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Costing the long‐term demand for water sector infrastructure

Adrian Cashman (Lecturer in Water Resources Management at the University of the West Indies, Bridgetown, Barbados)
Richard Ashley (Professor of Urban Water at the University of Sheffield, Sheffield, UK)

Foresight

ISSN: 1463-6689

Article publication date: 30 May 2008

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Abstract

Purpose

The water sector is set to continue to face severe challenges in meeting the financial requirements for maintaining, extending and upgrading new and ageing water systems in the face of growing water scarcity, stricter regulatory requirements and competition for capital. The gap between the required financing and the projected financing is said to be growing but there are no good estimates available. The purpose of this paper is to present a recent analysis of the investment requirements of the water sector in OECD countries, Brazil, Russia, India and China up to 2030, taking into account the likely impact of socio‐economic trends, internal politics, environmental challenges and technological change.

Design/methodology/approach

In order to estimate the required financing, present expenditures as a percentage of GDP were analysed. Estimates of projected annual GDP growth coupled with an evaluation of the impact of country specific socio‐economic, political, environmental and technological trends were used to derive projections for future investment needs.

Findings

The estimated level of infrastructure investment requirements to 2030 as determined by this study is considerably higher than had been expected and higher than for the energy, telecommunications and transport infrastructure sectors.

Practical implications

The findings have enormous implications in terms of the ability of service providers for their business models and in raising the necessary finances.

Originality/value

This is one of a very few studies to report on the potential scale of the overall future investment requirements of the water sector that has been undertaken. Previous works have focused mainly on sub‐sectoral goals such as meeting the Millennium Development Goals and so have under‐reported the scale of the financing problem.

Keywords

Citation

Cashman, A. and Ashley, R. (2008), "Costing the long‐term demand for water sector infrastructure", Foresight, Vol. 10 No. 3, pp. 9-26. https://doi.org/10.1108/14636680810883099

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited