Institutional issues of water resources management at national level

National water management structures

In the early 1990s, the former common water management system was scrapped, and various attempts were made to transform it, depending on the specifics of national economic development, preferred models of transition to a market economy, as well as the specific political and social processes in each Central Asian country.

In Kazakhstan, the transition from centralized planning to a market-based economy took a relatively short time. The reform led to the privatization of nearly all basic industries, the complete denationalization of agriculture and the reorganization of the State management system. Ministries and departments are focused on strategic and emerging issues, with economic functions moved to the level of economic entities.

Economic reform is a long-term undertaking and Kazakhstan is currently undergoing transition with the inevitable cutbacks in State funding for social and economic infrastructure that makes it insufficient for the new economic conditions. The same is true with respect to the water sector administered by the Committee for Water Resources of the Ministry of Natural Resources and Environmental Protection.

Water resource management is based on river basin as well as administrative-territorial principles. Under the Committee’s auspices, there are eight basin directorates (BVU) corresponding to the number of main river basins. BVUs are government agencies and, as such, are funded by the State budget.

Maintenance and operation of water management facilities and installations are the responsibility of public water management enterprises (RGP) that operate in each region and are part of the above-mentioned Committee. The economic activities of RGPs are funded by the water users. All water management systems and facilities under the RGP belong to the State. Maintenance and repair of facilities of inter-State and district significance is partly funded from the central budget through contracts commissioned by the State.

During the current transition period, the water sector finds itself in a difficult situation as users lack funds to pay for supply, while budget allocations are not enough to finance operation, repair and restoration. As a result, most facilities and engineering works continue deteriorating, and their operational reliability is decreasing.

Measures to break the deadlock should promote user involvement in maintaining the economic infrastructure. Organizationally, user associations would assume functions that used to belong to public-run networks which, however, are no longer able to exercise them at the level of districts or large water management systems. While such associations are being set up all over Kazakhstan, many organizational issues remain unresolved due to an inadequate legal framework. There is also a need for effective public financial support of supply networks and large water management systems, as well as for domestic and external investment in upgrading and refitting the engineering works of the water management infrastructure.

Kyrgyzstan has been more cautious in its water management reform, with market transition accompanied by a measure of public support in the maintenance and rehabilitation of district and regional networks. The former Ministry of Water Management has been merged with the Ministry of Agriculture to form the Ministry of Agriculture, Water Management and Processing Industry, with most water management functions exercised by its Department of Water Management. It has also assumed direct control of irrigation farming, which has led to certain legal problems over water use. Some management functions have also gone to such public agencies as the Ministry of Ecology and Emergencies , national agencies for energy, geology and mineral resources, etc. Certain reforms have taken place at lower administrative levels, where the assets have been divided between the State and municipal authorities, and individual economic entities. Basin directorates have been set up but they exercise purely administrative control within their respectives regions. In the future, the State intends to retain its ownership and control over all strategic assets– dams, reservoirs, hydroelectric power stations, main canals, etc. At the same time, it plans to denationalize water management systems by setting up new corporations. Guidelines have been adopted for the privatization of both large and small hydroelectric power stations. Steps are taken to prepare municipal water supply and sewage treatment for privatization, with their operation, maintenance and support transferred to the private sector. While many issues relating to the legal status of water user associations have finally been resolved through domestic laws, their establishment has slowed down. The Kyrgyz report notes a number of administrative drawbacks, including poor coordination of cooperating water-consuming sectors and the lack of clarity in the separation of functions and powers between administrative agencies. Plans exist for a new water code, , which is supposed to settle the organizational and legal wrangles in the water management sector. The Government has the additional responsibility for carrying out the administrative reform that would have water management operators withdraw from the combined Ministry.

In Tajikistan, water resource control and management functions are divided between different agencies, with the Ministry of Water Management being the main agency. The country has chosen the path of gradual conversion of collective and State farms to private farms and other market-based structures. Tajikistan has abolished State orders in agriculture and other industries, eliminated price controls, and supports small-and medium-size businesses. Water user associations have emerged to assume control over the operation of intra-farm irrigation systems. The Water Code adopted in 2000 gives priority to economic mechanisms to regulate water use.

A national medium-term Programme that is supposed to lead agro-industry out of its crisis contains guidelines for its development until 2005, including measures to rehabilitate capital assets, restructure agriculture and ensure food security despite the current shortage of arable land (about 0.1 hectare per capita). In this context, all problems relating to agricultural reform are considered in conjunction with land and water management reform, with priority given to overcoming poverty, especially in rural areas. Water relations in the country are regulated by water use licences and charges for water supply. No legal framework is yet in place to settle water management rights, especially the rights of domestic and foreign legal persons to operate irrigation systems.

Tajikistan is considering the benefits of the hydrographic (basin) principle of management, with respect to inter-sectoral interests and the privatization of enterprises in various water-using sectors. Economic development programmes focus on expanding hydropower facilities, including the construction of the Rogun hydropower station on the Vakhsh and Dashtidzhum station on the Pyandj, whose water reservoirs would improve water use efficiency not only in the country itself but also across the region.

Turkmenistan has a unique approach to water as a public and social resource, with its water management structure dominated by a single administrative body -the Ministry for Water Management whose powers are similar to those in the USSR period. The State has retained control over centralized and municipal management of water resources in all economic sectors, including irrigation, water supply and hydropower generation. Water, electricity and gas supply are free, and so is irrigation. Consumers pay only for consumption in excess of quotas established by the State, as a penalty for the inefficient use of natural resources. In the irrigation farm sector there are possibilities for privatization through concessions, where users commit, for example, to fulfilling State-fixed production targets for certain crops, while having full discretion to sell their output produced over and above the target. In the water supply sector, opportunities exist for setting up private water supply and sewage treatment services. This is also a possibility in the energy sector.

Like in other economic sectors, Uzbekistan proceeds cautiously with its market reform of the water sector, and maintains the practice of quite extensive budget allocations, which however, are not enough to maintain the enormous inherited fixed capital capacity. However, the situation is different between water supply, irrigation and hydropower generation sectors. In water supply, the function of maintenance is generally delegated to cooperative entities and joint-stock companies. In hydropower generation, State control is as firm as ever, except for small hydropower stations, which the Government would like to privatize and develop through public investment. A decision has been taken to restructure the energy sector, dividing it into generation and transmission components. The most critical problems have emerged in irrigation farming. In addition to water user associations already set up at the lowest administrative level, plans exist to start establishing water user federations that will assume responsibility for water supply along with the operation and maintenance of networks at the level of former State and collective farms. In some cases, the functions of water user associations would merge with those of private district-level enterprises, or the associations themselves would outsource services on the basis of trustee contracts. As in Turkmenistan, concessions may be granted to private companies for the use of irrigated land.

Great attention is given to the future transition to the basin-based and system management of water resources (with direct subordination of relevant bodies to the national administration), water user involvement in these processes, and the introduction of integrated management principles that are in accordance with the French or Spanish models.

Although the national reports under the SPECA project present differing views of the existing situation and propose specific approaches to the organization of management, one should note several common drawbacks of the organizational structure in the water sector and irrigation farming:

• The water sector in its present form primarily represents the interests of agriculture rather than all economic sectors.
• The water management organization should be modernized in order to equally represent the interests of irrigation, hydropower generation and other sectors, observe the priority of drinking water supply, water conservation, etc., provide for equality of rights and responsibility for all water users.
• In all stages from the initiation of all water management projects to their implementation, decisions are taken only by State agencies without any involvement of water users. This often results in situations where the cost of maintenance of water management systems and facilities transferred to the control of water users cannot be covered by profits from their operation.
• The policy of transferring a maximum share of costs of the operation and maintenance of the irrigation network to water users without appropriate public support complicates the resolution of issues related to development, restoration and modernization of the irrigation systems. The standard depreciation period has expired for most systems, yet in current circumstances the problem of renovating them has to be addressed by the water users, who often do not feel responsible for this work, whereas State agencies avoid involvement in these problems, referring to restricted budget funds.
• Legislatively and financially, the matters of distribution of responsibility between the water users and the State budget remain unspecified in all the countries. The prevailing view is that the government should not assume the growing financial burden, yet this ignores the fact that reduced efficiency of irrigation and conservation of water may result in declining agricultural productivity, as well as social losses. This represents serious risks in terms of reduced national income and tax payments, and even potentially increased social tensions.
• The establishment of associations of water users and the identification of optimal forms of their activities are two of the most essential measures for improving the efficiency of water use at the former intra-farm level.

Institutional issues at the national level

In Kazakhstan, water management and water use have until recently been determined primarily by economic interests, without taking into account the social and environmental impact of extensive water use. The existing organizational structure of water management failed to address the problems of water conservation, which resulted in its intensified depletion and aggravation of the environmental situation. Budgetary funding of water management facilities maintenance and centralized allocation of capital investment in the development of the water sector gave rise to the perception that water resources are free of charge, and distorted their economic significance.

The strategic objective of national water policy would, therefore, consist in implementing integrated long-term measures to overcome the adverse impact of the limited resource base and establish conditions for economic growth, and social and environmental improvements.

The main principles of the water policy include the basin approach to the management of water use, reduced abstraction of freshwater and pollutant discharges to natural water sources as well as economic regulation of water use based on a balanced tariff system.

The multi-purpose nature of water use coupled with its shortage makes it necessary to establish priorities. Priority should be given to satisfying the demand of the population for drinking water, reserving groundwater for this purpose. An adequate structure of the water sector corresponding to each management level is needed to address these problems.

The river basins are regarded as the structural basis for the State water resource management bodies. This principle is based on the integral nature of these resources and multiplicity of their use.

The separation of the functions for water resource management and the mechanism for their regulation and integrated use makes it possible to take into consideration the interests of water users both within the entire watershed and in a specific area, and to take efficient measures to protect the watershed waters from depletion. The basin principle is implemented through the basin-territorial structure of the water management bodies.

In Kyrgyzstan, the reform of the water management bodies is at present a pressing problem.The objectives of the reform are to:

• Reduce the administrative staff and the share of budget funding allocated for its maintenance;
• Improving the coordination among State administration bodies by eliminating parallel functions, separating their rights and responsibilities and improving the execution of their control and administrative functions;
• Transfer part of the administrative functions to water users associations, especially in the sectors of irrigation farming and rural water supply.

It is considered feasible to separate the functions of control and administration between the two basic administrative bodies – of water management and environmental protection – by legislatively regulating the separation of functions and authority among them. Participation of other ministries and departments in the management of the water resources should be restricted to performing specific functions.

By 2010, the functions of operation and technical maintenance of the privatized water management systems should be transferred to economic entities, water user associations and municipal bodies. At the same time, the State bodies should retain control of strategically important water management facilities also in the longer term.

To ensure equal rights of the population and water users in all economic sectors, it is proposed to separate the water management bodies from the Ministry of Agriculture, Water and Processing Industry and establish a specialized department in the structure of the executive authorities. In doing this, it is necessary to separate the functions of administration and control within this department, detaching them from economic activities. It would also be feasible to entrust this department with managing the State-owned shares in the privatized irrigation systems.

The water management hierarchy should envisage the preservation of the national and watershed administration levels in the future. In the long term, the district level of administration in the irrigation sector may be abolished due to the transfer of operation and technical maintenance functions to water user associations or independent (privatized) water management enterprises, and control and administrative functions to water inspections and watershed directorates, respectively. Economic entities should be ensured the right to independently establish the administration structure of the water management systems belonging to them.

In Tajikistan, the core of the organizational structure of the water sector is the operational hierarchy, from the Ministry of Water Management through regional bodies down to district directorates and end-users – the collective and State farms that have been mostly preserved and that have individual farms being set up on part of their land.

One of the major organizational problems is the need to resume the development of arrangements for the integrated use and protection of water resources. This work has been stopped for over a decade, whereas the former arrangements have lost their relevance due to the changed political and economic conditions.

The establishment of a modern information system is an important organizational link in the system of implementing a common State policy in water use. At present, Tajikistan is still lacking funds for this, and everything is based on extremely obsolete technologies and inadequate techniques. In addition to training specialists at higher educational institutions, it will be necessary to set up a network of training and demonstration centres in all climatic zones of the country. The fundamental issue is to train the teaching staff at higher and secondary educational institutions that would be capable of training market-oriented specialists.

Organizing water use and operation at the intra-farm level is a matter of special concern. The current transformation of collective and State farms and other State agricultural enterprises into individual farms results in the entire intra-farm irrigation system being practically abandoned and deprived of financial support. This is why Tajikistan focuses on the establishment of water user associations that would collectively engage in the operation of intra-farm systems and organize water use management on a semi-autonomous, decentralized basis.

Thus, the national legislation in all Central Asian countries envisages the restructuring of water management. The corresponding institutional reforms are gradually taking place, even though their pace may be different. To date, however, no harmonious collaboration of ministries, departments and municipal bodies regulating various aspects of water relations has been achieved. Water user association that are not yet strong enough organizationally and economically are not able to be actively involved in water resource management. All these factors hamper the application of the principle of integrated water resource management supported by legislation and organizational structures.