ly and Sanitation Sector in the NIS". Since then and in preparation for a five-year review meeting in November 2005, the state of the water assets has been further reviewed and found to be continuing to decline (OECD, 2005b). Thus the emphasis may need to be on replacement rather than maintenance for these countries and many that recently accessed the EU, as the means of improving service and addressing environmental pollution. The need for new investment in infrastructure coupled with the low rates of cost recovery and other factors has focused attention on the corresponding need for capacity building and to restructure the way in which services are delivered. There is a direct relationship between collection rates and affordability (Frankhauser and Tepic, 2005), and poor revenue collection affects almost all of the countries in the former Eastern Bloc. There have been drives for the reorganisation of water services to encourage greater levels of private sector participation, through measures such as corporatisation, concessions and leases and other forms of contract, as a way of freeing the sector up from state control or reliance on state financing. In developing economies there is an even greater need to extend basic services to burgeoning populations, often in rapidly urbanising situations. Here the need for basic services tends to take precedence over other concerns. Thus there is less of an emphasis on institutional forms and more on partnerships and capacity building, although the institutional and legal frameworks have needed reform in order to facilitate improvement of service provision. In order to meet the MDG, annual spending on water and sanitation needs to double, from around USD 14 billion to USD 30 billion, which indicates that there is a funding gap of some USD 16 billion per year to be met (WaterAid, 2005), at a time when aid from donor countries is generally in decline. INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 5. THE IMPACTS OF CHA