Poor drinking water quality and sanitation lead to major outbreaks of waterborne diseases[12] such as those that swept the cities of Faisalabad, Karachi, Lahore and Peshawar in 2006.

To put it in perspective, this means that the yearly water allocation for each individual in Pakistan would not even fill half of an Olympic swimming pool.

One document criticizes the MDG's methodology for only taking into account coverage figures, without giving attention to adequate service quality.

[29] Consequently, consumers use on-site storage mechanisms like ground or roof tanks, or they purchase water from lorry tankers or use shallow wells and rivers.

[30] Increased arsenic, nitrate and fluoride contamination was detected in drinking water in various localities in Pakistan, according to an official government document.

[32] In 2012, according to Rafiq Khanani, professor and pathology chairman at the Dow University of Health Sciences, water-borne Naegleria fowleri have killed at least 10 people in Karachi in three months.

In towns and villages water supply facilities were built and operated by the provincial governments through their Public Health Engineering Departments (PHEDs).

However, in 1992 the federal government launched a Social Action Plan, which emphasized user participation, hygiene promotion and the use low-cost technologies in water supply and sanitation.

[40] In 2008, it was reported that PHEDs were still active in water supply development, operation and maintenance, particularly in areas where the schemes spread across more than one tehsil.

The Ministry of Environment is to "provide the technical support to the provinces by installing various plants at selected places on turn key basis and then handing it over to local municipal administration.

The much larger US$168 million Clean Drinking Water for All Programme aims at delivering one purification plant to each Pakistani Union Council.

This has changed to some extent in Punjab in 2006 when the provincial government, through its Housing, Urban Development and Public Health Engineering Department drew up a roadmap for reforming its water utilities.

However, as indicated above, challenges in the transition period were reported and provincial Public Health and Engineering Departments (PHEDs) in the four Pakistani Provinces continue to provide water services, especially in rural areas.

Orangi is a large informal low-income settlement located in Karachi and place of a user participation success story.

In 2004, the Lodhran Pilot Project (LPP) received a US$1.1 million grant by the World Bank-administered Japan Social Development Fund (JSDF) to expand the model in 100 villages in Southern Punjab.

[53][54] In Pakistan, the concept of Community-led total sanitation (CLTS) was first introduced as a pilot project in Mardan District in the North West Frontier Province in 2003 by UNICEF together with a local NGO IRSP (Integrated Regional Support Program).

[55] A main objective of the concept is to create open defecation free villages through behavioral change in the whole community, rather than to construct sanitation facilities for individual households.

Since then, CLTS has spread rapidly in the whole country and became a main feature of the National Sanitation Policy, which provides financial rewards for defined outcomes.

[60][broken footnote] A 2010 report by the Water and sanitation program notes that "civil service staffing policies constrain utility managers from hiring the staff they require; they cannot incentivize them appropriately; and on-the-job training seems to be limited by most accounts.

[63] In many cities and towns, especially smaller ones, municipalities subsidize water supply because tariff revenues are insufficient to recover costs.

[65] In Rawalpindi a new managing director appointed in 2006 regularized unauthorized connections, collected arrears and thus increased cost recovery from 53 to 86 percent.

[66] The MTDF recognizes that with 0.25% of its total GDP, Pakistan's investment in the water supply and sanitation sector is inadequate and provides for US$2 billion (120 billion rupee) or US$404 million per year for the sector from 2005 to 2010,[6] half of which is to be paid by the federal and provincial governments, including the construction and rehabilitation of water supply schemes in urban and rural areas and wastewater treatment plants in provincial capitals.

The other half is expected to be provided by the private sector and includes water supply systems, sewerage networks and wastewater treatment as part of new housing schemes in cities and towns.

In July 2009 the Asian Development Bank (ADB) approved a loan for an unknown amount to support a "Punjab Cities Improvement Investment Program" that aims at "improved municipal environment and public health for an estimated 6 million residents across some 11 larger intermediate cities of Punjab Province".

As a result, about 2.5 million additional people in 778 villages were provided with water supply and sanitation facilities, according to the ADB "with full cost recovery".

In 1994 the Japanese Bank for International Cooperation (JBIC), one of the predecessor agencies of today's JICA, approved a 10.3 billion Yen loan for a Karachi Water Supply Improvement Project.

The amount of water supplied was only 41% of what had been planned, and there were "various problems with the executing agency (the Capital Development Authority) such as the scarcity of personnel, underdeveloped institutions, and the shortage of active efforts."

In 2012 the World Bank approved another US$150 million loan for cities in Punjab, again with a significant share devoted to water supply and sanitation.

The World Bank contributed with US$137 million to the Rural Water Supply & Sanitation Project, which was active from 1991 to 2000 in the self-governing Pakistani state of Azad Jammu and Kashmir.

For example, WaterAid from the UK has set up a rainwater collection project in the Thar Desert and influenced government in the city of Gujranwala in Punjab leading to the provision of clean water for 2,500 slum residents.