Water Demand Management in Mongolia

Annex A. Recommended action plan resulting from the National Dialogue on Water

The previous chapters present the main findings of the National Dialogue on Water in Mongolia and the policy recommendations that emerged from the Dialogue. The table below provides a recommended action plan that presents the main policy actions resulting from the Dialogue. The action plan brings the threads together by highlighting the main elements of potential reforms in Mongolia’s water sector (ranging from short to long-term action), and the partners and champions that ideally should take part in this reform.

Table A A.1. Recommended action plan resulting from the National Dialogue on Water in Mongolia

Main finding	Recommended action	Objectives of the action	Main partners and champions	Timeline
Improving water availability through water demand management instruments
The collection of water use and pollution fees has increased over the past 5 years; however, a gap still exists between the imposed and collected fees (“fee collection gap”)	Further increase fee collection by: Setting targets for fee collection and revenue transfers in IWRM plans Fostering cooperation and coordination between government entities on fee collection and inspection, if necessary, through water agreements or water pacts Integrating fee payments and streamline fee collection processes into the new digital permit system Considering offering technical assistance to the Mongolian Tax Authority and local tax administrations on environmental taxation, including fees on water use and pollution	Primary: improve water management, reflecting the scarcity value of water, change water use behaviour Secondary: show the benefits of the water fee to users, increase willingness to pay, increase revenue	National Water Council MECC Tax administrations RBOs Aimags Soums	Short-medium term
Responsibilities for water management are fragmented and some government entities have limited capacity to fulfill their tasks and enforce regulation.	Strengthen national coordination mechanisms, notably the National Water Council Increase financial and human resources for river basin organisations Explore whether collaboration and coordination between government entities at local level (e.g. sub catchments) could be beneficial, for instance through cooperation framework agreements or water pacts Explore whether certain aquifers could be mapped and managed jointly by government, private sector and civil society, e.g. through groundwater management agreements Consider delineating and consolidating responsibilities such as for monitoring, inspections and fee collection	Improve water management	National Water Council MECC Ministry of Food, Agriculture and Light Industry Tax administrations RBOs Aimags Soums	Short-medium term
Industry face challenges identifying wastewater treatment technologies that meet wastewater quality standards.	Introduce Best Available Techniques (BAT) policies in addition to existing wastewater quality standards Identify industry-specific Best Available Techniques (BAT) for industrial wastewater treatment to ensure industry compliance with water quality standards, consider starting with one industry, e.g. textiles or meat processing Stimulate wastewater reuse by providing an enabling legal and regulatory framework, prioritising industries that are ready and financially able to adopt wastewater reuse.	Primary: improve water quality and water resources availability Secondary: attract investments to sustainable infrastructure	MECC Ministry of Food, Agriculture and Light Industry Industry associations	Short-medium term
Elements of water allocation systems exist in practice and could be further strengthened to manage short- and long-term water demands in basins under pressure from water stress.	Prioritise the introduction of water allocation regimes in basins where water availability does not meet water demands (temporarily, structurally, or foreseen in the future) Integrate water allocation (e.g., principles, processes, methodologies, infrastructure needs, capacity building) in the national IWRM plan, basin plans, and basin planning guidelines Set and enforce long-term and short-term abstraction limits and align permit issuance and recording with the water balance Define a process for setting short-term abstraction limits (e.g., within a season) during periods of water stress, considering the time needed for water users to adjust (e.g. crop planting decisions) Consider defining in detail a sequence of priority uses during exceptional circumstances Develop grey or green surface water infrastructure that support water allocation (e.g. enabling storage, treatment, water delivery)	Avoid water resources depletion from structural and unsustainable over-abstraction Meet growing water demands and balance (potential) conflicting demands or manage trade-offs Provide clarity and predictability to current and future water users	MECC National Water Council RBOs	Medium-long term
Mongolia has made remarkable progress in implementing economic instruments for water use and pollution, which could be further strengthened.	Charge the water use fee to all water users and consumers, with special provisions for vulnerable groups, either through the water tariff or as a separate fee Gradually achieve the transfer of 35% of the water use fees to the river basin organisations by setting yearly transfer targets, supervised by the National Water Council	Primary: improve water management, reflecting the scarcity value of water, change water use behaviour Secondary: show the benefits of the water fee to users, increase willingness to pay, increase revenue	MECC Ministry of Urban Development, Construction, and Housing Water Services Regulatory Commission Ministry of Food, Agriculture and Light Industry	Long term
Water finance
Ensure sustainable water security in Mongolia requires a strategic approach to mobilising funding and financing. In the face of growing pressures on water resources, investments must be carefully planned, prioritised, and diversified to achieve long-term goals. Adequate funding needs to be allocated to feasibility studies at a more centralised level so that scarce resources can be strategically allocated.	Expand the role of the National Water Council on coordinating and prioritising strategic water-related investments and ensure participation of the Ministry of Finance and Ministry of Economic Development. Centralise funding for feasibility studies to ensure strategic allocation to well-screened projects. Sequence projects within broader investment pathways to maximise resilience and system-wide benefits. Integrate decentralised, natural and hybrid water storage solutions to enhance capacity and cost efficiency. Improve coordination of development support across multiple and interlinking strategic priorities including water security, for example through a Country Platform. While national policy plans prioritise water-related infrastructure investments, there is a need for an overarching water policy action plan or water management policy plan, which could be under the updated IWRM plan.	Prioritise and coordinate public funding and development finance around water security objectives.	National Water Council MECC Ministry of Economic Development Ministry of Foreign Affairs Ministry of Finance River basin authorities	Short-medium term
Private sector engagement can play a bigger role in wastewater treatment and reuse. However, limited private sector knowledge of water-related investment opportunities and unclear technology standards for pollution control remain barriers	Strengthen monitoring and enforcement of existing pollution regulation and collection fees to continue to send clear policy signals to private sector on the importance and necessity of these investments. Provide additional guidance on technologies and approaches. The BAT approach could be considered for water pollution. This would enable industry to participate in choice of technologies which meet environmental objectives whilst also being economically feasible. Support operationalisation of business models for treated wastewater reuse through stakeholder engagement. This includes discussions with the industry stakeholders and financial institutions on opportunities and current challenges to accessing/supplying finance and project implementation. Support uptake of PPPs through guidelines from the Government of Mongolia for wastewater treatment and reuse cases (including enforcement mechanisms) to support private sector investment.	Encourage private investment in wastewater treatment and reuse	MECC Ministry of Food, Agriculture and Light Industry Industry associations Ministry of Urban Development, Construction and Housing	Short-medium term
Mongolia is making substantial efforts to improve conditions for investment in water and to enhance the performance of water service providers across the country. Further improvements to the financial sustainability of water service providers remain critical for expanding and maintaining water supply and sanitation infrastructure. Current inefficiencies represent an opportunity cost for both the government and service providers.	Introduce performance-based contracts with clear accountability for water service providers. Address non-revenue water through actions to reduce both operational and technical losses, linked to unbilled water use or physical losses due to water seepage, pipeline accidents and leaks due to breaks. For commercial losses, increase the uptake of metering to generate more precise data on water usage and appropriate billing, notably in Ulaanbaatar; This includes residential users supplied by OSNAAUG. Address significant staff costs. Notably in Ulaanbaatar, USUG reports very large numbers of employees compared to peer utilities in other countries. Require service provider to develop sustainable business plans with multi-year targets to improve efficiency and financial performance, and plan capital expenditures. Expand the role of the Water Service Regulatory Commission (WSRC) to include reviewing utility business plans, notably with respect to reducing non-revenue water, or new capital investment programmes, financing sources and conditions. Review the tariff structure to improve the financial performance of service providers and support efficient water usage. A tiered tariffs approach combined with subsidies can be explored to balance affordability with cost recovery. Support WSRC in building its own capacity to develop robust tariff structures and review tariff proposals and manage this process effectively. At the same time, it is equally important to ensure that a targeted subsidy programme is put in place to ensure water affordability for low-income households.	Improvements ensuring the financial sustainability of water services.	Ministry of Urban Development, Construction and Housing The Water Service Regulatory Commission Ulaanbaatar Water Supply and Sewerage Authority, “USUG” the Housing and Communal Service Authority, “OSNAAUG” Private Water Companies MECC	Short-medium term
Enhancing Water Information System and Human Resources
Water resources information systems face challenges in providing systematic data analysis and information. Barriers are the hydrological observation facilities, access to adequate budgets, access to specialised personnel and analysis systems.	Modernising hydrological monitoring infrastructure Improving the hydrological monitoring data quality control Establishment of flood forecasting and warning system using cutting-edge technology Capacity building can be enhanced through the establishment of a National Water and Environmental Education Center. Pilot projects on ICT-based water resource management.	Enhancing and expanding existing hydrological management systems, Maximizing the utilsation of the human resources system for a sustainable water management framework.	MECC, National Agency of Meteorology and Environmental Monitoring, IRIMHE, Water Agency	Short-medium term
There is no central water information (management) centre that integrates and operates water information such as weather, surface water, and groundwater, and no comprehensive hydrological analysis programme for flood warning.	Establishing an IWRM Integrated Operations Center. Establish clear institutional roles through a strategy of selective focus.		MECC, National Agency of Meteorology and Environmental Monitoring, IRIMHE, Water Agency, WSRC	Medium-long term

Source: Authors.