NGE ON THE LONG-TERM FUTURE DEMAND FOR WATER SECTOR INFRASTRUCTURE Investment needs The estimation of future investment needs here has depended more on the availability of information than on sophisticated estimation methodologies. Information is often most readily available from central sources such as industry regulators. The reliability and usefulness of information become problematic when the sources are not centralised, where there are multiple sources of information and where several bodies and agencies are involved. Ideally, expenditure information should distinguish between operation and maintenance and capital expenditure, rarely available. In addition, it is useful to identify expenditures driven by the need for new services - growth, environmental regulation and pollution control as well as the requirements for providing the base service. This detailed information is seldom readily available; thus some of the estimates given below should be considered as indicative only and within orders of magnitude. The levels of investment and expenditure required for the proper provision of water services are substantial and growing. The role of the international finance community is often crucial for transition and developing economies even where the proportion of required investment may be limited, as it has the ability to leverage local funding to support investment. Estimates of the future demand for infrastructure services for the first decade of the 21st century, which include water services, have been made based on demand rather than measures of need (Fay and Yepes, 2003). It was noted that water and sanitation have dropped in importance relative to the rest of infrastructure stocks as incomes have increased. In deriving investment needs, account was taken not just of the provision of new infrastructure but also of maintenance needs, estimated at 3% of the replacement cost of capital stock for water and sanitation. Fay and Yepes (2003) estimated that water and sanitation should add up to 2% of GDP, noting th