the network needed to serve a given community, costs are further reduced by relying on community volunteer labor to construct the systems.

# **3.5 Obstacles to expanding coverage**<sup>**20**</sup>

In order to develop a strategy for reaching unserved households, it is important to understand the reasons why these households remain unconnected at present. Broadly speaking, there are two possible explanations. The first explanation is that the service is simply not available in the communities where they live; this is essentially a supply-side problem that requires increased investment in infrastructure expansion. The second explanation is that the households fail to take-up the service even when it is available in the community; this is essentially a demand-side problem that may be less costly to overcome in investment terms, but is perhaps more complex to deal with requiring a careful diagnosis and considered policy response.

It is possible to capture this difference by comparing two indices (Table 3.12). The availability index gives the percentage of households that live in communities where the service is available, while the uptake index shows the percentage of households who live in communities where the service is available _who actually connect to the service_<sup>_21_</sup> . The results show that electricity has the highest uptake index of any of the services at 88%, followed by water, sewerage and fixed telephone. Not only are services more likely to be available in urban areas, but urban households are substantially more likely to take-up these services when they are available.

**Table 3.12: Comparison of availability and uptake of services**

<u>(Percentage of households)</u>

||<br>|Electricity<br>|<br>|Pi<br>|ped wate<br>|r<sup>♦</sup><br>|<br>|Sewerage<br>|<br>|Fix<br>|ed teleph<br>|one<br>|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||Nat’l|Urban|Rural|Nat’l|Urban|Rural|Nat’l|Urban|Rural|Nat’l|Urban|Rural|
|Availability|83|100|70|81|95|70|51|91|20|36|68|11|
|Uptake|88|95|81|85|92|76|75|85|44|42|46|24|
|Coverage|73|95|56|69|88|54|38|76|09|15|31|03|

_Notes_ :<sup>♦</sup> Piped water in dwelling or yard. See Annex D for definitions and calculations of Availability, Uptake, and Coverage. _Source:_ World Bank calculations using the ENCOVI 2000, Instituto Nacional de Estadística – Guatemala Using these indices it is possible to calculate what proportion of the coverage deficit currently observed in Guatemala is attributable to supply-side or demand-side factors (Figure 3.7)<sup>22</sup> . The results indicate that, depending on the service, 20% to 40% of the coverage gap is related to purely demand-side factors and could be resolved without major investments in network expansion. Between 10% and 50% of the coverage gap, depending on service, would require both physical expansion and demand-side measures.

> 20 See Annex D for an explanation of the definitions of coverage, take-up, and availability.

> 21  It is important to clarify the definition of ‘community’. The sampling frame of the ENCOVI 2000 was based on ‘unidades primarias de muestro’, which are blocks of 50 contiguous households from which 10-12 households were sampled by the survey.

> 22 This breakdown is undertaken as follows. Households who live in communities where the service is available but who do not connect are counted as a demand-side only problem. For communities where the service is not currently available, the average take-up rate observed elsewhere in the country is applied to determine how many of these households could be expected to connect if the service were made available. These households are counted as a supply side only problem. All remaining households are counted as both a demand-side and a supply-side problem.

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