Improving water services: utility-small water enterprise partnerships

THIS PAPER IS based on current WEDC research on small water enterprises (SWEs), whose purpose is to identify and test constraints, opportunities and strategies for enabling small water-providing enterprises to deliver an acceptable water service to poor urban consumers. The paper provides some background and brief information on utilities and SWEs, and outlines typical constraints faced by SWEs in their operations. The paper then looks at the rationale for developing viable mechanisms through which water utilities could form mutually beneficial partnerships with SWEs for the benefit of customers, and explores potential opportunities and interventions that can enable SWEs to provide affordable good quality water services to customers while at the same time providing benefit to the water utilities. The aim of the proposed Utility-SWE partnerships is to improve water services to customers in informal urban settlements of developing countries, while meeting the objectives of water utilities and SWEs

Managing urban water services through segmentation, service and price differentiation: findings from sub-Saharan Africa

Water is life and its provision is vital not only for purposes of sustaining life but also for convenience, health, sanitation and economic well being. The United Nations estimates that over one billion people living in developing countries lack access to safe water, with a substantialp roportion of thesel iving in Africa. As a consequenceo f urbanisation and rapid growth of cities, urban water utilities in developing countries face an enormous challenge in meeting the water requirements of urban dwellers. The challenge is even greater when the prevailing poverty, high levels of debt and declining funding (in form of official developmenta ssistance)a re taken into account. In particular, Sub-Saharan Africa is facing low levels of water services and water supply coverage. Under thesec ircumstancesa, key objective for water utilities in Sub-SaharanA frica is to provide services to the growing urban population, including the poor, in a financially sustainable manner. To achieve this objective, utility managers need innovative methods of financing and managing urban water services. A systematic approach consisting of market segmentation, service and price differentiation is proposed as a suitable method of managing urban water services in Sub-Saharan Africa. This approach is the subject under investigation in the research, which is reported in this thesis. Using primarily the case study research methodology but also incorporating surveys, interviews and f6cus group discussions within the case study, research was carried out to investigate the use of a systematic approach consisting of segmentation, service and price differentiation for managing urban water services in the context of Sub-Saharan Africa. The detailed field research was carried out in Kenya and South Africa, and two case studies were prepared. Among the key findings was that this approach offers a framework for water utilities to structure their service delivery with appropriate pricing and serve more customers (including people living in informal settlements) at affordable cost, while achieving financial sustainability. The finding leads to the conclusion that segmentation, service and price differentiation is a suitable methodology that utilities can use to improve urban water servicesi n Sub-SaharanA frica

Financing and cost recovery: What happens after construction?

WATER AND SANITATION PROJECTS are known to bring wider economic benefits to communities in the form of health, opportunities for women and poverty reduction. Given the overall societal gains that can be achieved, water and sanitation services should be improved, especially for the poor. However, the challenge to finance new projects and increase sustainable access to water and sanitation services is particularly acute, largely due to lack of ability to generate funds for operations, maintenance, expansions and upgrades, coupled with insufficient institutional and administrative capacity

Improving utility management : case study of MWAUWASA, Tanzania

Mwanza Urban Water and Sewerage Authority (MWAUWASA) has been encountering a lot of challenges, which includes inter alia, the still high UfW, great outstanding balances by debtors, high power costs, underdeveloped management system and low sewerage network coverage. This lead to the need to improve utility management and thus the urge of the organisation to participate in the Water Utility Management & UfW project. One of the issues addressed is the developing of Performance Improvement Plan (PIP) to guide the organisation in its performance including reduction in UfW. This required the organisation to address the four key questions: where are we now, how did we get here, where do we want to go, how might we get there, and how do we ensure success. The newly established District Meter Areas (DMAs) is one of the effective strategies of reducing unaccounted for water (UfW) through Measurement-Validation-Identification- Rectification cycle. The project has indeed left MWAUWASA with the in-house capacity for long-term planning for further development and sustainability

Performance of management contracts in small towns water services

Although national and international institutions have put much effort in the field of water supply improvement during the last few years, coverage figures are still low. Many developing countries are taking initiatives to develop mechanisms of improving delivery of water supply services. One of the initiatives being employed is delegated management of water services to the private sector, through management contracts. Uganda started water sector reforms in 1997 and took steps to increase involvement of the private sector in management of its urban water services through management contracts in 2001. In Uganda, only 60% of urban areas and 55% of rural areas have access to improved water services. Against this background, this paper reports on research undertaken in Uganda, with the objective of analysing the performance of management contracts in the recent and still on-going reform and private sector participation process of the water sector. The research, which was undertaken as part of an MSc study, followed a case study methodology, and comprised a literature review, customer surveys, focussed group discussions and key informant interviews. The paper presents the research findings, and concludes that well planned and designed management contracts can potentially improve performance of small towns water systems for the benefit of the users of services

Strategic marketing of water services in developing countries

The recent (2000) global water supply and sanitation assessment by the World Health Organisation found that over one billion people do not have access to improved water supply. The finding points to the challenges faced by municipal engineers and other professionals responsible for the provision of water services in developing countries. Population growth and the increasing poverty, particularly in the urban areas, compound the challenge. A key objective for water utilities is to provide services to the growing population, including the poor, in a financially sustainable manner. Strategic marketing offers an innovative method of meeting this objective. Research aimed at adapting and developing a marketing approach for use in the water sector was carried out in a number of developing countries between 1999 and 2001, with detailed field research in Kenya, Uganda and India. This paper discusses strategic marketing of urban water services and provides a methodology that water utilities could use to structure their service delivery options to customers while meeting their financial objectives. The paper outlines how utilities could structure service delivery with appropriate pricing and serve more excluded customers (including the poor) at affordable cost and achieve financial sustainability. The paper concludes that strategic marketing of water services has potential to improve services to existing and excluded (potential) customers while improving the utility's revenue base

Managing watsan services in small towns

A SIGNIFICANT PROPORTION of people in developing countries live in small towns. Small towns often require more elaborate forms of water supply systems than villages, such as pipe networks. In addition, as villages are growing into rural growth centres and small towns, the transition of appropriate management of watsan and the institutional set up proves difficult, consequently many of the small towns have relatively low levels of water and sanitation services. Until recently, small towns have been largely ignored in terms of new investments in water supply and sanitation. Where investment has been made, deterioration of services occurs soon after commissioning, possibly because proper arrangements were not made for operations and maintenance of the systems, or because inappropriate management options were adopted. Low levels of water and sanitation services contribute to the poor economic growth in many small towns, thus hindering poverty reduction efforts in developing countries

Maximizing the ‘value’ of improved water services in small towns

This paper examines the value concept drawing on literature from consumer behaviour and services marketing disciplines. The relevance of the concept to water services management, particularly in small towns is highlighted. Consistent with other services or goods, the authors contend that value perceptions play a crucial role in consumer decision-making as regards improved water service use. To influence consumer decisions to utilise improved water services such as piped water, and the willingness to sustain the services, service providers should put more emphasis on maximising consumer perceived value of the service offering. The authors propose a wide range of value maximisation strategies. It is also suggested that water sector practitioners and researchers pay more attention to consumer behaviour studies so as to promote a consumer-centred approach to water service delivery

Partnerships for improving water utility management in Africa

Urban water utilities in developing countries face enormous challenges in meeting the water needs of growing urban populations. Many of the challenges stem from poor utility management practices and the lack of a commercially oriented culture. For many years the debate on how to address this problem has been dominated by two extremes. On the one hand, private sector participation (PSP) has had only limited success. On the other, public management reform, which urges the creation of incentives for public utilities to become more efficient and commercially oriented, has not yet taken hold due to the slow pace of institutional reforms in developing countries. Given this situation, major players in the sector are seeking alternative approaches to improving utility management and performance in developing countries. Such alternative approaches include innovative multi-sector partnerships between private, public and civil society. This paper discusses a partnering approach (pioneered by the Water Utility Partnership (WUP) of Africa) between Loughborough University, Severn Trent Water, six African water utilities and utility management consultants. The aim of the partnership is to increase the management capacity of utility companies in order to improve the performance of water utilities in Africa. This innovative model has implications for policy and practice in this field

Strategic planning for water utilities in developing countries

A common feature of public water utilities in developing countries is their lack of a commercial orientation. As a result, many utilities find themselves locked in a cycle of poor corporate performance - with low coverage of services, huge amounts of non-revenue water and insufficient funding for maintenance and expansion. Strategic planning in such turbulent times should be relevant, cost-effective and transforming. This paper discusses a strategic planning framework to assist utilities in developing meaningful and useful performance improvement plans. Recent application of this framework in Africa has demonstrated its relevancy, cost-effectiveness and potential to transform poorly performing water utilities