The cost of urban sanitation solutions: a literature review

The main objective of this paper is to review the literature on and compare the lifecycle costs of full sanitation chain systems in developing cities of Africa and Asia. Overall, financial cost reporting methodologies have been inconsistent and many studies only focus on capital costs or do not report cost data on desludging, transport and treatment. In addition, a comparative analysis of raw cost data across cities and countries would be of low utility, owing to the numerous determinants of costs (e.g. density, level of service) and their high sensitivity to local contexts. To circumvent this, this paper compares the cost ratios between different sanitation systems analysed in a same study. It concludes that conventional sewer systems are in most cases the most expensive sanitation options, followed, in order of cost, by sanitation systems comprising septic tanks, ventilated improved pit latrines (VIP), urine diversion dry toilets and pour-flush pit latrines. The cost of simplified sewer systems is found to be lower than both conventional sewer systems and septic tank-based systems, but lack of data prevented further comparisons with other types of sanitation solutions. This is an Open Access article distributed under the terms of the Creative Commons Attribution Licence (CC BY 4.0), which permits copying, adaptation and redistribution, provided the original work is properly cited (http://creativecommons.org/licenses/by/4.0/). doi: 10.2166/washdev.2017.058 om https://iwaponline.com/washdev/article-pdf/8/2/176/224240/washdev0080176.pdf er 2019 Loïc Daudey Agence Française de Développement/French Agency for Development (AFD), 5 Rue Roland Barthes, 75 598 Paris Cedex 12, France E-mail: loic.daudey@gmail.com

facilities that can all deliver access to improved sanitation. In addition, a range of treatment options can be associated with each type of on-site sanitation technology. In this perspective, stakeholders involved in the implementation of sanitation projects will need guidance on the different characteristics of each sanitation option, such as their respective costs and benefits.

Objectives of the literature review
The main objective of this paper is to review the literature on the financial costs of urban sanitation solutions. While global cost estimates of reaching sanitation SDGs have been produced, these are mostly based on the assumption that a certain type of sanitation solutione.g. improved latrineswould be selected to meet basic sanitation targets, without differentiating between and comparing the multiple types of sanitation options available. It is estimated that providing universal access to safe, equitable drinking water, sanitation and hygiene (SDGs 6.1 and 6.2) will cost USD 114 billion annually until 2030, including USD 19.5 billion for basic sanitation and USD 49 billion for safe faecal sludge management (FSM) (Hutton & Varughese ). The global scope of such studies also make them unfit for use in specific local contexts. In parallel, financial cost data on specific sanitation systems seem much weaker and inconsistent.
Robust knowledge on the financial cost of urban sanitation options would help ensure sustainable management of sanitation project finance. This is all the more important given that financial resources for sanitation projects tend to be low in developing countries (WaterAid ; UN-GLAAS ). Similarly, being able to anticipate the full economic costs of sanitation projects would help avoid project failure.
Such knowledge would be of high utility to three groups of stakeholders, in particular: (1) service providers (governments, utilities) managing urban sanitation systems and bearing at least part of the cost of such systems; (2) users (e.g. households) and those who represent their interest, such as community-based organisations and politicians • to identify the most useful research articles and project reports published to date on this subject, both in terms of methodology and in terms of cost data; • to review the main approaches adopted by the literature and methodological issues in the calculation of sanitation costs; • to identify the main categories of financial cost determinants. The objective is to get a clear understanding of what parameters affect financial costs; • to identify the main research and data gaps in terms of urban sanitation costs; • finally, to review the findings of the relevant literature on who bears the cost of sanitation systems, and identify potential differences across sanitation options.
This paper does not analyse the economic cost of urban sanitation systems, which would imply a broader, macroeconomic approach, including and monetising non-financial expenditures such as the opportunity cost for public authorities of building a new urban sanitation technology instead of using the same funds to support a different project or policy.

Structure of the literature review
The contents of this review are divided into four sections.
The next section presents the methodology used to review the literature on financial costs of urban sanitation systems, followed by a section covering the main qualitative findings, including an overview of the main publications on this subject and the main methodological issues and obstacles to the calculation of lifecycle costs of urban sanitation chains.
The following section presents the results of the analysis of financial cost data, including direct findings from the most relevant studies published to date and original quantitative analyses undertaken for the purpose of this paper. It also rapidly reviews the main findings of major studies looking at cost-benefits and cost-effectiveness of different sanitation options. The final section provides a summary of findings and elaborates on steps ahead to enhance knowledge on the financial costs of urban sanitation systems.

METHODOLOGY
The analysis is framed by a focus on lifecycle costs and on the full sanitation chain. According to the International Water and Sanitation Centre (IRC), lifecycle costs 'include the construction and maintenance of systems in the short and longer term, taking into account the need for hardware and software, operation and maintenance (O&M), capital maintenance, the cost of capital, source protection, and the need for direct and indirect support' (Fonseca et al. ; McIntyre et al. ). A sanitation chain typically comprises four elements: on-site facilities (e.g. toilet connected to piped sewer systems, septic tank, pit latrine, etc.); extraction and conveyance (through sewer pipes for sewerage systems, or manual transport for faecal sludge management system); treatment (typically at a wastewater treatment site or plant); and reuse (e.g. fertilisers) or disposal. Figure 1 illustrates the four components of the sanitation chain, depending on the main type of sanitation option. This literature review will mainly cover cost data on the sanitation chain related to human excreta management. The objective of covering both lifecycle costs and the full sanitation chain is to capture the full economic costs of urban sanitation options, and thereby maximise the utility of cost estimates to service providers, consumers and donors.      • Some studies only report one or two types of cost, and • In many cases, cost data provided do not specify sanitation options clearly enough. For instance, Ross et al.
() provide cost data on faecal sludge management systems without distinguishing between those using pit latrines and those using septic tanks as on-site facilities. Generally speaking, existing cost studies have been limited by the lack of robust and accurate cost data, in particular those aiming to estimate regional and global costs and not focusing on a specific sanitation project. The lack of unit cost data by country, in particular, is often described as a limit by the authors of such studies. For instance, Hutton () grounds its cost-benefits and cost-effectiveness analyses of urban sanitation options on unit cost data but these are not available in every country.
To circumvent this problem, the author filled the gap by replicating unit cost data of neighbouring countries.
The lack of data is partly due to the absence of efforts at the national level to report sanitation costs thoroughly, but it also owes to the absence of proper urban sanitation systems in developing countries. Many cities indeed lack integrated

The interest of comparisons across studies is limited by the numerous determinants of costs
The inconsistent methodologies and lack of data observed in the literature on the costs of urban sanitation significantly limit opportunities to compare lifecycle costs across studies, hence the need to shortlist studies with the most thorough cost data reporting. However, the relevance of comparing cost data between these shortlisted documents remains limited, in particular owing to the numerous determinants of the costs of urban sanitation systems identified through the review and summarised in Table 2.
The existence of many cost determinants complicates the comparison of cost data across projects and across geographical contexts, in particular because they have a high sensitivity to local contexts. The cost of a septic tank-based FSM system may differ significantly from one country to another, in this regard. Burr & Fonseca () also point out that 'even equivalent latrine types vary con-  Labour cost Labour is needed to build and install on-site and treatment facilities, and also to extract and transport sludge in the case of FSM systems. Higher labour costs imply higher overall cost for sanitation systems Material and utility cost Different types of raw materials can be used to build a given sanitation facility. The cost of materials partly depends on their availability. Some studies for instance have pointed out that an identical sanitation component may cost significantly more in Africa than in Asia (or vice-versa) because supply markets are unequally developed. Transport vehicles also need to be purchased to convey sludge to treatment stations Density Density particularly affects the cost of sewerage systems. Higher densities allow reaching a larger number of people and thereby help to reduce cost per capita or per household. The World Bank indicates that 'simplified sewer systems become cheaper than FSM systems at a population density of around 160 people per hectare' a . However, high densities may also make urban areasin particular slumsmore difficult to access, which may increase costs Topography Sanitation systems can be more easily put in place in flat areas. Projects undertaken in undulating urban areas may require more workmanship and time to achieve the same result Level of service provided by the sanitation system Different levels of service can be provided by the same sanitation system. For instance, a pit latrine could be installed for one household or several households, which would be likely to decrease the quality of the service, and also the costs Soil condition Bad soil conditions will require more time and more workmanship to install a sanitation component

ANALYSIS OF URBAN SANITATION COST DATA Methodology
In order to circumvent the aforementioned methodological issues and obstacles to cost data comparison, the quantitative analyses presented in this section focus on a comparison of cost ratios between different urban sanitation systems taken within a same study or report. The objective is to avoid comparing the cost of two or more urban sanitation systems in place in different contextswhich could significantly affect the determinants of costsand to avoid comparative obstacles associated with different reporting methods used across the shortlisted documents (e.g. use of different metrics such as cost per capita, cost per unit, cost ranges, etc.). As previously mentioned, despite being the most thorough research works found in the literature, the lack of clear information on methodologies employed in these selected studies incites the author to adopt a more conservative approach and refer to 'cost ratios' instead of 'lifecycle cost ratios'.
In most cases, calculations were made using the annualised capital and recurrent costs (and other types of costs if specified) directly given in the literature. However, in some documents capital costs are not annualised (since these are one-off investment costs) and therefore no overall cost is given for the entire sanitation system at focus. In these cases (City of Ulaanbaatar • The cost ratio between conventional sewer systems and FSM systems based on septic tanks is not always significant, as it ranges from around 1 (i.e. same cost) to 4.7 (i.e. almost five times more expensive).
• The cost ratio of FSM systems based on septic tanks is found to be systematically higher than wet pit latrines, VIP and UDDT, with cost ratios ranging from 1.9 to 4.9, 1.6 to 2.1, and 1.6, respectively.
• The cost ratio of UDDT to VIP ranges from 0.8 to 1.1 and therefore do not allow a clear hierarchy to be established.
Their separate cost ratios to conventional sewers and FSM systems based on septic tanks are also similar.
Both UDDT and VIP tend to be more expensive than wet pit latrines.
• Not surprisingly, the cost of simplified sewer systems is found to be lower than conventional sewer systems, but it is also found to be cheaper than septic tank-based sys- Amongst the studies reviewed to extract the data presented in Figure 2  (1) The data has been retrieved and analysed from the 11 studies mentioned previously. Although sanitation systems are here indicated by the name of their on-site facility (e.g. septic tank), they nonetheless refer to the full sanitation chain.
(2) A cost ratio above 1 indicates that the first type of sanitation system mentioned is more expensive than the second type of sanitation system mentioned. A cost ratio below 1 indicates the reverse. This threshold is represented by a red line on the graph. For instance, the first category on the horizontal axis shows that conventional sewer systems are between 1.03 and 4.7 times more expensive than decentralised septic tank-based systems.

Another report on sanitation in Senegal and Burkina
Faso also shows that conventional sewers are more expensive than simplified sewerage, VIP and wet latrines; interestingly, it also shows that wet latrines are more expensive than simplified sewerage, as mentioned previously (The World Bank c). The level of service is assumed to be the same for all sanitation systems at study, and is simply defined as a system that covers the full sanitation chain.
Similarly to Dodane et al. () and The World Bank However, such data must be handled carefully as the share of on-site sanitation facilities is highly dependent on the type of treatment applied at a later stage of the sanitation   Figure 7. Overall, cost patterns for on-site facilities alone are quite similar to those identified for the full sanitation chain. However, the following observations can be made: • The cost ratios of septic tanks to VIP and septic tanks to pit latrines tend to be higher than when the full sanitation chain is compared, as in Figure 2.
• The cost ratio of VIP and UDDT to pit latrine tends to be higher if compared to dry pit latrines than if compared to wet pit latrines.
• The cost ratio of VIP to UDDT is higher than shown in determine whether O&M costs account for a major share of total lifecycle costs, and if project finance can therefore be generally expected to be mainly affected by recurrent costs.
The results of the analysis show that patterns are difficult to identify, and that the share of O&M costs out of total lifecycle costs is extremely variable for any type of urban sanitation system. Figure 8 provides a summary of the analysis of O&M costs extracted from the literature. Similarly, Dodane et al. () reports that the share of O&M costs is much lower for conventional sewer systems (22%) than for FSM systems based on septic tanks (65%).
Another study of WSP in Indonesia finds that O&M costs of sewer-based systems are much higher, around 45% of total lifecycle costs, but are nonetheless lower than for communal sewerage (65%) and FSM systems based on shared latrines (50%), septic tanks (61%) and wet pit latrines (62%) (The World Bank b). Similar results were obtained in a study conducted by Cairns-Smith et al.
(), where the share of O&M costs of conventional sewers were found to be lower than for simplified sewerage (62%) and FSM systems based on septic tanks (53%).
This analysis is however limited by the fact that the categorisation by type of costs is highly inconsistent across studies. Indeed, while some research works provide a complete breakdown of costs, as listed in Table 1, the majority of documents reviewed provide a simple division between capital costs and recurrent costs, without specifying whether capital maintenance costs are taken into account and if yes, in which category they were included. The cost of capital is also absent from most studies found in the literature.  To circumvent these issues, lifecycle cost ratios between different sanitation systems analysed in a same study/report were calculated, and then compared between each other.
The results show that conventional sewer systems are in most cases the most expensive sanitation options, followed, in order of cost, by sanitation systems comprising septic tanks, ventilated improved pit latrines (VIP), urine diversion dry toilets (UDDT) and wet or dry pit latrines. The cost ratio of conventional sewer systems to septic tank-based systems ranges from 1 to 4.7. The cost ratio of FSM systems based on septic tanks is found to be systematically higher than wet pit latrines, VIP and UDDT, with cost ratios ranging from 1.9 to 4.9, 1.6 to 2.1, and 1.6, respectively. The cost ratio of UDDT to VIP ranges from 0.8 to 1.1 and therefore do not allow to establish a clear hierarchy. Their separate cost ratios to conventional sewers and FSM systems based on septic tanks are also similar. Both UDDT and VIP tend to be more expensive than wet pit latrines. The cost of simplified sewer systems is found to be lower than both conventional sewer systems and septic tank-based systems, but data on its cost ratio relative to other sanitation systems is almost non-existent.
The article also pointed out that households tend to bear the cost of FSM systems in a much larger proportion that for sewer systems which are mainly paid for by utilities. This can be explained by the fact that users need to pay for the installation, maintenance and desludging of on-site facilities such as septic tanks. This should be carefully considered by decision-makers in their choice of sanitation system, in particular in projects taking place in low-income communities.
Secondary analyses were also undertaken within the framework of this research. They point out that the share of costs of on-site hardware components out of total costs is more significant in the case of FSM systems than for conventional sewer systems; that comparative cost patterns for onsite sanitation facilities only do not significantly deviate from those for the full sanitation chain; and that no clear pattern regarding the share of O&M costs (and capital costs) could be identified by type of sanitation option.
Data retrieved was too weak to make any robust comparison at the continental level between Africa and Asia.
Steps ahead to enhance knowledge on the costs of urban sanitation systems The results of the analyses undertaken within the framework of this research paper are undermined by the weakness and low availability of data in the literature. Considerable efforts must be made to build sanitation cost databases at country level and even city level. Development partners could play a central role in this regard in building capacity of governments and utilities in Sub-Saharan Africa and developing Asia.
Knowledge on the costs of urban sanitation solutions would also benefit from academics and development professionals adopting more thorough reporting methods. Ideally, every study or project brief reporting cost data should clearly cover each type of costs and each component of the sanitation chain, and provide breakdowns. They should also include information on the factors affecting costs and listed in Table 2. This would open opportunities to compare cost data across different contexts, in particular. An example of possible cost reporting template is provided in Table 3.