consulted:
Contingent Valuation Study for Water Supply and Solid Waste Management Services in Dili
Draft Final Report, prepared for ADB, July 2015, DHInfrastructure.

DEWATS - Decentralized Wastewater Treatment in Developing Countries, Ludwig Sasse, 1998. Bremen
Overseas Research and Development Association, Germany.

Dili Water Supply Public-Private Partnership, Feasibility Study, Stage I Report WUM150800Y, July 2015.
Egis & Lelo Engineering Consultants.

District Capital Water Supply Pilot Project


Final Report and Appendices, ADB TA 7649-TIM – Aurecon.

DNSB Toilet Design. Publication, 2015. Dezeñu Sintina ba Komunidade - Timor-Leste Sumáriu Ezemplu
Sentina.

Evaluation of Existing Low-cost Conventional as well as Innovative Sanitation Systems and Technologies/
Assessment of Sanitation Systems and Technologies, Work package 3 - Deliverable 22 & 23, compiled by
Chris Zurbrügg and Elizabeth Tilley, Eawag/Sandec (undated).

Improved Septic Tank with Constructed Wetland…Anh Viet Nguyen, Nga Thuy Pham, Thang Huu
Nguyen1, Antoine Morel2, and Karin Tonderski3. Paper XI-RCS-07-30 NOWRA 16th Annual Technical
Education Conference & Exposition (Baltimore, Maryland; March 2007).

A Rapid Assessment of Septage Management in Asia - Policies and Practices in India, Indonesia,
Malaysia, the Philippines, Timor-Leste, Thailand, and Vietnam. US Agency for International
Development, January 2010.

Sanitation is more than Life VOLUME III: Guidelines and Technical Option Sheets - Sustainable Sanitation
Options for Timor-Leste WORLD VISION Lanka Tsunami Response Team, WORLD TOILET ORGANIZATION
– WTO, Elisabeth-Maria Huba & Thilo Panzerbieter, Timor-Leste/Germany, 2006

Scaling-up Rural Sanitation Using Smart Incentive Approach, PP Presentation, 2016 (DNSB, GoTL).

Simplified Sewerage Design Guidelines, Bakalian, Wright, Otis, Netto. UNDP/World Bank Water and
Sanitation Program. 1994.

Timor-Leste National Basic Sanitation Policy (Final version–11/1/2012)


Type of Sewer Systems. Presentation by Solomon Seyoum.

Wastewater Engineering: Treatment and Resource Recovery. Metcalf & Eddy, Inc., Tchobanoglous,
George, Stensel, H. Dav 5th (fifth) (2013).

Water Supply and Sanitation in Timor-Leste - Turning Finance into Services for the Future. April, 2015.
Service Delivery Assessment. The World Bank.

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