Contents -- Foreword -- Acknowledgments -- List of Acronyms -- Executive Summary -- 1 Introduction: Objectives and Scope -- Conceptual Framework -- Key Policy Themes and Strategic Directions -- Urban Water Market Segments -- Report Organization -- Data Sources -- 2 Sector Achievement and Performance -- Sector Achievements -- Water Supply Utility Performance -- Wastewater Utility Performance -- Chapter Summary -- 3 Sector Challenges -- Responding to Rapid Urbanization -- Dealing with Urban Diversity -- Confronting Water Scarcity and Degradation -- Meeting Infrastructure Investment Needs -- Improving Utility Financial Sustainability -- Chapter Summary -- 4 2020 Sector Vision and Path Forward -- Sector Vision in 2020 -- Benefits of Achieving the Sector Vision -- Strategic Directions and the Way Forward -- 5 Goal Based Sector Governance -- Overview of Sector Governance Structure -- Improving National Policy Coordination -- Shifting from Physical Targets to Policy Goals -- Strengthening Provincial Government Oversight -- Setting Appropriate Water and Wastewater Standards -- Summary of Strategic Directions -- 6 Improving Municipal Utility Governance and Structure -- Overview of Municipal Sector Structure -- Facilitating Cost Recovery -- Fostering Efficient Urban Water Utilities -- Managing Wastewater as a Network Utility Business -- Exploiting Opportunities for Service Aggregation -- Summary of Strategic Directions -- 7 Moving Up the Utility Financial Sustainability Ladder -- Achieving Utility Cost Recovery -- Accessing Domestic Credit Markets -- Improving Concessionary Finance Programs -- Summary of Strategic Directions -- 8 Using the Private Sector to Help Improve Municipal Utility Performance -- Private Participation Trends in China -- Engaging with the Private Sector as Part of the Reform Process.

BOT Treatment Plants as Part of a Network Business -- Utilizing Non-Investment Private Participation Arrangements -- Summary of Strategic Directions -- 9 Improving Capital Planning to Reduce Costs -- Capital Planning for Water Utilities -- Using Modern Water Supply Planning Processes -- Asset Management Planning: Optimizing Network Investments -- Strategic Planning and Management of Drainage Networks -- Integrating Industrial Pollution Control into a Wastewater Management System -- Managing Sludge as an Environmental and Financial Priority -- Summary of Strategic Directions -- 10 Strategic Action Plan -- APPENDIXES -- A Overview of World Bank's Urban Water Program in China -- B Summary of Water and Wastewater Standards -- C Technical Notes -- Glossary -- References -- List of Boxes -- 2.1 International Performance Comparisons -- 2.2 Wastewater Technical Terms -- 2.3 MOC's Analysis of Wastewater Treatment Operational Performance -- 2.4 Overview of Tianjin Drainage System in 2005 -- 2.5 Brazil National Sanitation Information System (SNIS) -- 3.1 China's Administrative System and Definition of Cities and Towns -- 3.2 China's Water Resources -- 3.3 Financial Sustainability Ladder -- 4.1 South Korea: Wastewater Treatment Coverage vs. Economic Development -- 4.2 Ecosystem Restoration in the Chesapeake Bay, United States -- 5.1 Agencies Involved in the Urban Water Sector -- 5.2 Role of National Government Agencies in Colombia -- 5.3 Water Utility Performance Benchmarking -- 5.4 Application of Discharge Standards in China -- 5.5 Full Cost Wastewater Pricing for Different Treatment Levels in U.S. and Europe -- 5.6 World Health Organization Framework for Safe Drinking Water -- 5.7 Grading the Safety of Water Supply Systems in New Zealand -- 6.1 General Functions of Key Municipal Agencies -- 6.2 Municipal Governance Models in California.

6.3 Singapore Public Utilities Board -- 6.4 Challenges Faced by Water Supply and Wastewater Companies in Chongqing, China -- 6.5 Drainage Collection Systems in U.S. and U.K. -- 6.6 Municipal and Regional Water Services in Latin America -- 6.7 Case Study of Ningbo, China -- 7.1 Concept of Utility Cost Recovery -- 7.2 International Comparison of Cost Recovery Ranges for Water Supply -- 7.3 Social Acceptability of Water Tariffs in OECD Countries -- 7.4 Special Purpose Municipal Investment Vehicles in Shanghai and New York -- 7.5 Financing Wastewater and Water Supply Infrastructure in the United States -- 7.6 Brazil's River Basin Restoration Program -- 8.1 Definition of Key Private Participation Terms -- 8.2 Integrated Water Projects with Private Partners -- 8.3 World Bank Toolkit on Private Participation -- 8.4 High Profile BOT Projects in China -- 8.5 Mixed Capital Company in Cartagena, Colombia -- 9.1 Capital Costs in the Water Industry: England and Wales -- 9.2 Water Supply Planning in State Council Decree No. 36 (2000) -- 9.3 Integrated Resource Planning (IRP) Concepts -- 9.4 Asset Management Planning (AMP) -- 9.5 Comparison of Separate and Combined Drainage Collection Systems -- 9.6 Drainage Collection Systems and Water Pollution Control -- 9.7 Applying the Polluter Pays Principle -- List of Tables -- 1.1 Urban Water Market Segments -- 2.1 Utility Service Area with Low Water Pressure -- 2.2 Non-Revenue Water for Chinese Utilities -- 2.3 Net Income to Revenue Ratio in 1997 and 2004 -- 3.1 Urban Water Market Segments -- 3.2 Approximate Urban Water Sector Investments -- 4.1 Chinese Urban Water Utilities in 2020 -- 5.1 Examples of Broad Policy Goals -- 5.2 General Supervision Responsibilities of Provincial Agencies -- 5.3 Summary of China's Municipal Wastewater Discharge Standards -- 6.1 Water Supply Utility Models.

6.2 Common Wastewater Utility Models -- 6.3 Options for Integrating Wastewater Services -- 6.4 Options for Aggregation -- 7.1 Summary of Urban Water Utility Financial Status in China -- 7.2 Weighted Average Water Supply Tariffs by City Category, 1998 and 2004 -- 7.3 Water and Wastewater Tariff History in Tianjin -- 7.4 Suggested Municipal Government Capital Contribution Policy -- 7.5 Urban Infrastructure Fund in 2004 -- 7.6 Per-Capita Urban Infrastructure Fund by City Type -- 7.7 Indicative Ranges of Urban Water Sector Financing Sources, 1991-2005 -- 8.1 Investment by Project Type -- 8.2 Private Participation in the Water Supply Sector -- 8.3 Private Participation in the Wastewater Sector -- 8.4 Types of Entities in Private Arrangements -- 8.5 Distribution of Private Participation Activity by City Type -- 8.6 Wastewater Treatment Fee and BOT Price -- 8.7 Responsibility Allocation for Common Arrangements -- 10.1 Summary Strategic Action Plan -- List of Figures -- 1.1 Overview of the Conceptual Framework -- 1.2 Key Policy Themes -- 1.3 Strategic Directions for Key Policy Themes -- 1.4 Structure of Report -- 2.1 Annual Investment in Urban Water and Wastewater Infrastructure -- 2.2 Urban Water Supply Coverage -- 2.3 Urban Water Supply -- 2.4 Wastewater Treatment Capacity -- 2.5 Trends in Industrial and Urban Wastewater Discharge Flows and Loads -- 2.6 Actual Water Supply and Installed Treatment Capacity -- 3.1 China's Economic Transformation and Urbanization -- 3.2 Urbanization Trends and Projections -- 3.3 Average Water Quality in Chinese Rivers from 1991-2002 -- 3.4 Estimated Wastewater Investments in the 11th Five-Year Plan Period -- 4.1 Strategic Directions for Key Policy Themes -- 5.1 Overview of Chapter Five -- 5.2 Overview of Government Administration -- 5.3 Overlapping Functions among Agencies -- 6.1 General Municipal Structure.

6.2 Typical Parent Bureau Models -- 6.3 Balancing Service Standards, Tariffs, and Subsidies -- 6.4 Example of a Municipal Drainage System -- 7.1 Water Supply Tariffs -- 7.2 Wastewater Tariffs -- 7.3 Combined Tariff as Percentage of Household Income in 2004 -- 7.4 Total Annual Expenditure for Urban Construction and Maintenance -- 7.5 State Bond Program Funding for Wastewater -- 7.6 China State Bond Program in Water Supply Sector -- 7.7 China State Bond Program in Water Supply and Wastewater by City Size -- 8.1 Private Participation Investment Trends.