Novel schemes include a plan to build an artificial wetland at a jail in Mombasa in Kenya, to process sewage from 4,000 inmates that now flows untreated into a creek, or ponds in South Africa where algae purify waste and are then used as fertiliser.
"About 90 per cent of the sewage and 70 per cent of the industrial waste in developing countries are being discharged untreated into water courses," said Achim Steiner, head of the United Nations Environment Program (UNEP).
"Understanding the ability of peatlands, of marshes, of wetlands, to play an integral part in filtering … waste water is often overlooked," he said.
The UN set a millennium goal of halving the proportion of people with no access to sanitation – even simple latrines rather than sewers – by 2015 from 40 per cent of humanity or 2.6 billion people now.
"Africa is probably struggling the most," Mr Steiner said.
France’s Veolia, the world’s biggest listed water supplier, says East Asia and the Pacific are progressing best.
In Africa, the company’s only big contract so far is to supply water and sanitation to three cities in Morocco, with investments totalling 2.2 billion euros ($3.66 billion).
Children dying
"A lot of countries underestimate the effect of sanitation on health," said Pierre Victoria, head of International Institutional Relations at Veolia Water.
UN data show a child dies as a result of poor sanitation every 20 seconds – that is 1.5 million preventable deaths a year from diseases such as diarrhoea or cholera.
In many countries "we are disappointed by the lack of interest of the politicians about water issues," Mr Victoria said.
"We’d like to have new contracts in developing countries but we need contractual, legal and financial security."
Proper sewers, with pipelines and treatment plants, are prohibitively costly for many nations.
Among lower-cost projects, prisoners at the Shimo La Tawa jail in Mombasa in Kenya will soon start work on an artificial wetland where plants will act as a sewage processing plant in an experimental $126,000 scheme.
"This technology costs very little both for construction and maintenance," said Peter Scheren, manager of joint UNEP-Global Environment Facility projects in Africa.
The scheme will also include a fish farm – fed by waste water purified by two artificial wetlands each 55 metres long, nine wide and two deep.
If it works, the fish can be eaten by prisoners, or even sold.
Such wetlands can have other spinoffs.
"There are experiments going on in Tanzania where types of grass for roof thatching and baskets weaving are grown on wetlands," Mr Scheren said.
Natural systems
Many scientists say natural systems, such as wetlands, forests or mangroves, are worth more left alone rather than cleared for farmland because they supply free services such as food, water purification or building materials.
"For sanitation it’s much better to get nature on your side," said Dag Hessen, a biology professor at Oslo University.
Mr Steiner also said the world urgently needs a better understanding of the natural water cycle, under threat from climate change stoked by human use of fossil fuels, to help manage water from rains to drains.
Global warming may aggravate water shortages for hundreds of millions of people, for instance by disrupting Africa’s monsoons or by thawing Himalayan glaciers whose seasonal meltwater now feeds crops from China to India.
UN estimates show it would cost only about $10.8 billion a year to reach the 2015 sanitation target and that every dollar spent on sanitation creates spinoffs worth $7.59 on average, largely because of less disease.
A 2006 UN Human Development Report said rich donor nations gave about 5 per cent of total overseas aid, or between $3.25 billion and $4.3 billion a year, to water and sanitation.
Excluding big investments in Iraq, the recent trend was down.
Many donors view water investments as too risky, partly because of problems of accountable financing, it said, adding that sanitation progress since the 1970s had been "glacial".
Yet many firms stand to benefit from a focus on water and sanitation.
Goldman Sachs sees prospects for growth in the water sector, from drinking water to processing waste.
Infrastructure costs
In rich nations such as the United States, upgrading water and wastewater infrastructure should bring 4-5 per cent growth and in markets such as China, new infrastructure should mean 10-15 per cent growth over 5-10 years, it said in a December 2007 report.
"Longer term, we expect the global water sector to surge towards a global water oligopoly, where the market for water equipment and services will be dominated by a few multi-industry companies, including General Electric, ITT Industries, Danaher and Siemens," the report said.
Suez, an international industrial and services group, says it has had successes in cities such as Buenos Aires, Casablanca, Jakarta, and La Paz.
In the 13 years to 2006, it estimates it has helped connect 5.3 million people to a sanitation network.
One headache is how to pass on the cost of upgrades.
"New systems are often under-funded. So the connections go often to the rich or medium-income households and the poor do not get it," said Helen Mountford, head of the Environmental Outlooks division at the Organisation for Economic Cooperation and Development (OECD).
With the world’s population growing, any advances in improving sanitation may be only helping the world stand still.
The OECD said this month that more than 5 billion people or 67 per cent of the world’s population, are expected to be without a connection to public sewerage in 2030.
That is up by 1.1 billion from 2000, when 71 per cent of a smaller world population had no connection.
About 1.1 billion people lack drinking water – another millennium goal is to halve that proportion by 2015.
"Investments in sanitation if anything have to be more urgent than for water because the deficit is double," OECD secretary-general Angel Gurria said.
French 19th Century author Victor Hugo wrote in Les Miserables that "the history of men is reflected in the history of sewers".
"The sewer is the conscience of the city… A sewer is a cynic – it tells everything."
– Reuters