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Water supply and sanitation in Venezuela

{| style="width: 25em; font-size: 90%; text-align: left;" class="infobox" |- !align="center" bgcolor="lightblue" colspan="2"|Venezuela: Water and Sanitation |-


}} |- !align="center" bgcolor="lightblue" colspan="3"|Data |- !align="left" valign="top"|Water coverage (broad definition) |valign="top"| 87% |- !align="left" valign="top"|Sanitation coverage (broad definition) |valign="top"| 71% |- !align="left" valign="top"|Continuity of supply (%) |valign="top"| n/a |- !align="left" valign="top"|Average urban water use (l/c/d) |valign="top"| 230 |- !align="left" valign="top"|Average urban water tariff (US$/m3) |valign="top"| n/a |- !align="left" valign="top"|Share of household metering |valign="top"| 14% (2001) |- !align="left" valign="top"|Share of collected wastewater treated |valign="top"| 14% (2003) |- !align="left" valign="top"|Annual investment in WSS |valign="top"| US$ 5/capita (1997-2001) |- !align="left" valign="top"|Share of self-financing by utilities |valign="top"| very low or nil |- !align="left" valign="top"|Share of tax-financing |valign="top"| high |- !align="left" valign="top"|Share of external financing |valign="top"| low |- !align="center" bgcolor="lightblue" colspan="3"|Institutions |- !align="left" valign="top"|Decentralization to municipalities |valign="top"| Partial |- !align="left" valign="top"|National water and sanitation company |valign="top"| Yes (Holding company) |- !align="left" valign="top"|Water and sanitation regulator |valign="top"| De iure yes, de facto no |- !align="left" valign="top"|Responsibility for policy setting |valign="top"| Ministry of Environment and Natural Resources |- !align="left" valign="top"|Sector law |valign="top"| Yes (2001) |- !align="left" valign="top"|Number of urban service providers |valign="top"| 20 |- !align="left" valign="top"|Number of rural service providers |valign="top"| n/a |- |}

Water supply and sanitation in Venezuela has been extended to an increasing number of people during the 2000s, although many poor remain without access to piped water. Service quality for those with access is mixed, with water often being supplied only on an intermittent basis and most wastewater not being treated. Non-revenue water is estimated to be high at 62%, compared to the regional average of 40%. Tap water is relatively inexpensive, because of a national tariff freeze imposed in 2003 and a policy not to recover capital costs. Investments are financed primarily by the national government, with little reliance on external financing. The sector remains centralized despite a decentralization process initiated in the 1990s that has now been stalled. Within the executive, sector policies are determined by the Ministry of Environment. The national water company HIDROVEN serves about 80% of the population. The remainder is being served by five state water companies, the Corporacion Venezolana de Guayana (CVG), a few municipalities and community-based organizations. Since the early 2000s the government encouraged the creation of about 1,500 Mesas Tecnicas del Agua, which have both a technical function and a political mobilization function. Major investment projects include the restoration of the polluted Valencia Lake and of the [[:es:Rio Guaire|Guaire river basin]] in Caracas (2005-2013).


According to the Ministry of Environment, access to water supply and sanitation has reached 93% in 2008, meaning that Venezuela achieved the UN Millennimum Development Goals for water and sanitation. It is not clear if these figures are based on any census or survey data. The website of the National Institute of Statistics has no figures on access to water and sanitation.

Older figures are much lower and differ depending on the source of information. The WHO/UNICEF Joint Monitoring Program's most recent estimates are from 1998 and show that 87% of citizens had access to potable water and 71% had access to sanitation. A study for the Corporacion Andina de Fomento (CAF), however, estimates based on figures from the 2001 census and HIDROVEN statistics that only 82% of the population had access to an improved source of water in 2001. The same source also quotes a lower coverage figure for sanitation than the WHO (66% vs. 71%). According to the same study over 4.2 million people had no access to piped water and 8 million residents did not have access to adequate sanitary facilities in 2001. Rural consumers are particularly under-serviced only 66% receive potable water and 40% have access to adequate sanitation. In the period 1990-2001 the share of population with access to water supply and sanitation modestly increased from 81% to 82% for water, and 63% to 66% for sanitation.

Source: WHO/UNICEF Joint Monitoring Programme . Data for water and sanitation based on the Global Water Supply and Sanitation Assessment (2000).

Service quality

In 2001, the Instituto Nacional de Estadisticas (INE) conducted a study of the quality of water and sanitation services in the country's 335 municipalities and determined that 231 municipalities, approximately 70%, received insufficient water and sanitation services.

In 2003 about 14% of collected wastewater was treated.

Water supply is not uniformly continuous and often fails to meet basic drinking water quality standards. As a result many consumers are forced to use alternative and more expensive water sources. For example, it is common in the urban barrios in central Venezuela for poor consumers to pay the equivalent of approximately US$1.90 m3 much more than the tariff for water from the network for water purchased from a tanker.

Water use

While there are no reliable figures on water use in Venezuela given the low coverage of metering, it has been estimated that average residential water use is about 230 liter/capita/day, compared to 143 l/c/d in Brazil and 259 l/c/d in Peru.

History and recent developments

Before 1991 a national sate-owned enterprise, the Instituto Nacional de Obras Sanitarias (INOS), was in charge of providing water and sanitation services in Venezuela.

First phase of decentralization (1991-2001)

When INOS was dissolved under the Presidency of Carlos Andres Perez the intent was to decentralize service provision to the municipalities that already had the legal responsibility for service provision. However, because of the lack of capacity and resources of most municipalities, service provision in 20 out of the 23 states was temporarily entrusted to the ten regional water companies under the holding company HIDROVEN (see above). In the remaining three states services were provided by the Corporacion Venezolana de Guayana (CVG).The Perez government also launched a bid for a private concession for the water and sanitation system of Caracas in 1992. However, the bid failed for lack of interested bidders under the proposed conditions.

Beginning in 1993 some states began to play a more active role in the sector. Until 1999 five decentralized water companies were created with a strong presence of the state governments (see above under service provision). This process began in Monagas in 1993 with support from the World Bank. Some of them also signed management contracts with private operators, which led to an improvement in the performance of the water and sanitation companies.

Between 1994 and 2001 water tariffs throughout the country were increased substantially, so that the ratio of cost recovery to operating costs increased from 27% to 87%. Such a substantial real tariff increase, which apparently did not cause political turmoil, is unusual in developing countries. However, the increase in tariffs was not paralleled by improvement in services. According to the IDB sector performance even deteriorated in this period.

The decentralization process remained very slow. Some municipalities refused to receive the service responsibility unless systems would be modernized, but a mechanism to finance the necessary investments was lacking. About 80% of the population thus continued to be served by HIDROVEN and its subsidiaries, and the slowness of the decentralization process consolidated institutions that were meant to be only temporary.

New sector law and second phase of decentralization (since 2001)

In December 2001 the Government of Hugo Chavez passed a new Water and Sanitation Law (Ley Organica para la Prestacion de los Servicios de Agua Potable y Saneamiento). This law was not passed by Parliament. Instead, together with 45 other laws it was passed by the Executive based on an Enabling Act that temporarily gave the President powers to enact laws and bypass Parliament.

The law aimed at reforming the institutional structure of the sector through:

the actual transfer of the responsibility for service provision to the municipalities through the creation of decentralized service providers - Business Units or Unidades de Gestion (UGs) each of which would serve several municipalities;

the creation of a regulatory agency (Superintendencia Nacional de los Servicios de Agua Potable y de Saneamiento - SUNSAPS), to oversee the implementation of the Law, regulate tariffs and subsidies, and develop a monitoring system for the sector;

the establishment of a policy making and financing body for the sector , whose primary responsibilities would be the management of a funding mechanism for targeted sector investments, policy formulation and facilitation of the provision of technical assistance to decentralized service providers including guidance on the establishment of decentralized service providers;

the creation of a national bulk water company to operate and expand regional water infrastructure; and

the establishment of a sector financing fund to channel public resources to the sector under a consistent policy framework.

According to the law HIDROVEN had to complete the transfer within no more than five years from the publication of the law, i.e. until December 2006. However, the transfer has been very slow and the deadline has not been met. Only in a few regions the decentralization to municipalities has advanced, notably in the State of Guarico where HIDROPAEZ, one of the regional utilities under the umbrella of HIDROVEN, is in the process of being replaced by five business units. The Government has also completed studies on the formation of business units in the states of Cojedes, Carabobo and Aragua.

Furthermore, the national institutions foreseen by the law so far have not been created. The Ministry of Environment and HIDROVEN thus continue to undertake the national-level functions that the 2001 law had assigned to the new institutions.

In February 2003 tariffs were frozen at the national level through an executive decree. This is in direct contradiction with the 2001 law that stipulates the principle of cost recovery and assigns the responsibility to set tariffs to the municipalities.

Responsibility for water supply and sanitation

Policy and regulation

The Ministry of Environment and Natural Resources is in charge of setting water and sanitation policies in Venezuela, in line with overall government policies. There is a Vice-ministry of Water within the Ministry and as of August 2007 the Vice-Minister was Cristobal Francisco Ortiz. HIDROVEN is under the authority of this Ministry. The Ministry of Industry and Commerce sets maximum allowable tariffs in the sector.

Service provision

Water and sanitation services in Venezuela are provided by the national water company HIDROVEN, five state water companies, the Corporacion Venezolana de Guayana (CVG), a few municipalities and community-based organizations.

According to the Municipal Law (Ley Organica de Regimen Municipal) service provision is a responsibility of the country's 335 municipalities, which own the water and sanitation infrastructure and in principle also set water and sanitation tariffs. However, in practice only few municipalities have the capacity and resources to fulfill these responsibilities.


In practice service provision in most urban areas of Venezuela is the responsibility of one of ten regional utilities affiliated with the Compania Anonima Hidrologica de Venezuela (HIDROVEN), a state-owned enterprise. Each regional utility covers between one and three of the countrys 23 states. The geographical coverage or the 10 regional utilities does not correspond to the country's nine regions. The responsibility for setting tariffs within the maximum levels set by the national government is shared between the regional companies and the municipalities.

Some of the bulk water supply infrastructure which provides water to municipal and state water companies is owned directly by HIDROVEN and its affiliated regional companies.

Corporacion Venezolana de Guayana

In the region of Guayana, covering the states of Bolivar, Amazonas and Delta Amacuro, water and sanitation services in urban areas are provided by the Corporacion Venezolana de Guayana (CVG), a conglomerate with its main activities in mining.

State water companies

There are also five decentralized water companies at the state level:

Aguas de Monagas,


Aguas de Merida,

Aguas de Portuguesa, and

Aguas de Yaracuy.

The population of these five states is almost 20% of the country's total population.


In some municipalities services are provided through municipal utilities, such as in Aguas de Anaco in Anzoategui state, Aguas de Capitanejo and Aguas de Zamora in Barinas state, Aguas de Ejido in Merida state, and Sucre in Miranda state.

Community-based organizations

Rural water systems are managed by community-based organization, including some cooperatives. In 2003 there were also 20 urban cooperatives that provided water services at the neighborhood level. The Chavez government encourages such "community experiences", which also include so-called "technical water tables" (Mesas Tecnicas de Agua). These are associations involved in monitoring neighborhood-level segments of water supply and sanitation networks, including the identification and reduction of leakage and illegal connections. In 2003 there were about 1,500 such technical water tables in Venezuela.

Economic efficiency

Non-revenue water stood at 62% in 2000, far above the regional average of 40% and higher than its historical level of 55% in 1996 and 59% in 1997. HIDROVEN suggests illegal connections are a major contributor to poor non-revenue water performance in the country. An inadequate record maintenance and rehabilitation likely also contributes to high losses.

Financial aspects

Tariffs and cost recovery

Revenues usually are not sufficient to meet operating costs - the ratio of revenue to operating costs was estimated at 86% in 2002. This was a substantial increase compared to 27% in 1994, 65% in 1997 and 75% in 2000, despite high levels of inflation. Tariff levels vary substantially within Venezuela by a factor of almost 1:10 between regional companies, reflecting differences in the cost of service provision. The highest tariffs are found in Caracas and the lowest in Aguas de Yaracuy and Llanos. Billing and collection performance is also inadequate as total sector collection in 2003 amounted for merely 73% of the total billing. In 1998 this coefficient stood at only 62%. In individual companies the ratio varied greatly between 26% in Yaracuy and 80% in Merida. Metering coverage was estimated at a national average of 14% 2001. As mentioned above, tariffs were frozen in February 2003 at the national level, leading to tariff declines in real value because of inflation.


Historical investment levels There are no recent data on the level of investments in the sector. In the five years between 1997 and 2001 Venezuela invested US$ 637 million in water and sanitation, or about US$ 127 million annually on average. Investment in the sector has historically been volatile. For example, annual investments fluctuated in the 1986-1998 period between less than US$100 million (in 1989) and US$400 million (in 1992). To a large extent investment levels mirror fluctuation in oil prices. Investment levels declined from 1986-1989 when oil prices were very low. Investments sky-rocketed in 1992 after oil prices had increased. Then they plummeted again when oil prices decreased during the remainder of the 1990s. The volatility in sector financing has made it difficult to initiate a sustainable medium-term investment program needed to rehabilitate infrastructure and extend access to services.

Planned investment levels In 2002 the Government adopted an ambitious six-year investment plan for the sector. Under that Plan by the end of 2007 access to potable water and sanitation should both reach 99%, non-revenue water should be reduced to 45%, collection efficiency should increase to 95% and the share of treated wastewater should reach 30%. The plan estimates that a total of US$ 4.77 billion will be required between 2003-2015 for the sector, which implies an average annual investment of approximately US$ 500 million, or about four times historic investment levels.


Sources of financing Before the decentralization of the 1990s investments were almost exclusively financed by central government transfers through a number of different programs, including funds borrowed from international financial institutions and passed on as grants to the service providers. In 2000-2001 state governments and municipalities financed almost half of total investments of US$120m and US$190m respectively. The capital market makes no contribution to sector financing.

Procedures for Investment Financing The 2001 sector law calls for the creation of a Financial Assistance Fund (Fondo de Asistencia Financiera - FAF) to be administered by a new entity called ONDESAPS which would coordinate and target investments in the sector (see section on the new sector law above). Until 2007 neither FAF nor ONDESAPS have been created. Neither investment subsidies nor recurrent subsidies, whether paid by the national government or state governments, are linked to performance improvements.

External support

The lack in the availability of counterpart funds, which the government has to provide as part of their obligations to execute projects financed by multilateral loans, has paralyzed various large externally financed projects.

Interamerican Development Bank The IDB supports the reform of the water and sanitation sector through a decentralization loan of US$100 million approved in 1998. The loan also aimed at introducing private sector participation, following the model of management contracts in the state of Monagas and Lara.

Andean Development Corporation The Andean Development Corporation (Corporacion Andina de Fomento, CAF supported the water and sanitation sector through various loans, including five loans approved until 2003 for a total of US$292m, of which three for HIDROCAPITAL, the subsidiary of HIDROVEN serving Caracas. In 2004 CAF approved a US$15m loan to improve water and sanitation services in the Peninsula of La Guajira in Zulia state. In 2005 the CAF reassigned US$25m from a non-disbursing water and sanitation sector modernization and rehabilitation loan to environmental projects. At the beginning of 2008, the CAF announced that it has approved a water and sanitaton loan for the Venezuelan states of Amazonas, Anzoategui, Aragua, Bolivar, Cojedes, Delta Amacuro, Sucre and Trujillo. The program is estimated to have a total cost of US$72.3m, of which CAF will finance US$50m, the remainder being financed by local counterpart funds. The program will be executed by Hidroven.

Canadian Development Agency The Canadian Development Agency CIDA finances a sanitation project for Caracas.

External links


Key sources

Corporacion Andina de Fomento (CAF): Venezuela. Analisis del Sector Agua Potable y Saneamiento, Marzo de 2004, written by Maria Elena Corrales CAF Agua y Saneamiento Venezuela Accessed on 10 October 2007

World Health Organization, Evaluation of water and sanitation in the Americas, 2000

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This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article Water supply and sanitation in Venezuela