I. INTRODUCTION

1. In 2015, the World Bank, under the umbrella of the Danube Water Program, undertook a comprehensive review of the water and wastewater services in 16 countries of the Danube region (Figure 1). These 16 countries represent a great diversity of socioeconomic, development, and geographic realities. They share a joint resource, the Danube; an intertwined history; and a common trajectory toward European integration. The review was captured in a regional report and 16 country notes and was published in May 2015 as A State of the Sector Report (available at https://sos.danubis.org/) and referred to in this report as SoS 2015.

2. SoS 2015, through a country by country sustainability assessment, shows where improvement opportunities exist in terms of access, quality, efficiency, and financing of water supply and sanitation services. The report highlights that despite the overall high level of access to services in the region and focus on wastewater collection and management, around 22.5 million people were without access to piped water on their premises and 28 million lacked flush toilets, out of 135 million people in the region. In 2015, countries globally adopted the 2030 Agenda for Sustainable Development and achievement of the Sustainable Development Goal (SDGs), which set new definitions and targets for achieving better and more sustainable water supply and sanitation services (see Chapter IV). The SDGs for water (SDG 68) raise the standard in targets for water supply and sanitation to “universal and equitable access to safe and affordable drinking water for all (6.1),” to be monitored by the proportion of the population using safely managed drinking water services (located on premises, available when needed, free from contamination) and “adequate and equitable sanitation and hygiene for all …” (not shared with other households, where waste is treated and disposed of in situ or transported and treated off-site, with hand-washing facility in the premises).

3. The State of the Sector Report 2018 update (SoS 2018) presents the state of knowledge on water supply and sanitation (WSS) challenges and opportunities in the Danube region according to the latest available data (from 2015–18) following the same approach and methodology as the SoS 2015, and it identifies trends and sector progress since the 2014–15 review. As in the first edition, the analysis assumes that the delivery of sustainable services depends on four main dimensions: (i) access to properly built and maintained infrastructure; (ii) the quality of services provided (and customer satisfaction with it); (iii) the efficiency and performance of the service providers that operate and maintain the infrastructure and deliver the services; and (iv) financing mechanisms to expand and maintain the operation of the services to all citizens in the long term.

4. In addition, the report brings together results and policy recommendations from other World Bank analytical work carried out in the past three years, as a direct response to the knowledge gaps identified in the first edition. These include a global study on utility aggregation (including case studies from the Danube region) completed under the report Joining Forces for Better Services? When, Why, and How Water and Sanitation Utilities Can Benefit from Working Together (World Bank 2017); a multicountry review on serving those beyond utilities’ reach (namely in rural areas), compiled in Beyond Utility Reach? How to Close the Urban-Rural Access Gap: A Review of Rural Water and Sanitation in Seven Countries of the Danube Region (World Bank 2018a); and a review of the situation of wastewater management in the Danube region under the European Union (EU) sphere of influence, condensed in Is the UWWTD Implementation Delivering Results for the People, the Economy, and the Environment of the Danube Region? A Wastewater Management Assessment Based on the World Bank’s Engagement (World Bank 2018b).
Further, the original Water Utility Performance Index (WUPI) used to analyze the efficiency of service providers in the region has been complemented with key conclusions from a fourth piece of research undertaken under the Danube Water Program (DWP): Econometric Analysis of the Cost-Efficiency of Water Utilities vs Their Cost Efficiency Frontier9 (Mundaca 2019) to quantify potential savings resulting from cost efficiency gains. Finally, given the relevance of theEU accession process for water services, the report presents many of the results separately for EU members, EU candidates (including potential candidates), and non-EU countries.

5. SoS 2018 is organized in a similar way to that of SoS 2015, updating the current sector status and understanding the reasons behind emerging trends. Chapter II focuses on the overall water resources framework and climate change considerations in the studied countries. Chapter III includes a few highlights and updates in the overall context, organization, and governance frameworks in the various countries for service delivery. Chapter IV describes the level of access to WSS services in the region and progress and trends since SoS 2015. Chapter V deals with the performance of service providers—service quality, efficiency, and overall performance— and progress made since SoS 2015. Chapter VI discusses the financing of services. Chapter VII presents conclusions. Several boxes provide additional information on good practices and key concepts. The report includes two appendixes: Appendix A offers a comprehensive, country-by-country list of indicators with updated data since the last review; Appendix B provides methodological details on the main sections of the report. The report includes a comprehensive list of sources for all data and information used throughout the document. Further information is available on the DANUBIS.org water platform, an online repository of resources for and about WSS services in the Danube region. In contrast to SoS 2015, this regional report is not accompanied by a set of 16 country notes given that the updated timeframe is relatively short (three to four years) to see meaningful developments at the country level. It is expected that a future edition of the SoS report at the end of the Danube Water Program’s third phase would include updated country notes that investigate the situation of the broad water sector.

6. This report draws largely from existing public data sources at the national and regional levels, presenting them into a coherent, regional narrative and analysis. In-country data collection (SoS data collection) was coordinated by Austria’s Environmental Agency (UBA), which relied on a team of national experts in each of the countries covered by the report, and where possible was validated with key stakeholders in each country. This report was hence made possible thanks to the effort of more than 30 contributors spread over the entire Danube watershed and beyond and builds largely on publicly available data and the collective work of many institutions in the region, including line ministries, regulatory authorities, and national waterworks associations. Other data sources include publicly available household survey data in each country, the World Bank World Development Indicators (WDI) and the World Health Organization/United Nations Children’s Fund (WHO/UNICEF) Joint Monitoring Programme (JMP), the European Environment Agency (EEA) Water Information System for Europe (WISE), the EU EUROSTAT, the Food and Agriculture Organization (FAO) AQUASTAT, and the International Benchmarking Network for Water and Sanitation Utilities (IBNET) DANUBIS.org database. Notwithstanding the efforts and care to ensure consistency and accuracy of the data and information and to seek their validation, the report includes assumptions and information by sector professionals, which could mean some deviation from official statistics. These or any of the data and information provided could be questioned, because the quality of information systems varies significantly among the countries. The team therefore welcomes comments and corrections and remains available for clarification of data sources and assumptions made.

7. Given the limits of the data and analysis, policy makers and stakeholders should use these conclusions as a broader framework to critically examine what specific recommendations could be derived for their context. Although every effort has been made to validate the information presented, an exercise involving 16 countries and hundreds of sources of information is inherently challenging. There are information gaps, and only limited times series, and the quality of information is better in some countries than in others. Some of the data sources might not be fully comparable. Specifically, the World Health Organization/Joint Monitoring Program (WHO/JMP) data on access goes as far back as 2015, and the utility data available for the different countries are not always comprehensive. National averages sometimes mask the significant heterogeneity within a country.

8. The main aim of the report is to continue supporting an informed dialogue around the sector’s challenges and progress since the SoS 2015, as well as around emerging trends and possible reasons behind them. The methods of analysis include horizontal comparisons among countries at a given point in time and identification of trends within different groups of countries or regions over data from SoS 2015 to 2018. The aim of this report is not to provide a definitive or comprehensive set of policy recommendations applicable across the board, but rather to provide policy makers and other national sector stakeholders with solid information on current sector status, and well as on policy options arising from the analysis of recent progress and evidence from the World Bank’s recent research on specific areas that the countries could adopt to address sector challenges and opportunities.