The current practice to ensure water safety in Pacific Island Countries (PICs) is to monitor the quality of the treated drinking water at the end of the supply chain through water quality testing and to assess compliance against national standards, WHO guidelines or US EPA standards. However, various shortfalls and limitations in relying on end-product testing have been identified, not least that this approach is unable to detect all pathogens and that – as it can only be conducted after water has been
distributed and consumed – it does not prevent the consumption of contaminated water. To overcome such limitations, the latest edition of the WHO Guidelines for Drinking-Water Quality (WHO, 2004) emphasises effective preventive management through drinking water safety planning (DWSP). DWSP is a “comprehensive risk assessment approach that encompasses all aspects of the water supply from catchment to consumer, to consistently ensure the safety of drinking water
supplies”.

A well prepared drinking water safety plan will be designed specifically for the supply situation at hand. It is intended to give confidence of consistently safe drinking-water throughout supply. The introduction of the DWSP approach is being piloted in Pacific Island Countries by SOPAC and WHO. Initial funding was received from AusAID over the 2005 to 2009 period. Palau is one the countries where the DWSP approach is being introduced and implemented. Thus, though 90% of households in Palau have
access to piped, treated water, ADB (2009) claims that water management in Palau is not efficient. This makes the introduction of the DWSP approach to Palau a key step to improve water quality in the country. The approach is being implemented for the Koror Airai (K-A) water supply with the intention that the benefits encourage the replication across Palau.


The K-A drinking water safety plan contains a technical analysis and threats of water safety issues as well as an improvement schedule, with a list of water management improvements to be made within a stated tentative timescale. Parts of the improvement schedule are now beginning to be implemented. The improvement schedule items are ranked according to the highest risk posed in relation to health and the urgency with which each item should be addressed (within available resources).
This document describes a preliminary economic assessment of the K-A drinking water safety plan. The information generated is to be used to inform stakeholders in Palau of the rewards from supporting the DWSP approach, demonstrating the potential benefits of investing in the Plan.

According to the assessment, the likely cost of establishing and implementing the K-A drinking water safety plan could potentially be around US$ 0.2 million in total over time. On the grounds of consultations with technicians and key stakeholders, the Plan would be expected to generate benefits in the form of reduced water-induced gastrointestinal diseases. In this respect, those at risk from gastrointestinal disasters are those with the weakest immune systems such as the young, the old and those with already compromised immune systems (already sick). Additionally, there would be a slightly reduced demand for bottled water for safety purposes from private consumers as they try to avoid consuming contaminated tap water. The total value of these benefits over time is estimated to be in the vicinity of US$ 1.34 million.

The expected net benefits of the K-A drinking water safety plan in Palau are thus estimated at US$ 1.1 million – a return of US$ 5.90 on each US$ 1.00 invested. The values are only preliminary; however data to conduct the assessment was scarce and there would
be considerable benefit from improving access to data in the future. For example, access to up to date information on the incidence of gastrointestinal disease in Palau was extremely limited. Aside from its value in predicting returns from a DWSP and in monitoring the effectiveness of it, the more effective collection and assessment of health data would likely be valuable for national health planning in Palau more generally.