These are some good ideas that I and others had:
- It makes sense to turn wastewater into biogas + dirty water that's then filtered by organic matter (e.g., "living machine") that removes contaminants and discharges clean (even drinkable) water.
- Drop nano sensors into a pipe network to find contamination sources, leaks and illegal connections using realtime GIS sensors. NB: Sensors need to be drinkable!
- Centralized treatment has a lower cost (economies of scale) ONLY if leaks (losses and contamination) are low. If they are high (e.g., many LDCs), then it makes more sence to deploy smaller local treatment plants. They are more expensive per unit treated but deliver more units. They can also be used for local wastewater recycling. For more on this idea, read this paper [PDF] on urban self-sufficiency, which also applies when the local monopoly is incompetent and/or will not deliver water at ANY price.
- In slightly-related news, read this World Bank paper on standpost water services. Short version: the water is too cheap for the utility to support the standpost and (simultaneously) too expensive for customers. Why? The standpipe guy has a little monopoly!