Audit of the operation and maintenance of USAID/Egypt water and wastewater projects

Since 1977, USAID/E has spent about $1.6 billion on 9 projects to improve water and wastewater services in Egypt"s urban areas. When USAID/E began its investment in the water and wastewater sector, the Government of Egypt (GOE) had been unable to finance any major infrastructure improvements for more than 20 years. Sewage flooding was common in Alexandria and Cairo, and water and wastewater facilities in cities on the Suez Canal had been destroyed in the wars between Egypt and Israel. Accordingly, USAID/E"s initial focus was on improving infrastructure -- water and sewer lines, pump stations, and treatment plants. In more recent years, concern has increasingly focused on whether the GOE can operate and maintain these facilities over the long-term. USAID funds were used for construction, supplies and equipment, and professional services. The USAID-financed facilities examined were performing the function they were designed to perform, except that 6 of 28 pump stations examined could not be operated automatically. (The pump stations could still be operated manually). USAID/E followed Section 611(e) of the Foreign Assistance Act and, in most respects, followed USAID policies and procedures to ensure that host governments can operate and maintain infrastructure projects. In its efforts to strengthen the Government of Egypt"s capability to operate and maintain water and wastewater projects, USAID/E took many actions that went beyond normal requirements. The facilities visited were operating at or near capacity and were meeting water and effluent quality standards. However, in some instances, the Government of Egypt did not follow good maintenance practices and failed to make needed institutional arrangements to ensure satisfactory operation and maintenance over the long-term. The report recommends that USAID/E arrange for additional assistance and oversight services for some of the water and wastewater organizations that are operating and maintaining USAID-financed facilities and clarify certain covenants in its existing project agreements. USAID/E was in general agreement with the findings and recommendations in the report. All of the recommendations have been resolved. (Author abstract)