It's perfectly correct. Look at it this way: Urban facilities fail to - meet the growing demand for clean water - DISPOSE of household (waste) effectively - MANAGE sewage. It's simply a list of the three things which they fail to do - hence the three infinitives. The phrase 'growing demand for' applies only to 'clean water'.

I've a feeling that the document in this case is using incorrect English, and that you have spotted an error. From what I see, I would use 'disposal' and 'management'. I would write: ...urban facilities fail to meet the growing demand for clean water, effective disposal of household waste and proper management of sewage.