Improving water, sanitation and hygiene sustainability with life cycle costing
Use our tools to calculate life cycle costs of water, sanitation and hygiene (WASH) services and behaviours in your context, and explore our experiences of applying this method to sustainable WASH programmes across the world.
We recognise that to achieve and sustain universal WASH services and behaviours, a strong system is required. Many blockages exist within systems in different contexts, but one common theme is insufficient understanding of and access to the finance required to operate, maintain and replace WASH services and reinforce hygiene behaviours so they keep working or being practised over time.
As part of our work to strengthen systems, we often collaborate with local authorities and service providers to assess the full costs of keeping services running and hygiene habits reinforced. We support local actors to use this information to plan and advocate increased or more effective use of WASH budgets for more sustainable outcomes at national and sub-national levels. To do this, we undertake participatory life cycle costing assessments (LCCAs).
What is life cycle costing and why do it?
Life cycle costs are the investment needed to sustain WASH services and behaviours indefinitely. They include not only the initial, often one-off, costs of installing new infrastructure or promoting behaviours, but also the short- and long-term costs of maintaining and supporting these services and reinforcing behaviours long into the future. Some examples of life cycle costs include:
- Spare parts for replacing ageing WASH infrastructure
- Local mechanics’ salaries and expenses
- Recurrent technical training of national and sub-national water, sanitation and health staff
- Repeat sanitation and hygiene promotion
- Ongoing monitoring of service performance
- Reforming and retraining WASH committees and other management structures
Although the cost of building new infrastructure is often included in government or other service providers’ plans and budgets, and in NGO or donor-funded projects, other costs that are essential to keep services running and behaviours sustained are often forgotten or only partially covered. This leads to infrastructure not being repaired or replaced in a timely manner and slippage in good hygiene behaviours, meaning WASH gains are quickly lost.
How to ensure life cycle costs are included
There are different ways to ensure maintenance costs are included in WASH plans and budgets. A life cycle costing assessment can help the user to break down the different cost components, understand the lifespan of different infrastructure types and generate a detailed prediction of the costs that need to be budgeted throughout the WASH service life cycle. These costs include capital expenditure, operation expenditure, capital maintenance expenditure and direct and indirect support.
The results of life cycle costing can help to:
- Predict the costs that need to be budgeted for in financing strategies to ensure sustainability.
- Model costs to compare different service options and technologies (e.g. a solar pump would have very different maintenance costs from a manual handpump).
- Generate discussion about which actors are responsible for paying different cost components.
Many utilities have been calculating life cycle costs for years. Life cycle costing began to be more widely used in international development WASH programmes from 2011 with the WASHCost programme, and governments, utilities, NGOs and private sector stakeholders who want to ensure their investments lead to lasting change are now starting to adopt the process.
Our experience of applying life cycle costing
We have promoted and used life cycle costing over the past five years as part of sub-national and national planning and budgeting processes in countries where we work. We take a participatory approach, working with local or national government staff, private sector and community representatives to build shared understanding and consideration (PDF) of costs to ensure sustainable WASH services and behaviours.
Examples of our application of life cycle costing assessments
In 2018 we used LCCA to develop a ten-year sustainable and equitable community water supply plan in Gololcha Woreda, together with local government staff and local utility representatives.
An LCCA informed the Bugesera District investment plan (PDF) for water and sanitation in communities and institutions. We supported a participatory process including an assessment of current service levels, use of national unit costs and future cost components for water and sanitation, in partnership with Agenda for Change.
Kirfi local government developed an investment plan that included a water supply budget informed by a life cycle costing estimation which included the different cost components needed to reach universal and sustainable basic WASH access in the district by 2030.
We have used participatory life cycle costing assessment to support the achievement of Municipal WASH Strategies in Manufahi and Liquiçá Municipalities.
In Manufahi, a participatory assessment determined the costs for municipality-wide WASH in healthcare facilities and, in Liquiçá, the costs of meeting national minimum WASH standards in every school.
Sub-national government and civil society organisations are using per-capita investment needs calculated by the LCCA to advocate adequate and appropriate resource allocations to schools and healthcare facilities.
In Cambodia, decentralisation reform meant district government received new responsibilities for rural water supply. We used a participatory LCCA approach to help rural water actors compare different scenarios for rural water supply service models and the relative cost burden these would place on the district government. The process highlighted potential overlaps and gaps in roles and responsibilities resulting from the incomplete decentralisation reform.
As part of the SusWASH programme, WaterAid Uganda supported schools in Kampala to improve their WASH budgets to include costs for small maintenance and asset replacements to address key sustainability challenges in school WASH latrines and water/handwashing points.
Water system planning for six communes. Publication upcoming.
Tools to support life cycle costing assessment implementation
A number of guides and tools have been developed to support life cycle costing assessment in the WASH sector. While these tools are useful to model different cost predictions, they should always be used as part of a wider participatory budgeting process rather than as standalone tools.
Some examples include IRC-WASH’s costing and budgeting tools developed to support local government and service providers to calculate the costs for planning and budgeting sustainable water services. UNC has developed a methodology to support life cycle costing of WASH in healthcare facilities through a gradual assessment process. Generally, the tools require some contextualisation to ensure they respond to specific context and budgeting needs, such as country-specific WASH standards, understanding of WASH components and their unit costs, and differences in staffing structures and remuneration.
WaterAid tools to support life cycle costing
We have developed tools to support life cycle costing in the contexts where we work. When using these tools, it is important to understand some of the assumptions used and perform any contextualisation needed.
Area-wide life cycle costing calculator
Designed for area-wide water supply life cycle costing assessment (based on both water assets planned and already built). It can also be used to compare costs with financing available. The tool can easily be used to calculate costs of other assets and at different scales, i.e. household-level handpumps through to piped networks that cover multiple communities.
Single water supply infrastructure life cycle costing
Designed to support financial feasibility assessment of a single water supply.
Household sanitation life cycle costing tool
Designed to support district/area-wide costing of household sanitation services and supporting activities.
Healthcare facilities area-wide life cycle costing assessment tool
Designed to support costing of WASH services in all healthcare facilities in a district/area in line with the Joint Monitoring Programme definitions. Publication upcoming.
For further information about these tools and their use, please contact WaterAid’s Programme Support Unit.
Top image: Hanifah Bako, Headteacher at Mirembe Primary School in Kampala, Uganda, presents a top-line life cycle costed WASH budget for the school. February 2019.