Increasing water scarcity in developing world cities combined with poor performance of water supply systems has led to an increasing reliance on informal water supply systems. Although the availability of informal supply provides a coping mechanism that enables water consumers to be resilient to failures in water supply, the longer-term effects on formal water supply systems (FWSS) are uncertain, with a potential reduction of tariff recovery (RT
), and in turn a service provider’s financial sustainability. This motivates an analysis of the coevolving dynamics and feedbacks involved in water systems where formal and informal components co-exist. Investigating Hyderabad, Pakistan as a case study, a dynamic socio-hydrologic system model is built, comprised of a formal system’s water and fund balance, consumer behaviour and infrastructure conditions. Simulations are executed on a monthly basis at a household level and for a 100-year period (2007–2107) using data available from years 2007–2017. Demand shift to informal is observed to be weakly associated with lower recovery rates, with household income as a major predictor. The FWSS’s financial balance, predominantly driven by infrastructure condition, appears to be less sensitive to recovery of a tariff to generate sufficient revenue.
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