ACRONYMS AND ABBREVIATIONS

Transcription

1 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 1 ACRONYMS AND ABBREVIATIONS AG Attorney General BNWP Bank Netherlands Water Partnership BOO Build Own Operate BOT Build Operate Transfer CBO Community Based Organization CLG Community Liaison Group Malawi CO Constructor Operator CSA Central Statistical Authority Ethiopia CTB Central Tender Board DEM Directorate of Operations and Maintenance DHH Direction d Hydraulique Humaine Cote d Ivoire DRA Demand Responsive Approach DWD Directorate of Water Development EU European Union GNP Gross National Product GWC Ghana Water Company HIPC Highly Indebted Poor Countries IDA International Development Association IWE Institute of Water and Environment (United Kingdom) KfW Kreditanstalt für Wiederaufbau (German Development Agency) LA Local Authority MDG Millennium Development Goals MWR Ministry of Water Resources of Ethiopia NGO Non Governmental Organization NRWB North Region Water Board Malawi O&M Operations and Maintenance PLC Private Limited Company PLC Public Limited Company PO Private Operator PPIAF Public Private Infrastructure Advisory Facility PPP Public-Private Partnership PSP Private Sector Participation RWSB Regional Water Boards RWSS Rural Water Supply and Sanitation SHC State Asset Holding Company ST Small Town WEDC Water, Engineering and Development Centre WFI Water Fund Indonesia WSC Water Supply Company WSS Water Supply and Sanitation WTP Willingness to Pay Keynote Speech by Jamal Saghir, World Bank

2 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 2 FOREWORD Small towns are important to policy makers and water and sanitation professionals for two basic reasons; (i) they account for a growing share of the people that have no access to safe water and decent sanitation; and (ii) we know little about how to meet their demand for improved water and sanitation services. In fact, a large part of the Millennium Development Goals for water and sanitation will have to be met in small towns, and sector professionals and national policy makers need more practical information on management model and professional support options that have proved effective, and a better understanding of other key ingredients for successful town water and sanitation services In 1999, the World Bank s Rural Water Supply and Sanitation (WSS) Thematic Group, in collaboration with the Water and Sanitation Program (WSP), launched a global small towns initiative to study and document innovative management models that provide good quality, affordable services that are sustainable and can be expanded to meet demand. This effort lead to simultaneous E-Conferences on Small Town WSS held in 2000, which were sponsored by the Water, Engineering and Development Centre (WEDC) of the University of Loughborough and One World and facilitated by Cinara in Latin America and the World Bank. The E-Conferences attracted a large number of participants from all over the world, who shared a wealth of information about local initiatives aimed at improving water services in small towns. Other institutions and programs such as the Programme Solidarité-Eau (PS -Eau), the Delft International Institute for Infrastructural, Hydraulic and Environmental Engineering International Reference Centre (IHE-IRC) and WEDC also established their own programs and projects to learn more about small town water supply and sanitation. In fact, the Addis Conference follows a number of previous workshops and meetings, such as those organized in 2001 by PS-Eau in Nouakchott and by WEDC in Lusaka. It has became clear that a better understanding of small town WSS must be learned from the ground up by sharing experience and finding out what works. This was the goal that we set ourselves in Addis Ababa, when more than 200 practitioners had the opportunity to review 30 case studies, over 40 posters and especially to share their experience and their vision through the many working groups organized during the conference. The Conference Statement attempts to capture the broad lines of shared understanding developed through the presentations and the exchanges. The Conference proceedings are structured as follows: 1. The Conference attempts to capture the broad lines of shred understanding developed through the presentations and the exchanges. 2. Volume 1: Conference Summary is meant for broad circulation (in print as well as electronically) in French and in English and expands on the Statement, including selected annexes on working group reports, participant feedback and networking. 3. Volume 2: Presentations includes the complete set of the presentations made in plenary and in working groups. It will be made available either electronically or in hard copy to all the participants, and willalso be accessible from the websites of the organizers. 4. Volume 3 Posters will be a compendium of the poster presentations and will be distributed the same way as Volume 2. The Bank sees dissemination of these proceedings as the first step in responding to the demand from participants of the Addis Conference for further learning and networking on small town WSS services. We will be led by the recommendations of the Conference in drawing up future research and pilot work on WSS services for small towns. The Conference has strengthened our conviction that by learning and sharing knowledge as partners, we will be better able to pursue our common vision of a world where everyone has access to safe water and hygienic sanitation Jamal Saghir Director, Energy and Water Chairman, Water and Sanitation Board The World Bank Keynote Speech by Jamal Saghir, World Bank

3 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 3 ACKNOWLEDGEMENTS The Small Towns Water Conference was made possible by the collaboration and support of many agencies and the vision, the expertise and hard work of countless individuals including the organizers, and those responsible for support and logistics. It was an exhibition of teamwork (session hosts, presenters, facilitators and rapporteurs) drawn from the participants, all pitching in to organize and facilitate the complex sessions. Our objectives were achieved: the towns water and sanitation crowd got to know each other, learned a lot, set an agenda, and had a good time. A first round of acknowledgement and thanks is due to the Government of Ethiopia that hoste d the Conference through the Ministry of Water Resources and to Ato Shiferaw Jarso, Minister for Water Resources and Jamal Saghir, Director Energy and Water Department for their keynote addresses. The conference was hosted by: - Government of Ethiopia (Ministry of Water Resources) and sponsored by: - The World Bank - Water and Sanitation Program - The World Bank Institute - UK Government - Bank-Netherlands-Water Partnership (BNWP) Conference Organizers Piers Cross Nick Pilgrim Annie Manou-Savina Belete Muluneh Bob Roche Letitia Obeng (Host) Suzanne Reiff (Reporters) Delphine Bouquin (Reporters) Yohannes Kifle (Logistics) Njeri Gicheru (Administrateur) Quirijn Röell (Rapporteur) Conference Secretariat Richard Uku (Reporters) Andreas Knapp (Reporters) Allen Hard (Designer) Sarah Fiset (Administrateur) Jean Doyen (Rapporteur) National Organizing Committee Ato Yohannes Gebremedhin MoWR Chairperson Ato Kasahun Dendir MoWR Member W/ro Hamere Wondimu MoWR Member Ato Mesfin Amare MoWR Member Ato Girma Zewde CRDA Member Ato Engdashet Bunare MoWR Member Ato Amhayseus Metaferia ECEAA Member Ato Yohannes Kifle Shebelle Firm Member Ato Sahle Sisay NM Member/Secretary Ato Yitbarek Tesema WB-CO Member Ato Frezer Zemedkun E A C E. Member Ato Ayana Kelbessa Oromia Water Bureau Member Ato Belete Muluneh WSP-AF Member The preparation, editing and assembling of the Conference Proceedings was carried out by Jean Doyen, Annie Manou-Savina, Nicholas Pilgrim, Robert Roche, Bruno Valfrey, Sarah Fiset, Njeri Gicheru and Hywon Cha Kim. The Addis Ababa Conference and preparation of the proceedings was funded by the Bank-Netherlands Water Partnership, a facility that enhances World Bank operations to increase delivery of water supply and sanitation services to the poor (for more information see Keynote Speech by Jamal Saghir, World Bank

4 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 4 TABLE OF CONTENTS / TABLE DES MATIERES List of Selected Acronyms / Liste des sigles sélectionnés...i Foreword / Préface...ii Acknowledgement / Remerciements...iii List of Country Cases / Liste des études de cas...iv Table of Contents / Table des matières... v Session 1: Conference Opening, Objectives & Program / Séance d ouverture, Objectifs & Programme STC 1.1 STC 1.2 Welcome Address: Honourable Shiferaw Jarso / Mot de bienvenue: Honorable Shiferaw Jarso Minister, Ministry of Water Resources of Ethiopia Ministre, Ministère des Ressources en Eau d Ethiopie... 1 Keynote Speech: Water sector in Ethiopia and Conference expectations by Yohannes Ghebremedhin Water Supply and Sewerage Department Head, Ministry of Water Resources Direction de l Alimentation en Eau et de l Assainissement, Ministère des Ressources en Eau... 3 STC 1.3 Keynote speech on Town Water Supply and Sanitation Jamal Saghir, Director Energy, Water Department, World Bank Directeur du Département Energie et Eau, Banque mondiale... 6 Session 2: Success Factors / Facteurs de succès STC 2.1 STC 2.1F Key Ingredients for Success in Small Towns Water Supply Bernard Collignon, Hydroconseil Les Principaux Ingrédients du Succès pour l Assainissement en Eau des Petites Villes Bernard Collignon, Hydroconseil Session 3: Professional Support and Aggregation / Appui professionnel et Agrégation STC 3.1 Professional Support and Aggregation Robert Roche, World Bank STC 3.2A Typology of Management / Financing Models in Small Towns WSS STC 3.2B Typology of Case Studies / Typologie des études de cas STC 3.3 STC 3.3F STC 3.4 STC 3.5 STC 3.6 STC 3.7 STC 3.8 Direct Management / Gestion Directe Brief Overview of the Multi -village Systems Global Study François Munger, Senior Water and Sanitation Specialist, WSP, World Bank Bref Aperçu de l Etude Global sur les Systèmes Multi-village François Munger, Spécialiste senior eau et assainissement, PEA, Banque mondiale USA: Rader McDowell County WV Public Service District Sanjay Saxena, West Vir ginia University Tanzania: Hai District Water Supply Project Eng. Immaculata Nshange Raphael, Hai District Water Supply Project Netherlands: Government-owned PLC in the Netherlands; The Case of Water Company Friesland Klaas Schwartz, Vice Rector, IHE -Delft Tanzania Rural Water Supply Companies and their Supporting Federation in Morogoro Region Kifu Shabaan (Federation of Morogoro Region Water Supply Companies) and Jo Smet (IRC) USA: Small Water System Management in the United States Sanjay Saxena, West Virginia University Delegated (with design / build) / Gestion déléguée (avec projet / contruction) STC 3.9F Sénégal: Le Développement et la Gestion des Systèmes Multi-villages Ruraux Masse Niang, Direction de l Exploitation et de la Maintenance (DEM) STC 3.9 Senegal: The Development and Management of Rural Multi-village Schemes Masse Niang, Direction de l Exploitation et de la Maintenance (DEM) STC 3.10 Colombia: Constructor-Operator as PSP Options for Small Water Systems in Colombia Keynote Speech by Jamal Saghir, World Bank

5 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 5 STC 3.11 Carmiña Moreno Rodríguez Paraguay: Private Sector Participation (PSP) in Small Town Water Supply Franz Drees, Senior Sanitary Engineer, The World Bank STC 3.12F Niger: Sonexie, Entrepreneur Engagé dans la Gestion Deleguée du Service de l Eau dans les Petites Villes Koroney Lihida, Directeur de la production, des relations publiques et commerciales Delegated (without design / build) / Gestion d éléguée (sans projet) STC 3.13F France : La gestion des services publics locaux en France Régis Taisne, Chef de Missions Service Public STC 3.14 Ghana: Private Sector Participation in Management of Water Supply Piped Systems Antoine Malafosse, EU STC 3.14F Ghana: Participation du Secteur Privé dans l Exploitation de Réseaux d Alimentation en Eau Potable Antoine Malafosse, EU STC 3.15 Spain: Water and Sanitation Services Country Overview Stephen Meyer, World Bank Consultant, Towns Water Supply and Sanitation Initiative STC 3.16 Uganda: Local Government Contracts with Private Operators in Uganda Azuba, Pr. Engineer, Water Authorities DWD STC 3.17 Uganda: WSS Services (U) Ltd., Private Operator Sonko Kiwanuka, Private Operator Regional or National Utility / Gestion par des Sociétés d eau nationale ou régionale STC 3.18 Malawi: Community Oversight; A Case of Karonga & Chitipa Schemes Titus Mtegha, General Manager, Northern Region Water Board STC 3.19 Cote d'ivoire: Cote d Ivoire Case Study Dominique Da Cruz, Direction Technique SODECI STC 3.19F Cote d'ivoire: Etude de cas de la Cote d Ivoire Dominique Da Cruz, Direction Technique SODECI STC 3.20F Maroc : Externalisation et franchising au Maroc Bernard Collignon, Hydroconseil STC 3.20 Morocco: Outsourcing and Franchising in MoroccoBernard Collignon, Hydroconseil STC 3.21 Mauritania: Water and Sanitation Services Management in Small Towns of Mauritania Ahmed Ould Weddady, Service de l Hydraulique Urbaine de la Direction de l Hydraulique et de l Assainissement et Mohamed Moustapha Ould Mohamed Lemine, Concessionnaire de Guerou STC 3.21F Mauritanie: La Gestion des Services d Eau et d Assainissement dans les Petites Villes de Mauritanie Ahmed Ould Weddady, Service de l Hydraulique Urbaine de la Direction de l Hydraulique et de l Assainissement et Mohamed Moustapha Ould Mohamed Lemine, Concessionnaire de Guerou Session 4: Sanitation / Assainissement STC 4.1 Introduction to Sanitation Session, Ato Brown, World Bank STC 4.2 Issues in Financing Sanitation for Small Towns Pete Kolsky, Senior Sanitation Engineer, WSP-AF, World Bank STC 4.2F Le Financement de l Assainissement dans les Petites Villes Pete Kolsky, Ingénieur sanitaire senior, PEA -AF, Banque mondiale STC 4.3 Institutional Arrangements for Service Delivery to Small Towns; Challenges and Issues Mukami Kariuki, Senior Water and Sanitation Specialist, WSP-AF, World Bank STC 4.4 STC 4.5 STC 4.6 Technology Issues & Options, Lukman Salifu, WSP-AF, World Bank Country Cases / Etudes de cas Uganda: Who is Responsible for Sanitation? The Case of Lugazi Daniel Christopher Kawesi, Town Clerk Philippines: Sanitation Enhancement in Local Government Units Rey Ancheta, Head of PMO, Land Bank of Philippines Session 5: Tools of Trade / Outils de la profession STC 5.1 Business Planning for Small Town Water Supply Catherine Revels, Senior Financial Analyst, World Bank Keynote Speech by Jamal Saghir, World Bank

6 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 6 STC 5.2 Streamlined Approach to Willingness To Pay Surveys Guidance Notes for ST Water Services Alison Wedgwood and Kevin Sansom (WEDC) STC 5.3 Billing System; Databases & Information Management, Michael Buadoo, Consultant, World Bank STC 5.4 Cost Effective Design and its Impact on Tariff Melaku Mulugetta, Managing Director, Tropics Consulting Engineers Plc Session 6: Contract Options / Options de contrats STC 6.1 STC 6.2 STC 6.3 How to move from default options to new efficient approaches in small town WSS? Contracting out watsan services using Service and Management contracts Sansom & Njiru (WEDC) & Franceys (IWE) Contract Options; Leases/Affermages and Concessions Jan Janssens, Principal Water Specialist, World Bank STC 6.4 Franchising; as a way to improve Small Town Water Supply, Ross Tyler, Vice-President, Idev STC 6.6 Country Cases / Etudes de cas STC 6.5Uganda: Features of New Arrangements; Uganda Case StudyWambui Gichuri, Economist, WSP-AF, World Bank 2 Public Management, Private Financing: The example of the government-owned Public Limited Company Klaas Schwartz, Vice Rector, IHE-Delft Session 7: Change Process / Processus de changement STC 7.1 STC 7.2 STC 7.3 STC 7.4 Country Cases / Etudes de cas Vietnam: Let a thousand Flowers Bloom Ghana: Addressing the Issues and Challenges in the Supply of Water in Small Towns in Ghana Kwabena Sarpong Manu, MIME Consult Ltd Indonesia: WSS Development Policy in Indonesia, Bert Jansen, Director, Water Fund Indonesia Ethiopia: Outline of Master Plans for the Water Sector in Ethiopia Session 8: Closing / Clôture STC 8.1 BNWP, the Town WSS Initiative and How it Builds on This Conference Meike van Ginneken, World Bank LIST OF COUNTRY CASES / LISTE DES ETUDES DE CAS Colombia STC 3.10 Constructor -Operator as PSP Options for Small Water Systems in Colombia Cote d'ivoire STC 3.19 STC 3.19F Cote d Ivoire Case Study Etude de cas de la Cote d Ivoire Ghana STC 3.14 Private Sector Participation in Management of Water Supply Piped Systems STC 3.14F Participation du Secteur Privé dans l Exploitation de Réseaux d Alimentation en Eau Potable STC 7.2 Addressing the Issues and Challenges in the Supply of Water in Small Towns in Ghana Ethiopia STC 7.4 Outline of Master Plans for the Water Sector in Ethiopia France STC 3.13F La gestion des services publics locaux en France Indonesia STC 7.3 WSS Development Policy in Indonesia Malawi STC 3.18 Community Oversight; A Case of Karonga & Chitipa Schemes Keynote Speech by Jamal Saghir, World Bank

7 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 7 Mauritania / STC 3.21 Water and Sanitation Services Management in Small Towns of Mauritania Mauritanie STC 3.21F La Gestion des Services d Eau et d Assainissement dans les Petites Villes de la Mauritanie Morocco / STC 3.20F Externalisation et franchising au Maroc Maroc STC 3.20 Outsourcing and Franchising in Morocco Netherlands STC 3.6 Government-owned PLC in the Netherlands; The Case of Water Company Friesland Niger STC 3.12F Sonexie, Entrepreneur Engagé dans la Gestion Deleguée du Service de l Eau dans les Petites Villes Paraguay STC 3.11 Private Sector Participation (PSP) in Small Town Water Supply Philippines STC 4.6 Sanitation Enhancement in Local Government Units Senegal STC 3.9 The Development and Management of Rural Multi -village Schemes Spain STC 3.15 Water and Sanitation Services Country Overview Tanzania STC 3.5 Hai District Water Supply Project STC 3.7 Rural Water Supply Companies and their Supporting Federation in Morogoro Region Uganda STC 3.16 Local Government Contracts with Private Operators in Uganda STC 3.17 WSS Services (U) Ltd., Private Operator STC 4.5 Who is Responsible for Sanitation? The Case of Lugazi STC 6.5 Features of New Arrangements; Uganda Case Study USA STC 3.4 Rader McDowell County WV Public Service District STC 3.8 Small Water System Management in the United States Vietnam STC 7.1 Let a thousand Flowers Bloom STATEMENT BY H.E. SHIFERAW JARSO MINISTER, MINISTRY OF WATER RESOURCES AT THE OPENING OF THE INTERNATIONAL CONFERENCE ON SMALL TOWN WATER SUPPLY AND SANITATION By His Excellency Shiferaw Jarso Honourable Guests, Dear Participants, Ladies and Gentlemen, It is an honour and privilege to me to welcome you all to this International Conference on Water and Sanitation Services in Small Towns and Multi-Village Schemes on behalf of the Ministry of Water Resources and myself. Ladies and Gentlemen, Ethiopia is a country with a total estimated population of 63.5 million out of which 85% is rural and 15% urban. As per recent sector review figures to date only 31% and 7% of the total population has access to safe water and Keynote Speech by Jamal Saghir, World Bank

8 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 8 sanitation respectively. Our economy is dominated by subsistence level agriculture, which is almost entirely dependent on rainfall that has become increasingly erratic over the past few decades. Generally speaking, Ethiopia, which is endowed with one of the largest fresh water resources in sub Saharan Africa, couldn t effectively utilise this potential so far due to the following challenges: Financial Constraints, Low-level infrastructure, Lack of efficient and stable institutional set up, and Lack of skilled work force. Respected Participants, Ladies and Gentlemen, In developing countries like Ethiopia, access to basic infrastructure services such as water supply, sanitation, road etc. is very low for the majority of the residents. The rapid rate at which the population in developing countries is increasing intensifies the problem. Furthermore, the situation often leads to environmental living conditions that endanger the health of the residents with consequent losses in productivity. Many governments have come to realise that with conventional strategies they will not be able to extend services to all residents as a consequence of which innovative approaches with respect to technical solutions and various ways of involving stakeholders are being introduced world wide. On the basis of the experiences built up over the years, it is visualized that the launching of studies, plans and programmes that contribute to effective and efficient water resources development will be of paramount importance. Affordable water resources development and healthy life are human rights, linked to personal and com munity requirements. We hope the various reforms and efforts done so far including the Ratification of the Policy, the Formulation of the Strategy, the Water Sector Development Programme, the National Water Supply and Sanitation Master Plan and the Basin Studies will contribute their part in changing the current gloomy situation of our country. Empowerment and people-centred development that are based on strategic planning, studies and programmes are important ways to rid our country Ethiopia of the squalid and unhealthy living conditions, facing so many of our people. The Government of Ethiopia is currently exercising further decentralization to the Woreda Level. In order to implement the decentralization in the water sector, the Ministry of Water Resources is working on training packages, which could equip the trainees both on technical and leadership capacities at the Woreda level. In addition, the establishment of water development fund is expected to facilitate the implementation of urban water supply and irrigation programmes. To this end, the intervention of Multi-lateral and Bilateral Donors in the development of the Water Sector in general and that of the Water Supply and Sanitation component in particular remains vital. As one of the donors, the World Bank Water Supply Programme has been making important interventions through RRP, ESRDF and Water Supply Rehabilitation and Development Projects. As a continuation of the ongoing support to the water supply and sanitation sector, the World Bank Water Supply and Sanitation Programme has recently organized the preparation of issue papers by consultants. These studies are believed to identify issues in selected areas, conduct detailed analysis and develop toolkits that will serve as inputs to the development of the next incoming programme. Respected Guests, Ladies and Gentlemen, Poverty remains the biggest hurdle in reaching sustainable development. Its alleviation has become a prime objective of development organizations. The magnitude of poverty is staggering and so are the human sufferings. Low and irregular income as being observed in small towns and elsewhere is one noticeable characteristic of poverty. It is also highly correlated with high morbidity rates, premature deaths and various social ailments like low levels of education. Together, these circumstances make it difficult for the poor in small towns and multi villages to support themselves and also to take part in many social activities. Pervasive and mass poverty must be reduced in order to build a stable society where its members can enjoy water and other forms of security. Keynote Speech by Jamal Saghir, World Bank

9 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 9 Water is a prerequisite for economic growth and social development and the services water provides to humans are more or less endless. Despite that, the degradation and mismanagement of water resources continues threatening economic gains. Water management strategies, regardless of their formulation at a national, international or project level, need to focus more on the interdependence between water as a fundamental natural resource and socioeconomic development. To this end, it may be necessary to aggregate small towns and multi villages for efficiently utilizing the limited financial and human power resources. Moreover, it is required to work with the international community in finding key ingredients for success under limited resources situation. Water experts and other relevant actors therefore need to take a much more proactive role in communicating proposals to decision makers, striking the balance between disciplinary and inter -disciplinary matters. International agencies worldwide have been studying different methods and management models that are also able to provide good quality water at affordable prices to small towns and multi-village schemes. It is encouraging to see that such an exercise is already on the move in our country. To this effect, the aim of this international conference would be to provide a forum to: Share experience amongst sector specialists, governmental and other agencies concerned with small town water supply and sanitation services, Review the findings of the Small Towns and Multi-Village Systems Initiative, and present a case study synthesis report and conclusions on key ingredients for successful small towns water supply intervention. We hope, the presentation of case studies on professional support models, aggregation, contracting options and financing will lead to intended practical solutions. This conference is also expected to launch a second phase of knowledge development in regard to the Town Water Supply and Sanitation Initiative which will help in developing practical tools and take the conclusions to the first phase of this applied research. It is also hoped that the deliberations during the five-days conference will be successful both in providing the participants with information and valuable tools for adoption. May I finally take this opportunity to extend my thanks to the World Bank Water Supply and Sanitation Programme and to all others involved, for sponsoring and organizing this international conference? With this brief remark, I now declare the conference is officially open. I thank you STATEMENT BY YOHANNES GHEBREMEDHIN WATER SUPPLY AND SEWERAGE DEPARTMENT HEAD MINISTRY OF WATER RESOURCES AT THE OPENING OF THE INTERNATIONAL CONFERENCE ON SMALL TOWNS WATER SUPPLY AND SANITATION By Ato Yohannes Ghebremedhin His Excellency Ato Shiferaw Jarso Minister of the Ministry of Water Resources, Honorary Ministers and Representatives of International O rganizations Distinguished Guests, Ladies and Gentlemen; It gives me a great pleasure to present a keynote speech at this august gathering of prominent persons of the water supply and sanitation sector from all over the world. I am honored to participate in this "International conference on Small Towns Water Supply and Sanitation. The convening of this conference in Addis Ababa is both timely and appropriate and for good reasons. Keynote Speech by Jamal Saghir, World Bank

10 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 10 Honorable participants; Ethiopia with its favorable climate is endowed with high amount of rainfall. Nevertheless due to the uneven distribution of these Water Resources spatially and temporally the country has suffered from the effect of drought for several times. The Ministry of Water Resources was preemptive and engaged on strategic initiatives some seven years ago. Since then a series of studies and projects were undertaken towards formulating policies and strategies for the ultimate objective of sustainable water sector development in Ethiopia. Chief among these initiatives is the development of the Water Resources Management Policy of Ethiopia. This Government endorsed policy provides now the much needed overall guidance to the water sector in general and the Water Supply and Sanitation sub sector in particular. By redirec ting its orientation for sustainable development; the water sector in Ethiopia has made appreciable strides towards strategic planning. Strategic planning is different from project planning in the sense that it is not limited to input/output results only. Rather it aims at influencing the course of future events in the desired direction. This is essentially true for two main purposes: (a) Efficient and effective utilization of available resources (b) Sustainable WSS development Subsequent to the development of the policy, the Ministry has completed the Water Sector Strategy and Development program studies. One component of these studies is the Water Supply and Sanitation Development Strategy and program. By successfully executing these strategic initiatives the water sector has irrevocably embarked on the necessary departure from Project Oriented Approaches to the Strategic Planning Process. In this respect for rational WSS programs the tasks shouldn't be limited to the identification of the number of projects in a time frame with the corresponding financial outlay. This has always been the case (albeit with some variations) in conventional planning. The bottom line in conventional project oriented planning is that of "Have money and undertake projects". In our situation, the important message should be "How shall we make efficient use of our limited resources to meet our predefined objectives"? How shall we make ends meet with minimum inputs eventually resulting in maximum benefits? In actual practice this will be translated in terms of identifying who can do what? and when? Best in line with government polices and the evolving role of the private and informal sectors. This further entails, among others, the following: 1. Setting up of the institutional reforms and arrangements on: Regulation / implementation Cross-sectoral coordination Vertical arrangements Functional arrangements The administration of the water councils and the water fund. 2. Laying the legal and regulatory framework for the smooth implementation of the reform agenda. 3. Clear-cut definition of the roles of the various stakeholders including the government at different levels, the private sector, the informal sector, the none governmental organizations and the external supporting agencies. 4. Definition of the criteria for the establishment of fees, accessing fund and prioritizing projects. 5. Choice of technology. 6. Establishment of rational Capacity building that is objective-oriented and in neither too high and squander the meager resources; nor too low and stunts the sustainable development of the Water sector. Keynote Speech by Jamal Saghir, World Bank

11 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 11 Honorable participants; The preparation of water sector development program is one of the important parts of the sector reform agenda, which is pursued by the Ethiopian Government in the water sector. The agenda comprises of formulation of the national water management policy, which has been prepared and endorsed by the council of Ministers. To quote one very important article of our policy on enabling environment; Ensure that the management of water supply systems be at the lowest and most efficient level of institutional set up, which provides for the full participation of users and to promote effective decision making at the lowest practical level. On this line the water sector is in accordance to the government policy of decentralization whereas power is developed to the regional government, further to the Wereda level. This is a significant step with long-term consequences in the water sector. In generic terms the policy outlines broad principles for addressing crosscutting, sectoral and sub-sectoral issues. Following the policy a national water strategy is formulated. The strategy is supposed to set road map in terms of describing national priorities, subsequently the ways and means to realize national water policy objectives. The sector development program consists of the development of a wide range of program and projects which can be implemented at national, regional and local levels including water supply and sanitation, with an objectiv e to secure basis for sustainable development and management of the water resources. Based on the goals and objectives of relevant national and regional development policies tremendous efforts is in progress by the regional government water sector and the Ministry of Water Resource to secure sustainable, efficient, reliable affordable and user acceptable to the population including livestock watering. The impact of inadequate water and sanitation services falls primarily on the poor. Most of them fetch water long distance or end up paying high price to water vendors for very small quantity of water. Coming now to sewerage, it is worse to note that there is no accurate figure regarding sewerage coverage. Yet our sector development program has recognized water supply and sewerage as priority program for action. Safe and enough water supply and adequate sanitation service are the main ingredients in the sustainable development of Ethiopia's rural and urban socio-economics. Currently both urban and rural population alike does not have adequate and safe access to water supply and sanitation services. In accordance to the 1994 Central Statistical Authority (CSA) survey only 24% of the household units in Ethiopia used safe source of water. This figure is very low even by sub-saharan African standards. Consequently over 70% of the contagious diseases in the country are water born / based diseases. The inadequate water supply and sanitation services could be accounted for sources of most of the diseases. If these problems could be alleviated, definitely the morbidity and mortality rates would be significantly reduced. Further the productivity of the population could be increase. As in many parts of the developing countries sanitation issues is disregarded. On the bases of our policy sanitation is defined as representing issues related to water resources management both on site and off site water dependent sanitation systems. In Ethiopia the sanitation coverage is very low, perhaps the lowest as compared to other East African countries. The World development report of 1996 indicates only 10% of the population in Ethiopia had access to proper sanitation facilities. CSA s 1994 report shows that access to sanitary facilities in rural areas is estimated as 6% while in urban areas is estimated as 57%. Consequently overall access to sanitary facilities in the nation was 13%. Recalling the Bonn international conference on fresh water, which was held from 3 up to 7 December 2001; it was found out that the chronic problem which require prompt solution in water supply and sanitation were governance, capacity building and financial mobilization. Again at that particular conference was noted that globally only half the amount of the required fund for the development of the water supply and sanitation is spent currently. In short, among other things no doubt the provision of funds will play a very important role in ameliorating the town water supply and sanitation difficulties. Keynote Speech by Jamal Saghir, World Bank

12 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 12 Honorable participants; With these scenario, where we are facing many challenges in the sector, we look at the conference with the following expectations: A broad comparative perspective on the state of art of small town management, which could be adopted to our country end, would be gained. The output of the conference would also be documented in the conference proceeding, which includes the case studies and issue papers. Further networking on small town management would be enhanced. Subsequently the outcome of the conference could bring forward practical tools, which could be adopted by the beneficiaries. Eventually this information would be disseminated through the Bank s Web site. Honorable participants; Having said this, in brief with a pragmatic approach, we need to work on a step-by-step" series of actions" for continued and sustained development which fit the specific needs of each region so as to accommodate existing realities on the ground with the needed reforms. Towards this end the Ministry of water resources and the Regions have now embarked on a series of initiatives which include institutional reforms in line with the Water Policy, Water supply and sanitation strategy and program and over all Government restructuring. It is hoped that this conference will provide the right environment for the exchange of ideas and experiences from different countries on the issues of sustainable development of Water supply and sanitation in small towns. We earnestly believe that we will draw important lessons from the achievements of other countries. In this process we certainly have the opportunity to enrich our reform agenda in the Water supply and sanitation sub-sector of Ethiopia. I wish all participants a fruitful conference and a pleasant time in Ethiopia. I thank you STATEMENT BY JAMAL SAGHIR DIRECTOR, ENERGY AND WATER, THE WORLD BANK AT THE OPENING OF THE INTERNATIONAL CONFERENCE ON SMALL TOWNS WATER SUPPLY AND SANITATION By Jamal Saghir Public-Private-Partnerships in Small Town Water Supply and Sanitation Mr. Chairman, Your Excellencies, Distinguished Participants, Ladies and Gentlemen: It gives me great pleasure to participate in this important conference. I would like to begin my remarks by thanking the Government of Ethiopia for hosting this conference on Small Town Water Supply and Sanitation, and on behalf of the organizers in the Ministry for Water Resources in Ethiopia, the World Bank and our co-sponsors from Britain and the Netherlands, I would also like to thank you for joining us this afternoon. It is a privilege and an honour to spe ak to such a distinguished audience. This gathering of town water supply and sanitation practitioners here in Addis Ababa provides a unique opportunity not only for sharing our own experiences to improve water and sanitation services in towns, but also to set out our learning priorities, and to discuss how we can better coordinate our work and disseminate the results. 1. Overview of presentation My introductory presentation will focus on public-private-partnerships in town water supply and sanitation, because I believe this partnership to be very important in building the capacity needed to plan, operate and expand town water supply services, independently of their size, scope and areas of activities. In doing so, I would also like to take this opportunity to introduce some of the basic questions and issues that we will be exploring during the conference. Keynote Speech by Jamal Saghir, World Bank

13 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 13 Town Water Supply and Sanitation should not be looked in isolation. Therefore, I believe that at the outset we should set out the big picture and challenges facing the water and sanitation sector, and in this broader context establish the importance of town water supply and sanitation. This is not an academic exercise, I hope that by first presenting these broader issues, I can highlight some of the policy issues and guiding principles that are necessary to implement sound sector reforms. In my views and based on World Bank long experience in this sector, only by first addressing these broader questions, can we make informed decisions about improved management models in town water and sanitation. Water and Sanitation directly contributes to poverty reduction and growth. But increasingly, clients and partners are viewing Water and Sanitation through the prisms of improved health, and a better quality of life. This links our sector in a very practical sense to other sectors and broader thematic priorities. 2. Sector status and role in development What does this mean in terms of our work? At the World Bank Water Forum in May last month, I discussed some of the broad sectorial issues and presented four business lines which we in the World Bank, with our partners, have been called on to address. These are: Liveable cities; Investment Climate and Fiscal Balance; Rural Transformation; and Safeguard Environment. These business lines address many challenges: Rural communities remain ill served or under served; There is a rapidly growing population of unserved urban poor; Sanitation and hygiene are poorly understood in urban and small town settings; Badly run public utilities impose fiscal burden, fail to deliver services to customers, and divert funds from social programs; The contribution of the private sector remains limited; And health and livelihoods are increasingly at risk as we continue to stress our environment. These multi-sectoral linkages need to be understood and fully exploited they are critical if we are to see a more substantial and lasting impact of Water and Sanitation interventions on urban and rural development and poverty reduction. Lets look at some figures just to remind ourselves of the challenge, and the need to reassess our traditional approach. 3. Current reality The current reality is at odds with our talk of efficient, sustainable services for all. If we are to make an impact then we need to recognise that providing good water and sanitation services is more than laying pipes. We face a huge challenge in addressing politically difficult reforms such as: Establishing a sound legal and regulatory environment; Utility governance including accountability to consumers and demand responsiveness; and private sector participation and financing. In other words much remains to be done in the sector on: Access Fiscal environment Regulation Governance Private sector participation Environmental issues and Community management But all of this should be done within the framework of sustainable development within the Millennium Development Goals. Keynote Speech by Jamal Saghir, World Bank

14 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page MDGs: implications for WSS What are those MDG? In short, the Millennium Development Goals are targets adopted by World Bank, the IMF, DAC/OECD and other agencies. The Millennium Development Goals focus attention on the most urgent needs of developing countries, and create a yardstick to assess the efforts of these countries, international agencies, and donors. They establish targets for: Reducing poverty, Improving health and education, and Protecting the environment Water and sanitation contributes to many goals in particular: Goal 2: to ensure environmental sustainability by: Halving between 2000 and 2015 the proportion of people without sustainable access to safe drinking water; And by 2020 to have achieved a significant improvement in the lives of at least 100 million slum dwellers in terms of access to improved sanitation And Goal 4: to reduce Child Mortality by: Reducing by 2/3 the under-5 mortality rate by MDG targets: access increase Meeting the Millennium Development Goal targets will require a significant increase in the provision of services to poor households. In rural areas there is a need for an increase in the rate of access (in other words scaling up sustainable service provision), while accelerating urbanisation means that increasing numbers of people will need to be provided for in towns and cities. 6. MDGs: access increase implications On the other hand, in order to close the access gap, there is a need for additional financing. Estimates of projected investment needed to meet the Millennium Development Goal targets by 2015 show an important increase in investm ent over past trends. The total investment needed for 2000 to 2015 is projected to be $380 billion (or an annual investment of over $25 billion). This means that an increase of over 70% in annual investment is needed. In particular, we must find ways to increase private sector financing in the Water and Sanitation sector. Private sector investments in our sector are still well below the investments made in other infrastructure sectors. 7. Closing the access gap However, it is also important to set a solid foundation for investment. Countries that have good policies and effective institutions can make better use of public funds (incl. external aid.) Sound policies, capable institutions, and well designed and executed national programs are indispensable to achieving lasting improvements in service and sustaining increases in access by the poor. Building sound policies and good institutions requires knowledge creation - ideas about what works and what doesn t work. This is key for helping countries to reform and helping communities to provide better water and sanitation services. And for small towns, why this conference in Addis Ababa is so important. Private participation is a powerful instrument in: Forcing greater discipline on government in clarifying goals, obligations, pricing and accountability; And with a record of achieving substantial gains in efficiency and performance. Government has also a central role to play in: Setting policies; Adapting public institutions to create an enabling environment; And generating and disseminating knowledge. Government also has a role to play in financing water and sanitation where: (1) payback periods for major infrastructure investments far exceeds commercial debt tenors, and (2) the costs of minimum service exceed affordability to the poorest. Keynote Speech by Jamal Saghir, World Bank

15 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Policy and guiding principles Lets now look quickly at some policy and guiding principles in other words the very difficult task of turning all these ideas into concrete work plans. When we consider the four bus iness lines which I highlighted earlier, it is apparent that each one has a significant impact on Town Water Supply and Sanitation. Let me indicate just a few of the actions that I feel can make an impact in the Town Water Supply and Sanitation sub-sector. Promoting market structures which provide incentives for lower cost solutions, appropriate levels of service and a mix of local, national and international providers; Designing institutional arrangements, tariff structures, subsidy policies and regulatory regimes which create no disincentives to expand a system or to serve low-income consumers; Promoting policies which encourage greater accountability, commercial orientation, creditworthiness and customer focus of service providers; Improving the climate for private participation through new financing and risk mitigation instruments, and expansion of local currency lending; Strengthening regulatory capacities to provide impartial, transparent and predictable oversight of service providers; And lastly, red ucing cost and improving service sustainability in accordance with communities expressed preferences and willingness to pay. 9. Town Water and Sanitation After setting the stage and providing a framework, allow me now turn to the important topic of public -privatepartnerships in town water supply and sanitation. I want to share my thoughts with you on why I believe this partnership is essential in building the capacity needed to plan, operate and expand town water supply services. In discussing this important topic, I would also like to introduce some of the basic questions and issues that we will return to during the conference. Why are small towns important? In terms of water supply, what is a small town? What is the existing situation in small towns? Why is professional support important? What are the emerging management model options? The first question is: why are small towns important? The need for improved water supply and sanitation services in small towns emerges from changes in demographics during the 1980 s and 1990 s, and from investments that were targeted at rural communities and urban centers. I draw on material prepared by Hydroconseil to illustrate this point s snapshot As this figure illustrates, during the 1980 s the largest g ap in service provision (by gap I mean settlements without an adequate supply of safe water) was for smaller, rural settlements with populations of less than 3,000 inhabitants. In the figure, the horizontal axis classifies settlements in terms of population size. The vertical axis shows the proportion of settlements of that size that were served by either a national utility or through rural water supply projects, and (in red) the unserved proportion of settlements. For example, if we take settlements of size 10,000 population, about 40 % of these settlements had a water service provided by national utilities, about 40 % were served through rural water supply projects, and about 20 % did not have a proper water supply service. 11. Some progress in rural water supply The 1990s saw two important changes, which together with relatively large investments in rural water supply helped improve coverage in rural areas. First, increased involvement of beneficiaries in design and implementation. Second, decentralizing r esponsibility for planning and implementation to local governments and communities. As we will see, these changes have also had a significant impact on the small towns sub-sector, where responsibility for service provision is often interpreted to mean providing the service. Keynote Speech by Jamal Saghir, World Bank

16 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page s snapshot These positive developments in rural water supply - and the need, from a national policy and strategy perspective, to clarify the scope of rural water supply and sanitation vis a vis urban water supply and sewerage - focused attention during the 1990 s on the need for improved services in mid-sized settlements with populations of around 3,000 to 30, Why are small towns important? To summarise, why are small towns important? The following points in particular are observed: The proportion of rural communities without a proper service deceased by 1/3 A rapid rise in the number of small towns (3,000 to 30,000), with the proportion of unserved small towns doubling A high population growth rate in small towns (of between 1% and 4% per year) Having established the need for improved water supply in small towns, the second question to address is: in terms of water supply, what do we mean when we use the term small town? As my previous comments indicate, the main concer n in defining small towns is to distinguish mid-sized settlements that are not better served by rural, community-managed or urban, utility-managed systems. 14. What is a small town? There is general consensus that the following are important when defining small towns. In terms of water supply, small towns are: Sufficiently large and dense to benefit from economies of scale and higher levels of service offered by piped systems; Complex enough to require formal management arrangements and professional support to supplement routine operations; Requiring expansion to meet demand including good financial management, and Too small and dispersed to be efficiently managed by a conventional urban water utility It is less well understood how to improve sanitation (excreta, solid waste and drainage). In this conference we will have a session dedicated to sanitation in towns, which I hope will shed more light on the subject and guide us on how to learn more about the provision of these services. I would like to focus the remainder of my speech on the management model options for town water supply and sanitation, and in particular the nature of public-private-partnerships. Before doing so let s reflect very briefly on the existing situation in town water supply worldwid e. 15. Existing situation in small towns Three models are predominant in the sub-sector: Direct public management, in which the water utility is integrated into municipal, regional or national government with weak management or financial autonomy. Direct community management, in which a community water user association or water board hires its own operating staff with no formal arrangements for external technical assistance. Informal build-own-operate, in which a private constructor-operator finances and operates a (usually small) system without any formal contractual arrangement. 16. Are default options good enough? These models are what we might be call default options they arise either from a process of decentralisation in which local authorities interpret responsibility for service provision to mean providing the service, or they arise (in the case of build-own operate) in a weak regulatory and legal environment. In other words, nothing is being done to address some of the basic concerns that I have raised earlier in my presentation. For example, to raise just a few points What can be done to improve financial and management Keynote Speech by Jamal Saghir, World Bank

17 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 17 autonomy? What are the performance incentives that ensure good quality and cost effective service provision? And what can be done to ensure universal coverage, in particular to marginal or poor areas? Here in Addis Ababa over the next few days, we are asking ourselves a simple question: are these default options good enough? Do we have a sustainable, expanding sub-sector on this basis? If not, then what can we do to bring about change? I hope that some of the issues that I have already discussed indicate a way forward. I now want to focus on one aspect in particular, that of public-private-partnerships. 17. Why is professional support important? In order to realize the potential of public-private-partnerships in town water supply and sanitation, we must first understand why professional support (which embodies private sector involvement) is important. When discussing town water supply and sanitation there is a need to differentiate between: Routine operations (such as, meter -reading, accounting, and basic operations), and Operations requiring a higher level of skills (such as, financial planning, infrastructure planning and design, and customer systems development) When we refer to professional support in town water supply and sanitation, we are referring back to this fundamental issue: routine operations in town water supply must be supplemented by professional support for operations requiring higher level skills. 18. Table of management model options This last table presents a simplified overview of management model options. The first and second columns indicate the types of management model to which we will refer in the confer ence, and the arrangements for management oversight. These are: Local Government (typically a Town Council representing voters), which is most common; Community (usually with a Water User Association or Water Board representing consumers); Regional or National Utility (which may be either a public utility or parastatal utility); and Private Water Companies or Public Limited Companies (with a Water Board representing shareholders) Most of these models can involve either direct hire of staff or contracting a private operator. And in many ways, the public vs. private debate in the small towns context can be more simply rephrased as hiring staff vs. contracting an operator. The third and forth columns illustrate an important point. Professional support (which as I have mentioned is needed to secure the higher level skills needed) can mean either a bigger, more experienced operator with all the required skills, or it can mean supplemental support to local operating staff. By local I mean either employees of the water user association or water board, or small-scale operators. I also want to stress that both forms of professional support can and should involve the capacity building needed for sustainability. If staff are hired directly, then in addition to the need for supplemental professional support other questions arise that need to be addressed: I have already alluded to these question - for example, How to separate management oversight from operations? How to ensure performance incentives to better manage and operate the system? And How to plan and finance expansion to keep up with demand? To repeat one last point, here in Addis Ababa over the next few days, we are asking ourselves a simple question: are default options good enough? If they are not good enough, then what can we do to bring about change? As we have seen, professional support is important whether provided by a bigger, more experienced operator with all the required skills, or as supplemental support to local operating staff. In the conference we will look not only at the options for professional support, but also at different types of aggregation as a means of making professional support affordable to the town, and financially attractive to the provider. Keynote Speech by Jamal Saghir, World Bank

18 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 18 Thank you. Keynote Speech by Jamal Saghir, World Bank

19 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 19 PUBLIC-PRIVATE-PARTNERSHIP IN SMALL TOWN WATER SUPPLY AND SANITATION By Jamal Saghir Overview of presentation Public-Private-Partnerships in Small Town Water Supply and Sanitation Jamal Saghir Director, Energy and Water The World Bank Addis Ababa, June 11, 2002 Sector status and role in development Millennium Development Goals Closing the access gap Policy issues and guiding principles to implement sound reforms Town Water Supply and Sanitation 3. Sector status and role in development Overview Safeguard Environment Responsible stewardship of water resources Focus the business on four themes or business lines Livable Cities: Serving and Empowering the Urban Poor WSS Rural Transformation : Increase RWSS Access Investment Climate and Fiscal Balance: Building sustainable utilities 4. Current reality... at odds with efficient, sustainable services for all 1.1 billion people without access to improved water 2.4 billion without access to improved sanitation 4.0 billion without sound wastewater disposal 3.0 million children die from waterborne diseases each year Badly run public utilities impose great fiscal burden in resource constrained environments, diverting funds from social programs Politically difficult reforms - regulation, utility governance, private participation, community involvement - are needed to break a cycle of poor performance 5. MDGs: Implications for WSS International consensus is captured through the Millennium Development Goals. WSS contributes to many goals - in particular: Goal 2: Ensure environmental sustainability By 2015: halve proportion of people without sustainable access to safe drinking water By 2020: improve lives of 100 million slum dwellers through access to improved sanitation Goal 4: Reduce Child Mortality By 2015: reduce by 2/3 the under-5 mortality rate MDG targets: access increase MDG targets require a significant increase in extension of services to poor households In rural areas, a sharp increase in the rate of access is needed Accelerating urbanization means the majority to be served will reside in urban areas Urban Population (Billions) * W/ Water Access W/ Sanitation Access Rural Population (Billions) * Source: World Development Indicators, The World Bank Key Ingredients for Success in Small Towns Water Supply

20 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 20 US$ (Billions) 7. MDGs: access increase implication More investment needed Average Annual Investment Implications of MDG Targets (US$b) Investments ( ) Investment Needed ( ) Source: WHO Global Assessment Global Water Partnership/WB Estimates Estimated 70% increase in annual investment 8. Closing the access gap Increased investment (annual investment of over $25 billion needed)... but also closing knowledge, policy and capacity gaps What works and what doesn t work? Private sector participation and financing Government has a central role 9. Policy and guiding principles Incentives for lower cost solutions, appropriate levels of service and a mix of local, national and international providers Tariff structures and subsidy policies which create no disincentives to expand a system or to serve low-income consumers Encourage greater accountability, commercial orientation, creditworthiness and customer focus New financing and risk mitigation instruments, and expansion of local currency lending Impartial, transparent and predictable oversight of service providers Reduce cost and increase sustainability in accordance with communities preferences and wtp 10. Town Water and Sanitation Why are small towns important? What is a small town? What is the existing situation? Why is professional support important? What are the management model options? 11. During the 80 s, the main gap (settlements without a proper water supply) was for smaller, rural settlements (pop < 3,000) s snapshot 40% 40% rural water supply no proper water supply national utility size of settlement 12. Some progress in RWS Over the last decade, progress in rural water supply can be attributed in part to: Large investments in rural water supply Increased involvement of beneficiaries in design and implementation Decentralising responsibility for planning and implementation to local governments and communities These developments have also had significant impact on the small towns sub-sector Key Ingredients for Success in Small Towns Water Supply

21 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page s snapshot 14. Why are small towns important? During the 90's, the main gap (settlements without a proper water supply) shifts to midsized settlements (pop 3,000 to 30,000) rural water supply no proper water supply national utility Summary: Proportion of rural communities without a proper service deceased by 1/3 Rapid rise in the number of small towns, and proportion of unserved small towns doubles High population growth rate in small towns (between 1% and 4% per year) 15. What is a small town? Sufficiently large and dense to benefit from a piped system Complex enough to require formal management and professional support Requires expansion to meet growing demand Too small and dispersed for a conventional urban water utility 16. Existing situation in small towns Three default options predominate: Direct public management - utility has weak management or financial autonomy Direct community management - water user association or water board hires its own staff with limited external technical assistance Informal build-own-operate (BOO) - private constructor-operator working without a formal contract 17. Are default options good enough? These default options arise when: Local authorities interpret responsibility for service provision to mean providing the service, or (in the case of informal build-own operate) in a weak regulatory and legal environment 18. Why is professional support important? Need to distinguish between: Routine operations (e.g. meterreading, accounting, basic operations etc.), and Operations requiring higher level of skills i.e. professional support (e.g. financial planning, infrastructure planning and design, customer systems development etc.) Key Ingredients for Success in Small Towns Water Supply

22 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Management model options Model Oversight Operations (public Vs. private) External support to local operating staff Community Local Government Regional or National Utility Private Water Company, or Public Ltd. Company WUA or Water Board Town Council either public body, or parastatal Water Board Either (i) Direct Hire of staff, or (ii) Private Operator (small, local) or (iii) Private Operator (full service) For example: (i) Private Sector (e.g. retainer contracts, franchising), or (ii) Higher Level Organizations (e.g. regional or national utility, NGOs, regional association of WUAs) No external support needed Thank you KEY INGREDIENTS FOR SUCCESS IN SMALL TOWNS WATER SUPPLY By Bernard Collignon 21. Water and Sanitation Services in Small Towns and Multi-Village Schemes Addis Ababa June 11-15, 15, 2002 Water and Sanitation Program The World Bank and the World Bank Institute Key Ingredients for Success in Small Towns Water Supply Bernard Collignon Hydroconseil 22. Small towns water systems management : a rising issue A high population growth rate in the small towns (1 4 % per year) A rise in the number of towns whose population exceeds 2,000 inhabitants, The reluctance of national water utilities to deserve more towns Key Ingredients for Success in Small Towns Water Supply

23 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page The number of small water scheme in Benin rose very quickly during the last 5 years 24. National scale utilities (public or private) are reluctant to deal with small towns, because profitability is uncertain (consumption is low and running costs are high) Année de mise en service Evolution du nombre d'aev au Bénin Total Therm Sol Elect Autre Sales (m3/year.customer) 0 Abidjan Small Towns Network length (m/customer) Abidjan Small Towns % 100% 50% 0% Profitability of the various schemes managed by ONEA (Burkina Faso) profitable 100% 80% 60% 40% 20% 0% % 80% 60% rural water supply gap national utility During the 90's, the gap (localities without a proper water supply) increased in small towns (3,000 to 30,000 inhabitants) rural water supply gap -50% 40% national utility -100% -150% non profitable Annual cash flow ($) 20% 0% A rising demand.for an improved service Demand is growing for piped water systems (instead of dug wells and hand pumps) Even in small villages, and that is the success factor for multi-village piped systems 28. The number of small water schemes in Senegal rose quickly during the last 20 years. Most of them are supplying a small town + some villages Small piped systems funded by administration in Senegal Key Ingredients for Success in Small Towns Water Supply

24 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Demand is growing for house connection (instead of standposts and kiosks) Mauritania - water supply in 33 small towns - In the last 6 years, customers shifted from standpipe to house connection Standpipe users House connection users 30. Overview of the most frequent management models for water (and sanitation) in small towns Direct management by local authorities is still frequent But delegation is a growing option And various levels of delegation can coexist in the same country 0 starting ( ) now (2001) 31. Direct management by local authorities Advantages so simple no need for contract Limitations no independent control, no regulation low reactivity when breakdown low demand responsivity Where? most common management model when nothing else very common model in countries with a strong municipal tradition (Latin America, Vietnam, Cabo Verde ) 32. Delegation Advantages oversight is possible, because operator is independent of owner operator is a water supply and sanitation professional Limitations to find an operator, ready to support the business risk to draw a contract (although no suitable framework exist in almost the countries) Where? every country and most promising (growing number of towns choosing delegation) Management models in small towns Direct municipal management Direct community management Municipal autonomous utility Contract duration 33. % investment by operator Examples no contract 0% Colombia no contract 0% Ghana, Tanzania no limit 0% no risk Colombia, Vietnam Management contract 2-5 years 2-5 % low risk DBL (Design, build, lease) Benin, Mauritania (early stage) 5-15 years 2-10% Philippines, Colombia Lease contract 5-15 years 10-30% Concession to private entreprise BOT (Build, operate,transfer) BOO (Built, operate, own) years 30-50% years 100% no limit 100% high risk Mauritania, Colombia, Vietnam (Coop) no examples in S.T. except agregation no examples in small towns Paraguay, Cambodia, Niger 34. Occurrence of various management models in small towns 1. Still predominant traditional management models 2. Management models that are proving to be more and more popular in various contexts 3. Most promising Key Ingredients for Success in Small Towns Water Supply

25 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Traditionnal management models are still predominant in countries were no improvment was introduced in the regulatory framework Direct management by local authorities (Cape Verde, Colombia ) Informal management, often called community management even if no CBO is formally in charge (Senegal, Burkina Faso ) Informal BOO : a private operator invests out of any contractual arrangement (Niger, Cambodia ) Management models that are proving to be more and more popular Private entrepreneurs with a lease contract (Mauritania, Niger ) Private entrepreneurs with a management contract, including performance incentives (Benin, Ghana ) 21% Management model in 200 Mauritania small towns 4% Concession naire (private) Community (association) 75% Municipality Management models that are proving to be more and more popular in various contexts Public utilities (Municipal Colombia, Somalia - Provincial Vietnam) with a complete autonomy from administration, with a concession styled contract. 45% Management models for the 125 small towns of Antioquia Dep. (Colombia) 24% 31% Private entreprise (leasing contract) Municipal utility Municipality (direct management) Most promising management models (recent innovations, designed to adress crucial issues) DBL (design, build, lease), designed to address the lack of candidates for lease contracts : Philippines, Paraguay, Colombia Franchising, designed to address the technical deficiency of local operators (proposal for ONEP Morocco- and Ghana) Transforming the existing BOO (build own operate) with very few rules in true concessions with rules and guarrantees Key ingredients for success 39. Financial and management autonomy Meeting the demand (suitable standards) Transparency, accountability Incentives for expansion A professional operator Competition 40. Key ingredients for success A full financial and management autonomy of the operator in financial matters (no subsidy, money from water remains in water sector) as regards employment (no civil servant, water utility objective is not to solve unemployment issue) as regards recovery (operator can disconnect clients who are not paying including public administrations). Key Ingredients for Success in Small Towns Water Supply

26 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Key ingredients for success Transparency, accountability Accountability is necessary to fulfil most contracts obligations Transparency is an important way to win the customers support (and tariff adjustment approval)..but it is not a very common quality for utilities 42. Key ingredients for success Contracts should include incentives for expansion or or just not prevent local operators to invest in expansion Morocco : local operators went beyond contract obligations and extended house connection service although public investment was limited to trunk pipes Mauritania : local private operators expand networks to reach new customers, even if it is not in their contract 43. Mauritania : local private operators expand networks to reach new customers, even if it is not in their contract In Mauritania, during the 5 last years, customers and operators (with a lease contract) funded long extensions (60 % of networks) 0 Mata Moulana Tiguent Keur Macene Moudjeria R'Kiz Bouhdida Magta Lahjar Extension (m) = private investment Initial network length (m) = public investment 44. Key ingredients for success A professionnal operator Pure «community management», with voluntary technicians and accountants is inadequate for piped motorized water systems. Professional technical and financial staff is a need for any operator. Few programs are designed to train this kind of professional staff in small towns. Professional support (or outsourcing) is a promising solution for special operations : leakage detection, filtration station monitoring 45. Key ingredients for success Competition competition at the entrance (bidding processes) let the door open (every new provider is welcome), always for production and bulk supply, but also for competitive distribution network in the same area (e.g. Aguateros in Paraguay) : no territory territory when the coverage is high, that is time for a concession-style style contract (with a 100 % coverage obligation) contract duration according to investment life (not shorter to to attract investment, not longer to introduce competition as soon as reasonable) 46. Some crucial issues still not properly adressed Tariff setting Cross subsidy mechanism between large and small towns Service provision to low income groups How to attract new investors in less attractive towns Sanitation Key Ingredients for Success in Small Towns Water Supply

27 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Issue 1 Tariff setting is very often not efficient, unwritten, depending of arbitrary political decision making The national policy should provide rules for local negotiations about tariff setting + if possible, professional regulatory bodies (e.g. Commission regulatoria de Agua and Super intendencia in Colombia) But it is not always necessary to introduce centralised tariff setting mechanisms (e.g. Mali) And when these centralised mechanisms exist, they are often ineffective (e.g. Mauritania) 48. Issue 2 Cross subsidy mechanism between large and small towns disappear after decentralisation and desaggregation processes Aggregation is an easy way to introduce cross subsidy between small and large towns (e.g.sodeci in Côte d Ivoire) d Aggregation rises service standards in small towns and rising standards is costly In order to be cost effective, large utilities managing many aggregated small towns can use outsourcing procedures (e.g. ONEP in Morocco, SODECI in Côte C d Ivoire) d 49. Issue 3 Service provision to low income groups in small towns (how to provide a 100 % coverage?) In small towns, standpost is the most frequent option to serve the poor But standposts are closed when the number of customers is too low (Mauritania, Senegal) Few contracts deal with this issue (how to subsidize this basic level of service?) In Africa, this issue is probably less crucial than in large towns, because low level of social segregation (no slums) and land tenure issue is less sensitive than in capital cities 50. Issue 4 How to attract new investors in less attractive towns (very small towns, remote areas, high cost production systems )? Aggregation (and contractual obligation to supply every town with more than X inhabitants) Suitable service delivery standards, in order to reduce unit costs (e.g. in Vietnam small towns, unit cost for systems expansion is only US$ / inhabitant) 51. Issue 5 In small towns, most contracts deal with water but not sanitation In most small towns, users build on-site sanitation systems, because no sewer exists On-site sanitation is a private business (public intervention is generally not efficient) Issue 5 Sanitation 52. Water contracts could provide obligation for sanitation services, like cesspool emptying and provision for tariff increase to finance this service Because customers are reluctant to pay more (especially in very small towns : e.g. France), it is necessary to open space for local negotiation, town by town And small private providers are generally more cost effective and customers friendly than inefficent municipal cesspool emptying service Key Ingredients for Success in Small Towns Water Supply

28 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page 28 LES PRINCIPAUX INGREDIENTS DU SUCCES POUR L APPROVISIONNEMENT EN EAU DES PETITES VILLES By Bernard Collignon 1. Services de l eau et l assainissement dans les petites villes et les systèmes multi-villages Addis Abeba Juin 2002 Programme Eau et Assainissement Banque Mondiale et Institut de la Banque Mondiale Les principaux ingrédients du succès pour l approvisionnement en eau des petites villes Bernard Collignon Hydroconseil 2. La gestion de l eau dans les petites villes : un enjeu de plus en plus crucial : La population des petites villes croît à un rythme élevé (1 4 % par année) Le nombre de villes dépassant habitat augmente très s rapidement Les compagnies nationales des eaux rechignent à desservir plus de villes 3. Le nombre de petites adductions d eau d s est s accru très s rapidement ces 5 dernières res années au BéninB Année de mise en service Evolution du nombre d'aev au Bénin Total Therm Sol Elect Autre 4. Les compagnies nationales des eaux (publiques ou privées) rechignent à traiter les petites villes, parce que la rentabilité y est incertaine (la consommation est faible alors que les charges d exploitation d sont importantes) Sales (m3/year.customer) 0 Abidjan Small Towns Network length (m/customer) Abidjan Small Towns % 100% 50% 0% -50% Profitability of the various schemes managed by ONEA (Burkina Faso) profitable 100% 80% 60% 40% 20% 0% rural water supply gap 100% 80% 60% 40% national utility Durant les années 90, le déficit de l offre (les localités s ne disposant pas d un système d approvisionnement répondant à la demande) s est s accru dans les petites villes (3 000 to habitants) rural water supply gap national utility -100% non profitable Annual cash flow ($) 20% -150% 0% Key Ingredients for Success in Small Towns Water Supply

29 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page Une demande croissante.pour un service amélior lioré La demande croît t pour les petites adductions d eau (plutôt t que des puits et des forages avec pompe manuelle) même me dans les petits villages et cela explique le succès s des systèmes multi-villages 8. Le nombre de petits réseaux au Sénégal s est accru très fortement durant ces 20 dernières res années. La plupart d entre elles alimentent une petite villes + quelques villages voisins Small piped systems funded by administration in Senegal La demande s accros accroît t pour des branchements à domicile (plutôt t que des bornes fontaines) Mauritania - water supply in 33 small towns - In the last 6 years, customers shifted from standpipe to house connection Standpipe users House connection users starting ( ) now (2001) 10. Panorama des modèles de gestion les plus courants pour l eau l et l assainissement dans les petites villes La gestion directe par les collectivités locales est encore très s fréquente Mais la délégation d est une option de plus en plus fréquente Et plusieurs niveaux de délégation peuvent coexister dans le même m me pays Durée du contrat 11. Exemples Pas de délégation Régie municipale autonome pas de contrat 0% Colombie Gestion communautaire directe pas de contrat 0% Ghana, Tanzanie Délégation à un opérateur professionnel Entreprise municipale autonome pas de limite 0% pas de risque Colombie, Vietnam Contrat de délégation de gestion DBL (Design, build, lease) Affermage 5-15 ans 10-30% Concession ans 30-50% BOT (Build, operate,transfer) BOO (Built, operate, own) 2-5 ans 2-5 % risque limité Benin, Mauritanie (initialement) 5-15 ans 2-10% Philippines, Colombie ans 100% Investissement par le délégataire Mauritanie, Colombie, Vietnam (Cooperative) pas d'exemples dans les petites villes (sauf agrégation) pas d'exemples dans les petites villes pas de limite 100% risque élevé Paraguay, Cambodge, Niger 12. Les principaux ingrédients du succès L autonomie financière et dans la gestion Répondre à la demande (adapter les standards) Transparence, audit Des encouragements à l expansion du service Un opérateur professionnel La concurrence Key Ingredients for Success in Small Towns Water Supply

30 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page Les principaux ingrédients du succès L opérateur doit avoir une complète autonomie financière et de gestion En matière financière (pas de subvention, mais les produits de l activit l activité restent investis dans le secteur de l eau) En matière de ressources humaines (pas de fonctionnaires, la compagnie des eaux n est pas destinée à combattre le chômage) En matière de recouvrement (l op opérateur peut déconnecter les clients qui n ont pas payé, même me si ce sont des administrations publiques) 14. Les principaux ingrédients du succès Transparence, audit indépendant Rendre des comptes audités s est généralement une obligation contractuelle pour l op l opérateur mais c est c aussi un moyen important de gagner le soutien des usagers (et l approbation des hausses tarifaires) Malheureusement, ce n est pas la qualité première des compagnies des eaux 15. Les principaux ingrédients du succès Les contrats devraient toujours inclure des encouragements à étendre le service ou simplement ne pas mettre freiner ll investissement par les opérateurs locaux (standards irréalistes, bureaucratie ) Maroc : les opérateurs locaux vont au-delà de leur contrat de travaux et participent à l extension des réseaux (travaux de tiers et branchements) bien que l investissement public soit limité au réseau r principal Mauritanie : les concessionnaires étendent les réseaux pour atteindre de nouveaux clients, même me si ce n est pas dans leur contrat 16. Mauritanie : les concessionnaires étendent les réseaux pour atteindre de nouveaux clients, même me si ce n est n pas dans leur contrat In Mauritania, during the 5 last years, customers and operators (with a lease contract) funded long extensions (60 % of networks) 0 Mata Moulana Tiguent Keur Macene Moudjeria R'Kiz Bouhdida Magta Lahjar Extension (m) = private investment Initial network length (m) = public investment 17. Les principaux ingrédients du succès Un opérateur professionnel La gestion communautaire pure, avec des gérants et des techniciens bénévoles b ne convientpour les systèmes motorisés. Une équipe de professionnels (techniques et financiers) est nécessaire à tout opérateur. Trop peu de programmes sont engagés pour former ce genre de professionnels dans les petites villes. La fourniture de services par des professionnels (et l externalisation) l sont des pistes de solution prometteuses pour les opérations les plus techniques : recherche de fuites, gestion des stations de filtration 18. Les principaux ingrédients du succès La concurrence A l entrée e (processus de mise en concurrence) Il n existe n pas de monopole naturel pour l eau : il faut laisser la porte ouverte à tout nouvel opérateur ; c est évident pour la production et la fourniture d eau, mais c est également vrai pour la distribution à l intérieur même m me des quartiers (exemple : les aguateros du Paraguay) C est seulement quand le taux de couverture est très élev levé qu il est intéressant de passer à un contrat comportant des clauses d exclusivit é (de type concession) avec une obligation de couvrir 1A00 % de la demande La durée e du contrat doit être calée e sur la durée d amortissement des investissements attendus de l opérateur (pas plus pas pas moins) Key Ingredients for Success in Small Towns Water Supply

31 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page Quelques enjeux cruciaux encore mal réglés s dans les petites villes La tarification Les subventions croisées entre grandes et petites villes L approvisionnement des groupes d usagers à faibles revenus Comment attirer de nouveaux investisseurs dans les villes les moins attractives? L assainissement 20. Enjeu 1 La politique tarifaire est très souvent inefficace, informelle, soumise à l arbitraire des cécisions cisions politiques La politique nationale (d eau et d assainissement dans les petites villes) devrait fournir des procédures facilitant la négociation locale des tarifs + les services de professionnels de la régulation (exemple : Commission regulatoria de Agua and Super Intendencia en Colombie) Mais il n est pas nécessaire d instituer des mécanismes centralisés s de tarification (il n y y en a pas au Mali par exemple) Et quand de tels mécanismes m centralisés existent, ils sont inefficaces (en Mauritanie par exemple) 21. Enjeu 2 Les mécanismes m de subvention croisée entre grandes et petites villes disparaissent à la suite de la décentralisation d et de la désagrd sagrégation gation des grandes entreprises publiques L agrégation gation est un moyen efficace d introduire d une subvention croisée e entre petites et grandes villes (exemple : SODECI en Côte d Ivoire) Mais ll agrégation gation pousse le standard d é équipement vers le haut dans les petites villes et cela entraîne ne nécessairement des surcoûts Pour réduire r leurs charges, les grandes compagnies qui gèrent de nombreuses petites localités s peuvent recourir à l externalisation (exemples : ONEP au Maroc, SODECI en Côte d Ivoire) d 22. Enjeu 3 Fournir l eau l aux usagers à faibles revenus dans les petites villes (comment assurer la couverture de 100 % des familles?) Dans les petites villes, le mode de desserte le plus fréquent est la borne-fontaine Mais ces points d eau sont fermés quand le nombre de branchements augmente (Mauritanie, Sénégal) S Peu de contrats prennenten compte cet enjeu (comment subventionnerle service de base : les bornes-fontaines)?) En Afrique,, cet enjeu est probablemùent ent moins sensible dans les petites villes que dans les grandes villes,, car le niveau de ségrégation gation sociale est plus faible (pas de bidonvilles) ) et que les question foncières sont moins sensibles que dans les capitales. 23. Enjeu 4 Comment attirer de nouveaux investisseurs dans les localités les moins attractives (très petites villes, zones isol ées, systèmes de production coûteux ) )? L agrégation gation de ces villes dans des ensembles rentables (et l obligation de desservir toute localité de plus de X habitants) Des standards d é équipement bien adaptés,, afinde réduire les charges d investissement (exemple : au Vietnam, les opérateurs locaux installent des extensions de réseau pour seulement10-20 US$ / habitant) 24. Enjeu 5 L assainissement Dans la plupart des petites villes, les usagers construisent des systèmes d assainissement autonomes (parce qu il n existe pas d égouts) L assainissement autonome est un investissement privé (et les interventions publiques en ce domaine sont souvent inefficaces, voire contre-productives) Key Ingredients for Success in Small Towns Water Supply

32 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page Enjeu 5 L assainissement Les contrats de déllégation d pour ll eau pourraient contenir des obligations en matière d assainissement (comme la vidange des fosses) et des clauses permettant d en répercuter r le co ût dans le tarif de l eau l Mais comme les consommateurs rechignent à payer l eau plus cher (particulièrement rement dansles petites villes,, et la France en est un bon exemple), il est indispensable que ce genre de décision soit l objet d une négociation n locale, ville par ville Et les petits opérateur privés sont généralement les plus effices pour fournirdes services de vidange à un prix intéressant 26. Services de l eau et l assainissement dans les petites villes et les systèmes multi-villages Addis Abeba Juin 2002 Programme Eau et Assainissement Banque Mondiale et Institut de la Banque Mondiale Les principaux ingrédients du succès pour l approvisionnement en eau des petites villes Bernard Collignon Hydroconseil LES PRINCIPAUX INGREDIENTS DU SUCCES POUR L APPROVISIONNEMENT EN EAU DES PETITES VILLES By Bernard Collignon 27. Services de l eau et l assainissement dans les petites villes et les systèmes multi-villages Addis Abeba Juin 2002 Programme Eau et Assainissement Banque Mondiale et Institut de la Banque Mondiale Les principaux ingrédients du succès pour l approvisionnement en eau des petites villes Bernard Collignon Hydroconseil 28. La gestion de l eau dans les petites villes : un enjeu de plus en plus crucial : La population des petites villes croît à un rythme élevé (1 4 % par année) Le nombre de villes dépassant habitat augmente très s rapidement Les compagnies nationales des eaux rechignent à desservir plus de villes 29. Le nombre de petites adductions d eau d s est s accru très s rapidement ces 5 dernières res années au BéninB Année de mise en service Evolution du nombre d'aev au Bénin Total Therm Sol Elect Autre 30. Les compagnies nationales des eaux (publiques ou privées) rechignent à traiter les petites villes, parce que la rentabilité y est incertaine (la consommation est faible alors que les charges d exploitation sont importantes) Sales (m3/year.customer) 0 Abidjan Small Towns Network length (m/customer) Abidjan Small Towns Key Ingredients for Success in Small Towns Water Supply

33 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page % 100% 50% 0% -50% Profitability of the various schemes managed by ONEA (Burkina Faso) profitable 100% 80% 60% 40% 20% 0% rural water supply gap 100% 80% 60% 40% national utility Durant les années 90, le déficit de l offre (les localités s ne disposant pas d un système d approvisionnement répondant à la demande) s est s accru dans les petites villes (3 000 to habitants) rural water supply gap national utility -100% non profitable Annual cash flow ($) 20% -150% 0% Une demande croissante.pour un service amélior lioré La demande croît t pour les petites adductions d eau (plutôt t que des puits et des forages avec pompe manuelle) même me dans les petits villages et cela explique le succès s des systèmes multi-villages 34. Le nombre de petits réseaux au Sénégal s est accru très fortement durant ces 20 dernières res années. La plupart d entre elles alimentent une petite villes + quelques villages voisins Small piped systems funded by administration in Senegal La demande s accros accroît t pour des branchements à domicile (plutôt t que des bornes fontaines) Mauritania - water supply in 33 small towns - In the last 6 years, customers shifted from standpipe to house connection Standpipe users House connection users 0 starting ( ) now (2001) 36. Panorama des modèles de gestion les plus courants pour l eau l et l assainissement dans les petites villes La gestion directe par les collectivités locales est encore très s fréquente Mais la délégation d est une option de plus en plus fréquente Et plusieurs niveaux de délégation peuvent coexister dans le même m me pays Key Ingredients for Success in Small Towns Water Supply

34 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page 34 Durée du contrat 37. Pas de délégation Régie municipale autonome pas de contrat 0% Colombie Gestion communautaire directe pas de contrat 0% Ghana, Tanzanie Délégation à un opérateur professionnel Entreprise municipale autonome Contrat de délégation de gestion DBL (Design, build, lease) Affermage 5-15 ans 10-30% Concession ans 30-50% BOT (Build, operate,transfer) BOO (Built, operate, own) Exemples pas de limite 0% pas de risque Colombie, Vietnam 2-5 ans 2-5 % risque limité Benin, Mauritanie (initialement) 5-15 ans 2-10% Philippines, Colombie ans 100% Investissement par le délégataire Mauritanie, Colombie, Vietnam (Cooperative) pas d'exemples dans les petites villes (sauf agrégation) pas d'exemples dans les petites villes pas de limite 100% risque élevé Paraguay, Cambodge, Niger 38. Les principaux ingrédients du succès L autonomie financière et dans la gestion Répondre à la demande (adapter les standards) Transparence,, audit Des encouragements à l expansion du service Un opérateur professionnel La concurrence 39. Les principaux ingrédients du succès L opérateur doit avoir une complète autonomie financière et de gestion En matière financière (pas de subvention, mais les produits de l activit l activité restent investis dans le secteur de l eau) En matière de ressources humaines (pas de fonctionnaires, la compagnie des eaux n est pas destinée à combattre le chômage) En matière de recouvrement (l op opérateur peut déconnecter les clients qui n ont pas payé, même me si ce sont des administrations publiques) 40. Les principaux ingrédients du succès Transparence, audit indépendant Rendre des comptes audités s est généralement une obligation contractuelle pour l op l opérateur mais c est c aussi un moyen important de gagner le soutien des usagers (et l approbation des hausses tarifaires) Malheureusement, ce n est pas la qualité première des compagnies des eaux 41. Les principaux ingrédients du succès Les contrats devraient toujours inclure des encouragements à étendre le service ou simplement ne pas mettre freiner l investissement par les opérateurs locaux (standards irréalistes, bureaucratie ) Maroc : les opérateurs locaux vont au-delà de leur contrat de travaux et participent à ll extension des réseaux (travaux de tiers et branchements) bien que l investissement public soit limité au réseau r principal Mauritanie : les concessionnaires étendent les réseaux pour atteindre de nouveaux clients, même me si ce n est pas dans leur contrat 42. Mauritanie : les concessionnaires étendent les réseaux pour atteindre de nouveaux clients, même me si ce n est n pas dans leur contrat In Mauritania, during the 5 last years, customers and operators (with a lease contract) funded long extensions (60 % of networks) 0 Mata Moulana Tiguent Keur Macene Moudjeria R'Kiz Bouhdida Magta Lahjar Extension (m) = private investment Initial network length (m) = public investment Key Ingredients for Success in Small Towns Water Supply

35 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page Les principaux ingrédients du succès Un opérateur professionnel La gestion communautaire pure, avec des gérants et des techniciens bénévolesb ne convientpour les systèmes motorisés. Une équipe de professionnels (techniques et financiers) est nécessaire à tout opérateur. Trop peu de programmes sont engagés pour former ce genre de professionnels dans les petites villes. La fourniture de services par des professionnels (et l externalisation) l sont des pistes de solution prometteuses pour les opérations les plus techniques : recherche de fuites, gestion des stations de filtration 44. Les principaux ingrédients du succès La concurrence A l entrée e (processus de mise en concurrence) Il n existe n pas de monopole naturel pour l eau : il faut laisser la porte ouverte à tout nouvel opérateur ; c est évident pour la production et la fourniture d eau, mais c est également vrai pour la distribution à l intérieur même m me des quartiers (exemple : les aguateros du Paraguay) C est seulement quand le taux de couverture est très élev levé qu il est intéressant de passer à un contrat comportant des clauses d exclusivit é (de type concession) avec une obligation de couvrir 1A00 % de la demande La durée e du contrat doit être calée e sur la durée d amortissement des investissements attendus de l opérateur (pas plus pas pas moins) 45. Quelques enjeux cruciaux encore mal réglés s dans les petites villes La tarification Les subventions croisées entre grandes et petites villes L approvisionnement des groupes d usagers à faibles revenus Comment attirer de nouveaux investisseurs dans les villes les moins attractives? L assainissement 46. Enjeu 1 La politique tarifaire est très souvent inefficace, informelle, soumise à l arbitraire des cécisions cisions politiques La politique nationale (d eau et d assainissement dans les petites villes) devrait fournir des procédures facilitant la négociation locale des tarifs + les services de professionnels de la régulation (exemple : Commission regulatoria de Agua and Super Intendencia en Colombie) Mais il n est pas nécessaire d instituer des mécanismes centralisés s de tarification (il n y y en a pas au Mali par exemple) Et quand de tels mécanismes m centralisés existent, ils sont inefficaces (en Mauritanie par exemple) 47. Enjeu 2 Les mécanismes m de subvention croisée entre grandes et petites villes disparaissent à la suite de la décentralisation d et de la désagrd sagrégation gation des grandes entreprises publiques L agrégation gation est un moyen efficace d introduire d une subvention croisée e entre petites et grandes villes (exemple : SODECI en Côte d Ivoire) Mais ll agrégation gation pousse le standard d é équipement vers le haut dans les petites villes et cela entraîne ne nécessairement des surcoûts Pour réduire r leurs charges, les grandes compagnies qui gèrent de nombreuses petites localités s peuvent recourir à l externalisation (exemples : ONEP au Maroc, SODECI en Côte d Ivoire) d 48. Enjeu 3 Fournir l eau l aux usagers à faibles revenus dans les petites villes (comment assurer la couverture de 100 % des familles?) Dans les petites villes, le mode de desserte le plus fréquent est la borne-fontaine Mais ces points d eau sont fermés quand le nombre de branchements augmente (Mauritanie, Sénégal) S Peu de contrats prennenten compte cet enjeu (comment subventionnerle service de base : les bornes-fontaines)?) En Afrique,, cet enjeu est probablemùent ent moins sensible dans les petites villes que dans les grandes villes,, car le niveau de ségrégation gation sociale est plus faible (pas de bidonvilles) ) et que les question foncières sont moins sensibles que dans les capitales. Key Ingredients for Success in Small Towns Water Supply

36 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page Enjeu 4 Comment attirer de nouveaux investisseurs dans les localités les moins attractives (très petites villes, zones isol ées, systèmes de production coûteux ) )? L agrégation gation de ces villes dans des ensembles rentables (et l obligation de desservir toute localité de plus de X habitants) Des standards d é équipement bien adaptés,, afinde réduire les charges d investissement (exemple : au Vietnam, les opérateurs locaux installent des extensions de réseau pour seulement10-20 US$ / habitant) 50. Enjeu 5 L assainissement Dans la plupart des petites villes, les usagers construisent des systèmes d assainissement autonomes (parce qu il n existe pas d égouts) L assainissement autonome est un investissement privé (et les interventions publiques en ce domaine sont souvent inefficaces, voire contre-productives) 51. Enjeu 5 L assainissement Les contrats de déllégation d pour ll eau pourraient contenir des obligations en matière d assainissement (comme la vidange des fosses) et des clauses permettant d en répercuter r le co ût dans le tarif de l eau l Mais comme les consommateurs rechignent à payer l eau plus cher (particulièrement rement dansles petites villes,, et la France en est un bon exemple), il est indispensable que ce genre de décision soit l objet d une négociation n locale, ville par ville Et les petits opérateur privés sont généralement les plus effices pour fournirdes services de vidange à un prix intéressant 52. Services de l eau et l assainissement dans les petites villes et les systèmes multi-villages Addis Abeba Juin 2002 Programme Eau et Assainissement Banque Mondiale et Institut de la Banque Mondiale Les principaux ingrédients du succès pour l approvisionnement en eau des petites villes Bernard Collignon Hydroconseil PROFESSIONAL SUPPORT AND AGGREGATION By Robert Roche Two years ago the Bank facilitated an internet conference on town water supply. At that time participants debated if there was such a thing as a town water supply distinct from rural or urban water supply. In fact, the discussion focused on one question. What is a small town water supply? The result of that discussion was that towns do have a niche, requiring unique management strategies. Participants concluded that town water supplies are sufficiently large to benefit from economies of scale offered by piped systems, and that they are too big to be operated informally by communities, but too What s a Town Water Supply? Economies of scale = piped Too big to be operated informally communitie Too small to finance their own complement of staff to operate, maintain, and facilities. small to be operated efficiently by a typical urban water supply utility. For our discussion today, I would like to modify that definition as you can see on the screen, that is they are too big to be operated informally by communities, but too small to finance their own full complement of staff to efficiently operate, maintain, and expand facilities. Basically towns need professional support to secure efficient, sustainable services that can be expanded to meet growing demand. The problem is that towns can t afford the requisite professional support by themselves. This dilemma is what my presentation is about. I m going to make the case that towns need professional support, so must join together to share costs. Key Ingredients for Success in Small Towns Water Supply

37 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page 37 Professional Support Need operators, mechanics, revenue collectors, accountants, a strategy to improve efficiency, and a business plan to expand the system. Professional Support: Routine operations + specialized services specialist skills. I will try to be provocative, but declare now that I reserve the right to change my mind. To make progress, we all need to be flexible. We all know that both technical and financial skills are needed to properly operate a town water supply system. There s no doubt that towns need operators and mechanics, and revenue collectors and accountants. However, what is often overlooked is that towns need a strategy to improve efficiency, and a business plan to expand the system. For the purposes of analyzing different management models, these professional skills can be divided into routine operations and In this table I ve given examples of technical and financial skills that are needed to manage and operate a town water supply, divided into routine operations and specialist skills. Professional Support Financial staff can handle routine operations like meter reading, billing, revenue collection, and accounting but, as indicated in the right hand column, need training to do it well. They also need assistance in business planning, tariff setting, and cus tomer relations. Similarly, trained technical staff can handle normal O&M and other routine tasks like installing new house connections. They also need assistance in expansion planning, problem solving, and efficiency improvement. A town that can perfectly handle routine technical and financial operations, but fails to secure specialist services, is doomed to failure. Technical and financial training, business planning, expansion planning and efficiency strategies are all needed to be successful. Financial Technical Routine Operations Specialist Skills Meter reading Financial mgt training Billing Business planning Revenue Tariff setting collection Accounting Customer relations Routine O&M Technical training House Expansion planning connections Stores Problem solving Efficiency improvement The BIG MISTAKE? GOING IT ALONE Responsibility for providing services is often interpreted as providing the service. needed to sustain and expand the system. What s the big mistake that towns make when it comes to water supply? Going it alone. Town authorities think that they can manage their system and that their staff can operate their facilities by themselves. After all, how hard can it be to turn pumps on and off, and collect revenue to pay running costs? They can manage routine operations but lack skills Very often responsibility for providing services is interpreted as providing the service. The revenue from water sales further entices towns to maintain direct control of the facilities. Whereas, the bigger the system, the more important it is to get professional support. The BIG QUESTION? Who OWNS the facilities? Who OVERSEES the assets and supervises operations? Who OPERATES the facilities? operations? (In other words, who s in charge?) and Who operates the facilities? Let s take a look at the most common management models. Key Ingredients for Success in Small Towns Water Supply For town water supplies to be successful, some things need to be clear. Particularly, Who owns the facilities? Who oversees the assets and Ownership, Oversight, and Operation supervises Ownership Oversight Operation Municipal Department Town Town Council Staff Water Board Water Board Water Board Staff Water Association Local Gov t User Association Staff National Utility Utility Utility Board Staff

38 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page 38 Town water supplies are almost always managed by a Municipal Water Department, Water Board, Water User Association, of a National/Regional Utility. In the case of a MWD, the town owns and the town council oversees the facilities. In the case of WBs, the town typically establishes a WB through bylaws, and inv ests ownership and oversight in the Board. For WAs, local government retains ownership but allows the assets to managed by a community association. N/R Utilities are most often owned by a government agency or parastatal and overseen by a Board appointed by the central government. Ownership and oversight are different in each case. But what they all have in common is that the oversight body, hires and directly manages its own staff. At the risk of annoying some participants, I ve made an attempt to rate the different management models. Four stars is best. It seems to me that the group discussions this morning mirror these ratings. In broad terms, when it comes to autonomy, demand responsiveness, transparency and accountability (the success factors between the dark yellow lines), WBs and WAs do well primarily because they are established for the sole purpose of managing their water supply. Whereas. in MWDs, decisions are often linked to broader political considerations that are not necessarily in the interest of the town s water supply system, and revenues are often diverted to other uses. N/R Utilities are autonomous, but the towns they manage are not. Each is simply one of many towns operated by a utility that is mostly interested in its big systems, and tends to minimize its financial loses by minimizing services to the towns. Management Types Direct Management Delegated Management Ownership Ownership Oversight Oversight Operations Contract Operator Staff When it comes to professional support, all the management models fall short. Operators generally carry out routine operations and maintenance pretty well, and national utilities have reasonably good backup services for repairs, but no one has a business plan, an expansion plan, or a strategy to improve efficiency. At least I ve never met a town that has such plans. Competition? There is no competition. Each town is a monopoly. As a result none of the management models score a single star. Nearly all towns follow the direct management model that I just described, where the oversight body hires and supervises its own staff. This is shown on the left where ownership, oversight and operations are all in the same box. The other approach is delegated management, where the oversight body contracts a separate private operator. It seems to me that such contracts address many of the deficiencies of the direct management models. Autonomy and demand responsive ratings don t change much. But contracts do improve transparency and Population 10,000,000 1,000, ,000 10,000 Utility 1,000 Informal community Key Ingredients for Success in Small Towns groups Water Supply 100 Community Big, sophisticated companies Who? Do contracts make a difference? Transparency and Accountability Introduces checks and balances Introduces performance targets and incentives Can terminate contract Professional Skills Entrepreneurs can make business in water sector Career opportunities bring better professionals Competition Improved efficiency/services at fair price

39 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page 39 accountability through an arms length, written agreement between the oversight group and the operator, that introduces checks and balances and eliminating the conflict of interest that exists when a water board superises its own staff. Contracts can also introduce clearly defined performance targets and incentives that are lacking in direct management, and offer the opportunity to terminate a contract or switch to anew operator at the end of a contract period. There is no doubt that contracts can also be unfair to consumers, so must be done well. We can all debate whether a private operator will provide more efficient services at a fair price, but there is no doubt that contracts with private operators introduce opportunities in the water sector for entrepreneurs to make business in the water sector, and that this builds capacity. Without such career opportunities, few students want to study water engineering, and no entrepreneurs will enter the business. Full Service Model Contract Models Specialized Services Model If one accepts the argument that professional operators and specialized services are needed to efficiently operate, sustain and expand a town water supply, we still need to figure out how to achieve this. Ownership Oversight Contract Operations Routine & Specialized One stop shopping for professional support Ownership Oversight Contract Routine Operations Contract Specialized Services Contract routine operations and specialized services separately There are two types of contacts full service (shown on the left) and specialized services. Full service operators offer one stop shopping where both routine and specialized services are provided by the operator. In the specialized service model routine operations and specialized services are offered separately. An example of the specialized services model is franchising, where the franchisor offers specialized services to a local operator, the franchisee for a share of the revenue. There will be a presentation on this approach Friday morning that I think you will find most interesting. If you look at the range of community sizes, it s safe to say that big, sophisticated companies are interested in big cities with 10 million population. However, it turns out that they are not much interested in cities with less than a million population, unless packaged with big cities. At the other end of the spectrum in communities with less than 1000 people, we also know that communities can manage their systems even with informal community groups. Population 100,000 Utility Small, medium enterprises Full service operators The real question is who would be interested in the small and medium sized towns in between? If we focus on communities with populations between 1,000 and 100,000, it looks to be a great place for small and medium sized enterprises to make business. 10,000 1,000 Community Local operators + Specialized service providers Better financial analyses are required, for the sake of discussion let s say that a full service operator needs to serve about 200,000 people to generate sufficient revenue to be financially viable. As a result they would be interested in bigger towns above 50 thousand, and if Summary packaged with bigger ones, may be interested in smaller towns. As a result I ve shown the range of towns suitable for full service operators to have populations between ten and several hundred thousand. Towns have the perception, and it s probably true, particularly for small towns below 10,000 population, that costs can be reduced by directly employing their own Towns need professional support for routine operations and for specialized services. Best done by full service providers in big towns, and local operators + specialized services providers in small towns. Private operators with contracts break monopolies, build capacity, and improve service. Key Ingredients for Success in Small Towns Water Supply Secure professional support, towns need to join together to share costs.

40 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page 40 staff or by contracting a private operator from within the community. In either case, professional support is still needed to train local operators and to provide ongoing technical assistance to them. Again towns must be aggregated, with specialized service providers serving a number of towns to cover their costs while making water affordable to communities. I would bet that even if personnel costs doubled by buying specialized support, services would be better, more sustainable, and able to be expanded. Let me conclude the discussion on aggregation by describing the ways we ve found that towns join together to secure professional support. This can work for both full service and specialized service contracts. Towns can: Form an association or company that contracts a full service operator. Join together for bidding, but sign separate contracts, or Enter into separate contracts with established operators. Aggregation Full Service Operators & Specialized Service Providers Form an association that contracts a full service operator. Join together for bidding, but sign separate contracts. Enter into separate contracts with established operators. Obtain support from an NGO that provides such services. They may also obtain support from NGOs, like in the USA where the Federal Government contracts NGOs to provide technical and financial assistance to towns free of charge. To summarize: Towns need professional support both for routine operations and for specialized services to train operators, to prepare and update business plans, expansion plans and efficiency strategies. In my view, this can best be done through a full service provider in big towns, and a local operator supported by a specialized services provider in small towns. Such private operators break monopolies, build capacity, and ensure better services at a fair price. To secure professional support, towns need to join together so that the costs of professional support can be shared. Our challenge is to go beyond the status quo and take chances, like those who will be presenting the case studies that follow, finding ways to improve water and sanitation services in towns. Somehow I doubt that I ve convinced everyone to hire private water operators, and I suspect that many of you disagree with what I ve said. I m not quite convinced myself. I can try to answer a few questions now, but what s important is that everyone gets a chance to be heard. Please stay tuned for the big debate when we can have some fun tackling the question of direct versus delegated management. In other words, hiring ones own staff compared to contracting an operator, or the infamous public versus private debate. Right here, Friday morning. Thank you very much. The BIG Debate! Direct versus Delegated Management Own Staff versus Contract Operator Public versus Private Key Ingredients for Success in Small Towns Water Supply Friday Morning Right Here

41 Volume 2, Papers & Presentations on Small Towns Water Supply and Sanitation Page 41 TYPOLOGY OF MANAGEMENT/FINANCING MODELS IN SMALL TOWNS WSS Nature of model Small towns Management Financing Direct public management Public Direct management by municipal department Public Usually deriving from municipal budget Default options New approaches in town WSS Informal BOO Public Water Plc Service contract Management Lease/Affermage Concession Franchising contract Private Public Private/public Private Private Private Private SSIPs manage their Operated by Private sector Transfer of The private operator Long term right to use Joint responsibility small systems, often autonomous public assistance for specific responsibility for takes responsibility for all utility assess of franchisor and with little or no utility: 0versight by tasks (installing or management of O&M all management conferred on operator franchisee oversight from government through reading meters, to private sector (technical and including government; cost shareholder meeting repairing pipes, commercial) of responsibility for all recovery from collecting accounts) existing services operations customers Private SSIPs finance investments and O&M Advantages Access to public capital High competition Strong incentive for expansion High demand response Constraints Examples Low autonomy (political capture) Low professional capacity] low incentive for expansion Colombia Malawi Low accountability Low professional capacity No access to public capital Paraguay Private Government owns shares of company; utility functions under commercial law & has access to private financing High autonomy High transparency Access to private capital Risk of political capture Lack of incentive to improve efficiency Germany Madagascar Poland Netherlands Public Private operator is not required to fund investment into the system: operator is paid fixed fee for services Medium professional capacity Low autonomy (political capture) low incentive for expansion USA Burkina Faso Public Private operator is not required to fund investment into the system: operator is paid fixed fee for services High professional capacity Low autonomy (political capture) Low incentive for expansion Benin Mauritania Ghana Uganda Public Private operator is not required to fund investment into the system: volumetric fee paid between operator and government based on volume of water sold or produced. High professional capacity Medium incentive for expansion Needs large revenue base (aggregation) Senegal Cote d Ivoire Niger Private/public Private operator responsible for investment during contract period, assets revert to government at end of period, including any created by the operator High professional capacity Strong incentive for expansion Access to private capital Needs large revenue base (aggregation) Gabon Morocco Private Franchisee (small operator) finances investment and O&M costs High professional capacity Strong incentive for expansion High demand response New model: need for further testing Morocco Key Ingredients for Success in Small Towns Water Supply

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43 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 43 TYPOLOGY OF CASE STUDIES / TYPOLOGIE DES ETUDES DE CAS 1 DIRECT MANAGEMENT USA Case study Rural communities (by definition < 10,000) Contract Municipal employees or county level Public Service District staff for day to day management and operations Municipal or PSD water board for management oversight Capital works / financing US Department of Agriculture loans and grants program Other state and federal financing mechanisms Professional support National and state NGOs, circuit riders, local government staff (e.g. Public Service Commission, local Health Department officials) Aggregation Public Service Districts (towns aggregated together) Expansion Loans and grants Netherlands Case study Public Limited Companies (operating under company law) Shares are owned by Government (the municipalities) Contract Company Law regulates the PLC structure Articles of Association specify responsibilities of the main actors of a PLC Structure: Shareholders; Board of Directors (mayors and political administrators); Managing Director, Utility staff Regulation by the Public Health Inspector (water quality) Capital works / financing Current: PLCs borrow money from commercial lenders era: Initial investments financed by loans and Government subsidies for non-profitable expansion Professional support PLCs provide full range of services Aggregation 20 PLCs (in 2000) up-scaling to a certain size is compulsory Expansion Strategic 10 year planning by the Netherlands Waterworks Association PLCs responsible for one year plans Self-financing (no Government subsidies) Tanzania Case study Domestic Water Board Supply Program Contract Executive Committee (elected by the community) responsible for monitoring, assessment and policy development Management team (Manager, Supervisor, operating staff) Successful communities encouraged to become service providers to less successful ones Capital works / financing Donor financed Professional support Provided by umbrella Federation Aggregation Small companies form an association (Federation) capable of taking on more commercial responsibilities Expansion 1 Note: Colombia case study was replaced by Uganda Private Operators, and Tanzania case study on multi-village schemes was included. WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

44 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 44 DELEGATED (with works) Colombia Case study Colombia Water Sector Reform Assistance Project (World Bank) 25 small towns Contract year concession based on a Constructor-Operator Contract between the Municipality and a Private Operator Separate contract for design of works Maximum acceptable tariff set at municipal level, in agreement with the Government Capital works / financing Constructor-Operator invests to a level that can be recovered over the period of the contract National Government (through donor credit) subsidizes most of the remainder Municipal Gov. contributes 8 % to 20 % of subsidy Professional support Constructor-operators provide full range of services Ministry of Economic Development provides technical assistance if needed Aggregation Aggregation of construction contract and operations Aggregation of towns encouraged Expansion Financed by Constructor -Operator from revenues Senegal Cas e study Multi-village schemes One main village and smaller satellite villages Contract Water User Association General Assembly elects Water Board Water Board responsible for management oversight Executive Board and pump operator responsible for day to day management and operations Tariff covers O&M, expansion and replacement of items with life-spans less than 10 years Capital works / financing Ministry of Finance responsible for capital costs and major renewal and replacement costs Small user contribution Professional support Support provided by the Government "Direction de l'hydraulique et de la Maintenance" Aggregation Multi-village schemes Expansion Paid for by user charges Paraguay Case study Fourth RWSS Project (World Bank) Pilot in 4 towns using a Private Operator (Contractor and/or Aguatero ) Contract Design-Build-Own-Operate with three contracts: (i) Government - Operator for construction; (ii) Government Junta (Users Association) agreeing on financing and responsibilities; and (iii) Operator - Juntas for 10 year lease Community owns the assets Capital works / financing All construction costs are Operator s responsibility Two types of subsidies offered: borehole for free, or US$150 for each connection made Operator recovers costs through connection fees and tariff Professional support Operator provides full range of services Aggregation Aggregated contract (Build-Own-Operate) Expansion Operator required by contract to connect anyone within a defined service area ready to pay the connection fee WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

45 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 45 Niger Case study Experience of a national private company (SONEXIE) in managing simplified water distribution systems Contract The contract allocated to SONEXIE is a concession Capital works / financing Initial investments are donor financed Rehabilitation is financed by the company Professional support SONEXIE provides or has access to a full range of services Aggregation One company serving many towns Expansion SONEXIE intends to rehabilitate / manage more simplified water distribution schemes Expansion of systems is financed by SONEXI DELEGATED (no works) France Case study 36,000 municipalities of which 32,000 have fewer than 2,000 residents Merging of municipalities or association is encouraged The syndicate becom es owner of the assets Responsibilities are transferred from the Mayors to the President of the syndicate Contract Management, lease and concession contracts with large private operators or subsidiary companies No independent regulator - Municipalities/syndicates regulate the private operator directly through the contract Capital works / financing All new investments are funded by the syndicate from user charges Partial subsidies for larger works from river basin agencies and rural/urban solidarity funds Professional support Independent companies provide a full range of services Aggregation Municipal associations (syndicates) Expansion Funded by the syndicate from tariffs, with occasional Government subsidies Uganda Case study Small Towns Water and Sanitation Project 46 small towns Contract arrangement Performance Contract between the Government (owner) and Town Council Two-year Management Contract between the Town Council and a Private Operator Separate construction contracts Town Council approves operator s business plans, recommended tariff and expenses Capital works / financing Community 2% to 5% Government of Uganda 95% to 98% (donor loan) Under management contacts, operators provide start-up capital Professional support Support from WSP to prepare Business Plans, monthly operations reports, etc) Aggregation Towns aggregated for bidding purposes (6 operators running 23 systems) Expansion Revenue and conditional grants WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

46 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 46 Spain Case study National review of water sector serving 39m population 8070 municipalities each responsible for own water services Massive capital investment ($40 bn.) needed to meet EU water sector laws and improve service levels to end-users Rapid increase in private sector participation in water services (47% water & 54% wastewater) due to need for investment & service efficiency/effectiveness improvement Contract If a municipality involves private sector it is free to choose contract option management contracts; joint stock companies; finance-design-build-leaseback all common Capital works / financing Bulk water supply financed by regional taxation Water charges levied by municipalities supports all capital needs of water service municipal loans & contractor finance EU funds part-subsidise wastewater treatm ent investment Professional support Commercially by partnering or contracting the larger water companies, international and local private sector Aggregation Many examples of cooperation between municipalities Expansion Government & bank loans; EU grants; contractor finance Ghana Case study Case study on contract negotiation process Bekwai town, Ashanti Region, Ghana 35,000 population (40 standpipes, 500 private connection) Contract District Assembly delegates responsibility to the community Water Board under an operating license Water Board enters O&M contract with a local private operator Gov. agency (CWSA) monitors Water Board, and supports DA 75% of water sales to the operator, remainder earmarked for sanitation, renewal and expansion Capital works / financing Donor financed with 5% community contribution / District Assembly contribution Professional support Private Operator has necessary skills and access to support Aggregation Operators can negotiate with more than one town Expansion Renew al and expansion covered under the tariff and paid into a fund controlled by the DA REGIONAL OR NATIONAL UTILITY Malawi Case study Three Regional Water Boards Town Water Service Units Water users represented on board of directors and by consumer groups Contract Water Works Act of 1995 established RWBs and assigned secondary cities and towns Performance Agreement between RWB and Government sets performance indicators and tariffs Performance Agreements between RWBs and town units Capital works / Finan cing Investment funds secured by Ministry of Finance and passed on as loans/credits to RWBs RWBs can borrow money from commercial lenders Professional support RWBs provide technical support to town units RWBs require consultant assistance in business planning and financial management Aggregation Each RWB is responsible for 20 to 30 towns Expansion Revenues are set aside for replacement and expansion WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

47 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 47 Morocco Case study National Utility ONEP assigned small towns and villages Management and operation of distribution networks sub-contracted to local private companies Contract Franchise arrangement (contracts between ONEP and local companies) Companies purchase bulk water from ONEP Companies operate under the trade mark ONEP ONEP guarantees quality and pressure at bulk water supply point Tariffs are set and regulated by ONEP on a national basis (including cross subsidy between regions) Capital works / financing ONEP finances capital works (with support of donors) Companies finance expansion using connection fees Professional support ONEP provides support (credit, training, technical assistance, supply of equipment etc.) Aggregation Use of local companies to achieve economies of scale Expansion By companies based on demand and connection fees Cote d Ivoire Case study SODECI - private national utility Profits from large centers subsidize secondary systems Regional departments oversee local "centers" Local agents responsible for surveillance, distribution of bills and collection of receipts and fees Contract Concession Government owns assets, sets price of water and regulates the contract Capital works / financing Taxes integrated into price of water cover debt service, small to medium size investment needs, social policy matters, expansion, rehabilitation of older systems etc. Large investments financed by government loans Professional support SODECI has its own extensive resources Aggregation National Utility serving the entire country Expansion Government loans and utility revenues Mauritania Case study Emergence of 270 small towns equipped with piped water schemes 75% of small towns delegated by Government to local private operators called "gérants" (managers) Contract 3 year renewable Management contract Community provides management oversight Strong accountability of gérants Gov. agency ANEPA draws up contracts, sets water tariff, and audits technical and financial performance Capital works / financing Initial Government/donor investment but users also make significant contributions (extensions and connections) Professional support ANEPA supports gérants ANEPA contracts one private operator for maintenance of all solar pumps Aggregation Single source for maintenance of solar pumps Expansion Planned and financed by hy draulic and poverty Departments Users often finance expansion WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

48 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 48 BRIEF OVERVIEW OF THE MULTI-VILLAGE SYSTEMS GLOBAL STUDY By Francois Munger 53. Brief overview of the multi-village systems global study Addis Ababa, the 12 th of June 2002 By François Münger,, Sr. Water and Sanitation Specialist Water and Sanitation Program (WSP) rural source 54. Different types of MV distribution systems Small system: One rural source supplies several villages and pos sibly a number of urban zones villages Large scheme: a water service for a large town also supplies surrounding rural communities villages urban zone large town villages villages source Borehole Issues of small multi-village systems (for example, villages with a total population of around 10,000) are similar to small towns in many ways Large scheme, (for example, serving 100 villages or more with a total population of over 100,000). Differencesbetween multi-village systems and small towns arise in the context of large villages schemes, The high complexity of the system requires a higher level of management and high technical expertise villages 55. Multi-village Systems Case studies 56. Driving factors in the realization of a multi-village project Scarcity of water. In areas with few water sources and/or deep aquifers, multi-village systems provide a practical solution to wider coverage amongst all the neighboring villages. Colombia 4 case studies 1 Study Tour Model: Community management Peru 2 case studies Model: Community management Brazil 1 case study Large scheme MV Model: Government Utility Cabo Verde studies Model: Municipal autonomou s agencies Senegal 1 important studies on various samples Model: Community management Côte d Ivoire 3 case studies Model: Utility management India Search of successful MV syt. examples & analyze of existing MV systems in India Quality of service and economies of scalefor construction and management. Multi-village systems provide a higher level of service to dispersed villages at an affordable cost. While individual villages may lack the financi al means to build their own system, as a group they may be able to build a multi-village system. This is because the infrastructure serving many villages can be limited to one source, one treatment plant etc., and staff requirements and running costs are reduced. Leadership. To initiate a water supply project, strong negotiating skills are required to open dialogue with external support agencies and/or sector authorities, and to mobilize financial resource s. The grouping gives a bigger pool of competence and a critical mass of beneficiaries. These leadership qualities are often lacking in small villages. 57. Multi-village management/operation types Small town & multi-village systems serve settlements that are too small and disper sed to manage efficiently as cities and too complex to manage efficiently as traditional rural water systems. Community Water User Association village meeting village meeting village meeting Private Water utility 58. Multi-village management/operation types (ii) Delegates the responsibilities of tariff collection, operation, distribution & maintenance of the system to a private company Example of SODECI in Ivory Coast where various multi-village systems are integrated within the national SODECI s lease contract (Case study presented in group 4) general assembly of users define policies, approve budget and work plan, and elect executive board 2 aggregation levels (i) the MV systems their selves and (ii) the national lease auditor professional support services executive board general management, propose budget and hire staff, propose extensions manager technical administrative financial supervisor secretary accountant plumbers Day to day management operators and operations day to day O&M and revenue collection Close of a small enterprise of public service Municipal Association Municipality Municipality Inter Municipal Committee Municipal agency Municipality Public Autonomous agency This type of management is globally the most common for the sma ll scale MV systems WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

49 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 49 Name (commenced) Guachavita Colombia (1982) Sucuneta Colombia (1997) Andes Colombia (1996) El Ingenio Peru (1995 ) Songon Kassemble Côte d Ivoire (1980) Bobouo Bahouan Côte d Ivoire (1995) Pacouabo Côte d Ivoire (1984) Ndiago Senegal (1999) 59. Some comparative datas from MV Systems in Colombia, Peru,Côte d Ivoire, Senegal Served Served pop. Invest. Technical Source Type o Financial status a zones no. costs aspects: and mgmt./ quality of service ma in line and Legal connections (US $) based System design no. conn. sec. status if data available) 5 villages 3, connections $ 406,000 $ 135 per capita 15 villages 6 urban zones 37 villages 6 urban 11,100 1,350 connection (1,835 connections) 9,600 1,203 connection zones (1,400 connections) 10 villages 3, connections on actual pop./ line (Km)/ no. of (design pop.) tanks/ treatment $ million $ 184 per capita ($ 139 per capita) $ million $ 181 per capita ($ 155 per capita) $ 347,000 $ 108 per capita 9 villages About 13,000 1,317 connection $ 136,000 $ 10 per capita 5 villages About 2, connections $ 123,000 $ 61 per capita 3 villages About 3, connections 11 villages 5, connections $ 96,000 $ 32 per capita $234,000 $53 22 Km and 20 Km 4 tanks (400 m 3 ) treatment plant 22 Km and 245 Km 14 tanks (579 m 3 cap) treat. plant 45 Km and 208 Km 14 tanks 3 treatment plants 27 km and 20 Km 6 tanks (150 m 3 cap.) disinfection 42 Km distr. line 1 tank (100 m 3 cap. chlorination 12 Km distr. line 1 tank (50 m 3 cap.) chlorination 8 Km distr. line 1 tank (80 m 3 cap.) chlorination 28 Km 1 tank River Gravity River Gravity River Gravity River Gravity Borehole Gravity Borehole Gravity Borehole Gravity Borehole WUA Communit - owned WUA Communit - owned WUA Communit - owned WUA Communit - owned Utility (concession Gov.-owne Utility (concession Gov.-owne Utility Gov.-owne WUA State & community owned 1999profit of $ 4,977. Use satisfaction reflected in low level of late payments (5%) loss of $ 2,200 (exclud connection fees). Occasional lo of service. 25% late payments. Profitable ($ 9,000 in savin Good service. Poor community participation. 30% late payme Profitable ($ 2,000 in savin Good service. 15% late payme Profitable. Occasional loss service, but customer satisfactio good. 9 % late payments. Not profitable. Occasion of service, but customer satisfactio good. 2% late payments. Profitable. Occasional loss service, but customer satisfactio good. 3% late payments. Profitable 60. The small multi-village aggregation, a mix of urban and rural cultures inside a rural framework Technological aspects Complexity of network development (consumption, extension/densification..) requires external support Social aspects Transparency and demand responsive approach required Economical aspects Substantial financial participation of the population in the investments (initial investment & extensions ). Water metering and paid in proportion of consume Staff of WUA are salaried Management of important funds and necessity for the WUA to acquire accounting capacities to be audited and to have access to bank services. Institutional aspects An institution with local presence is needed for long term follo w-up, monitoring, and support to the communities All these key factors are similar to those of small-town systems Some of the important issues specific to multi-village schemes are: Rationale for building multi-village schemes Arguments around economies of scale versus increasing complexity Selection of participating villages and development of the systems Management stability - appropriate social intermediation, and level of social cohesion amongst the group of villages. The distinction between management of bulk supplies and managem ent of village level supplies (for large schemes) References Internet site: /activities/smv/globalmvstudy.html Notes: Multi-Village Rural Water Supply Schemes - An Emerging Challenge (WSP, 2001, Engl & Sp versions) Water User Association case study: El Ingenio in Peru (2000 WSP,Sp vers.) Utility case study: SODECI in Côte d'ivoire (2000, WSP,Fr. vers.) Multi-village schemes in India (2001, WSP,Eng. vers.) Characteristics and success factors of the Multi-village systems in Senegal (2002, WSP,Eng. & Fr. vers.) BREF APRECU DE L ETUDE GLOBAL SUR LES SYSTEMES MULTI-VILLAGE By Francois Munger 1. Bref aperçu de l étude globale sur les systèmes multi-villages Addis Ababa,, le 12 juin 2002 By François Münger, Spécialiste Sr.. Eau et Assainissement Programme d Eau et d Assainissement (PEA) source 2. Différents types de systèmes de distribution MV Petits systèmes: une source rurale alimente plusieurs villages et éventuellement quelques zones urbaines villages Grands systèmes: un service d eau urbain alimente aussi des villages avoisinants villages Zone urbaine Gde ville villages villages source Forage La problématique des petit systèmes multivillages (pour par ex villages avec un total d env. 10,000 personnes desservies) est similaire à celle des petites villespar beaucoup d aspects Grands systèmes, (par exemple, servant 100 villages ou plus avec une population desservie de plusieurs pers) En revanche les grands systèmes multi-villages se distinguent des petites villes; villages notamment la haute complexité de ces systèmes nécessite de hautes compétences administrative et une forte expertise technique pour leur villages gestion WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

50 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Systèmes Multi-villages Cas d études Facteurs qui conduisent à la réalisation d un projet multivillages Manque d eau. Dans les régions avec peu de sources d eau et/ou avec des aquifères profonds, les systèmes MV offrent une solution pratique pour étendre la couverture à un groupe de villages voisins Colombie 4 cas d étude 1 visite d étude Modèle: Association d usager Pérou 2 cas d études Modèle: Association d usager Brésil 1 cas d études Grand système MV Modèle: Entreprise publique Cap Vert Étudesde qqq. Syst. Modèle: Agence municipale autonome Sénégal 1 importante étude de différents échantillons de syst. MV Modèle: Association d usager Côte d Ivoire 3 cas d étude s Modèle Compagnie privée: affermage Inde Recherche d exemples de systèmes MV durable/viable & analyse des systèmes MV existants aux Inde Qualité du service et économies d échelle pour la construction et la gestion Les systèmes multi-villages offrent un haut niveau de service à des villages dispersés et ceci à des coûtes abordables. Alors qu un village individuel peut manquer de moyens financiers pour construire son propre système, en se regroupant avec d autres, l association de villages pourra construire un système MV; car l infrastructure se limitera à un seul captage, une station de traitement etc..et que le pers onnel et les frais courants seront réduits. Leadership. Pour initier un projet d approvisionnement en eau de forte capacit és de négociation sont nécessaire pour entamer le dialogue avec les agences externes et./ou les autorités sectorielles.et pour mobiliser des ressources financi ères. L agrégation de villages donne un grand pool de compétences et une masse critique de bénéficiaires. Ce qui est beaucoup plus difficile dans une village et encore pl us si celui est petit. 5. Types de management/opération des systèmes Multi-villages Les systèmes d adduction d eau dans les petites villes et les agrégation de villages servent des centres de peuplement qui sont trop petits et dispersés pour être géré comme une ville et trop complexe pour la gestion communautaire villag eoise qui prévaut dans le monde rural. Association d usagers Assemblée villageoise Assemblée villageoise Assemblée villageoise Compagnie d eau privée 6. Types de management/opération des systèmes Multi-villages Délégation de la responsabilité de la perception des tarifs, opération, distribution & maintenance à une compagnie privée Exemple: Côte d Ivoire où plusieurs systèmes multi-villages sont dans le contact d affermage de la SODECI (Cas d étude présenté dans le groupe 4) (ii) Assemblée générale des usagers Définit les politiques, approuve le budget et plan de travail, et élis le comité directeur 2 niveaux d agrégation (i) le système MV lui-même et (ii) l affermage national audit e support professionnel externe Comité directeur Gestion générale, propose le budget, engage le personnel et propose les extensions du réseau manager technique administrative superviseur secrétaire plombier Opérateur financière comptable O&M et perception des factures Proche d une petite entreprise de service public Association Municipale Municipalité Municipalité Comité Inter Municipal Agence Municipal e Municipalité Agence municipale autonome Ce type de management est globalement le plus fréquent pour lespetits systèmes multi-villages Name (commenced) Guachavita Colombia (1982) Sucuneta Colombia (1997) Andes Colombia (1996) El Ingenio Peru (1995 ) Songon Kassemble Côte d Ivoire (1980) Bobouo Bahouan Côte d Ivoire (1995) Pacouabo Côte d Ivoire (1984) Ndiago Senegal (1999) 7. Some comparative datas from MV Systems in Colombia, Peru,Côte d Ivoire, Senegal Served Served pop. Invest. Technical Source Type o Financial status a zones no. costs aspects: and mgmt./ quality of service ma in line and Legal connections (US $) based System design no. conn. sec. status if data available) 5 villages 3, connections 15 villages 6 urban 11,100 1,350 connection zones (1,835 ($ 139 per connections) capita) 37 villages 9,600 $ million 6 urban 1,203 connection $ 181 per capita zones (1,400 ($ 155 per connections) capita) 10 villages 3, connections $ $ ,000 per capita 9 villages About 13,000 1,317 connection on actual pop./ line (Km)/ no. of (design pop.) tanks/ treatment $ 406, Km and 20 Km $ 135 per capita 4 tanks (400 m 3 ) treatment plant $ million $ 184 per capita $ 136,000 $ 10 per capita 5 villages About 2, connections $ 123,000 $ 61 per capita 3 villages About 3, connections 11 villages 5, connections $ 96,000 $ 32 per capita $234,000 $53 22 Km and 245 Km 14 tanks (579 m 3 cap) treat. plant 45 Km and 208 Km 14 tanks 3 treatment plants 27 km and 20 Km 6 tanks (150 m 3 cap.) disinfection 42 Km distr. line 1 tank (100 m 3 cap. chlorination 12 Km distr. line 1 tank (50 m 3 cap.) chlorination 8 Km distr. line 1 tank (80 m 3 cap.) chlorination 28 Km 1 tank River Gravity River Gravity River Gravity River Gravity Borehole Gravity Borehole Gravity Borehole Gravity Borehole WUA Communit - owned WUA Communit - owned WUA Communit - owned WUA Communit - owned Utility (concession Gov.-owne Utility (concession Gov.-owne Utility Gov.-owne WUA State & community owned 1999profit of $ 4,977. Use satisfaction reflected in low level of late payments (5%) loss of $ 2,200 (exclud connection fees). Occasional lo of service. 25% late payments. Profitable ($ 9,000 in savin Good service. Poor community participation. 30% late payme Profitable ($ 2,000 in savin Good service. 15% late payme Profitable. Occasional loss service, but customer satisfactio good. 9 % late payments. Not profitable. Occasion of service, but customer satisfactio good. 2% late payments. Profitable. Occasional loss service, but customer satisfactio good. 3% late payments. Profitable 8. Les petits systèmes multi-village, un mixte de cultures urbaine et rurale dans un cadre rural Aspects technologiques La Complexité du développement du réseau (consommation, extens ion/densification..) nécessite un appui conseil externe Aspects sociaux La transparence et l application du concept de réponse à la demande sont des éléments fondamentaux. Aspects économiques Substantielle participation financière des populations dans l investissement initial et les extensions L eau est comptabilisée par des compteurs et payée en proportion des consommations Le personnel de l Association d usagers doit être salarié La gestion de fonds importants impose à l Association d acqu érir des capacités comptable, d avoir accès aux banques et que des audits soient réalisés. Aspects institutionnels Une institution avec une présence locale/régionale est nécessairement pour le suivi, le monitoring, et support/conseil à la communauté et l Association. Ces facteurs sont similaires pour des systèmes desservant les petites villes WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

51 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Quelques importantes questions spécifiques aux multi-villages : Motivation pour la construction de systèmes multi-villages Arguments quant aux économies d échelle versus la croissance de la complexit é Sélection des villages et développement du system Gestion de la stabilité - intermédiation sociale appropriée et degré requis de cohésion entre les villages. Distinction entre la gestion de la vente en gros pour la r éseau principal et la gestion villageoises des branches secondaires (pour les grands systèmes) Références Site Internet : /activities/smv/globalmvstudy.html Publications: Multi-Village Rural Water Supply Schemes - An Emerging Challenge (WSP, 2001, Engl & Sp versions) Water User Association case study: El Ingenio in Peru (2000 WSP,Sp vers.) Utility case study: SODECI in Côte d'ivoire (2000, WSP,Fr. vers.) Multi-village schemes in India (2001, WSP,Eng. vers.) Caractéristiques et facteurs de succès des systèmes Multi-villages au Sénégal (2002, WSP,Eng. & Fr. vers.) MCDOWELL COUNTY WV PUBLIC SERVICE DISTRICT Bringing Safe Drinking Water to the Coalfields of Appalachia By Sanjay Saxena McDowell County WV Public Service District Bringing Safe Drinking Water To The Coalfields of Appalachia History Prior to 1900 Considered Extremely Inaccessible. Sparsely Populated. Travel Very Difficult. Prior to 1880 There were No Bridges. In 1891 the Norfolk and Western Railroad Began to Open the Coalfields. WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

52 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Boom Times! By 1950 McDowell County had a Population of 98,887. Communities Were Still Isolated. Population Mostly in Coal Camps. All Services, Including Drinking Water, Were Provided by the Coal Companies. Unemployment < 6%. What Happened? By 2000 the Population Dropped to 27,329, a ~ 72% Decline from 1950 to The Coal Was Gone! Over Forty Small Coal Camp Communities Were Still in Place. Unemployment Rate >35% >31.4% of Persons Below Poverty Line. >39.3% of Children Below Poverty Line. 67. What About Drinking Water? Most Coal Company Water Systems Were Sold Either to the Community or to a Private Entity, Usually for $1.00. Systems Were Poorly Maintained and the Water was Unsafe. Customers Were Charged Flat Rates for Poor Service and Even Poorer Quality. McDowell County was Written Off! 68. McDowell County Public Service District Created by the WV Public Service Commission on May 1, Systems Under Private Ownership Were Placed in Receivership, One Owner was Prosecuted. Began Operating Ten Water Systems Serving Fourteen Communities. Initially six employees, Including Office. 69. WHY A PUBLIC SERVICE DISTRICT? Centralized Management, Billing and Record Keeping. Eliminate Need for Highly Trained People at Every Community. Larger Customer Base. Ability to Hire and Keep Skilled Employees. Better Access to Funding. 70. Governing Body Three Board Members Appointed by the McDowell County Commission for One Year Terms. Regulated by the West Virginia Public Service Commission. Continues to Acquire and Upgrade Other Small Communities as Money is Made Available. WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

53 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PSD Staff The PSD Currently Employs 11 Persons. The Office Staff Consists of 2 Persons Who Handle Billing, Collection and all Bookkeeping from a Centralized Location. The Field Staff Consists of 9 Persons, Including a Manager, Who Also Operate From a Centralized Location. The Field Staff is Responsible for Plant Operation as well as Distribution System O&M. Treatment Facilities Three New Treatment Plants Were Constructed to Replace 8 Old Plants, And Serve 16 Communities. Nine Communities Were Connected to Three Existing Treatment Facilities Owned and Operated by Entities Other Than the PSD. The PSD also Operates 2 Other Treatment Plants Which Were Turned Over to Them by the Public Service Commission, After Being Placed in Receivership Other Infrastructure In Addition to the Treatment Facilities, New Tanks and Distribution Lines Were Also Constructed. The End Result McDowell PSD Currently Serves ~2,000 Customers Located in 27 Separate Communities Which Range in Size From 9 to 250 Homes. 75. THE COST Beginning in 1990 When McDowell County PSD was Formed, to Present, app. $12 Million Dollars Has Been Spent. Of That Figure, app. $8.5 Million was Grant Monies From Several State and Federal Agencies With RUS, the Old Farmers Home Administration Being the Largest Player. Also, app. $3.5 Million Dollars Was Loaned by RUS. 76. WHAT THE CUSTOMER PAYS. Tap or Connection Fees are $ per Household. Water is Sold for $9.30 per Thousand Gallons (3,754 L). A Minimum Bill is $29.70 per Month Which Allows a Household to Use Up To 3000 gal. (11,356 L). The Collection Rate is Better Than 95%. In West Virginia the Average Use per Household is 4,500 gal. (17,034 L) per Month. HAI DISTRICT WATER SUPPLY PROJECT By Eng. Immaculata Nshange Raphael WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

54 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page HAI DISTRICT WATER SUPPLY PROJECT Eng. Immaculata Nshange Raphael Hai District Water Engineer Secretary, Steering Committee Hai District Water Supply Project 78. Overview (Uroki-Bomang ombe Water Supply Trust, Board of Trustees) Autonomous community based entity Serves district headquarter and 8 villages 50,000 beneficiaries in 2001 (90,000 by 2010) Annual revenue (2001) TUS$ 79. Performance indicators (2001) Production capacity m³/d: Water produced m³/d: Water sold m³/d: Annual revenue US$/year: 5918 and 66 l/c/d 1290 and 26 l/c/d 1041 and 21 l/c/d and 1.5US$/c/y Unit operational cost US$/m³ produced: 0.18 Average tariff US$/m³: 0.20 Tariff structure: PT: 0.15 and HC: 0.25 US$/m³ Fraction of water billed to commercial / industrial users: 0 % No. of connections per 000 population: 27 Staff per 000 population served: Ownership, oversight and operations Board has right for Hire and fire Cost recovery for O&M and movable assets Management team (Technical staff) cares for daily activities Operation and Maintenance, billing, revenue collection, etc 81. Autonomy and Accountability Trustees elected from Village Water Users Committees Board of Trustees oversees operations is an autonomous entity institutionally and financially has tariff autonomy Management team is employed by the Board for operating the system 82. Regulation and competition External financial auditing is done annually No external technical performance control yet Board review/regulate tariffs Board provides water service within its area of jurisdiction No competition yet WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

55 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Professional support Professional Manager/Engineer and Accountant No other high skilled manpower for O&M required On job training during implementation Accompanying measures program Service extension subject to demand Strategy prepared by the management Financing German Government - KfW German Lutheran Church (Phase I) Government of Tanzania Beneficiaries Tariff cares for O&M and depreciation of movable assets and items with life span of less than 10 years 85. Community participation and sensitisation Community participate in planing, construction, commissioning and management Project sensitises the community to create awareness on: Sanitation and hygiene Self-help activities Metering and billing system National Water Policy Operation & maintainance 86. Summary The success of the project has resulted into: Reliable water supply - development Sense of ownership, confidence and responsibility - sustainability Important issues: Community participation at all levels Metering - billing according to consumption Community capacity building Beneficieries own and manage their scheme All these lead to Project Sustainability GOVERNMENT-OWNED PLC IN THE NETHERLANDS The Case of Water Company Friesland (WLF) By Klaas Schwartz WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

56 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Case Study Presentation on the Government-owned PLC in the Netherlands: The Case of Watercompany Friesland (WLF) Klaas Schwartz IHE-Delft 88. A Definition of the Government-owned Public Limited Company (PLC) The government-owned PLC is a company, which is established and operates under company law, whilst the shares of the company are in hands of national, regional or local government authorities. Generally, there is no legal or organisational difference between a publicly owned and a privately owned PLC apart from the government ownership of shares. 89. Governance Structure of the Public Water PLC 3 Complementary Parts 1. Political & Legal Environment Regulations affecting the water sector in general or companies in general 2. Private Company Law Regulations applicable to to all PLCs 3. Company Statutes Regulations applicable only to the one PLC 90. Political and Legal Environment Example: Legislation from the European Union The Bathing Water Directive obliges Member States 'to take all necessary measures to ensure that [ ] the quality of bathing water conforms to the limit values set in the Directive'. The Urban Wastewater Treatment Directive: has the purpose to protect the environment from adverse effects of sewerage discharges and to ensure that all significant discharges are treated before being released into receiving waters Example: National labour legislation All PLCs with more than 100 employees must have a Worker s Council which has rights of information (legal and strategic information, business plan, etc.), initiative (often advise accepted by management), advise (activities, structure, powers, investments, etc.) and approval (pensions, working hours, assessment, training, etc.) 91. Dutch Company Law : Governance Structure Shareholders Shareholders - All powers not bestowed on BoD or MD 92. Dutch Company Law : Other Arrangements Board of Directors Managing Director BoD - Supervision of the management and general functioning of the company MD - Day-to-day functioning of the company Annual Financial Accounts - Approved by Managing Director, Board of Directors and Shareholders Meeting, and a reputable accountancy firm - Open to public scrutiny Accountability Managing Director and Board of Directors can be held personally accountable for mismanagement of the company WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

57 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Articles of Association What is arranged? 1. Company Objectives 2. Composition of the Board of Directors 3. Ownership and Transferability of Shares 4. Number of Annual Shareholders Meetings 5. How to Utilise Financial Result 6. Detailed specification of Powers held by Different Actors Notable arrangements in the Dutch water sector - Limited but essential powers with shareholders - Limited profit-sharing, low equity, high debts - Multiple shareholders - Geographical distribution of seats on Board of Directors Case of WLF Water supply company Historical Background - Established as a PLC in 1922 by the town of Leeuwarden and 8 surrounding municipalities; - Established as a company that would not only serve the towns and villages but also the surrounding rural areas; Current Characteristics - 276,000 connections - 629,000 consumers - water supplied: 44 milion m Financing of WLF s Expansion Strategy Expansion financed primarily by loans extended on grounds of projected company income from new areas; This income was secured by a contract between the utility and newly participating municipalities or rural industries with large water needs; The participating municipalities also became stakeholders of the company. In these contracts minimum use of water was guaranteed against a set price; Municipalities passed regulations which made connecting to the network mandatory (in addition to having public campaigns to convince inhabitants of their municipality to switch to the network); 97. Financing of WLF s Expansion Strategy Human Resources Management at WLF Expansion of non-profitable connections (rural farms) was eligible for subsidy by the national government (70%), provincial government (10%), andmunicpal government (10%). Subsidies were paid into a WLF sinking Fund to pay for future expansion. All consumers paidthe normal fee Change in tariff system aimed at raising revenues and inducing consumption by raising the fixed part of the bill and lowering the price per cubic meter consumed The Company had a a philosophy of technical selfsufficiency: staff should be capable of doing all tasks necessary to plan, construct, operate, maintain, repair and improve water facilities. Appropriate skills were to be developed through apprentices/in-house training since most staff were unskilled or semiskilled from within the service area. Large degree of career mobility within the company as few skilled employees were hired from outside and development prospects inside he company were promising. WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

58 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Key lessons learnt: Role of Municipality was crucial: Became shareholders in the company (shares in proportion to the number of residents); Entered contracts guaranteeing the company revenue from its constituencies; passed regulations to make users connect. Financinal support for establishing new (un-profitable) connections, not for subsidy on the tariff. Consumers always had to pay the full tariff Stimulating a sense of local ownership and selfsufficiency: Training unskilled staff recruited from within the service area Motivated employees by providing opportunities for career development 101. Factors influencing succesful functioning of WLF (Government) Shareholders Board of Directors Political and Legal Environment Political Commitment to service expansion (local, provincial and national) Availability of subsidies for non-profitable connections Company Law Company Law dictates financial transparency Defines the broad powers of the different actors 102. Possible Recommendations for Improving the PLC mode (Government) Shareholders Board of Directors Minority shareholding by private investors Customer Representation Committees Managing Director Articles of Association Multiple minority shareholders Local shareholding Geographical distribution of Board members Company policy HRM policies Managing Director Professionalization of the Board of Directors Independent technical and economic regulator TANZANIA RURAL WATER SUPPLY COMPANIES AND THEIR SUPPORTING FEDERATION IN MOROGORO REGION Management of Rural Piped Water Systems and Services in the Tanzanian Decentralisation Context By Kifu Shabaan and Jo Smet SUMMARISED PAPER Mr. Audace KANSHAHU A, Mr. Issae MADUNDO A, Mr. Kifu SHAABAN B and Mr. Jo SMET C 1. INTRODUCTION AND BACKGROUND Efficient community management of rural water supply schemes poses a great challenge in Tanzania. Tanzania s water policy has introduced major changes including the cost recovery principle in operation and maintenance of piped water supply schemes and the management at the lowest level possible. To face this challenge, user communities in villages and small towns in Morogoro region have established companies and have united to form a Federation of Water Supply Companies. What are the institutional and management arrangements of these rural Water Supply Companies and what lesson can be learned from their performance in water supply service delivery? WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

59 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 59 This case study pr esents an overview of the institutional arrangements and the management options of rural piped water supply schemes found today in Tanzania, and key issues of the WSCs and their Federation. 2. INSTITUTIONAL ARRANGEMENT AND MANAGEMENT OPTIONS IN RURAL VILLAGE/ SMALL TOWN PIPED WATER SUPPLY IN TANZANIA Overview of institutional options According to various studies 2, there are eight institutional options common in rural piped water supply schemes. The most successful options water users can choose from are: (i) Water Supply Company Ltd by Guarantee; (ii) Water Supply Company Ltd by Shares; (iii) Water User Association; and (iv) Water User Trust. The more traditional institutional options are still common but have proven to be not very suitable for these situations. These options are: (i) Conventional Single-Village/Town Water Committees; (ii) Multi-Village Water Committees; (iii) District-operated Water Supply Schemes; (iv) Central Government Operated Water Supply Schemes. Management options of rural village/town water supply schemes Different management options applied in Tanzania - are compared using the following criteria: business-oriented management; competency and confidence of management; guarantee for high technical service level provision; guarantee for efficient cost recovery; facilitation of external funds acquisition (future rehabilitation, expansion and growth); efficiency in financial management; and facilitation of internal and external communication, reporting and transparency. The best scoring management options are the professional management team and management by contract. The management by Village/Town Water Committee (under the Village Government), by designated Committee in Central Water Committee, and by executive committee of a Water Board or Central/Scheme Committee gave substantially less guarantees and efficiencies leading to sustainable water systems and services. 3. WATER SUPPLY COMPANIES (WSCs) IN MOROGORO REGION Representation and Governance In Morogoro region, 21 legally registered WSCs limited by guarantee have been established. A WSC covers 1 to 6 villages ranging in population from 1,000 to 28,000. All companies have elected Water User Group Committees at domestic water points. Each committee elects a representative. The maximum number of representatives is 50. The representatives elect a Board of 8 to 10 members. The Board elects an Executive Committee led by a chairman. The companies final decision making body is the Annual General meeting of users representatives. Management The executive committee is responsible for the day-to-day management of the company. In few companies all those serving a larger population a professional management team comprised of a manager, a water supply Successes recorded (period ) by the WSCs in Morogoro are the following: Users have established their entities to run their water supply schemes Users participated in construction rehabilitation and maintenance Users have a sense of ownership of their schemes, elect democratically their leaders, and manage the schemes. Users clean the surroundings of the water points. Users pay water fee and attend DWP and WSC meetings to solve water supply problems WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper technician and an accountant has been put in place. Smaller, uneconomical WSCs will increasingly face more problems to sustain the water service provision, particularly because of their income-base is low and the unprofessional approach in management of their services. Management by contracting private companies is not an option for lack of financial profit and the expected refusal by the users for such a management option. The option to pool management staff and other resources among a Problems experienced (period ) by WSCs in Morogoro include the following: Poor relation between the Village Government and A. Adviser to Federation; B. Chairman of the Federation; C. IRC International Water and Sanitation Centre, The Netherlands 2 the WSC Board Mission report Enhancing Sustainability of Piped Water Supply in Rural Tanzania from the Netherlands Governmentsupported Domestic Water Supply Programme in Morogoro Region, Low managed fee by collection DHV, December ratio ( , to 50%) gives a in good most comparative analysis of the different institutional and management options. companies Insufficient funds for major rehabilitation and expansion of schemes Insufficient management skills. Insufficient funds for users mobilization

60 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 60 group of small and uneconomical WSCs is being looked into. Another option is merging WSCs into a few large (district) WSCs. There are three types of users: at domestic water point, house connection, and institution/business connection. Each category of users has its own tariff. The tariff is set by the Board of Directors and takes into account the operation and maintenance cost as well as the depreciation of assets. The Treasurer prepares a monthly report on income and expenditure and an external auditor prepares an audit report every year. The sustainability of the WSCs is totally dependent on the enabling environment. The Water Policy is conducive to the WSCs. So far, the District Councils have been supportive. At village level, the success and sustainability of WSCs depends on the harmonic relationship with the Village Government and local leaders and politicians. Some companies are made up of poverty-stricken communities that cannot raise the water fee. Income-generating projects using the improved water availability may help here. 4. THE FEDERATION OF MOROGORO REGION WATER SUPPLY COMPANIES Background The last phase of the donor -supported project focused on sustainability analysis and capacity building of the WSCs. The Federation is an autonomous intermediary institution owned by the WSCs. It protects and lobbies the interests of the WSCs. The Federation facilitates linkages between the WSCs and supporting institutions such as local/central government, NGOs and donors, training institutes, resource centres, private sector, and the credit/loan The SWOT assessments concluded that for longterm sustainability of the WSCs a support organisation, a Federation, is needed. When the donor support to the WSCs ended, they realised that they need this Federation and so it was founded with some financial assistance from the Dutch Government. GOVERNMENTS; NGOs; PRIVATE SECTOR; DONORS; BANKS FEDERATION OF WATER SUPPLY COMPANIES WSC WSC WSC WSC WSC WSC WSC Figure. Relationship between Federation, supporting institutions and the WSCs Objectives of the Federation The major objectives of the companies include the following: To strengthen WSCs region to sustain themselves. To foster strong unity among WSCs of Morogoro region. To assist water users to establish WSCs and to manage the provision of water services in villages/rural towns. To identify actual financial requirements and expertise needed to provide water services to villages. To forge trustful relationships with government institutions, local leaders and private sector organisations. To provide assistance and facilitation to all companies on technical, financial, administrative monitoring and general management activities. To promote education on water-related hygiene and environment. Some selected activities of the Federation considered to fulfil the needs of the WSCs are: To further sensitise water users with support from independent facilitators including NGOs. To assist the Government in publicising and promoting the water policy in order to explain the roles of each stakeholder. Present conflicts between Village Governments and some WSCs are solved by facilitation of the Federation. WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

61 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 61 To raise donor support for the rehabilitation and expansion of schemes and to co-finance the capacity building among leaders and managers of the WSCs. To promote the establishment of a Rural Village/Town Water Fund to support the sustainability of WSCs. To conduct studies to determine water fee affordability in poverty-stricken communities and to formulate strategies to enable the poor to have permanent access to adequate and safe water. To help poor communities to start income generating projects using the improved water availability. Institutional Arrangement The Federation of Morogoro Region WSCs Limited is a new institutional arrangement in Tanzania. It is the first umbrella organization of autonomous water supply entities of its kind established by 21 WSCs covering 35 villages and rural small towns. The Federation has a Board of Directors composed of six members. Four members represent the WSCs, one from each district of Morogoro region and two directors are women purposely elected to ensure women involvement in the management of the Federation. The directors hold office for a three-year term and elect a chairman and a secretary. So far, the Federation has no permanent management team but uses a part-time secretary and professional consultants. Plans are underway to recruit employees. Financial sustainability In the past, the Tanzanian water policies indicated that water in rural areas was a free social good. That perception was and often is strongly carved in the minds of rural community members. The decentralisation brought the responsibility for water supply to the district and village levels but payment for water to recover O&M costs remained an issue hard to achieve. Political interests often do not support the awareness-raising for cost recovery; willingness-to-pay for water remains low particularly when alternative water sources are available. The Federation gets a nominal contribution from the members (membership fee is $50/year); this amount is even not enough to establish a small office. For the first year the Dutch Embassy in Tanzania provided financial support which ends July The present contribution level is insufficient to provide any support to the WSCs, an issue that has to be looked into to sustain the Federation. Contribution may for instance be based on water production or the number of consumers. External financial support may be needed for specific activities. Successes, Problems and Risks Some key successes: Awareness among consumers on ownership of the water system has increased Autonomy especially at BoD level has increased Transparency of the Important issues remaining Some problems and risks Continuing interference by Village Government in WSCs affairs Absence of local political support in Water Policy issues as need to pay for water services for O&M of the system, resulting in low willingness -to-pay for water Presence of free -of-charge alternative water sources Low level of hygiene education, so low awareness on need for safe water Past hangover of poorly-managed community projects No professionally competent staff at management and technical level Need for a national and regional regulator Monitoring of performance indicators in order to identify WSCs with poor management Need to exchange lessons from financial monitoring to improve financial performance Need for benchmarking on quality service provision to improve service performance Need for better facilitation between WSCs and private sector (for designs implementation) WSCs and their Federation in Morogoro Region, Tanzania - Summary Paper

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63 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page RURAL WATER SUPPLY COMPANIES AND THEIR SUPPORTING FEDERATION IN MOROGORO REGION, TANZANIA Management of Rural Piped Water Systems and Services in the Tanzanian Decentralisation Context Presentation by Kifu SHABAAN and Jo SMET At International Conference on Water Supply and Sanitation Services in Small Towns and Multi-Village Schemes Addis Ababa, June WHY WATER SUPPLY COMPANIES Ltd? Rural piped water supply in Morogoro Region Range consumers in service areas: 1,000-28,000 Water policy: decentralisation: : management at the lowest appropriate level = community-based management Water policy: recovery of at least O&M cost Users of limited trust in local government (village/district) Paper gives comparison of different institutional options WSC Ltd best because legal body; autonomous; no government/political interference; users own system; governed by Board of Directors elected by users; 18 July OVERVIEW WSCs 21 WSCs established in Morogoro region (in context of Dutch-supported programme) but some 50 more piped water systems in region Covering 39 villages, serving some 190,000 people Scheme types: Diesel/electric pumped (9) and gravity-fed (12) Service level: 1,700 house/business connections (9% of users) and 700 domestic water points (91%) 18 July PERFORMANCE INDICATORS-overall Total production capacity Actual production & volume sold Average income/consumer.year Unit operational cost Tariff structure Actual tariff or tariff range (per month) Collection rate (Q2-2002) 2002) Not known Not measured US$ 0.40 Data not known Varies per WSC and type of service level; No meters in any WSC DWP: US$ 0.28/HH HC: US$ 1.2/connection BC: $1-10/connection 10/connection Dom. Water Points:28% House Connection:85% Business Conn. 95% 18 July PERFORMANCE INDICATORS-overall - 2 Fraction water billed to commercial users Number of connections per 000 people Staff per 000 people served Functionality of supply systems Estimate 2% 13 Varies per WSC; some smaller WSCs have no paid staff Dom. Water points: 87% House connections: 96% Business connections: 98% 108. PERFORMANCE INDICATORS-large WSC Ikela WSC serving 28,000 people and delivering to Sugar Company Total production capacity Actual production Volume sold Annual revenue Unit operational cost Tariff per month for different service levels Collection rate (efficiency) Fraction water billed to commercial users Number of connections per 000 people Staff per 000 people served Functionality of supply systems?????? About US$ 17,000?? DWP: $ 0.2; HC: $ 1; BC: $3.5 plus Sugar Company No data available here About 75%; most to Sugar Comp % 18 July July The Development and Management of Rural Multi-village Schemes

64 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PERFORMANCE INDICATORS- small WSC Total production capacity Actual production Volume sold Annual revenue Unit operational cost Staff per 000 people served Functionality of supply systems Ndole serving 1,700 people Tariff per month for different service levels Collection rate (efficiency) Fraction water billed to commercial users Number of connections per 000 people?????? US$ 240?? DWP: $ 0.3; HC: $0.5; BC: $3-5 No data available now 0% % 110. OWNERSHIP, CONTROL and MANAGEMENT of WSCs Ownership: still unclear: users (WSC) or central gov t?? Ownership of WSC-financed expansions is at WSC Control/oversight and governance is by WSC (Board of Directors) WSC is community-based institution Elected BoD has trust of users if there is effective communication (transparency) and accountability Management 1: in smaller WSCs by BoD and hired O&M staff (part time) Management 2: in larger WSCs by hired management team (manager, accountant, technicians) part or full-time Most BoDs lack competency and confidence to manage Paper gives other management options applied in TZ 18 July July AUTONOMY & ACCOUNTABILITY WSC is financially and institutionally autonomous and independent of village and district government/authorities But.. good relation and support from them, local politicians and other leaders crucial for success Government creates enabling environment Important: financial & service monitoring (by BoD) ) and regular communication to users on financial and service performance and problems 112. REGULATION and COMPETITION No national or regional regulator yet; needed for set of basic rules and regulations on financial issues and quality of service provision No clear legal framework for rural water supply 6 out of 21 WSCs have annual external audit Federation capacitates WSCs on financial management Audit on technical and service performance lacking BoD sets tariffs that need approval users Private sector weak in Morogoro: : no competition Piped water supply has competition from free alternative water sources around villages 18 July July FEDERATION of WSCs DHV consultant (of Dutch-supported programme) ) was very supportive to functioning of WSCs: : ended in 2000 WSCs realised need for higher support in many areas to sustain the service provision So. Federation of WSCs (2001): their own initiative with some financial support of Dutch Embassy (1 year only) Main drive: together we can sustain! Federation to assist, facilitate and capacitate Federation to be bridge to private sector and government Federation is looking after the interests of the WSCs 114. CONCEPTUAL SUPPORT FRAME FEDERATION Roles may include: Roles may include: Policies, legislation GOT Management support WSCs support Facilitation with private sector External Support Agencies and NGOs DWSP Learning on Communication Development support & financing FEDERATION OF WSCs Training of WSC Nat. Information and Cap. Building Institutes Learning and cap building Technical advice Commercial & Development Banks External audits Advisory support loans Crisis moderation in WSC Private Sector Advisory support WSC WSC WSC WSC WSC 18 July July The Development and Management of Rural Multi-village Schemes

65 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PRESENT SUPPORT ACTIVITIES FEDERATION Rapid assessments of WSCs to identify key problems and to make plans to improve Training Board of Directors and managers on financial management Training technicians on technical issues Establish monthly financial performance database Annual General Meetings And made 5-year 5 plan 18 July SUSTAINABILITY of FEDERATION? Sufficient recognition from higher level? (Gov t+esas+banks+ps) Sufficient recognition and appreciation from WSCs? Do they see added value? Does Federation provide right services and good quality? Financial basis of Federation: do WSCs pay all operational costs of Federation? Will smaller/weaker WSCs survive? Mergers? Pooling? Will more WSCs-WUAs WUAs-Water Water Boards join the Federation? Critical mass higher efficiency Can Federation become national or remain just regional? 18 July SMALL WATER SYSTEM MANAGEMENT IN THE UNITED STATES By Sanjay Saxena The Development and Management of Rural Multi-village Schemes

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71 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 71 CONSTRUCTOR -OPERATOR AS PSP OPTIONS FOR SMALL WATER SYSTEMS IN COLOMBIA By Carmiña Moreno Rodríguez CONTENT CONSTRUCTOR-OPERATOR AS PSP OPTIONS FOR SMALL WATER SYSTEMS IN COLOMBIA Ministry of Economic Development- General Directorate of Water and Sanitation Carmiña Moreno Rodríguez Ethiopía, june 11-14, 2002 Water Sector Overview Constructor-Operador Model PSP case in the municipality of Nátaga Conclusions 153. GENERAL OVERVIEW 154. GENERAL OVERVIEW Municipality Category Population 1997 (thousands) Inhabitants Number of Municipalities Urban/cities Rural/towns < ,188 7, ,804 2,486 > , State Capitals < State Capitals > , Metropolitan Center 9 12, Suburbs Zones 37 2, TOTAL 1,091 28,061 11,958 Total Population: 40 million A major restructuring of the water and sanitation sector took place in The responsability of municipalities to provide water and sanitation services was confirmed in the constitution. In 1994, Law 142 was enacted which established a legislative and regulatory framework for the sector Coverage of Water and Sewerage in Colombia as Indicators of Sector Performance 156. GENERAL OVERVIEW Major Cities (%) Medium Cities (%) Small Municipali ties(%) Rural Areas (%) Water 96* 87* 82** 40*** Sewera ge 88* 87* 60** 16*** The Effective Water Coverage in Colombia as Indicator of Level of Service Major Cities Medium Cities Small municipalities National Average 82% 46% 27% < 50%?? Water Produced Billed Water Effectively Paid The Development and Management of Rural Multi-village Schemes

72 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page CONTENT Water Sector Overview Constructor-Operador Model PSP case in the municipality of Nátaga Conclusions 158. CONSTRUCTOR-OPERATOR A model as a PSP alternative for small water systems The concept applied to municipalities with less than inhabitants, is that through competitive bidding small and medium size construction companies, possibly in association with small consulting firms, will compete for the construction and/or rehabilitation of the water supply and sewerage systems in a small municipality and the winning bidder will have to commit to operate the systems for a period of 10 years CONSTRUCTOR-OPERATOR Advantages No experience in operation of water systems is required from the bidders. It is assumed that construction companies that have the capacity to construct the systems, also have the technical and management capacity to operate them after minimal training, since the involved systems are quite small and simple. The winning bidder will receive training in management of water utilities as well as written material and management software CONSTRUCTOR-OPERATOR C-O More advantages It is expected that this type of contract will be attractive for both the municipal governments and the construction companies. Municipal governments will find it attractive because of the significant amount of central government subsidy involved. Construction companies will be interested in the construction contracts CONSTRUCTOR-OPERATOR Requirements for bidders Technical experience in construction of works of similar size and complexity and availability of an operation and management team. Financial submission of audited income statements of the last three years, as well as proof of availability of working capital. Legal submission of documents of registration as a legal entity. START NO REFORMULATE WIP 162. CONSTRUCTOR-OPERATOR CAPACITY TO PAY ENOUGH $? YES DESIGNS Procedure TARIFF FINANCIAL STUDY BIDDING PROCESS OPERATIONAL COSTS WORKS AND INVESTMENT PLAN - WIP SIGNED CONTRACT END The Development and Management of Rural Multi-village Schemes

73 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page CONSTRUCTOR-OPERATOR Benefits for the poor CONTENT 164. Since the majority of the population in small municipalities is of low income, the subsidy will mainly benefit the poor. Also, since the small municipalities suffer a significant backlog in infrastructure and the population does not have the capacity to finance this backlog through tariffs, the government subsidy needs to be high enough so as to finance most of the works, while only a small portion can be financed from tariffs and recently Law 715 funds. Water Sector Overview Constructor-Operador Model PSP case in the municipality of Nátaga Conclusions Nátaga NÁTAGA CASE Population of inhabitants Nominal coverage 98% for water and wastewater Colombi a The main problem is continuity of service- 10/12 hours/day and the quality of water is bad The contract include investments in a water intake, water treatment, extension of water distribution networks and extension of sewerage network. It doesn t include investments in sewage treatment. SOUTH AMERICA NÁTAGA CASE After having structured the constructor - Operator for the Municipality of Nátaga, the process of public bid opened up, in October of the year Two proposals were submitted, one of a consortium of three of the local interested constructor and the other of another interested local constructor. Both proponents have experience of construction of water installations. The winning bidder was the local constructor Almafama, with experience in the type of works required. In March of 2001 began to execute the contract. Monthly Bill for a consumption of up 20 m3/month Stratum Average Monthly bill Before PSP (US$) Commercial Average Monthly bill During PSP (US$) NÁTAGA CASE Before PSP the water bill was based on the number of water taps in each house. The payment for the first tap was US$ 0.71 per month and for any additional tap, an additional US$ 0.21 per month. Yet the mount of the tariff has not defined, until the micromedition installing finished. The Development and Management of Rural Multi-village Schemes

74 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page NÁTAGA CASE 170. NÁTAGA CASE Some Indicators Financial Structure Production capacity Water produced Water sold Unit operational cost Number of connection per 000 population Staff per 000 population served 150 lt/hab/day 250 lt/hab/day 8 lt /sg. year 2002 Micrometers is installing USD$0.03 / m Contributor Amount (US$) Municipality of Nátaga 54,550 (Law 715/2002) Government 200,300 Operator 0 Total Project Cost 254,850 The executed works is 100%, the quality of water has improved and the continuity will be 24 hours in august/ CONTENT Water Sector Overview Constructor-Operador Model PSP case in the municipality of Nátaga Conclusions 172. CONCLUSIONS The Nátaga case has proved that the constructor-operator is a PSP model which can be successful for small municipalities in Colombia. Yet, it is too early to withdraw final conclusions. It can be implied that in order to achieve sustainable investments, it should be made a permanent follow-up of the projects. Colombia will carry out aprox. 25 cases of Constructor-Operator in the next 5 years (World Bank financied project) 173. THANKS A LOT!!! Further information: Pme@sias.gov.co The Development and Management of Rural Multi-village Schemes

75 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 75 PRIVATE SECTOR PARTICIPATION (PSP) IN SMALL TOWNS WATER SUPPLY Early Experiences from Paraguay By Franz Drees Background Over the past decade, Latin America (and other regions to a lesser extent) has witnessed a gradual paradigm shift in the way that governments support rural infrastructure service provision. A number of governments have sought to induce private sector operators to make socially desirable (though not always financially viable) investments in rural areas by offering one-off investment subsidies that cover part of overall capital costs. Private operators then operate the assets for a defined period of time to recover the remainder of their investments through tariffs paid by rural users. The subsidy level is bid out competitively to ensure that governments reach rural infrastructure coverage targets at least cost ( Minimum Subsidy Concessions ). The trend began in Chile in the telecommunications sector in 1994/95 and has since been extended to lower middle income and low income countries (Colombia (1999), Peru (1998), Guatemala (1998) etc.) in the telecom sector as well as to other sectors that have traditionally been less attractive to private sector investors (rural electricity, transport and water/sanitation) 3. At the same time, a number of external support agencies (including the World Bank) have begun to look more systematically at ways of moving from the financing of development inputs (typically, physical assets) to the financing of outputs (services provided or results achieved) as a way of shifting the onus for attaining defined development outcomes to the private sector and NGO s. The Rural and Small Towns Water Supply Sector in Paraguay Cover age. About 3.1 million of Paraguay s 5.5 million citizens (2000) live in rural areas and small towns of less than 10,000 inhabitants. Of these, about 0.9 million (about 30% of the rural population) are served by some 1000 autonomous water users associations ( juntas de Saneamiento ) which typically operate piped systems consisting of a borehole, disinfection unit, storage tank(s) and a distribution system supplying metered and un-metered household connections. Estimates 4 put the number of rural household connections nationwide at about 173,000, with only about 550 public standpipes. In urban areas, CORPOSANA, the state water company, is responsible for service provision to the 2.4 million residents of 28 towns with populations in excess of 10,000 inhabitants. Given that CORPOSANA s coverage in these areas is very low (only about 1.2 million consumers are served overall), some small private operators ( aguateros ) have set up on the peri-urban fringe of larger cities (mostly Asunción and Ciudad del Este) where they provide autonomous piped water service to some 0.7 million customers. The combination of CORPOSANA and private suppliers brings overall urban water supply coverage in Paraguay up to about 78% overall. Sector Institutions. The Servicio Nacional de Saneamiento Ambiental (SENASA) is the lead sector agency for the rural water supply and sanitation (RWSS) sector, responsible, i.a. for promoting and co-financing the construction of RWSS infrastructure, creating and strengthening water users associations ( juntas ) and providing technical assistance to juntas which operate RWSS systems autonomously. In addition, an October, 2000 Sector Law created ERSSAN ( Ente Regulador del Sector de Saneamiento ), the regulator for both urban and rural water and sanitation systems, responsible, i.a. for issuing tariff guidelines and supervising service quality. The central government retains concessioning authority for all systems, but may delegate it to provinces and municipalities. Service provision by private providers (and community organizations such as juntas) is authorized under concessions (up to 30 years) and licenses (up to 10 years for systems of up to 2,000 connections). RWSS Investments. Current public sector investment in RWSS (mostly through SENASA) is approximately US$5-6 million/year. SENASA requires communities to contribute (i) 5% of overall WS investment costs up-front in cash (1% for systems < 150 connections); (ii) 10% in cash during construction (2-4% for systems < 150 connections); (iii) 15% in unpaid labor during construction; and (iv) 30% of overall system cost in the form of a 10-year loan at subsidized interest rates (for systems > 70 connections). In theory, the public subsidy for RWSS systems ranges from 40% (for large systems) to a maximum of 82% (for systems < 70 connections) in practice, the subsidy is much higher, since many communities receive systems even when they fail to make their cash contributions or subsequently service their debt. Historically, public sector subsidies for RWSS systems are estimated to have amounted to US$300-US$400/connection. At the current level of public sector financing, Paraguay would require years to reach a coverage of 85% in rural areas. The following section describes a pilot approach to mobilize private sector financing for rural/small town water 3 See Experience of PSP in other rural Infrastructure Sectors: The Minimum Subsidy Concession Concept, Vivien Foster, The World Bank, May, See Revisión de la Estrategia de SENASA, Informe Final, 28 March, 2001, Consorcio Asociación Euroestudios-Hidrocontrol Consultoría. The Development and Management of Rural Multi-village Schemes

76 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 76 supply by offering private contractors/operators a subsidy to design, build and operate WS systems in rural areas. It is expected that the approach will increase overall investment in Paraguay s RWSS sector and allow for coverage targets to be met more quickly. Pilot Approach under the Fourth Rural Water Supply and Sanitation Project Under the Fourth Rural Water Supply and Sanitation Project ( ; supported by US$40 million in loans from the World Bank), SENASA is currently piloting defined subsidy concessions with output-based subsidy disbursement in 4 small towns. Private sector contractors and operators are being asked to bid (in 4 separate lots) on the right to design, build and operate water supply systems with household connections in the towns of Monday and Acaray (both in Alto Paraná province, 14 km west of Ciudad del Este) as well as in Caraguataity and Tarumandy (both in Central province, near Asunción). The tariffs that PS operators may charge communities as well as the subsidy that SENASA will provide (US$150/connection or, in one case, a lined borehole) have been defined and bidders will be asked to bid on the minimum connection charge in cash up-front for users wishing to connect to the network. In practice, operators may charge users the connection charge in installments using a social interest rate not to exceed 24%/year (payment in Guaranies). Table 1 summarizes the main characteristics of the 4 pilot communities: Monday Acaray Caraguataity Tarumandy Province Alto Paraná Alto Paraná Central Central Number of families in service area Population Medium Medium Medium Low density Source of income Subsidy Current WS source Mostly wageearners, medium - to-low income US$150/connection (up to maximum number of connections) Household wells with and without electric pumps (high water table, poor quality) Mostly wageearners, mediumto-low income US$150/connection (up to maximum number of connections) Household wells with and without electric pumps (high water table, poor quality) Small farmers and day laborers (poor) At option of bidder either (i) US$150/ connection or (ii) a lined borehole with a defined minimum flow Household wells and polluted stream Small farmers and day laborers (somewhat richer than Caraguataity) US$150/connection (up to maximum number of connections) Household wells Bidding documents are currently for sale and 28 sets had been sold as of late May, Bids are due on 18 June, Contractual Arrangements. Once successful bidders have been selected for each of the 4 lots, 3 contracts will be signed: A contract between SENASA and the Contractor/Operator. This contract is based on the standard WB bidding document for small works and will govern the construction phase (technical standards, supervision, subsidy, guarantees etc.) A contract between SENASA and each water users association. This contract sets out SENASA s agreement to provide a subsidy for system construction once the water users association has signed the concession contract with the Contractor/Operator. A simplified concession contract (14 pages) between the Contractor/Operator and the water users association. This contract defines the service area and sets coverage targets for connecting the population within it. It also (i) provides the contractor/operator with exclusivity in this area; (ii) defines water and service quality standards The Development and Management of Rural Multi-village Schemes

77 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 77 (pressure, continuity of service etc) and sets out penalties for non-compliance; (ii) provides formulas for adjustments to tariffs and miscellaneous fees; and (iv) establishes compensation in the case of early contract termination. Challenges ahead. While the pilot project has generated significant interest both among the selected communities (who see it as an alternative to the traditional, time-consuming SENASA approach and a short-cut to accessing funding) and among contractors (28 sets of bidding documents sold to date), significant challenges remain: Selecting qualified bidders and managing the inevitable start-up difficulties associated with a new type of contractual arrangement; Building the capacity of local water users associations to manage the concession contract and to assume the role of local regulator rather than direct service provider; Keeping Contractor/Operators engaged over the life of the concession contract, even after they have collected their subsidy payment. The Development and Management of Rural Multi-village Schemes

78 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PRIVATE SECTOR PARTICIPATION (PSP) IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Franz R. Drees Alexander E. Bakalian Jordan Z. Schwartz June, 2002 PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Minimum Subsidy Concessions for Rural Infrastructure (Foster, 2001) level of PS interest telecom electricity transport water low income Guatemala Peru Colombia Nepal South Africa (Uganda) (Ghana) (Nicaragua) Cape Verde (Benin/Togo) (Uganda) (Senegal) (Paraguay) lower middle income Bolivia (Mexico) (Ecuador) Chile Argentina Chile upper middle income income level PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Population :5.5 million (2000) Area : 407,000 km 2 (40% in Eastern Region where 98% of the population lives) Distribution : 56% of population lives in rural areas and small towns (< 10,000); Major cities : Asunción (metro area: 1.1m); Ciudad del Este (0.3m) PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Water Sector Structure CORPOSANA urban systems (pop. > 10,000) : 28 cities with a total pop. of 2.4m coverage : 21% of total population (49% of urban population); SENASA rural systems and small towns (<10,000 population) total pop. of 3.1m; coverage : 17% of total population (30% of rural population); service provision through more than 1,000 autonomous water users associations( juntas ) (total of 173,000 household connections and 550 public standpipes); SMALL-SCALE PRIVATE PROVIDERS ( AGUATEROS ) about 400 independent aguateros serve mostly peri-urban pop. of about 700,000 (13% of total pop) (mostly around Asunción and Ciudad del Este) Urban Coverage Rural Coverage PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay CORPOSANA AGUATEROS SENASA 1.2m of 2.4m 0 0.7m (mostly in peri-urban areas) 0 0.9m of 3.1m PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Who are these Aguateros? Today: some 400 providers operate systems with connections (ave. 300 con.); average age : 10 years, some up to 20 years old; stiff competition on the edge of business zones; Camara Paraguaya del Agua (CAPA) represents 96 (larger) aguateros; Systems : borehole + disinfection + storage tank (ground level or elevated) + distribution network with metered & un-metered connections; Costs: about US$250/con. vs. US$500/con. (SENASA); Quality : good - 100% disinfection; 90% 24h service (CAPA members); few SENASA systems actually use disinfection although all have equipment; Licensing: municipal installation permit; SENASA lab. tests. The Development and Management of Rural Multi-village Schemes

79 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Aguateros Average system size : about 300 connections; Tariff : US$ /m 3 Connection charge : about US$150 in installments over 1 year, (wide variance: US$0-370) Cost recovery primarily through connection charge Juntas de Saneamiento (SENASA) Average system size : about 200 connections (historical ave); new systems : 100 connections and less Tariff : US$ /m 3 Connection charge : about US$150 in installments typically over 3 years, (wide variance) Cost recovery primarily through connection charge Regulatory Structure ERSSAN (Ente Regulador del Sector de Saneamiento)Sector Law passed in October, 2000 : Creates regulator for water and sanitation services (tariffs, supervision of service quality); Central govt. retains concessioning authority with option of delegation to provinces ( gobernaciones ) and municipalities; PSP under concessions (up to 30 years) and licenses (up to 10 years for systems of <2,000 connections, renewable); Detailed regulation under preparation PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Sector Financing Challenges Target population : need to serve an additional 2.0 million people in SENASA s service area by 2010 to reach 85% coverage. Investment cost : about US$ million; Current public sector investments in rural WS: about US$5-6 million/year. It would take years to reach coverage target! Current financial arrangements for new systems (THEORY): 5% in cash up- front (for larger communities, less for small ones) 10% in cash during construction (for lg. communities, less for small ones) 15% in labor during construction (communities) 30% as 10-year loan at subsidized interest rate (6% below market, communities with more than 70 connections only) 40% -82% as grant (central govt..) In practice, subsidy is much higher! Need to mobilize PS capital. PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Pilot program (US$0.5 million) under Fourth Rural Water Supply & Sanitation Project PS operators bid on 10-year concessions to design, build and operate WS systems in 4 small towns (bid as 4 separate lots); SENASA design standards (exception: hydro-pneumatic tanks) Tariffs are fixed in line with local levels : US$3.85/month for un-metered connections; US$2.88/month for 12m 3 + US$0.38/additional m 3 for metered connections; Bidding variable : Minimum connection charge up-front (in practice operator may charge in installments at an interest rate not to exceed 24% (payment in Guaranies)); Defined subsidy rather than Minimumsubsidyconcession PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Km14-Monday (Alto Paraná) Subsidy: US$150/connection actually made up to a maximum of 375 connections (< US$200/ connection traditionally offered to juntas); Current situation: Poor water quality from household wells (high groundwater table, proximity to latrines); High pumping costs (US$2-4/month); Population: mostly wage-earners (proximity to Ciudad del Este), but visible income differential within community. Medium pop. density. PHOTO Km14-Monday (continued) PHOTO The Development and Management of Rural Multi-village Schemes

80 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Km14-Acaray (Alto Paraná) Subsidy: US$150/connection actually made up to a maximum of 457 connections (< US$200/ connection traditionally offered to juntas); Current situation: Slightly larger but very similar to Km14-Monday PHOTO Caraguataity (Central): Subsidy: At option of bidder either (1) US$150/connection actually made up to 194 connections OR (2) a lined borehole with a defined minimum flow (Q=2.8 l/s); Current Situation: Poor water quality from shallow wells and polluted stream; Population: poor (mostly small farmers and day laborers); Medium pop. density. PHOTO PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Caraguataity (continued) Tarumandy (Central) PHOTO Subsidy: US$150/connection actually made up to a maximum of 213 connections; Current Situation: Water supply from shallow household wells. Rocky soil makes installation of piped system difficult; Population: Moderately poor and low population density. High construction costs; Private sector interest will probably be limited PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Departures from pure output-based aid (OBA) model: Advance payment (equivalent to 20% of total subsidy amount) against presentation of an unconditional bank guarantee; Contractor may collect subsidy for some houses on served streets even if they don t connect (up to a maximum of 1/6 of total); Borehole insurance (if after 3 borehole drillings minimum flow not obtained, contractor may rescind contract without losing performance guarantee and receive compensation of US$35/linear meter of excavation) PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay Contractual Arrangements 1. Contract SENASA - Contractor/Operator based on modified WB document for small works; covers construction and payment of subsidy based on existing number of households in the service area; 2. Contract SENASA - Junta de Saneamiento 3. Contract Operator -Junta de Saneamiento (14 pages) operator has exclusivity in service area; service area and timetable for meeting coverage target; water and service (continuity, pressure) quality standards (+penalties for non-compliance); formulas for adjustments to tariffs and miscellaneous fees; compensation in the case of early contract termination. The Development and Management of Rural Multi-village Schemes

81 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay INITIAL EXPERIENCE AND NEXT STEPS Tender initially called in July, 2001, then suspended in September, 2001 amid questions about conceding authority under new ERSSAN sector law; Bidding documents were modified and the tender was re-launched in May, 2002, with bids due on 18 June, To date, 28 sets of bidding documents have been sold. Further information : click SENASA; CONCLUSIONS Rapid growth of piped WS systems designed, built and constructed by private providers is largely unprecedented in Latin America; Key Enablers: entrepreneurial tradition spawned by underperforming public sector and high population growth in peri-urban areas; investment cost recovery for simple systems in under 3 years; relatively abundant, accessible groundwater in Eastern Paraguay; traditionally cheap electricity for pumping (now about US$0.05/kWh, previously much less); WB involvement with pilot small town PSP process (subsidy financed through WB loan); Expectation : good competition for market in upcoming tender 194. PSP IN SMALL TOWN WATER SUPPLY Early Experiences from Paraguay OUTLOOK Private sector financing for small town water supply through designbuild-operate schemes supported by output-based aid (OBA) is promising but still unproven; Challenges include institutional opposition and limited community capacity to manage contracts; Nonetheless, support for this approach is growing in Paraguay and a second tender is expected later this year (Puerto Falcón/Nanawa) LA SONEXIE, UN ENTREPRENEUR ENGAGE DANS LA GESTION DELEGUEE DU SERVICE DE L EAU DANS LES PETITES VILLES (NIGER) By Koroney Lihida The Development and Management of Rural Multi-village Schemes

82 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page NIGER LA SONEXIE, UN ENTREPRENEUR ENGAGE DANS LA GESTION DELEGUEE DU SERVICE DE L EAU DANS LES PETITES VILLES LE CADRE INSTITUTIONNEL La SONEXIE a un contrat de concession (travaux de remise à niveau et gestion du service), cahier des charges négocié avec les services déconcentrés de l Etat Contrat signé pour dix ans Le concessionnaire a réhabilité les installations sur ses fonds propres en début de contrat, l entretien et le renouvellement se font sur les fonds générés par la vente de l eau Ministry of Water Resources (Central Government) Users Association (elected by users) Transfer of the water supply facilities Agreement watchdog "social control" Local level of government (owner of assets) Delegation contract Local operator DONNEES GENERALES Répartition des fonds générés par la vente de l eau : 53% de charges de fonctionnement (salaires, énergie ) 30% extensions et renouvellement 15% pour rémunérer l exploitant 1% pour le fonctionnement de l association d usagers 1% pour l audit technique et financier DONNEES GENERALES 7 petites villes sont desservies ( habitants + Bétail) Chiffre d affaires annuel: 150 millions FCFA (200,000 $ US) Complète autonomie financière Le Ministère supervise les études techniques (1% des recettes) INDICATEURS DE PERFORMANCE Capacité de pompage journalière: 3,470 m3 Nombre de m3 pompés / jour : 1,715 m3 Production réellement vendue: 100% (excepté 1 ville) Revenu moyen annuel: 19,930 US $ Coût unitaire opérationnel: 0,75 $ US Tarif moyen: 0,44 $ US Nombre de branchement / 1000habitants: 0,5 Fraction d eau facturée à un usager industriel ou commercial: 32% The Development and Management of Rural Multi-village Schemes

83 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Capacit é de pompage Nombre Nombre de M 3 Production Villages Journaliè re d habitants Pompé réellement Observation 20 /24 H actuellement vendue /Jour Alimenté par courant Malbaza 540 électrique (8 H) Galmi Groupe électrogè ne (10 H) Groupe Dibissou électrogè ne (10 H) Groupe Tierrassa électrogè ne (10 H) Groupe Azarori électrogè ne (10 H) Groupe Karofan électrogè ne (10 H) Groupe Madetta électrogè ne (10 H) Vétustes 202. PROPRIETE, SUPERVISION, CONTROLE ET FONCTIONNEMENT PROPRIETE: Installations déléguées par l Etat à l administration territoriale, en l absence de collectivité locale CONTRÔLE : L association des usagers, la DDH FONCTIONNEMENT: SONEXIE prend en charge l intégralité des fonctions techniques et commerciales, en embauchant son propre personnel (CDD et CDI) TOTAL 203. RESPONSABILITE: Comment et à qui l opérateur rend-il des comptes? Réunions périodiques (/mois) entre les usagers, représentant de l Etat et l exploitant (SONEXIE) Informations financières et techniques fournies à l association d usagers et à la DDH Procès verbaux de réunions en double exemplaire (village et DDH) 204. REGULATION ET COMPETITION La DDH / DIGOH audite les performances financières et techniques Régulation au niveau local : les comités possèdent les fiches de recettes Régulation pour les tarifs et la qualité de l eau : DDH, DIGOH Compétition: opérateur choisi par appel d offres, respect des délais pour les réparations, régularité du service, politique commerciale APPUI PROFESSIONNEL APPUI PROFESSIONNEL ENTREPRISE SONEXIE Statut juridique: SARL Nombre de personnes : 23 dont 4 cadres Capital: 5 millions de FCFA (6,600$) Nombre d actionnaires (30 actionnaires dont 12 comites de gestion) Accès au sytème bancaire (crédit en matériaux) Endettement (environ 38 millions) Appui professionnel procuré par l entreprise Stratégie pour réduire les coûts: orientation technique et financière discutées en conseil d administration à la SONEXIE Ecoute de la clientèle Stratégie pour l extension des infrastructures: Extension au départ financées par le FED Sur fonds propres et sur une partie du fonds de renouvellement (7millions) En cours 16 millions pour 2 centres The Development and Management of Rural Multi-village Schemes

84 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page FINANCEMENT Construction : Etat sur financement extérieur Pas de renouvellement après heures de fonctionnement Réhabilitation : fonds propres SONEXIE (pas d accès au système) Investissement privé de 7 à 30 millions Remboursement sur les recettes de l eau Conditions agréées et contrat signé par toutes les parties INFORMATIONS UTILES Paramètres qui influencent la qualité du service: Facilité de communication (SONEXIE /usagers) Déplacements réguliers assurés Extension du réseau effectif pour répondre à la demande Réhabilitation des infrastructures 209. FACTEURS DE SUCCES Négociation du cahier des charges par les différentes parties Respect du cahier des charges Réhabilitation effective 210. LES FACTEURS CLE DE SUCCES Autonomie financière de l opérateur et durée du contrat Audit par des consultants indépendants pour les aspects financiers Investissement au début du contrat pour développer l accès au service Audit technique par la DDH 211. LES LIMITES ACTUELLES Pas d accès de l opérateur au secteur bancaire classique Flou juridique pendant la phase d investissement Dans certains cas les charges de fonctionnement sont encore trop élevée et le prix de l eau trop bas The Development and Management of Rural Multi-village Schemes

85 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 85 THE DEVELOPMENT AND MANAGEMENT OF RURAL MULTI-VILLAGE SCHEMES Main Findings of the Case Study in Senegal By Masse Niang Introduction The Water and Sanitation Program is developing with the World Bank Urban and Rural Water and Sanitation Thematic Groups joint research on the management of small town and multi-village water and sanitation systems. The research is implemented through two initiatives: The first, launched in 1999, had the principal objective of documenting management models for simplified piped networks and multi-village schemes for small towns throughout the world; The second initiative, to be launched in June 2002, is oriented towards research solutions and tools to help in dec ision-making for improving the management of water systems and service quality. In the two initiatives, small towns and multi-village schemes were jointly studied. We speak of multi-village schemes when a pipe water supply network serves many villages. Two cases exist: the large systems like those seen in India and East Africa (capable of serving a hundred villages and over 100,000 people) and the small systems, which is the subject of this study. These small systems can reach, as in small towns, a tota l population of several tens of thousands of people. The dispersion of settlement centers or the scarcity of the resource leads to the construction of inter-village systems. These systems combine several villages and together and start to realize economies of scale, thereby enabling these villages to attain a level of service that they would otherwise not have attained individually as a small town. However, just like for small towns, the fact that technical and financial management needs improvement makes the multi-village schemes an important component of the new initiative. Senegal, where rural water supply is provided almost exclusively through multi-village schemes since the 1980s, is an interesting example to study, and at the same time an attempt at optimizing initial heavy investments (deep boreholes, thermal pumping systems) and to meet a strong demand for better service. The multi -village approach emerges as an alternative to improved point sources of village water supply. Study Framework This study relies on many sources of information: Studies undertaken in the Thiès, Fatick, Diourbel and Kaolack Regions, known as the arachidier basin zone, is Senegal s main export zone and source of foreign. Detailed investigations were conducted on a sample of eight villages, representing existing situations in terms of age, size and type of potable water service (stand-posts or house connections). Each network was systematically mapped and meetings were conducted with the main authorities as well as with user groups. This sample (E1) gives a vision of the development of multi-village schemes over time. The systems considered in this sample have been in service for seven to twenty-two years. Analysis of results of the RRESFMR Project (rehabilitation, new facilities and borehole site development in rural areas), financed by the Government of Belgium and implemented by the Directorate of Hydraulics. This project constructed new facilities or rehabilitated existing systems in the same arachidier basin. Twenty-two (22) systems were put into operation between 1998 and 2001 with branches of 4 to 25 villages per network. This sample (E2) gives a vision of the new generation of multi-village projects and is especially very rich in financial information; Short studies (sample E3) on other Regions of Senegal allowing for points of comparison to be made with Matam (Saint-Louis Region) and Louga, administrative districts, where field visits were also organized; Round table discussions organized by DEM in October 2001, following the field study with the partners involved in the multi-village programmes. Population and the Water Sector in Senegal Situated in the most westerly point of Africa, Senegal is a flat and sandy country with a sahelien type climate. Local authorities (principally the The Development and Management of Rural Multi-village Schemes

86 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 86 Communes 5 and Rural Communities) do not as yet have any competence in the management of water supply service. The population of the country is 9.3 million, of which 53.3% live in the rural areas in about 13,200 settlements of less than 5,000 inhabitants. (Figure 1 gives the population distribution). In the urban 6 areas, about 52% of the population has access to potable water. 13% Figure 1 : Population distribution by size of town Dakar and suburbs 22% 26% Major towns Secondary towns inhbts inhbts 12% 5% 2% 20% inhbts < 500 inhbts In Dakar and the principal secondary towns, the water supply service is provided by the Sénégalaise des Eaux (SDE), a private company, under a lease contract with the State. The infrastructure belongs to an asset holding company, SONES. A study in progress (2002) envisages extending SONES assets to about 10 small towns (with 10,000 to 25, 000 inhabitants). In the rural areas and small towns, one in two inhabitants has no access to water from an improved water point (network of pipe borne water supply, large diameter dug-well or hand pump). It is estimated that for the 5.5 million people living outside the SONES perimeter in 2001, only 1.5 million are served by a small pipe borne water system, and 1.2 million are served by another type of improved water point. Wide disparities exist between regions, with access to an improved water point ranging from 29% for the Kolda region to 67% for the Fatick region. In the rural areas and in all towns that are outside the control of SONES, the water service is within the jurisdiction of the Directorate of Operations and Maintenance (DEM), a body under the Ministry of Energy and Hydraulics, which is relatively well decentralized in the country. Since 1984, the government has been withdrawing progressively from investment and operations responsibilities. From that year, part of the operational costs of hydraulic infrastructure is transferred to management committees, which are spread throughout the country. During Socio-economic indicators of Senegal Area km 2 Population (1999 estimate) million Urban Population 1 (1999)....47% Rural Population (1999)..53% Population growth % per annum ( ) Urban population growth.3.7% Life expectancy years (1999) GDP per capita habitant (PPA, 1999) US$ 1,419 GDP growth...5.4% / year ( ) Human Development Index (1999): 145 th out of 162) Source: World Development Indicators database, April 2001 & UNDP 2001 Report the course of the year 2000 (decree no of April 5, 2000), reform of the management of rural boreholes was initiated by the government and is intended to achieve financial autonomy in the maintenance and renewal of equipment. The reform entails greater empowerment of the population (involving the rural communities in the planning, construction and management of facilities), improvement in local resource mobilization, (through community contribution to the financing of facilities) and a greater involvement of the private sector for the supply of goods and services. The reform is currently being tested for a period of five years in four Regions (Thiès, Fatick, Diourbel and Kaolack) and involves some 325 hydraulic facilities, which were rehabilitated (rehabilitation of boreholes and ancillaries and extension of networks). The Agence française de Développement provided a subsidy of 50% of the cost of equipment for the rehabilitation of facilities, with the remaining 50% coming from local resource mobilization. 5 A rural community becomes a commune when the population exceeds 10,000 6 For the senegales authorities, urban" refers to towns with populations more than 10,000 The Development and Management of Rural Multi-village Schemes

87 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 87 To access the subsidy for the rehabilitation of the facilities, the reform has set conditions for operation of the facilities. Figure 2 : Increase in no. of small drinking water supply networks in Senegal (outside SONES assets) The choice of small piped network for water supply in the rural areas and small towns As at 2000, the country has about 800 deep boreholes fitted with motorized or solar equipment. From the early eighties, the Senegalese authorities focused on the technical option for small pipe water supply, which has increased from about a hundred in the early 1980s to more than a thousand today. Handpumps remain marginal and are almost exclusively installed by NGOs in areas with poor groundwater resources (today, Senegal probably has less than 5,000 of these in working condition). From the outset, technical specifications for the pipe networks were relatively sophisticated: deep boreholes, reinforced concrete tanks, extensive distribution network. The development of the national electricity network (Sénélec) has led to the connection of an increasing number of pumping stations, limiting the constraints The large size of water tanks (here in the district of Matam) is undeniably a favorable factor for the development of multi-village networks associated with thermal motors and improving pumping reliability (limiting interventions and reducing maintenance costs). Figure 3 : Diagram of distances from satellite villages to village The hydrogeological and topographic centre (in km) conditions are without doubt the factors - Sample of 119 systems and 900 villages - that swayed the government s choice in 200 favour of multi-village schemes. A very 180 large part of Senegal is situated in the 160 sedimentary zone. The groundwater 140 levels (which cannot be a major local 120 resource) are generally subjected to 100 wide variations in depth and are 80 exposed to contamination by saline 60 water and surface pollution. The deep 40 Maestrichien acquifer is by far the 20 country s largest groundwater resource and has many elements that favour Distance (Km) long-term exploitation. It extends over 4/5 of the territory with good hydrodynamic characteristics and significant reserves. The Development and Management of Rural Multi-village Schemes

88 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 88 The borehole therefore, is a relatively expensive equipment, which must be made profitable by constructing an elevated reservoir that can serve as many inhabitants as possible. The very favorable topography of most of the territory is also a factor for developing multi-village pipe networks, as the difference in elevations is small (less than 5m per kilometer). The Development and Management of Rural Multi-village Schemes

89 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 89 Most small pipe network water supply systems in Senegal serve several villages. These are generally small villages that are connected to a slightly bigger center village. 68% of the villages concerned have less than 500 inhabitants, and 14% have from 500 to 1000 inhabitants. The number of villages supplied from the same borehole is 7.5 on the average for a sample of 900 villages representing about 119 small pipe networks. Figure 4 : Diagram of number of villages connected per system - Sample of 119 systems and 900 villages - 18 No. of 16 villages No. of systems Population des villages raccordés (y compris village centre) Echantillon de 119 systèmes et 900 villages Zoom sur la tranche habitants Figure 5 : Population of villages connected (including central village) Sample of 119 systms and 900 villages Focus on 0 1,500 inhabitants How to Construct a Multi-village scheme High Design Standards Infrastructures meeting high design standards constitute the triggering factor for the multi-village schemes in Senegal: A productive borehole (not less than 25 m 3 /hour nominal discharge in sample E1 of villages surveyed); A large sized water system (in terms of pipe diameters), in general with unit allocations close to 35 to 40 liters per day per inhabitant; A good quality storage facility: In general, about one hundred m 3 and an invert level over 10 m high. This is quite a substantial investment by the State (on average, about fifty million CFA francs, i.e. about US$ 70,000 per facility) A strong spatial organization When they are commissioned, the water supply networks (sample E1), in general, do not serve more than two or three villages, among which there is a well defined central village, often an economic center (a well- patronized weekly market for example), and/or an administrative center (administrative centre of a rural community, housing a number of infrastructures and public services such as schools, post office, health center and rural development center). Apart from potable water supply issues, the central village also generally oversees a group of smaller villages lying within a 3 to 4 km radius. These are villages historically linked to the central village (through family ties), and which use the central village as a resource center, for trading (buying and selling) or for benefiting from public services such as education, health, agricultural advisers, etc. The Development and Management of Rural Multi-village Schemes

90 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 90 Légende Bornes-fontaine Stand post Borehole Forage Figure Figure 6: 6 The network : Le réseau of Touba de Touba Toul Toul and et its ses successive extensions extentions successives from 1990 to 2001 de 1990 à 2001 Route principale 75 Doudoul 8 46 Métrage Number of private Nombre connections de branchements privés Keur Thiof 5 Ngan Ngan Keur Lamane Touba (centre) Sinthiane Dio urbel Ngayene Diourbel Payene Ndoronc 63 Ndondol Tiathiaw 6 1 km A good illustration of the abov e is the case of Touba Toul (sample E1), commissioned twelve years ago. From the outset, the Committee grouped 17 villages all linked to a central village that supervised their social and economic activities, and this was well before the first extension. After the borehole was put into service, and even before the network was extended, the nearby villages were already using the network and were supplied through stand posts. This cluster of villages initially relied on cart-driven or container water vendors at a tariff fixed by the system s association. This water is sometimes supplied in return for a fee by small private operators. However, most families use their own carts to go and fetch water from the network. This first access to the network by the satellite villages gave rise to the concept of unconnected polarized village ; this means that the village is supplied from the network without being physically connected. Among the 17 villages, only 12 were physically connected in 2001 (see figure 6) Gradual network extension strategy After a few years, the strategy of the management Committee is to extend the network to other neighborhoods or villages. This extension follows the overseeing process" explained earlier. During the field surveys, we met (in sample E1) only one case where the village that applied was not connected for reasons other than technical: the inhabitants of this village had refused to participate in the extension, by way of digging trenches. In sample E1 of the eight systems studied, the number of villages connected rose from 3 to 4 at an average of 9 while the population served was multiplied by a factor of 3 to 5, and while the average length of the network increased by more than 50% on average. The layout of the Touba network (see figure 6) illustrates the long and patient extension work done by of the Management Committee and the users. Practically, each year, since the start of operation, a branch of the network has been constructed, gradually increasing the number of villages connected from 3 to 12 in under 10 years. This corresponds to an increase in the population served from approximately 1,500 inhabitants to over 6,000 today. Steadfast commitment to service improvement Half the villages in sample E1 have been in operation for over 15 years. They have a long history of water service management, beset by minor conflicts and misappropriation of funds, and made good and bad decisions. However, the strength of the users association is that within 10 to 15 years, practically all of them aim to improve service, which involves connecting new villages and gradually moving to payment according to the quantity consumed as well as the installation of meters. Each new village connected increases the volume of water sold. This helps to The Development and Management of Rural Multi-village Schemes

91 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 91 maintain production costs at reasonable levels and generally allows the users associations to keep up the quality of service. Financing of multi-village schemes Until recently, the Senegalese government has single-handedly funded the total investment cost for most pipe borne water supply or multi-village schemes projects. The only exceptions are projects financed by nationals association or NGOs (evaluated at about 10% of existing systems). The users have often participated personally in the works (digging of trenches ) but only rarely contributed financially to initial investment costs. Up until 1984, the State bore the entire recurrent costs of small piped water supply systems (including the salary of the borehole operator, fuel, repairs, etc.). From 1984, people started paying for water at a fixed charge to pay for recurrent repairs; and then from 1990, payment by volume became more frequent, helping to improve cost recovery. During that time, the State strongly urged new satellite villages to connect to an existing borehole. The DEM observed that, increasing the number of users was the only way of ensure profit for stations without increasing the price Figure 7 : RESFMR project investments for new networks of water beyond CFA 500 Francs / m3 With the reform, the key to recurrent costs sharing between the users association and the State has now been clearly defined: The users take charge of the entire cost of operations (salaries, energy, repairs, transport costs, etc.), replacement of equipment with short life span (electric pump, generating sets ) as well as the cost of extensions or increasing the density of the distribution network. The State takes charge of renewal of all equipment with a life span greater than 20 years, in particular the borehole, major works (reservoir) the primary network. However, the modalities for making these funds available are not very clearly defined. The field survey on sample E1 (taking aside a particular case where the pumping station in the Walane village was particularly expensive), enabled the conclusion that the value of replacement of infrastructure lies within a very reasonable range (between US$ 20 and US$ 55 per user) and that the networks which are not very extensive are those which are now attaining an advantageous cost ratio (Thienaba et Touba Toul). Practically all the extensions were carried out through local financing (user groups, community leaders, local government), and this helped to extend considerably facilitating the initial Figure 8 : RRESFMR project investments for rehabilitated networks. While the local government networks (the communes mainly) lack water service management skills, they 120 contribute towards the initial investment 100 and more frequently towards future extension works. 80 Ranking investments needed The RRESFMR Project (E2) has recently financed seven new networks on sites with variable population. Analysis of unit costs gives a good idea of investments needed in terms of the number of persons served (see figure 7). The ratio cost/pers. CFA costs per capita FCA No. of consumers per system No. of consumers per system costs per capita US$ cost/pers. US$ The Development and Management of Rural Multi-village Schemes

92 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 92 varies from single to double digits when the population increases from 2,000 to 5,000, with investments costing an average of between US$80 and US $100 per capita. However, the majority of networks financed under this project are for the moment installed with stand posts. Still under the RRESFMR Project (E2), for the rehabilitation of networks where the borehole and all or part of the network is reused, the investment cost varies from US$20 and US$80 per inhabitant with an average of about US$50. (See figure 8) Optimization of Investments Senegal s multi-village schemes of develop as a star starting from the water tank, contrary to the linear systems of Colombia, Peru, and Cote d Ivoire, described in the Field Note: Multi-village Water Supply Schemes - An Emerging Challenge. The RRESFMR Project derived a simple theoretical model for determining an optimum between the radius of action of a borehole site and the total cost (handed down to the user). This model is given here for illustration purposes only (see figure 9), as it is clearly applicable only in the project Region 7. In this case, when we take the investment criteria per user, it appears that with an overhead water tank with an invert level at 15 meters high, the optimal radius is about 5 to 6 kilometers. To supply a village situated outside this radius, it is more economical to connect it to a different borehole or construct a separate system. The economic benefit (measured in terms of per capita investment cost) of a multi-village scheme supplied from a single borehole diminishes from a radius of 6 km. In reality, this radius of action is rarely attained. For a better optimization of investments, the management committee would have to acquire technical skills for the extension of the systems. Such skills are often limited, and extensions are made with unrestrictive standards, be it for the hydraulic balance of the network or the works execution per se (materials Unit costs of a multi village scheme (survey findings) Borehole (in CFAF million): x depth (in m) 100 m 3 to 10 m reservoir:.. CFAF 40 million 100 m 3 to 15 m reservoir:.. CFAF 60 million 20 m 3 /h electric pump for 60 m total dynamic head:...cfaf3.6 million Electric pump, transformer, cabinet... CFAF 12 million Motor set for 40m3/h total dynamic head 71 m:...cfaf 14.5 million 63 mm diameter PVC pipe, supply & laying:.....cfaf 2.2 million / km 90 mm diameter PVC pipe, supply & laying:.. CFAF 3.0 million / km Stand-post built by a project: CFAF 0.6 million Stand-post built by users :..CFAF 0.2 million Private connection fitted with a meter :.. CFAF 40 to Height (m) Figure 9 : Cost of investment in US$ per capita (according to radius of action of borehole (km) and height of wa ter tank (m) For water tank with 10 m invert For water tank with 15 m invert Radius of action (km) quality, depth of buried parts, etc.) The users generally call on local cheap but unqualified job hands. As and when the network extends and becomes dense, serious quality problems may crop up, namely low pressure in certain areas, badly calibrated extensions which can serve the target village for only a few hours in a day, etc. The increase in house connections rapidly reduces the output of the network. 7 The model in the Senegal situation (homogeneous hydrogeology and topography) was constructed on a squared mesh of villages and the average distances between the villages, the average population density of the zone, the average daily water demand and the discharge at the point were brought to bear : in addition, the project used a certain type of equipment in the zone. The Development and Management of Rural Multi-village Schemes

93 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 93 Operation of a Multi-village scheme Users associations as operators The model most widely used in Senegal is users associations serving as operator. The system remains the property of DEM, which transfers the responsibility for operation to the water users with much more autonomy (fixing water tariff, investment decisions etc.) than State run services. These associations are governed by the decree of May 20, 1997, which gives them legal status, as ASUFORs (borehole users associations) as part of the reform of the management of rural boreholes. Under the reform, the associations can delegate all or part of the management of the water service The management model currently promoted by DEM rely on the following principles: The water tariff must cover most of the recurrent charges. Only investments with a life cycle exceeding 20 years (boreholes, civil works, primary network) will be handled by the State, which must ensure their renewal. The ASUFOR is encouraged to delegate the operation of the pumping station (water production) or the larger aspects of management (production, distribution, billing) to a private operator (which could be a company). The operator is paid based on indicators of service performance. The maintenance of pumping equipment must be sublet to a private company pre-selected and acceptable to the DEM as a sole maintenance entity for a region. This is a condition for access to financing of the rehabilitation of infrastructures under the REGEFOR Project. For the renewal of their pumping equipment, the ASUFORs are invited under the REGEFOR Project to use an original financial arrangement which combines a State subvention (50%), a direct contribution by the ASUFOR (15%) and a credit (35%) obtained from the Crédit Mutuel du Sénégal, which is the bank most often used by the ASUFORs. The DEM refocuses on the functions of water resources management, investment planning, monitoring of service quality, operators agreements and the mobilization of financial resources for renewal of heavy infrastructure. The user; Associations acting as operators hardly delegate management The Committees in none of the villages studied (samples E1, E2, and E3) chose to sublet management or operation of the network to a private operator as authorized by the reform. Similarly, no maintenance contracts have as yet been signed. Figure 10 The Development and Management of Rural Multi-village Schemes

94 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 94 The management of multi-village water supply networks by management Committees (or the ASUFORs, as they were so declared by the new legislation) comprise many levels of representation and decision-making, comprising many people. All the users are to be represented at the association s General Meeting, which must meet every a year to replace the leaders. In reality, the democratic functioning is limited: women and children are under represented and take little part in decision-making and the same teams remain in place for many years. However, the associations are gradually improving the skills of their members by setting up a team with different profiles (first, a borehole operator, then revenue collectors/meter readers, then in certain cases a secretary general and whose functions make him a manager of sorts) and remunerating people most involved in the Committee. As part of the 22 multi-village schemes of the RRESFMR Project (E2), remuneration in the form of a fixed amount and a percentage on the volume sold has become the rule (cf. P11) The representation of various villages served Some projects have imposed, under the guise of an democratic ideal and parity between men and women, a system of representation where each village connected sends the same number of delegates to the General Meeting, with very restrictive designation criteria. Under the reform, the number of representatives is supposed to be proportional to the size of the village represented, which, in general, is the solution chosen spontaneously by the users The Delegates Meeting (which often replaces the General Meeting) is very balanced in terms of representation of the satellite villages. On the other hand, when we analyze the composition of the management Committee (the executive office of the ASUFOR in the case of systems that follow the principles of the Reform), we find that the central village is over-represented, with its representatives systematically occupying nearly all the key positions. There are however, a few exceptions such as the Thienaba network, whose president is not from the central village). However, this over -representation of the central village appears to be well accepted by the other connected villages. We thus have to refrain from interpreting the influence of the central village as a stranglehold over the management of the water service. In most cases, the management Committee s participation seems like a burden as it is hardly a Polarized village (PV2) Stand pipe users A Stand pipe users House hold connection users Gender promotion Assoc. Young people assoc. Main Village (MV) Cattle breeder Assoc. B Stand pipe users Polarized village (PV1) Stand pipe users House hold connection users Control and ratify the expenses and follow the respect of the general directives Approves: annual accounts report and annual budget Elects the water board 2 delegates / house hold users of MV 2 delegates / house hold users of VP1 Minister of hydraulic representative (1.) consultative General Assembly Water Board 2 delegates/standpipe 2 delegates/standpipe 2 delegates/standpipe Local authority representative (1.) consultative External audit 2 delegates/ Gender Assoc. 2 delegates/ Young people Assoc. 2 delegates/cattle breeder Assoc. By law, any user can be elected to the water board excepted persons with offic political and/or religious responsibility Day to day management and responsible to elaborate the management report of the system System management Executive board General Administrator President Secretary 2 observers General supervisor Standpipe administrator Standpipe administrator Standpipe administrator Pumping operator or Private operator Private enterprises Could be privatized by law The Development and Management of Rural Multi-village Schemes Multi-villages Water users Association scheme in Senegal

95 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 95 Figure 11 : Average cost per cubic metre of PRESFMR project systems for an average consumption of 78 m3/day F CFA US $ (Average for 20 systems since their first use) Consumables Salaries of stand post operators Office Salaries Salary of borehole operator Operation, repair and Extension lucrative post for a workload that often takes two or three days a week. That is why the management committees are made up mostly of retirees (often retired civil servants, literates). Problems do exist and the multi-village schemes in sample E1 have encountered more or less serious conflicts in the course of their development. Such conflict situations have often caused the downfall of the committee. However, no major conflict was detected in this sample. Some brief complementary surveys targeted at some old and recurrent conflict situations (despite several attempts at mediation) were carried out in the multi-village schemes of Sagata in the administrative departments of Louga and Agnam in the Region of Matam, (sample E3), all having a few points in common: The number of villages involved is large (up to 37 villages in the case of Sagatta) and the network, especially, is geographically extensive (case of Agnam). In the two cases, the socio-economic focus has probably been surpassed and spatial arrangements do not count any longer. Refusal to move on to payment by volume and the installation of meters. The Sagata system did not go through this until very recently. The quality of service is poor on the whole: insufficient pressure, limited operation hours, frequent break downs (in general related to deficient pumping and/or poor maintenance of the generating set or the pump); The location of facilities could well be the source of many misunderstandings: at Sagatta, the borehole and reservoir (infrastructure that is highly symbolic) are sited in a very small village, which is not the principal village (and which monopolizes the chair of the Committee). Strong external interference in the management of the systems: political and religious authorities in the case of Sagatta ; European partners (twinning) Figure 12 : Breakdown of receipts, project RRESFMR and natives from the village living in France in the case of Agnam. At Agnam, more than 15 years of rivalry among villages have led to a situation where boreholes and two separate networks co-exist, each one corresponding to different sources of finance. In the two cases, local logic is bypassed, and faced with such a complex situation, the DEM has passed on its arbitration role to the local authorities (sub-prefects). The financial performance of the associations General structure of expenditure and revenue Statistical analysis of data from the RRESFMR Project helps to calculate the structure of expenditure and revenue. The average results for the 20 systems since the start of operations (about 15 months) are shown in figures 11 and 12. In figure 13, the financial performance of a representative sample of systems of the RRESFMR Project is represented: The stand posts make up most of the revenue, as only very few house connections have been made; Animal watering equally constitutes a source of significant revenue; Operational costs (which include repairs) are still reasonable compared to costs from older projects. 12% 3% 10% membership, diverse 75% Public taps Watering troughs Private water points The Development and Management of Rural Multi-village Schemes

96 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 96 A Price of water remains reasonable and attractive for users The price of water, adopted by the water users associations is reasonable for the users: from 125 to 175 Francs CFA/m3 for house connections and 5 to 10 Francs CFA per basin at the stand posts (i.e. from 150 to 400 Francs CFA/m3) in sample E1 The 20 or so systems built or rehabilitated by RRESFMR dropped their rates from 400 francs CFA/m3 to 200 Francs CFA/m3 after a few months of operation, following a successful recovery exercise. The price of water covers in general, the entire operations cost (electricity and diesel bills, current repairs, salaries, any compensation that may arise for the Committee etc.) and depreciation of equipment with short life cycles) Billing based on volume consumed tends to become widespread Seven out of Other revenue eight villages of sample E1 have been practicing meter billing for many years now. This is a Water point proceeds general practice for RRESFMR Project systems (reform condition). Despite some opposition, the system has largely been accepted by the users. This aspect undeniably House connections proceeds constitutes a strong point for the management of the service, since the payment of a fixed price is the primary cause of the deficits and of conflict for the Committees. Payment by volume allows for Public stand post proceeds close monitoring of increases in consumption volumes. These have tripled in Operating maintenance and certain cases in sample E1 without the number of users tripling. We observe that extension expenditure when users Office salaries are satisfied with the management of the water system, the quantities of water Stand post operator salaries Figure 13: Annual Financial Statement Bilan Borehole of financier some operator RRESFMR annuel project de quelques systems sytèmes du projet RRESFMR 18'000 16'000 14'000 12'000 FCFA x1000 tarif 200 FCFA/m3 US$ 0.27 US$ Autres recettes Recette Abreuvoirs Recette connexions privées Recette Bornes Fontaines Publiques 10'000 8'000 tarif 400 FCFA/m3 US$ Dépenses fonctionnement-entretien & extensions Salaire Bureau 6'000 4'000 2'000 8' Salaires fontainiers Conducteur du forage '0 Ndiago 187 m3/j Fass Gossas 161 m3/j Keur M. Poste 92 m3/j Keur Socé 79 m3/j Nguélou 57 m3/j Sanghaïe 27 m3/j M.Marom.. 14 m3/j Source des données: rapport final R consumed tend to increase. The Development and Management of Rural Multi-village Schemes

97 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 97 RRESFMR Project An efficient management system that minimizes voluntary work Managing water by volume, measured with meters at both the production and supply stage is a key management element. Meter reading and payment of bills by stand post managers (pump operator) and connected users take place monthly. Users at the public stand posts and cart stations have to pay cash. To facilitate the process, the price of a 25-litre bucket of water corresponds to the change available. The borehole operator (a professional) is usually paid by volume. The water is sold wholesale to stand post and water point operat ors at CFAF 150 or 350 /m3, which they in turn resell at a fixed rate with a profit of CFAF 50/m3. The office is reimbursed CFA 10 per m3 sold. The Association has to have two bank accounts to manage its funds (a current account and savings account) to receive proceeds and ensure their Economies of scale in terms of operational costs Six of the eight systems studied in sample E1 realize a sufficient profit margin for renewing the system s pumping equipment (this renewal cost has been reduced gradually with the installation of electric submersible pumps, accounting for a reduction of about 20% of the price of this equipment). Data analysis on 20 multi-village schemes under the RRESFMR Project (systems operating for 15 months on average and that have not yet undergone any major repairs) shows that monthly expenditure per capita tends to decrease with the number of villages served albeit in a limited manner, but with a high dispersion (especially for systems whose number of villages exceeds 25). The financial results of the RRESFMR project gives an initial general idea of the viability and profitability of multi-village schemes in Senegal operated by the ASUFORs, based on average consumptions (which could be very variable during the project s first few years and which also depend on animal rearing-related consumption: Below a critical threshold of about 35 m 3 /day it is difficult for ASUFOR (and to any operator for that matter) to bear fixed costs and amortize the pumping plant, even by charging 400 Francs CFA/m 3. A large portion of the pumping plant renewal must be subsidized. This threshold corresponds to a number of persons ranging from 1,500 to 2,500, with an average of 400 inhabitants per village. Systems serving more than five villages are more likely to balance their accounts. From 35 to 70m 3 /day, the site is viable at a tariff of 400 Francs CFA/m 3 From 70 to 100 m3/day, the site is viable at a tariff of 200 Francs CFA/m 3. This corresponds to a viability threshold at this tariff for 2,500 to 3400 consumers (6-8 villages). Above 100m 3 /day, the site is profitable and in addition to amortization and tertiary networks, can also contribute to heavy investments. Turnover and remarkable savings capacity Over a period of 420 months, the 20 or so ASUFORs of the RRESFMR Project realized over 270 million Francs CFA in cumulated turnover and generated direct salaries exceeding 65 million CFA francs (for 408 stan d post vendors, 21 borehole operators and approximately 82 ASUFOR delegates). The ASUFORs have major companies of the region, with deposits in bank accounts and are therefore becoming important clients of the local bank. Recovery of cost of pumping equipment Figure 14 : Savings made by RRESFMR project ASUFORs 120% 100% 80% 60% 40% 20% Cumulative renewal funds since commission Average annual renewal funds 0% Average consumption m3/j The ability of the user associations to provide the renewal cost of pumping equipment is often a management stumbling block. Data analysis of the RRESFMR project however shows a remarkable savings capacity: the depreciation account of two committees have, over a period of under 20 months, sufficient funds to buy back their equipment, while half of the Committees of this project have deposited 50% of the cost of the equipment. This is a sign that (knowing that the life span of this equipment is The Development and Management of Rural Multi-village Schemes

98 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 98 calculated over 6 years) there will be enough to largely fund extensions or house connections for a large part of the systems. The other sites surveyed outside the RRESFMR Project, and which do not benefit from any project support show comparable savings levels, varying from 2.5 to 10 million Francs CFA, even though these were mobilized over longer periods (about 4 to 5 years) Service demand and its recent evolution in the multi-village schemes High demand for house connections It can be seen from sample E1 (which comprises the oldest systems) that as soon as there is the opportunity arises, and despite the large investment that this calls for (from US$ 50 to 100 according to standards imposed by the management committees, i.e. one or Figure 15 : Volumes supplied (in m3 per month) at stand-pipes and private connections for Thienabamulti-village system Volume Jan-98 Apr-98 Jul-98 Private connections Stand posts Linear (Stand posts) Oct-98 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 two months salary), users try to get connected to the nearest network, gradually abandoning the stand posts that have been installed. This tendency is particularly clear in cases where the users are satisfied with the service and where the management committees have set up teams that are more professional capable of dealing with more complex forms of management, such as billing). The transition from stand posts to house connections lasts only a few years. The Thienaba multi-village scheme shown in figure 6, offers a good illustration of the phenomenon. Today, the stand posts account for less than 10% of the quantity of water distributed compared with 100% 5 to 6 years ago (see figure 15). In sample E1, most of systems and the management methods are undergoing transition from stand post service (tied to the community management model and supported by the projects for the past 20 years) and service by house connection (tied to the gradual professionalization of the operator functions of the committees and the clear-cut change in user expectations). Strong demand for house connections including in the smallest connected villages We observe that the trend is exactly the same between the central village and the satellite villages as illustrated in the table on the Thienaba multi-village scheme. The connection rate is very strong with 19 inhabitants per house connection, which is close to what we observe in the urban areas. The number of connections does not depend on the size of the village connected. On the other hand, technical and topographic characteristics undeniably play a role; and some villages prefer not to make house connections because of low pressure in the network. Near urban consumer habits The unit consumption tends to approach levels in urban areas. We have analyzed (figure 16) the spectrum of monthly consumption in two different systems and at the scale of all the house connections (central village and satellite villages). The assumption used is one house connection serving 12 people. The similarity of distribution is striking, and corresponds to an average of 30 to 35 liters per day per inhabitant, Village Consumption Proceeds Population Allotment Connections Inhab/SP Thienaba Seck (village centre) Thienaba Gare Khaye Babal Keur Maïssa Ndiacké / Keur Magueye Ndao Touba Gueye Centre d expansion / rural Total The Development and Management of Rural Multi-village Schemes

99 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 99 which is very much an "urban" is striking, and corresponds to an average of 30 to 35 liters per day per inhabitant, which is very much an "urban" For some time now, the local market has adjusted to demand. Even in the smallest towns, one can buy all the spare parts needed to install a private connection (even if quality still leaves a lot to be desired) Under the RRESFMR Project, over the short period of op eration (less than 2 years), the average consumption is 18 liters per person per day with extremes between 3 and 30 liters. The annual consumption increment is around 20%. The best performing sites have values around 25 liters per person per day. The least consumptions are the small systems where wells serve as alternative sources (with the population only buying drinking water at this stage of development). This gradual increase in unit consumption is also the best indicator of gradual ownership of the service by the users association (as operators), as well as the users themselves (who massively finance their connection to the network). Do the poorest people have access to the service? Today, many users from the sample of old systems (E1) are connected. The user only pays the cost of connection to the existing network (cost of service line), and not the connection fee, which would include a portion of the initial investment. This is the case of Colombia where the connection can cost hundreds of dollars. 8 It appears that managing the transition from stand posts to house connections is, well controlled by the ASUFORs of sample studied (E1). It was never observed that the poorest have been excluded from access to the services. On the one hand, th e resale of water to neighbors is quite widespread and the poorest could have access to potable water without a connection cost and on the other, many families utilize the same house connection (which is in fact a semi- Figure 16 : proportion (expressed in %) of users vs daily consumption (expressed in litres per person per day), Thienaba and Touba Toul, May % 10% 8% 6% Touba Toul in % Thienaba in % 4% 2% 0% The Development and Management of Rural Multi-village Schemes

100 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 100 house connection) Many user associations are concerned about serving the poorest people, as in Thienaba for instance, where the Committee invested its own funds in the construction of new stand posts, although 90% of households have house connections. It was, however, difficult to interest stand post vendors since stand posts located in neighborhoods where the users are connected individually do not supply more than one or two cubic meters per day. In some cases, the committees pay the vendors to keep stand posts running or they reduce the price of water sold in bulk to the vendors to enable them to increase their profit margin. Lessons from the Senegalese experience A number of lessons could be drawn from the Senegalese multi-village schemes with impact on both the Sahel region and on small multi-village schemes at the global level Role of government While the user associations are to a large extent responsible for the success of the success of multi-village networks in Senegal, the State has equally played a positive role in these dynamics: The government has financed technically sophisticated networks with a great capacity for expansion in terms of service coverage to meet the demand of inhabitants Faced with dwindling external investments, the State redirected its financing and cost recovery policy by modifying the conditions of management of the network. The construction of new systems or rehabilitation includes contributions to initial investment costs and cost recovery for maintenance and operation by the communities and takes into account minimum optimization of the system. The decentralized structure of the brigades of DEM has helped to convey important messages to the Committees, especially concerning payment by volume and pricing, as well as the major technical options for initial system support and development. At the same time, the State has given a lot of leeway to the Committees, with regard to tariff fixing and the choice of mode of payment. Role of the banking system The bank network in the rural areas is well developed in Senegal and the ASUFORs are gradually becoming major clients by virtue of the considerable proceeds from water sales that are deposited in their bank accounts. This situation should facilitate the ASUFORs access to credit for the maintenance or replacem ent of water systems. On the design/building of systems Initial facilities capable of ensuring system development Without seeking to justify over-sizing, large infrastructure works must be designed to allow connection to new villages as well as increas e house connections. An increase in the consumption beyond the generally accepted standard of 20l/person/day for rural areas must be taken into account as well as consumption of livestock and indeed small gardening (when sustainable alternatives, such as wells do not exist). Consideration of social and political arrangements already existing between villages is a vital factor for sustainability of the service No matter how efficient the technical and economic solutions are, they have little chance of surviving if they involve villages that have no ties other than those of a water supply system or if they involve villages in conflict. The a water supply system or if they involve villages in conflict. The establishment of a multi-village scheme should not disturb the balance in the relations between villages or encourage personalities unacceptable to some of the villages with regard to management. Knowledge of the area and prior negotiations with all the villages on the installations of all the elements of the network and its development, the management mode and the social and economic implications are prerequisites for the implementation of such a system. In this way, the multi-village schemes in Senegal developed better because of the willingness of the Commitees than from the projects. This process developed over time can explain why the risk of conflicts is minimized in most of the systems studied which is not the case in the Agnam systems for example, where there have been many external interventions. The use of a simple mathematical model can serve as the basis for conceptualizing the network with the population: 8 Multi-village Rural Water Supply Schemes, an Emerging Challenge, WSP 2001 The Development and Management of Rural Multi-village Schemes

101 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 101 A simple mathematical modeling can give a good idea about optimizing the physical and economic variables of the investments and can constitute a baseline for designing the system with the population as well examine the alternatives. Nevertheless, as mentioned earlier, the social coherence of the grouping is the dominant aspect in intermediation with the people. Management of the systems In addition to the need for having regulations and specifications for the Associations, representation of the different consumers of the various villages (stock breeders, stand post consumers, household consumers, interest groups ) is an important factor for good management. However, with time, this large democratic representation tends to simplify without harmful consequences. Symbolic compensation for members of the Association for participating in the meetings, as adopted in the RRESFMR Project, can be a stimulant that highlights the responsibilities of the post. The relatively satisfactory management of the systems studied could be due to the phased development of the multi-village schemes network. The associations first make their mark with the simple systems that are relatively easy to manage (network that is not extensive and distribution through stand posts) and then move gradually up to more complex systems (extensions to the network and increase of house connections). The dynamics and lessons learnt by the old associations as a result of the reforms tend to the fundamental need to sell water by volume with a meter and professionalization of the Committees The RRESFMR Project has instituted a system of payment by volume for the operator and also for the remuneration of the committee, which appears like an incentive system to minimize unaccounted-for-losses in the network and distribution. Since the community is responsible for the choice of stand post vendors, when problems erupt, the stand post is closed by the association until the conflict is resolved by the community. The demand for house connections is high in the rural area including the small villages. The Senegalese experience clearly shows that when the demand of users is sufficiently high, most of the financing for extensions and house connections can be done by mobilizing local financing. Users take over ownership of the network as the extensions take place. The multi-village dynamics and gradual increase in consumption allow the price of water to be maintained at an attractive level for the users in this case 175 Francs CFA/m 3 on average in the sample studied, which is low for West Africa. Technical support for system extensions and external audits are important for maintaining the quality of service The development of Multi-village schemes Due to lack of technical support, the Committees have difficulty in identifying the limits of their network in terms of service coverage. The management committees have little or no technical advice on how feasible the extension of such or such branch of the network is. Meanwhile, government technical services are rapidly over taxed by the rate of extensions. The more efficient committees have started a professionalization process for their teams and opted out of the restrictive voluntary set up. This professionalization is increasingly becoming a de facto delegation, whereby the people who carry out the daily services receive remuneration. However this external support is still not enough and must be increased either by upgrading the DEM itself or facilitating the emergence of private specialists capable providing the Associations with technical support. Is the multi-village scheme an alternative to rural water supply? A conclusion has gradually emerged from this case study: In the rural areas, there is a strong demand for a level of service higher than those for improved dug-wells and handpumps, including for the smallest villages. The increase in daily consumption (which is now approaching 30 to 35 liters per day per inhabitant after a few years of operation of the network, even in the very small villages) is clear proof that the demand is there. This study, like previous ones on the multi-village schemes in Latin America and in Cote d Ivoire seems to prove that the multi-village schemes are emerging as an alternative to the PMH cost Network extension cost : 0.5km Network extension cost: 1 km Network extension cost: 2 km Inhabitants Total Per user Total Per user Total Per user Total Per user The Development and Management of Rural Multi-village Schemes

102 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 102 traditional rural water supply system normally reserved for small rural communities. This alternative allows for acceptable water tariffs comparable to those of the traditional rural water supply (wells, handpump, spring sources, improved dug-wells, etc.) The installation of a borehole fitted with a handpump represent an incompressible investment of 5 to 6 million Francs CFA, which is a high per capita cost for a village of 200 to 300 inhabitants. As such, the extension of a network will be a more reasonable investment for a village of that size: 2 to 3 million Francs CFA will suffice to connect a village of some 100 to 150 inhabitants situated less than a kilometer away from an existing network. From an equal start position, in order to serve a small village it is often more economical to extend the network than to drill a new borehole and install a handpump, as illustrated in the table below: Unit costs (in US$ per inhabitant) for connecting a village according to: 1) Technology chosen (handpump or extension), 2) Distance, 3) Number of inhabitants When we make the financial statement of multi-village networks in Senegal in investment terms, the results are quite impressive: with community self financing, often exceeding 50%, under the multi-village schemes, hundreds of small villages (a few hundred inhabitants) were connected, reaching a very appreciable level of service for the users, while enhancing the overall profitability of the systems for the villages already served. With its extensions, the system represents an investment of US$ 20 to 55 per user connected, quite comparable to the investment ratio realized for the traditional rural water supply system (installation of handp ump or improved dugwell). Moreover, one determining criteria for the success of multi-village schemes may probably be the population density, which is particularly favorable in Senegal, more so in the arachidier basin. A multi-village approach that allows for coverage of small sized villages could diversify the technological options presented to rural communities. It will be suggested to the people to contribute to the investments and pay the relevant tariff. If well designed, the multi-village approach can help make systems with high quality of service economically viable (in an environment where the villages are not too dispersed). True, the economically viable (in an environment where the villages are not too dispersed). True, the technological conditions are more complex, but in a fast-changing rural area, it is often easier to find a diesel mechanic and engine spare parts in the nearest small town than handpump repairers The Development and Management of Rural Multi-village Schemes

103 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 103 Annexes Basic data on surveyed systems sample E1 Villages polarisés Population (estimation 2000) Types de points d'eau Site d'implantation du forage Total Raccordés Non raccordés Totale Village centre Villages raccordés Villages non raccordés Année de mise en service du réseau Bornes-fontaines Branchements privés Abreuvoirs Autres Maka Kahone Koutal Thienaba Touba Toul Ngodiba Hanene Walalane Kissane Basic data on RRESFMR project systems (sample E2) Villages polarisés Population (estimation 2000) Types de points d'eau Site d'implantation du forage Total Raccordés Non raccordés Totale Village centre Villages raccordés Villages non raccordés Année de mise en service du réseau Bornes-fontaines Branchements privés Abreuvoirs Autres Maka Kahone Koutal Thienaba Touba Toul Ngodiba Hanene Walalane Kissane Basic data on sample E3 projects Basic data on sample E3 Location of borehole Connected focus villages Population census on 31/05/00 Commissioning Stand post Stand post Watering point Sagatta Sinthiane Agnam The Development and Management of Rural Multi-village Schemes

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105 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page SENEGAL The development and management of rural multi-village schemes Main findings of the case study Addis Ababa, the 12 th of June 2002 By Masse Niang, Direction de l Exploitation et de la Maintenance (DEM), Dakar, Sénégal 213. The case study Commanded by WSP Africa Tight partnership with the Direction de l Exploitation et de la Maintenance (the division of the Ministry of Water in charge of following up rural water supply) Carried out by a team of 3 consultants, with technical assistance of Hydroconseil Field survey in June and July 2001 (mainly in the Kaolack / Fatick / Diourbel regions; validation workshop in October Key points of the institutional arrangements for rural water supply Until Now - Users associations are managing water service - DEM is providing support and maintenance of pumping sets - Bulk payment ( forfait forfait ) in 95% of the cases - No private sector - Renewal of facilities by the Central State (DEM) The New Policy - Users associations can delegate service to an independent operator - Maintenance of pumping sets by private sector - Systematic metering - Renewal of facilities (mainly pumping sets) by the Water Board ( ASUFOR ), using credit 215. Senegal, the Land of Multi-Village Systems DEM has been promoting the «small scheme» as the main technical option for rural water supply Number of small water supply schemes in small towns and rural areas Senegal, the Land of Multi-Village Systems Number of small water supply schemes in small towns and rural areas Around 1,200,000 rural residents are getting water from a small scheme (in 2002) Many of these schemes are multi-village ones (average of 5 villages per scheme,, up to 9 in some regions for instance Kaolack) The average distance from a connected village to the centre of the scheme is 4 km Multi-village schemes allow to provide service to very small villages (42% of rural residents are living in villages of less that 500 people) 217. Senegal, the Land of Multi-Village Systems 42% of rural residents are living in villages of less that 500 people Population in Senegal according to the size of the settlement 13% 22% 12% 5% 2% 26% 20% Number of small water supply schemes in small towns and rural areas Dakar and its suburbs Main cities Secondary cities From 2,000 to 5,000 inhab. From 1,000 to 2,000 inhab. From 500 to 1,000 inhab. Less than 500 inhabitants Le Développement et la Gestion des Systèmes Multi-villages Ruraux

106 Public stand-post Borehole + tank Number of house connections Keur Thiof Ngam Ngam Keur Lamane Tiathiaw Main road Sinthiane 1 Touba (centre) Ndondol 1 km Ndoronc Doudoul Public stand-post Borehole + tank Number of house connections Keur Thiof Ngam Ngam Keur Lamane Tiathiaw Main road Sinthiane 1 Touba (centre) Ndondol 1 km Ndoronc Doudoul Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Birth and growth of a multi-village system Public stand-post Borehole + tank Touba Toul network, Main road 46 Number of house connections 46 Keur Lamane Keur Thiof 5 Ngam Ngam Tiathiaw Touba (centre) Ndondol Sinthiane1 Diourbel 14 Payene 1 km Doudoul Ndoronc Birth and growth of a multi-village scheme Initial facilities have been over-designed (high-discharge boreholes, elevated tanks) The Ministry of Water has been promoting the connection of new villages to meet the objectives of financial sustainability In 10 years the average number of connected villages has raised from 3 to 9, which represents 3 times the initial population Local funds have been used to meet the extension and connection costs Diourbel 14 Payene Investment Costs (New or Updated Scheme) Diourbel 14 Payene How a multi-village scheme is managed: beyond community Investment Costs in US $ per Capita Updated scheme New scheme A professional Water Committee, slowly evolving towards a small scale utility Members of the WC are getting (little) money for their activity: the are no more voluntaries All connected villages send representatives to the general assembly, but they accept the leadership of the main village The MV scheme is reflecting and respecting the geographical and social polarization Conflicts are not so frequent and solved locally 222. The standard of service in MV systems 223. The standard of service Transition from stand posts to house connections : the example of Thienaba (1983 system, 7,500 residents, 14 villages, 21 stand posts and 321 HC) In 50% of the systems the coverage by house connections is quite high (30 HC for 1,000 residents, or 1 HC for 5 households) 90% of the systems have experienced the transfer from stand posts to HC When service delivery is made through HC, the daily consumption is quite high (around 30 litres per day and per capita) Examples of Touba Toul and Thienaba, two old schemes (see next slide) janv-98 mars-98 mai-98 Stand posts juil-98 sept-98 nov-98 janv-99 mars-99 mai-99 juil-99 sept-99 nov-99 janv-00 House connections mars-00 mai-00 juil-00 sept-00 nov-00 Le Développement et la Gestion des Systèmes Multi-villages Ruraux

107 6 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page The standard of service Daily consumption for house connections in Thienaba and Touba Toul (in litres / day.capita with an estimated 12 persons per house connection). It represents around litres / day.capita. 12% 10% 8% 6% 4% 2% 0% Touba Toul Thienaba Economical aspects 225. Efficient Water Committees have imposed systematic metering,, especially for HC Water is sold at an attractive tariff: : from 0.17 to 0.23 US $ / m 3 for HC and 0.20 to 0.53 US $ / m 3 at stand posts Water Committees are recovering all running costs without any subsidy A majority of the Committees are able to save enough money to renew the pumping set and to ensure heavy maintenance Economical aspects Economical aspects Incomes of a Water Committee Expenditures of a Water Committee 10% 12% 3% Membership fees, miscellanous Stand posts 45% 31% Running costs (energy ) Stand posts attendants Pump attendant 75% Water points for livestock Private water points (HC) 4% 5% 15% Committee remuneration Savings Economical aspects 228. Scale effect? Savings for replacement of the equipment (in US $ compared to the life span of the system in months Investment costs (in $ US per capita) according to the range (in km) and the heigth (in m) of the (elevated) tank 15 m above ground level 10 m above ground level Le Développement et la Gestion des Systèmes Multi-villages Ruraux

108 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 108 Scale effect? Handpump or network extension? A strong opportunity for economies of scale is offered during the initial investment phase, but it s not really interesting because users are able to raise money for future extensions There is not really a scale effect in terms of running costs, but there are lower limits in terms of financial sustainability: 50 m 3 / jour, 200 FCFA / m 3 and 4-6 connected villages Don t forget the scale effect in terms of social engineering and mobilisation Handpump vs. Network Extension (in US $ per capita) Borehole + handpump 500 m extension 1,000 m extension 2,000 m extension Handpump or network extension? In almost all the cases the network extension option is very competitive compared to the handpump option Whereas rural residents are demanding for house connection, and the operating rate of handpumps is very low That s why network extension is a real alternative to handpumps Lessons learnt from MV schemes in Senegal 1 Role of the Central Government: The initial networks have been designed using high standards, so they were able to extend to neighbouring settlements Water Committees have a great freedom in the day- to-day arrangements, but DEM is pointing out most important issues (for example metering) DEM has been able to better focus the public funds on heavy equipment (boreholes, tanks ) and to encourage the connection of villages Role of the Banks: A good network exists in rural areas of Senegal 234. Lessons learnt from MV schemes in Senegal 2 On design & implementation issues Primary investments should include the future extensions of network and the growing demand for house connections Social issues: MV schemes in Senegal grew up because of the willingness of Water Committees The Water Committee has revealed to be a very flexible option, making it possible to get a good representation of all connected users; but be careful to organize the leadership of the main village Mobilisation must respect the historical, geographical and economical existing links 235. Lessons learnt from MV schemes in Senegal 3 About the management of systems A good representation of connected villages / categories of different users is a sine qua non condition An ingredient for success is the progressive involvement of the Water Committee in the management >>> professional Committee A very important ingredient is metering and the development of house connections Mobilisation must respect the historical, geographical and economical existing links The demand for house connections is very strong, and it s a good ingredient to increase incomes and enhance the financial sustainability Le Développement et la Gestion des Systèmes Multi-villages Ruraux

109 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Lessons learnt from MV schemes in Senegal 4 Encouraging multi-village schemes When the service is good, users are able to raise fund locally for extensions A simple technical-economical economical model can help to decide between two standards (handpump ( or extension) or two design option (1 or 2 networks) WCs cannot easily access technical support, e.g. for house connections; sometimes the service is bad because to many users are connected In the future WC should encourage delegation of the operating functions to a technical team, which already exists in many schemes 237. SENEGAL The development and management of rural multi-village schemes Thank your for your attention! LE DEVELOPPEMENT ET LA GESTION DES SYSTEMES MULTI-VILLAGES RURAUX Principaux résultats de l étude de cas au Sénégal By Masse Niang Introduction Le Programme Eau et Assainissement développe avec les Groupes thématiques sur l eau et l assainissement en milieu rural et urbain de la Banque mondiale des recherches conjointes sur la gestion de l eau et de l assainissement dans les petites villes et les systèmes multi-villages. Ces recherches sont mises en œuvre à travers deux initiatives : La première, lancée en 1999, a eu pour objectif principal la documentation des modèles de gestion des réseaux d adduction d eau simplifiés et des systèmes multi-villages dans les petites villes à travers le monde ; La deuxième initiative, qui sera lancée en juin 2002, est orientée vers la recherche de solutions et d outils d aide à la décision pour améliorer la gestion des systèmes d eau et la qualité du service. Dans les deux initiatives, les petites villes et les systèmes multi-villages sont étudiés conjointement. On parle de système multi-villages lorsqu un réseau d eau dessert plusieurs villages. Deux cas de figure existent : les grands systèmes comme ceux rencontrés en Inde et en Afrique de l Est (pouvant desservir une centaine de villages et plus de personnes) et les petits systèmes comme ceux objets de cette étude. Ces «petits» systèmes peuvent atteindre, comme pour les petites villes, une population totale desservie de plusieurs dizaines de milliers de personnes. La dispersion des centres de peuplement ou la rareté de la ressource conduisent à la construction de systèmes inter -villageois. Ceux-ci, en associant plusieurs villages, réalisent un début d économie d échelle permettant à ces villages d accéder à un service qu individuellement ils n auraient pas pu obtenir au même titre qu une petite ville. Cependant, comme pour les petites villes, les performances à améliorer en matière de gestion technique ou financière font des systèmes multi-villages un volet important de la nouvelle initiative. Le Sénégal, où l alimentation en eau rurale se fait presque exclusivement par des systèmes multi-villages depuis les années 1980, est un exemple intéressant à étudier à la fois comme tentative pour rentabiliser des investissements lourds au départ (forages profonds, pompage thermique) et pour répondre à une forte demande pour un meilleur service. L approche multi-villages émerge comme une alternative à l hydraulique villageoise. Le cadre de l étude La présente étude repose sur plusieurs sources d information : Des études faites dans les régions de Thiès, Fatick, Diourbel et Kaolack, zone du "bassin arachidier " principale zone d exportations et de sources de devises du Sénégal. Des enquêtes approfondies ont été conduites Le Développement et la Gestion des Systèmes Multi-villages Ruraux

110 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 110 sur un échantillon de 8 villages, représentatifs des situations existantes en matière d ancienneté, de taille et de type de desserte en eau potable (bornesfontaines ou branchements pr ivés). Chaque réseau a été systématiquement cartographié et des entretiens ont été conduits auprès des principaux responsables ainsi que des groupes 13% Figure 1 : Répartition de la population par taille d'agglomération Agglomération dakaroise 22% 26% Villes principales Villes secondaires hbts hbts 12% 5% 2% 20% hbts < 500 hbts d utilisateurs. Cet échantillon (E1) donne une vision de l évolution des systèmes multi-villages dans le temps. Les systèmes considérés dans cet échantillon ont entre sept et vingt deux années de service. L analyse des résultats du Projet RRESFMR (Réhabilitation, Réalisation et Equipement de Sites de Forages en Milieu Rural), financé par le gouvernement belge et réalisé par la Direction de l hydraulique. Ce projet a réalisé ou réhabilité dans le même bassin arachidier 22 systèmes qui ont été mis en fonction entre 1998 et 2001 avec une fourchette de 4 à 25 villages par réseau. Cet échantillon (E2) donne une vision d une nouvelle génération de projet multi-villages et surtout est très riche en informations financières. Des études courtes (échantillon E3) sur d'autres régions du Sénégal permettant ainsi d établir des points de comparaison avec notamment le département de Matam (région de Saint-Louis) et celui de Louga, où des visites de terrain ont également été organisées. Les discussions d une table ronde organisée par la DEM en octobre 2001 à la suite de l étude de terrain avec les partenaires impliqués dans des programmes multi-villages. La population et le secteur de l eau au Sénégal Situé dans la partie la plus occidentale du continent Africain, le Sénégal est un pays plat et sablonneux avec un climat de type sahélien. Les collectivités locales (principalement les Communes 9 et les Communautés Rurales) n ont pour l instant aucune compétence en matière de gestion du service de l'eau. La population du pays est de 9.3 millions de personnes dont 53.3% vivent en milieu rural dans environ agglomérations de moins de 5000 habitants. (la figure 1 donne la répartition de la population) En milieu urbain, 10 environ 52% de la population a accès à l eau potable. A Dakar et dans les principales villes secondaires, le service de l'eau est assuré par la Sénégalaise des Eaux (SDE), société privée liée par un contrat d'affermage avec l'etat. Les infrastructures appartiennent à une société de patrimoine, la SONES. Une étude en cours (2002) envisage d'étendre le patrimoine de la SONES à une dizaine de petites villes (de à habitants). En milieu rural et dans les petites villes, un habitant sur deux environ n'a pas accès à l eau à partir d un point d eau "moderne" (réseau d alimentation en eau potable, puits à grand diamètre ou pompe manuelle). On estime en effet que sur les 5,5 millions de personnes habitant en dehors du périmètre de la SONES en 2001, seulement 1,5 millions sont desservies par un petit réseau d alimentation en eau potable (AEP), et 1,2 millions sont desservies par un autre type de point d'eau "moderne". Les disparités sont assez fortes entre les régions, l'accès à un point d eau "moderne" variant de 29% pour la région de Kolda, à 67% pour la région de Fatick. 9 Une communauté rurale devient commune lorsqu elle dépasse les habitants 10 Pour l administration sénégalaise «l urbain» correspond aux villes de plus de habitants Le Développement et la Gestion des Systèmes Multi-villages Ruraux

111 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 111 En milieu rural et dans toutes les villes qui sont hors du patrimoine de la SONES, le service de l'eau est du ressort de la Direction de l'exploitation et de la Maintenance (DEM), structure dépendant du Ministère de l'energie et de l'hydraulique et relativement bien déconcentrée dans le pays Figure 2 : Augmentation du nombre de petits réseaux AEP au Sénégal (hors patrimoine SONES) Depuis 1984, le gouvernement se désengage progressivement des charges d investissement et d exploitation. A partir de cette date, une partie des charges d exploitation des ouvrages hydrauliques est transférée à des comités de gestion qui sont généralisés à travers tout le pays. Dans le courant de l année 2000 (décret n du 5 avril 2000), la réforme de la gestion des forages ruraux est initiée par le gouvernement et a pour objectif d aboutir à l autonomie financière de la maintenance et du renouvellement des équipements. La réforme propose une plus grande responsabilisation des populations (implication des communautés rurales dans la planification, la réalisation et la gestion des ouvrages), une amélioration de la mobilisation des ressources locales (notamment par une participation des communautés au financement des ouvrages) et une plus grande implication du secteur privé pour la fourniture des biens et services. La réforme est actuellement testée pour une période de cinq ans dans quatre régions (Thiès, Fatick, Diourbel et Kaolack) et concerne quelques 325 ouvrages hydrauliques qui seront réhabilités (réhabilitation de l exhaure et extensions des réseaux). Une subvention de 50% du coût des Indicateurs socio -économiques du Sénégal Superficie km 2 Population (estimation 1999)...9,3 millions Le large dimensionnement des châteaux d'eau constitue indéniablement un facteur favorable au développement des réseaux multi-villages Population urbaine 1 (1999)..47% Population rurale (1999)..53% Croissance démographique..2,7% ( ) Croissance démographique urbaine.3,7% Espérance de vie..52,4 ans (1999) PIB par habitant (PPA, 1999) $ US Croissance du PIB...5,4% / an ( ) Indice de Développement Humain. 0,423 (1999) : 145 ème rang sur 162 Source : World Development Indicators database, April 2001 & Rapport équipements est mis à disposition par l Agence française de Développement pour la réhabilitation des ouvrages, les 50% restant devant provenir de la mobilisation des ressources locales. Pour accéder à la subvention permettant la réhabilitation des ouvrages, la réforme fixe des conditions en matière d exploitation des ouvrages. Le choix des petits réseaux d'adduction pour l'alimentation en eau des zones rurales et des petites villes Le pays dispose en 2000 d un patrimoine d environ 800 forages profonds équipés d équipements motorisés ou solaires. Dès le début des années 1980, les autorités sénégalaises ont privilégié l option technique du petit réseau d adduction d eau, dont le nombre est passé d une centaine au début des années 1980 à plus d un millier aujourd hui. Les pompes àmotricité humaine (PMH) restent marginales et presque exclusivement mises en œuvre par des ONG dans les zones de socle pauvres en ressource d eau souterraine (aujourd'hui le Sénégal en compte probablement moins de en état de marche). Le Développement et la Gestion des Systèmes Multi-villages Ruraux

112 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 112 Dès le départ, les prescriptions techniques des réseaux sont relativement sophistiquées : forage profond, château d'eau en béton armé, réseau de distribution étendu. Le développement du réseau de la compagnie nationale d'électricité (Sénélec) a permis de raccorder un nombre croissant de stations de pompage, limitant les contraintes liées aux moteurs thermiques et améliorant la fiabilité du pompage (limitation des interventions et Population des villages raccordés (y compris village centre) Echantillon de 119 systèmes et 900 villages Zoom sur la tranche habitants réduction des coûts de la maintenance). Les conditions hydrogéologiques et topographiques sont des facteurs qui ont sans doute pesé dans le choix du gouvernement pour le multi- villages. La plus grande partie du Sénégal se situe en zone sédimentaire. Les nappes superficielles (qui peuvent être localement une ressource importante) sont généralement soumises à de fortes variations de leur niveau et sont exposées à la contamination par des eaux salées et aux pollutions de surface. L aquifère profond du Maestrichien est de loin la ressource en eau souterraine la plus importante du pays et il réunit beaucoup d éléments favorables pour une exploitation à long terme, il s étend sur les 4/5 du territoire avec de bonnes caractéristiques hydrodynamiques et des réserves considérables. Figure 3 : Histogramme des distances des villages satellites au village centre (en km) - Echantillon de 119 systèmes et 900 villages - Nombre de 200 villages Distance (Km) Figure 4 : Histogramme du nombre de villages raccordés par système - Echantillon de 119 systèmes et 900 villages - 18 Nombre 16 de villages 14 Le forage est par conséquent un équipement relativement coûteux, qu'il faut rentabiliser en construisant un réservoir en hauteur qui permet de desservir le plus d'habitants possible. La topographie très favorable sur la majorité du territoire constitue également un facteur de développement des réseaux multi-villages, puisque les dénivelés sont en général faibles (moins de 5 m par kilomètre) Nombre de systèmes Le Développement et la Gestion des Systèmes Multi-villages Ruraux

113 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 113 La plupart des petits réseaux d'adduction d'eau au Sénégal desservent plusieurs villages. Ce sont en général de petits villages qui sont raccordés à un village centre légèr ement plus grand. 68% des villages concernés ont moins de 500 habitants, et 14% ont de 500 à 1000 habitants. Le nombre de villages alimentés à partir d'un même forage s élève en moyenne à 7,5 sur un échantillon de 900 villages représentant environ 119 petits réseaux. Comment se construit un système multi-villages? Des normes élevées Les infrastructures répondant à des normes élevées constituent le facteur déclenchant indéniable pour le multivillages au Sénégal : Un forage productif (pas moins de 25 m 3 /heure de débit nominal dans l'échantillon E1 des villages enquêtés) Une adduction largement dimensionnée (en termes de diamètres des canalisations), en général avec des dotations unitaires proches de 35 à 40 litres par jour et par habitant ; Un ouvrage de stockage de bonne qualité : en général une centaine de m 3 et un radier à plus de 10 m de hauteur, ce qui représente un investissement conséquent de la part de l'etat (en moyenne, une cinquantaine de millions de FCFA, soit environ US $ par ouvrage). Une structuration de l espace forte A leur mise en service, les réseaux (échantillon E1) ne desservaient en général que deux ou trois villages, dont un village centre bien marqué, qui est souvent un centre économique (marché hebdomadaire particulièrement fréquenté, par exemple), et/ou un centre administratif (chef lieu de la communauté rurale, donc lieu d'implantation d'un certain nombre d'infrastructures et de services publics écoles, bureau de poste, centre de santé, centre d'expansion rurale, etc.). Indépendamment des questions d'approvisionnement en eau potable, le village centre polarise généralement déjà un ensemble de villages plus petits, dans un rayon de 3 ou 4 kilomètres. Il s'agit de villages liés historiquement au village centre (notamment par des liens familiaux), et qui utilisent ce dernier comme centre de ressources, pour y faire du commerce (achat ou vente) ou pour bénéficier de services publics tels que l'éducation, la santé, les conseillers agricoles, etc. tre) Une bonne illustration de cette polarisation est le cas du réseau de Touba Toul (échantillon E1), mis en service il y a une dizaine d'années. Dès le départ, le Comité a rassemblé 17 villages, qui correspondaient à la polarisation socioéconomique du village centre, et ce, bien avant la première extension. Après la mise en service du forage, et avant même qu'il soit question d'étendre le réseau, les villages les plus proches utilisent déjà le réseau, et s'approvisionnent aux bornes-fontaines du noyau de villages initialement reliés par l'intermédi aire de charrettes et de récipients au tarif fixé par l association du système. Cette eau est parfois livrée moyennant paiement par de petits opérateurs privés, mais la plupart des familles utilisent leur propre charrette pour aller chercher l'eau du réseau. Ce premier accès au réseau par les villages satellites a abouti au concept de "village polarisé non raccordé", qui signifie que le village s'approvisionne au réseau sans pour autant y être raccordé physiquement. Sur ces 17 villages, seuls 12 étaient d'ailleurs physiquement raccordés en 2001 (voir figure 6). Le Développement et la Gestion des Systèmes Multi-villages Ruraux

114 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 114 Légende 46 Métrage Bornes-fontaine Forage Figure 6 : Le réseau de Touba Toul et ses extensions successives Figure 6 : le réseau de de Touba 1990 à Toul 2001 et ses extensions successives Nombre de branchements privés Keur Thiof 5 Ngan Ngan Keur Lamane Route principale 63 Touba (centre) Sinthiane Dio urbel Ngayene Diourbel Payene Ndoronc Doudoul 8 63 Ndondol Tiathiaw 6 1 km Une stratégie d'extension progressive du réseau Après quelques années, la stratégie du Comité de gestion est d'étendre le réseau à de nouveaux quartiers ou villages. Cette extension respecte la polarisation mise en évidence ci-avant. Lors des enquêtes menées sur le terrain, nous n'avons rencontré (dans l échantillon E1) qu un seul cas de village candidat qui n'a pas été raccordé pour des raisons autres que techniques : les habitants de ce village avaient refusé de participer à l extension, notamment sous la forme du creusement des tranchées. Dans l'échantillon E1 des huit systèmes étudiés, le nombre de villages raccordés est passé de 3-4 à une moyenne de 9 tandis que la population desservie était multipliée par un facteur de 3 à 5, et que la longueur moyenne des réseaux augmentait de plus de 50% en moyenne. Le plan schématique du réseau de Touba Toul (cf. figure 6) illustre le long et patient travail d'extension du Comité de gestion et des usagers. Pratiquement chaque année, depuis la mise en service, une branche du réseau a été construite, portant progressivement le nombre de villages raccordés de 3 à 12 en moins de 10 ans, ce qui correspond à une augmentation de la population desservie de habitants environ à plus de aujourd'hui. Une volonté d'amélioration constante du service La moitié des villages de l échantillon E1 ont plus de 15 ans de fonctionnement. Ils ont une longue histoire de gestion du service, faite de petits conflits, de détournements de fonds, de bonnes ou de mauvaises décisions mais ce qui fait la force des associations d'usagers, c'est qu'au bout de ans, elles ont pratiquement toutes un objectif d'amélioration du service qui passe par le raccordement de nouveaux villages et le passage progressif au paiement en fonction de la quantité consommée et la pose de compteurs. Chaque nouveau village raccordé augmente les volumes d'eau vendus, ce qui permet de maintenir les coûts de pr oduction à des niveaux tout à fait acceptables et permet généralement aux associations d'usagers de maintenir la qualité du service. Le financement des systèmes multi-villages Dans la majorité des cas, lorsqu'on parle d'adductions d'eau ou de systèmes multi-villages, l'etat sénégalais a financé seul, jusqu à récemment, l'intégralité des coûts d'investissement. Les seules exceptions notables sont les projets financés par des associations de ressortissants ou des ONG (évalués à environ 10% des systèmes existants). Les usagers ont souvent participé physiquement aux travaux (creusement des tranchées ) mais ils n'ont que rarement contribué financièrement aux investissements initiaux. Le Développement et la Gestion des Systèmes Multi-villages Ruraux

115 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 115 Jusqu'en 1984, l'etat a pris en charge l'intégralité des charges récurrentes des petites adductions d'eau (y compris le salaire du conducteur de forage, le carburant, les réparations, etc.). A partir de 1984, l eau commence à être payée au forfait pour assurer les réparations courantes puis à partir de 1990 le paiement au volume devient plus fréquent et permet d amél iorer le recouvrement des coûts. A cette époque, l'etat a fortement encouragé le raccordement systématique de nouveaux villages "satellites" à un forage existant. Le constat fait par la DEM était que l'augmentation du nombre d'usagers était la seule façon de pallier au manque de "rentabilité" de certains sites, qui ne pouvaient couvrir les charges d'exploitation sans porter le prix de vente de l'eau à plus de 500 FCFA / m3. Avec la réforme, la clé de répartition des charges récurrentes entre les associations d'usagers et l'etat est maintenant clairement définie : Les usagers prennent en charge l'intégralité de l'exploitation (salaires, énergie, réparations, frais de déplacement, etc.), le renouvellement des équipements à courte durée de vie (électro-pompe, groupe électrogène ) ainsi que les charges d'extension ou de densification du réseau. L Etat prend en charge le renouvellement de tous les équipements dont la durée de vie est supérieure à 20 ans, en particulier le forage, le gros oeuvre (réservoir) et le réseau primaire. Cependant les modalités pour assurer la disponibilité de ces financements ne sont pas clairement définies. Les enquêtes sur l échantillon E1 (mis à part un cas particulier où la station de pompage dans le village de Walalane était particulièrement coûteuse), permettent de constater que la valeur de remplacement des infrastructures reste dans une fourchette très raisonnable (entre 20 et 55 $ US par usager), et que les réseaux qui se sont le plus étendus sont également ceux qui atteignent maintenant le ratio le plus avantageux (Thienaba et Touba Toul). Les extensions sont effectuées pratiquement entièrement sur financement local (groupes d usagers, notables, communautés ou collectivités territoriales) et ont permis d'étendre considérablement les réseaux initiaux. Les collectivités locales (principalement les Communes) bien que n ayant pas de compétence en matière de gestion du service de l'eau, participent à l'investissement initial ou plus fréquemment aux travaux d'extension ultérieurs. Ordre de grandeur des investissements nécessaires Le Projet RRESFMR (E2) a récemment financé sept réseaux neufs sur des sites concernant une population variable. L'analyse des coûts unitaires donne une bonne idée des investissements nécessaires en fonction du nombre de personnes desservies (voir figure 7). Le ratio varie du simple au double lorsque l'on passe de 2000 à habitants, avec une moyenne des investissements comprise entre 80 et 100 $ US par habitant. Il faut cependant noter que les réseaux financés dans le cadre de ce projet sont pour le moment équipés en majorité avec des bornes -fontaines. Toujours dans le projet RRESFMR (E2), dans le cas de la réhabilitation des réseaux où le forage et tout ou partie du réseau sont réutilisés, les coût/pers. CFA coûts per capita FCA Figure 7 :Investissements du projet RRESFMR pour de nouveaux réseaux Nombre de consommateurs par système Figure 8 : Investissements du projet RRESFMR pour des réseaux réhabilités Nombre de consommateurs par système coût/pers. US$ 120 coûts per 100 capita US$ 80 Le Développement et la Gestion des Systèmes Multi-villages Ruraux

116 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 116 coûts d investissements varient entre 20 et 80 US$ par habitant avec une moyenne autour de 50 US $. (voir figure 8) Optimisation des investissements Les systèmes multi-villages au Sénégal se développent en «étoile» à partir du château, contrairement aux systèmes «linéaires» de Colombie, du Pérou et de Côte d Ivoire décrits dans la Field Note : «Multi-village water supply schemes, an emerging challenge». Les coûts unitaires d un système multi village (résultats obtenus lors des enquêtes) Forage (en millions de FCFA) : ,115 x profondeur (en m) Réservoir de 100 m 3 à 10 m :.40 millions de FCFA Réservoir de 100 m 3 à 15 m :.60 millions de FCFA Pompe électrique de 20 m 3 /h pour une HMT de 60 m :.3,6 millions de FCFA Pompe électrique, transformateur, armoire 12 millions de FCFA Equipements d exhaure thermique 40m3/h HMT 71 m : 14.5 millions de FCFA Canalisation PVC diamètre 63 mm, fourniture et pose : 2,2 millions de FCFA / km Canalisation PVC diamètre 90 mm, fourniture et pose : 3 millions de FCFA / km Borne-fontaine construite par un projet : 0,6 million de FCFA Borne-fontaine construite par les usagers :.0,2 million de FCFA Branchement privé équipé d'un compteur : 40 à FCFA Le projet RRESFMR a réalisé une modélisation théorique simple pour déterminer un optimum entre le rayon d'action d un site de forage et le coût total (ramené à l'usager ). Ce modèle est donné ici à titre d'illustr ation (voir figure 9) car il n est évidemment applicable qu à la région du projet 11. Dans ce cadre, lorsque l'on prend le critère de l'investissement par usager, il apparaît qu'avec un château d'eau dont le radier est placé à 15 mètres de hauteur, le rayon optimal est de l'ordre de 5 à 6 kilomètres. Pour alimenter un village situé au-delà de ce rayon, il devient plus intéressant de le raccorder à un autre forage ou de construire un système autonome. L'intérêt économique (mesuré en termes d'investissement per capita) d'un système multi-villages al imenté à partir d'un seul forage semble diminuer à partir d'un rayon d'action de 6 km. Dans la réalité ce rayon d'action est rarement atteint. Une meilleure optimisation des investissements nécessiterait l acquisition de compétences techniques par les comités de gestion pour l extension des systèmes. En effet, celles-ci sont souvent limitées, et les extensions se font avec des normes peu contraignantes, qu'il s'agisse de l'équilibre hydraulique du réseau ou de l'exécution des travaux proprement dits (qualité des matériaux, profondeur d'enfouissement, etc.). Les usagers font généralement appel à des tâcherons locaux, bon marché mais peu qualifiés. Au fur et à mesure de l'extension et de la densification des réseaux, de sérieux problèmes de qualité du service peuvent apparaître : manque de pression dans certaines zones, extensions mal calibrées qui ne peuvent desservir le village ciblé que Hauteur (m) Figure 9 : Le coût d'investissement en $ US per capita) (en fonction du rayon d'action du forage (km) et de la hauteur du château (m) Pour un château d'eau avec radier 10 m quelques heures par jour, etc. La multiplication des branchements privés diminue rapidement le rendement des réseaux. L exploitation d un système Multi-Villages Pour un château d'eau avec radier 15 m Distance (km) Des associations d usagers en situation d exploitant Le modèle très largement répandu au Sénégal est une association d usagers placée en situation d exploitant. Les systèmes restent propriété de la DEM qui en concède l exploitation aux associations d usagers d eau avec une large 11 Le modèle dans la situation Sénégalaise (homogénéité hydrogéologique et topographique), a été construit sur une maille carrée de villages et fait intervenir la distance moyenne entre les villages, la densité moyenne de la population dans la zone, les besoins journaliers de la zone et les débits de pointe ; de plus le projet concerne une certaine gamme d équipement utilisée dans la zone. Le Développement et la Gestion des Systèmes Multi-villages Ruraux

117 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 117 autonomie (fixation du prix de vente de l eau, décisions en matière d'investissement etc.) par rapport aux services de l État. Ces associations sont régies par l arrêté du 20 mai 1997, qui leur donne un statut juridique, celui des ASUFOR (Associations des Usagers d un Forage), dans le c adre de la «réforme de la gestion des forages ruraux». Dans le cadre de la réforme, les associations peuvent déléguer tout ou partie de la gestion du service de l eau Le modèle de gestion actuellement promu par la DEM repose sur les principes suivants : Le prix de l'eau doit permettre de couvrir la majeure partie des charges récurrentes. Seuls les investissements dont la durée de vie est supérieure à 20 ans (forages, ouvrages de génie civil, réseau primaire) restent à la charge de l'etat, qui doit assurer leur renouvellement. L'ASUFOR est incitée à déléguer l'exploitation de la station de pompage (production d'eau) ou de la gestion au sens large (production, distribution, facturation) à un opérateur privé (qui peut être associatif). L'opérateur sera rémunéré sur la base d'indicateurs de performance du service. La maintenance de l'équipement de pompage doit être sous-traitée à une entreprise privée agréée par la DEM comme unique maintenancier pour une région. C'est une condition d'accès au financ ement de la réhabilitation des infrastructures dans le cadre du projet REGEFOR. Pour le renouvellement de leur système d'exhaure, les ASUFOR sont invitées dans le cadre du projet REGEFOR à utiliser un dispositif de financement original, qui combine une subvention de l'etat (50%), une contribution directe de l'asufor (15%) et enfin un crédit (35%) obtenu auprès du Crédit Mutuel du Sénégal, qui est souvent la "banque des ASUFOR". La DEM se recentre sur des fonctions de gestion de la ressource en eau, de planification des investissements, de suivi de la qualité du service, d'agrément des opérateurs, et de mobilisation des financements pour le renouvellement des infrastructures lourdes. Des exploitants associatifs faisant peu appel à la délégation de gestion Dans aucun des villages étudiés (échantillon E1, E2 et E3) les Comités n ont choisi, comme le leur autorise la réforme, de sous-traiter la gestion ou l'exploitation du réseau à un opérateur privé. De même, la maintenance ne fait pas encore l'objet d'un contrat spécifique. Le Développement et la Gestion des Systèmes Multi-villages Ruraux

118 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 118 La gestion des réseaux multi-villages par les Comités de gestion (ou les ASUFOR lorsqu'elles sont déclarées selon la nouvelle législation) comporte plusieurs niveaux de représentation et de prise de décision, et implique la participation d'un grand nombre de personnes. L'ensemble des usagers sont censés être représentés à l'assemblée Générale de l'association, qui doit se réunir chaque année et procéder au remplacement des dirigeants. Dans la réalité le fonctionnement "démocratique" est limité : les femmes et les jeunes sont sous-représentés, et interviennent très peu dans les décisions et les mêmes équipes restent en place pendant de nombreuses années. Cependant, les associations améliorent progressivement les compétences de leurs membres en constituant une équipe avec des profils différents (d'abord un opérateur de forage, puis des collecteurs / releveurs de compteurs, et même dans certains cas un "secrétaire général" dont les fonctions font de lui une sorte de gérant) et en rémunérant les personnes les plus impliquées dans le Comité. Dans le cadre des 22 systèmes multi-villages du projet RRESFMR (E2), la rémunération sous la forme d'un fixe et d'un pourcentage sur le volume vendu est devenue la règle (cf encadré P11) La représentation des différents villages desservis Certains projets ont imposé, au nom d'un certain idéal démocratique et de la parité homme-femme, un système de représentation où chaque village raccordé envoie le même nombre de délégués à l'assemblée Générale, avec des critères de désignation très contraignants. Dans le cadre de la réforme, le nombre de représentants est normalement proportionnel à la taille du village représenté, ce qui est en général la solution choisie spontanément par l'association des usagers. L'Assemblée des Délégués (qui tient souvent lieu d'assemblée Générale) est donc très paritaire en matière de représentation des villages satellites. En revanche, lorsqu'on analyse la composition des Comités de gestion (c'està-dire du Bureau de l'asufor dans le cas des systèmes qui ont adhéré au principe de la Réforme), on trouve une sur-représentation du village centre, dont les représentants occupent quasi systématiquement tous les postes clés (avec quelques exceptions notables : par exemple le réseau de Thienaba, dont le président n'est pas originaire du village centre). Cependant, cette sur-représentation du village centre semble parfaitement bien acceptée par les autres villages raccordés, et il faut se garder d'interpréter le poids du village centre comme une mainmise sur la gestion du service de l'eau : dans la plupart des cas, la participation au Comité de gestion est vécue comme une Village polarisé (VP2) Usagers des bornes fontaines Usagers des BF Usagers des BP Association des femmes Association des jeunes Village centre (VC) Association des éleveurs Usagers des BF Village polarisé (VP1) Usagers des bornes fontaines Usagers des branchements particuliers Contrôle et ratifie les dépenses et suit le respect des instructions générales Approuve le bilan financier et Vote le budget annuel Élit le comité 2 délégués / groupe d usagers de VP1 2 délégués / groupe d usagers de VP2 1 Représentant de la Direction de l Hydraulique consultatif Assemblée Générale Comité Directeur 2 délégués / BF 2 délégués / BF 2 délégués / BF 1 Représentant de l autorité locale consultatif Audit externe 2 délégués / association 2 délégués / association 2 délégués / association D après la réglementation de la réforme, tout usager de l eau peut être éligible au comité en dehors des personnes ayant des responsabilités politiques ou religieuses Gestion quotidienne et responsabilité pour l élaboration du rapport de gestion du système Trésorier Bureau Président Secrétaire 2 observateurs Surveillant général Fontainier Fontainier Fontainier Conducteur de forage Ou Opérateur privé Entreprises privées Possibilité de privatisation d après la loi Figure 10 : Organigramme du système de gestion par les ASUFOR pour les systèmes Multi-villages Le Développement et la Gestion des Systèmes Multi-villages Ruraux

119 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 119 charge car il s'agit d'un poste peu ou pas lucratif pour une charge de travail qui est souvent de deux ou trois jours par semaine ce qui explique que les retraités (souvent d'anciens fonctionnaires, lettrés) soient majoritaires dans les Comités de gestion. Les problèmes existent et les systèmes multi-villages de l échantillon E1 ont été confrontés à des conflits plus ou moins graves au cours de leur développement. Ces situations conflictuelles ont en général entraîné la «dépose» du comité. Néanmoins il n a pas pu être mis en évidence de conflit très marquant dans cet échantillon. De brèves enquêtes complémentaires, ciblées sur des situations conflictuelles anciennes et récurrentes (malgré plusieurs tentatives de médiations), ont donc été réalisées dans les systèmes multi-villages de Sagatta dans le département de Louga et d Agnam dans le département de Matam, (échantillon E3) qui présentent un certain nombre de points communs : Le nombre de villages concernés est important (jusqu'à 37 villages dans le cas de Sagatta), et surtout les réseaux sont très étendus géographiquement (cas des Agnam) ; dans les deux cas, la polarisation socio-économique est probablement dépassée et la structuration de l espace ne joue plus ; Le refus de passer à un paiement au volume et à l installation de compteurs. Le système de Sagatta n'a franchi le pas que très récemment ; La qualité du service est globalement mauvaise : pression insuffisante, heures de distribution limitées, pannes fréquentes (en général liées à une déficience du pompage et/ou un mauvais entretien du groupe électrogène ou de la pompe) ; La situation des ouvrages peut faire l'objet de nombreux malentendus : à Sagatta le forage et le réservoir (infrastructures hautement symboliques) sont situés dans un tout petit village, qui n'est pas le village principal (mais qui de ce fait accapare la présidence du Comité) Fortes interférences extérieures dans la gestion du système : autorités politiques et religieuses dans le cas de Sagatta ; partenaires européens (jumelage) et ressortissants du village en France dans le cas d'agnam. A Agnam, plus de 15 ans de rivalités entre les villages ont conduit à une situation dans laquelle trois forages et deux réseaux séparés coexistent, chacun correspondant à des sources de financement différents. Dans les deux cas, les logiques locales sont courtcircuitées et devant la complexité des situations, la DEM a abandonné son rôle d'arbitre aux autorités territoriales (sous -préfets). (Moyenne pour les 20 systèmes depuis le début de leur exploitation) F CFA Figure 12 : Structure des recettes projet RRESFMR 10% US $ Provisions Salaires des fontainiers Salaires du bureau Salaire du conducteur de forage Fonctionnement, réparation et exte et extensions 12% US $ % 75% Cotisations, divers Bornes-fontaines Abreuvoirs Points d'eau privés Les performances financières réalisées par les associations Structure générale des dépenses et des recettes Le Développement et la Gestion des Systèmes Multi-villages Ruraux

120 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 120 Le dépouillement statistique des données du projet RRESFMR permet de calculer la structure des dépenses et des recettes. Les résultats moyens pour les 20 systèmes depuis le début de leur exploitation (env. 15 mois) sont présentés dans les figures 11 et 12. Dans la figure 13, le bilan financier d un échantillon représentatif des systèmes du projet RRESFMR est représenté : Les bornes-fontaines Figure 13: représentent la grande majorité des recettes, car encore peu de branchements privés sont installés ; L abreuvement des animaux constitue également une source de revenus non négligeable. Les charges de fonctionnement (qui incluent les réparations) restent raisonnables, et comparables aux coûts FCFA x '000 16'000 14'000 12'000 Bilan financier annuel de quelques sytèmes du projet RRESFMR tarif 200 FCFA/m3 US$ 0.27 US$ Autres recettes Recette Abreuvoirs Recette connexions privées Recette Bornes Fontaines Publiques 10'000 8'000 tarif 400 FCFA/m3 US$ Dépenses fonctionnement-entretien & extensions Salaire Bureau 6'000 8'000 Salaires fontainiers 4'000 2' Conducteur du forage '0 Ndiago 187 m3/j Fass Gossas 161 m3/j Keur M. Poste 92 m3/j Keur Socé 79 m3/j Nguélou 57 m3/j Sanghaïe 27 m3/j M.Marom.. 14 m3/j Source des données: rapport final de projets plus anciens. Un prix de l'eau qui reste raisonnable et attrayant pour l'usager Le prix de vente de l'eau adopté par les associations d usagers d eau est raisonnable pour l'usager: de 125 à 175 FCFA / m 3 pour les branchements individuels et de 5 à 10 FCFA par bassine aux bornes fontaines (soit de 150 à 400 FCFA / m 3 ) dans les échantillons E1. Les quelques 20 systèmes réalisés ou réhabilités par le projet RRESFMR sont passés de 400 FCFA/m 3 à 200 FCFA/m 3 après quelques mois d'exploitation des réseaux, à la suite des bons résultats obtenus en termes de recouvrement. Les prix de l eau couvrent en général la totalité des charges d'exploitation (facture d'électricité et de gasoil, réparations courantes, salaires, indemnités éventuelles du Comité, etc.) et l amortissement des équipements de courte durée de vie. La facturation au volume consommé a tendance à se généraliser 7 des 8 villages de l'échantillon E1 pratiquent la facturation au compteur et ce depuis plusieurs années. Et c est une généralité pour les systèmes du projet RRESFMR (condition de la réforme). Malgré quelques oppositions le système a été largement accepté par les usagers. Cet aspect constitue indéniablement un point fort de la gestion, car le paiement au forfait est la première cause de déficit et de conflit pour des Comités, alors que le paiement au volume permet de suivre au plus près l'augmentation des volumes consommés, qui ont plus que triplé dans certains cas constatés dans l échantillon E 1, sans que le nombre d'usagers ne triple. On constate en effet que lorsque les usagers sont satisfaits de la gestion du système, les quantités d eau consommées ont tendance à augmenter. Le Développement et la Gestion des Systèmes Multi-villages Ruraux

121 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 121 La pose systématique de compteurs et la vente au volume permettent également de limiter les risques de conflits, d accroître la transparence et d instaurer une relation client prestataire de service qui est une des conditions clés de réussite d'une bonne gestion "multi-villages". Les économies d'échelle en termes de frais d'exploitation 6 des 8 systèmes étudiés de l échantillon E1 dégagent une marge suffisante pour le renouvellement du système d'exhaure (ce coût de renouvellement ayant été diminué par l'installation progressive d'électropompes immergées qui représente une diminution d environ 20% sur le prix de ces équipements). Le projet RRESFMR Un système efficace de gestion qui minimise le bénévolat La gestion de l eau au volume mesuré avec des compteurs tant à la production qu à la distribution est un élément clé de la gestion. Les relevés des compteurs et le règlement des factures par les gestionnaires des bornes fontaines (fontainiers) et les usagers connectés sont effectués mensuellement. Aux bornes fontaines publiques et station de charrettes, l eau est payée comptant. Pour faciliter ce processus, le prix du seau de 25 litres correspond aux pièces de monnaie disponibles. Le conducteur de forage (professionnel) est normalement payé au volume produit. L eau est vendue en gros aux fontainiers des bornes-fontaines et abreuvoirs au prix de 150 ou 350 FCFA/m3 qui la revendent à un tarif fixe avec un bénéfice de 50 FCFA/m3. Le bureau est indemnisé a 10 FCFA le m3 vendu Pour la gestion des fonds, l Association doit obligatoirement disposer de deux comptes bancaires (compte courant et d épargne) destinés à recevoir et sécuriser L'analyse des données sur 20 systèmes multi-villages du projet RREFMR (systèmes fonctionnant depuis 15 mois en moyenne et n ayant pas enc ore fait l objet de grosses réparations) montre que les dépenses mensuelles par habitant ont tendance à décroître avec le nombre de villages desservis, mais de façon limitée, et surtout avec une forte dispersion (notamment pour les systèmes dont le nombre de villages est supérieur à 25). Le bilan financier du projet RRESFMR permet de dégager une première approximation de la viabilité et la rentabilité des systèmes multi-villages au Sénégal exploités par des ASUFOR à partir des consommations moyennes (qui peuvent être très variables notamment dans les premières années du projet et qui dépendent aussi des consommations liées à l élevage) : En dessous d un seuil critique d environ 35m 3 /jour il est très difficile à l ASUFOR (et à n'importe quel exploitant) de faire face aux charges fixes et à l'amortissement du groupe de pompage, même en appliquant un tarif de 400CFA/m3. Une grande partie du renouvellement du groupe de pompage devra être subventionnée. Ce seuil correspond à un nombre de personnes compris entre 1500 et 2 500, et avec 400 habitants en moyenne par village, les systèmes desservant plus de 5 villages seraient susceptibles d'équilibrer leurs comptes. De 35 à 70 m3/j, le site est viable au tarif de 400CFA/m3 De 70 à 100 m3/j, le site est viable au tar if ordinaire de 200 CFA/m3. Ce qui correspond à un seuil de viabilité à ce tarif de 2500 à 3400 consommateurs (6-8 villages) Au-dessus de 100m3/j, le site est rentable et peut prendre en charge en plus des amortissements et des réseaux tertiaires une participation aux investissements lourds. Chiffre d affaire et capacité d'épargne remarquable Les quelques 20 ASUFOR du RRESFMR ont un chiffre d affaire cumulé sur 420 mois de plus de 270 millions de FCFA et ont généré des salaires directs pour plus de 65 millions (concernant 408 fontainiers, 21 conducteurs de forage et approximativement 82 délégués des ASUFOR). Les ASUFOR sont devenues des entreprises importantes de la Région ayant des dépôts sur des comptes bancaires et deviennent ainsi des clients importants de la Banque locale. La capacité des associations d'usagers à provisionner le coût de renouvellement du matériel d'exhaure est souvent une pierre d'achoppement recouvrement des coûts des équipements d'exhaure Figure 14 : Epargnes réalisées par les ASUFOR du projet 120% 100% 80% 60% 40% 20% RRESFMR Fonds de renouvellement accumulés depuis la mise en service Moyenne annuelle des fonds de renouvellement 0% consommation moyenne m3/j Le Développement et la Gestion des Systèmes Multi-villages Ruraux

122 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 122 en matière de gestion. L'analyse des données du projet RRESFMER montre cependant une capacité et des réseaux tertiaires une participation aux investissements lourds. Figure 15 : volumes distribués (en m3 par mois) aux bornes-fontaines et branchements privés pour le système multi-villages de Thienaba Chiffre d affaire et capacité d'épargne remarquable Les quelques 20 ASUFOR du Branchements privés RRESFMR ont un chiffre d affaire 2000 Bornes-fontaines cumulé sur 420 mois de plus de 270 millions de FCFA et ont généré des 1000 salaires directs pour plus de 65 0 millions (concernant 408 fontainiers, 21 conducteurs de forage et approximativement 82 délégués des ASUFOR). Les ASUFOR sont devenues des entreprises importantes de la Région ayant des dépôts sur des comptes bancair es et deviennent ainsi des clients importants de la Banque locale. Volume La capacité des associations d'usagers à provisionner le coût de renouvellement du matériel d'exhaure est souvent une pierre d'achoppement en matière de gestion. L'analyse des données du projet RRESFMER montre cependant une capacité d'épargne remarquable : les comptes d amortissement de 2 comités ont en moins de 20 mois les fonds suffisants pour racheter leurs équipements d exhaure et la moitié des Comités de ce projet ont déposé 50% du montant des coûts de ces équipements, ce qui laisse présager (sachant que la durée de vie de ces équipements est calculée sur 6 ans) des marges permettant de financer largement des extensions ou des branchements privés pour une grande partie des systèmes. Les autres sites enquêtés en dehors du projet RRESFMR, qui ne bénéficient pas du soutien d'un projet, présentent des niveaux d'épargne compar ables, qui oscillent entre 2,5 et plus de 10 millions de FCFA bien que mobilisés sur des périodes de temps plus longues (environ quatre ou cinq ans). La demande de service et son évolution récente dans les systèmes multi-villages Une forte demande pour des branchements privés Il ressort de l échantillon E1 (qui comprend les systèmes les plus anciens) que dès qu ils en ont la possibilité, et malgré l investissement assez important que cela représente (de 50 à 100 US$ selon des "normes" imposées par les Comités de gestion soit un à deux mois de salaire), les usagers cherchent à se connecter au réseau le plus proche, délaissant progressivement les bornes-fontaines initialement installées. Cette tendance est particulièrement nette dans les cas où les usagers sont satisfaits du service et où les comités de gestion ont mis en place des équipes plus professionnelles capables d assurer une gestion plus complexe (facturation notamment). La transition entre les bornes-fontaines et les branchements privés ne dure que quelques années. Le système multi villages de Thienaba, représenté dans la figure 6, offre une bonne illustration de ce phénomène. Les bornesfontaines représentent aujourd'hui moins de 10% des quantités distribuées, contre 100% il y a 5 à 6 ans. Dans l échantillon E1, la plupart des systèmes et des modes de gestion se trouvent donc dans une situation de transition entre la desserte par bornes fontaines (liée au mode de gestion communautaire et soutenu par les projets depuis 20 ans) et la desserte par branchements privés (liée à la professionnalisation progressive des Comités dans leur fonction d exploitant, Village Consommation Recettes Population Dotation Branchements Hab/BP Thienaba Seck (village centre) Thienaba Gare Khaye Babal Keur Maïssa Ndiacké / Keur Magueye Ndao Touba Gueye Centre d expansion / rural Total , Le Développement et la Gestion des Systèmes Multi-villages Ruraux

123 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 123 ainsi qu'à l'évolution très nette des attentes des usagers). Une forte demande pour les branchements privés y compris dans les plus petits villages raccordés On constate que la tendance est exactement la même entre le village centre et les villages polarisés, comme l illustre le tableau ci-contre concernant le système multi village de Thienaba. Le taux de raccordement est très fort avec 19 habitants par BP, ce qui est proche de ce qu on observe en milieu urbain. Le nombre de branchements ne dépend pas de la taille du village raccordé. En revanche, les caractéristiques techniques et topographiques jouent indéniablement, certains villages préférant ne pas mettre en place de branchements privés à cause de la faible pression dans le réseau. Le marché local s est depuis longtemps adapté à la demande des usagers. Jusque dans de toutes petites agglomérations, on peut acheter toutes les pièces détachées nécessaires à l installation d un branchement particulier Des habitudes de consommation quasiment «urbaines» Les consommations unitaires ont tendance à se rapprocher des niveaux de consommation en milieu urbain. Nous avons analysé (figure 16) le spectre des consommations mensuelles dans deux systèmes différents et à l échelle de tous les branchements particuliers (village centre et villages satellites). L hypothèse utilisée est de un branchement privé desservant 12 personnes. La similitude des distributions est frappante, et elle correspond à une moyenne de 30 à 35 litres par jour et par habitant, ce qui est bien une consommation «urbaine», très loin de ce que peuvent fournir les standards techniques de l hydraulique villageoise (puits modernes ou pompes manuelles). Dans le projet RRESFMR sur la courte durée d exploitation (moins de 2 ans) des systèmes, la moyenne de la consommation est de 18 litres par personne et par jour avec des extrêmes entre 3 et 30 litres. L augmentation annuelle moyenne est de l ordre de 20%. Les sites les plus performants ont des valeurs autour de 25 l/j/personne. Les plus faibles consommations sont dans les petits systèmes et lorsqu il existe des puits comme alternative (la population n achetant à cette étape du développement que l eau de boisson). Figure 16 : proportion (exprimée en %) d'utilisateurs en fonction de leur consommation unitaire (exprimée en litres par jour et par habitant), Thienaba et Touba Toul, mai % 10% 8% 6% Touba Toul en % Thienaba en % 4% 2% 0% Le Développement et la Gestion des Systèmes Multi-villages Ruraux

124 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 124 Cette augmentation progressive des consommations unitaires apparaît aussi comme le meilleur indice d une appropriation progressive du service par l association d usagers (en tant qu exploitant), mais aussi par les usagers eux-mêmes (qui financent massivement leur raccordement au réseau). Les plus pauvres ont-ils accès au service? Aujourd hui, beaucoup d'usagers de l échantillon des systèmes anciens (E1) se sont raccordés. L usager ne paie que les frais de raccordement au réseau existant (coût du branchement), et non pas un "droit de raccordement", qui comporterait une partie de récupération de l'investissement initial, ce qui est le cas en Colombie et porte dans ce cas le raccordement à plusieurs centaines de $ US 12. La gestion de la transition de la borne fontaine au branchement privé est semble t-il maîtrisée par les ASUFOR de l échantillon étudié (E1), il n a en effet pas été constaté d exclusion des plus pauvres de l accès au service. D une part, la revente de voisinage est assez répandue et les plus pauvres peuvent avoir accès à l eau potable sans coût de rac cordement et d autre part plusieurs familles utilisent le même branchement privé (ce qui en fait un branchement "semi-privatif"). Plusieurs associations d'usagers sont sensibles à la desserte des plus pauvres, comme par exemple à Thienaba où le comité investit sur fonds propres dans la construction de nouvelles bornes fontaines alors que 90% des ménages disposent de branchements privés. Il est cependant difficile d intéresser les fontainiers lorsque les bornes fontaines situées dans les quartiers où les usagers se raccordent individuellement ne distribuent plus qu'un ou deux mètres cubes par jour. Dans certains cas, les comités salarient les fontainiers pour maintenir quelques bornes en activité ou baissent le prix de l eau vendue en gros au fontainier lui permettant ainsi d augmenter sa marge de gain. Les leçons de l'expérience sénégalaise Une série de leçons peuvent être tirées des systèmes multi-villages au Sénégal avec une portée non seulement pour la région Sahélienne mais aussi au niveau global pour les petits systèmes multi-villages. Sur le rôle de l Etat Bien que les associations d'usagers soient en grande partie à l'origine du succès des réseaux multi-villages au Sénégal, l'etat a également joué un rôle positif dans cette dynamique : L'Etat a financé des réseaux suffisamment sophistiqués sur le plan technique possédant une capacité d'expansion assez importante en terme de desserte pour suivre la demande des habitants. Devant la diminution des investissements extérieurs, l Etat a su réorienter sa politique de financement et de recouvrement des coûts en modifiant les conditions de prise en charge des réseaux. La construction de nouveaux systèmes ou la réhabilitation comprend une participation à l investissement initial et le recouvrement des coûts d entretien et de fonctionnement par les communautés et prend en compte une optimisation minimum des réseaux. La structure décentralisée des brigades de la DEM a permis de faire passer des messages importants aux Comités, notamment en ce qui concerne le paiement au volume et la tarification, ainsi que les grandes options techniques pour l accompagnement initial et le développement des systèmes. Dans le même temps l'etat a laissé une grande liberté d'action aux comités, notamment en ce qui concerne la fixation des tarifs et le choix du mode de paiement. Sur le rôle du système bancaire Le réseau bancaire en milieu rural est bien développé au Sénégal et les ASUFOR deviennent progressivement des clients importants compte tenu de l épargne considérable générée par la vente de l eau et déposée sur des comptes bancaires. Cette situation devrait permettre un accès au crédit plus facile pour les ASUFOR pour la maintenance ou le renouvellement des systèmes d eau. Sur la conception/ réalisation des systèmes Des ouvrages initiaux capable d assumer le développement du système Sans faire l apologie du surdimensionnement, le gros œuvre doit être calculé pour permettre non seulement le raccordement de nouveaux villages mais aussi une augmentation des branchements privés. L augmentation de la consommation au delà du standard généralement admis de 20l/personne/jour pour les zones rurales devrait être 12 Multi-Village Rural Water Supply Schemes an Emerging Challenge» WSP 2001 Le Développement et la Gestion des Systèmes Multi-villages Ruraux

125 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 125 pris en compte ainsi que les consommations de l élevage voire du petit jardinage (quand il n existe pas d autres alternatives pérennes, comme les puits etc ). La prise en compte des arrangements sociaux et économiques pré-existants entre les villages est un facteur primordial pour la durabilité du service. Les solutions technico-économiques aussi performantes soient-elles n ont que peu de chance de survie si elles regroupent des villages qui n ont pas d autres liens que ceux du système d alimentation en eau ou regroupent des villages avec des conflits. La réalisation d un système multi-villages ne devrait pas déséquilibrer les relations entre les villages ou favoriser des personnalités non acceptées par une partie des villages dans la gestion. La connaissance du milieu et la négociation préalable avec tous les villages sur l implantation de tous les éléments du réseau et de son développement, le mode de gestion et ses implications sociales et économiques, sont des conditions préalables à la mise en place d un tel système. En ce sens, les systèmes multi-villages au Sénégal se sont développés beaucoup plus à partir de la volonté des comités qu à partir des projets. Ce processus qui s est fait progressivement dans le temps peut expliquer que les risques de conflits soient minimisés dans la plupart des systèmes étudiés ce qui n est pas le cas dans les systèmes d Agnam par exemple, où il y a eu de nombreuses interventions extérieures. L utilisation d un modèle mathématique simple peut servir de base pour la conceptualisation du réseau avec les populations : Une modélisation mathématique simple peut donner une bonne approximation pour l optimisation physicoéconomique des investissements et peut constituer une première base pour dimensionner le système avec les populations et étudier des alternatives. Néanmoins, comme mentionné préalablement, la cohérence sociale de l agrégation rester a l aspect dominant dans l intermédiation avec les populations. Sur la gestion des Systèmes En plus de la nécessité d un règlement et d un cahier des charges de l Association, la représentation des différents types de consommateurs des différents villages (éleveurs, consommateurs à la borne, consommateur privé, groupe d intérêt..) est une condition importante pour une bonne gestion. Cependant, avec le temps, cette large représentation démocratique tend à se simplifier, sans semble-t-t-il de conséquences néfastes. L indemnisation symbolique des membres de l Association pour leur participation aux Assemblées, adoptée dans le projet RRESFMR, peut être un stimulant qui met en valeur les responsabilités de la fonction. La gestion relativement satisfaisante des systèmes étudiés peut s expliquer par un développement du réseau des système multi-villages par étapes. Les Associations font d abord leurs preuves sur des systèmes relativement simple à gérer (réseaux peu étendus et distributions par bornes fontaines) puis progressivement sur des systèmes plus complexes (extensions des réseaux et multiplication des branchements privés). La dynamique et l apprentissage des associations anciennes comme la réforme convergent vers la nécessité fondamentale de vendre l eau au volume avec compteur et vers la professionnalisation des comités. Le cas du projet RRESFMR a instauré un système de paiement au volume pour les opérateurs et aussi pour la rémunération du comité qui apparaît comme un système incitatif pour minimiser les pertes sur le réseau et sur la distribution non comptabilisée. La communauté étant responsable du choix des fontainiers, en cas de problème, la borne fontaine est fermée par l association jusqu à la résolution du conflit par la communauté. La demande pour des branchements privés est forte en milieu rural y compris dans les petits villages. L'expérience sénégalaise montre clairement que lorsque la demande des usagers est suffisamment forte, l'essentiel du financement des extensions et des branchements privés peut se faire à partir de la mobilisation des financements locaux. L'appropriation des réseaux par les usagers se construit au fur et à mesure des extensions. La dynamique multi-villages et l'augmentation progressive de la consommation permettent de maintenir le prix de l'eau à un niveau très attractif pour l'usager en l'occurrence 175 FCFA / m 3 en moyenne dans les échantillons étudiés, ce qui est faible pour l'afrique de l'ouest. Les appuis techniques pour l extension des systèmes ainsi que les audits externes sont importants afin de maintenir la qualité du service. Développement des systèmes Multi-villages Par manque d'appui technique, les comités ont du mal à identifier les limites de leurs réseaux en termes de desserte. Les comités de gestion n'ont pas ou peu accès à des conseils techniques concernant la faisabilité de l'extension de telle ou telle branche du réseau, et les services techniques de l'etat sont rapidement débordés par le rythme des extensions. Les comités les plus performants ont engagé une professionnalisation de leur équipe et sortent du cadre contraignant du bénévolat. Cette professionnalisation se transforme de plus en plus en une "délégation de fait" via la rémunération des personnes qui assurent quotidiennement le service. Cependant cet appui Le Développement et la Gestion des Systèmes Multi-villages Ruraux

126 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 126 externe est encore trop faible et devra être renforcé soit par le renforcement de la DEM elle-même soit en facilitant l émergence de spécialistes privés capables d assurer un appui technique aux Associations. Le multi-village : une alternative à l'hydraulique villageoise? Une conclusion s'est progressivement dégagée de cette étude de cas : il existe en milieu rural une forte demande pour un niveau de service supérieur à celui des puits modernes et pompes manuelles, y compris pour les plus petits villages. L augmentation des consommations journalières (qui s'approchent désormais de 30 à 35 litres par jour et par habitant, après quelques années de fonctionnement du réseau, et ce même dans de très petits villages) est bien la preuve de l existenc e de cette demande. Cette étude, comme les précédentes sur les systèmes multi -villages en Amérique latine et en Côte d Ivoire 13, semble prouver que les systèmes multi-villages émergent comme une alternative à l hydraulique rurale traditionnelle normalement réservée aux petites communautés rurales et permet des tarifs de l eau acceptables et comparables à ceux des solutions techniques de l hydraulique rurale traditionnelle (puits et pompe à main ou captage de source, puits moderne etc.). L'installation d'un forage équipé d'une pompe manuelle représente en effet un investissement incompressible de 5 à 6 millions de FCFA, ce qui représente un coût per capita élevé pour un village de 200 ou 300 habitants. En ce sens l'extension d'un réseau représente un investissement plus facilement adaptable à la taille du village : 2 à 3 millions de FCFA suffisent à raccorder un village de 100 ou 150 habitants situé à moins d'un kilomètre d'un réseau existant. A situation de départ égale, lorsque l'on veut desservir un village de taille réduite, il est souvent plus intéressant d'étendre le réseau que de faire un Coût PMH Coût Extension Coût Extension nouveau forage et d'installer une réseau : 0.5km réseau : 1 km pompe manuelle, comme l'illustre le tableau suivant : Coûts unitaires (en $ US par habitant) de raccordement d un village en fonction de : 1) la technologie choisie (PMH ou extension), 2) la distance, 3) le nombre d habitants Coût Extension réseau : 2 km HabitantsTotal Par usagertotal Par usagertotalpar usagertotalpar usager Quand on fait le bilan financier des réseaux multi-villages au Sénégal en termes d'investissements le résultat est impressionnant : avec un autofinancement des communautés souvent supérieur à 50%, les systèmes multi-villages ont permis de raccorder des centaines de villages de faible taille (que lques centaines d'habitants) et d accéder à un niveau de service très apprécié par les usagers, tout en renforçant la "rentabilité" globale des systèmes pour les villages déjà desservis. Le système, avec ses extensions, représente une charge d'investissement de l'ordre de 20 à 55 $ US par usager raccordé, tout à fait comparable au ratio d'investissement constaté en hydraulique villageoise "classique" (installation d'une pompe manuelle ou d'un puits moderne). Il est par ailleurs pr obable qu'un des critères déterminants pour la réussite des systèmes multi-villages est la densité de peuplement, particulièrement favorable au S énégal plus particulièrement dans le bassin arachidier. Une approche multi-village permettant de desservir des villages de petite taille pourrait diversifier les options technologiques proposées aux communautés rurales il serait proposé aux populations de participer aux investissements et de payer le tarif nécessaire. L approche multi-villages si elle est bien conçue permet de rendre économiquement viables des systèmes qui offrent une haute qualité de service (dans un environnement où les villages ne sont pas trop dispersés). Les conditions techniques sont certes plus complexes, mais dans un monde 13 cf Multi-village Rural Water Supply Schemes, an emerging challenge, WSP 2001 Le Développement et la Gestion des Systèmes Multi-villages Ruraux

127 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 127 rurale en pleine évolution il est souvent plus facile de trouver un diéséliste et des pièces de moteur dans la petite ville la plus proche que des réparateurs de pompe à motricité humaine. Le Développement et la Gestion des Systèmes Multi-villages Ruraux

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129 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 129 Annexes Données de base sur les systèmes enquêtés, échantillon E1 Villages polarisés Population (estimation 2000) Types de points d'eau Site d'implantation du forage Total Raccordés Non raccordés Totale Village centre Villages raccordés Villages non raccordés Année de mise en service du réseau Bornes-fontaines Branchements privés Abreuvoirs Autres Maka Kahone Koutal Thienaba Touba Toul Ngodiba Hanene Walalane Kissane Données de base sur les systèmes su projet RRESFMR (échantillon E2) Site d implantation du forage Donnés de base sur les projets de l échantillon E3 Site d implantation du forage Villages polarisés Raccordés Villages polarisés Raccordés Population recensée au31/05/00 Mise en service Population recensée au 31/05/00 BF BP ABV Ndiago /2/ Thicky /2/ Ndiognick /3/ Fass Gossas /3/ Keur Moussa Poste /3/ Niahène /4/ Nloro Alassane tall /4/ Sanghai /3/ Paoskoto /5/ Ouadlour /7/ Keur Socé /8/ Somb / Médina Mbobo /10/ Médinatou Salam II /11/ Lour Escale /11/ Nguélou /11/ Mbouma Maronème /4/ Saté Waly /4/ Kohel /5/ Keur Mama Lamine /5/ Kouyandé Kandji /6/ Mise en service BF BP ABV Sagatta Sinthiane Agnam Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

130 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 130 Sigles et abréviations AEP... Alimentation (ou Adduction) en Eau Potable AFD... Agence Française de Développement AFVP... Association Française des Volontaires du Progrès ASUFOR... Association des Usagers d un Forage BF... Borne-Fontaine BI... Branchement Individuel (= Privé) BP...Branchement Privé (= Individuel) CARITAS... ONG diocésaine de développement CdF... Conducteur de Forage (= pompiste) CdG... Comité de Gestion (ancien nom des ASUFOR circulaire de 1984) CTB... Coopération Technique Belge DEM... Direction de l Exploitation et de la Maintenance DHA... Direction de l'hydraulique et de l'assainissement GEFOR... Gestion des Forages (base de données de la DEM) GIE... Groupement d Intérêt Économique GPS... Global Positioning System HVDR... Hydraulique Villageoise et Développement Rural IRH... Inventaire des Ressources Hydrauliques ISF... Ingénieurs Sans Frontières MV... Multi-Village PAGE... Programme d Appui à la Gestion de l Eau PEA... Programme Eau et Assainissement PMH... Pompe à Motricité Humaine (pompe manuelle) REGEFOR.R éforme de la Gestion des Forages SDE......Sénégalaise des Eaux (privée) SODECI Société de Distribution des Eaux de Côte d Ivoire SONES... Société Nationale des Eaux du Sénégal (publique) TdR... Termes de Référence UNICEF... United Nations International Child and Education Fund WSP Water and Sanitation Program LA GESTION DES SERVICES PUBLICS LOCAUX EN FRANCE Une responsabilité locale et un fort recours au secteur privé By Regis Taisne Les collectivités sont responsables des services d'eau et d'assainissement Pour des raisons historiques 14, la France compte un nombre élevé de communes : , soit plus que tous les autres pays de l'union Européenne 15. La conséquence de cette atomisation est qu'une majorité des communes ont moins de 500 habitants (89% ont moins de habitants et 80% ont moins de 1000 habitants), mais leurs prérogatives restent les mêmes quelle que soit la taille de la commune. Les communes ont notamment la responsabilité de faire respecter l'obligation de service public. Cette obligation de service public, dont les principes fondamentaux sont l'intérêt général, l'égalité de traitement des citoyens, la continuité et la mutabilité, constitue indéniabl ement une caractéristique française forte sur le plan des idées et des pratiques. Le législateur confie aux collectivités locales l'essentiel des compétences dans les secteurs de l'eau (au sens large) et de l'assainissement, avec de rares exceptions (l'etat ne dispose que d'un rôle assez général d'orientation et de police). Pour une illustration de ces compétences, voir par exemple l'article 31 de la loi du 3 14 Transformation des anciennes paroisses en communes après la Révolution française, à la fin du XIIIe siècle. En milieu rural, cela a conduit à l'équation un clocher = une co mmune 15 A titre d'exemple, le Portugal compte 305 communes pour 10 millions d'habitants. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

131 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 131 janvier 1992, dernière avancée notable en matière de législation pour ce qui concerne le secteur de l'eau 16. Ce principe fort ancre nettement la gestion des services d'eau et d'assainissement dans la vie locale, et les élus sont d'ailleurs pénalement responsables du respect de la réglementation (même si une loi récente a limité la responsabilité pénale des élus mais pas celle des collectivités). L Etat central garde néanmoins un pouvoir important au travers de son Administration territoriale (notamment les Préfectures). Les communes peuvent se regrouper pour l'organisation des services d'eau et d'assainissement. On parle alors d'epci, Etablissement Public de Coopération Intercommunale, à qui les communes adhérentes transfèrent partiellement ou totalement leurs compétences en matière d'eau et/ou d'assainissement. L'EPCI devient alors "l'autorité organisatrice", et l'epci prend alors le plus souvent la forme d'un syndicat. Remarquons que le "taux d'intégr ation" (le nombre d'autorités organisatrices rapporté au nombre total de communes) reste assez faible, puisque l'on compte selon les derniers chiffres disponibles services des eaux (soit une autorité organisatrice pour deux communes) et services d'assainissement, avec de très fortes disparités (le Syndicat des Eaux d'ile de France (SEDIF) regroupe à lui seul plus de 144 communes de l'agglomération par isienne 17, ce qui en fait et de très loin la plus grande entité organisatrice du pays. Les formes que peut prendre la coopération intercommunale dans les secteurs de l'eau et de l'assainissement sont très variables. Historiquement la forme la plus répandue (depuis le début du siècle dernier) est le syndicat 18, qui a déjà été analysée par S. Tremolet. La "syndicalisation" des services d'eau et d'assainissement est très ancienne en France et illustre une tradition intercommunale bien ancrée dans les habitudes. Notons d'ailleurs que la création des syndicats a été motivées essentiellement par des impératifs d'ordre technique (mutualisation des outils de production, interconnexion des réseaux cela est flagrant dans le cas du SEDIF et des communes de la banlieue parisienne). L'intercommunalité a pris un nouveau tournant en 1999 avec la loi , dite "Loi Chevènement 19 ", qui : 1. Simplifie considérablement les formes de la coopération intercommunale (une seule forme de syndicat et 3 formes de communauté (fonction de la taille) au lieu de 9 auparavant) ; 2. Incite fortement au regroupement, soit de manière "non négociable" (des échéances sont fixées par la loi, par exemple la disparition des districts au 1 er janvier 2002 ; en outre le Préfet a le droit de "provoquer" l'apparition des communautés) soit par des incitations fiscales. Cet aspect fiscal est très incitatif, puisque la dotation globale de fonctionnement des collectivités locales (versée par l'etat) est d'autant plus élevée (par habitant) que la population concernée est importante 20. L'incitation fiscale concerne moins l'eau que l assainissement ou d autres services. Les collectivités n'ont pas le droit d'utiliser les ressources de la dotation globale pour l'eau, qui est un budget annexe qui n'est pas pris en compte pour le calcul du coefficient d'intégration fiscale. Les autres services tels l'assainissement et le ramassage des ordures (qui sont inscrits au budget général) peuvent bénéficier de la dotation globale (d'autant plus si ces secteurs ne sont pas délégués au secteur privé et font l'objet de marchés publics). Les principales motivations pour l'intercommunalité sont l'intégration des contrats de délégation et la possibilité d'obtenir une grille tarifaire unique à l'échelle des communes concernées. Ceci permet d une part d augmenter la 16 En outre parce que cette loi transcrit dans le droit français un ensemble conséquent de directives européennes, dont certaines (qualité des eaux de boisson 1980 et 1998 (transcrite le 20 décembre 2001) et traitement des eaux urbaines résiduelles 1991) ont un impact considérable sur le financement du secteur et sont en grande partie responsables de l'augmentation du prix des services sur la période Le SEDIF a déjà été étudié dans le rapport de Sophie Tremolet (2001). 18 La dénomination générale de "Syndicat" regroupe en fait deux options, selon que le Syndicat est à Vocation Multiple (SIVOM) ou à Vocation Unique (SIVU) (cette distinction est amenée à disparaître progressivement). Les SIVOM permettent aux groupements de communes de gérer collectivement, sur la base de la libre adhésion, des services aussi divers que les piscines, les cantines scolaires, et bien sûr (très répandu) la collecte des ordures ménagères. A l'inverse, un Syndicat peut être créé pour ne prendre en charge qu'une partie des services d'eau et d'assainissement à l'échelle de plusieurs communes : gestion d'une Station de Traitement et d'épuration des Eaux (STEP), ou encore ouvrages de production. La loi prévoit quand même l'obligation de transférer "un bloc de compétences fonctionnelles". Dans ce cas c'est le Préfet qui évalue et qui tranche. 19 A l'époque Ministre de l'intérieur, tutelle des collectivités locales en France. 20 C'est ce qu'on appelle en France le "coefficient d'intégration fiscal", qui mesure en fait le pourcentage des ressources budgétaires qui sont gérées localement. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

132 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 132 capacité technique de négociation des collectivités et l'attractivité du marché pour les délégataires potentiels et d autre part de réaliser une péréquation entre les différentes communes de l'epci. Notons pour finir que l'intercommunalité et cela ne concerne pas seulement le secteur de l'eau est un phénomène pratiquement irréversible. En d'autres termes, les cas de dissolution de structures intercommunales sont extrêmement rares, et ce cas de figure est rendu quasiment impossible par la loi Chevènement. Les options de ge stion sont très variées Les régies directes (non distinctes de la collectivité, ni financièrement, ni comptablement) ne sont plus autorisées depuis le 28 décembre 1926, même si les régies créées avant cette date ont été maintenues, y compris dans des villes de taille importante (Mulhouse, Reims, Strasbourg ). La régie (ancienne régie directe maintenue ou régie indirecte créée après 1926) reste néanmoins une forme assez répandue, surtout en termes de nombre de communes 21 (moins en part de population). Les modes de gestion des services de distribution d'eau et d'assainissement en France (source : Direction de l'eau, Ministère de l'aménagement du territoire et de l'environnement) Mode de gestion Service de distribution d'eau : Part des comm unes (en %) Part de la population (en %) - Régie Délégation de service public dont affermage 88 (n.c.) dont concession, régie intéressée, gérance ou autre 12 (n.c.) Service de l'assainissement collectif (1) : - Régie Délégation de service public Dont affermage 85 (n.c.) Dont concession, régie intéressée, gérance ou autre 15 (n.c.) (1) L'assainissement collectif est assuré dans 58 % des communes abritant 93 % de la population. Globalement, la délégation au secteur privé, et tout particulièrement l'affermage 22 est le mode de gestion de très loin le plus répandu en France : quatre français sur cinq sont desservis en eau par un opérateur privé, et le secteur de l'assainissement (notamment sous la contrainte du financement nécessaire à la mise aux normes européennes) est en train de suivre cette même tendance : 53% de la population dépend du secteur privé pour l'assainissement, contre 35% en Deux choses importantes sont à souligner concernant le mode de gestion : Il n'y a pas de lien direct entre le niveau d'intégration de l'autorité organisatrice des services et le choix du mode de gestion, en d'autres termes, l'intercommunalité ou la syndicalisation ne conduit pas forcément à la délégation au secteur privé. 21 Les cas de retour à la régie après une longue période de délégation sont très rares mais hautement symboliques : cf. par exemple le cas de Grenoble après le scandale du début des années Au sens de la loi française, la distinction entre affermage et concession repose essentiellement sur les investissements : à la charge de l'autorité organisatrice dans le cas de l'affermage, à la charge du délégataire dans le cadre de la concession. Cette distinction n'a cependant plus beaucoup de sens dans le secteur de l'eau, où l'essentiel des investissements sont faits depuis longtemps. Dans la réalité, la plupart des contrats actuels sont des contrats d'affermage, avec des clauses "à tendance concessive" sur une partie des infrastructures seulement. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

133 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 133 La délégation coûte globalement plus cher que la régie : 13% de plus en moyenne selon les chiffres publiés par la DGCCRF (en 2001) après analyse d'un échantillon de collectivités essentiellement urbaines. Une autre estimation porte cet écart à 27% à partir d'un échantillon de communes plus rurales 23. Notons enfin la grande souplesse du cadre institutionnel et réglementaire français, qui offre un choix de solutions quasiment illimité en termes de partenariat public -privé : une collectivité peut par exemple décider d'assurer la production de l'eau en régie (ou par un syndicat, ou encore une société d'économie mixte c'est le cas de Paris), et d'en affermer la distribution, ou de ne recourir au secteur privé que pour la facturation, ou la maintenance, etc. Un secteur peu régulé et caractérisé par des monopoles Au contraire des autres services publics en réseau (voir encadré) les services d'eau et d'assainissement ne sont pas régulés, mise à part la régulation locale "par le contrat" qui s'avère souvent insuffisante. La forte intégration des entreprises délégataires limite la concurrence (l'obligation de mise en concurrence est récente) et introduit donc des "monopoles naturels". L'absence de régulation a conduit récemment à la multiplication des associations locales de consommateurs, relayées au niveau national notamment par l'ufc (Union Fédérale des Consommateurs), et la CLCV (Confédération Locale du Cadre de Vie) qui surveillent attentivement la qualité de l'eau distribuée et analysent les différents éléments des factures. Par exemple, la revue «Que Choisir?» de l'ufc a distribué à plusieurs reprises des tests de teneur en nitrate. Au niveau local, ces associations de consommateurs jouent le rôle d'un contre-pouvoir (à défaut de permettre une véritable régulation). Cette forme de "régulation" est de plus en partie informelle, et donc peu efficace face aux grandes entreprises délégataires. Bien souvent les associations de consommateurs s'opposent à la collectivité plus qu'elles ne la soutiennent, lorsqu'il s'agit de renégocier un contrat de délégation. L'évolution du mode de financement et du prix des services Les usagers financent l essentiel des coûts des services Le principe de base du financement du secteur reste la participation intégrale des usagers, par le biais du payement des services et sur la base de la couverture de tous les coûts, y compris l'amortissement des installations 24. Ce principe a été réaffirmé récemment (1997) par le rapport de la Cour des Comptes, qui constate De quelle manière les autres services publics "en réseau" sont-ils régulés en France? La régulation des services d'eau et d'assainissement accuse un retard certain par rapport aux dispositifs existants pour les autres services publics en réseau (électricité / gaz, télécommunication) : Pour l'électricité, la CRE (Commission de Régulation de l'électricité) constitue l'entité régulatrice de création récente (2000), notamment chargée d'ouvrir progressivement le secteur à la concurrence d'opérateurs autres qu'edf, dans le respect des directives européennes, qu'il s'agisse du transport ou de la distribution. Cette ouverture à la concurrence ne concerne pour encore quelques années que les gros consommateurs ; Dans le cas des télécommunications, l'ancien monopole de France Télécom a presque entièrement disparu, battu en brèche par une très forte concurrence (à la fois sur la téléphonie des dérives essentiellement liées à la complexité fiscale des collectivités et de leurs regroupements, dérives qui constituent autant d'accrocs au principe général "l'eau paye l'eau". La loi Chevènement devrait contribuer à une simplification de cette situation. 23 Ce qui tendrait à prouver que le déséquilibre dans la négociation joue à plein en faveur des entreprises délégataires lorsqu'il s'agit de petites villes ou de communes rurales. Il est néanmoins difficile de faire la part entre l'efficacité de la négociation et/ou de la mise en concurrence et l'attractivité d'un contrat en termes de population desservie, même en milieu rural. 24 On pourrait même dire que les usagers paient plus de 100% du coût des investissements.en effet une des sources de financement est constituée par les six Agences de l'eau, et les usagers domestiques sont la catégorie d'utilisateurs la plus défavorisée pour ce qui est du ratio redevances / subventions reversées (à titre de comparaison les agriculteurs contribuent pour 1% au budget des Agences et reçoivent 30% des subventions reversées et les industriels reçoivent à peu près autant qu'ils contribuent). Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

134 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 134 Evolution du prix de l eau en France (en FF/m3), selon différentes sources : SPDE (Syndicat des Producteurs et Distributeurs d'eau), INSEE (Institut National des Statistiques et Etudes Économiques) et DGCCRF (Direction Générale du Contrôle de la Concurrence et de la Répression des Fraudes). Notons qu'une caractéristique forte du contexte français est la faible péréquation à l'échelle nationale, sauf pour les investissements (car les 6 Agences financent 30 à 50% du total des investissements sur l'ensemble du territoire), et même si le développement de l'intercommunalité devrait permettre de "lisser les prix". Le prix est établi localement, plus souvent sur la base d'une négociation 25 entre la collectivité et l'entreprise délégataire que sur la base d'une véritable mise en concurrence, sauf pour les marchés plus importants. Evolution de la structure du prix de l eau depuis 10 ans L'évolution du prix de l'eau sur les 10 dernières années fait apparaître un doublement, même si la tendance est maintenant à l'infléchissement. La raison majeure de ce doublement est la mise en conformité des services avec les normes européennes en matière de traitement des eaux usées (imposée par la loi de 1992). La structure de la facture d'eau a donc fortement varié en l'espace de 10 ans, la part correspondant au service "eau" passant de 54 à 42%. Dans le même temps les prélèvements des Agences de l'eau et les taxes locales ont augmenté dans une proportion non négligeable (bien que le montant de la TVA soit resté au taux réduit 5,5%). Comment les investissements sont-ils financés? Dans le cas de la concession, c'est l' entreprise qui est chargée de financer les investissements. Dans toutes les autres formes de délégation ou dans le cas d'une régie, c'est la collectivité qui doit financer les investissements. Pour cela la collectivité procède en général à l'augmentation du prix de l'eau. Mais pour éviter une hausse trop brutale, la collectivité peut également recourir à des mécanismes d'aide publique, parmi lesquels : Les financements accordés par les 6 Agences de l'eau, qui proviennent des redevances payées sur les prélèvements ou les rejets ; ce type de financement devrait d'ailleurs être renforcé dans la nouvelle loi en préparation ; Les subventions du FNDAE, "fonds de solidarité ville-campagne", qui prélève un pourcentage sur la facture des usagers urbains pour financer les extensions de réseau dans les très petites communes ou dans les zones 25 C'est le principe de l'intuitu personae, très fort dans le droit français. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

135 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 135 rurales faiblement peuplées ; les montants collectés par le FNDAE sont néanmoins très faibles environ 14 centimes par m3, soit entre 1 et 1,5 % du prix de la facture d'eau selon les communes ; Enfin, les départements ou les régions, sur leurs propres fonds, peuvent décider de cofinancer les investissements des collectivités locales, sous la forme de subventions ou de bonification des intérêts des emprunts. C'est la seule source de financement qui n'est pas alimentée directement par les usagers (prélèvement sur la facture). Notons d'ailleurs que la question de l'accès au service dans les zones à faible densité ou non planifiées en termes d'urbanisation se pose aussi en France : cf. par exemple la question écrite posée récemment par un sénateur 26 et la réponse du Ministère du Logement. Evolution de la composition du prix de l eau ( ) : 8% % 1999 (+215%) 10% 31% 54% (+32%) 42% (+266%) 17% Distribution de l'eau Collecte et traitement des eaux usées Redevances des agences de l'eau Taxes (+66%) 31% Source : direction de l Eau, ministère de l Aménagement du territoire et de l Environnement Le contrôle des services publics d'eau et d'assainissement Le contrôle (monitoring au sens large, mais pas de régulation : voir page 3, le paragraphe «un secteur peu régulé») des services publics d'eau et d'assainissement se fait à plusieurs niveaux dans le système français : Les aspects légaux au sens large (conformité des contrats de délégation, conformité de la passation des marchés publics, respect des règles en vigueur pour les EPCI) sont contrôlés au niveau préfectoral, comme tous les actes effectués par les collectivités. Le Préfet peut déférer au Tribunal Administratif une décision de la collectivité 27 ; Les aspects techniques sont contrôlés par trois directions : Direction Départementale de l'agriculture et de la Forêt (DDAF), Direction Départementale de l'equipement (DDE), Direction Départementale des Affaires Sanitaires et Sociales (DDASS) ; le rôle de cette dernière est important puisqu'elle est chargée de contrôler la qualité des eaux ; bien entendu, en dehors de ces entités publiques, les collectivités sont parfaitement libres de faire appel à n'importe quelle structure privée pour contrôler leurs services ; Les aspects comptables et budgétaires sont contrôlés directement par les Chambres Régionales des Comptes, la Cour des Comptes (au niveau national) et le Conseil de la Concurrence. La DGCCRF (Direction Générale du Contrôle de la Concurrence et de la Répression des Fraudes) intervient de façon plus ponctuelle. Cette multiplicité des niveaux de contrôle rend difficile le suivi du secteur. Les indicateurs de performance 28 sont mal définis et leur collecte-compilation est rendue quasiment impossible par l'émiettement des services. Il n'existe donc pas de statistiques au niveau national. 26 N du 20 décembre 2001, au sujet de la répartition des financements nécessaires pour étendre le réseau dans une zone non prévue dans le plan d'urbanisation de la commune. 27 Et dans ce cas le seul recours pour la collectivité est le tribunal administratif. 28 Les choses évoluent cependant : voir la thèse de Laetitia Guérin-Schneider (2001). Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

136 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 136 Trois lois récentes (émises au cours de ces dix dernières années) ont contribué (avec des effets lim ités) à introduire plus de transparence dans la gestion des services : La loi "Sapin" (1993), réaction aux "scandales" du début des années 1990, qui introduit l'obligation de "publicité" permettant la présentation de plusieurs offres concurrentes, ainsi que la limitation des durées de délégation (fin de la tacite reconduction) ; La loi "Barnier" (1995), qui introduit l'obligation pour les maires d'éditer un rapport annuel (contenant des données chiffrées) sur la qualité des services des eaux et d'assainissement, et limite la durée des contrats de délégation à 20 ans ; La loi "Mazeaud" (1995 également), qui oblige le délégataire à produire un rapport annuel, contenant des informations comptables "retraçant la totalité des opérations afférentes à l'exécution de la délégation", et autorise leur contrôle par les CRC 29. Trois points de comparaison avec le reste de l'europe Le contexte français se démarque des autres pays européens, caractérisés soit par un modèle de "privatisation" plus marqué, sans véritable délégation (Royaume-Uni), soit par la prédominance d'une gestion communale (Allemagne) ou encore par la mise en place de cadres de régulation relativement récents (Portugal). Les années 1990 ont entraîné des bouleversements assez importants en Europe pour ce qui est des modèles de gestion, alors que dans le même temps le contexte français n'évoluait pratiquement pas. 30 Le Royaume-Uni : une privatisation intégrale, un dispositif de régulation très sophistiqué et une intégration moyenne à forte Le Royaume-Uni, sous l'impulsion du gouvernement d'inspiration libérale de Margaret Thatcher, s'est lancé dans un vaste mouvement de privatisation au début des années 1990, sur le double constat du manque de compétences des opérateurs et de leur incapacité à financer les infrastructures nécessaires pour maintenir la qualité du service. Le modèle mis en place est celui d'une privatisation intégrale : les entreprises sont propriétaires du patrimoine, qu'elles financent directement, rattrapant plusieurs années de sous-investissement public, ce qui introduit une différence fondamentale avec le système français (et notamment la subtile distinction entre affermage et concession). Cela a conduit à une forte intégration des entreprises exploitantes : une trentaine au total, 10 pour l'eau et l'assainissement, et 19 pour l'eau uniquement. Les communes ont peu de prérogatives : elles ne délèguent pas le service, et gardent seulement une mission (très réduite) de contrôle de la qualité du service. Les entreprises sont soumises à une régulation économique très forte, avec notamment l'ofwat, qui dispose de pouvoirs très étendus et d'une indépendance totale. Le prix est fixé tous les 5 ans par l'ofwat, sur la base d'une analyse des coûts supportés par les exploitants au cours de la période précédente. Charge alors à l'entreprise d'améliorer sa productivité pendant ce laps de temps pour dégager des profits suffisants. On est donc clairement dans un modèle de régulation par comparaison des performances, qui permet d'introduire de la compétition sans pour autant mettre en concurrence les entreprises. Ce modèle, et c'est sa force, a permis de respecter les objectifs fixés au début des années 1990 en termes d'investissement et de qualité du service. Les critiques sont cependant nombreuses : les entreprises sont soupçonnées de sous-investir systématiquement, la renégociation quinquennale ne permettant pas d'envisager le long terme ; l'ofwat est accusée de ne pas représenter directement les intérêts des consommateurs. L Allemagne : l archétype du modèle municipal Tout comme en France, et au contraire du Royaume-Uni, les communes allemandes ont une très forte implication dans la gestion des services publics, en particulier l'eau et l'assainissement. Suite au démantèlement des grandes entreprises d'etat est-allemandes, après la réunification, la situation est maintenant la même (en tous 29 Disposition renforcée par le Conseil d'etat en 1998, suite au procès Saint-Dizier / CGE. 30 Nous ne parlons ici que de l'angleterre et du Pays de Galles, dont le cadre institutionnel est identique ; le cas de l'ecosse a déjà été analysé par S. Tremolet. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

137 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 137 les cas sur le plan institutionnel, car sur le plan de l'investissement c'est très différent) entre les Länder de l'ouest et ceux de l'est. De manière générale l'architecture institutionnelle de la gestion des services publics répond au principe de subsidiarité, recherchant un équilibre entre l'etat central, les Länder et les communes. Les modèles de gestion "publics" sont donc majoritaires en Allemagne. La régie autonome et l'entreprise publique municipale représentent à eux seuls près de 65% de la distribution exprimée en volume. Les syndicats intercommunaux (publics) sont également assez nombreux (14% de la distribution). En revanche, seulement 20% de la distribution est assurée par des «exploitants de statut pr ivé avec capitaux privés», parmi lesquels 12% représentent des sociétés d'économie mixte. La gestion "purement" privée se limite donc à 3% de l'approvisionnement en eau et 1% de l'assainissement. Notons égal ement que bon nombre d'entreprises municipales ne se limitent pas aux services d'eau, mais exploitent conjointement plusieurs services publics en réseau 31 (eau, électricité, gaz ). Il n'y a pas à proprement parler d'autorité de régulation en Allemagne. Deux raisons principales à cette situation : 1) La plupart des communes se trouvant en situation d'exploitant (via les compagnies municipales), il serait difficile de déterminer la limite de responsabilité de la commune en tant que responsable de l'organisation du service ; 2) Chaque Länder ayant pour mission "d'adapter" la législation fédérale aux conditions locales, il serait très difficile de mettre en place un régulateur unique pour l'ensemble du pays. La régulation se fait donc localement, par le contrat. Le taux d'intégration des "autorités organisatrices" (au sens français du terme) est donc relativement faible (on a vu que le mode d'organisation intercommunal restait limité) ; le constat est le même pour les exploitants (publics autant que privés), qui n'ont pas connu le vaste mouvement de concentration qu'a pu connaître la France (un recensement récent dénombrait plus de 6500 organisations de distribution d'eau pour les seuls Länder de l'ouest). Ce faible taux d'intégration ne se fait pas trop ressentir en termes de compétences car les puissantes et anciennes associations d'exploitants ont très tôt constitué des groupes d'experts techniques mais plutôt en termes de capacité d'investissement (cas de l'ex-rda). L'Allemagne connaît aujourd'hui une crise due aux retards d'investissement des Länder de l'est aggravée par : La baisse marquée des consommations domestiques, liée aux campagnes d'incitation au non-gaspillage, La baisse des consommations industrielles, liée au niveau élevé du prix de l'eau, un des plus élevé d Europe compte tenu des choix techniques très sophistiqués et donc très coûteux, notamment en matière de traitement des eaux usées, Et enfin l'atomisation des exploitants, qui n'offre pas une surface financière suffisante pour envisager de gros investissements 32. La baisse des consommations est d autant plus ressentie sur le plan financier que la part fixe dans la facture est peu élevée. On se dirige donc vers une "privatisation" progressive, sous une pression essentiellement économique. En d'autres termes "en Allemagne, les communes ne sont vraisemblablement pas attirées par le "professionn alisme" du secteur privé, mais plutôt par sa capacité à résoudre les difficultés financières et à générer des gains de productivité 33 ". On estime que la proportion des usagers allemands dépendant d'une gestion privée pourrait atteindre 30% en Le Portugal : entre un modèle d inspiration libérale et une tradition fortement ancrée d entreprise publique Deux caractéristiques fortes du Portugal sont à retenir : l'inégalité dans l'accès aux ressources en eau entre le Nord et le Sud ; une distinction très nette entre les zones urbaines, fortement concentrées, et les zones rurales, très faiblement peuplées, ce qui justifie la mise en place d'une organisation différenciée des services d'eau. 31 A défaut d'effets d'échelle (rares sont les compagnies dont l'échelle dépasse le territoire d'une commune), cela permet des "effets d'objet" importants : gestion commune de la clientèle, chauffage urbain en recyclant la chaleur dégagée pour produire l'électricité, etc.). 32 Cela explique le dynamisme des entreprises allemandes pour le rachat des grands groupes français du secteur en cours de cession, notamment Vivendi Environnement. 33 In Guérin-Schneider Laetitia, 2000 (voir bibliographie). Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

138 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 138 Le Portugal a connu un bouleversement complet de son cadre institutionnel au cours de cette dernière dizaine d'années. Le Portugal initie au début des années 1990 une privatisation des services d'eau, qui reste moins marquée qu'au Royaume-Uni, car si les compagnies créées sont de droit privé (à commencer par EPAL, l'ancienne compagnie publique de distribution de Lisbonne, privatisée en 1991), leurs actionnaires restent l'etat et les collectivités. Le but recherché est avant tout les effets d'échelle, notamment pour la production et le transport d'eau en gros au bénéfice des collectivités. Le décret-loi de 1993 prévoit la création de compagnies "multi-municipales" en zone urbaine. En zone rurale, c'est le modèle d'un contrat de concession signé directement entre une commune et un opérateur qui prévaut. Une étape importante est franchie en avec la mise en place d'un régulateur pour les services d'eau et de collecte des déchets (IRAR : Instituto Regulator da Agua e dos Residuos). Deux logiques continuent cependant à s'affronter : la logique libérale qui avait amorcé le processus au début des années 1990 ; et la logique des socialistes au pouvoir jusqu'en mars 2002, qui ont plutôt ajourné la privatisation des entreprises multimunicipales et défendu la vision d'un Etat jouant un rôle fort dans le secteur des services publics. Le changement récent de gouvernement, qui a évincé les socialistes au pouvoir au profit d'une majorité conservatrice, pourrait bien relancer les privatisations. Trois modèles de gestion prévalent actuellement au Portugal : la gestion directe par la municipalité, la gestion par une entreprise municipale (régie dotée de la personnalité morale) ; et enfin la concession à une structure de droit privé (les entreprises multimunicipales dans ce cas c'est l'etat qui est l'autorité concédante et toute entreprise candidate dans le cas des systèmes d'approvisionnement en zone rurale). Le processus, quoique timide, a suscité la création de plusieurs opérateurs privés professionnels, ainsi que la signature d'une vingtaine de contrats de délégation (ce qui n'est pas négligeable, puisque le Portugal ne compte que 305 communes). Les entreprises multinationales du secteur, à commencer par les filiales des groupes français, sont assez mal vues et leur part de marché au Portugal reste négligeable (au contraire de l'espagne : cf. par exemple le rôle d'ondéo dans Aguas de Barcelona qui a d'ailleurs signé une association avec le groupe portugais Lusagua construction, environnement et finance). En matière de tarification, le Portugal présente quelques spécificités, puisque le prix de l'eau est maintenu artificiellement bas, les usagers n'ayant pas à supporter totalement les charges d'investissement (importance des fonds structurels européens et des subventions d'etat). L'objectif de recouvrement de l'intégralité des coûts est néanmoins bien présent dans les esprits, et de toutes les façons les charges d'exploitation vont automatiquement augmenter au fur et à mesure de la modernisation des infrastructures. Néanm oins, le rôle décisif de l'etat dans l'attribution des subventions lui conserve un certain pouvoir, notamment celui d'organiser et "d'optimiser" les regroupements de communes. Le modèle de régulation qui a été choisi par le Portugal est celui d'un observatoire, en d'autres termes un "sunshine regulator" qui ne possède en propre aucun moyen coercitif et n'intervient que très peu dans le mécanisme de fixation des prix 34. Le régulateur portugais se met en place de manière très prudente, puisque son premier directeur n'a été nommé qu'en Potentiellement la situation actuelle du Portugal en matière de régulation ne devrait pas être très différente de celle de la France dans les années à venir avec le "Haut Conseil des Services Publics de l'eau" (voir ci-dessous). Une nouvelle loi est en préparation en France (2002) Revendication majeure des écologistes qui participent au gouvernement depuis 1997, la nouvelle loi sur l'eau est en préparation depuis plusieurs années. Elle n a été votée en pr emière lecture par l'assemblée Nationale qu en janvier 2002, ce qui signifie concrètement qu'elle ne sera pas promulguée avant la fin de l'année Cette loi a fait l'objet d'intenses controverses 35, car elle cristallisait nombre d'enjeux, y compris sur le plan agricole (prélèvements sur les exploitations polluantes, ce qui constitue la première véritable application du principe pollueurpayeur aux agriculteurs). Les organisations écologistes militantes, les défenseurs du service public (ATTAC) et la 34 A population égale, les moyens de l'irar sont la moitié de ceux de l'ofwat amendements déposés lors de la première lecture à l'assemblée Nationale. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

139 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 139 CACE (Coordin ation des Associations de Consommateurs d'eau) lui reprochent sa timidité et les concessions faites au lobby des grandes entreprises délégata ires. En ce qui concerne les services d'eau, outre des mesures de transparence concernant les factures (limitation de la part fixe) et l'instauration de garde-fous pour pallier au caractère léonin des contrats de délégation (durée maximale ramenée à 12 ans), une des mesures phare est la création d'un Haut Conseil des Services Publics de l'eau, qui fonctionnera plutôt comme un "sunshine regulator" et conseillera les collectivités sur le prix de l'eau. Les phénomènes d'agrégation De quoi parle-t-on? L'agrégation 36 peu être motivée par des raisons différentes : Du point de vue des entreprises délégataires, l'intégration a pour principales motivations les effets d'échelle (gains de productivité importants qui permettent de satisfaire les actionnaires), le professionnalisme des agents et la capacité de mettre en œuvre d'ambitieux projets de recherche-développement ; mais aussi d accéder à des financements importants pour de nouvelles infrastructures, ce qui est toujours difficile pour une collectivité isolée, qui ne peut pas toujours anticiper ces investissements ; Du point de vue des autorités délégantes des services des eaux et d'assainissement (maîtrise d ouvrage publique), la principale motivation est de se regrouper pour mieux affronter les enjeux en termes d'investissement et de sécur ité (continuité du service, vulnérabilité en cas de pollution) ; l'autre motivation est d'atteindre une taille suffisante pour disposer en interne des compétences techniques et juridiques nécessaires à un bon contrôle des dél égataires (c'est vrai aussi pour les régies, qui font l'objet d'un contrôle de la part des communes) ; L'agrégation peut également être justifiée pour augmenter la force de pression 37 face à l Etat qui garde un rôle encore important en matière d'orientation, comme en témoignent les débats autour de la nouvelle loi sur l'eau ; du côté des entreprises délégataires le lobbying se fait via le SPDE ou le groupe "eau" du MEDEF, très influent 38 ; côté collectivités deux acteurs interviennent : l'amf (Association des Maires de France) et la FNCCR (Fédération Nationale des Collectivités Concédantes et Régies). L'influence de la taille des communes sur le mode de gestion L'enquête menée par l'ifen en 1998 permet d'analyser le degré d'intégration des collectiv ités dans l'organisation de leurs services d'eau et d'assainissement. On constate que l'intercommunalité est très fréquente dans le domaine de l'eau (voir ci-dessous), notamment pour les plus petites communes (rurales). Le recours à l'intercommunalité est moins marqué pour l'assainissement (voir ci-dessous), même si la tendance est à la hausse pour affronter les investissements nécessaires. 36 On utilise le terme d agrégation en référence à l initiative globale et au découpage thématique adopté pour la préparation de la conférence d Addis Abeba (juin 2002) 37 Pour une illustration de ce lobbying politique, cf. la polémique autour du nouveau cahier des cha rges, et l'article du Monde d'avril 2001 cité en bibliographie. 38 Cette influence s'expliquant par le fait que les grands distributeurs d'eau sont également les plus grands groupes industriels français. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

140 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 140 Remarque : dans ce graphique le type "mixte" désigne les cas où par exemple la collecte des eaux usées est communale, mais leur traitement se fait en intercommunal. En ce qui concerne les petites communes, on rappelle que l'assainissement collectif n'est obligatoire qu'au dessus de 500 équivalent-habitant. La même enquête permet également d'analyser les choix en matière de mode de gestion. On constate que pour les services d'eau la régie est très fréquente(plus de la moitié) pour les très petites communes ; l'affermage devenant progressivement majoritaire au-dessus de habitants (environ). Pour l'assainissement les tendances sont les mêmes, mais les proportions sont différentes : la régie est majoritaire dans toutes les communes de moins de habitants. Si l'on croise les données la conclusion est que pour les petites communes rurales (moins de habitants) la régie mono-communale reste la règle. Remarque : l'assainissement non-collectif (fosses septiques entre autres) est en train de rattraper son retard. Les communes ont maintenant l'obligation de créer des services d'assainissement non-collectif (dont les rôles sont : contrôle et conseil, autorisation lors de l'obtention du permis de construire, et compétence optionnelle sur l'entretien). Mais la situation est assez floue puisque officiellement une fosse septique fait partie du domaine privé, Prix de l eau Eau potable Eau assainie donc le service 'public d'assainissement ne peut que proposer le service de curage, en concurrence avec des entreprises de curage appartenant au secteur privé. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

141 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 141 L'influence de la taille des communes sur le prix des services La même enquête apporte un éclairage sur le prix des services en fonction de la taille de la commune. (Voir le graphique ci-dessous). On constate que le prix total eau + assainissement varie assez fortement pour les petites communes, ce qui ne signifie pas forcément que la qualité du service soit moindre que dans les plus grandes villes : ce graphique rend simplement compte du retard qu'ont pris les plus petites communes dans la mise en conformité de leurs installations en matière d'assainissement, ou du choix que font certaines communes rurales d'un assainissement non-collectif, où les charges sont prises en charge directement par l'usager 39. Le prix de l'eau, quant à lui, est remarquablement constant et ne varie pratiquement pas selon la taille de la collectivité. En ce qui concerne les rapports entre l'intercommunalité et le prix de l'eau, on remarquera que les transferts de compétences des communes vers un EPCI se font souvent à l'occasion d'investissements lourds. En d'autres termes, l'intercommunalité aurait tendance à augmenter le prix, mais pour un service qui s'améliore. Une offre déjà fortement agrégée pas forcément au bénéfice de l'usager final Le secteur privé français, impliqué depuis plus d'un siècle (la CGE et la Lyonnaise des Eaux ont toutes les deux été créées dans la deuxième moitié du XIXème siècle) dans la gestion des services d'eau et d'assainissement, connaît déjà un niveau d'agrégation absolument remarquable, et unique dans le monde (il s agit de l'intégration du capital, puisque l'intégration physique des infrastructures n'a pas vraiment de sens au contraire du secteur de l'électricité par exemple). Trois grands groupes se partagent en effet le marché français, par ordre d'importance Vivendi (ex Compagnie Générale des Eaux), Ondéo Services (ex Lyonnaise des Eaux, maintenant pôle "eau" du groupe Suez) et enfin, assez loin derrière, la Saur 40 (groupe Bouygues). Notons d'ailleurs que ces grands groupes proposent des prestations qui dépassent de très loin la seule gestion des services d'eau et d'assainissement : tous ces groupes possèdent de très nombreuses filiales d'ingénierie (Degrémont, Safège, Nalco, Seureca ) aussi bien que de travaux publics (valable tout particulièrement pour Bouygues). Cette situation unique a permis de développer un secteur industriel de l'eau très compétent sur le plan du savoirfaire technique et commercial. Ce savoir -faire s'exporte très bien, puisque trois des quatre plus grandes compagnies d'eau dans le monde sont d'origine française, que l'on raisonne en nombre de clients ou en chiffre d'affaires ; les deux majors que sont Ondéo et Vivendi représentent à elles seules plus de 220 millions de clients dans le monde 41. Ces entreprises se sont d'ailleurs très fortement diversifiées dans d'autres secteurs, notamment la téléphonie portable et la communication. Comme cela a souvent été souligné (voir le rapport de la Cour des Comptes, 1997 et plus récemment le rapport parlementaire pr ésenté en 2001), cette intégration s'est rarement faite au bénéfice des collectivités ou des usagers finaux. Les critiques portent aussi bien sur le manque de concurrence du secteur, le suivi difficile des performances, le manque de transparence financières des entreprises délégataires, la durée excessive des contrats (dont les clauses rendent souvent tout changement de conditions impossibles), l'asymétrie de l'information et des compétences entre les collectivités et les grands groupes, et enfin les nombreux manquements au principe "l'eau paie l'eau" (mais dans ce cas la faute profite aussi bien aux entreprises délégataires qu'aux collectivités ). 39 Si l'on considère que la construction d'une fosse septique aux normes coûte entre et 8000, et que les vidanges peuvent représenter entre 80 et 100 / an, on arrive à une "facture" moyenne pour l'usager proche de ce qu'il payerait en cas d'assainissement collectif. 40 Il est intéressant de noter que les trois majors françaises ne sont pas sur les mêmes segments de marché : Vivendi se concentre sur les grandes villes (4 800 contrats pour 51% de la population, le plus gros contrat ét ant celui avec le SEDIF 4 millions de personnes) alors que la Saur se concentre sur les communes rurales ou les petites villes (7 000 contrats pour seulement 13% de la population). 41 Source d'information : the Water Page, Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

142 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 142 L'intercommunalité, principal moteur actuel de l'agrégation Le succès de l'intercommunalité est indéniable en France, comme le soulignait un rapport récent (début 2002) de la DATAR 42. Si l'on prend l'exemple des communautés d'agglomérations, l'objectif du Ministère de l'intérieur était de 50 communautés en 2004 (sur 140 potentielles) ; or fin 2001, le cap des 120 a déjà été dépassé. Le transfert des compétences "eau et assainissement" n'est obligatoire que dans le cas des communautés urbaines (plus de habitants, ce qui est rare en France, et ne concerne que les très grandes villes : Marseille, Lille, Lyon, Bordeaux ). Il est évident que cette agrégation progressive des "autorités organisatrices des services" va avoir un impact sur les conditions de négociation / renégociation des contrats de délégation avec les entreprises délégataires. Remarquons que l'on peut distinguer deux grandes motivations pour l'intercommunalité : des motivations "techniques" (gérer des installations complexes, interconnecter les réseaux de distribution ou d'évacuation des eaux usées ) dans ce cas le Syndicat est la forme la plus adaptée 43 ; ou des motivations "projet" : créer une entité dotée d'une fiscalité propre pour financer de très lourds investissements, comme c'est le cas actuellement pour l'assainiss ement (on a vu que beaucoup de communes n'étaient pas encore aux normes). Le facteur "investissement" doit d'ailleurs être relativisé. Au début des années 1990, les collectivités françaises étaient en effet très endettées, mais aujourd'hui la situation est considérablement assainie et les collectivités sont redevenues un interlocuteur crédible auprès des banques. L'appui conseil aux autorités délégantes et la question du «professional support» Les communes ou EPCI ne disposent généralement pas de compétences en propre La forte intégration de l'offre de services décrite ci-dessus a eu pour conséquence de réduire à leur plus simple expression les compétences que les communes / EPCI sont capables de mobiliser en interne (d'autant plus que, comme nous l'avons vu, les entreprises délégataires proposent une très large gamme de service en matière d'ingénierie technique). Cela pose un problème majeur de capacité des collectivités à contrôler les entreprises délégataires et à en mesurer les performances, malgré toutes les avancées en ce domaine (voir Page 5). L'appui technique encore assuré par les services techniques de l'etat est insuffisant et surtout mal défini Les services techniques de l'etat continuent à fournir un appui technique aux collectivités locales. Dans le domaine de l'eau il s'agit essentiellement des DDAF, des DDE et des DDASS (déjà citées P5). Ce système offre de multiples inconvénients : Confusion des rôles entre conseil aux collectivités et maîtrise d'œuvre (même si la mise en concurrence est obligatoire depuis le 1 er janvier 2002 pour les missions de maîtrise d'œuvre mais cela ne change pas grand chose, puisque le seuil est de ) ; Concurrence déloyale des services techniques de l'etat, qui empêchent par leur quasi monopole l'émergence d'une offre concurrente, privée et indépendante (même si les services techniques de l'etat sont indépendants des collectivités et des délégataires) 44 ; Enfin, les services techniques de l'etat, très pointus sur les aspects techniques, ne disposent généralement pas de compétences sur les aspects juridiques et financiers, pourtant cruciaux lorsqu'on parle de délégation de services publics. Remarque : Si l'on cons idère le secteur du "conseil en environnement" au sens large, la part de marché des organismes publics et parapublics 45 atteint près de 60% (source : BIPE, Bureau d'informations et de Prévisions 42 Délégation à l'aménagement du Territoire et à l'action Régionale. 43 Même si dans quelques syndicats les communes se contentent de se "revendre" de l'eau sans forcément gérer en commun des installations (pas d'interconnexion de réseaux, syndicats dont les communes ne sont pas limitrophes) 44 Il y a quelques années, sur les réseaux en milieu rural, il était contractuel que 1% du montant du chiffre d'affaires de l'eau soit reversé aux DDA au titre du "contrôle qualité" des contrats de délégation. 45 Y compris les sociétés privées dans lesquelles la participation de l'etat est majoritaire. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

143 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 143 Economiques) ; si l'on écarte les filiales "conseil" des grands groupes industriels, l'offre privée réellement indépendante n'est plus que de 13%. Une offre d'appui-conseil indépendante émerge lentement, mais dans un cadre complexe Une offre pour l instant limitée Peu de collectivités délégantes font aujourd'hui appel à des bureaux indépendants (et privés) pour l'audit et le contrôle de leurs services délégués d'eau et d'assainissement. Dans ce marché en pleine croissance, on retrouve les principaux cabinets d'audit comptable, mais aussi un opérateur plus original, puisqu'il est issu de la démarche des élus eux -mêmes L'exemple de service public 2000 Service Public 2000 a été créé par l Association des Maires de France (AMF) et la Fédération Nationale des Collectivités Concédantes et Régies (FNCCR) pour répondre à la demande d'expertise des collectivités dans la délégation de leurs services publics. Le "modèle" a été celui de l'aec (Association pour l'expertise des Concessions), créée en 1993 par les deux mêmes entités, mais pour le secteur de l'énergie. Ce service est un bureau d études associatif (à but non lucratif). Son indépendance est garantie par la nature des deux membres de l association et par l exclusion de son champ d intervention de toute activité rémunérée par les entreprises délégataires de service public, leurs holdings et leurs filiales. Pour la même raison, Service P ublic 2000 ne réalise pas de mission de maîtrise d œuvre, afin d éviter tout conflit d intérêt lié à une rémunération dépendante du montant des travaux à réaliser. Il mobilise une équipe d experts pluridisciplinaire qui lui permet d aborder les problématiques de la gestion des services publics locaux dans toutes leurs dimensions : technique, économique, juridique et financière. Service Public 2000 intervient dans tous les services publics, à commencer par les "services publics industriels et commerciaux" : eau, assainissement, collecte et traitement des déchets, chauffage, transport, restaur ation scolaire, loisirs Un accent particulier est mis sur les services "en réseau" dont l usager est en général "captif". Ses missions d expertise permettent aux collectiv ités de : 1) Définir leurs projets en matière de services publics locaux ; 2) Maîtriser leurs services publics et assurer la transparence technique et financière ; 3) Dialoguer d égal à égal avec les entreprises exploitantes ou délégataires. Les limites du cadre réglementaire actuel Le développement d'une expertise et d'un secteur d'appui-conseil véritablement indépendant est cependant bridé par plusieurs facteurs : Malgré toutes les avancées, la transparence reste limitée sur les aspects compt ables, et les entreprises délégataires se prétendent toujours "incapables" d'identifier analytiquement tel ou tel contrat dans leurs comptes ; les structures d'appui- conseil auprès des collectivités n'ont pas encore vraiment de pouvoir d'investigation et les entreprises ne présentent pas toujours des comptes faciles à analyser. Il n'existe aucune obligation pour les collectivités à recourir à des expertises indépendantes, qu'elles doivent de toutes les façons financer sur les ressources propres, ce qui limite forcément le recours à ce type de services ; il n'y a pas non plus de charte de déontologie des opérateurs d'appui-conseil ; alors que la demande est forte 46 et que par conséquent cela attire beaucoup de monde ; Les entreprises délégataires on favorisé la création de "bureaux d'expertise", y compris sur les aspects juridiques et financiers, dont l'indépendance est for cément limitée. ANNEXES Article 31 de la loi de 1992 Titre II : De l'intervention des collectivités territoriales Chapitre I : De l'intervention des collectivités territoriales dans la gestion des eaux Article 31 de la loi du 3 janvier Pour fixer des ordres de grandeur, Service Public 2000 est considéré comme le leader de l'appui-conseil aux communes pour la renégociation de leurs contrats, avec 50 contrats expertisés par an ; le nombre de contrats renouvelés est estimé à environ un millier par an. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

144 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 144 Codifié à l'article L du code de l'environnement. Sous réserve du respect des dispositions des articles 5 et 25 du code du domaine public fluvial et de la navigation intérieure, les collectivités territoriales et leurs groupements ainsi que les syndicats mixtes créés en application de l'article L du code des communes et la communauté locale de l'eau sont habilités à utiliser (Loi n du 2 février 1995 article 24) " les articles L à L du code rural "pour entreprendre l'étude, l'exécution et l'exploitation de tous travaux, ouvrages ou installations présentant un caractère d'intérêt général ou d'urgence, dans le cadre du schéma d'aménagement et de gestion des eaux s'il existe et visant : - L aménagement d'un bassin ou d'une fraction de bassin hydrographique; - L entretien et l'aménagement d'un cours d'eau non domanial, y compris les accès à ce cours d'eau; - L approvisionnement en eau; - La maîtrise des eaux pluviales et de ruissellement; - La défense contre les inondations et contre la mer; - La lutte contre la pollution; - La protection et la conservation des eaux superficielles et souterraines; - La protection et la restauration des sites, des écosystèmes aquatiques et des zones humides ainsi que des formations boisées riveraines; - Les aménagements hydrauliques concourant à la sécurité civile. L'étude, l'exécution et l'exploitation desdits travaux peuvent être concédées notamment à des sociétés d'économie mixte. Les concessionnaires sont fondés à percevoir le prix des participations prévues à " l'article L du code rural". (Loi n du 2 février 1995 article 24). Il est procédé à une seule enquête publique au titre de" l'article du code rural", de l'article 10 de la pr ésente loi et, s'il y a lieu, de la déclaration d'utilité publique. (Loi n du 2 février 1995 article 24). Un décret en Conseil d'etat fixe les conditions d'application du présent article." Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

145 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page La gestion des services publics locaux en France : une responsabilité locale et un fort recours au secteur privé Addis Ababa, 12 juin Plan Présentation du contexte Français Des opérateurs fortement concentrés Vers plus d intercommunalité Une régulation suffisante? L assistance aux collectivités locales Addis Ababa, 12 juin Services publics locaux : Une responsabilité communale Des compétences obligatoires ou facultatives Les Communes peuvent se regrouper pour l organisation des services (EPCI) Le principe d autonomie financière 241. Quelques chiffres 61 millions d habitants communes, 88% de moins de 2000 habitants services des eaux et services d assainissement collectif 26 millions d abonnés eau 4,2 milliards de m3 consommés 10 milliards d euros par an Addis Ababa, 12 juin Addis Ababa, 12 juin Un recours important au secteur privé 243. Des entreprises fortement concentrées Des entreprises centenaires Un très fort mouvement de concentration dans les années Addis Ababa, 12 juin Addis Ababa, 12 juin Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

146 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page La poussée de l intercommunalité Traditionnellement, intercommunalité «technique» : mise en commun d infrastructures, financement groupé, Depuis 20 ans, montée en puissance d une logique «projet de développement des territoires» : intégration, fiscalité commune Des incitations fiscales et financières fortes de la part de l Etat (DGF) Addis Ababa, 12 juin La régulation : une affaire locale Jusqu aux années 90 : très grande liberté contractuelle, fondée sur un principe de libre choix du délégataire par le Maire Capacité d endettement des communes réduite au moment d engager de gros investissements Concurrence faible et marges élevées Importantes augmentations des prix et montée de la pression des abonnés/électeurs Addis Ababa, 12 juin Plus encadrée à partir des années 90 La mise en concurrence obligatoire Une limitation de la durée des contrats (20 ans maximum) L interdiction des tacites reconductions La possibilité de contrôle par les CRC L obligation de transparence (rapports, audit ) Addis Ababa, 12 juin Au delà du contrôle, l assistance aux collectivités L importance du contrôle : légalité des actes, qualité de l eau Prépondérance historique (et culturelle) des services déconcentrés de l État (agriculture et équipement) Une assistance très technique et majoritairement liée à la conception d infrastructures et au contrôle des travaux Addis Ababa, 12 juin Une réponse des collectivités Tournant des années 90 : complexité accrue (normes, procédures ) et exigence de transparence Besoin d une réelle expertise indépendante (des délégataires, des constructeurs et des maîtres d œuvre) Création de Service Public 2000 en 1996 par l AMF et la FNCCR Addis Ababa, 12 juin Service Public 2000 Un bureau d études associatif Une garantie d indépendance Une équipe d experts pluridisciplinaire : Technique Économique Juridique Financier Addis Ababa, 12 juin Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

147 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Pour permettre aux Collectivités de : Définir leurs projets en matière de services publics locaux Maîtriser leurs services publics et assurer la transparence technique et financière Dialoguer d égal à égal avec les entreprises pour mieux négocier 251. Un service à la demande SP2000 premier organisme privé d assistance aux collectivités sur les Services publics locaux En pratique, principalement des collectivités de plus de 3 à habitants Coût de l assistance hors de portée des petites communes un argument de plus en faveur de l intercommunalité Addis Ababa, 12 juin Addis Ababa, 12 juin Quelques éléments de réflexion sur le «modèle français» Le recul de près de 200 ans d histoire Une régulation par la mise en concurrence initiale, cohérent avec une responsabilité locale, mais qui montre des limites Encore peu de régulation sur le prix et sur la performance contrairement à beaucoup d autres pays d Europe Addis Ababa, 12 juin Merci de votre attention... Addis Ababa, 12 juin PRIVATE SECTOR PARTICIPATION IN MANAGEMENT OF WATER SUPPLY PIPED SYSTEMS, CASE STUDY: BEKWAI, GHANA By Antoine Malafosse Introduction: The Project The Small Towns Water Supply Project (STWSP) is funded by the European Union at a cost of 15 million Euros. It is designed to provide piped water systems for 30 communities and also build local level capacity in elected representatives from the participating communities for the management of the delivered systems. As such, the Project places strong emphasis on: Design and construction of an efficient water delivery system in each community Capacity building in stakeholders at the following levels: o Water and Sanitation Development Board (WSDBs) and their operating staff in each community trained for the sustainability of the systems, especially in the following areas: accounting, technical monitoring, management techniques and hygiene education. o District Assembly level teams for the monitoring of the activities of the WSDBs and their staff o Community Water and Sanitation Agency (CWSA) staff at the regional levels in technical and managerial skills. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

148 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 148 o Private sector firms in the operation and maintenance of the designed systems Institutional Environment The institutional environment may be summarized as follows: The District Assembly (D.A.) are the owners and responsible of all publics services. They may of course delegate any operational task to private bodies. As far as water supply and sanitation is concerned for rural and semi-urban areas, a governmental agency, «Community Water and Sanitation Agency» has been set up with the following objectives: o To facilitate the provision of water supply and sanitation services to Communities that will contribute towards the capital cost and bear the full cost of operation and maintenance of their facilities; o To ensure sustainability of these facilities through private sector provision of goods and services and public sector promotion and support; o To maximize health benefits by integrating water, sanitation and hygiene education interventions; o To ensure effective O&M of the systems through monitoring. For each town, town councils», although theoretically existing, are not yet fully operational, that is to say enough equipped to actually be able to manage services. That is one of the reasons why the national policy is encouraging the setting up of WSDBs, which shall represent the population for the design of the network and are also responsible for the operation and maintenance of it. The WSDB is entitle to delegate part or all of the operation and maintenance tasks to a private operator, under the technical support and monitoring of the District Assembly and the CWSA regional office. The Operation and Maintenance arrangements: a demand driven approach Beyond the design and construction of these infrastructures, the essential matter is to propose to the various concerned communities a sustainable organization for the operation and maintenance. Two options were presented, according to the size of the town and the complexity of the system: Option 1: The WSDB employs its own staff for the daily operation and small maintenance and requests the presence of a specialized private company for heavy maintenance of the pumping systems, or in case of breakdown. To formalize this participation of the private operator, a maintenance contract has been written and proposed to the Communities. All other long-term expenses, like renewal of tanks and boreholes, or extension of the system are taken in charge by the WSDB or the D.A. They are expected to save part of the revenues to be able to fulfil these tasks. Option 2: The WSDB, together with the District Assembly, sign a management Contract with a private operator, which take in charge all aspects: production and distribution of water, collection of revenue, heavy maintenance of the pumping systems. The extension of the system, and renewal of big assets (boreholes and tanks) is the responsibility of the District Assembly. The following paragraph describe the full process for one of the town that finally choose the management contract option. Case Study: Bekwai Bekwai is located in the Ashanti region, 30 km south from the regional capital, Kumasi, and is a big administrative centre. Population consist mostly of traders, farmers, and civil servants. Being located in the Ashanti traditional area, the traditional authorities have still a big influence on any decision taken by the Community. The Bekwai Water Supply System is one of the biggest of this Project. It includes, for a design population of 35,000 inhabitants: Five mechanized boreholes, able to produce 1,300 m3/day Two tanks, totalising a capacity of 590 m3 25 km of PVC pipes for distribution 40 standpipes (2 taps each) 500 private connections Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

149 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 149 The process to reach the signature of a management contract between a private operator and the WSDB / District Assembly lasted about nine months, and may be described as follows: Selection of an operator at national level Community preparation towards the negotiation Negotiation process Selection of an operator at national level The Community Water and Sanitation Agency first launched a call of interest at national level for the operation and maintenance of small water supply systems. More than 70 local Ghanaian companies answered this call. It must emphasized at that stage that most of them did not have much experience on the operation of water supply systems, rather in construction. However, it is worth to be noted that retired experienced people from GWCL, the national public water utility, constituted some of them. A list was then constituted by CWSA, on the basis of experience, geographical criteria and means & resources of the companies. Very few were rejected at that stage, as the list was meant to be used as a database from which companies could be short-listed and/or selected for a specific assignment. When the option of getting private sector participation for the Operation and Maintenance of Bekwai was agreed, short-listing of a few companies were done, and a call for proposals was sent to them. An evaluation was done by the Consultant on the received proposals and a recommendation made to the WSDB and District Assembly. The proposed methodology was to start discussion with the recommended operator, and, should this discussion not be successful, to invite the second operator. Community preparation towards the negotiation process Even before, and in parallel with the selection of a possible operator, the Consultant presented to the Community the possible options for the O&M of the system. This was done by means of general public meetings, training workshops for WSDB members and District officials, and general sensitisation about the private sector participation for a piped system like the Bekwai one. Once the choice has been made by District Officials and WSDB members of the need to call a private operator and all along during the negotiation process, general public information on the on-going process was organised, jointly by the Consultant and the local authorities. To review the draft contract presented by the Consultant, the WSDB appointed a technical committee with legal, financial and technical qualifications. The members of this technical committee were chosen by the WSDB not only for their competences, but also to represent more widely than the WSDB itself the Community. Finally the draft Contract was widely distributed so as to involve as much as possible the opinions leaders and various members of the Community. The Negotiation Process The technical committee met several times to discuss and agree on various issues coming out from the draft contract submitted by the Consultant. These meetings gave the opportunity to inform members about water tariff, duration of the Contract, exclusivity of water selling within the town In parallel, the draft Contract was also discussed between the Consultant and the private operator, to include as well its comments and suggestions. After an official introduction of the private operator to the Community by the WSDB and District officials, several meetings were organised by the Consultant with CWSA, D.A., WSDB and the technic al committee to discuss and review with the private operator the draft Contract proposed by the Consultant. These formal negotiation meetings were done over a six month period to allow the submission of a new draft of the Contract in between each meeting and its internal review by each stakeholder before the meeting. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

150 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 150 This negotiation process was successfully concluded by the signature of the Contract, and the start of the operation by the private operator. Main Contract Features This management Contract includes the following main features: Duration of five years, renewable by written agreement. Water tariff: o 75% of water sales income goes to the operator o 10% paid to WSDB for a small scale sanitation project fund o 10% paid to D.A. for renewal of assets o 5% paid to D.A. for the future extension of the system Exclusive rights for the Operator to ensure the water supply service in the area : as Bekwai is near to the regional capital Kumasi, this was done mainly in order to ensure that no water could be sold at a lower tariff by water tankers A strong emphasis was put on the need to maintain good public relations both for the WSDB and the Operator : as a good patronising of the water points are essential, it was deemed necessary both for the WSDB and the oper ator to put means and resources for these public relations : appointment of a public relation officer, for instance. Detailed definition of personnel and logistics put in place by the Operator, which shall follow what was put into his technical proposal Quarterly and annual reporting to all stakeholders (WSDB, D.A., CWSA) : in order to allow a good monitoring of the system. Conclusion and recommendations for future process The above-described methodology may be described as a learning process, as Bekwai is the first town of this size in Ghana to operate and maintain a water supply system with the participation of a private operator. From this process, the following experience and recommendation may be drawn for future cases: The selection process of the private operator shall be fully transparent, both at national and local levels. In particular, the District Assembly and the WSDB shall be incorporated in the selection procedure right from the beginning. To achieve this, more time would have to be allowed. The general public from the concerned town must be kept fully informed of the procedure and enough means and resources must be given to allow for a complete and meaningful information As District Assemblies still lack capacity to conduct the process alone, a strong commitment from CWSA regional office and headoffice to assist and monitor this negotiation process, as well as the first months of the operation of the system is necessary. This may have to be done with the support of a Consulting firm, highly qualified for Community mobilisation and technical appraisals. Private Sector Participation in Management of Water Supply Piped Systems, Case Study: Bekwai, Ghana

151 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PRIVATE SECTOR PARTICIPATION IN MANAGEMENT OF WATER SUPPLY PIPED SYSTEMS CASE STUDY : BEKWAI GHANA WEST AFRICA June 2002 Presented by : General Overview Project in three regions of GHANA West Africa, southern part of the country European Union funded, 15 Millions Euros, over a four years period Construction of water supply piped systems in 30 communities : supply essentially by standpipes (80-90% of the population) and by private connections (10 to 20% of the population) Strong emphasis on capacity building of all stakeholders: Community members District officials Private sector CWSA /Small Towns Water Supply Project Institutional Framework Governmental agency Support and training Community Water & Sanitation Agency (C.W.S.A.) Accreditation for O&M of piped systems CWSA /Small Towns Water Supply Project District Assembly (D.A.) Monitoring Operating License Reporting Operator Local Government (Owner of the facilities) Community representative body Water & Sanitation Development Board (W.S.D.B.) Delegation of of all or or part of O&M tasks Private Company 257. BEKWAI, ASHANTI REGION Design population 35,000 inh. Big administrative centre Civil servants, traders, farmers Important traditional Ashanti town : essential role of traditional rulers The piped system: 5 mechanised boreholes, 2 tanks 25 km of PVC pipes 40 standpipes (2 taps) 500 private connections 258. The Negotiation process for the signature of a O&M Contract with a private operator: Three important steps 1. Selection of an operator at national level 2. Community preparation towards the negotiation 3. Negotiation process Process conducted and facilitated by CWSA regional and national office, with support of the Consultant Selection of an operator at national level Call of interest at national level for the operation and maintenance of water supply systems Establishment of a list of operators at national level Short listing of a few companies best suitable for Bekwai system Call for proposals for these companies Recommendation of one of them to the D.A. and W.S.DB. CWSA /Small Towns Water Supply Project CWSA /Small Towns Water Supply Project CWSA /Small Towns Water Supply Project Etude de Case de la Cote d Ivoire

152 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Community Preparation towards the negotiation process Presentation of possible options for O&M of the system: general public meetings, training workshops for WSDB members, General public information on the choice made by D.A. and W.S.D.B.: meetings, radio announcements, Appointment of a technical committee by the W.S.D.B., in charge of reviewing legal,financial and technical aspects of the draft contract Wide distribution of draft contracts copies Negotiation process Official introduction of the private operator to the Community by D.A. and W.S.D.B. Organisation of several internal meetings with the D.A., WSDB, Technical committee to discuss and review the draft Contract proposed by the Consultant Informal discussion with the private company over main Contract features Formal negotiation meetings : three over a six-months period 262. Main Contract Features Duration of five years, renewable by written agreement Water tariff : 75% of water sales income goes to the operator 10% paid to WSDB for a small scale sanitation project fund 10% paid to D.A. for renewal of assets 5% paid to D.A. for the future extension of the system Exclusive rights for the Operator to ensure the water supply service in the area Strong emphasis on the need to maintain good public relations both for the WSDB and the Operator Detailed definition of personnel and logistics put in place by the Operator Quarterly and annual reporting to all stakeholders (WSDB, D.A., CWSA) CWSA /Small Towns Water Supply Project CWSA /Small Towns Water Supply Project CWSA /Small Towns Water Supply Project 263. Conclusion - Some Recommendations for future process: Strong emphasis must be put on information of the general public 264. Full transparency of the selection process of the private operator, both at national and local levels Commitment of the regional and national administration to closely monitor both the process and the first months/years of the operation of the system, with or without support of consultant CWSA /Small Towns Water Supply Project CWSA /Small Towns Water Supply Project PARTICIPATION DU SECTEUR PRIVE DANS L EXPLOITATION DE RESEAUX D ALIMENTATION EN EAU POTABLE; BEKWAI, GHANA Par Antoine Malafosse Introduction : Le Projet Etude de Case de la Cote d Ivoire

153 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 153 Le Small Towns Water Supply Project (STWSP) est finance par l Union Européenne pour un coût total de15 million d Euros. Il a été conçu pour alimenter en eau potable 30 Centres, tout en améliorant la capacité au niveau local des représentants élus des Communautés pour la gestion de ces systèmes d AEP. Ainsi, le Projet se fixe pour objectifs: Les études et la construction de réseaux AEP adaptés à chaque ville, La formation des différents intervenants à tous les niveaux : Les «Water and Sanitation Development Board (WSDBs)» (Associations d Usagers) et leur personnel exploitant dans chaque ville. o Les Autorités Locales («District Assembly») pour le suivi et la supervision des WSDBs o La «Community Water and Sanitation Agency (CWSA)» agence gouvernementale responsable au niveau national pour l eau et l assainissement o Des opérateurs privés en charge de l exploitation et la maintenance des réseaux construits. Environnement Institutionnel L environnement institutionnel peut être résumé comme suit : Les Districts sont les propriétaires et responsables de tous les services publics sur leur territoire. Ils peuvent bien sûr déléguer toute tâche d exploitation à des opérateur s privés. Pour l eau et l assainissement en milieu rural et semi-urbain, une agence gouvernementale, «Community Water and Sanitation Agency» poursuit les objectifs suivants: o Faciliter la provision d eau potable et l assainissement à des Communautés qui acceptent de contribuer à l investissement et la prise en charge à 100% des coûts d exploitation et de maintenance; o Assurer la pérennité des équipements en s appuyant sur la participation du secteur privé pour fournir les services nécessaires ; o Maximiser les bénéfices obtenus sur la santé publique en intégrant les interventions dans les domaines de l eau potable, l assainissement et l éducation sanitaire; o S assurer d une exploitation efficiente des systèmes AEP par un suivi rapproché. Dans chaque ville, les municipalités, bien que théoriquement existantes, ne sont pas encore complètement opérationnelles et en mesure de gérer des services publics. C est la principale raison pour laquelle la politique nationale encourage la formation de WSDBs (Association d Usagers), qui doivent à la fois représenter la population pour le dimensionnement des équipements et être responsables de l exploitation et la maintenance des réseaux.. Le WSDB peut déléguer tout ou partie des tâches d exploitation et de maintenance à des opérateurs privés, sous la supervision et le suivi des Districts et des équipes régionales de CWSA. L organisation de l exploitation et la Maintenance : une approche basée sur la demande Au-delà du dimensionnement et de la construction des infrastructures, l enjeu essentiel est bien de proposer aux communautés une organisation pérenne pour l exploitation et la maintenance. Deux options ont été présentés, suivant la taille des villes (variant de 5000 à habitants) et la complexité de systèmes : Option 1: Le WSDB emploie son propre personnel pour les tâches quotidiennes et la petite maintenance, et s assure de la participation d une entreprise privée pour la maintenance lourde sur le systèmes de pompages. Afin de formaliser la participation d un opérateur privé, le Consultant a écrit et proposé un Contrat de Maintenance aux WSDBs. Toutes les autres dépenses «long-terme», comme le renouvellement de forages ou de châteaux d eau, et l expansion du système sont à la charge des Districts. Ceux-ci doivent assurer l épargne nécessaire, prise sur les revenues de la vente d eau. Option 2: Le WSDB, en étroite collaboration avec le District, signe un Contrat d affermage avec un opérateur privé, qui prend en charge tous les aspects d exploitation : production, distribution, collecte des revenues et maintenance des systèmes de pompage. L expansion du système et le renouvellement des gros équipements (forages, châteaux d eau) restent de la responsabilité du District. Le paragraphe suivant décrit le processus pour une villes ayant choisi l option 2, Contrat d affermage. Etude de Cas: Bekwai Etude de Case de la Cote d Ivoire

154 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 154 Bekwai est située dans la région Ashanti, 30km au sud de Kumasi, Capitale régionale et deuxième ville du pays. Bekwai est un gros centre administratif. La population est principalement constitué de fonctionnaires, commerçants et agriculteurs ; étant située au cœur de la région Ashanti, les autorités traditionnelles jouent encore un rôle prépondérant dans toutes les décisions prises par la Communauté. Le réseau AEP construit pour Bekwai est un des plus importants du Projet. Il comprend pour une population de habitants : Cinq forages mécanisés, produisant au total 1300 m3/jour Deux réservoirs, totalisant une capacité de 590 m3. 25 km de tuyaux PVC pour la distribution 40 bor ne-fontaines 500 connections privées Le processus visant à signer un Contrat d affermage entre un opérateur privé et le WSDB/District a duré neuf mois et peut être décrit en trois étapes : Sélection d un opérateur au niveau national Préparation de la Communauté à la négociation Processus de négociation Sélection d un opérateur au niveau national La «Community Water and Sanitation Agency» a lancé tout d abord un appel national pour les opérateurs intéressés généralement à l exploitation de petits réseaux AEP. Plus de 70 entreprises ghanéennes ont répondu. A ce niveau, il est important de souligner que beaucoup d entre elles n avaient pas ou peu d expérience dans le domaine de l exploitation. Un fichier a ainsi été constitué par CWSA, en classant les entr eprises sur la base de critères géographiques, moyens et expériences. Très peu ont été éliminés à ce niveau. Lorsque Bekwai choisit l option Contrat d Affermage, une «short-list» fut constitué par CWSA à partir de ce fichier et un appel à propositions fut envoyé à ces entreprises. Une évaluation des propositions reçues fut effectuée par le Consultant, et une recommandation faite au District et au WSDB. La méthodologie proposée était de démarrer une négociation avec l entreprise recommandée, et, si cette négociation n aboutissait pas, d inviter une autre entreprise. Préparation de la Communauté au processus de négociation Avant et en parallèle au processus de sélection de l opérateur, le Consultant a présenté à la Communauté les deux options possibles. Cela s est effectué par le biais d Assemblées générales, de séminaires de formation des membres du WSDB et du District ainsi qu une sensibilisation générale sur la participation du secteur privé. Une fois que le choix fut fait par le WSDB et le District, et pendant toute la durée du processus de négociation, des sessions d information destinés au public ont été organisés conjointement par le Consultant et les Autorités locales. Afin d étudier en détail les différentes versions du Contrat proposé par le Cons ultant, le WSDB a nommé un «Comité Technique», composé de membres compétents dans les domaines juridiques, financiers et techniques. Ces membres ont été choisis non seulement pour leurs compétences, mais aussi pour représenter plus largement la population de Bekwai que le seul WSDB. Enfin, la 1 ère version du Contrat a été largement distribué afin d impliquer au maximum les différents leaders d opinion au sein de la population de Bekwai. Le Processus de Négociation Le «Comité Technique» s est réunit pl usieurs fois pour discuter et se mettre d accord sur les différents problèmes à régler : choix du tarif ; durée du Contrat, formule de révision des prix En parallèle, le Contrat a aussi été revu et discuté par l opérateur, afin de prendre en compte ses commentaires et suggestions. Etude de Case de la Cote d Ivoire

155 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 155 Après une introduction officielle de l opérateur par le WSDB et District à la population, plusieurs réunions de négociation formelles ont été organisées par le Consultant, afin de discuter et d améliorer les différentes versions successives du Contrat. Trois réunions ont ainsi été tenues sur une période de six mois, permettant ainsi aux différentes parties de relire et discuter chaque nouvelle version du Contrat avant la réunion de négociation. Ce processus de négociation a été heureusement conclu par la signature du Contrat et le démarrage de l exploitation du système par l opérateur privé. Principales Clauses du Contrat Les principales clauses de ce Contrat d Affermage sont les suivantes : Durée de cinq années, renouvelable par tacite reconduction Revenues sur la vente de l eau : o 75% des revenues vont à l opérateur o 10% sont reversés au WSDB pour créer un fonds Assainissement o 10% sont reversés au District pour le renouvellement des équipements o 5 % sont reversés au District pour l expansion du système Droit exclusif pour l opérateur de vendre l eau sur la zone concernée. Un fort engagement de toutes les parties à maintenir le public bien informé et à préserver de bonnes relations avec celui-ci. Une définition détaillée du personnel et des moyens mis en place par l Opérateur, déjà définis dans sa proposition initiale. Rapports annuels et trimestriels au WSDB, District ainsi qu à CWSA, afin de permettre un bon suivi des performances du système. Conclusion et recommandations La méthodologie décrite ci-dessus peut être qualifiée de pilote, Bekwai étant la première ville de cette taille au Ghana à opter pour un Contrat d Affermage. De ce processus, on peut d ores et déjà tirer les conclusions et recommandations suivantes : Le processus de sélection de l opérateur doit être complètement transparent, aussi bien au niveau national qu au niveau local. En particulier, le District et le WSDB doivent être associés à ce processus dès le début. Il faut donc prévoir plus de temps pour cela. La population de la ville concernée doit être également informé en détail du processus, et suffisamment de moyens doivent être alloués à cette tâche primordiale. Tant que les Districts n auront pas acquis une autonomie technique suffisante pour gérer le processus seuls, un fort engagement des agences régionales de CWSA est nécessaire pendant toute la durée du processus et également pendant les premiers mois/années de l exploitation. Cela peut être fait avec l appui d un bureau d études, spécialisé dans la rédaction de contrats, l information et la sensibilisation des populations, ainsi que dans l évaluation technique des opérateurs privés. WATER AND SANITATION SERVICES COUNTRY OVERVIEW Spain A Case Study By Stephen D. Myers Etude de Case de la Cote d Ivoire

156 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Spain - Water & Sanitation Services Country Overview The World Bank Water & Sanitation Services in Small Towns & Multi-Village Schemes Addis Ababa, June 11 14, 2002 Spain population 39 million not presently growing National constitution devolved many powers to municipalities 8070 municipal authorities each responsible for its own water and sanitation service Approx 7600 towns <10,000 population (20% of natl. popn.) Case Study Spain 20% population in cities with populations of 0.5M or more 99% population connected to water supply 95% population connected to sewers, but only 45% wastewater receives effective treatment Stephen D Myers (stephen_ psilink.co.uk) WB Consultant, Towns Water Supply and Sanitation Initiative 19 July Stephen Myers Associates Limited United Kingdom Spain - Water & Sanitation Services Public Sector Responsibilities Spain - Water & Sanitation Services Sector Development Drivers 45% population live in areas of water stress High water demands of seasonal tourism, manufacturing industries & irrigation (90% of total water used) Many users suffer low water pressure & seasonal intermittent supply Every municipality responsible for its own water service Required to respect stringent EU quality laws & timetable Poor municipal finances - low water service tariffs National government 10 Water Basin Authorities water resource planning 17 Regional governments regional bulk water & sanitation planning capital works for bulk water supplies within region occasional financing of municipal water services wastewater discharge permits 8070 Municipal Authorities supply of water & sanitation services to end-user own, finance, build, operate and maintain water & sanitation service infrastructure 19 July 2002 Stephen Myers Associates Limited United Kingdom 3 19 July Stephen Myers Associates Limited United Kingdom Spain - Water & Sanitation Services Ownership, Oversight & Operations Spain - Water & Sanitation Services Financing Heavy capital investment needed in water services to cope with water scarcity & stringent EU legislation - $40bn Investment also needed to meet water service obligations, quality demands and to improve service efficiency & reliability Substantial grant support from EU - 23% capital cost of wastewater treatment Ownership municipalities own water and wastewater service infrastructure temporary private ownership if contractor provides finance Oversight municipalities are responsible for oversight of the water servic e whether individually or jointly with other municipalities Operations municipalities have primary responsibility for water service free to choose any option for discharging their responsibilities fully financed, operated and maintained by public sector fully or partially contracted out to the private sector joint public/private responsibility - mixed stock companies 19 July 2002 Stephen Myers Associates Limited United Kingdom Etude de Case de la Cote d Ivoire 5 Water tax levied at national and regional levels - used to pay for bulk water supply projects Many demands on municipal revenue and borrowing Municipalities generally unable to allocate or directly borrow sufficient funds for water and wastewater infrastructure The need to raise finance for capital works is one of two principal drivers for involving private sector companies 19 July 2002 Stephen Myers Associates Limited United Kingdom 6

157 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Spain - Water & Sanitation Services Professional Support Spain - Water & Sanitation Services Regulation & Competition No institutions for training water sector personnel Some professional development by water sector associations Public sector salaries too low to attract well-qualified staff In practice - professional capabilities of public sector personnel are significantly supplemented by: Stephen Myers Associates Limited United Kingdom 7 Quality municipalities must respect EU quality laws & timetables regional government should monitor potable water & effluent quality in practice, minimum level of monitoring & control Levels of service municipalities set own levels of service based on national guidelines Need for professional support is second principal driver for private sector involvement in water services 19 July 2002 Financial each municipality sets own water service tariffs no external controls competitive tendering assists in minimising tariffs contracting-out specific water service activities, and/or more intensive private sector involvement finance, design, build & operate leasing and concessions joint stock companies equity participation by one or more municipalities and private contractor Customer recourse direct recourse to operator or municipality, local Consumer Association, the courts & if all else fails - through the ballot box! 19 July Spain - Water & Sanitation Services Private Sector Development - 2 Cyclical history of water service Pre-1930s strong involvement of private sector in water services 1930s to 1975 water services nationalised & management centralised 1978 new Constitution devolved responsibility to municipalities Since mid 1980s, strong growth of private sector involvement By 2001, 47% water supply and 54% wastewater service nationally has private sector involvement in operations Main private sector players Aguas de Barcelona - approximately 55% of market share Aguas de Valencia serves 2m people (Valencia city 400k) FCC a large construction and services contractor wastewater 25 towns (6.1m pop); water 45 towns (2.5m pop) Urbaser, Dragados and Iberner large private companies Canal de Isabel II (Madrid ex city) & Concorcio de Aguas de Gran Bilbao public-owned companies seeking contracts 19 July 2002 Stephen Myers Associates Limited United Kingdom Spain - Water & Sanitation Services Key Factors from Experience Positive factors freedom for each municipality to choose option best for them whether to combine - or not - with other municipalities operational form public or private choice of service levels and water service tariffs private sector involvement bringing rapid sector investment and improved efficiency and effectiveness of water service Spain - Water & Sanitation Services Private Sector Development - 1 Stephen Myers Associates Limited United Kingdom Negative factors many small operational units difficult to fund infrastructure and to provide efficient and effective service highly variable service quality, directly reflects local municipal capabilities and user awareness weak central government guidance on service levels, service provision and no monitoring of municipal performance benefits of local aggregation denied due to intensely parochial culture 19 July 2002 Stephen Myers Associates Limited United Kingdom Etude de Case de la Cote d Ivoire 11 Experience of last decade shows that involving private sector: accelerates investment in water service infrastructure improves efficiency and effectiveness of water service improves responsiveness to end -user needs Each region of Spain is highly parochial & prefers to give water service contracts to local companies so large public water companies & private operators set up local subsidiaries Good experience with private sector involvement, difficulties in raising finance and parochial culture is slowly leading to development of small local private sector companies which undertake out-sourced service contracts 19 July 2002 Stephen Myers Associates Limited United Kingdom 10

158 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 158 LOCAL GOVERNMENT CONTRACTS WITH PRIVATE OPERATORS IN UGANDA By Christopher Azuba Overview - 2 years of reforms Small Towns Water and Sanitation Local Government Contracts with Private Operators in Uganda Christopher Azuba Pr.Engineer, Water Authorities-DWD Indicators for 9 Towns ITEM (UNIT) Aggregate Water Supplied (M 3 ) 221,178 Water Sold (M3) 166,359 UFW (%) 21 Billings (UShs.,000s) 203,445 Collections (Ushs.,000s) 187,948 Management Fees ( Ushs.,000s) 191,540 Collection Efficiency (%) 96 Total Active Accounts (No.) 1,135 New Connections (No.) 110 Number of Applications 527 Received (No.) Total Population Served 200,000 Scope of operations 46 out of 63 local government systems have been declared Urban Water and Sewerage Authorities and have signed Performance contracts 6 local operators have signed management contract for operating clusters (50% of systems with PSP) Preliminary Outcomes Increase in reliability of water supply services, reduced stand down time and reliable operating information Most systems are or very close to breakeven point on O&M Typical System Information - Lugazi Population served 30,000 Installed capacity 1000 cum/day Production cum/day Water sold cum/day No of connections 137 No of kiosks - 5 Non-domestic 30% Collection efficiency 93% Annual revenue $30,000 Unit production cost - $0.40/cum Average tariff - $0.56/cum Staff/1000 connections 18 Outstanding clients Town Council 1 Av. of 2000 Connections per Management Cluster Contractual Framework MWLE Performance Contract Assets transfer WSS Authorities Town Council 2 (Assets Management) Town Council 3 Town Council 4 Management Contracts Local Private Operator (Management of Technical, Financial and Commercial Operations) Customer Contract Users/Clients 5 Member WSS Board Town clerk Chair Social Services Committee Rep of domestic consumers Rep of institutional consumers Rep of Old WUA WSS SERVICES (U) LTD., PRIVATE OPERATOR COUNTRY OVERVIEW By Sonko Kiwanuka Etude de Case de la Cote d Ivoire

159 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page WSS SERVICES (U) LTD. Private Operator Outline Introduction 281. International Conference on Small Towns Water Supply and Sanitation Addis Ababa June 2002 Sonko Kiwanuka 12th June Areas of Operation Achievements Performance indicators for each Area Constraints Recommendations/Way forward First Year Experience as a Private Operator in Uganda 283. AREAS OF OPERATION AS Private Operator WSS Services (U) Ltd. Is a consulting firm managed by a group of experienced water and sanitation professionals and technicians; with 30 full-time staff (22 Water Supply Operations); turnover of US$ 150,000 per year with (75 % from Water Supply Operations) Areas of specialization include; water supply, sanitation, solid waste management, water quality management, institutional development, environmental and utility management (O & M). The head office is located in Kampala,Uganda 3 WSS SERVICES (U) LTD is involved in 6 Areas under STWSP & ECWSP in Uganda Lot 3. Lyantonde, Rakai, Kalisizo and Kyotera Lot 4. Ntungamo Lot 5. Rukungiri Etude de Case de la Cote d Ivoire

160 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Achievements 289. WSS Services for 11 months We have maintained a qualified, motivated and efficient staff in all areas As of now we have maintained a 24-hr, good quality water supply in all our Areas We have carried out both preventive and corrective maintenance on time We have cultivated cordial relationships with the customers, civic leaders, DWD and sister utility organizations. We have initiated a few interventions to boost water supply e.g. Kalisizo, Rukungiri & Lyantonde We have established an operational MIS in most areas 9 Kalisizo No. INDICATOR Average 1 Total Connect New Connect. 7 3 Production m 3 /m 21,640 4 Water Billed 17,809 5 Bill Efficiency 81 6 UFW 18 7 CE 94 8 Metered A/Cs, % Situational Analysis for Rakai No. INDICATOR 1 st QTR 2 nd QTR 3 rd QTR 4 th QTR Average 1 Total Connect New connect./disconnected Production m 3 /m Water Billed Bill Efficiency UFW CE Metered A/Cs, % Water Quality, % Lyantonde 291. Situational Analysis for Lyantonde No. INDICATOR 1 st QTR 2 nd QTR 3 rd QTR 4 th QTR Average 1 Total Connect New connect./disconnected Production m 3 /m Water Billed Bill Efficiency UFW CE Metered A/Cs, % Etude de Case de la Cote d Ivoire

161 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Constraints 293. Recommendations Limited production and system capacity in Ntungamo, Rukungiri and Kalisizo. Poor raw water quality in Rakai and Lyantonde, hence higher production costs. Increased production costs due to revised power tariff. Delayed release of capital contribution for implementation of business plans. Delayed payment of power/telephone bill arrears by some Authorities. Issues of tariff rationalization, VAT and its remittance are yet to be resolved. 13 Water Authorities should expedite release of funds to carry out planned activities to improve service coverage. Re-negotiate management contracts to cater for increased production costs due to water quality and power bills. DWD as the regulator should conduct strategic alliance workshops of all stakeholders. Adding more Areas in one cluster improve economies of scale. PSP in water sector (Uganda) is still new it needs to be supported by all improve service delivery. 14 COMMUNITY OVERSIGHT Community Oversight; A Case of Karonga & Chitipa Schemes, Malawi By Northern Region Water Board of Malawi CASE STUDY SUMMARY Background The Northern Region Water Board is a parastatal organisation responsible for the supply of water in nine small towns scattered across the Northern Region of Malawi. Established under the Waterworks Act No 17 of 1995, the Northern Region Water Board is amongst the three Regional Water Boards which were created as part of the sector reform which aimed at, among other things, improving service delivery to the water consumers. One of the outputs of the sector reform was the improved water resources management policy and strategies, the implementation of which is supported by the World Bank through the National Water Development Project. One of the major issues which the policy is addressing is the involvement of stakeholders in the entire process of service delivery. It upon this policy that the NRWB piloted the concept of Community Liaison Groups (CLGs) for the two towns of Karonga and Chitipa. Operating Arrangements The Northern Region Water Board, like all Water Boards, is governed by a Board of Directors who are appointed by the Government to represent water rate payers within the water area of the Board. Members of the Board of Directors are appointed by Government from within and without the water supply areas. The Northern Region Water Board, owns all the assets and operates these assets at scheme level.the Head Office in Mzuzu has the major responsibilities of policy direction, planning, design and implementation of projects, general administration and accounting for financial resources. The small towns have the tasks of operation and maintenance and ensuring that customers are billed and subsequently pay for water. Etude de Case de la Cote d Ivoire

162 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 162 Challenges Being Faced by the Board Within the six years since its creation, the Board has faced a number of challenges. T hese challenges range from low efficiencies in its provision of services to doubtful financial viability arising from unsettled Government arrears, government being the largest consumer of the services in the region. Efforts Taken by the Board n order to improve on service delivery, the Board has piloted the concept of Community Liaison Groups in the towns of Karonga and Chitipa as part of the National Water Development Project. CLGs are established to bridge the communication gap which exists between the water users and the service provider and also to address the problem of lack of user involvement in the service delivery planning, design implementation etc. The Board has also invested in upgrading and rehabilitation of the other existing schemes in or der to increase customer base. The investment is through a loan on lent to the Board by the Government which borrows on its behalf. The tariff charged takes into account operational costs as well as replacement costs. The Board has engaged a number of Consultants in trying to build capacity and this is in the area of financial management, town water supply improvement and business planning. The Board in conjunction with other Regional Water Boards is planning to hire a Consultant to carryout a functional review and recommend ways of streamlining operations for maximum benefits to the organisation. Roles of CLGS The CLGs as is an elected committee, represents consumer interests to the Board at scheme level. Their roles in Karonga and Chitipa where they hav e been established has been mainly to monitor performance of the scheme, demystifying fee paying piped water supply to would-be consumers and negotiate a facility for payment of new water connection. In addition the CLGs have provided a channel of communication between the consumers and the Board. Progress in Establishing the CLGs Following the establishment of the two CLGs in Karonga and Chitipa Schemes respectively, quality of service in these two towns has improved. Since the CLGs are operating without legal support, the Board has initiated to register them as Trusts. However, in the long-term, the CLGs should transform into small water boards responsible for the management of small towns water supply. Efforts in the Pipeline The Board through its cap acity building consultancies has initiated a process of devolving most of its functions to scheme level and treating them as cost centres. In parallel with this, the Board has also initiated an incentive scheme to operational staff at scheme level. The Board is exploring ways of making the CLGs into small town water boards who can outsource the expertise required to operate the facilities. Of course this arrangement will be advantageous to those towns which are financially viable. Those which are not will require high tariffs in the absence of cross subsidy. Further more this arrangement will render the headquarters to only provide the professional support services to the small towns and this can be through contractual arrangements. Decentralisation Malawi Government is going through a decentralisation process which will eventually affect the provision of water supply. This is likely to affect water service provision arrangement with the respective Schemes. Etude de Case de la Cote d Ivoire

163 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 163 Etude de Case de la Cote d Ivoire

164 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Water And Sanitation Services In Small Towns And Multi Village Schemes Min of Water Development 295. INTRODUCTION Community Oversight Water Resources Division Water Supply Division A Case of Karonga & Chitipa Schemes, Malawi Lilongwe Water Board Southern Region Regional Water Boards Central Region Water Boards Blantyre Water Board Northern Region MANAGEMENT TYPE & OPERATING ARRANGEMENTS Public, NRWB as a parastatal owns and operates the facilities. On a pilot basis, in two small towns of Karonga and Chitipa communities and the Board work hand in hand. In the long term the communities to take over the operation and maintenance of small towns. MISSION STATEMENT The Board shall develop, maintain and provide within its Statutory Area, safe and adequate potable water for domestic, institutional, commercial and industrial use and treat waste water to acceptable standards in an efficient and effective manner as well as protect its Catchment Areas PERFORMANCE INDICATORS I 299. PERFORMANCE INDICATORS II RFORMANCE INDICATORS AND PARAMETERS Scheme Population Population Served Staff Production Volume Produced Volume Billed Annual Revenue (Town) Per Town Per Town Per Town Capacity Cu.m per Month Cu.m per Month Cu.m per Month US$ (1US$=MK76) Karonga 39,000 23, ,456 71,575 36, ,295 Chitipa 6,500 4, ,295 10,828 8,729 42,958 Chilumba 16,336 8, ,353 19,296 16,918 30,036 Rumphi 13,329 11, ,925 19,892 14,308 43,743 Ekwendeni 11,121 6, ,180 13,020 11,484 35,592 Mzimba 13,291 11, ,000 21,779 18,603 66,809 Nkhata Bay 8,821 7, ,000 19,778 12,142 39,694 Chintheche I&II 8,503 3, ,000 7,760 4,571 17,408 Mzuzu 81,514 42, , , , ,481 Head Office 82 Scheme Staff/1000 Population Production Volume Produced Volume Billed Annual Revenue Average Tariff Unaccounted (Town) Served Capacity l/c/d l/c/d l/c/d US$/capita/day US$/Cu.M for water % Karonga Chitipa Chilumba Rumphi Ekwendeni Mzimba NkhataBay Chintheche I&II Mzuzu Total 198, , , , ,163 1,248,015 Etude de Case de la Cote d Ivoire

165 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page ROLES Roles of Headquarters Policy directions Planning, Design and Project Implementation Administration Financial Management Roles of Towns Operations and Maintenance Collection of water rates 301. PROBLEMS BEING FACED Efficiency e.g. delays in attending to maintenance, customer complaints, new water connections etc. Effectiveness e.g. delays in meeting demand, limited expansion, delays in new water connections. Financial viability e.g. non-payment of bills by government institutions, high operational costs The Present (Status Quo) EFFORTS TAKEN BY BOARD TO ADDRESS ISSUES Stakeholder involvement (CLG etc). Restructuring a move to devolve functions ROLES OF CLGs AS CONSUMER ADVOCATES AND PARTNERS TO NRWB What was the motivation for community management system? What are the relations with the Board and customers as well as communities served? Progress 304. ESTABLISHMENT OF CLGs Quality of Service Legal Status 305. OWNERSHIP OVERSIGHT & OPERATION Who operates the system Future of CLGs Etude de Case de la Cote d Ivoire

166 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page AUTONOMY How are the oversight body and operator accountable to consumers? Is the water service autonomous (institutionally and financially)? Is the oversight body involved solely in water supply and are all revenues from water sales used only for water supply? 307. REGULATION AND ACCOUNTABILITY Who Audits Financial and Technical Performance? Who regulates tariffs and water quality? Do water tariffs provide financing for operations? 308. EFFORTS IN THE PIPELINE Isolation of Towns as cost centres with own budget IMPLICATIONS OF THE PROPOSED ARRANGEMENT CROSS SUBSIDY Introduction of performance incentives to operational staff. Legalisation and Recognition of CLGs as Small Town Water Boards. Outsourcing (possibility of contracting out to private operators) FUTURE ROLE OF HEADQUARTERS 311. FUTURE CLG LEVEL OF SERVICE RESPONSIBILITIES INSTITUTION INCHARGE WATER SOURCE Pumping of water from Ground source (boreholes) surface sources (rivers, lakes and dams). Northern Region Water Board WATER TREATMENT WORKS Water treatment. MAIN RESERVOIR Water storage. WATER METER Wholesale bulk supply of water to Small Town Water Boards. WATER DISTRIBUTION Meter reading. CSG Billing. (Community Collection of payments. Support Group) New water connections. Maintenance works. Expansion of system etc. Supervision of the CSG CLG (The Small Town Water Board) Etude de Case de la Cote d Ivoire

167 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 167 ETUDE DE CAS DE LA COTE D IVOIRE Par Dominique Da Cruz Préambule La Cote d Ivoire est une république d Afrique Occidentale, respectivement limitée au nord par le Burkina Faso et le Mali, au Sud par l océan Atlantique, à l est par le Ghana à l ouest par le Liberia et la Guinée. Elle regroupe 15 millions d habitants dont plus de la moitié vit en milieu rural sur un territoire de Km2. Sa capitale économique est Abidjan. L économie du pays est essentiellement fondée sur l agriculture. Le service public de distribution d eau potable est privatisé en Côte d Ivoire depuis 1960, année de création de la SODECI (Société de Distribution d Eau de Côte d Ivoire) Société de droit privée ivoirien qui opère sur l ensemble du territoire national selon un cadre contractuel d une durée de 20 ans établi entre la SODECI et l état de Côte d Ivoire en RUBRIQUE VALEUR 2000 Effectif personnel 1504 Capital Social 4,5 Milliards fcfa Chiffre d'affaire 35 Milliards fcfa Nombre d'abonnés M3 Produits 146 Millions Ratio de facturation 81,40% Organisation Direction Générale 1 Direction Centrale 13 Direction en région 10 Introduction «L eau est un bien public mondial, un bien commun qui devrait être accessible à tous», pouvait-on lire dans la déclaration du forum des «anti-mondialistes» de Porto Alegre opposé à celui de Davos. Comment réunir les conditions d accessibilité à l eau potable à toutes les couches de la population, bien économique dont la mise à disposition engendre des coûts de production et de service? Telle est la problématique qui a fait couler beaucoup d encre depuis l objectif de la DIEPA défini en Pays avant-gardiste, la Côte d Ivoire avait compris dès 1973, la nécessité de favoriser l accès des populations à cette denrée essentielle à la vie qu est l eau potable à travers l ambitieux Programme National de l Hydraulique. Aujourd hui, même si les résultats obtenus depuis 1960, année d indépendance, sont appréciables, les besoins à satisfaire et les difficultés à résoudre sont nombreux et variés. Au nombre de ces problèmes, figure l alimentation en eau potable des multi-villages et petites villes, souvent dispersés, ayant une population comprise entre et habitants. En Côte d Ivoire, 76 % des localités équipées d un système d adduction en eau ont moins de habitants et sont déficitaires. Malgré ces handicaps, il faut délivrer un service correct à un prix convenable. Plusieurs solutions dont l une est présentée dans cette étude de cas cohabitent, avec chacune leurs fortunes diverses. Les localités exploitées par le concessionnaire privé 1) Le cadre institutionnel Le partenariat entre l Etat de Côte d Ivoire et la SODECI, société ivoirienne de droit privé, crée depuis 1960 est résumé dans le schéma ci-dessous.(figure n 1 Schéma du cadre institutionnel). Etude de Case de la Cote d Ivoire

168 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 168 Dans ce contrat définissant les attributions des différentes parties, l Etat conserve son rôle régalien en matière de stratégie, de politique et d investissements pour l eau potable pendant que la société privée assure l exploitation et la maintenance des ouvrages. Ces obligations contractuelles sont valables quelque soit la taille de l exploitation incorporée dans les biens de retour, donc pour les localités dont le nombre d habitants est compris entre ou égal à et Figure 1 : schéma du cadre institutionnel ETAT Ministère Des Infrastructures Economiques - Maître d ouvrage, - Propriétaire du Patrimoine, - Choix de développement et program mation des travaux neufs, d extension et de renouvellement, - Décision des Prix et des Tarifs, - Suivi du Fonds de Développement. Direction d l Hydraulique Humaine (DHH) - Maître d ouvrage délégué, - Maître d œuvre chargé du contrôle technique et financier de la concession du service de distribution publique urbaine d eau potable BNETD : Appui Technique à la DHH Convention de concession Ministère de l Economies et des Finances Service de la dette Eau et Assainissement : gestion FNE Exploitation du service public Captage, traitement, adduction, distribution, entretien du réseau avec prise en charge de l intégralité des coûts et frais afférents encaissements, SODECI Gestion des abonnés Branchements, abonnements, facturations, Dépannages. Gestion du Fonds de Développement Réalisation des branchements sociaux, Renouvellements, extensions, nouveaux centres. Contrat D Abonnement ABONNES Etude de Case de la Cote d Ivoire

169 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 169 2) Critères d éligibilité pour bénéficier d un système d AEP La programmation des équipements est basée sur des considérations d ordre social, technique et économique à partir desquels sont édictées des critères de dimensionnement et de sélection des localités à équiper. Pour ce qu'il est convenu d appeler centres secondaires en Côte d Ivoire, leur éligibilité à un programme d AEP dépend des critères résumés dans le tableau ci-après : Figure 2 : Critères de sélection SELECTION DES CENTRES SECONDAIRES CRITERES SE SELECTION PARAMETRES D ETUDES 1 : Données humaines Population : > 3000 habitants Participation financière : Payer les frais d abonnement 2 : Habitat et urbanisme Centre loti, électrifié et ayant au moins 60 % de constructions en dur 1 : Données techniques Besoins en eau : 21 l/j/hbt la 1 ère année 30 l/j/hbt la 10 ème année Taux de branchement : 30 à 40 % la 1 ère année 60 à 70 % la 10 ème année 2 : Données économiques Coût d investissement/hbt : < FCFA Coût d exploitation du m3 d eau : < 180 FCFA Coût e revient du m3 d eau produit : < 590 FCFA 3) Description des systèmes d alimentation des petites localités Deux cas de figure peuvent se présenter. Dans le premier cas, si ces petites localités sont des satellites d un centre urbain important doté d infrastructures suffisantes, alors elles bénéficient d extension de réseau pour leur desserte. Pour le second, si le centre est complètement isolé, il sera équipé par un système autonome d adduction généralement composé : d un forage, d un poste de chloration, d un château d eau, d un réseau primaire et secondaire. Les eaux souterraines sont les plus utilisées pour réduire les coûts d investissements et d exploitation. En général, elles prés entent des caractéristiques physico-chimiques et bactériologiques qui les rendent sans traitement particulier, exceptée la désinfection, apte à la boisson. 4) Mode de financement La réalisation des installations existantes a été rendu possible grâce à des sources de financement dont la plupart proviennent de l extérieur. Cependant, depuis la dernière réforme du cadre institutionnel intervenu en 1987, il a été introduit dans la structure tarifaire, une taxe appelée Fonds de Développement de l eau qui est en partie utilisée pour réaliser 10 AEP par an. Grâce à ce mécanisme d autofinancement exclusivement basé sur le principe de la péréquation du prix de l eau, les zones les plus riches du pays subventionnent le développement de l accès à l eau potable des localités pauvres. Il Etude de Case de la Cote d Ivoire

170 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 170 MODE DE FINANCEMENT Abonnés : Abonnés : Privés 75% Privés 75% Public 25% Public 25% Prix Moyen 2000 = 323,5F/m3. Il est calculé sur la base d un plan de développement à 5ans ; Prix fixe sur cette période Rémunération Concessionnaire 182,6 F/m3 TVA reversée à l'état 20,35 Taxe Spéciale sur l'eau Surtaxes FNE (CAA) FONDS de DEVELOPPEMENT 44 F 76,55 F 120,55 F Calculé sur la la base du Compte d Exploitation, il finance les Coûts d Exploitation et et de de maintenance+ Investissts+ Taxes + Obligations Résultats : Taux encaisst Prv: 98% Ratio Facturat. : 85% Standards OMS Fourniture : 24H/24 Calculé pour financer les lesbrtssociaux +Renouvelts Tvx neufs +Nouveaux centres + Extensions avec Décision ETAT mais Transactions SODECI Service de la dette Eau Potable (HU+HV) Service de la dette Assainissement en sera ainsi tant que les moyens de production et de distribution seront suffisantes pour satisfaire la demande dans les villes nanties d une part et surtout si le nombre d abonnés de ces dites localités est supérieur au nombre de clients des localités démunies. 5) Mode de gestion Après le lancement de ce programme national de l hydraulique, la SODECI a été confrontée à un ensemble de problèmes lié à l accroissement du nombre de centres à exploiter et leur éparpillement sur l ensemble du territoire national. Il a donc fallu s adapter à cette nouvelle contrainte afin d assurer au mieux, la mission d agent de service public. La SODECI a adopté une organisation décentralisée à travers laquelle s effectue une répartition des fonctions à trois niveaux : local, régional et national. 5-1) Structure locale Le centre demeure la cheville ouvrière à partir de laquelle s organise la gestion des abonnés. Il se voit confié un ensemble de tâches qui sont à la fois : Technique : production et distribution, entretien des installations, réalisation des branchements, Administrative : relevé des indexes compteurs, distribution des factures, relance, Financière : encaissement des règlements. Le dimensionnement des effectifs et des moyens matériels affectés au centre, sont fonctions du nombre d abonnés. Dans le contexte contractuel actuel, toutes les localités distantes de plus de 25 km, disposent de leur propre moyens humain et matériel, donc érigées en centre d profit. Dans le cas contraire, la localité est rattachée au centre le plus Etude de Case de la Cote d Ivoire

171 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 171 proche. Pour les villages ou villes éloignés du siège du centre, les prestations sont sous -traitées à un agent local sous la supervision du chef de centre. 5-2) Structure régionale Elle coordonne, contrôle et anime les centres. Par des visites périodiques, des réunions et une formation in situ, elles doivent s assurer du bon fonctionnement des centres, corriger les écarts et consolider les résultats. 5-3) Structure nationale Ce sont des processus transverses qui apportent un appui logistique, technique aux centres et régions. 5-4) Formation Le centre étant le noyau de base de notre organisation, la fonction de chef de centre nécessite une très grande polyvalence afin de maîtriser l ensemble des problèmes techniques et administratifs d où la nécessité d une bonne formation de base et surtout d un perfectionnement continu au Centre des Métiers de l Eau. Résultats obtenus 1) Localités desservies Le tableau ci-dessous indique l évolution les localités équipées depuis l indépendance de la Côte d Ivoire en Figure 4 : Tableau du nombre de localités Année Nombre de centre Nombre de localités desservies Nombre d abonnés Sur l ensemble de 618 localités desservies, 459 ont une population comprise entre et habitants. A partir de 1987, grâce au mécanisme d autofinancement du secteur appelé Fonds de développement, 65 localités ont été dotées d un système d eau courante pour un coût cumulé de 9,7 millions $ US. Cet investissement servira environ habitants, ce qui représente un investissement par habitant de 37 $ US. 2) Le branchement Si les autorités ivoiriennes sont pour favoriser l accès des populations les moins nanties à l eau potable, elles excluent la gratuité au niveau des consommations. Ainsi, pour permettre à une plus large frange de la population de se connecter au réseau public, les branchements sous certaines conditions sont subventionnées à 100 %. Figure 5 : Tableau du nombre d abonnés Année Nombre de branchements subventionnés Nombre d abonnés Grâce à cette politique sociale très hardie qui a non seulement permis d équiper sur fonds propre un nombre important de centres et surtout de subventionner le branchement à 100 %, le nombre d abonnés a littéralement explosé depuis 1987 pour atteindre aujourd hui plus d un demi-million. Le nombre de client dans l ensemble de petites localités est actuellement de soit 13 % de l ensemble national, ce qui donne un taux de desserte de 62 %. Etude de Case de la Cote d Ivoire

172 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 172 Les graphiques de la figure 6 montre l évolution du nombre d abonnés et de la production dans les multi village ou Evolution des Abonnés des Centres Evolution de la Prodution des Centres les petites villes. La forte croissance du nombre d abonnés est à la fois due à la subvention totale du branchement et aux campagnes promotionnelles qui sont réalisés périodiquement dans les centres. Figure 6 :Evolution du nombre d abonnés et production 3) Production et charges d exploitation Le tableau Figure 7 ci-dessous indique le poids des localités dans les charges d exploitation des Directions régionales. Ces charges d exploitation intègrent à la fois le coût de production et de fonctionnement du centre tel que déterminé dans le tableau Figure 7. Notons que ces charges d exploitation ne tiennent pas compte des frais de structure de la Direction Régionale et du Siège. Le chef de centre étant le représentant local de SODECI vis-à-vis des autorités administratives et politiques, il se doit d être dans de bonnes conditions de travail. Figure 7 : C harges de fonctionnement du centre de coût nmoyen annuel Main d œuvre Fourniture de bureau et divers Electricité Téléphone Amortissement (mobilier, moto, caisse à outil) Tenue de travail Loyer Frais de déplacement Carburant Désignation TOTAL Etude de Case de la Cote d Ivoire

173 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 173 Figure 8 : Tableau des charges du centre (hors mis frais de structure DR et Siège) RESULTATS OBTENUS CHARGE DE FONCTIONNEMENT DU CENTRE I - Toute la DR Directions Régionales DR 02 DR 03 DR 04 DR 05 DR 06 DR 07 DR 08 DR 09 Nombre de localites désservies Population totale alimentée (Hbts) Nombre total d'abonnés Production totale m3(2001) Cout Production en dollars US Coût/m3 produit en dollars 0,08 0,08 0,10 0,09 0,08 0,09 0,08 0,07 II < Population < Nombre de localites désservies Population totale alimentée (Hbts) Nombre total d'abonnés Production totale m3(2001) Conso spécifique/abonné Cout d'exploitation en dollars Coût/m3 en dollars 0,34 0,46 0,44 0,29 0,16 0,29 0,26 0,29 Recettes Nous constatons dans le tableau figure 7, que hors mis la région de la Basse côte, toutes les autres régions sont déficitaires. Cela est normale compte tenu du mode de vie et de la relative richesse des populations du sud. 4) Le tarif C est un tarif progressif dont le tableau figure 9ci-dessous indique les différentes composan tes. Rappelons que le prix de l eau en Côte d Ivoire est le plus bas dans la zone UEMOA. Notons aussi qu il n incorpore pas l immobilisation du patrimoine. En général, dans les localités dont il est ici question, les consommations spécifiques sont en moyenne de 120 m3/an soit 30 m3/trimestre ; l abonné devra débourser hors TTC 9 $ US / trimestre, ce qui nous ramène à 3 $ US / mois. (37 $ US / an) Figure 9 Grille tarifaire Forfait trimestriel 0 à 9 m3 Tranche 1 Tranche 2 Tranche 3 Tranche 4 10 à 18 m3 19 à 90 m3 91 à 300 m3 > 300 m3 Prix en $ US Tranche administrative 5) Rémunération du fermier Elle est passée de 0.20 $ US en 1987 à 0.24 $ US depuis 1996, année de la dernière révision tarifaire suite au réajustement monétaire intervenu dans la zone CFA en En 15 ans, la rémunération de l exploitant n a augmenté que de 0.06 $ US ou 2 % par an alors que l inflation en Côte d Ivoire est supérieure à 6 % par an sur la Etude de Case de la Cote d Ivoire

174 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 174 même période. Cette situation rend particulièrement difficile notre tâche mais en tant que professionnel du service public et société citoyenne, nous n avons jamais failli à notre mission. 6) Organisation mise en place Le dimensionnement des moyens, quelque soit la taille de la localité dépend du nombre d abonnés comme le résume le tableau ci-dessous. Figure 9 : Tableau d organisation des centres Désignation CO C1 C2 C3 C4 C5 CC CD Nbres d abonné Type de traitement PERSONNEL Multi Village 0/200 Simpl e 0/200 Complet 200/500 Simple 200/1500 Complet 500/1500 Simple 500/1500 Complet > 1500 Complet Chef Centre cadre Chef Centre Agent Exploitation.A. Administratifs.Agent Local VEHICULES. Mobylette. Voiture 1 1 pour 10 en moyenne > 5 1 à 3 >2 6-1)Agent local L agent local est un sous traitant extérieur résident dans la localité qui reçoit une formation appropriée avant d être installé dans ses fonctions de correspondant. Il a en charge la préparation de la solution du désinfectant, la bonne marche des équipements, la distribution des factures et leur recouvrement. Le Chef de centre sillonne tous les jours, les localités distantes de moins de 25 km qui sont sous sa responsabilité pour réaliser les branchements, réparer les fuites et surtout suivre les activités de l agent local. 6-2) L appui professionnel La délégation,la responsabilisation appliquée à la SODECI vise deux objectifs à savoir : - Réduire de façon très importante «les Temps réponse» entre décision et exécution - Mener une gestion clientèle de proximité L application de ces dispositions requiert une compétence avérée acquise à travers des modules de formation continue essentiellement orientés sur la pratique.cette formation est dispensée au centre des métiers de l eau de la SODECI qui compte des spécialistes en électromécanique, gestion clientèle, hydraulique,comptabilité et en informatique. Cet outil de formation est également à la disposition de tous les professionnels de l eau souhaitant renforcer leur capacité.plusieurs sociétés consœurs ont d ailleurs déjà bénéficié des prestations de notre centre de métiers. 6-3)Direction participative par objectif Elle a été introduite à la SODECI depuis les années Elle a permis une plus grande responsabilisation du personnel, plus de dignité face à un travail accompli parfois dans des conditions difficiles (isolement, moyens précaires, etc.). Grâce à cet outil le collaborateurs se sent concerné et impliquée dans la vie de l entreprise.il définit ses propres objectifs,les moyens pour les atteindre et est apprécié périodiquement par rapport à ces objectifs. L intéressement de fin d année est non seulement une source de motivation mais un système d auto - contrôle car il est déterminé par une formule mathématique fondé sur les indicateurs de performances du centre. 7) Difficultés Etude de Case de la Cote d Ivoire

175 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 175 Les problèmes susceptibles de provoquer de profonds dysfonctionnements à même de compromettre durablement la qualité du service rendu sont nombreux. Citons entre autres : le blocage du tarif et surtout de la rémunération du fermier depuis 6 ans qui risque d être un frein à l amélioration de performances déjà acquises, le fardeau du social à travers les branchements sociaux (4 milliards/an) qui réduit inexorablement la capacité d autofinancement de projets plus importants. Aujourd hui, la Côte d Ivoire souffre de la saturation de l ensemble des moyens de production et de distribution et nous ne pouvons y faire face faute de ressources financières, la prolifération de système d adduction autonomes qui accroissent les charges de production et le périmètre d exploitation alors que des regroupements de localités auraient pu être desservies à partir d une unité de production utilisant une ressource en eau plus pérenne. 76% des localités dans le périmètre du contrat sont déficitaires. CONCLUSION De 16 en 1960, nous avons aujourd hui 618 localités desservies soit un facteur de multiplication de 38,5 dont 76 % ont une population comprise entre 2500 et habitants. On peut affirmer qu en investissements d équipement, les résultats sont appréciables. Malheureusement, la quasi totalité de ces centres secondaires est déficitaire, les recettes annuelles n arrivent pas à couvrir les charges d exploitation. Dans le contexte ivoirien, la gestion de ces petites villes et multi-villages, est rendue possible grâce à la péréquation du prix de l eau. En effet, à Abidjan qui représente 68 % de la production nationale, le coût du mètre cube produit est relativement bas compte tenu de la bonne qualité des eaux souterraines utilisées mais le prix de vente de l eau est identique aux autres régions du pays. N eût été ce dispositif tarifaire, il aurait certainement été difficile sans appliquer le juste prix d assurer une bonne gestion de ces petites localités. Il est donc nécessaire pour assurer un service durable dans ces localités de petite taille d observer les recommandations suivantes : Abréviation La formation continue et la polyvalence des chefs centres Une tarification adéquate L accès de Privés de prêts concessionnels La durée des contrats doit être supérieure à 30 ans Le maintien de la péréquation. DIEPA : Décennie Internationale de l Eau Potable et de l Assainissement AEP : Alimentation en Eau Potable SODECI : Société de Distribution d Eau de Côte d Ivoire DR : Direction Régionale DHH : Direction de l Hydraulique Humaine BNETD : Bureau National d Etudes Techniques et de Développement HV : Hydraulique Village HU : Hydraulique Urbaine TVX : Travaux INVESTISSTS : Investissement Etude de Case de la Cote d Ivoire

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177 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation 312. Page CONFERENCE INTERNATIONALE SUR LES SERVICES D ALIMENTATION EN EAU ET EN ASSAINISSEMENT DANS LES PETITES VILLES ET LES MULTI-VILLAGES (CAS DE LA COTE D IVOIRE) CONFERENCE INTERNATIONALE SUR LES SERVICES D ALIMENTATION EN EAU ET EN ASSAINISSEMENT DANS LES PETITES VILLES ET LES MULTI-VILLAGES (CAS DE LA COTE D IVOIRE) M. DA CRUZ Dominique Directeur Technique SODECI PLAN DE PRESENTATION INTRODUCTION CADRE INSTITUTIONNEL CRITERE DE SELECTION DES LOCALITES A EQUIPER MODE DE FINANCEMENT MODE DE GESTION RESULTATS OBTENUS LOCALITES DESSERVIES CHARGES DE FONCTIONNEMENT TARIFICATION ORGANISATION DIFFICULTES Juin 2002 Addis Abeba, Ethiopie 314. INTRODUCTION 315. LOCALITES EXPLOITEES PAR LA SODECI CADRE INSTITUTIONNEL RUBRIQUE VALEUR 2000 Effectif personnel 1504 Capital Social 4,5 Millards Chiffre d'affaire 36 Millards Nombre d'abonnés M3 Produits 146 Millions Ratio de facturation 81,40% Organisation Direction Générale 1 Direction Centrale 13 Direction en region 10 Responsabilités des Intervenants ETAT IVOIRIEN Convention Concession -Propriété du Patrimoine ; Choix de développement et programmation des tvx neufs /extensions /renouvelés ; Décisions des Prix et des Tarifs -DEAU Maîtrise d'ouvrage et contrôle exploitation ; Conduite des négociations quinquennales ; Ordre de Travaux d investist ; Suivi Fonds de développement -BNETD : Contrat d Appui Technique à DE ; - Min Eco & Fin.: suivi FNE(Service de la Dette) SODECI REPARTION DU CAPITALE PRIVE IVOIRIEN 45% FCP 5% SAUR 47% ETAT IVOIRIEN 3% SODECI Contrat Abonnement ABONNES -- Exploitation du service public (captage, traitement, adduction, distribution), entretien du réseau, à ses risques et périls -- Réalisations des travaux de premier investissement (branchements, renouvellements, petites extensions) -- Commercialisation (Branchements, abonnements, facturation, encaissements, dépannages) - Services - Consommations et règlements factures 316. LOCALITES EXPLOITEES PAR LA SODECI CRITERE DE SELECTION DES LOCALITES A EQUIPER 1:Données humaines CRITERES DE SELECTION Population :>3000 habitants Participation financiere :Payer les frais d'abonnement 2:Habitat et urbanisme Centre loti,électrifié et ayant au moins 60% de constructions en dur 1:Données techniques PARAMETRES D'ETUDES Besoins en eau :21l/j/hbt la 1ère année 30l/j/hbt la 10 ème année Taux de branchement :30 à 40% la 1ère année 2:Données économiques 60 à 70% la 10 ème année Coût d'investissement/hbt :< Fcfa Coût d'exploitation du m3 d'eau :< 180 Fcfa Coût de revient du m3 d'eau produit :< 590 Fcfa - Forage - Réseau - Poste de desinfection - Château d'eau EQUIPEMENTS Abonnés : Abonnés : Privés Privés 75% 75% Public Public 25% 25% MODE DE FINANCEMENT 317. Prix Moyen 2000 = 0.43 $ US /m3. Il est calculé sur la base d un plan de développement à 5ans ; Prix fixe sur cette période Rémunération Concessionnaire TVA reversée à l'état Taxe Spéciale sur l'eau Surtaxes FNE (CAA) FONDS de DEVELOPPEMENT 0.05 $ US 0.1 $ US 0.24 $ US 0.02 $ US 0.16 $ US Calculé sur sur la la base base du du Compte d Exploitation, il finance les Coûts d Exploitation et et de de maintenance+ Investissts+ Taxes + Obligations Résultats :: Taux encaisst Prv: 98% Ratio Facturat. : 85% Standards OMS Fourniture :: 24H/24 24H/24 Calculé pour financer les Brts Sociaux + +Renouvelts Tvxneufs +Nouveaux centres + Extensions avec Décision ETAT mais Transactions SODECI Service de de la la dette Eau Potable (HU+HV) Service de la dette Assainissement Water and Sanitation Services Management in Small Towns of Mauritania

178 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation 618 localités desservies alimentées par 318. RESULTATS OBTENUS LOCALITES DESSERVIES au 31 Décembre ,0% 70,0% 60,0% 50,0% Page RESULTATS OBTENUS CHARGE DE FONCTIONNEMENT DU CENTRE I - Toute la DR Directions Régionales DR 02 DR 03 DR 04 DR 05 DR 06 DR 07 DR 08 DR 09 Nombre de localites désservies UNITES DE PRODUCTION ABIDJAN 68 forages en service 8 stations de neutralisation gérées par INTERIEUR 386 forages en service 57 stations de traitement 181 centres administratifs de gestion 13 secteurs 10 Directions régionales 40,0% 30,0% 20,0% 10,0% 0,0% LOCALITES POPULATION ABONNES PRODUCTION TAUX DE RACCORDEMENT AU RESEAU Le Fonds de Développement de l eau a financé depuis 1987 : 65 localités soit habitants Branchements sociaux Population totale alimentée (Hbts) Nombre total d'abonnés Production totale m3(2001) Cout Production en dollars US Coût/m3 produit en dollars 0,08 0,08 0,10 0,09 0,08 0,09 0,08 0,07 II < Population < Nombre de localites désservies Population totale alimentée (Hbts) Nombre total d'abonnés Production totale m3(2001) Conso spécifique/abonné Cout d'exploitation en dollars Coût/m3 en dollars 0,34 0,46 0,44 0,29 0,16 0,29 0,26 0,29 Recettes RESULTATS OBTENUS Evolution des Abonnés des Centres RESULTATS OBTENUS INDICATEUR DE PERFORMANCE Nom de la localité Mankono Napié Fresco Ouéllé Nassian Attingué Dabakala Sipilou Population Evolution de la Prodution des Centres Nombre de branchements Capacité de production (m3/ville/jour et 600m3 160m3 380m3 282m3 140m3 239m3 400m3 130m3 litre/capita/jour) 57L 36L 54L 49L 45L 23L 34L 40L Eau produite (m3/ville/jour et 395m3 144m3 291m3 178m3 77m3 193m3 360m3 94m3 litre/capita/jour) 37L 32L 41L 30L 25L 19L 31L 29L Eau vendue (m3/ville/jour et litre/capita/jour) 371m3 135m3 274m3 168m3 72m3 177m3 324m3 86m3 35L 30L 39L 29L 23L 17L 28L 27L Coût unitaire opérationel 1 (US$/m3 produit) 0,32 0,26 0,13 0,25 0,43 0,43 0,32 0,4 Tarif moyen 2 (US$/m3) 0,31 0,31 0,31 0,31 0,31 0,31 0,31 0,31 Structure du tarif 5 blocs 5 blocs 5 blocs 5 blocs 5 blocs 5 blocs 5 blocs 5 blocs Fraction de l'eau facturée à un usager commercial ou industriel (%) domestique domestique domestiquedomestique domestique domestique domestique domestique Nombre de branchements par 1000 habitants Nombre de staff par 1000 habitants desservis 0,2 0,26 0,21 0,18 0,28 0,27 0,3 0,18 GRILLE DE TARIFICATION Forfait trimestriel 0 à 9 m RESULTATS OBTENUS Tranche 1 Tranche 2 10 à 18 m3 19 à 90 m3 Tranche 3 91 à 300 m3 Tranche 4 > 300 m3 CONSOMMATION SPECIFIQUE MOYENNE 30 M 3 /TRIMESTRE SOIT 120 M 3 / AN COUT ANNUEL DE LA CONSOMMATION / ABONNE de 0 à 9 M 3 FORFAIT 2.2 $ US de 10 à 18 M 3 9 x 0.24 $ US 2.2 $ US de 19 à 30 M 3 12 X 0.4 $ US 4.8 $ US TOTAL : 9.26 $ US / TRIMESTRE $ US / AN Tranche administrative Prix en $ US MODE DE GESTION 323. DESIGNATION CO C1 C2 C3 C4 C5 CC CD NOMBRE D'ABONNES MULTI 0/200 0/ / / / /1500 >1500 TYPE DE TRATEMENT VILLAGE Simple Complet Simple Complet Simple Complet Complet PERSONNEL Chef de centre - cadre 1 Chef de centre Agents d'exploitation >5 Agents administratifs 1à3 Agent local 1 VEHICULES RESULTATS OBTENUS Mobylette Voiture 1 pour > 2 en moyenne POLYVALENCE REDUIRE LE TEMPS DE REPONSE GESTION CLIENTELE DE PROXIMITE DEFINITION DES OBJECTIF FORMATION CONTINUE AU CENTRE DES METIRES DE L EAU ELECTROMECANIQUE HYDRAULIQUE COMPTABILITE GESTION ABONNES ETC Water and Sanitation Services Management in Small Towns of Mauritania

179 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation 324. RESULTATS OBTENUS CHARGE DE FONCTIONNEMENT DU CENTRE Page 179 LES CINQ IDEES CLES 325. RESULTATS OBTENUS DUREE DU CONTRAT DESIGNATION ANNEE 2000 Main d œuvre Fourniture de bureau et divers Electricité Téléphone Amortissement (mobilier, moto, caisse à outil) Tenue de travail Loyer Frais de déplacement Carburant PEREQUATION DU PRIX DE L EAU >30 ANS SEVICE DURABLE L ACCES DES PRIVES AUX PRETS CONCESSIONNELS TOTAL FORMATION DES AGENTS TARIFICATION ADEQUATE COTE D IVOIRE CASE STUDY By Dominique Da Cruz Background Côte d Ivoire is a West African republic sharing borders with Burkina Faso and Mali in the North, Ghana in the East and Liberia and Guinea in the West and watered by the Atlantic Ocean in the South. It has 15 million inhabitants nearly half of whom live in rural areas on a territory of 322,463 Km 2. Its economic capital is Abidjan. The economy of the country is mainly based on agriculture. The potable water public service was privatized in Côte d Ivoire in 1960, when SODECI (Société de Distribution d Eau de Côte d Ivoire, or Water Supply Utility of Côte d Ivoire) was created. SODECI is a private company that operates throughout the whole country in accordance with a 20 year-long contract established between SODECI and the State of Côte d Ivoire in ITEMS 2000 VALUE Manpower 1,504 Issued capital 4.5 billion CFA* Turnover 35 billion CFA Number of subscribers 509,000 M 3 of water produced 146 billion Billing ratio 81.40% Organization General management 1 Central management 13 Region headquarters 10 *1 billion CFA ~ US $1.5 million Introduction Water is a global public good d, a common good that should be accessible to all, according to the declaration of the anti-globalization forum held in Porto Alegr e to oppose the Davos Conference. How can we ensure that all social classes have access to potable water when we know that water is an economic good, the supply of which generates production and service costs? These are the terms of the problem that has caused much ink to flow since the objective of the IDWSSD was defined in Water and Sanitation Services Management in Small Towns of Mauritania

180 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 180 As a country in the vanguard of development, Côte d Ivoire understood as early as 1973 the need to improve the population s access to the essential commodity of water through an ambitious National Water Supply Program. This program and the institutional reform of 1987 that provided the sector with a self-financing mechanism have had a dramatic effect on service provision: the number of equipped towns has increased from 16 in 1960 to 618 today, including 76% with less than 15,000 inhabitants. Almost all these multi- village or small town system, scattered throughout the country, are in financial deficit. To meet the needs of the entire service area of the lease contract, and to better ensure its role as a public service provider in providing satisfactory service to its customers, SODECI, in 1978, chose to decentralize and increase the responsibility of the local distribution centers, making them the cornerstone of the whole organization. Today, despite the significant results achieved since 1960, when the country became independent, the unsatisfied needs and the difficulties to be solved are numerous and varied. Water provision to clustered villages and small towns, (which are often scattered with a population ranging from 2,500 to 15,000,) is one of these problems. In Côte d Ivoire, 76 % of the towns equipped with a water supply system have less than 15,000 inhabitants and are operating in financial deficit. Despite these handic aps, a satisfactory service must be provided at an affordable cost. There are several possible solutions, each with their own consequences; this case study focuses on one of them. The Towns Covered by the Private Concession Holder 1) The Institutional Framework The partnership between the State of Côte d Ivoire and SODECI, a private Ivorian company created in 1960, is summarized in the diagram below (Figure n 1: Diagram of the Institutional Framework). In the contract defining the duties and obligations of the various parties, the State keeps its sovereign role in the areas of strategy, policy and investments for potable water, while the private company takes care of the operation and maintenance of the assets. These contractual obligations are valid whatever the size of the facility, including the unprofitable services. They are therefore valid for towns with the number of inhabitants equalizing, or varying from, 2,500 to 15,000. Figure 1: Diagram of the Institutional Framework 1. STATE TE Ministry of Economic Infrastructures - Prime contractor, - Owner of the estate, - Development choice and scheduling of new, extension and renewal works, - Decision on prices and tariffs, - Monitoring of the Development Fund. Human Hydraulics Management (DHH) - Delegated prime contractor, - Prime contractor in charge of the technical and financial control of the concession of the urban potable water supply service. BNETD: Technical Support to DHH Ministry of Economy and Finances management Concession Water and sanitation debt service : NWF Convention Water and Sanitation Services Management in Small Towns of Mauritania

181 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 181 Operation of the Public Service Catchment, treatment, transmission, distribution, network maintenance with full coverage of related costs and charges. Customer Management Connections, subscriptions, billing, receipts, repairs 2. SODECI Subscription Contract Management of the Development Fund Completion of social connections, Renewal, extensions, new centers SUBSCRIBERS 2) Eligibility Criteria for a WS System The programming of the infrastructure investment is based on social, technical and economic factors from which criteria for the sizing and the selection of the towns to be equipped are determined. The eligibility for a WS program of what are known as secondary centers in Côte d Ivoire depends on the criteria presented in the following table: Figure 2: Selection Criteria SELECTION OF SECONDARY CENTERS SELECTION CRITERIA STUDY PARAMETERS 1: Human Data Population: > 3,000 inhabitants Financial participation : Pay the connection costs 2: Habitat and Town Development Electrified center divided into plots, with at least 60 % of the houses made of concrete 1: Technical Data Water needs : 21 l/d/inhbt the first year 30 l/d/inhbt the 10th year Connection rate: 30 to 40 % the first year 60 to 70 % the 10th year 2: Economic Data Investment cost/inhabitant: < 60,000 CFA Operation cost of the water m3: < 180 CFA Cost price o f the produced water m3: < 590 CFA 3) Description of Supply Systems in Small Towns There are two cases. First, if theses small towns are satellites of an important urban center equipped with adequate primary infrastructure, then, this existing network will be extended for their supply. For the second case, if the center is completely isolated, it will be equipped with an autonomous water supply system generally comprising the following: A borehole, A chlorination station, Water and Sanitation Services Management in Small Towns of Mauritania

182 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation A water tower, A primary and sec ondary network. Page 182 Ground water is most commonly used to reduce investment and operating costs. Generally, these sources are fit for drinking in physico-chemical and bacteriological terms without any specific treatment except for disinfections. 4) The Financing System Most of the existing facilities were established using external financing sources. However, since the last reform of the institutional framework that occurred in 1987, a tax, called the Water Development Fund, has been introduced into the tariff structure. That tax is used to fund 10 WS systems per year. Through this self-financing mechanism based on the principle of equal water price for all in Côte d Ivoire, the richest areas subsidize the development of poor areas access to potable water. This system will survive as long as the production and distribution capacity is adequate to meet the demand in rich cities, and above all if the number of subscribers in these cities is higher than the number of customers in poor towns. 5) The Management System After the launch of the national water supply program, SODECI faced a series of problems related to the increase of the number of centers to be operated and their scattered distribution all over the country. We had to adjust to this new constraint in order to carry out as best as possible our role as a public service. SODECI adopted a decentralized organization through which the functions are allocated at three levels, the local, regional and national levels. Water and Sanitation Services Management in Small Towns of Mauritania

183 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 183 THE FINANCING METHOD Subscribers : 509,000 Subscribers: 509,000 Private 75% Private 75% Public 25% Public 25% 2000 average price = 323.5F/m3. It is calculated On the basis of a 5 year development plan ; A fixed price over that period Statutory company s remuneration 182,6 F/m3 VAT paid back to the State 20,35 Water special tax NWF Surtaxes (CAA) 44 F 120,55 F Calculed on the basis of the operating account, it it finances operating and maintenance charges+ + Investissts+ Taxes + Performance bond: : Planned rec. rate: 98% Billing ratio : 85% WHO standards Supply : 24Ha a day DEVELOPMENT FUND F Calculated to to finance social connect + renewals New works +New centers + Extensions avec STATE s decision but transact. are made by by SODECI Potablewater debt service (urban and rural) Sanitation debt service 5-1) The Local Structure The distribution center remains the cornerstone from which customer management is organized. It is assigned a series of tasks which are simultaneously: Technical: production and distribution, facilities maintenance, installation of connections, Administrative: reading of meters, distribution of bills, reminders, Financial: receipts of payments. The estimated requirements for manpower and material means assigned to the distribution center depend on the number of its subscribers. In the context of the current contract, all the towns located more than 25 km away have their own infrastructure and staff. They are therefore turned into profit centers. Otherwise, the town is linked to the nearest distribution center. For villages or towns located far from the headquarters of the distribution center, the services are sub-contracted to a local agent under the supervision of the center manager. 5-2) The Regional Organization The regional organization co-ordinates, controls and runs the distribution centers. Through periodic visits, meetings and an in-situ training, regional organizations make sure that the centers operate in an appropriate way, correct the deviations and consolidate the results. Water and Sanitation Services Management in Small Towns of Mauritania

184 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page ) The National Organization The national organization provides centralized logistic and technical support to the centers and the regions. 5-4) The Training The distribution center being the nucleus of our organization, the function of the center manager must be versatile to control all the technical and administrative problems. This is why both very good basic training and continuing professional development at the Centre des Métiers de l Eau are needed. The Results Achieved 1) The Towns Supplied The tableau below shows the progress achieved in the equipment of the towns since the independence of Côte d Ivoire in Figure 4: Table of the Number of Towns Year Number of centers Number of towns supplied Number of subscribers ,947 40, , , , , , ,757 Out of the 618 towns supplied, 459 have a population ranging from 2,500 to 15,000. As of 1987, through the selffinancing scheme of the sector also known as the Development Fund, 65 towns have been equipped with a running water system for a cumulative cost of $ US 9.7 million. About 264,000 people benefited from this investment, which represents an investment of $ US 37 per capita. 2) The Connection While Ivorian authorities want to increase the access to potable water for underprivileged populations, they have ruled out any possibility of making it free. But, to enable a greater number of people to be connected to the public network, the connections are subsidized at 100 %, under certain conditions. Figure 5: Table of the Number of Subscribers Year Number of subsidized connections 14,681 19,468 20,246 25,094 30,334 38,537 35,776 31,852 Number of 201, , , , , , , ,757 subscribers This very daring policy has not only enabled the State to equip, with its own fund, an important number of distribution centers but also to subsidized the connection at 100 %, and the number of subscribers has literally skyrocketed since 1987 to reach half a million today. The number of customers in the small towns is currently 70,669, that is, 13 % of the whole, which amounts to 62 % coverage. The graphics in Figure 6 show the progress of the number of the subscribers and the production in multi - villages or small towns. The great increase of the number of subscribers is due both to the 100 % subsidy of connection costs and to the promotional campaign periodically waged in the centers. Water and Sanitation Services Management in Small Towns of Mauritania

185 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 185 Growth in Subscriptions to Distribution Centers 72,000 70,000 68,000 66,000 64,000 62,000 60,000 58,000 56, Figure 6: Growth of the Number of Subscribers and Water Production 3) Production and Operating Charges Figure 7 below shows the share of the towns in the operating charges of the regional headquarters. These operating charges comprise both the production and operating cost of the center as determined in Figure 7. Let us note that they do not take into account the charges relating to the organization and headquarters maintenance charge of the regional headquarters. The center manager is the local representative of SODECI vis-à-vis the administrative and political authorities, and he must enjoy good working conditions. Manpower Office supplies and other articles Electricity Telephone Depreciation (Furniture, motor cycle, tool box) Working uniform Rent Traveling expenses Fuel Description ,401, , , , , , , , ,000 TOTAL 7,035,102 Figure 7: Average Yearly Operating Charges of the Cost Center In Figure 8, we can see that apart from the coastal zone, all the other regions are deficit areas. This is normal taking into account the southern populations' living standards and relative wealth. 4) The Tariff Figure 8: Table of the Center s Charges (Regional mananagement organization and headquarters charges not included) Water and Sanitation Services Management in Small Towns of Mauritania

186 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 186 THE RESULT ACHIEVED THE RESULT ACHIEVED OPERATING CHARGES S OF THE DISTRIBUTION CENTERS I - All the RH Regional Headquarters DR 02 DR 03 DR 04 DR 05 DR 06 DR 07 DR 08 DR 09 Number of towns supplied Total population supplied (inhbts) 625, , , , , , ,529 Total number of subscribers 30,509 23,337 25,918 45,228 51,836 34,896 34,091 17,032 Overll production m 3 (2001) 5,690,726 3,923,125 4,272,696 8,414,902 8,356,435 3,870,677 7,652,646 2,796,18 Production cost in US dollars 483, , , , , , , ,936 Cost of production ($/m 3 ) II < Population < Number of towns supplied Total population supplied (inhbts) 135, ,592 88, , , , , ,374 Total number of subscribers 5,406 6,661 3,318 11,885 19,444 10,059 9,364 4,532 Overll production m3 (2001) 708, , ,673 1,211,280 2,593,025 1,064,211 1,407, ,936 Specific consumption/subscriber (m3/annum) Operating cost in dollars 238, , , , , , ,565 m3 cost in dollars Receipts 201, , , , , , , ,938 This is a graduated tariff represented in Figure 9 below, which shows the various components. Let us remember that in Côte d Ivoire, the water price is the lowest in West African Economic and Monetary Union countries. Let us also note that it does not include the fixed assets of the estate. Generally, in the towns mentioned here, the average consumption amounts to 120 m3/year, that is, 30 m3/quarter; the subscriber will have to pay US $ 9 / quarter, which amounts to US $ 3 / months. (US $ 37 / year) Figure 9 Tariff Scale Quarterly lump sum 0 to 9 m3 Block 1 10 to 18 m3 Block 2 19 to 90 m3 Block 3 91 to 300 m3 Block 4 > 300 m3 Administrative Block Price in $ US/ m ) Remuneration of the Lease Holder It has increased from US $ 0.20/m 3 in 1987 to US $ 0.24/m 3 since 1996, when prices were last reviewed following the monetary readjustment that occurred in the CFA zone in In 15 years, the remuneration of the operating company has increased by only US $ 0.06, that is, 2 % per year while the inflation rate has been above 6 % per year over the same period in Côte d Ivoire. That situation makes our task particularly difficult, but as professionals of the public service and as a citizen company, we have never failed our mission. 6) The Organisation Set Up The sizing up of the means, whatever the importance of the town depends on the number of subscribers as summarized in the table below. Water and Sanitation Services Management in Small Towns of Mauritania

187 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 187 Figure 9: Table of the Organization of the Centers Description CO C1 C2 C3 C4 C5 CC CD Nber of subscrib. Type of treatment PERSONNEL Ex. Center Man. Center Manager Operating Agent Administrative ag. Local Agent VEHICLES. Motor cycle. Car Multi Village 1 An average of 1 for 10 0/200 Simpl e 1 1 0/200 Complete /500 Simple /1500 Complete /1500 Simple /1500 Complete > 1500 Complete 1 > 5 1 to 3 >2 6-1) The Local Agent The local agent is an external sub-contractor residing in the town. He must have the required training before he can be accepted as a local agent. He is responsible for preparing the disinfectant solution, for the smooth running of the equipment, for the distribution of the bills and for their collection=. Every day, the center manager drives to the towns located less than 25 km away, where he is responsible for new household connections, the repair of leaks and above all to follow the activities of the local agent. 6-2) The Professional Support This delegation and decentralisation of SODECI's responsibilities aim at achieving two objectives, namely: - Reduce significantly the "time of response" between the decision and the implementation - Implement a customer-oriented management system The enforcement of these two provisions requires a real competence acquired through continuing training modules mainly geared toward practice. That type of training is provided at SODECI's "Centre des métiers de l eau," which has experts in electro-mechanical equipment maintenance and repair, customer management, hydraulics, accounting and data processing to provide the teaching. This training tool is also made available to all the water professionals wishing to build their capacities. Several sister utilities have already taken advantage of the services provided by our "centre de métiers." 6-3) Participatory Management by Objective This was introduced in SODECI in the late 197Os. It has enabled us to improve the responsibility of the personnel, to have more dignity and pride in a job sometimes carried out under difficult conditions (isolation, limited means, etc.). Thanks to this tool, the workers feel concerned and involved in the activities of the company. The employee defines his/her own objectives, the means to achieve them and is periodically assessed on the basis of these objectives. The allowance granted at the end of year is not only a motivation source but also a self-controlling system as it determined by a mathematical formula based on the center s performance indicators. 7) The Difficulties There are many problems that may affect the quality of the service provided over the long haul. We can name among others: Static prices that have kept the lease holder s remuneration constant for 6 years and that may constitute a constraint to the improvemen t of the current performance level, The financial burden of social connections (4 billion/year) which unavoidably reduces the self-financing capacity for more important projects. Today, Côte d Ivoire is suffering from the saturation of all its Water and Sanitation Services Management in Small Towns of Mauritania

188 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 188 production and distribution means and we cannot solve this problem because of the shortage of financial resources, The proliferation of autonomous water supply systems that increase the production charges and operating areas, where consolidating small towns into a big ger city could have enabled us to serve the latter with one production unit using a more sustainable water resource. 76% of the towns in the operating area incur financial deficits. CONCLUSION The towns we serve have increased 38 fold rom 16 in 1960 to 618 today. 76 % of these towns have a population between 2,500 to 15,000 inhabitants. We can say that in terms of equipment investments, the results are quite remarkable. Unfortunately, almost all the secondary centers are in financial deficit, as the yearly receipts cannot cover the operating charges. In the Ivorian context, the management of these small towns and the multi-villages has been made possible by having everybody pay the same price wherever they live in the country. Indeed, in Abidjan, which represents 68 % of the national production, the cost of the cubic meter is relatively low taking into account the good quality of the ground waters used, but the sale price is identical to that of the other regions of the country. If these price provisions had not been made, it would have been difficult to manage these small towns without applying the right price. Therefore, in order to ensure a sustainable service in the small-sized towns, the following recommendations are considered essential: Continuing training and versatile center managers with multiple skills An adequate tariff Access of the private sector to confessional loans The length of the contracts should exceed 30 years The conservation of the same-price-for-all system. Acronyms IDWSSD: International Drinking Water Supply and Sanitation Decade WS : Water Supply SODECI : "Société de Distribution d Eau de Côte d Ivoire" (Water Utility of Côte d Ivoire) RM: Regional Management MHH: Management of Human Hydraulics (i.e. potable water supply) BNETD: Bureau National d Etudes Techniques et de Développement (National Bureau of Technical and Development Studies) VH: Village Water Supply UH: Urban Water Supply INVESTS: Investments OUTSOURCING AND FRANCHISING IN MOROCCO How ONEP mobilizes small scale local enterprises to cut down running costs By Bernard Collignon Water and Sanitation Services Management in Small Towns of Mauritania

189 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Outsourcing and franchising 1. How ONEP (Morocco( Morocco) mobilizes small scale local entreprises to cut down running costs Bernard Collignon Hydroconseil Page 189 Water and Sanitation Services in Small Towns and Multi-Village Schemes Addis Ababa June 11-15, 15, 2002 Water and Sanitation Program The World Bank and the World Bank Institute ONEP delivery 2. ONEP is mostly a bulk water supplyer. Rural areas accounts for only 0.1 % of its turn over. 3 private utilities 13 municipal. pop > pop < direct distribution in rural areas (PAGER) 1000 villages population sales ,1 (Mm3/year) sales/capita (l/day) turnover (M$US/year) Production and bulk sales management contract for 251 small towns 300 2,4 3. PAGER objectives in rural areas are very ambitious: 80 % coverage in year 2010 ( villages) Coverage in rural areas 100% 80% 60% 40% 20% 0% PAGER ONEP has been asked to cover a large part (> 50%) of PAGER scope. Task sharing between ONEP and DGH "territory" water sources present management model promising management model tariff setting ONEP areas without local water sources supply from remote dams (regional schemes) regular customer service + outsourcing franchising national (cross subsidy between urban and rural areas) DGH areas with local water sources on site boreholes community management management contract local (full cost recovery) The challenge for ONEP is: 5. how to supply many thousands more villages and small towns..although the utility is already loosing money in small towns and villages and is supposed to stay financially autonomous (no subsidy)? 6. In order to reduce costs in small towns and villages, ONEP uses three main contracting arrangements : (a) Outsourcing technical functions to local entreprises (b) Outsourcing some retail sales (standposts) (a) + (b) = (c) Franchising local small entreprises for water distribution Water and Sanitation Services Management in Small Towns of Mauritania

190 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page (a) Outsourcing technical functions ONEP outsources many technical tasks to entreprises 8. (a) Outsourcing technical functions Typical entreprises contracted by ONEP Pumping station operation Network inspection Leakage detection Field water analysis and water sample collection House connection. Typical micro-enterprises age staff size turnover 0 to 7 years 2 to 10 people 10,000 to 50,000 US $/year total (202) 600 people (compared with 6000 for ONEP) 5 M $/year (compared with 250 M$ for ONEP) 9. (a) Outsourcing technical tasks ONEP provides strong support to these local entreprises Typical micro-entreprises total (202) 10. (b) Outsourcing retail sales Outsourcing standpost management : it works, but water sales at standposts are very low in small towns and villages Water delivery for all the ONEP standposts (year 1999) age staff size turnover 0 to 7 years 2 to 10 people 10,000 to 50,000 US $/year 600 people (compared with 6000 for ONEP) 5 M $/year (compared with 250 M$ for ONEP) Standposts number average delivery m 3 /day.sp concerned population consomm./ inhabitant l/day.inhab large towns 731 8, ,8 small towns and villages , ,5 total , ,8 60% 40% 11. (b) Outsourcing retail sales Standpost managers monthly incomes (US$/month) are very low in small towns and villages 12. For ONEP, the challenge is to cut running costs for small towns, villages and scatered customers : For the time being, small towns are highly unprofitable (50 % financial losses) In villages, perspective are worst 20% 0% < >160 Long pipes and few users (rising maintenance costs) Remote villages (rising logistic costs) Few customers per village (rising metering / billing / recovery costs) Water and Sanitation Services Management in Small Towns of Mauritania

191 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation 13. Page 191 Franchising is the most promising solution to cut running costs in rural areas : (a) Simple technical outsourcing is not feasable (turnover in village is not enough to keep alive a professional entreprise) (b) Outsourcing retail sales (standpost( standpost) ) do not meet the demand (users ask for connections) and do not pay the standpost manager (a)+(b)=(c) But a contract for all the local operations is feasible : operating the system, managing the standposts, installing house connection, managing customers (metering, billing, recovering) 14. The management option chosen by ONEP in rural areas is one step ahead of its management system in towns : ONEP manages most of the investments and supplies bulk amount of water at the head of the branch. The local micro-entreprise manages all the functions, downstream a bulk meter Connecting new customers Running equipment (including booster stations) Recovering costs (metering / billing ) Valve General meter (ONEP billing basis) ONEP Main pipe ONEP (franchisor) management 15. Extension with kiosks and house connections Micro-enterprise (franchisee) management 16. It looks like a franchising agreement : The franchisee (local entreprise) ) : Manages all relationships with customers Uses the ONEP trade mark Pays a fee (according to water consumption) The franchisor (ONEP) : Provides bulk amount of water Defines standards for service, tariffs But ONEP undertakes all initial investment and that is a big difference with most common franchising aggreements 17. What is different with ONEP? (Most water utilities do not practice franchising in small towns) Most national water utilities provides water to some dozen of medium sized towns and negotiated contracts excluding very small towns On the other hand, ONEP has been assigned a global ambitious objective by Morocco government : 5,400 villages in year 2006 and that makes the difference! NB : SODECI is another water utility providing water to very small towns (545 towns in Côte d Ivoire) Ivoire).and it is also outsourcing daily management of the systems to local sub-contractors 18. Water and Sanitation Services in Small Towns and Multi-Village Schemes Addis Ababa June 11-15, 15, 2002 Water and Sanitation Program The World Bank and the World Bank Institute Outsourcing and franchising How ONEP (Morocco( Morocco) mobilizes small scale local entreprises to cut down running costs Bernard Collignon Hydroconseil Water and Sanitation Services Management in Small Towns of Mauritania

192 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 192 WATER AND SANITATION SERVICES MANAGEMENT IN SMALL TOWNS OF MAURITANIA By Ahmed Ould Weddady and Mohamed Moustapha Ould Mohamed Lemine Foreword Water and Sanitation Services Management in Small Towns of Mauritania

193 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 193 In 1999 the World Bank "Water and Sanitation in Rural areas" thematic group, in collaboration with the Water and Sanitation Programme (WSP) launched a Global Initiative to document management models of water and sanitation services in small towns and multi-village systems. The Global Initiative is organised around three main case studies undertaken by teams of national consultants (with methodological support provided by Hydroconseil) in Mauritania, Colombia and in Vietnam. From an institutional and sectoral analysis, as well as field surveys in dozens of small towns, these case studies highlight the most important issues at stake and new opportunities for improving the water and sanitation services in the three countries small towns. Taking into account the institutional, legal and economic factors, this Initiative aims to highlight the factors which can limit or enhance the performances of the operators. The Water and Sanitation Programme Africa launched the Mauritania case study in October 2000, following a study visit organised in May of the same year, which had confirmed the strong interest for the national policy that Mauritania has developed on managing water services in small towns. These studies were mainly focused on the management of the service (rather than on technological issues) and on the best and more innovative practices, as well as the limitations and bottlenecks in improving and extending the service. The most in teresting aspect of the management of the water services in Mauritania is their original policy of willingly delegating the operation of services in small towns to local operators. These oper ators are known as concessionnaires, although these contracts are more like a lease or a management contract. In Mauritania, in-depth investigations were Mauritania; this also allowed the most recent institutional changes to be included in the conclusions and recommendations. MAURITANIA IN A NUTSHELL Key Figures Population: 2,550,000 inhabitants Growth rate 1988/2000: 3.1% / year Urban/rural population: 55.3 / 44.7% Surface area: 1,031,000 km2 PPP GNP per capita: 1,609 $ US GNP growth rate: 1.3% Exchange rate: 1 $US = 250 UM UNDP HDI Rank: 147/174 Life expectancy: 53.5 years Literacy: 41.2 % Administrative Divisions The country is divided into: 13 wilaya (regions) headed by a Wali (Governor); 53 moughatâa (departments) headed by a Hakem (Prefect); and arrondissements (districts) headed by a Chef d arrondissement (District Commissioner). Local Government 53 urban municipalities (generally the principal town of the moughatâa) rural municipality (big rural centre or principal town of an arrondissement) villages without clear administrative status Annie Manou-Savina Water and Sanitation Programme Africa undertaken in about thirty small towns, and the mobilisation of a multi-field team of consultants made it possible to highlight the main trends and key ingredients for the success of this model. The conclusions of the study were pr esented and discussed in October 2001 with all the partners from Water and Sanitation Services Management in Small Towns of Mauritania

194 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 194 Small Towns in Mauritania What is the demographic weight of small towns? The concept of a small town in Mauritania does not have a precise legal definition. A small town can be an urban dist rict (municipality), the principal centre in a rural district or a simple village without any administrative status, but whose population is significant enough to justify a supply water scheme (a borehole and a distribution network). A commune is a corporate body. It has true financial autonomy (with a budget financed partially by local taxes) and its own assets (water supply facilities are not included in these municipal assets, because they still belong to the central State). The concept of a small town in Mauritania reflects a strong recent development in the country: the migration of the rural population towards the cities and the very rapid settlement of the population since Many towns grew up along the roads that were built in the 80s (in particular the "road of hope" which crosses the cou ntry from the West end to the East end) and other towns experienced accelerated growth after the installation of basic services (and particularly water supply, which is subject to a keen demand in this very dry country). 80% 60% 40% 20% 0% Evolution of the nomadic population In addition, the country has faced spectacular changes in the distribution of its population. The population of the capital town (Nouakchott) grew from 5,000 to 700,000 inhabitants in 40 years and this fast urbanisation continues, former rural residents not only migrating towards the large cities, but also towards a great number of small Year 2000 Year 2010 towns. Small Villages (less than 500 inhab) Big Villages (500 to 2000 inhab.) Small Towns (2000 to inhab.) Urban Areas (territory of SNDE) Total Demographic forecast for The proportion of the population living in "small towns" in Mauritania is very large. One inhabitant in 4 lives in a small town (between 2,000 and 30,000 inhabitants) not served by the national utility (SNDE). One inhabitant in 5 lives in a large village (between 500 and 2,000 inhabitants) and also needs to be supplied by a small scheme. Consequently, the "small towns" issue affects 40 % of the population in Mauritania (settlements that are sufficiently large and dense to benefit from the economies of scale offered by piped systems, but too small and dispersed to be efficiently managed by a conventional urban water utility ). This proportion should increase to Part de la population mauritanienne dans les localités de diverses tailles milieu urbain (gestion SNDE) petites villes (2000 à 30000h) gros villages (500 à 2000h) petits villages (<500 h) 0 année année Forecast undertaken under the auspices of the study of the investment master plan for rural and semi-urban water supply (PARSEAE, 2001). Water and Sanitation Services Management in Small Towns of Mauritania

195 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 195 nearly 45 % by 2010, except if SNDE's perimeter is extended to new towns. The national policy and the main stakeholders of the sector Until very recently (middle of the year 2001), responsibilities were shared between the main stakeholders was as follows 48 : Participant Roles Perspectives Ministère de l Hydraulique et de l Énergie (MHE) et la Direction de l Hydraulique (DH) Ministry of Water and Energy (MHE) and Water Directorate (DH) During the year 2001, the Water Directorate became the Water and Sanitation Directorate MHE is responsible for the definition of the national water policy, the prospecting and the extraction of water and the conservation of the water resources. Owner of water facilities, it is respons ible for investment planning and implementation. MHE represents the State as the owner of all water supply infrastructures and equipment. DH is in charge of the maintenance of pumping stations and also undertakes works (well construction). DH draws up the contract and the technical specific ations for the concessionnaires to follow, sets the water tariff, and is responsible for the technical and financial follow -up of the service and the concessionnaires. On-going reform has led to a new role for the DH, which will be in charge of: Policy -making and planning of new investments for the water and sanitation sector; Management of water and sanitation projects and programmes; Administrative supervision of decentralised bodies (such as ANEPA, see chapter 6). New roles for DH are taking into account changes such as re-focusing of the State on the fundamental missions, its withdrawal from industrial and commercial activities, and the decentralisation. Société Nationale d Eau et d Électricité (SONELEC) National Water and Energy Utility Concessionnaire (operator) Municipality This public utility provides water supply and electricity services in urbanised areas. SONELEC also carries out technical design and works for the towns which it serves. The concessionnaire may be a private operator, a Water Board or a Municipality (rare). Its roles are: Water supply; Technical management; Administrative and commercial management of the service. According to the decentralisation rules and regulations (1986), communes are in charge of water supply and sanitation services. But this mission has been de facto withdrawn by DH, after the failure of municipal management in the early 90s. A recent change in regulation has split the former public utility in two separate bodies: A (private) company in charge of producing and distributing electricity (SOMELEC); And a (public) utility in charge of the water service (Société Nationale d Eau: SNDE). This utility provides water to 11 towns (for a total of 1 million inhabitants), and it is planned to extend its territory to 6 other towns. The original contract used by DH is not really a concession contract, and not even a lease contract. But in reality, this contract is evolving towards a "de facto" concession. For a better analysis of this delegation framework, see the chapter 3 of this document. The role of the commune is very ambiguous, because it gets a levy from the concessionnaires and is supposed to oversee the maintenance of public services (for an example see Moudjéria, a town surveyed during the May 2000 study tour). 48 An overview of the new institutional framework in Mauritania is given in chapter 6. Water and Sanitation Services Management in Small Towns of Mauritania

196 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 196 Mauritania - Institutional framework up to 2001 (valid throughout the period this case study was carried out) Water Directorate (DH) Selects the authorized providers Equipment and spare parts provider (private firm) Local Divisions ("bases") of DH Delegation contract Maintenance Agreement by DH "Free" commercial relationship Maintenance Company Reports the performances of the water supply service Follows up the concessionnaire and monitors water resources Maintenance contract Water Service "Concessionnaire" Controls the respect of technical specifications of the delegation contract Municipal levy (5 UM per cubic meter) Final contract (in general informal) Municipality Voting User Water and Sanitation Services Management in Small Towns of Mauritania

197 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 197 An overview of this case study The case study surveyed 33 small towns in 4 wilayas: Brakna, Trarza, Tagant and Gorgol (see map). These areas are among the most densely populated in the country and represent 62 % of the water supply schemes currently existing in Mauritania. Among the 120 networks which exist in these 4 wilayas, 33 were selected as a representative sample: The life span of these systems is at least 3 years (except for one of them), which means that it is possible to reconstitute financial data; the average life span of these 33 schemes (10 years) is exactly the national average; Selected towns are quite large: an average of The main steps of the case study Step 1: review of the water supply in the small town context in Mauritania (demography, institutions, etc.) Step 2: assessment of water services management models in 4 wilaya (first sample of 33 small towns). Step 3: in-depth survey of water and sanitation services in the final sample of 10 small towns. Step 4: summary, recommendations, final workshop for the validation of the main findings (October 2001). 4,200 inhabitants, slightly higher than the national average for towns served by a distribution scheme (3,500 inhabitants per town, except within the territory of SNDE); The percentage of systems with private, associative or municipal management is comparable with the rural situation. Water and Sanitation Services Management in Small Towns of Mauritania

198 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 198 Delegation to concessionnaires, a model based on experience in the field The origin of this model Operating the water supply schemes became increasingly onerous in the Eighties and Nineties, and the Mauritanian government no longer wanted to be responsible for the day-to-day management. The fi rst alternative operators appointed were the communes (municipalities), who quickly proved themselves to be poor managers. The water service rapidly declined, and the financial deficit grew, leading the government to consider radically changing the management model, and delegating the management. So, since 1993, Mauritania has developed an original strategy of water service delegation in the small towns, contracting with operators (one-man or "unipersonal" companies in 75 % of cases) called "concessionnaires". Today these operators provide the water service in 190 of the 270 Mauritanian small towns equipped with a water distribution scheme. This very determined strategy is controlled with very little regulation (a simple ministerial decree of a few pages, issued in 1993 and accompanied by a standard contract a few months later). These regulations are not very detailed and the Ministry showed sufficient flexibility in their application to support local initiative without insisting on any formal aspect of this management delegation (management contract to be more precise). The 1993 decree envisages several possibilities for the "concessionnaire s legal status: a private oper ator, a Users association or an autonomous municipal body (régie ). In practice, it is the private operator (in general a unipersonal company) which is most common, except in the area of the Senegal basin where the community management is relatively frequent (on this aspect, cf. the field note on the study tour organised by the WSP in 200 0). What does the delegation contract say? Choice and role of the concessionnaire (operator) The "community" (all the people living in the small town) selects an owner, in general within the same community; the Water Directorate (Direction de l'hydraulique, DH, in French) validates this choice, choosing a back-up if needed. The commune on which the small town depends is also supposed to have a say in the choice of the concessionnaire, but in practice it seldom uses this right (except of course when the commune wants to sign the delegation contract directly with DH). The operator manages the facilities and is responsible for maintenance; he is also responsible for the supervision of works small extensions or a house connections campaign. The operator sells water at a price determined by the Ministry. In theory, this price covers: running costs (energy, payroll, small items etc) and preventative maintenance. Finally, he pays two taxes to the DH (one for heavy maintenance, the other for the renewal of any equipment) and a communal levy (see below for more details). Role and duties of the Water Directorate (DH) The Water Directorate (DH) organises heavy maintenance (relating to boreholes and pumping sets), directly or through a company (this is the case for all the solar systems in the country). DH ensures the renewal of any equipment which may be necessary (using taxes and State funding for any replacements. Finally, DH fixes the tariffs and controls their evolution (to take account of the increasing price of diesel, for example). Beyond the weakness of contracts, a de facto security The legal situation of the concessionnaires seems very insecure when we look at their contracts: The duration is very short (one year for the diesel stations, only one month fo r the solar stations... all contracts continuing unless terminated by either party); Some provisions are ambiguous (contradictory provisions, share of responsibilities of the various participants unclear). During the first few years after the implementation of the 1993 decree (setting up the delegation model), some operators gave up the activity. However, for 4 years now, the situation has seemed remarkably stable (less than 10 % of contract cancellation and the 33 owners met during this case study have be en in business for Water and Sanitation Services Management in Small Towns of Mauritania

199 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 199 an average of 4.5 years). This proves that the operators, their community and the delegating authority have found a consensus. Social and political criteria are very important in the choice (and the stability) of the operators. The legal insecurity is compensated by informal mechanisms which confer on the operator a true "social legitimacy", giving him a real security (the administration will not cancel his contract) as long as he provides a good service. The contractual obligations, often considered as fundamental to success when delegating public service, are replaced by an obligation to provide results (to provide water each day, to an increasing number of families). The fulfilment of this obligation is controlled directly by the community as a whole, rather than by the town or a sector regulatory body. Who are these "concessionnaires"? Above all, individuals Status of the concessionnaires in Mauritania 21% Private Municipal the service and the viability of the equipment. Portrait of a successful operator When operators meet performance targets, they develop small-scale public service utilities Acting as entrepreneurs, the majority of the operators engaged new employees, in addition to Selection Wherever the application (to be concessionnaire) comes from, selection must be confirmed by the main leaders of the community in the small town. Competition between two candidates is quite rare, and it would mean that selecting the operator would require more skill. Social status in town To be born in the town and to havea good relationship with the community members and the local authorities (traditional or modern). Other activities? A full time job requiring great availability (concessionnaires never leave their town for more than 2 or 3 days at a time). Personality Requires an "entrepreneurial" spirit. To take into account the opinion of clients and be able to manage conflicts. Finally, to be aware of the general interest (because water is a public service). Understanding of their activity / mission The activity must be regarded as a "public service", for which the first sustainability criterion is the profitability of operation. 9% 70% Communitary The management of the water supply service in a small town is regarded as a pr ofessional activity. It thus fulfils the professional ambitions of the majority of the operators who regard themselves as small scale entrepreneurs engaged in this activity in the long term. The comparison of the performances of the operators met during the field survey in the 33 towns emphasises the standard portrait of the potential operator, capable of responding to the users' demand and guaranteeing the continuity of Status Private operator (one-person company, not formally registered). Age years. Background and skills Previous professional experience + Bachelor of Science Water or higher and Sanitation degree Services (PhD for Management some of in them). Small Towns of Mauritania the personnel initially specified in the delegation contract (someone to look after the pumping equipment, and resellers at public stand posts, plus a supervisor for the solar st ations). The average number of staff employed by the 10 operators who were interviewed in phase 2 increased from 1.5 to 4 permanent employees (plus stand posts resellers one per stand post and temporary employees for the extension and connection works). The evolution of the teams highlights the Nombre d'agents Evolution du personnel des concessionnaires (non compris fontainiers) Bouhdida Bababé Magta Lahjar Monguel Moudjéria Keur Macène Tiguent Bareïna Mata Moulana R'Kiz Personnel à la signature du contrat de concession Equipe actuelle

200 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 200 dynamism of the private operators, anxious to respond as fully as possible to the keen demand of the clients. From a basic team, a technical team evolves, and then some time later a billing team is added. A clerk and an accountant provide added skills to make the operator's team a real service utility. Business logic and main steps in the evolution of the concessionnaire towards a small-scale public service utility Start of the contract Basic Team Manager + technicians + resellers Promotion of extension Full Technical Team Manager + technicians + plumbers + resellers Promotion of HC < = 100 HC Technical and Commercial Team Manager + technicians + plumbers + resellers + billing team Number of House Con. > = 500 Full Technical and Commercial Team Manager + technical team + billing team + clerk and accountant A model which has provided a good response to the users' demand and the local operators' capacities Schemes have been considerably extended In all the towns studied, without exception, the "concessionnaires" have extended the scheme. For some, it was enough to install a few dozen meters, for a house connection, but others extended the network by more than 40 km. In the 33 towns surveyed, the extensions carried out by the operators represent 150 % of the initial length of the network. How important these investments were was completely unknown: this was the main reason why Mauritania was chosen for a case study: Why did operators with just a management contract invest so much? How did the operators carry out works which are in theory prohibited to them (since DH, owner of the assets, is the only body authorised to undertake works)? How were such expensive extension works financed? Which factors encourage and limit private investment in the extension of the network? House connection is now a very popular service, which perfectly fulfils the users' demand One very impressive phenomenon emerges if we consider the sample of 33 towns surveyed: the increase of the number of house connections. 88% of these small towns currently have private connections. Only 4 towns do not have any individual connection (therefore users rely on public stand posts alone). Parallel to the installation of the house connections, we observed a progressive decline of public stand posts, whereas the same stand posts were still considered only 5 years ago as the "regular standard" for small towns in Mauritania. In more than 21% of the towns, public fountains are no longer working. Generally very little used, they operate less and less: an average of 3 public stand posts are wor king out of Water and Sanitation Services Management in Small Towns of Mauritania

201 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page that exist in each small town. In the 10 towns studied, without exception, the number of working public stand posts decreased in the last 5 years, while the population was increasing. The majority of the households which abandoned the public stand posts tran sferred to a higher standard of service: house connections. The average number of house connections thus passed from one connection per town (at the time of the signature of contracts) to a current total of 183 connections per town. It regularly increases year by year in the 10 towns. The cover rate is less than 15 inhabitants per house connection in the sample of 10 towns (from 8 to 39 inhabitants / house connection), i.e. a ratio of almost 8 house connections for 100 inhabitants (from 2.5 to 19 house connections for 100 inhabitants), which is remarkable and confirms the users interest in this level of service. The evolution of the water service in the small towns of Mauritania shows that there is a strong demand for affordable house connections, even in a very poor country (with a daily average income per capita lower than 1 $ per day). The development of the house connections is accompanied by a progressive marginalisation of the public stand posts and there is a true transfer of customers from one level of service to another. In the 33 small towns studied, 70 % of the households are getting water from a house connection, which shows that this type of equipment is not restricted to high-income families, but is now very popular across the board. Business practices to promote house connections The fact that many households agree to invest a significant amount of money (180 US $ for a connection of an average length of m) in extension and connection works shows their trust in the capacity and the will of the "concessionnaire" to provide connection at a reasonable price and then to prov ide a rel iable service. The principal limitation in the increase in the connection rate is the lack of water resources. Many towns are equipped with underdesigned solar pumps and others do not have highdischarge bor eholes. The development of these house connections was carried out without any recourse to formal credit (commercial banks or "mutualist" systems). Therefore, the users or the groups of users generally use their own savings or informal credit. The operator plays a role in initiating and sup ervising extension works (supervision in which local and central administration takes no part). The operator s financial investment, with some exceptions, is extremely limited - this proves that the contract does not involve a full concession. But the concessionnaire provides materials and spare parts, and supervises works for house connections at a very low price, the "connection technician" being the plumber at the same time, and the operator himself controlling the quality of works (almost free of charge). Community vs. commercial logic When the operator is in a community system (the users operate the scheme themselves), it is very difficult for a "Water Board" to deal with an individual request (like a request to be connected to the network). Indeed, this request is in contradiction of the "egalitarianism" which characterises the Community models. On the other hand, the (private) operator such as a concessionnaire places himself in a business relationship with the user/client, by proposing a (paying) service to the users: to connect them to the network and to supervise connection works. The rapid development of the house connections is thus closely related to the commercial logic of the operators (to increase the income rather than to reduce the expenditure). A daily consumption higher than in neighbouring cou ntries More evidence of users satisfaction: consumption is around 25 litres per day and per person, in spite of the rather high price of water (cf. 5.3). The only exceptions are solar stations, where the provision of water does not cover the demand. This is a fairly high unit consumption, with the price of water higher than the average in West Africa. It is Water and Sanitation Services Management in Small Towns of Mauritania

202 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 202 explained by the success of house connections along with the users satisfaction with the service. How are funds raised for scheme extensions and how much money do they repr esent? Banks are not involved in the water supply sector at all. Not a single concessionnaire had access to credit in order to finance extension or connection works. 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 Consommations journalières (l/j.hab) Bouhdida Monguel Moudjeria Magta Lahjar R'Kiz Bababe Mata Moulana Tiguent The funding mechanism for these extensions is quite different from one town to another. However, it always comes down either to the use of the users' own savings (by paying the connection fee) or the use The "concessionnaire" model allowed strong private fund -raising in the water sector. The total amount of the inves tments raised directly by the users in the 33 towns surveyed exceeds 400 million UM (1.6 million US $) and, by applying these figures to the 190 localities or so where the service is delegated to concessionnaires, we can estimate that the private investment is around one billion UM (4 million US $) over the whole the country. The investment represents an average of 11 US $ per connected user. What about sanitation? The case study also focused on the (public) sanitation service, which is underdeveloped in the small towns. The main findings were: In all the small towns households have latrines (improved to a greater or lesser extent), built by local craftsmen; There is no "urban" sewer system (in any case, the daily water consumption is insufficient to justify the development of a sewer); There is no public investment in the sanitation sector (apart from the subsidising programmes e.g. UNICEF); None of the operators interviewed for the study was offering specific sanitation services Mauritania - Private investments for network extensions in 33 small towns UM = 1 US $ Estimated population in 2000 Life span of the schemes (years) Initial length of the network (m) Length of the network in 2001 (m) Investment (with 6 US $ per m) Initial number of house connections Number of house connections in 2001 Investment (with 80 US $ per HC) Total for the 33 towns 138, , ,957 1,004, , ,240 Average per town 4,207 2,898 7,898 30, ,007 Average per capita Extension rate 275% 2,314% of local funds by the community (public or private funds, Community funds, co-operation with local gover nments of Northern countries). to its "water" custo mers; The level of service is weak in the recentlysettled tow ns (20-30%); there is probably a Water and Sanitation Services Management in Small Towns of Mauritania

203 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 203 correlation between the improvement in the standard of house connections and the building of latrines; Older towns are better equipped (coverage 85-90%, even if all the latrines do not always meet sta ndards); Cesspool emptying services (like those in big cities) do not exist in any the small towns surveyed; 70% of the towns represent an attractive market for manual cesspool emptiers (but probably not for a company using a truck). Water and Sanitation Services Management in Small Towns of Mauritania

204 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 204 Technical and financial performance of the concessionnaires Taxes and levies paid by the concessionnaire The operator is supposed to pay: A municipal levy of 5 UM per m3 of pumped water; A tax for heavy maintenance of the equipment (average: 13 UM / m 3 of pumped water); A tax for the renewal of the equipment (average: 12 UM / m 3 of pumped water). The total amount of these mandatory taxes repr esents approximately 30 UM per m3 of pumped water, which is equivalent to 40 % of the operator s total i ncome redevances dues (UM/m3) redevances payées The recovery rate of these taxes is approximately 22% (see chart below). This low recovery rate can be explained by practices in the field which are quite diffe rent from those provided for in the delegation contract, but which reflect very clearly the hold-ups which the operators must face (see table). Towards an effective del egation of maintenance? The unwieldy public procedures, in particular when paying for spare parts for the pumping equipment, and the lack of human resources in the Water Directorate make this difficult to achieve. At the sam e time maintaining the pumping equipment in good condition is a crucial issue for the operators and the continuity of the water supply. Since the maintenance being provided by the local offices of DH is poor, the operators are looking for other alternatives (contract with a private operator specialising in maintenance, or maintenance provided directly by the operator's technical team). Rather than paying twice for maintenance, many operators prefer not to pay their taxes to DH. The majority of the operators prefer to increase the skills of their team and some of them develop relationships with local private operators. Civil servants working for DH are still called upon for the most complex operations (like the extraction of the pumps). The technicians from DH sometimes act on an official basis but generally on a purely private basis. Centralised and arbitrary setting of tariffs The price of water (inclusive of all taxes) is UM (0.32 to 0.40 US $) per m 3 in the 33 towns surveyed (the price is 145 UM (0.58 US $) in bigger towns managed by SNDE). This tariff is relatively high compared to the average in the neighbouring countries in West Africa, where the price is around CFA Francs (0.15 to 0.30 What should be done according to the law and what is done in reality The operator pays a municipal levy (5 UM / cubic metre) The operator pays a "maintenance" tax to the DH, who is supposed to provide this maintenance The operator pays a "renewal" tax into a fund managed by DH The operator does not pay the commune, but provides free water to the municipal institutions. Since the access to these funds is very difficult, the operator pays the maintenance companies directly. Since the access to these funds is very difficult, only the most efficient operators are able to make savings in order to renew the equipment (mainly pumping equipment). Water and Sanitation Services Management in Small Towns of Mauritania

205 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 205 $ US). Tariff increases have been frozen for almos t 5 years, after a cut in tariffs which occurred one or two years after the signing of the first contracts. In 2001 the tariff was being increased to take into account the rising price of diesel, but without fully compensating for this increase, which considerably weakened the financial viability of the operators tarif moyen eau (UM/m3) Pris moyen gasoil (UM/l) To do this, they develop strategies to by-pass the initial provisions of the contract: 1) Reducing the maintenance costs (by operating less frequently, contracting directly with private operators and not paying the maintenance tax to DH); 2) Not paying the communal levy and the tax for the renewal fund managed by DH (but they still finance renewal operations); 3) Relying exclusively on the users to finance the network extensions (which prevents any crosssubsidisation between the different categories of users). All of the concessionnaires are meeting the running R'kiz Tiguent Maghama costs, but sometimes to the detriment of long-term sustainabi lity One of the main findings about the management model in Mauritania is its unexpected success: no operator stopped managing the water service for purely economic reasons. Since the operators financial resources are close to zero, and they never use bank credit, they succeed in balancing their costs and income (in spite of the very low price of water). Water and Sanitation Services Management in Small Towns of Mauritania

206 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 206 The new participants and their roles The institutional framework has faced fundamental changes During the year 2001, 3 new bodies were established in the W&S sector: Body ANEPA ARM AAU Status Non-profit-making association Independent body Public entity (MAED) Main roles Selection and follow -up of concessionnaires. Recovery and management of the funds for renewal. Organisation of maintenance and replacement of equipment Regulation (delegation contracts, agreements with operators, tariff-setting policy) Supervision of participants and control of delegated services; this control is direct in the case of an urban area; for small towns and rural areas it can be delegated to AAU. To promote the access to basic public services of all citizens of Mauritania A professional body dedicated to small towns The positive aspect of this new framework is the emergence of a professional agency specialising in the sector specific to small towns (ANEPA, see table above). The associative status of ANEPA makes it possible to compensate for some of the government s deficiencies (delays in starting work and reac ting to situations etc). ANEPA will fulfil some of the former which were not fulfilled at all (training, setting tariffs, definition of indicators to measure the performance of operators, etc.). but its competence has to be confirmed The global success of the "concessionnaires" model should not mask some important issues for the water and sanitation services in small towns which have not yet properly been addressed. The first issue is the possibility of establishing a cross-subsidy mechanism MHE / DHA ARM MAED Regulation Supervision Delegation Contract Delegation of the regulatory functions CNRE ANEPA Controls the respect of its obligations by ANEPA AAU Supervision Service Delegation Contract (and payment of a tax by the operator) Water service "concessionnaire" Regulation MHE: Ministry of Water and Energy ANEPA : National Agency for Water Supply and Sanitation (beyond the territory of SNDE) ARM: Multi-sector Regulatory Agency AAU: Agency for Universal Access to Public Services MAED: Ministry of Economical Affairs and Development functions of DH (contract follow-up) and functions between the "profitable" small towns and those which Water and Sanitation Services Management in Small Towns of Mauritania

207 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 207 will never be profitable (even for an individual oper ator e.g. the very isolated towns in Northern Mauritania). Another issue is to provide decentralised support for the operators, and to give a real service for the taxes paid by the concessionnaire. Conclusions & perspectives Water and Sanitation Services Management in Small Towns of Mauritania

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209 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 209 A good model, which has proved its efficiency without needing heavy institutional changes The coverage of small towns by the water service is quite extensive: 90% of the towns with more than 3,000 inhabitants are getting water from a piped network. The 1993 model for delegation has been an unexpected success: very few dealers ceased operating or gave up managing the service. A fairly high standard of service (30 connections per 1,000 inhabitants, i.e. a ratio comparable with Nouakchott). A rapid extension of the service: particularly house connections, and 500 km of extensions in 5 years, for an estimated cost of 1 billion UM (4 million US $). These extensions of the network were undertaken using exclusively locally-raised funds, without public subsidies nor any recourse to the commercial banks. Small-scale companies gradually developed under the impetus of the most dynamic operators, and many jobs were created at a local level. The new institutional framework should promote the development of this model of delegated management Follow-up of concessionnaires will be provided by an independent body (ANEPA), aiming to standardise the type of delegation model in use since Maintenance will be delegated to local craftsmen and private companies, and ANPEA will be in charge of controlling services provided by these companies. A new financial mechanism will be established to manage funds for renewal and it will probably solve the question of the unwieldy nature of the Ministry / DH; provided that funds can be quickly procured and that agreements are not tran sformed into monopolies. Genuine regulators have been established (AAU and ARM), to guarantee access to the service for all the citizens of Mauritania, and in particular the poorest among them provided that all the efficient local mechanisms which have been implemented since 1993 are kept in place. Some issues which have not been addressed Some questions remain unanswered: How will the tariffs be updated to meet real operating and renewal costs for the water service? Will a specific mechanism for local re-negotiation be set up for small towns? Exactly which skills/practices and what quality of service will be provided by ANEPA to the concessionnaires? Will the commercial banks develop a real credit policy for small-scale water utilities, showing their capacity to invest and make a profit, and to get new customers, guaranteeing financial sustainability (or at least no deficit)? How to develop the "public service" (i.e. universal access to basic services) in the towns which are not easily profi table without subsidising them? Who will manage cross-subsidies between towns, and using which kind of criteria? How to support the access of poor families to what is now the "regular" standard for service delivery: house connections? Is it necessary to continue some water distribution by keeping stand posts? Or to subsidise hous eholds who have been unable so far to connect due to financial limitations? INTRODUCTION TO SANITATION SESSION By Ato Brown Outline of Master Plans for the Water Sector in Ethiopia

210 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page SANITATION SESSION 327. Ted Turner Your either lead, follow or get out of my way The miracle of the toilet seat The challenge to all IT Specialist 328. Vote for your sanitation rights! ITF- International Toilets (IT) Specialists Federation is carrying the mother of all referenda on the sanitation question The referendum will be based on the universal principle of one man one vote No Florida counting procedures are permitted; the voting should be free and fair The losers should concede honorably - there is no room for two sanitation presidents 329. Referendum Questions #1 1. What is your guess of average share of sanitation in the Water and Sanitation expenditures for small towns in the country of your greatest interest? (A A combien estimez-vous en moyenne la part de l assainissement dans le dépenses d dans les petites villes de votre pays de plus grand intérêt t?) a. 0-5% b. 6-15%; c %; d %; 50%; e. can t t even guess / ne peut pas l estimer l 330. Referendum Questions #2 2. Who is responsible for sanitation? (Qui est responsable de l assainissement?) a. Utility; La société d eau b. Local government; ; le gouvernement local c. Minister of Health; ; le ministère de la santé d. All above; tous e. none of above / aucun d entre d eux 331. Referendum Questions #3 3. Who is actually doing something? (Qui ( fait actuellement quelque chose?) a. Utility; La société d eau b. Local government; ; le gouvernement local c. Minister of Health; le ministère de la sant é d. All above; tous e. none of above / aucun d entre d eux Outline of Master Plans for the Water Sector in Ethiopia

211 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Objectives To work with participants to identify the core features of small town sanitation and Develop principles for a framework for sustainable management of sanitation in small towns Session Overview Working Groups Technology -SR Finance LF Institutional Arrangements-NG Wrap-Up 333. Session Plan Facilitator(s) AB; Kawesi/Ancheta Salifu, Stoveland,, Roche Klosky, Cole, Bosche Kariuki, Jawara, Makokha LS, PK, MK, AB Location Plenary Room 4 Room 2 Room 6 Plenary 334. Key Issues and Discussions 335. Rules for Group Discussions Finance Institutional Arrangements 3-4 key issues Responses to the issues Areas for further work Technology Each group should select a chairperson and a scribe Each group should consider a maximum of 6 issues after the lead presentation (20 mins) Each group should consider breaking up into 3 sub-groups for detailed discussions (60 mins) Each sub-groups should deal with 2 issues plus hygiene education The group should consolidate the sub-group report for presentation at the plenary session (10 mins) ISSUES IN FINANCING SANITATION FOR SMALL TOWNS By Pete Kolsky Outline of Master Plans for the Water Sector in Ethiopia

212 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Issues in Financing Sanitation for Small Towns Who pays what? public vs private How best to pay? over time... forms of contribution 2 case studies Food for thought 337. Different issues for different types of infrastructure... Toilets/latrines are expensive are lumpy investments Drainage is more collective...harder to recover indiv. costs. maintenance costs are the hidden catch Rubbish collection/recycling strong recycling potential problems of service at transfer/disposal levels 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 1 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa Who pays what? How best to pay? Splitting the Public & Private Share Incidence of Benefits concept Public funds only to cover externalities Household, Neighbourhood, City level infrastructure have difft mix of public/private...see handout Investment vs. maintenance costs If any subsidy, subsidize the investment, not the maintenance Subsidize promotion, but not the construction costs of HH sanitation 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 3 Some public options From national funds (e.g. HIPC) through incentive linked conditional grants General taxation Property rates surcharge on water services user charges Private options Credit to HH in various forms (e.g. micro-finance, subsidized sewer connection with capital recovery from water rates) Facilitate contribution in labour and materials 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 4 Burkina Faso 340. Case studies Sanitation surcharge on water bills Promotion of on-site sanitation Vietnam Sound credit schemes to households No subsidy, high repayment rates Applicable to small towns? 341. Burkina sanitation surcharge to water bill Initiated by the government in 1985 Applied on all the bills for consumption of raw and treated water Tariff varies with consumption Collection and management of funds by ONEA (National Water & Sanitation Organisation) Kept separate from the water account Use of the tax: - Promote sound management of wastewater/ excreta - Functioning of the Sanitation Directorate 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 5 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 6 Outline of Master Plans for the Water Sector in Ethiopia

213 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Burkina Faso: Sanitation surcharge Burkina Faso Population: 11.3 million Urban Population: 16 % GNI per Capita: $210 Poverty (% pop.): 45 % Urban Safe Water 84 % Urban Sanitation 88 % Total Water Billling (1000 F CFA) Water and sanitation tariffs Volume (m 3 ) Sanitation tariff (1000 F CFA) 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa ~US $600k per annum The key mechanics 2 ary Towns San. Plans 28% Bobo san const./promo 21% Ouaga san const. subsidy 18% Ouaga promotion/ awareness 14% Ouaga trainers, school latrines 19% The promotion of demand v Fieldworkers hired by NGOs or consulting firms promote demand at the household level The contract v The fieldworker contacts the sanitation artisan, and puts him into contact with the household; v The artisan and household agree on a price The subsidy v ONEA pays a subsidy during the construction, as a function of the types of work and materials used. 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 9 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa No of works Physical Output Rehabilitation of latrines Soakaways Pour flush latrine Months since the start (March 92) Shower s VIP million F CFA* Financial results *1 million F CFA US $1.5k Total cost Months since the start Household contribution ONEA subsidy 110 Outline of Master Plans for the Water Sector in Ethiopia

214 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 214 Cost-sharing Household 47% 348. Who pays what? Pour Flush 1% VIP 10% ONEA Costs Soakaways 7% Showers 5% Rehabilitation 5% 349. Vietnam Revolving Funds for Household Sanitation Vietnam Population: 80 million Urban Population: 20% GNI per Capita: $390 Poverty (% pop.): 37% Urban Safe Water 81% Urban sanitation 86 % 3 cities project Danang Pop. 700,000 Haiphong Pop. 680,000 Quang Ninh Pop. 275,000 12/06/02 ONEA 53% Training/ n.b. all ONEA Costs Promotion financed by water Sanitation Finance Session: 72% Small Towns Conference- Addis Ababa surcharge! 13 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa Revolving funds for sanitation What is it? A credit system for household sanitation improvement (latrines, septic tanks, sewerage connections) Women s Union manages the credit through savingscredit groups A linkage with income generation and public awareness of health/environment issues Target: Low income families Coverage of 80-90% of households in each city (approx. 14,000 HH) 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 15 City People s Committee City Urban Environmental Project Management Unit (PMU - URENCO) City Revolving Fund Management Board (City Women s Union) Ward Revolving Fund Management Board (Ward Women s Union, People s Committee) Saving-credit groups Household Borrowers Community Participation program (Local & International Consultants) Saving-Credit groups Organized in groups of persons. Saving of 20,000 VND/mo (US $1.3) required throughout loan period Savings provide 480,000 VND ($32 US) towards repayment of the principle Savings can be on-lent to other savings-credit group members for income generation. Saving-Credit Groups Most important feature of these groups are Monthly Group Meetings, organized by the heads of groups in order: To collect monthly savings, interest payments, and principal as per regulations For members to interact in order: To share knowledge and experiences To discuss hygiene environmental and social issues To provide assistance in technical matters and construction To assist each other with income generation 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 17 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 18 Outline of Master Plans for the Water Sector in Ethiopia

215 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Rules of the Game for Household Loan Eligibility Live in the project area Willing to participate in saving-credit groups and to comply with the group-rules (regular saving, use of funds for proper purpose, monthly payment of interest, etc) No previous bad debt Capacity to pay back Loan terms Loan amount: Max. 2,000,000 VND (equiv. to US $ 150) Repayment Period: 2 years Interest Rate: 0.5% per month Grace Period: 6 months Achievement so far (April 2002) High number of borrowers Over 350 Savings-Credit Groups formed Over 4000 borrowers in less than 1 year 80% of borrowers construct their household s sanitation facility within two months of receiving the loan Nearly all of sanitation facilities are constructed within three months of disbursement High repayment rate 95 % 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 19 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa /06/02 Achievement so far (April 2002) Effective accounting and book-keeping system by Women s Union. Active participation in Savings-Credit monthly group meetings. In many households, this upgrading has resulted in the mobilization of additional capital for the construction of bathrooms, kitchens Communities show a higher level of social interaction and participation in general community related issues. Sanitation Finance Session: Small Towns Conference- Addis Ababa 21 12/06/02 Lessons learned in/for Vietnam No need to subsidize low income families High demand from people living in low income areas for in-house sanitation because they add dignity to people s lives, particularly for women. Groups such as the Women s Union have skills which can make these ideas work. The integration of various social activities (income regeneration, social funds ) through micro-credit & savings groups strengthens the community. Sanitation Finance Session: Small Towns Conference- Addis Ababa /06/02 Common Lessons Finance is about more than dollars and interest rates Both accounts stressed institutional arrangements, and promotion of demand It is stupid to assume that the poor cannot contribute...especially if the state cannot afford to cover their costs... Sanitation Finance Session: Small Towns Conference- Addis Ababa 23 12/06/02 Food for thought What about other forms of sanitation infrastructure with higher public component? drainage solid waste How does reform and decentralization affect finance? cross-subsidy from large to small towns harder to defend in era of privatisation and decentralisation What s special about finance in small towns? Potential/limits of micro-finance? Sanitation Finance Session: Small Towns Conference- Addis Ababa 24 Outline of Master Plans for the Water Sector in Ethiopia

216 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 216 BF material 360. Acknowledgements ONEA, esp. Arba Jules Ouedraogo; WSP/World Bank: Christophe Bosch, Eustache Ouayoro, Annie Manou-Savina,et al. Vietnam material World Bank: East Asia Urban Development Sector Unit Other input World Bank/WSP: Ato Brown, Meera Mehta (esp. handout), Lukman Salifu Errors, omissions Pete Kolsky, 361. Group work responsibilities... What are 3 or 4 truly key issues in small town sanitation finance? What are some promising approaches that work for you? Where do we need further work? 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 25 12/06/02 Sanitation Finance Session: Small Towns Conference- Addis Ababa 26 INSTITUTIONAL ARRANGEMENTS FOR SERVICE DELIVERY TO SMALL TOWNS Challenges and Issues, Public-Private Interface By Mukami Kariuki 362. Institutional Arrangements for Service Delivery to Small Towns 363. Sanitation systems -by institution Agency Total Sewer - age On-site Sanitation Challenges and Issues Presented by Mukami Kariuki, WSP-AF Kenya (13) Nat./Reg. Utility Ministry Local Authority (MC mgd.) Public- Private Interface Peru (6) Nat./Reg Utility Local Authority LA company /22/2002 Water Utility Partnership: Project 5 2 Outline of Master Plans for the Water Sector in Ethiopia

217 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Key Findings.1 Key Findings 2 Policy and legislative framework for STs established at national level by several agencies MOLGovernment (local government roles and responsibilities), MOWater (water and sewerage), MOHealth (public health, on-site sanitation), MOEnvironment (environmental protection) Inappropriate strategiesand inadequate resources for translating policy into practice at local level. weak local authorities outdated bylaws contradict policy, regulations not enforced, hygiene education not funded supply driven sanitation systems prescribed by the center conventional sewerage split functions between institutions (e.g. sewerage revenue collected by water supply operator but not passed on to LA) Multiple central government institutions with roles in sanitation, often overlapping MOLG, MOW, MOH, public utilities all involved in policy, planning, development and financing of sewerage/sanitation works, Level of sanitation development depends on the institutional arrangement for water supply (national vs municipal) In reality on-site sanitation is the predominant form of excreta disposal in most small towns the primary role of ST sanitation provision rests with the household or user assisted by private sector; local authority may provide (or delegate) support functions such as colletion and disposal to private sector; typically retains responsibility for regulation 7/22/2002 Water Utility Partnership: Project 5 3 7/22/2002 Water Utility Partnership: Project Key Questions? Who is responsible for ST sanitation services? 1. Who is responsible for ST sanitation services? 2. Should ST sanitation be managed jointly with water supply? 3. Who should carry out the various functions - planning, development, operation, maintenance, policy, regulation? 4. What role should private sector (including private operators) play in sanitation provision? In Policy - local authorities/small towns have the legal responsibility to ensure the provision of water and sewerage/sanitation services (water = sometimes sewerage = normally on-site sanitation = always); includes drainage, solid waste and hygiene In Practice - they often manage sanitation systems; but their role in sanitation development depends on the scale of investment/access to financing: central government/utility for sewerage systems, LA for collection and some disposal (e.g. solid waste); household/user for on-site systems 7/22/2002 Water Utility Partnership: Project 5 5 7/22/2002 Water Utility Partnership: Project Should ST sanitation be managed jointly with water supply? Who should carry out what functions in ST sanitation - planning, development, promotion, financing, O&M, policy, regulation? Since most small towns sanitation systems are on-site therefore a household responsibility, the key LA functions are: collection and disposal of waste; establishing and enforcing regulation. Does joint management of WS and S improve accountability, sanitation coverage, public health? Do delegated operators have the incentive to run ST sanitation individual, syndicated, regional? What should the sequence of transfer of responsibility for sanitation be? (i) financing (surtax), (ii) management (O&M), (iii) development Central Government what residual role in planning, financing and development of systems? Local Authority/Small Town how to regulate delegated managers and improve access to financing (own revenue, local borrowing) for sanitation, hygiene? Private Operator/Sector gradual transformation of role from supplier to operator to developer Community Organisation transform role from developer (self help) to oversight/regulation Household/User provide for/finance own on-site facilities; aggregate/bundle at neighbourhood level 7/22/2002 Water Utility Partnership: Project 5 7 7/22/2002 Water Utility Partnership: Project 5 8 Outline of Master Plans for the Water Sector in Ethiopia

218 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page What roles should/can the private Sector play? Group Work Development of new systems or rehabilitation of old moving from B to BOOT Supply periodic maintenance services - collection and disposal of waste Implement financing mechanisms revenue collection for O&M, surtax for development of new infrastructure, on-site sanitation, hygiene education Operation and maintenance outsource through management contract, franchise, concession, etc 3-4 key issues with respect to the thematic area institutional arrangements, Solutions employed in dealing with these issues (coping strategies); and Aspects of thematic area recommended for further attention 7/22/2002 Water Utility Partnership: Project 5 9 7/22/2002 Water Utility Partnership: Project Group Work Questions How to balance decentralisation and local authority empowerment with aggregation (to ensure economies of scale), and improve sanitation? Should Small Town water supply management be combined with sanitation (including on-site) in order to expand systems and achieve sustainability? What incentives are required to bring the PO to the table for a menu of services that includes not just water but sanitation and hygiene education? 7/22/2002 Water Utility Partnership: Project 5 11 TECHNOLOGY ISSUES & OPTIONS By Lukman Salifu Outline of Master Plans for the Water Sector in Ethiopia

219 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Small Towns & Multi-village Sanitation Conference June 2002, Addis Ababa Sanitation Session: Break-out Dialogue on Technology Issues & Options Introduction Presented by Lukman Salifu, WSP-Africa WSP Africa Small Towns Sanitation : Technology Issues & Options What is the scope of sanitation in Small Towns? What do findings on the ground tell us? WSP Africa Are there Emerging Opportunities &, or Options? (Ecosan, condominial Sewerage, solid waste recycling-drainageother infrastructure links?) Dialogue on critical challenges for ST Sanitation & next action steps? Scope of Sanitation Services in STs? Uganda STWSP planning, communities priorities include... TOWN Wobulenzi Luwero Lugazi Malaba Busia PRIORITIES Solid waste collection Excreta management Drainage Hygiene promotion Excreta management Hygiene promotion Drainage Drainage Solid waste collection Excreta management Hygiene promotion SPECIFIC REQUESTS Tractor & Trailer Refuse bunkers Disposal site improvement Public latrines Drainage channels in priority areas Drain maintenance program Sensitization of communities & institutions Construction of communal latrines Sensitization of communities Drainage channels in priority areas Culverts Soakpits Drainage channels in priority areas Tractor & Trailer Privately managed public toilets Sensitization of communities & institutions WSP Africa Scope of Sanitation Services in STs? WSP Africa From findings Small Towns Sanitation entail managing... Excreta Disposal - mainly at HHD level plus communal treatment (for off-site systems) Solid Waste - mainly HHD level primary collection /disposal & or communal, collection, transport,disposal (core dense areas) Sullage & Drainage - mainly HHD level discharge plus communal conveyance and outfall discharge Excreta Disposal Methods from findings no preferred method but on-site systems are common Household Excreta Disposal Facility Wubeye - Kenya WSP Africa 378. Excreta Disposal Methods Pit latrines are still predominant at HHD level in Africa Household Excreta Disposal Facility Ngaraka- Kenya WSP Africa WC connected to public sewer 12% WC connected to public sewer 0% WC connected to septic tank 6% WC connected to septic tank 0% Pour flash toilet 4% Pour flash toilet 0% VIP latrine 6% VIP latrine 0% Pit latrine 67% Pit latrine 100% Public/Demonstration Latrine 2% Public/DemonstrationLatrine 0% Bush 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% Bush 0% 0% 20% 40% 60% 80% 100% 120% 5 6 Outline of Master Plans for the Water Sector in Ethiopia

220 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Refuse management... WSP Africa Sullage/Stormwater Stormwater conveyance & discharge WSP Africa dispersed areas - on-plot burial dense core areas - one-truck (tractor)- collection-to-direct disposal (for primary collection & secondary transfer) final disposal - uncontrolled dumping is common Simply Neglected and flows to find its own level through gullies and channels Matching Scope, Service Delivery & Technologies? WSP Africa T here is no specific technology option for small towns sanitation, the important parameters are: Service Types Service Levels above all how to use & integrate hygiene and health education and promotion to stimulate household demand and progressively improve hygiene awareness, and effective use of sanitation facilities. 9 Opportunities & Options Off-site: Condominial Sewerage WSP Africa Opportunities & Options Off-site: Condominial Sewerage WSP Africa Plus, plus for areas where Community Management can be effectively supported by small private operators Opportunities & Options Condominial Sewerage eg eg.. El Alto, Bolivia WSP Africa Outline of Master Plans for the Water Sector in Ethiopia

221 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Opportunities & Options Condominial Sewerage eg eg.. El Alto, Bolivia WSP Africa Capital cost Savings for sewerage design in Asafo, Kumasi (Ghana) Simplified Sewerage, 50% 386. Opportunities & Options On-site: Ecological Sanitation Conditions of geo-hydrology and/or spatial patterns WSP Africa 13 A B C A pores B Fractures C - karst Opportunities & Options On-site: Ecological Sanitation WSP Africa Lack of space in core dense or re -use in sparse areas 388. Opportunities & Options Ecosan: O&M and Small-Scale Scale Operators WSP Africa Van s Biological (Compost) Toilet is easily retrofited into existing building (Accra Ghana ) 15 Can individual householders manage the waste safely? Even if they can, will they be willing to do so? Private Operators 16 can & do Offer services (Accra, Ghana) 389. Opportunities & Options: Ecosan Willingness-to-Pay & Affordability? More lower-cost options? WSP Africa 390. Next Action Steps & Approaches Excreta Disposal: re-focus on re-use? Coordination of efforts for larger impact - more Advocacy & Networking among Stakeholders WSP Africa Outline of Master Plans for the Water Sector in Ethiopia

222 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Next Action Steps & Approaches Refuse management: re-focus on recycling, re-use, & link to improving other community amenities? demand for compost for food production, recycled products Components of refuse recycling and re-use loop Urban consumption and waste generation Legal and institutional context Waste collection & processing (composting, recycling) WSP Africa Paving Blocks using refuse N Djamena, Chad 392. Next Action Steps & Approaches Drainage (Sullage( & Stormwater conveyance): Re-focus on links to other infrastructure..?? Lack of basic town planning in small towns contributes significantly to poor drainage and other infrastructure WSP Africa dense core areas : property & tertiary drains linked to road-side drains Dispersed outlying areas : on-plot disposal of sullage, valley-dams & cattle-troughs Economic viability, marketability & distribution Next Action Steps & Approaches What approaches may enable these issues of technology to be addressed inter-actively & effectively for STs? Neighbourhood-based sanitation solutions community systems zonal systems town-wide systems WSP Africa Next Action Steps & Approaches Group Dialogue on critical challenges & next action steps on Small Towns Sanitation Technologies What are 3 or 4 key Challenges for small town sanitation technology issues? WSP Africa What are some of the practical approaches to providing technology options that address the often dense core & dispersed outlying spatial phenomenon of small towns? How can these be adapted and applied? In which areas should our efforts be focused on more? 22 WHO IS RESONSIBLE FOR SANITATION? The Case of Lugazi, Uganda By Daniel Christopher Kawesi Outline of Master Plans for the Water Sector in Ethiopia

223 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Who is Responsible for Sanitation? The Case of Lugazi, Uganda Daniel Christopher Kawesi, Town Clerk 396. LugaziTown - Uganda Location - Eastern Uganda; 50 from Kampala Population - 30,000 people Area - 19,0 sq.km Commercial base (40% of internally generated revenue from the sugar estate) Large sugar estate and factory (second largest sugar factory) Electrical cable company Metal fabrication industry 100 bed hospital, 5 secondary schools, 3 petrol stations, etc Snapshots of Lugazi Town 30,000 people Core and fringe Commercial sector Industries, market, petrol stations Sanitation Situation Management of sanitation is under the health department FY total budget of $200,000-30% of budget is internally generated revenue Sanitation budget is about 20% of total we are trying but our efforts are not good enough Excreta-wastewater management 60% coverage of latrines Latrines are of poor quality semi-permanent and characterized by high usage per stance Maintenance is very poor When full, most residents re-located facilities Soakpits in house plots are poorly drained Hand washing facilities are nonexistent The town has no exhauster service Outline of Master Plans for the Water Sector in Ethiopia

224 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Solid waste 40% solid waste collection Collection from town core bunkers is done on routine basis - using a private collector with 2 trucks There is no organized landfilling Most bury on plot; others burn or dump indiscriminately on over 20 heaps scattered in town Drainage Less than 20% of roads are drained leading to some flooding and property damage during rainy season Maintenance of drains is inadequate Maintenance of roads very expensive due to drainage problems Issues confronting Lugazi Behavioural - attitudes are difficult to change; most resident live in periphery camps Planning - only town core (20% of town) is planned Financing - weak revenue base, inadequate budget and prioritization Institutional Arrangements - inadequate infrastructure for maintenance and hygiene promotion Institutional capacity- inability to recruit well qualified staff and fire non-performing staff Political - interference from leaders at all levels The future-building on existing situation 3-year development plan with a focus on sanitation services Increase sanitation share to 50% of Town budget Focus of FY03 Building partnerships - improving our relation with industries and expanding tax base and sensitization of political leaders Review of staffing structure Invest in additional services $50,000 for drainage $12,000 for water supply to per-urban areas through private operator $23,000 for 10 public latrines in the periphery sugarcane camps Improve solid waste collection and bild more bunkers 405. Who is responsible for sanitation? The local government is responsible This is backed by the Constitution and Local Government Law; full responsibility rests with Town Council Sanitation is one area the Town council has full responsibility; the issue is how the Town plans to deal with sanitation We don't have answers to all the questions - control of resources (for big ticket items) sometimes lies outside the council We in the Council need to get out act together! Outline of Master Plans for the Water Sector in Ethiopia

225 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 225 THE PHILIPPINES EXPERIENCE; Sanitation in Local Government Units By Rey Ancheta The Philippine Experience: SANITATION ENHANCEMENT IN LOCAL GOVERNMENT UNITS WHO IS RESPONSIBLE IN THE PROVISION OF WATER SUPPLY AND SANITATION SERVICES? Demography Population : 76.5 Million Population : 2.32% Urban Population : 56.9% Sewerage and Sanitation Situation On -site Sanitation: 81% have either flush toilet or closed pit latrine 17% have no toilet facility Source: 1998 National Statistics Office Sewered 7% Off-site sanitation Untreated (possible sources of pollutants) 90% Acceptable off-site collection, treatment and disposal 3% Metropolitan Waterworks and Sewerage Systems (MWSS) - Metro Manila and its contiguous areas (8 cities and 29 municipalities) - total service area population : 10.5 Million with 64% water supply service coverage - sewerage and sanitation never improved more than 25 years ago Local Water Utilities Administration (LWUA) through the Water Districts (WDs) - urban centers outside Metro Manila - In the late 70 s, LWUA s policy was established placing a priority in Water Supply Development. This was more than 25 years ago!!! - with an intent to deal with wastewater issues later Local Government Units (the Local Government Code in 1991) - LGUs (towns and cities) to provide basic services, including sanitation, sewerage and flood control - Creating a partnership with the Water Utility Operator - Viable technical, institutional and financial arrangements can be developed What triggered sewerage and sanitation awareness? Legal Issues and Constraints to Improve Sanitation and Sewerage Today. Water Utility Operators are more effectively delivering more water to its customers Towns and cities with water utility operators are drowning in wastewater Towns and cities with water utility operators are increasing the pollution load in their rivers and lakes. THERE DOES NOT SEEM TO BE ANY STRATEGY TO ADDRESS THIS PROBLEM!!! It is obvious that the country have sufficient sewerage and sanitation legislation and policies but are not properly enforced and implemented. Even in the country s development plans, more emphasis were given to water supply provision than sanitation. gaps in existing legislations particularly those applicable to LGUs lack of interagency coordination at the national and local level lack of national framework for implementing the polluter pays policy lack of effective monitoring and enforcement at both the national and local level insufficient rules and regulations to implement the laws Institutional Issues and Constraints to Improve Sanitation Sanitation and Sewerage Technical Issues and Constraints to Improve Sanitation Sanitation and Sewerage Enforcement of laws on sanitation and sewerage remains weak due to the absence of clear implementing rules and regulations as well as sufficient guidance. absence of national body responsible with sanitation and liquid waste management inadequate enforcement of existing legislation at national and local levels. fragmented sanitation and liquid waste management by LGUs leads to poor accountability limited capacity of LGU to manage private sector operations no incentive s to improve present sanitation levels inadequate training, public information campaign and advocacy lack of incentives for appropriate technologies persistent use of technologies that do not significantly reduce pollution in street drains and receiving waters lack of incentive to connect to sewerage system, where available inadequate septage desludging/vacuum vehicles to collect septage inadequate septage/wastewater treatment facilities lack of treatment provision for special wastes high cost of conventional sewerage lack of local experience in sanitation and sewerage limited information currently available at local levels on sanitation and low cost sewerage technologies Outline of Master Plans for the Water Sector in Ethiopia

226 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Financial Issues and Constraints to Improve Sanitation and Sewerage Comparative Investment on Water Supply versus Sanitation and Sewerage ( ) limited funds at the local level to finance sanitation and sewerage infrastructure lack of financial support at the national level to provide incentives for sewerage system limited willingness to pay for sewerage service by households inadequate provision of capital and revenue for sewerage/ sanitation facilities, which can be demonstrated by the low interest of private sector to participate 3% 97% ( PHP 43.7 B/yr) (PHP 1.5 B/yr) Source : World Bank s WPEP ; Urban Sewerage & Sanitation - 30 years of experiences and lessons. Septic Tank Soakage Trench Sewerage Interceptor Pipe 413. Stormwater Pipe/Channel CREEK CREEK CREEK CREEK INITIAL SITUATION No Formal Sanitation System STEP 1 Formal Drainage System Stormwater Overflow STEP 2 Overflow Diversion Combined Sewerage System To Sewage Treatment Sewage Pipe STEP 3 Separate Sewerage System L A D D E R I Z E D A P P R O A C H To Sewage Treatment 414. BUSINESS PLANNING FOR SMALL TOWNS WATER SUPPLY By Catherine Revels Outline of Master Plans for the Water Sector in Ethiopia

227 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page BUSINESS PLANNING FOR SMALL TOWN WATER SUPPLY 416. Topics of Discussion Differentiate business planning for utilities from traditional technical, financial and economic feasibility analyses carried out to justify projects Review the business planning process Look at a case study 22 July July Traditional approach to planning for water supply and sanitation Technical Financial feasibility usually only for the proposed investment Economic feasibility and social assessment maybe? Customer communication usually after the fact 418. Issues often not addressed Design of right-sized facilities in phases Source of future funds for maintenance, expansion, renewal and replacement Customers ability to afford the service Customers willingness to pay for the service 22 July July Without a viable business plan We know what we need, just give us money to build it Customers stop paying, seek other sources, drop off system Customer growth slower then expected Insufficient funds for expansion, maintenance, renewal & replacement Tariff increases are not politically acceptable Utility cannot afford to attract or retain trained & motivated staff 22 July Facilities deteriorate, service level declines 22 July Outline of Master Plans for the Water Sector in Ethiopia

228 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Business Planning Approach Plan from the beginning so that utility can provide a good level of service to customers who are willing to pay for it, enabling the utility to maintain facilities, retain qualified and well trained staff and attract financing for ongoing expansion and development of system 22 July What is a business plan? Plan for development of a business, which includes: identification of products and services to be provided technical plan for production and delivery management plan (human resources, incentive structure, operations internal & contracted out) financing plan start-up & ongoing development marketing plan (pricing, promotion, customer service, distribution) 22 July Guiding principles The ideal design for a water supply and sanitation system is the one that is affordable for those it is designed to serve Technical design must be driven by customer willingness and ability to pay to connect to it and later for its operation and maintenance Financiers will not provide funds to a utility that is not creditworthy 22 July The Business Planning Process Assess current operations Project demand (an iterative, ongoing process) Management & operation plan Technical design Financial projection Agree financing plan with financiers Agree performance indicators for M&E Willingness to pay 22 July Case Study System is designed to meet 10 year projected demand Financial projection shows tariffs would have to be set at $0.55 in first year and increase to $0.75 (before inflation) Willingness to pay study indicates customers are not willing to pay these tariffs Redesigned to construct in 5 year increments Revised tariffs range from $0.40 to $0.66 Population Coverage Production capacity Tariff 426. Case Study Scenario 1 10 year plant Avgmonths bill Base Year 10,000 50% 900 m 3 /day $0.55 / m 3 $15 Year 5 12, % 900 m 3 /day $0.62/ m 3 $18 Year 10 14,802 75% 900 m 3 /day $0.75 / m 3 $22 22 July July Outline of Master Plans for the Water Sector in Ethiopia

229 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 229 Population Coverage Production capacity Tariff Avg. months bill 427. Case Study Scenario 2 5 year plant Base Year 10,000 50% 600 m 3 /day $0.40 / m 3 $11 Year 5 12, % 600 m 3 /day $0.54/ m 3 $16 Year 10 14,802 75% 900 m 3 /day $0.66 / m 3 $20 22 July Alternative Scenarios Plant design size, increments, service level Strategies for increasing growth on the system e.g., lower connection fees Alternative financing plans different loan/grant, debt, internal financing 22 July Summary Business planning is necessary to achieve financial viability and creditworthiness Talk to customers early in the process and be prepared to revise plans based on their input 430. Business Plannng For Small Town Water Supply And Sanitation GROUP INPUT 22 July July Problems with the planning process Overly optimistic assumptions In order to justify the investment Lack of realism Unforeseen circumstances E.g., natural disaster Election / political shift Failure to implement tariffs (lack of willingness to charge) Failure to match investment or o&m spending & strategy to targets 22 July Problems with the planning process (continued) Over-design No penalty for over-design Financing seen as a once in a lifetime opportunity Investment focused on production, not matched by distribution Design according to designer s s criteria, not customers 22 July Outline of Master Plans for the Water Sector in Ethiopia

230 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Problems with the planning process (continued) Business plan prepared in too much haste Incomplete information on realistic O&M requirements Lack of capacity to prepare business plan Lack of appreciation for value of planning process Perception of water utility as development, not business 22 July Problems with the planning process (continued) Insufficient research on customer requirements Willingness to pay not sufficiently considered Business plan not sophisticated enough to take into consideration willingness & ability to pay Insufficient customer consultation Poor Willingness to Pay study can lead to wrong design standposts /kiosks major outlet 22 July Problems with the planning process (continued) Planning carried out by wrong agency Wrong design led to poor choice of management model poor operations Who the operator will be not thought out at planning stage whether local authority or WAU 436. Strategies for improving the planning process Have input to the plan by those whose future incentives will depend on achievement of performance targets e.g., private sector financiers and operators Have someone with incentives review the planning assumptions to keep everyone honest (e.g., micro-credit credit institution) Look into both optimistic scenario and worst case scenario 22 July July Strategies for improving the planning process Create awareness of need for business planning & tools (e.g., in local language) Revisit plans for reality check continuous process Allow sufficient time for iterative process Consult the customers early and often To understand and factor in cultural and social factors Research customer requirements Create step-based business plan taking into consideration the above 22 July Strategies for achieving the plan Provide utility with flexibility to implement e.g., raise tariffs Finance expansion immediately after commissioning Include connections as part of the capital investment Pre-finance connections and recover from tariff Separate bulk supply from distribution Willingness to charge culture change of employees Benchmarking 22 July STREAMLINED APPROACH TO WILLINGNESS TO PAY SURVEYS GUIDANCE NOTES FOR SMALL TOWNS WATER SERVICES Outline of Master Plans for the Water Sector in Ethiopia

231 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 231 By Alison Wedgwood and Kevin Sansom Some definitions Streamlined Approach to Willingness To Pay Surveys Guidance Notes for Small Town Water Services Alison Wedgwood and Kevin Sansom (WEDC) Alison Wedgwood & Kevin Sansom Effective demand can be defined as demand for goods and services which is backed up with the resources to pay for it (Pearce 1981) Whereas if people merely want something it may not be backed up by a willingness to pay (WTP). WTP is the maximum amount that an individual states they are willing to pay for a good or service (DFID 1997). Alison Wedgwood & Kevin Sansom 441. Contingent valuation methodology (CVM) CVM is a tool used to elicit the potential service users maximum willingness to pay (WTP) for carefully selected water supply service options, such as house connections, standposts, public kiosks etc. There are other techniques to determine demand and WTP, such as Revealed Preference Surveys but CVM tends to be more reliable Guidance notes for streamlined WTP surveys Aim: to encourage wider use of good quality CVM surveys, so as to inform key decisions in the water sector in developing countries. Alison Wedgwood & Kevin Sansom Alison Wedgwood & Kevin Sansom Use of WTP survey results The urban water sector requires good quality data in order to: justify future investment proposals develop a better understanding of user perceptions and preferences support selection of preferred service options set out scope for future tariff increases and subsidy reduction plans Why WTP surveys for small towns? Key decision makers for small town investments, eg. government and donor staff, are often remote from small town consumers. CVM results provide those key decision makers with valuable data on the varying demands of small town water consumers. Small town consumers may prefer to pay for alternative point sources - so we need to check. Survey results can be used to counteract subsidy opportunism and a lack of willingness to charge. Alison Wedgwood & Kevin Sansom Alison Wedgwood & Kevin Sansom Outline of Master Plans for the Water Sector in Ethiopia

232 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Typical consumer groups in a small town Preferences for service options (example) Existing main source use patterns Core area service options may be kiosks and hand pumps Main road ORE Fringe area service options may be springs & hand pumps Based on work in Uganda FRINGE AREA CORE AREA Service options Protected springs Public water kiosks Shared yard taps Private connections Other (vending, unprotected springs) Core Area (%) Fringe area (%) Total Source: Bushenyi, Uganda, financial sustainability analysis, 2001 Alison Wedgwood & Kevin Sansom Alison Wedgwood & Kevin Sansom Estimated future main source patterns (from WTP survey) Service options Protected springs Public water kiosks Shared yard taps Private connections Other (vending, unprotected springs) Core Area (%) Fringe area (%) Total Source: Bushenyi, Uganda, financial sustainability analysis, 2001 Average % change in preferences: Core: 20% increase in demand for kiosks, yard taps & private connections Fringe: 25-50% increase in demand for the same options. Typical Contingent Valuation (WTP) Process (11 key steps) Phase 1 Preparation Step 1 Select Interview Technique For example should it be a personal interview, mail survey or group discussion? Step 2 Develop a Sampling Strategy Including agreeing sample size and how to achieve a random and representative sample Step 3 Develop the CVM Scenario Including defining the viable service options and deciding how the options will be offered to the respondents Alison Wedgwood & Kevin Sansom Alison Wedgwood & Kevin Sansom Step 4 Decide Which Elicitation Method to Use For example, bidding game, referendum voting or contingent ranking Step 5 Cost the Options Based on the costs that could realistically be charged for each option Phase 2 - Implementation Step 7 Enumerator Training and Pilot Testing Including enumerator selection, role playing, sampling in the field and pilot testing. Step 6 Write Household Survey and CVM Questionnaire For example: Section 1 Socio-economic data, Section 2 Existing water supply, Section 3 Elicit WTP Step 8 Implement Survey Considering translation and gender issues, as well as the field manager s role. Monitoring work of the enumerators. Alison Wedgwood & Kevin Sansom Alison Wedgwood & Kevin Sansom Outline of Master Plans for the Water Sector in Ethiopia

233 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Phase 3 - Data analysis and policy implications Step 9 Data entry and analysis Including checking the validity of the data and considering how to present the results Step 10 Using CVM results to develop tariffs Including developing financial sustainability analyses and consider options for subsidy reduction Step 11 Ensuring that WTP studies inform policy Including how to use the results to support new projects and advocate changes such as an improved willingness to charge Information that can be presented to key stakeholders The number of households that want to use each water option; Estimates of the likely consumption of water for each option; How much people are WTP for their preferred option(s); The likely tariffs that would be charged to cover O&M, O&M plus replacement costs or full costs; The preferred method of paying for the improved service option; How respondents think the water supply system should be managed; Projected tariffs and subsidy levels over the forthcoming years. Alison Wedgwood & Kevin Sansom Alison Wedgwood & Kevin Sansom Advantages of CVM over other techniques Tool to investigate peoples maximum WTP for different services that are not currently available to that community; It can accurately estimate what proportion of households are likely to switch to improved service levels at given tariff levels; Consumers can bid on a range of different service options; Generates information on ability and willingness to pay; It can enable simple financial models to be developed for future tariffs & subsidies; The results, if presented clearly, are conceptually easy for nonspecialists, politicians and administrators to understand. Potential disadvantages of CVM The costs are often higher than other demand assessment techniques (although the information is usually more valuable); Respondents may not pay the water charges they said they would in the survey; Results are often not transferable, even to apparently similar locations; Individuals may answer inaccurately for a variety of reasons (biases), (but there are techniques to minimise these biases). Alison Wedgwood & Kevin Sansom Alison Wedgwood & Kevin Sansom How much will a CVM survey cost? Figures of $70,000+ are often quoted. CVMs in East Africa with the aid of an experienced international consultant, produced successful results for under $30,000. Once in-country CVM study teams have demonstrated their capabilities to manage the entire CVM process without external assistance, it should be possible to undertake surveys in small towns for much less than $30,000. Alison Wedgwood & Kevin Sansom Table 12. Capital costs for small towns water supply programme Uganda Town Pipe Line Laid (m) House Connections Alison Wedgwood & Kevin Sansom Price ($) Luwero 18, ,667 Lugazi 19, ,222 Busia 28, ,778 Malaba 10, ,111 Kalisizo 6, ,444 Lyantonde 22, ,313,333 Ntungamo 16, ,444 Rukungiri 12, ,667 Source: STWSP Uganda Outline of Master Plans for the Water Sector in Ethiopia

234 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Table 10. Water supply option selected following description of characteristics in town outside Dar es Salaam New community kiosks Private connection Do not want any new water system Frequency Alison Wedgwood & Kevin Sansom Valid Percentage TOTAL Do not know / refused to answer 420 Source: Wedgwood, A. Assessment of Demand, Dar es Salaam Developing a Financial Projections Model A simple model can be developed on an Excel spreadsheet setting out the expected revenues (based on WTP results), costs & deficits or surpluses for each option, over say a 10 year period. Other information that can be derived from such a model includes: - expected population percentages in fringe & core areas using each option; - Sensitivity analyses can be carried out to determine deficit/surplus levels for different tariff levels. Alison Wedgwood & Kevin Sansom Implications for scheme option selection There are many examples of towns with expensive water supply systems that have fallen into disrepair, so we need to proceed carefully. The survey results combined with the financial model projections provide unique data to support the key decision: if or when to introduce piped schemes and other expensive technologies in the small town? If funding of the projected deficit cannot be found, then consider using cheaper alternative options. Alison Wedgwood & Kevin Sansom Supporting key project design decisions: If there is a demand for piped water, what should be the proposed bulk water supply capacity? What technical options (piped systems, hand pumps etc.) should be developed in which areas of the small town (core or fringe)? - Follow up focus group discussions are also likely to be required. If and what other alternative sources should be developed further? Alison Wedgwood & Kevin Sansom Key skills required for the survey team (1) The WTP survey manager should have good experience of conducting CVM surveys. Collectively the survey team should: be familiar with technical issues, including the types of water supply service options that could be used in the hypothetical scenario understand the socio-economic and cultural aspects of small town water supply services can appreciate managerial and institutional issues with relation to small town water supplies Alison Wedgwood & Kevin Sansom Key skills required for the survey team (2) Be familiar with sampling techniques to ensure that the survey sample is random and unbiased can write surveys to facilitate easy analysis, and has previous experience of pre-testing and managing household surveys be able to train and manage a team of enumerators be able to use spreadsheets and analyse simple frequency graphs etc Alison Wedgwood & Kevin Sansom Outline of Master Plans for the Water Sector in Ethiopia

235 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Ensuring WTP studies inform policy (1) Ensuring WTP studies inform policy (2) Policy issues to consider for new small town water schemes: Which scheme options are preferred by the various consumer groups and are most likely to be financially sustainable? Will the users be prepared to pay water charges that will cover all costs for proposed scheme option? If not what proportion of the costs can they pay? How can the WTP study results be used to increase the willingness to charge higher water charges? What are reasonable targets for tariffs & subsidy reductions, assuming they will have to be gradually reduced over a number years? Alison Wedgwood & Kevin Sansom WTP survey recommendations have not always influenced policy in the past. This is likely to be due to a number factors including: Results are not clearly presented in the survey report. One report on one small town may not influence the most senior decision makers. Key administrators and engineers may have preferred a supply driven approach and have not been familiar with WTP surveys. Alison Wedgwood & Kevin Sansom Example of a WTP study informing policy Examination of consumption patterns in Lugazi (a small in Uganda) in 2001, suggest that the predictions made in the 1994 CVM report by D. Whittington et al, were accurate. Demand for private connections is now higher than was first anticipated by project designers before the CVM was commissioned. On-selling of water is occurring, to the extent that 7 private connections sell more water than three of the kiosks. Alison Wedgwood & Kevin Sansom Ensuring WTP studies inform policy (3) Suggested strategies: Pay attention to the presentation of the results in the final report, incorporating good sector practice. Government departments should be encouraged to commission their own WTP surveys. Produce overview reports that collate survey results and proposals from a number of towns. Develop a report dissemination strategy with follow up promotion work to influence policy. Alison Wedgwood & Kevin Sansom 467. WTP surveys group work Consider the following questions: How can governments & other stakeholders best use the information from good quality WTP surveys for water services in small towns? What are the constraints to a more widespread use of WTP surveys using the streamlined CVM approach in small towns? How can we overcome these constraints? Alison Wedgwood & Kevin Sansom Outline of Master Plans for the Water Sector in Ethiopia

236 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 236 BILLING SYSTEM; DATABASE & INFORMATION MANAGEMENT By Michael Buadoo Water and Sanitation Billing System Databases & Information Management Michael Buadoo, Ph.D. SEI-CMM Consultant, World Bank Sources/References World Bank s Rural Water Supply and Sanitation Thematic Group. GDT Corporation Systems Development Methodology LachlarmM. Mackinnon Information Systems Life Cycle Avison D. & Shah H. "The Information Systems Development Life Cycle", McGraw-Hill Process Consideration Considering the whole information system Software is usually involved but not always Process A Software Process B Manual Process C Software Organizational Support and directive Identify Problems area current system New business opportunities Feasibility study Systems investigation Systems analysis Systems design 471. Feasibility study report **User requirements Current system data flow New system data flow IS planning Project plans System requirements Billing Systems Development Lifecycle Resource requirements System Training and specification test plans Staff assignment Methods and tools Implementation Programs Procedures Documentation Discuss domain of automation Review and maintenance Evaluation report New problem statement? New system in operation Key Functional Components Why This Approach? Subscriber Management Marketing/Lead Tracking Customer Contact Inventory Commissions Service Location Collections Meter Reading Processing Rate Planning / Rating Bill Production Management Reporting Building Owner Multiple Dwelling Units Tracking Feasibility study Propose and evaluate alternatives Establish priorities Gather information Perform cost-benefit analysis Form options for computerisation Review during maintenance Learning from experience Effectiveness of the solution Correctness of function Suitability for the business process Effectiveness of the process Kept to time? Kept to budget? Lessons learned for future developments Outline of Master Plans for the Water Sector in Ethiopia

237 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Why This Approach? continue System is an open one Take account of influences from the organisation which change over time Managerial directives often arbitrary but often dominate decision making New opportunities business process change requires system change Longer term information systems planning system change to maintain business process Operation feeds back to design Operation reveals errors - maintenance in SE Operation reveals bottlenecks for the business Operation reveals new opportunities for business Operation reveals difficulties for users 475. Subscriber Management Functional Area Create, Modify and Delete Customer Account Equipment Services Billing aliases Process Orders and Miscellaneous charges Perform Customer Credit and Bill inquiry Assign billing frequency Access finance charges and late fees 476. Marketing/Lead Tracking Functional Area To maintain and track potential customers Converts as a work order Converts to active customer Contact log (Free form notes) Proration and effective date 477. Customer Contact Functional Area Create/Capture, track and report contact with customer Types tracked are: Problems, Concerns, Suggestions and Comments Follow-up prompt Search feature by Problem, Product or Service etc Knowledge base: * Searchable to resolve similar problems * Month end summary report showing number of contacts for each product type within the contact reason code * Helpful to indicate which product or service received the most calls Inventory Functional Area Track Status and location of inventory items Information tracked include: Name Serial or tag number Previous owners All relevant information about water meters Cost Re-order level Transfer inventory items to other locations - also provides appropriate account for each transfer Relevant Inventory Reports Maintain average cost of each item Good for budgeting 479. Meter Reading Processing Functional Area Meter reading data will be captured for use as input in other processes. Further analysis involving the user community will be required Commonalities and Uniqueness among various user entities will be identified Outline of Master Plans for the Water Sector in Ethiopia

238 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Rate Planning and Rating Functional Area Define Rate plans Assign rate plans to each subscriber account Definition of multiple rating schemes Assign rating schemes to each customer account Water meter readings will be used as input for rating customer accounts Rating of meter readings based on inventory criteria and subscribers assigned rate plan Execute the system algorithm 481. Billing Production Functional Area Timely to maintain adequate revenue flow Ability to assign accounts to any of 31 billing cycles in a calendar month automatically manually Bill report with all relevant billing data along with notes Multi bill format Commercial and Residential Multi account set-up Credit Card billing Bank EFT Transfer Recurring Charges (MRC) applied on a full month or prorated 482. Billing Production continues Other Charges and Credits (OCC) Tax Calculations Definition of tax tables (user function) Comprehensive Applicable worldwide (Regional?) Balance Forward Billing Messages (Multi usages) Inquiry of Customer Bill Information Post Billing Update 483. Commissions Functional Area Sales personnel information will be captured in the system Provide the ability to track and compute commissions for sales personnel using predetermined formula Commission formula may be different from entity to entity (This needs to be verified with functional experts) 484. Administrative & Control Functional Area Accounts Receivable Dunning Notices System Access Other control features Earned & Unearned Income 485. Management Reporting Functional Area Crystal Reports Ability to create custom reports Minimum list of reports Address listing report Name data listing report Service listing report Transaction register report History of services Credit limit report New account report New service report More Outline of Master Plans for the Water Sector in Ethiopia

239 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Building Owner Functional Area 487. Multiple Dwelling Units (MDU) Functional Area Creates and controls Building demographics and owner information Contract information Address of Building Contact information for owner, manager or both Creates and controls Building demographics and owner information Contract information Address of Buildings Contact information for owner, manager or both Problems with New business existing system opportunities Managerial directive Feasibility study Systems investigation Systems analysis Systems design Implementation Review and maintenance IS planning scope objectives Management budget information needs operation of current Users system investigation analysis Analysts requirements program design testing Programmers system implementation Users test system initialise system input data use information ensure smooth running Operators and fix faults technicians Your role in the Billing Software Development Process Next A meeting with SMEs to bless each function Capture Business Rules for each functional area Prioritize key component Proceed with systems design Develop System Prototype 490. Thank You Thank you all for your time. We look Forward to working with you to develop a worthwhile billing system for your operations Dr. Michael Buadoo, SEI CMM. MBuadoo@G-D-T.com ( ) United States of America Outline of Master Plans for the Water Sector in Ethiopia

240 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 240 COST EFFECTIVE DESIGN AND ITS IMPACT ON TARIFF By Melaku Mulugetta 491. Cost Effective Design and Its Impact on Tariff 492. OBJECTIVE To investigate the impact of design on Tariff resulting in a vi feasible solution. Prepared by Tropics Consulting Engineers Plc.in August Project was financed by the World Bank Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes SCOPE OF WORKS Analysis of water demand for varying service levels Development of costs for unit components of water supply system. Development of basic cost curves for different components of a water supply scheme Projection of costs and water demand for the specified planning period. Estimation of tariff rates for varying service levels. Drawing conclusions & recommendations SCOPE OF WORKS Contd. The unit cost of Components such as sources (BH, Intake, Spring), Pumping station, Storage reservoirs, Pipelines and accessories, associated buildings, Electrical and mechanical units have been developed form collected data base as given in the handout For rural on spot sprig, HDW, shallow well, BH with small distribution have been considered Operation and Maintenance costs including power,chemical and personnel re included Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes APPROACH METHODOLOGY Applying a Design concept which is Demand driven approach instead of classical Top down approach The approach allows interactive dialogue between designer and beneficiary Collection of Secondary data (from previous engineering studies & construction works) resulting in a substantial data for urban and rural Analysis of collected data, check for consistency using spread sheet formats. Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Outline of Master Plans for the Water Sector in Ethiopia

241 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page BASIC ASSUMPTIONS POPULATION & WATER DEMAND Categorization of urban rural centers is > 2,500 Urban and < 2,500 pop Rural For the Study Towns Population range range 5,000-50,000 Depending on the Population the recommended water demand are the following: house connection = 40 to 60 lpcd Yard connection = 25 to 45 lpcd Public fountain = 20 to 23 lpcd Rural population range from 500-2,500 and the water demand is assumed to fall between 15 to 20 lpcd. Basic assumption Contd.. Percentage connection profile Type HC YC PF Population Range Min 5, Max 50, Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes BASIC ASSUMPTIONS Contd. Public demand 20 % of the domestic water demand for pop> 20,000 and 10 % for less UFW 24 % Industrial demand 5% of the domestic water demand Basic assumptions Contd.. Major cost assumptions Design costs 5 % urban and 3% ruraln inflation rates 5.7 and 5% for local and foreign respectively Maintenance civil.5%, E&M 2% average Personnel 0.8 Contingency 10% Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Technology Options Technology options Source Treatment Pumping Transmission Storage Station BH Chlorintaion Pump Station Riser pipe Balancing Bulb Reservoir Springs Partial treatment E&M equipment Gravity main Counter reservoir Intakes Full treatment Aeration Device Elevated Dams Flushing Device Ground level Crossings Access road Transmission Distribution Buildings Gravity main Pipelines Operators Dwellings Aeration Device Standpipes Store and workshop Flushing Device Fire fighting Equipment Office building Crossings Guard houses Access road MODEL DEVELOPED FOR COST EFFECTIVE DESIGN Demand Cost Tariff Level of Service Investment FC Type of source O&M Dep + O&M O&M Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Outline of Master Plans for the Water Sector in Ethiopia

242 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page MAJOR FINDINGS The list cost options in terms of order of priority are spring, borehole, and surface water. Investment cost per capita is the smallest for as compared to other sources. If available, spring development is the preferred option for small towns from the point of investment cost. For all categories of population O&M cost per capita boreholes are smaller than springs (pumped) and surface water. MAJOR FINDINGS Contd.. For each type of water source AIC decreases as population increases (effect of economics of scale). For each type of water source AIC increases as level of service decreases. Reduction in service level by 50% will result in Reduction of cost per capita but increase of tariff Reduction of Investment cost on the average by 36% and increase Tariff by 47%. Reduction of O&M + Depreciation costs per capita on an average by 41% and increase of Tariff by 33%. Reduction of O&M costs per capita on an average by 46% and increase of Tariff by 26%. Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes MAJOR FINDINGS Contd.. If Birr 5/m3 is taken as the maximum limit for affordable tariff rate then: Full cost recovery tariff levels will be unaffordable for all sources and categories of population. O&M + Depreciation cost recovery tariff levels will be unaffordable for all sources with population less than 10,000. O&M cost recovery level tariffs will be affordable for all sources and categories of population. AIC ( Full Cost) AIC (Full Cost) Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes AIC (Dep( + O&M) AIC (O&M) AIC (Dep+O&M) AIC (O&M) Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Outline of Master Plans for the Water Sector in Ethiopia

243 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page AIC for Full Cost Recovery AIC for Full Cost Recovery AIC for Depreciation and 0&M AIC for Depreciation and O&M Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes AIC for O&M only AIC for O&M only. IN THE NAME OF TROPICS CONSULTING ENGINEER PLC WE THANK YOU FOR YOUR PATIENCE IN ATTENDING THE PRESENTATION. Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes 513. DISCUSSION FORUM. GROUP TOPIC 1 WHY COST EFFECTIVE DESIGN? Concept of cost effectiveness result in low in investment cost and high tariff, How do we solve this paradox? Advantages and Disadvantages of cost effective design Demand driven approach for cost effective design Cost effectiveness & service levels Service levels & tariff rates 2 HOW TO ARRIVE AT AFFORDABLE TARIFF RATES FOR SMALL TOWNS? Definition of small towns for water sector Small towns and the tariff policy Small towns & level of services Small towns & sources of water supply Financial sustainability & affordability Subsidy for how long? For what? How do we handle connection fee? Tropics Consulting Engineers Plc. International Conference on water and sanitation Services in small Towns &Multi Village Schemes Outline of Master Plans for the Water Sector in Ethiopia

244 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 244 HOW TO MOVE FROM DEFAILT OPTIONS TO NEW EFFICIENT APPROACHED IN SMALL TOWNS WSS? 514. Conference on Water and Sanitation Services in Small Towns and Multi-Village Schemes Addis Ababa, June 2002 Intro to Friday morning session, June 14 th on contracts How to move from default options to new efficient approaches in small town WSS? This session builds on earlier ones Tries to answer Jamal Saghir s question: Are default options good enough? Uses rating framework proposed by Bernard Collignon ( Key Ingredients for Success ) Operationalizes Bob Roche s ideas on Professional Support & Aggregation Three default options predominate 517. Proposed Rating Framework Key Ingredients for Success Direct public management utility has weak management or financial autonomy Direct community management water user association (or water board) hires staff with limited external technical assistance Informal build-own-operate (BOO) private constructor-operator works without a formal contract 3 1. Financial and Management Autonomy 2. Meeting the Demand (suitable LOS) 3. Transparency and Accountability 4. Incentives for Expansion, particularly Serving the Poor 5. A Professional Operator 6. Competition 7. Workable regulation Finance and management options default options & new approaches 519. Finance and management options default options & new approaches Finance Public Private Finance Public Private public water plc direct public mngt direct comm mngt informal BOO franchising concession lease/affermage service/mngt contract Public Management Private 5 Public Management Private 6 Outline of Master Plans for the Water Sector in Ethiopia

245 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Default Option: Direct Public Management 521. Default Option: Informal Build-Own-Operate (BOO) Model characteristics management Public Direct management by municipal department financing Public Usually deriving from municipal budget Applicability to small towns advantages Access to public capital constraints Low autonomy (political capture) Low professional capacity, low incentive for expansion examples Colombia Malawi 7 Model characteristics management Private SSIPs manage their small systems, often with little or no oversight from government; cost recovery from customers financing Private SSIPs finance O&M and investments Applicability to small towns advantages High competition Strong incentive for expansion High demand responsive constraints Low accountability Low professional capacity No access to public capital examples Paraquay Wrap-up Friday morning session Overview of options now being handed out How to move from default options to new efficient approaches in small town WSS? Moving from informal BOO 2. Moving from direct public management Improve institutional & regulatory framework Improve institutional & regulatory framework Formalize informal BOOs (both privately managed and community managed) Franchising Make utilities more autonomous (corporatization and beyond, e.g. towards public water plc) Introduce outsourcing (e.g. service and management contracts) Franchising Outline of Master Plans for the Water Sector in Ethiopia

246 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Need of Alternative Management Model for Small Towns Too big to be managed by communities Large and dense enough to benefit from economies of scale offered by piped water systems Too small and dispersed to be managed by a conventional utility 527. Possible option Regional or multi-town utilities Advantages Creates economies of scale in management Minimizes transactions costs of contracting Increases revenue base and creates viable volumes of business Criteria for Aggregation include Large enough population base Manageable overall distance Within a watershed boundary Voluntary or prescribed Moving further on: aggregation and regional utilities Paves the way for: Affermage Concession Hybrid arrangements Franchising arrangements Processes of change From default options to new approaches informal BOO Finance Public Private public water plc direct public mngt franchising concession affermage/lease service/mngt contract Public Management Private 17 CONTRACTING OUT WATSAN SERVICES USING SERVICE AND MANAGEMENT CONTRACTS Outline of Master Plans for the Water Sector in Ethiopia

247 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 247 By Sansom, Njiru & Franceys 531. Water and Sanitation Services in Small Towns and Multi-Village Schemes Addis Ababa, June 11-15, 15, 2002 Water and Sanitation Program The World Bank and the World Bank Institute Contracting out watsan services using Service and Management contracts Sansom & Njiru (WEDC) & Franceys (IWE) 532. Overview of Service & Management contracts Over 300 Service & Management contracts reported around the world Cost savings of 20+% reported in comparison with doing the work inhouse. Many contracts let without specialist advice Considerable room for improvement in contract development Sansom & Njiru (WEDC) & Franceys (IWE) Forthcoming research outputs: 534. Extensive contracting out case studies from: 1) Case studies & analysis of Service & Management contracts 2) Guidance notes for Service & Management contracts 3) Database list of contracts (on web sites) Latin America (Chile, Mexico, Haiti and Trinidad) Asia (India, Indonesia) Africa (Uganda, Kenya, South Africa) USA Sansom & Njiru (WEDC) & Franceys (IWE) 3 Sansom & Njiru (WEDC) & Franceys (IWE) Figure 1: Basic modes of water sector organization Table 1: Typical allocation of responsibilities between the public and private sector for the diffe rent contract types: Contract Type Asset Ownership Operation and Maintenance Capital Investment Commercial Risk Typical Duration Location of example contracts Service contacts Public Public and private Public Public 1 to 3 years Mexico city, Chile and Chennai in India Management contracts Lease contract Public Private Public Public 3 to 5 years Public Private Public Shared 8 to 10 years Trinidad and Tobago, Columbia, Uganda Columbia Guinea, Cote d Ivoire, Czech republic Concession Public Private Private Private 25 to 30 years Buenos Aires, Manilla, BOT Private and public Private Private Private 25 to 30 years Malaysia, Mexico Source: Blokland et al.(1999) Divestiiture (e.g. UK) Private or private and public Private Private Private England and Wales Sansom & Njiru (WEDC) & Franceys (IWE) 5 Sansom & Njiru (WEDC) & Franceys (IWE) 6 Outline of Master Plans for the Water Sector in Ethiopia

248 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Figure 2: Announced W&S PPP s Cumulative Service Contracts Cumul ative An nounced in year Are the simplest form of PPP Public authority / utility retains overall responsibility for O & M, except for specific components contracted out Contractor s responsibility limited to managing its own personnel & services Sansom & Njiru (WEDC) & Franceys (IWE) 7 Sansom & Njiru (WEDC) & Franceys (IWE) Service contracts (Continued) Typically used for maintenance of specific components (e.g pumping stations), and meter reading Payment usually on lump sum basis, dependent on achieving agreed targets Typical contract duration 1 to Labour Only contract Variation of Service contract Contractor provides specified staff to public authority, who maintains responsibility for service provision Precise staff numbers & skill of contract staff specified by public authority / utility Sansom & Njiru (WEDC) & Franceys (IWE) 9 Sansom & Njiru (WEDC) & Franceys (IWE) Labour only contract (continued) Contractor acting as contract staff agency Difficult to set performance standards, as public authority makes Mgt decisions Possible to replace unsatisfactory staff Very limited benefits 542. Management Contracts More comprehensive than service contract Public authority transfers responsibility to contractor to manage a range of activities Remuneration based on a tendered fee Public authority finances working & investment capital, and determines cost recovery policies Sansom & Njiru (WEDC) & Franceys (IWE) 11 Sansom & Njiru (WEDC) & Franceys (IWE) 12 Outline of Master Plans for the Water Sector in Ethiopia

249 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Management Contracts (continued) Contracts with incentive based components are generally more successful Often a useful 1st step towards more complex PPP s (Leases or Concessions) Typical contract duration is 3 to 5 years 544. Types of Management contracts: A joint public/private company A new company is established with staff and resources provided by both public utility and the private operator This encourages shared ownership and hopefully shared benefits This type of contract has been used in large scale management contracts, e.g. the Management contract in Trinidad and Tobago. Sansom & Njiru (WEDC) & Franceys (IWE) 13 Sansom & Njiru (WEDC) & Franceys (IWE) Types of Management contracts:- Delegated management to a private operator Public authority hands over responsibility for O&M of a full range of activities such as O&M of a distribution system &/or billing and collection, to a private Operator Examples: Tongaat in South Africa and Malindi in Kenya. Sansom & Njiru (WEDC) & Franceys (IWE) Types of management contracts: Community/co-operative contracts Informal/formal contracts occur where a community or user group manages some aspect of watsan provision, in collaboration with a utility. Often used in informal settlements, where community group manages part of water distribution, collects revenue and pays utility for bulk supply Examples found in Haiti, Kenya and India Sansom & Njiru (WEDC) & Franceys (IWE) Potential PPP objectives for the water sector are to: Improve quality of service (adequacy & reliability) Make more effective use of existing infrastructure Introduce expertise to the sector Introduce improved commercial management Improve operating efficiency & system performance Sansom & Njiru (WEDC) & Franceys (IWE) PPP Objectives (continued) Introduce net savings in the costs of service provision & reduce subsidies Reduce political interventions in utility operations Introduce competition in the sector & act as a catalyst for change to the wider public sector Reduce number of public sector employees & associated obligations Sansom & Njiru (WEDC) & Franceys (IWE) 18 Outline of Master Plans for the Water Sector in Ethiopia

250 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page PPP Objectives (continued) Requiring capital funding: To inject private investment capital (and efficiency in the use of that capital) in order to reduce the evident public funding shortfall in the sector To expand service coverage to more customers including the poor Figure 1 Competition Benefits of: Partnering Length of contract Sansom & Njiru (WEDC) & Franceys (IWE) 19 Sansom & Njiru (WEDC) & Franceys (IWE) Example contracts: Chile service contracts in the water sector Substantial: Up to 45 water companies serving 3.1 million people in Significant savings on contracts for meter reading, disconnections/reconnections, network maintenance and repairs. EMOS & ESSEL supported their staff to become independent and motivated contractors Complimentary with commercialisation and sector reforms Sansom & Njiru (WEDC) & Franceys (IWE) 21 Chile Service contracts in water sector Key phases in contract development: Phase 1 ( ) Simple contracts with ex-employees, mostly without bidding. Phase 2 ( ) Formal bidding procedures introduced and performance improvements encouraged with penalty provisions Phase 3 ( ) Increased competition through subdividing areas and inclusion of incentive clauses Sansom & Njiru (WEDC) & Franceys (IWE) Incremental contract development (in Mexico city service/mgt contract) 554. Incremental contract development in Mexico city (continued) Stage 1 : Data gathering activities, survey and meter installation tasks (paid by unit price) Mapping of the secondary water and drainage networks Customer census Installation of meters to all customers Stage 2 activities - Customer-oriented tasks (paid by unit price) Meter reading & maintenance Billing & revenue collection Customer care in dedicated offices Telephone care service New connections (water and drainage) Sansom & Njiru (WEDC) & Franceys (IWE) 23 Sansom & Njiru (WEDC) & Franceys (IWE) 24 Outline of Master Plans for the Water Sector in Ethiopia

251 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Incremental contract development in Mexico city (continued) Stage 3 - Network management tasks (together with Stage 2 activities and paid by unit price plus an incentive formula) O & M of the secondary water & drainage networks Detection & repair of leaks in networks Rehabilitation of water & drainage networks Sansom & Njiru (WEDC) & Franceys (IWE) Mexico city Service /Management contracts Demonstrates a promising incremental development approach Significant achievements in customer database, mapping, metering & leak repairs Progress hampered due to institutional complexities on the client side, and lack of transparency Sansom & Njiru (WEDC) & Franceys (IWE) Service/Management contracts in Africa Contracts in Kenya, Uganda & S. Africa achieved relatively limited benefits, perhaps due to lack of balanced incentives and penalties, & bidding Small town contracts let in Uganda appear to have well designed contracts, e.g a clause limiting interference in contractor s operations Larger Management/Lease contracts being pursued in East & S. Africa Sansom & Njiru (WEDC) & Franceys (IWE) 27 Service/ Management contracts in India More than 40 contracts have been let in India for aspects such as O&M of water & sewage treatment plants, pumping stations and bill collection Cost savings have been achieved in many cases Changes in policies & legislation are required for contracting out to succeed in the key areas of network management and services to customers. Sansom & Njiru (WEDC) & Franceys (IWE) Dealing with larger unforeseen repairs In Chennai (India), the O&M of pumping stations was contracted out & achieved savings, but problems emerged (1999): Contractors were responsible for repairs upto Rs2,000; Reported tendency for contractor to wait until repairs exceeded Rs 2,000. This did not encourage preventive maintenance. Number of staff was specified, and this restricted contractor s ability to innovate Solutions include output orientated contracts related to measurable indicators Sansom & Njiru (WEDC) & Franceys (IWE) 29 Contracting Out - Outline Process Problem Analysis (related to organisational objectives) Selecting preferred contra options and strategies Contract preparation an agreement Monitor, evaluate & Agree and implement review plans and bidding process progress as require Evaluate and select preferred bids Contract implementation and monitoring Sansom & Njiru (WEDC) & Franceys (IWE) 30 Outline of Master Plans for the Water Sector in Ethiopia

252 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Typical contract structure for O&M, billing and collection Include general background, key objectives, definitions, applicable legislation, scope of work, duration etc Very important are the obligations & duties of both client and operator, and Payment terms 562. Incentive clauses A key principle in Service and Management contracts is to include incentive clauses Why? To encourage successful performance against carefully chosen indicators and targets that relate to the contract s objectives Avoid redundant incentives Sansom & Njiru (WEDC) & Franceys (IWE) 31 Sansom & Njiru (WEDC) & Franceys (IWE) Summary of incentive payments in a Puebla contract (1998) The services being managed for this Management contract inpuebla, Mexico include metering, database development, water billing, collection & customer services. The efficiency gains will have an economic incentive as a percentage increase to the service cost according to the following table: Collection efficiency of the period in % Additional payment as % of service costs More than more than more than more than more than more than more than Penalty clauses Guiding principle: Appropriate penalties should be included in the contract to discourage poor performance against carefully chosen indicators and targets that relate to the contract s objectives. Ajmer Pipelines contract: penalty & incentive clauses An O&M contract was let in 1995 in Rajasthan for 112 km of transmission pipelines. The penalty clause is summarised below. Period of delay beyond specified Penalty (Rs./hour) 0-2 hours hours hours 1,000 Beyond 8 hours 2,500 Sansom & Njiru (WEDC) & Franceys (IWE) 33 Sansom & Njiru (WEDC) & Franceys (IWE) Common areas for improvement in contract development (part a) Contract preparation/process aspects Clear and suitable output based contracts Suitable identification and allocation of risks Addressing key local sector problems either within or outside the contract Payment aspects Inclusion of suitable penalty and incentive clauses Transparent financial reporting Sansom & Njiru (WEDC) & Franceys (IWE) 35 Common areas for improvement in contract development (part b) Partnership aspects Clear definition of roles and duties for all parties Both parties dealing fairly with each other seeking win-win solutions Impartial dispute adjudication Sansom & Njiru (WEDC) & Franceys (IWE) 36 Outline of Master Plans for the Water Sector in Ethiopia

253 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Concluding comments Service & Management contracts are likely to be effective: When contracting out in conjunction with commercial approaches and reforms When client works in partnership with private operator, to seek win-win situation When using output based contracts, with both penalty & incentive clauses Concluding remarks (Continued) And, when utilities gain experience in contracting out, then translate lessons into development of new contracts Management contracts in conjunction with appropriate sector reforms can be an effective step towards more comprehensive PPPs such as Lease and Concessions Sansom & Njiru (WEDC) & Franceys (IWE) 37 Sansom & Njiru (WEDC) & Franceys (IWE) Concluding remarks (Continued) Lease and Concession contracts have potential to offer substantially more benefits than Service and Management contracts, BUT in the right environment Wishing you successful Contracting out! Thank you Dr Cyrus Njiru and Kevin Sansom WEDC, Loughborough University, UK Sansom & Njiru (WEDC) & Franceys (IWE) 39 CONTRACT OPTIONS; LEASES / AFFERMAGES AND CONCESSIONS By Jan Janssens Outline of Master Plans for the Water Sector in Ethiopia

254 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Conference on Water and Sanitation Services in Small Towns and Multi-Village Schemes Addis Ababa, Ethiopia, June 2002 Contract Options Leases/Affermages and Concessions 572. Public-Private Partnerships (PPP) the right balance and the right design Jan G. Janssens World Bank World Bank World Bank Selecting the appropriate public-private partnership trade-off between the optimum and the feasible World Bank 2002 Perfection (P) reform option retained 100 % 0 [P*I]max 100 % Implementability (I) 3 World Bank Choice of Options It is not the option chosen but the process by which the objectives of the reform process are achieved, that matters. The sustainability of reform and the longterm future of water utilities will depend on the success in extending services to lowincome communities Critical success factors to introducing a PPP High-level, sustained commitment in central and local government Stakeholders informed and involved Build upon local assets: population, small enterprise, CBOs / NGOs Build regulatory capacity early 576. Participatory Approach Building consensus among stakeholders, including: Parliament and ministries Utility management and staff; unions Customers (domestic, industrial, Govt.); civil society Financiers Media Operators Local investors/lenders Communication strategy on objectives of reform World Bank World Bank Outline of Master Plans for the Water Sector in Ethiopia

255 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Selecting a Public-Private Partnership 578. Finance and Management Options Define the problem before jumping into a partnership Implement a transparent competitive process Consider structural options first Finance Public Private public water plc direct public mngt direct comm mngt informal BOO franchising concession lease/affermage service/mngt contract 7 Public Management Private 8 World Bank 2002 World Bank Forms of private participation 580. Mapping Options to Preferences commercialized public enterprise service contracts managt. contracts lease concession affermage BOT BOO divestiture Objective Option Service Contract Management Contract Technical Expertise Yes Yes Managing Expertise No Yes Operating Efficiency Investment in Bulk Investment in Distribution No No No Some No No Private O&M Private O&M + financing Lease/Affermage Yes Yes Yes No Some A continuous range of Public- Private Partnerships, with varying degrees of private risk-taking hybrid or intermediate forms 9 BOT Concession Yes Yes Some Yes Some Yes Yes Yes No Yes 10 World Bank 2002 World Bank What Can the Government Get? Mapping Options to Prerequisites The preferred option of the government may not be the preferred option of the private sector Option Requirement Service Contract Management Contract Political Commitment Low Moderate Cost -covering Tariffs Low Moderate Regulatory Framework Low Low Good Information Low Low Options that yield higher benefits for consumers also tend to demand a higher level of government commitment, and a better prepared institutional framework Lease/Affermage BOT Concession High Moderate High High High High Moderate High High Moderate High High World Bank 2002 World Bank 2002 Outline of Master Plans for the Water Sector in Ethiopia

256 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Allocating risks... without losing track of incentives easier financing more money BOT concession better incentives (smarter money) 584. Private financing is a key component of OBA schemes Figure 1: Traditional vs. Output-based Approaches Traditional Approach Inputs ( eg, materials) Service Provider Service Recipients Private Finance Public Finance Output-Based Approach Private financing mobilized by service provider Public funding linked to service delivery World Bank World Bank Cash from operations: the engine 586. the largest source of WSS investments asset renewal most small, routine investment the only source in many LDCs / transition countries a major component of concession finance basis for any use of credit or private equity CREDIT etc CASH World Bank World Bank Why Affermage/Lease Contracts? downgraded Concessions or, upgraded Management Contracts? Why Affermage/Lease Contracts? When private equity and commercial debt are not available for WSS Affermage /Lease second best option to Concession: combines public financing and attracts private efficiency Preferred to Management Contracts: because transfer of commercial risk is believed to create incentives to perform. World Bank World Bank Outline of Master Plans for the Water Sector in Ethiopia

257 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Why Affermage/Lease Contracts? True Concessions are feasible: when investment can mostly be financed from cash generation (e.g. Casablanca, Macao, Manila, Jakarta, Côte d Ivoire); or in rich countries or transition economies (e.g. Argentina, Bulgaria, Gabon) Concessions are also possible if: Governments and financiers accept that public funds be on-lent to private concessionaires; but, often not the case 590. Affermage The difference between affermage and concession is more a difference of degree than of nature. The basic legal principles governing the affermage are the same as those of the public service concession. The affermage is not leasing (bail, location) of the infrastructure coupled with a contract setting forth how the infrastructure is to be used in the public interest. The lease contract however may be constructed as a synthetic equivalent to affermage in other legal systems. World Bank World Bank Affermage To-day s jurisprudence and doctrine are little concerned with distinguishing between affermages and concessions. Hybrid contracts have become more popular to-day with an appropriate allocation of risk. In the affermage model as developed in the nineties (e.g. Senegal, Niger), and in those currently in preparation (e.g. Sri Lanka, Jordan), the private operator has a contractual obligation to co finance network rehabilitation and renewal investments Flow of Funds in Affermage Customer, Operator and SHC Operator collects Customer tariff fixed by Regulator Operator retains Operator tariff or affermage rate (prix du fermier) (Pe per m3) Operator remits the difference between customer tariff and Pe to the public authority (e.g. State Asset Holding Company, SHC) that serves to pay for the investments that the public authority has undertaken. World Bank World Bank Affermage: flow of funds (simplified) Public Authority (State Asset Holding Company) (SHC) World Bank 2002 Private Operator (PO) PO collects tariffs into own account Vb*Tavg Customer PO remits investments & debt service contribution to SHC Vb: volume billed Vb*[Tavg Pe] Tavg: average tariff Bid award criterion: lowest affermage rate Pe Pe: affermage rate (./m3) (prix du fermier) 23 Public Authority (State Asset Holding Company) (SHC) SHC monitors costs of O&M (close to price-cap regulation) World Bank Lease: flow of funds 1 (simplified PO holds tariff account) Lease fee Costs of O&M Private Operator (PO) PO pays lease fee to SHC for leasing WSS infrastructure PO collects tariffs into own account and pays costs of O&M Vb*Tavg Bid award criterion: highest lease fee Customer 24 Outline of Master Plans for the Water Sector in Ethiopia

258 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Lease: flow of funds 2 (simplified - public authority holds tariff account) Public Authority (State Asset Holding Company) (SHC) Lease fee SHC pays costs of O&M to PO out of tariff revenue Costs of O&M Private Operator (PO) PO pays lease fee to SHC for leasing WSS infrastructure PO collects tariffs into SHC account Vb*Tavg Customer 596. Allocation of Risk Operational Commercial Revenue Technical Financial Foreign exchange Regulatory World Bank 2002 Bid award criterion: highest lease fee 25 World Bank Operator willing to take Operational Risk if Existing assets are in good shape or rehabilitated Supply conditions (power, chemical) are acceptable Contractual performance targets are compatible with assets and supply conditions Operator willing to take Commercial Risk if Coercive measures for non payment are enforceable Tariff level and structure are adequate Substitutes (ground water) are regulated Proper budgeting and payments of Government water bills exist World Bank World Bank Operator willing to take Technical Risk if For new fixed assets Mobilization of new source of water not too problematic and expensive Treatment and discharge of effluent not too complex and expensive Operator willing to take Financial Risk if No or limited equity to be brought in commercial debt can be mobilized on the merits of the Project Strong reliance on cash generated by operations adequate tariff level low operating costs World Bank World Bank Outline of Master Plans for the Water Sector in Ethiopia

259 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Operator willing to take Foreign Exchange Risk if Operator willing to take Regulatory Risk if Most expenses are in local currency Confidence in Regulatory Framework WSS tariff is (partially) indexed on exchange rates variation Transparency Competence Independence Predictability Arbitration World Bank 2002 World Bank Risk Acceptability Concessions, Leases, Operating and Management Contracts Thank you Operational Concession Affermage / Lease Operating Contract Management Contract Commercial Technical Financial Forex Regulatory World Bank FRANCHISING; AS A WAY TO IMPROVE SMALL TOWN WATER SUPPLY By Ross Tyler Outline of Master Plans for the Water Sector in Ethiopia

260 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Franchising: It s Place in the Quadrants Franchising as a way to improve Small Town Water Supply Ross Tyler Finance Public Private public water plc direct public mngt informal BOO frachising concession lease/affermage service/mngtcontract Public Management Private 1 2 Why Franchising? 607. Franchising has the potential to: encourage experienced urban / international operators to participate in the development of the Small and Medium operators in serving small towns and reaching the poor. attract new urban / international operators in participating with this objective Franchising - Overview Franchisor $ $ Franchisee 1 Franchisor Franchisee 2 Under the franchise brand Franchisees receives business know-how from Franchisor and provides services / products to customers Franchisor monitors quality of product / service to customers Customers pay Franchisees for products and services and a % is passed back to the franchisor as a royalty payment 3 Franchising a business methodology, based on the duplication of success, between two or more separate legal business entities operating under 4 the same brand name. An early plus Franchising offers one solution to The Mistake of Going it Alone as it is: Being in business for yourself but not by yourself Franchising - Advantages Provides a way to strengthen existing businesses or to create new business / enterprises using proven, successful business know-how (operational, managerial and commercial). Allows the passage and transfer of best practices (capacity building) within existing businesses. Increases entrepreneurship. Possesses competitive characteristics as it is performance based. Shares risk between Franchisor and Franchisee. Provides greater outreach to more customers in a shorter time. 5 6 Outline of Master Plans for the Water Sector in Ethiopia

261 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Franchising within Water & Sanitation Two main scenarios: I - International Franchisor with Urban (National) Franchisee(s) serving population of ~ 200K + Example: Argentina II - Regional Franchisor with Local Unit Franchisee(s) - serving population of ~ 10K + Example: Morocco 612. Scenario I - International Franchisor with Urban (National) Franchisee(s) $ Country A with International Franchisor $ Urban Franchisee 1 Urban Franchisee 2 Country B with National Franchisee International Franchisor and Urban Franchisee maintain financial and managerial autonomy BUT Franchisee receives support from the Franchisor. Arrangements: International Franchisor provides: Operation Expertise for existing, replacement and new fixed assets Training Techniques for economies of scale in procuring parts and chemicals Possible access to finance Urban Franchisee provides: Representation through locally owned business with transparency and royalty payment to international Franchisor Better and sustainable water and sanitation supply to water users Scenario II - Regional Franchisor with Local Unit Franchisee(s) Regional Franchisor $ Franchisee Country with Regional Franchisor and Local Unit Franchisees $ Franchisee Examples of Franchise packages from Regional Franchisor to Unit Franchisee include: Routine (Ops. and Maint.) Training Leak reduction Procurement and economies of scale Revenue Collection (third party) Specialized (Additional higherlevel Services) Expansion planning (town aggregation or satellite) Financial budgeting Hired Management Team NOTE: Multiple franchisees bring comparative competition Small-Town Water Model Affordable SME development: Existing Small-town water operator strengthened from immediate and on-going benefits with improved efficiencies. New start-up water operations with local investments attracted by access to full technical and commercial know-how. Payment to franchisor (on-going interest in the partnership) is spread over time as on-going royalty vs a single consulting fee. Franchisees have access to higher level technical assistance e.g.: for expansion planning or securing funding when needed and vetted by Franchisor Small Town Franchise Dynamics Town Water Board Regional Franchisor Franchisee $ Town Water Board will have oversight of the franchisee. Franchisor always has oversight of the franchisee. Franchisor will want to build reputation with Town Water Board Advantages to the Regional Franchisor Regional Franchisor Regional Franchisor may leverage its operational and technical capacity by providing value-added services to the Unit Franchisees. It can extend its presence (through the brand name) to smaller towns / remote regions without expending its own capital. It has potential to increase its own economies of scale by adding the Franchisees parts and chemicals to its own procurement needs Outline of Master Plans for the Water Sector in Ethiopia

262 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Advantages to the Local Unit Franchisee(s) Franchisee Franchise package can be a menu of services or parallel the evolutionary growth of the Unit Franchisee initially focusing on routine operation and maintenance, improving efficiency of existing assets, then later addressing expansion strategies to serve more customers and selling more water. Unit franchisee water operators of a know utility should provide confidence to customers and contract decision makers giving them competitive advantage. Reputable technical support becomes available with the cost spread over all Unit Franchisees. Possible support in setting tariffs Increased access to possible funding Company Name / Brand Value TRUST (Proven business methodology, providing confidence to customers and potential financiers). Attributes who is responsible for operational improvement in: Regional Franchisor Franchisee Supply service Water quality Associates better water with social components of: Conservation Sanitation and better health Environmental Value (willing to pay) NOTE: Franchisor assumes reputation risk Franchising: The 7 Critical Success Factors 620. Review: The advantageous components Franchising brings to Small Town Water Supply Autonomy Transparency & Accountability Demand Responsive Professionalism Incentive for expansion Competition Workable Regulation YES YES YES YES YES Partial Potential 15 Franchising provides: An new approach geared to increased sustainability at the operator level. A framework that encourages increased entrepreneurship and motivation. Reputable professional services extended to small-towns with on-going support. Higher level specialist skills available (as needed) with costs distributed over all franchisees. Higher chances of success as poor performing Franchisees can be terminated by Franchisors. More water users receiving consistent quality and service Franchising: Management / Financing Summary Model Characteristics Management Financing Applicability to Small Towns Advantages Constraints Examples Private: Divided but shared responsibility of the Franchisee and Franchisor. (Mgt & Concession) Private: Franchisee operator finances investment and O&M costs Private / Public: both are source for fixed assets Capacity building at local level Encourages entrepreneurship and strong motivation for sustainability with incentives to meet high demand response though expansion Reputation risk - possibly others arise after further testing Morocco & Argentina 17 Outline of Master Plans for the Water Sector in Ethiopia

263 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 263 FEATURES OF NEW ARRANGEMENTS; UGANDA CASE STUDY By Wambui Gichuri Features of New Arrangements Ministry of Water, Lands and Environment appoint Local Gov t as Water and Sewerage Authority (UWSA) through a performance contract Local Gov t appoints a Board which owns the assets, set tariff and oversees operations Board enter into Mgt Contract with PO to manage commercial, technical and financial aspects of WSS services Appointment of POs based on competitive bidding process Private Operator (2 years contract with 1 year extension) - Pre-finances Operations on a monthly basis -Collects Revenue & Banks it in Escrow Account of the Board - Joint Account control Board and PO in order to ring fence revenues - Paid against monthly invoices (Management Fee) Management Contract hardly requiring PO any Commercial Risk because concept still new in Water Supply WSS Authority Private Operator Bills User/Clients Financial Flows Board Running cost (2%) Performance Bonus Fee Reserve/Replacement Account Fixed O&M fee Commercial Losses Conditional Grants For Investment (if necessary) Town Council Fiduciary Arrangements Start-up business plan with bid Annual update of business plan Annual Fin/Tech. Audits Quarterly Board meetings COMPUTATION OF MANAGEMENT FEE The monthly Management Fee payable to the Operator shall be comp uted on the following basis Lugazi COMPONENT UNIT BASIS AMOUNT Base Fee Shs. 521,320 /month Water Sales Fee Shs. 282 /m 3 Billing Fee Shs.2,534/ conn/month Pipe Network Shs. 0/km/month Maintenance Fee New Connections Fee Shs. 6,285 /connection 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - Jul Aug Sep Oct Nov Dec Jan Feb Mar Amount Billed Amount Collected Collection Efficiency Management Fee TOTAL MF= BF+A(WS)+B(BF)+C(PNM)+D(NC) Private Operators-Procurement Process Ingredients for Success No Activity Target Date Responsibility Call for EOI Done DWD 1.2 Submission of EOI Done Potential Operators 1.3 Preparation oflonglistof potential operators Done DWD Project Managers 1.4 Interim Management Arrangements Workshop Done DWD 1.5 Prequalification/Shortlist of Operators 31 July 2000 DWD Local Authorities Unit 1.6 Gazetting of Urban Water Supply Authorities (UWSAs) 31 July 2000 MWLE/DWD 1.7 Appointment of UWSA/Signing of Performance Contracts 31 July 2000 DWD TCs 1.8 Finalization of RFP and Model contract 31 July 2000 DWD Water Authorities Unit 1.9 Clearance of model contract 31 July 2000 DWD- AG s Office Preparation of system profiles for 11 towns 31 July 2000 DWD Water Authorities Unit 2.2 Preparation of packages or Lots 07 August 2000 DWD Water Authorities Unit 2.3 Estimation of start-up costs 15 August 2000 DWD Short- term consultant 2.4 Launch RFP 15 August 2000 DWD 2.5 Establishment of WSS Boards 31 August 2000 DWD-TCs 2.5 Submission of proposals 30 September 2000 Pre - qualified Operators 2.6 Evaluation and Submission of results to CTB 30 October 2000 DWD 2.7 CTB Approval 15 November 2000 CTB 2.8 Signing of Management Contracts 30 November 2000 TC Boards Selected Operators 2.9 Mobilization of operator(s) in Lots 30 December 2000 Selected Operators Preparation of system profiles for second batch December 2000 DWD-Water Authorities Unit -Danida 3.2 Launch RFPs January 2001 DWD-TCs 3.3 Select operators for Lots April 2001 TC Boards/DWD Preparation of system profiles for third batch April 2000 DWD-Water Authorities Unit AFD 4.2 Launch RFPs June 2001 DWD 4.3 Select operators for Lots August 2001 TC Boards/DWD Good sector work, clear strategy and Action Plan Selection and developments of instruments (contracts) and rules of engagement (procurement process) Consultation with stakeholders on roles Monitoring framework Technical assistance and support to contracting parties Outline of Master Plans for the Water Sector in Ethiopia

264 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Future Strategy-Reform Agenda #2 Emphasize demand driven approach design for breakeven status (full cost recovery) from day one of operation Establish clear rules of the game and for accessing funds Put the Local Governments in the driving seat (design and procurement of construction and operators) Adopt enhanced private sector participation arrangements pilot lease contracts PUBLIC MANAGEMENT, PRIVATE FINANCING The example of the government-owned Public Limited Company By Klaas Schwartz Finance and management options Public Management, Private Financing: The example of the government-owned Public Limited Company Klaas Schwartz Finance Public Private public water plc direct public mngt informal BOO franchising concession lease/affermage service/mngt contract Public Private Management Outline of Master Plans for the Water Sector in Ethiopia

265 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Characteristcs of the Public Water PLC The Government-owned Public Limited Company (PLC) or Public Water PLC: The government-owned PLC is a company, which is established and operates under company law, whilst the shares of the company are in hands of national, regional or local government authorities. Ownership of Infrastructure Who operates the infrastructure Direct Public Management Government Municipal administration Public Water PLC PLC or Government Legal status of operator Municipal department Legal Who owns Framework the shares Public Law PLC PLC Company Law N.A. Government. Fully private utility PLC PLC PLC Company Law Private shareholders The General Structure of Public Water PLC Shareholders Board of Directors All Powers not bestowed on others Responsible for general function of the company Shareholders Board of Directors Government retains influence on the utility through the Shareholders Meeting and (possible) representation on the Board of Directors Managing Director Responsible for day-to-day management of the company Managing Director Public Management... Consumers Consumers Private Financing... Investment capital is obtained by way of loans from (commercial) banks: - Underwritten by assets owned by the Public Water PLC - On the basis of projected income from service areas - Example Water Company Friesland (Netherlands): Expansion of services financed primarily by loans extended on grounds of projected company income from new service areas. This income was secured by a contract between the utility and previously unserved municipalities. In these contracts the unserved municipalities guaranteed a minimum use of water against a set price. Outline of Master Plans for the Water Sector in Ethiopia

266 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page The PLC structure provides a general framework. Actual performance of the utility depends strongly on how this general framework is filled in by company statutes, government and company policy. Examples in relation to two success factors Autonomy of the Utility 1. Broad division of powers arranged for in Company Law between various actors: Board of Directors is responsible for overviewing general functioning of the PLC. Managing Director is responsible for day-to-day operation (Netherlands, Chile). 2. Public officials are not allowed to reside on the Board of Directors, creating a buffer between the government shareholders and the utility (Philippines). 3. Company Statutes provide substantial powers to the Managing Director (Netherlands): - Billing and Collection for Services - Terminating Service Provision to Defaulters - Enter Loan Agreements (limited), - Procurement of Goods and Services - Hire and Fire Individual Staff Members - Determine Structure of the Organisation 4. Multiple minority shareholding, meaning that no one shareholder can "capture" the utility (Netherlands) Transparency and Accountability Company Law stipulates that the Managing Director and Board of Directors can be held personally responsible for mismanagement of the company (Netherlands) Independent Regulator charged with supervision of the concessionaires. (Chile) Composition of the Board of Directors. The Board of Directors consist of a representative from the Civic Service, a representative of a women s organization, a representaive of the educational sector, a representative of the business community (Phillipines). Company Law dictates that every PLC must produce an annual financial account, approved by the Shareholders, the Board of Directors, the Managing Director and an Certified Accountant. The accounts are open to the general public (Netherlands) Public Water PLCs and Private-Sector-Participation The Public Water PLC is an example of a Government-owned utility operating under (private) company law. It does not exclude PSP. Example of EMOS S.A. (Chile): Outcontracting of services became a company policy in the 1980s; EMOS does not outcontract services which are considered strategic, activities that involve potential high risks to the quality of services, activities which can be done more efficiently in-house and activities for which third parties have no interest. All other activities-services are out-contracted if possible. In 1999, approximately 20% of the value of operational activities totalling close to US$ 13 million, were outcontracted to third parties Public Water PLCs Model characteristics management Public Shares of the company are owned by government authorities financing Private Investment capital is obtained by loans from (commercial) banks underwritten by assets or projected income Applicability to small towns advantages Government retains strategic control over provision of a basic human need Utility operates as a private company Intermediate form between private utility and direct public management constraints Low competition Dependent on quality/nature of Company Law and of its enforcement examples Chile (until recently), Philippines, Germany, Netherlands, VIETNAM: LET A THOUSAND FLOWERS BLOOM Outline of Master Plans for the Water Sector in Ethiopia

267 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 267 Evolving Models for Small Towns Water Supply in a Transitional Economy Vietnam is a predominantly rural but rapidly urbanizing nation. It currently contains some 530 small district towns, and about 3000 townlets large urbanizing commune centers. Access to water supply services, not to mention sanitation services, is still rudimentary in most small towns and even more so in townlets and communes in Vietnam. Small towns and townlets do not fit into either the rural or urban context. They are often considered too small to be financially viable for management by water utilities, and too big for effective community management. As a part of the World Bank s Global Small Towns Water Supply and Sanitation Initiative, WSP-EAP commissioned a study of management models in 22 small towns and townlets. The models were broadly classified in six categories: Direct management by small town or commune People s Committees (STPCs and CPCs); Community management through user groups; Management by existing cooperatives; Management by Provinicial Water Supply Companies (PWSCs); Management by other State-Owned Enterprises (SOEs); Private water company service provision In the study sample, about 38 percent of the population in these settlements owns house connections, while a slightly higher number representing 45 percent of the population has access to water supply services. However, these data present an atypically rosy picture as they reflect the situation in settlements that have a basic piped water network, which is only the case in a minority of these settlements nationwide. Is there a best practice management model? Viet Nam (Provinces in study in red text) Ten selected indicators reflecting the operational, financial, social, and institutional dimensions of management performance were ranked the best performance within the sample getting the highest number of points. The total values show that sustainability is marginal for all systems with an average value hovering around 110 out of a maximum score of 202. Summing all four dimensions of sustainability together, there are no serious outliers in how management models perform. Cooperatives, communities, and PWSCs are doing better than average, while STPC/CPC-managed systems are performing below average. The SOEs and privately operated systems are performing more or less average. The implications are interesting, showing that: The use of more focused, customer-oriented approaches results in better overall performance, which supports global evidence that demand-responsive approaches have a positive impact on system sustainability. Cooperatives, communities, and private operators show above-average social performance, while SOEs and People s Committees that are also engaged in outside business activities, may be less effective than companies that deliver water supply services exclusively. Better technical and financial management performance does not necess arily result in more successful systems overall customer satisfaction may still be low if tariffs or connection costs are high and the needs of the poor are not met. Cooperatives, PWSCs, and SOEs have, on average, higher financial scores than the other management models. Technical performance is best by PWSCs, SOEs and cooperatives. Part of the better performance of PWSCs and to Outline of Master Plans for the Water Sector in Ethiopia

268 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 268 a lesser extent SOEs may be due to the greater age of those systems. Coverage and consumption levels tend to be higher in sys tems that are more mature than in systems that only recently came on stream. The age of a system is strongly correlated with it s technical performance, and adjusting for age is likely to make the differences in technical performance much less evident. The largest differences between the various management models are shown in the social dimension of performance. Systems managed by communities, cooperatives and private operators have much higher scores than systems managed under other management models. SOEs score significantly below average in this dimension of performance. STPC/CPCs score below average on institutional performance. The data presented in the study report are average data for each management model, and they do not reflect differences within the same management models. The PWSCs show very mixed results, with companies in the Mekong Delta (in the province of Tien Giang) being among the top performers in the total study sample sample, while PWSCs in other regions are scoring below average in overall performance. The question arises, what makes the PWSC of Tien Giang so much more successful? The reasons for the success of Tien Giang province are manifold, but the most likely factors to have contributed are (i) Clear institutional arrangements between the different agencies involved in the water supply sector, with Tien Giang having three different types of arrangements (PWSC, rural WSC, and private operator); (ii) Entrepreneurial approach, with PWSC also undertaking other business activities, including the design and construction of small towns and commune water schemes; (iii) Innovative financing arrangements, such as a water development fund that has been set up for the rehabilitation and expansion of investments, funded by existing customers through a surcharge of VND200 per cubic meter. Among the three models studies in Tien Giang, the oldest PWSC systems perform significantly better than the more recently established rural water supply company or the private operator, suggesting that age should not be overlooked as a factor explaining performance. The large variation in performance between models also shows that the more important aspect of management is not so much the organizational model around which it is organized, but what rules of the game are being used and applied. Some rules of the game like autonomy in managing the water supply business, proper tariff levels, and affordability of services are better indicators for success than are the organizational management models per se. What about economies of scale? Correlation shows there is a weak, but inverse relationship between the size of settlement and performance - the higher the model s performance rating, the more likely it is located in a townlet. This is an intriguing result and it seems to contradict the intuition that small towns can benefit more from economies of scale than townlets. The difference in population size between small towns and townlets is smaller than one may expect. The aver age small town has 10,805 inhabitants compared to about 8,500 inhabitants for the average townlet. Correlations between coverage, population size and performance show inconclusive results suggesting that other factors besides size are more important in defining overall performance either population, households with access to water supply services or the different set of national standards that apply for small towns and townlets. However, economies of scale do exist when consumption is taken into account. Government regulation, incentive structures and procedures (including technical standards and government subsidy policies, for instance) seem to have an overall adverse impact on a system s performance. Lack of government regulation in townlets has res ulted in a sharp proliferation of different types of management models which are tailored to local needs. Technical standards in townlets are more in line with actual consumption patterns, resulting in a lower probability of over -designed systems. Also, the average townlet depends more on other sources of funding than that provided by the government. In general, townlets generate larger community contributions than small town-based systems, a feature linked to above average performance. Outline of Master Plans for the Water Sector in Ethiopia

269 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 269 As the benefits of economies of scale are not straightforward, the issue regarding the value of aggregation or regionalization of systems needs to be addressed. Aggregation or regionalization has the advantage that systems within a province can pool scarce human and financial resources more efficiently. Aggregation also offers the possibility to use different forms of cross-subsidies, such as those between different locations and between different types of business activities. Yet, this does not necessarily result in a better outcome for society than establishing a more competitive water market, characterized by an enabling environment for a variety of management systems. It is important that the cross-subsidy system is understood in order to develop an efficient and effective tariff design. In the sample, PWSCs as regional or provincial entities, show a reasonable, above-average performance, but this performance is mainly due to the fact that the one provincial PWSC (represented with three systems) in the Mekong Delta is performing very well; other PWSCs in other provinces perform below average. Moreover, factors such as age of the system, hydrological and socio-cultural factors, rather than the benefits of aggregation only, may influence performance significantly. Serving the Poor Water supply services are still not reaching the poor in small towns and townlets in an equitable way. For the moment, the beneficiaries of pro-poor pricing schemes and policies are generally more well off residential customers. As elsewhere in the region, the poor tend to be excluded from access to piped networks, because of the prohibitive cost of connecting to the system (especially so in systems run by PWSCs, SOEs and STPC/CPCs) and the location of the poor, often on the periphery of settlements. In lieu of or in addition to a subsidy policy decisionmakers should seek mechanisms to help the poor gain better access to services. A majority of households prefer to have connections and use piped water. If there is no substitute water source and they are not able to purchase tanks for storing rainwater or to dig wells, the poor and unconnected have to buy water from neighbors at a higher price. In a group discussion, people in Can Giuoc town said: It is possible to live without eating for 3 days, but how can we live without water for 2 days?, or people from Nam Giang: People sometimes need water more than electricity. Being short of water for one week is really a nightmare. Cross subsidies need to be studied further to fully understand the role they may play in reaching the poor, especially with regard to the system of cross-subsidies that is at work in PWSCs and SOEs and possibly STPC/CPC managed systems. The fact that many PWSCs have profitable businesses flourishing alongside their water supply business (including pipeline installation contracts with districts, and communes, bottled water, and the like), the question arises, how sustainable is the actual water supply business in these companies? Although cross-subsidies are a means of funding water supply investments, more insight into how the different systems are subsidized could help rationalize the government s subsidy policy and the water company s tariff policies. Outline of Master Plans for the Water Sector in Ethiopia

270 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Background - Vietnam Viet Nam Let a thousand Flowers Bloom Evolving Models for Small Towns Water Supply in a Transitional Economy Communist Government embracing free-market economic principles Doi Moi (1990) Progressive liberalization of legal framework for private enterprise Steady economic growth Enterprise Law August 2000, led to many new business applications, including for water (and san.) enterprises Viet Nam Some Statistics Pop. 78 million Urban/rural = 24/76% GDP per capita: US$370 HDI rank: 108/174 ±550 small towns (district centers) ± 3000 townlets (commune centers) Background - Study Part of Global Small Towns WSS Initiative Focus on organizational models for WSS services Search for best practice examples Evolving mix of WSS management systems State-owned enterprises (water companies and others) Private sector Local government/communes Cooperatives Water user groups Why so many models? The study what we looked at Reflection of the transitional economic-policyregulatory environment New private sector opportunities Increased autonomy for local governments and communities Not yet clear which models have the key ingredients for success But do the organizational models per se matter? 5 22 small towns and townlets studied District towns (small towns) Commune centers (townlets) Four performance measures related to sustainability: Operational Financial Social Institutional Also looked at access to services by the poor 6 Outline of Master Plans for the Water Sector in Ethiopia

271 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Small towns & Townlets 649. Small Towns & Townlets: different shades of gray Small towns: Ministry of Construction In principle supported by Provincial water Cos. Most are district administrative centers, with some investment Mgmt. Authority Smallest urban unit Townlets: Ministry of Ag. & Rural Development Considered urbanizing rural settlements Prov. Centers for RWSS provide support Residential areas under Commune PCs 7 Formal Institutions (Water Utilities) State-Owned Enterprises Provincial Water Companies Private Operators Dist. Town People s Committees Small towns (class V district towns) Townlets (urbanizing commune centers) Local Govt. Agency (Prov. CERWAS) Private operators Commune People s Committees Cooperatives Water User groups Non-formal Institutions (community user groups) Findings Sustainability issues - Operational No clear winning management model Sustainability is marginal in all systems studied. Range: 40 60% of total score Coops., user groups, and Prov. Water Cos. tend to do best overall. Low coverage (avg. 38%), but higher access (avg. 51%) in every model the poor buy from the better off. Investment per capita highest in SOE systems, lowest in community-based schemes overdesign in SOEs. Per capita billed consumption below design standards in all but Prov. Water Cos. (small towns higher income, older, more sharing) Sustainability issues - Financial Sustainability issues - Social Tariffs Highest in SOE models, lowest in community-managed systems, but none high enough Profitability Only PWSCs are profitable, but may be due to multiple profit centers (water may be a cost center) Complex funding sources State, consumers (contributions and tariffs), grants, loans, cross subsidies 11 All models have tariff payments well below 3% of average HH income, but Connection fees are high 10 35% of average annual income. Consumer satisfaction (water pressure and quality) ranged between 58 and 98%. 12 Outline of Master Plans for the Water Sector in Ethiopia

272 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Sustainability issues - Institutional Ownership a messy issue Ownership an issue in townlets where investment is from multiple sources communities, private investors, and the State. Adherence to design standards PWSCs tend to over-design; on average, only 36% of capacity is used. Ownership of system needs to be clear Mix of sources for investment can lead to complex and confused ownership Selling of shares or bonds may be a more transparent way of generating investment capital. Govt. funds Community cash and labor Private investment Who owns the system? Coop. shares Findings - caveats Sample small and non-representative Wide variation in performance within each management model (e.g. PWSC outlier) System age is a significant factor influencing performance Consumption goes up with age Coverage goes up with age Performance of innovative models (e.g. private sector involvement) should improve over time 15 Findings some implications Stronger customer orientation leads to better overall performance DRA seems to work Service providers that provide WS as a sideline activity (SOEs, PCs) tend to be less effective. Good Tech. And financial performance does not always lead to good overall performance Customers are sensitive to tariffs, connection costs, access Findings Rules may be more important than models Rules of the game applied rather than organizational management models per se, seem to be most important for sustainability and performance. Keep design standards and physical capacity in line with projected demand Tariffs need to balance costs, profits, and access More entrepreneurial models use progressive and differential tariffs Getting a connection needs to be easy and affordable Need to balance community roles with professional support what are the best mechanisms for identifying needs and providing support? Findings How do the poor fare? Services are not equitable Public access is limited Few or no public taps House connections are expensive for poor households. The poor have access through shared connections Expensive unit cost of water May have limited use Only those with connections benefit from subsidized tariffs. 18 Outline of Master Plans for the Water Sector in Ethiopia

273 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Findings Economies of scale? Where do we go from here? Weak but inverse relationship between size and performance! (but remember caveats) Restrictive government regulations tend to reduce system performance Tech, standards, subsidies But, regulations apply less stringently to townlets Competitive market more important than size? Key may be to establish enabling environment linked to performance for a variety of management systems Look for optimal balance between professional support and local accountability Areas for further research Improving access for the poor Cost and profit centers for Prov. WS Cos. PWSCs often have several lines of water-related businesses, with cross-subsidy arrangements Sanitation service provision, rules, and management models Optimizing public-private partnerships Balancing aggregation with local accountability Some current initiatives in Vietnam National Program for improving services in District towns Ambitious targets, limited resources Proposed IDA-financed Urban Water Supply Development Project Pilot project financed through Public-Private Infrastructure Advisory Facility (PPIAF) Proposed UWSD Project Focused on improving district towns services through a combination of competition and collaboration between Prov. WS Cos. And private sector. Responsiveness to customer demand and willingness to pay Open and transparent bidding for service contracts Tariffs cover full costs PPIAF Pilot Testing models for large-scale implementation in UWSD Project Design-Build-Lease model Consumers agree on tariff PWSCs and private sector bid on system improvement and lease for service provision District People s Committee remains owner. In large-scale project, IDA provides capital for system improvement, and operator lease provides funds, through People s Committee, for repayment Outline of Master Plans for the Water Sector in Ethiopia

274 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page New research on townlets Summary Much entrepreneurial activity, but limited documentation or understanding What are optimal roles for micro-enterprises? What enabling framework is needed to support improved services in townlets? What are optimal roles for informal and formal institutions at the townlet level how do these institutions interface? Vietnam has many, evolving mgmt. Models The old school (SOEs, PWSCs) are looking for new ways of providing services as a business. Some are quite promising (aggregation models) Local governments are filling in where there is a service void The private sector and communities are responding to new opportunities, but still learning the key ingredients for success Summary, cont. How to respond? Some key challenges Finding the optimal balance between the professionalism and efficiencies of utilities and local accountability Identifying the key ingredients for success in local circumstances e.g. North very different from South in Viet Nam, etc. More operational research BNWPP Field trials linked to large-scale investments PPIAF pilots UWSDP Get the lessons out to the service providers as well as policy makers, decision-makers Points for discussion What are the principle challenges that you face? What are the processes that you have entered into to bring about change? What are the key ingredients for success? How are you promoting these ingredients? 29 Outline of Master Plans for the Water Sector in Ethiopia

275 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 275 ADDRESSING THE ISSUES AND CHALLENGES IN THE SUPPLY OF WATER IN SMALL TOWNS IN GHANA By Kwabena Sarpong Manu INTRODUCTION A small town is defined in Ghana s Community Water and Sanitation Agency (CWSA) Act is a community that is not rural but is a small urban community that has decided to manage its own water and sanitation systems. CWSA further characterises the small towns systems as piped systems that serve communities of between 2,000 and 50,000 inhabitants. These systems are owned by District Assemblies (DAs), but managed by communities through Water and Sanitation Development Boards (WSDBs). There are at the moment around 300 community-managed small town water systems and soon more towns would be added on to this. There are, however, several communities with populations between 5,000 and 50,000 whose water supply systems are currently owned and managed by the Ghana Water Company (GWC), the public utility serving urban towns. Eighty-six (86) urban systems have been packaged into 2 business units under the country s private sector participation (PSP) programme to be leased out to major water operators, whilst a further 120 have been transferred to District Assemblies for community management. This report focuses on the issues and challenges of the CWSA small towns water supply systems, which are owned by the DAs. OVERVIEW OF THE SMALL TOWNS WATER SYSTEMS 49 MANAGEMENT Management WSDBs - made up of persons nominated by the community and representatives of the DA - are responsible for the management of small towns systems. There are guidelines for representation on the board and membership is generally set at between 11-13, of which 40% should be women. In most of the systems, the WSDB has employed operating staff for day -to-day operations, even though supervision and involvement in operation by members seem s to be on day -to-day basis. Indeed there is a thin line between oversight and day -to-day management. Technical Generally, small towns tend to rely on mechanised boreholes with piped networks. Submersible pumps usually use electricity from the national grid where possible and diesel in areas without electricity. In areas with ground water problems, surface water sources are used. In a few cases small towns transferred from GWC rely on conventional treatment, and some of these systems have posed considerable challenges for community management. Financial Financing of small towns water systems have come from GOG and ESA, with communities contributing between 5-10% of the capital cost. Current tariffs, which are set by the communities themselves, range from 50 to 150 per size 34 bucket (18 litres) - 2,778 to 8,333/m 3 (US$ ). These compare with a social (lifeline) tariff of 900/m 3 ($0.11) and a top marginal rate of 3,600/m 3 ($0.45) for high volume consumers in the urban water sector. The current CWSA policy guidelines recommend that tariffs should not exceed $1.0 /m 3 ). One significant issue is that in a number of small town communities water consumption is low and is less than 10 litres per capita per day in some, with implications for hygiene, and revenues as well. This compares to CWSA s project design estimate of 40 litres. Full cost recovery (for capital replacement, extensions, operations and maintenance, and depreciation) remains unclear as GoG policy suggests that subsidies will continue to be given for community water supply. However, all O&M costs are to be met from operations. CWSA guidelines for tariff-setting also include a provision for replacements but very few of the communities are budgeting for this let alone setting monies aside for future use. 49 The findings in this section are based on a study of 20 small town systems carried out in 2001 as part of a PPIAF/CWSA study on the involvement of the private sector in small towns water and sanitation delivery. Outline of Master Plans for the Water Sector in Ethiopia

276 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 276 ANALYSIS OF STRENGTHS AND WEAKNESSES OF COMMUNITY MANAGEMENT Community Management The concept of demand-driven community management of water systems is a good one and has had a positive impact on accessibility to water supply in rural communities. As reported by the Ghana Living Standards Survey (GLSS), in rural areas there is a much bigger change in the proportion of households having access to potable water. Indeed by 1998/9 around two-thirds of rural households [had] access to potable water and this contrasts with 1991/92 when on average only around one-half had access. Increased accessibility is not however synonymous with long-term sustainability, and while community management has so far been largely successful in much smaller, coherent and homogenous villages and towns, the same cannot be said of bigger small towns (>10,000 pop). The increasing number of small towns coming under community management as a result of a number of policy initiatives, including decentr alization and the PSP programme in urban water supply, has imposed the need to look at ways of exploiting the strengths of community management and those of the pr ivate sector to create partnerships to run small town water systems. Strengths of Water and Sanitation Development Boards In general we may note the following strengths of community management. a) WSDBs have been able to mobilize the community to initiate and help build water systems, and have increased awareness for sanitation issues b) WSDBs have, in almost all small towns, been able to explain the rationale for tariff increases, and have gotten their communities to pay for water, even at rates higher than what prevails in the urban water sector. b) Users perception of the water service delivery is high, since in most cases the water situation was poor before the boards took over. c) In a number of situations, the responsiveness of WSDBs to breakdown maintenance is high, compared to the previous situation of centrally-managed systems Weaknesses of Water and Sanitation Development Boards An evaluation of O& M practices in relation to CWSA policy and guidelines clearly indicates that existing practices in a number of small towns are poor. The management of small towns is affected by the following weaknesses: a) The technical/administrative capacity is wanting. b) Data collection and records -keeping have been poor. c) Most of the systems visited revealed that regular water quality monitoring has not yet started; d) Even though the various boards have been taught the guidelines for tariff-setting, in a majority of the systems visited, the tariff was not based on a rational analysis of the cost components O&M, future extension and replacement cost; e) Regulation and monitoring from DAs is poor and in most cases no reports are sent by the boards. Even where these are sent no analysis or follow-up is done by the DAs; f) There is little or no self-regulatory mechanism - for example internal and external audits - to check perfor mance; g) Revenues accruing from water sales are sometimes appropriated for other purposes; h) Membership of some boards is dwindling due to a lack of interest, presumably because of the poor/lack of remuneration. This leaves a few who then take decisions that may not always be in the interest of the whole. CWSA/PPIAF PILOT PROJECT The PPIAF-funded PSP in Small Town Water Report indicates the potential for the local private sector to improve service delivery by pr oviding support for operations and maintenance. It also reports the interest by some WSDBs to engage the private sector. Specific objectives of increasing private sector involvement include the need to bring technical and managerial expertise, improve ec onomic efficiency, and make the sector more responsive to consumer needs. The local private sector in Ghana is already involved in water service delivery in terms of design, construction, training, institutional support programs, procurement of spare parts, and maintenance of electrical and mechanical equipment. Therefore, it is well positioned to participate in operations and maintenance as well. Outline of Master Plans for the Water Sector in Ethiopia

277 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 277 The next step in the CWSA/PPIAF project is to help interested WSDBs and DAs in three towns (or clusters of towns) to initiate private sector transactions through a number of partnership options. The essence of piloting is to derive lessons and good practices from the partnership initiatives which could be replicated countrywide. The main tasks involved in developing the three pilot transactions, i nclude: Consensus-building and training Analysis of, and definition of supporting legal and institutional arrangements for PSP in small towns Choice of option and preparation of business plans Design of a contract for each PSP Transaction Pre-qualification of private operators, tender and selection Model contracts and training manual Monitoring of ongoing PSP initiatives CWSA/PPIAF PILOT STUDY: ISSUES AND CHALLENGES Community sensitisation The critical issue is to get the communities to accept that partnerships will work for them. Ghana s PSP process in urban towns has run into a bit of opposition from some civil society groups and one is therefore being cautious in promoting the same in small towns. The pilot project is relying on community ownership of the process, from the choice of the option through procurement of the private partner. Defining options Community responses and perceptions of PSP are that ownership and control of the water systems cannot be given to the private sector. This has been made very clear even in situations where the community is fully ready to go into partnership with the private sector in O&M. Those communities in which consultative forums have been held have expressed a preference for management contracts given their position on ownership and control, as well as the problems that they are faced with. The relatively shorter duration of management contracts (3-5 years) seems attractive to them, as it allows them to cement the courtship with the private sector. Social and political factors In a number of communities, political agitations and social tensions seem to be affecting the membership, tenure and therefore the effectiveness of WSDBs. This poses threats for the sustainability of the contractual relationship with the private sector. Indeed this fear was confirmed by some private sector respondents during interactions with them. The project is addressing this by ensuring that DAs pass the necessary bye-laws to give legal authority to the boards, and provide warranties in the contract that provide comfort to the private sector. But above all, the emphasis has to be placed on the consensus-building and education, which should extend beyond transaction closure. Localisation One of the concerns raised in the debate on the urban PSP process is the question of foreignisation, as large mulitnationals bid for the business packages. To address this in the CWSA/PPIAF project, emphasis is placed on the involvement of the local private sector. Even within the communities themselves we have sought to know whether local should be confined to their immediate community/district. Thankfully the response has been that whilst it would be desirable to have a firm from the community/district, this should not be placed before competency. Tariff-setting The difficulty emerging in small towns, particularly in respect of the systems transferred from the mail public utility (GWC), centres on the tariff that should be paid by those who have household connections. The tariff paid by those who collect water at standpipes by containers was considerably higher than that for metered households in the era when GWC managed the systems. The latter tariff was based on that defined for urban water systems and approved by the country s utilities regulator. The real test is how to define a tariff structure that ensures equity between consumers, discourage water -vending from private house connections, but at the same time encourage house connections. After all it is through house connections that greater volumes can be sold. To address this, the Bekwai PSP arrangement has set tariffs on a rising block arrangement with the minimum tariff equivalent to the rate at standpipes. The emerging evidence is that this has raised serious concerns from some household consumers as bills have risen in multiples from what they used to pay under GWC. The adverse impact of rising block tariffs on multi-family, single-metre households is also relevant in this situation, particularly in small towns where there is relatively less affluence. The issue will be studied criticaly to be able to define an appropriate tariff structure. Outline of Master Plans for the Water Sector in Ethiopia

278 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 278 Clustering of towns Clustering a number of small towns will provide greater revenues, assure economies in scale and make transactions more attractive to the private sector. In a multi-town, multi-system arrangement, the issues to be investigated include the feasibility of a zonal water board (as one party to the contract), or whether there should be individual contracts between the private operator and the WSDBs involved. Is the private sector ready and able? The project has established through consultations that the private sector is ready to participate in small towns O&M, and indeed in carrying out limited capital expenditures. However there is no recorded track record or a demonstrated ability to respond to community water supply needs, even though there are a few initiatives in which private individuals are pr oducing water from mechanised boreholes for sale. At a recent forum for the private sector in connection with the project, significant participation came from ex-employees and serving employees of GWC who would like to create partnerships with small town WSDBs. The project is studying the needs of the private sector as well to establish the level of support they will require to be able to carry out the expected role. CONCLUSION There are strengths in the community management concept. But these are hardly adequate to address longterm sustainability of small towns water systems. There is evidence that some communities would like to work with the local private sector to enable them achieve their vision of increased accessibility to water supply. In pursuing a path of partnerships adequate care should be taken to ensure a fair understanding of all the issues involved as one failed transaction could deal a blow to future transactions. The CWSA/PPIAF initiative provides a platform for studying good practice for replication. Outline of Master Plans for the Water Sector in Ethiopia

279 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page ADDRESSING THE ISSUES AND CHALLENGES IN THE SUPPLY OF WATER IN SMALL TOWNS IN GHANA MIME CONSULT CWSA/PPIAF PILOT PROJECT FOR INVOLVING LOCAL PRIVATE FIRMS IN IN THE MANAGEMENT AND AND DEVELOPMENT OF OF SMALL TOWN WATER SUPPLY kwabena kwabena sarpong sarpong manu manu 672. Outline of presentation Purpose of CWSA/PPIAF Pilot Project in small towns Overview of small towns water supply in Ghana Strengths and weaknesses of community management CWSA/PPIAF Project: Issues and challenges MIME CONSULT June 13, 2002 International Conference on delivery of WSS services in small towns 1 June 13, 2002 International Conference on delivery of WSS services in small towns Main tasks in project Consensus-building and training Analysis of, and definition of supporting legal and institutional arrangements for PSP in small towns Choice of option and preparation of business plans Design of a contract for each PSP Transaction Pre-qualification of private operators, tender and selection Model contracts and training manual Monitoring of ongoing PSP initiatives MIME CONSULT Issues and challenges in in creating partnerships in small towns Community sensitisation Defining options Social and political factors Localisation Tariff-setting Clustering of small towns Is the private sector ready? MIME CONSULT June 13, 2002 International Conference on delivery of WSS services in small towns 7 June 13, 2002 International Conference on delivery of WSS services in small towns Conclusion MIME CONSULT Community management has strengths. But these are hardly adequate to address long-term sustainability of small towns water systems. Some communities would like to work with the local private sector to enable them achieve their vision of increased accessibility to water supply. Pursuing partnerships require a fair understanding of all the issues involved as one failed transaction could deal a blow to future transactions. The CWSA/PPIAF piloting initiative provides a platform for studying good practice for replication. June 13, 2002 International Conference on delivery of WSS services in small towns 16 Outline of Master Plans for the Water Sector in Ethiopia

280 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 280 WSS DEVELOPMENT POLICY IN INDONESIA By Bert Jansen SUCCESSFUL START FOR DUTCH WATER FUND INDONESIA Business partnerships work! Water Fund Indonesia (WFI), a cooperative venture of several Dutch water companies founded in 2001, has facilitated water connections for 52,000 houses in four cities in Indonesia s West Java and North Sumatra provinces. WFI has begun rehabilitation and operation of water processing plants in a number of small cities in North Sumatra. This drinking water will be supplied in bulk to regional branches of water utility Tirtanadi for distribution. Tirtanadi is the municipal water supply company for the city of Medan (population 3 million) in North Sumatra, and, with WFI s help, is transforming into a provincial water utility. WFI sees opportunities for further, rapid expansion in North Sumatra and elsewhere. The Consulting group Aquanet plays a central role in WFI s development. Aquanet is jointly owned by Dutch water supply and wastewater utilities, and facilitates their overseas activities. The article gives a short description of the 20 year history behind WFI, its ongoing activities, and new initiatives in the pipeline. From twinning to business development Starting in 1985, some 10 Dutch water utilities were twinned with similar utilities in Indonesia for the mutual exchange of knowledge and experience. Dutch company officials visited their Indonesian counterparts and vice versa. In 1997, the Indonesian and Dutch partic ipants concluded twinning had served its purpose and that it was time to cooperate in a different, more business-oriented, manner. The Dutch Water Works Association (VEWIN) contracted with Aquanet in 1998 to investigate new forms of cooperation. In its report that year, Aquanet concluded that commercial partnerships between the utilities were feasible from a policy, legal and regulatory standpoint, noting that foreign water companies were already active in the Indonesian market. Aquanet advised a follow -up mission to identify concrete opportunities for commercial coo peration between Dutch and Indonesian water utilities. In 1999, six Dutch water utilities engaged Aquanet for the identification mission. Following research in Indonesia in early 2000, Aquanet specified two initial areas for commercial cooperation: implementation of house connections, and rehabilitation and operation of water processing plants. Aquanet advised investigating the feasibility of implementing these options before making final dec isions. The Dutch Ministry of Economic Affairs granted 140,000 (2/3 of the cost) for the feasibility study; three water utilities underwrote the rest. The study was initiated in October 2000, and its findings led two of the three water utilities to incorporate the Water Fund Indonesia in 2001 as limited liability company under Dutch law. A third utility joined WFI a few months later. Aquanet pr ovides management for WFI on an interim basis. House connections In Indonesia, when a customer contracts for supply from a water utility (known by the Indonesian acronym PDAM), the PDAM provides the house connection. The cost of a house connection is about 60, which customers generally repay over 5 or 6 months. However, many PDAMs are too weak financially to carry the cost of house connections, particularly as demand increases. As a consequence of this bottleneck, installed production capacity may remain unused and the PDAM loses revenue that added users would bring. Potential customers also are forced to wait longer to benefit from improved water supply. Outline of Master Plans for the Water Sector in Ethiopia

281 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 281 WFI offers a solution to these problems. It finances the cost of house connections under a lease-purchase agreement. The PDAM repays the cost of the connection to WFI in 9 equal monthly instalments. Once the final instalment is paid, ownership of the connection is transferred from WFI to the PDAM. WFI reinvests its revenues to finance more new connections. The advantages of this approach are obvious: accelerated implementation of house connections makes more effective use of PDAMs installed capacity, and potential customers get their water sooner. In January 2001, WFI signed its first two contracts with the regional water utility of Bogor in West Java for 5,000 house connections, and with Bogor s municipal water utility for 18,000 connections. In September 2001, a third contract was signed with the water utility in Indramayu, West Java, for 4,800 connections, and a fourth contract with Tirtanadi in North Sumatra for 24,000 connections. In its first year, WFI facilitated implementation of 51,800 connections. These connections will be installed over three years. For local management of its house connection activities, WFI incorporated a subsidiary in Indonesia, PT Mitra Tirta Indonesia (MTI), in June MTI procures materials for house connections on a quarterly basis. Materials for each connection include a water meter, 6 meters of PVC pipe, a stopcock, elbows, and similar plumbing supplies. MTI also commissions the services of contractors, maintains regular contacts with PDAMs for installation work, sends monthly invoices to PDAMs, and applies revenues for procurement of new materials. WFI and MTI have a credit agreement. WFI s investment in the four contracts amounts to some 700,000. WFI aims to expand this service and is in discussion with the PDAM for the region and the city of Bekasi in West Java for the installation of 75,000 connections over three years. Bekasi has grown as a satellite of the capital, Jakarta. PDAM Bekasi currently covers only 10% of about 3 million people in its supply area. Other PDAMs have also approached WFI, demonstrating there is sufficient demand in the market for this program. Operation of water processing plants North Sumatra is the testing ground for an innovative project to increase the scale of succes sful water utility oper ations. Piped water in the province is supplied by Tirtanadi and by 16 smaller utilities. Tirtanadi is a well-run company, among the best utilities in Indonesia. Its annual accounts consistently show a profit, unaccounted-for water is only 20% of supply, and staff/customer ratio is as low as 1:200. The 16 smaller utilities, on average, operate at a loss, and their technical performance, including 50% unaccounted-for water, compares unfavor ably with their big brother in Medan. Tirtanadi has begun to take over the operations of these smaller utilities, on the basis of lease contracts with the municipal governments that own them. Under these contracts, physical assets remain property of the municipalities, while Tirtanadi assumes debt in exchange for a concession to supply water over a period of 25 years. Tirtanadi has contracts with six of the 16 smaller utilities. To finance investments to rehabilitate and extend the infrastructure of more small utilities, Tirtanadi needs a strategic partner. So WFI and Tirtanadi have decided to form a joint venture, the North Sumatra Water Company (PT Tirta Sumut). This company will become responsible for the rehabilitation and operation of smaller water plants through a contract with Tirtanadi. In general, these plants treat surface water for household use and pump it into trunk and distribution networks. Tirta Sumut will sell its processed water in bulk to Tirtanadi, which will distribute it to customers. This WFI project was also able to obtain financial support from the Dutch Ministry of Economic Affairs. WFI has devised a project for the rehabilitation of six processing plants with a total capacity of 26,000 cubic meters per day in three small towns in North Sumatra. The total project cost is estimated at 750,000. The Ministry approved this project in March 2002, granting 500,000 to WFI, which will finance the balance internally. The project began in May 2002 and will run for about 18 months. For project implementation, WFI has contracted for expertise from several Dutch and Indonesian consulting firms. Part of the project involves negotiation and preparation of a contract between Tirta Sumut and Tirtanadi, within the framework that Tirta Sumut will operate the plants for a period of 15 years. The subsidy allows Tirta Sumut to move swiftly to take over operation of the first six plants. Tirta Sumut will have a staff of 60, with management recruited from Tirtanadi and operations personnel from the small water utilities Tirta Sumut takes over. WFI s parent utilities will from time to time deploy experts on short missions to North Sumatra for monitoring and advice. In total, there are 60 water processing plants serving small Outline of Master Plans for the Water Sector in Ethiopia

282 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 282 towns in North Sumatra; that is a sufficient market within the province for Tirta Sumut to expand its activities in the future. Bank Netherlands Water Partnership The Directorate-General for Development Cooperation of the Netherlands Ministry of Foreign Affairs has made 25 million available worldwide for strengthening institutions within the water sector. The World Bank, under the so-called Bank Netherlands Water Partnership (BNWP), manages this budget. Aquanet has proposed to BNWP for funding to create a single provincial water company in North Sumatra. Formation of such a company would result in economies of scale. This water sector reorganization program would require the province and local governments to transfer their water supply assets to the provincial company, in return for shares in it. This proposal is a logical development from the step of Tirtanadi providing water supply services outside Medan while the physical assets remain under ownership of the municipalities and the province. BNWP has positively received the idea and is considering the program for fun ding. New shareholders To further develop its activities in the Indonesian water sector, WFI intends to increase its capital. Prospects for that are promising. A fourth Dutch utility recently joined WFI as shar eholder, and a fifth has shown interest. Furthermore, Thames Water of Great Britain has ind icated it endorses the WFI approach and is considering participation. The water utilities branch of the Pension Fund of Indonesia (known locally as DAPENMA), which manages some USD 40 million, has expressed interest in investing in WFI s water connection subsidiary PT MTI. WFI is also in discussions with co-financing and credit institutions in the Netherlands to strengthen its capital base. Future capital injections will enable WFI to considerably expand its current activities in installation of house connections and rehabilitation and operation of water processing plants. Conclusion The Water Fund Indonesia has proven to be an effective vehicle for Dutch and other foreign water companies to enter the Indonesian water market on a commercial basis. These activities also contribute to accelerated development of the local water supply and wastewater sectors. The potential impact of WFI will s ignificantly increase as more water utilities become shareholders. Bert Jansen Director Water Fund Indonesia May 2002 Water Fonds Indonesië bv Groningenhaven 7 P.O. Box BB NIEUWEGEIN THE NETHERLANDS Telephone Telefax aquanet@aquanet.nl Outline of Master Plans for the Water Sector in Ethiopia

283 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page WSS Development Policy in Indonesia Background 100 million people ( out of 210 million) without access to WSS services properly Investment cost $ 3 billion, recurring cost $ 1 billion No funding capability of Government Change of Approach System Management Basis Past : Administrative basis Future : System Management basis Type A : Management by an Institution (mostly urban) Type C : Management by Community (mostly rural) Type B : Jointly managed Policy Objectives Sustainability Financing Technical Environmental Institution Social Effective use Ease of Access Equity General Policy Water as an Economic and Social good Informed Choices Environmental friendly development Hygiene Education Poverty Focus Woman s role in Decision making Accountability of planning process Outline of Master Plans for the Water Sector in Ethiopia

284 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page General Policy ctd Government s role as Facilitator Community Participation Optimal and Target Oriented Services Improve Monev Strategy Implementation Derived from general policy General framework for ensuring sustained and effective use of WSS facilities and services Formulating in 17 implementation strategy, categorized in 5 issues : finance, institution, technology, environmental, and social perspective 684. More Information Visit our web site Thank You OUTLINE OF MASTER PLANS FOR THE WATER SECTOR IN ETHIOPIA 1. INTRODUCTION 1.1 General Ethiopia, a country divided into nine federal regional states and two administrative councils is one of the largest African Countries both in geographical area and population size. It has an area of about 1.12 million square kilometres and a population of about 63.5 million as of July 1,2000. The country is situated in north-eastern Africa, lying between latitude 3 degree N and fifteen degree N and longitude 30 degree E and 48 degree E. The temperature in Ethiopia is so much influenced by elevation. In the highlands with an elevation of 2500 meters above sea level, the temperature rarely exceeds 17 o c, while in plateaus with elevations ranging from 1600 to 2500meters above sea level, the temperature remains between 15 o c and 25 o c. Outline of Master Plans for the Water Sector in Ethiopia

285 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 285 The heavy rainy season occurs in June, July and August. The light rainy season is during February and March. Rainfall ranges from about 200mm/annum in the lowlands to 2400 mm/annum on the highland plateau. Agriculture is the backbone of the country s economy. Ethiopia is known to have abundant surface and ground water resources. Especially its highlands are the main sources of many rivers and the origin of a large proportion of the water flow out of the country. As a result of the spatial and timely distribution of water resources influenced by the increasingly erratic nature of rainfall, Ethiopia experiences persistent and recurrent drought, which is affecting the socio-economic well being of the sector. Modern water resources management is known to have started since the early 1950 s. Due national efforts are being done to organize and develop the human resources and improve the institutional structure of the sector. The country has continued to adequately assess, quantify and study its water resources. The government of the Federal Democratic Republic of Ethiopia has an economic policy, which is being implemented under the Agricultural Development Led industrialization Strategy. The economic policy and the development strategy being pursued are believed to have encouraged private investors. It is believed that effective and sustainable development and management of the water resources is based on identified priorities for the various sub-sectors and a rationally and systematically developed sector programme and strategy. As indicated above the modern water resource management has been started long time ago. However, the achievements so far made are of a low performance. The total population that has access to safe drinking water is not more than 30%. Sanitation coverage is as low as 7%. Achievements in other fields of water resources development are also very low calling for a concerted effort for an improved and rapid development of the resources. 1.2 Objective The objective of the paper is to present an overview of the existing condition and future plans of the water sector with emphasis on water supply and sanitation in Ethiopia. Outline of Master Plans for the Water Sector in Ethiopia

286 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page BACKGROUND 2.1 Demography Regional Population distribution and Densities According to CSA, the Ethiopian Population has reached 63.5 million by the mid Of this 54.0 million people are classified as rural and 9.5 million people as urban population as shown in Table 2.1.1i Table 2.1.1i: Population by Region, year 2000 Region Population Percentage Percentages Total Rural Urban of Nation Rural Urban 1 Tigray 3,694,000 3,072, , % 83% 17% 2 Affar 1,216,000 1,117,000 99, % 92% 8% 3 Amhara 16,295,000 14,615,000 1,680, % 90% 10% 4 Oromiya 22,354,000 19,706,000 2,648, % 88% 12% 5 Somali 3,698,000 3,138, , % 85% 15% 6 Benishangul 537, ,000 47, % 91% 9% 7 SNNPRS 12,515,000 11,557, , % 92% 8% 12 Gambela 211, ,000 36, % 83% 17% 13 Harari 160,000 63,000 97, % 39% 61% 14 Addis Ababa 2,495, ,495, % 0% 100% 15 Dire Dawa 318,000 89, , % 28% 72% Total Country: 63,493,000 54,022,000 9,471, % 85.1% 14.9% Source: CSA Statistical Abstract The graphical regional population distribution is as shown in Figure 2.1.1a below. Figure 2.1.1a: Population Distributions, Percentage by Region, Year 2000 Gambela 0.3% Addis Ababa 3.9% Harari 0.3% Tigray 5.8% Dire Dawa 0.5% Affar 1.9% SNNPRS 19.7% Amhara 25.7% Benishangul 0.8% Somali 5.8% Outline of Master Plans for the Water Sector in Ethiopia Oromiya 35.2%

287 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Population Densities Population density varies from 8 in Gambela to 4746 in Addis Ababa as shown in Table 2.1.2i. Table 2.1.2i: Regional Population Densities, year 2000 Region Total Area Density Population km 2 pop/km 2 1 Tigray 3,694,000 56, Affar 1,216,000 92, Amhara 16,295, , Oromiya 22,354, , Somali 3,698, , Benishangul 537,000 50, SNNPRS 12,515, , Gambela 211,000 25, Harari 160, Addis Ababa 2,495, Dire Dawa 318,000 1, Totals: 63,493,000 1,132, Source: CSA Statistical Abstract Generally speaking the highland areas of Ethiopia are densely populated whereas the lowland areas are scarcely populated as shown in Map Urban population CSA classifies 15% of the year 2000 population as urban. In the CSA definition, an urban area is any town or conglomeration of houses with a population of over 2000 as well as administrative centres with fewer inhabitants. Occasionally, small settlements with some town-like characteristics such as frequent markets, a number of shops and other services (i.e. not purely a rural village) are also counted as urban. In total 933 settlements have received the classification ur ban. The number of urban towns and population in each of the regions is shown in Tables 2.1.3i and 2.1.3ii. Of the 9.5 million urban population, one-fourth lives in Addis Ababa. Another one-fourth lives in towns larger than 30,000 inhabitants, of which there are 36 (including Dire Dawa and Harar, excluding Addis Ababa). Most of these are in Oromiya regional state, some in Amhara, Tigray and SNNPRS, none in Affar, Benishangul-Gumuz or Gambela. The 37 largest towns with more than 30,000 inhabitants together accommodate just over 50% of the urban population. The other 50% of the urban population live in the 888 smaller towns with less than 30,000 inhabitants. Nearly half of this population (or ¼ of total urban) reside in 116 towns of 10,000 to 30,000 inhabitants. The rest live in 780 small settlements of less than 10,000 people. Outline of Master Plans for the Water Sector in Ethiopia

288 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 288 Table 2.1.3i Number of Towns by Population Group, Year 2000 Metropolis , , , , , , ,000 < 2,000 Totals 1 Tigray 2 Affar Amhara Oromiya Somali Benishangul SNNPRS Gambela Harari Addis Ababa Dire Dawa Totals: Table 2.1.3ii Population in Towns, by Population Group, Year 2000 Metropolis , , , , , , ,000 < 2,000 Totals 1 Tigray 128, ,621 70,362 54, ,919 55,871 24, ,002 2 Affar 29,986 31,380 28,108 16, ,984 3 Amhara 406, ,617 32, , , , ,650 73,103 1,679,997 4 Oromiya 389, , , , , , , ,662 2,647,991 5 Somali 126,800 32, , , ,178 66,026 26, ,673 6 Benishangul 15,359 5,435 22,703 3,502 46,999 7 SNNPRS 94,010 54, ,120 90, , , ,732 57, , Gambela 23,955 9,095 2,949 35, Harari 97,000 97, Addis Ababa 2,495,000 2,495, Dire Dawa 217,975 11, ,000 Totals: 2,495,000 1,334, , , ,938 1,204,998 1,082,940 1,110, ,892 9,508,657 Cumulative: 2,495,000 3,829,429 4,377,399 5,005,070 5,759,008 6,964,006 8,046,946 9,157,764 9,508,657 Percentages: 26% 14% 6% 7% 8% 13% 11% 12% 4% 100% Source:CSA Outline of Master Plans for the Water Sector in Ethiopia

289 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 289 Outline of Master Plans for the Water Sector in Ethiopia

290 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 290 Number of Small Towns and urban Population, by Population Group or category for the Year 2000 are as shown in Tables 2.1.3iii and 2.1.3iv. For town sizes see Map 2. Table 2.1.3iii: Number of Small Towns by Population Group, Year , , ,000 <2000 Total 1 Tigrai Affar Amhara Oromya Somali Benishangul SNNPRS Gambela Harari 10 Addis Ababa 11 Dire Dawa Total Table 2.1.3iv: Population in Towns, by Population Group-Year , Feb-00 <2000 Total 1Tigray 54, ,919 55,871 24, ,045 2Affar 29,986 31,380 28,108 16, ,984 3Amhara 335, , ,650 73, ,244 4Oromya 494, , , ,662 1,540,985 5Somali 104, ,178 66,026 26, ,523 6Benishangul 15,359 5,435 22,703 3,502 46,999 7SNNPRS 160, , ,732 57, ,799 8Gambela 9,095 2,949 12,044 9Harari 10Addis Ababa 11DireDawa 11,025 11,025 12Total 1,204,998 1,082,940 1,110, ,892 3,749,648 Cumulative 1,204,998 2,287,938 3,398,756 3,749,648 Percentage of Total urban Population i.e.: 9,508,657 13% 11% 12% 4% 39% Population Projections Source: CSA CSA has made population projections up to the year 2030 and has considered three variants. In the first high growth variant it is assumed that the government makes some attempts to reduce the current high level of fertility, but that the effectiveness of various approaches and programmes is very limited. In a Outline of Master Plans for the Water Sector in Ethiopia

291 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 291 medium variant it is assumed that the effectiveness is moderate, while in the third low growth variant it is optimistically assumed that fertility rates will decrease at an accelerated pace. Table 2.1.4i shows the three forecasts. Table 2.1.4i: Population forecasts, 3 variants, in million people year Low variant Medium variant High variant Source: CSA Projected Urban populations per town category are shown in Table 2.1.4ii below. Table 2.1.4ii: Projected urban populations per town-category Population per town group (x thousand) 1) Years: Addis Ababa 2,495 2,890 3,330 3,790 4,250 4,660 5,090 > 250, ,530 2,480 3,580 5, ,000 1,334 1,830 2,350 2,490 3,060 4,550 5, , ,000 1,790 2,200 2,210 3, , ,180 1,310 1,490 2,250 2,650 2, , ,260 1,410 1,490 1,900 2, ,000 1,205 1,440 1,690 2,170 2,670 3,110 3, ,000 1,083 1,350 1,620 1,770 1,850 1,900 1, ,000 1,111 1,130 1,070 1, < 2, Totals: 9,509 11,720 14,410 17,550 21,170 25,250 29,870 1) rounded to the nearest 10,000 Source: ESPC3 projection with CSA 1999 data Demographic Indicators 2.2 Socioeconomic Conditions Summarized demographic indicators based on medium variant scenario are as shown in Table 2.2i. Table 2.2i Summarised Demographic Indicators Based on Medium Variant Scenario Indicator s CBR/ ,89 33,62 30,58 27,51 24,63 CDR/ ,75 9,22 8,03 7,04 6,20 Outline of Master Plans for the Water Sector in Ethiopia

292 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page TFR(child ,34 4,82 4,30 3,77 3,32 ren born / woman) Male LE ,91 58,37 60,83 63,13 65,13 (Years) Female ,93 60,42 62,89 65,34 67,65 LE (Years) GR(%) ,62 2,44 2,26 2,05 1,85 Urban GR ,06 3,88 3,69 3,51 3,35 (%) Rural GR (%) ,35 2,15 1,98 1,68 1,41 Source: CSA (1999). CBR= Crude Birth Rate, CDE= Crude Death Rate, TFR= Total Fertility Rate, LE= Life Expectancy, GR= Growth Rate National Income The gross national product of Ethiopia in 1997/98 was about 5.44 billion US$. This is equivalent to a GNP per capita of 91.5 US$, one of the lowest in Sub-Saharan Africa 3. The Ethiopian economy is dominated by subsistence smallholder agriculture and allied activities that account for 46% GDP and 85% of em ployment 3. Industry and The Service sector share about 11% and 43% of GDP in 1997/98 respectively (CSA, 1999;NBE, 1999;MEDaC, 1999). The growth of real GDP is estimated at 5.2 %, 12.7 %, and 6.3 % for 1995/96, 1996/97 and 1997/98 respectively. (CSA,1999). The average growth rate of agriculture, Industry Services and total GDP was 3,4, 7,3, 7,7, and 5,5% for the period 1992/ /99 at 1980/81 constant factor growth rate respectively. The per capita real GDP for the year 1998/99 was about 121 USD (NBE, 1999). The Projection of medium scenario GDP in million Birr, GDP growth rate, and GDP per capita based on recent trends in economic performance, free market economic policies, population growth, etc is as shown in Table 2.2.2i. Table 2.2.2i GDP Projections in Million Birr At 1980/81 Constant Factor Cost, GDP Growth Rate, in Percent and GDP Per Capita in Birr rounded Outline of Master Plans for the Water Sector in Ethiopia

293 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 293 Economi c Indicator GDP GDP s growth in % GDP/Capi ta in Birr # Status Medium Scenari o Medium Scenari o Medium Scenari o 1994/ * Source: Bedada Balcha, 2000, Socio Economic Scenarios for Ethiopia 4. * Actual estimates (not Projection) # 1 USD=8,55Birr With per capita GNP of 100 USD in 1994 Ethiopia ranks as one of the poorest countries in the world and certainly within sub-saharan Africa as can be seen from Table 2.2.2ii ,2* 4,7 4,9 5,1 5,3 5,5 5,6 5, Outline of Master Plans for the Water Sector in Ethiopia

294 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 294 Table 2.2.2ii Comparison using Demographic and Economic Indicators Pop. Per Capita Pop.1994 Countries Growth GNP 1994 (millions) (%) (Dollars) Per Capita GNP Growth, (%) Ethiopia 54 3, ,7 a Eritrea 4 3,3 b 169-0,6 b Kenya 26 3, ,0 Tanzania 29 3, ,8 Uganda 19 2, ,3 Sub-saharan 3,0 259 a -1,0 d Africa d Low-income Countries e a. World Bank: African development Indicators (1996) b. Data for c. Excluding South Africa. d. Excluding China and India. Source: World Bank: 1996 World Development Report 5 2, ,1 As can be seen from the table shown above, the high population growth of the 1980 s and early 1990 s has greatly contributed to the low GNP thereby limiting the progress of social sector development. The consequences of Ethiopian poor economy and the magnitude of the challenge ahead are presented in Table2.2.2iii. Table 2.2.2iii Other Social Welfare Indicators Countries Life Expectancy at birth, Infant Mortality (per 1000 live Births), 1994 Total Fertility Rate, 1994 Adult illiteracy 1994 (%) 1994 Ethiopia ,5 65 Outline of Master Plans for the Water Sector in Ethiopia

295 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 295 Eritrea a ,8 Kenya ,9 22 Tanzania ,8 32 Uganda ,1 38 Sub-saharan ,9 43 Africa b Low-income Countries c No data available ,1 46 a. World Bank 1993a (data reported are for 1993) b. Excluding China and India. Source: World Bank, 1996 World Development Report Affordability The analysis of the amounts of money households would be able to spend on water done by Environmental support project indicates that, it is presently about 23Birr per month for private connection owners and 10Birr for shared yard connection and public tap users. The analysis considers income distribution of urban households, uses a correlation between type of connection and household income and assumes that households are able to spend 4% of their cash income on water (as is a widely accepted assumption for developing countries). Water consumption figures are taken from the demand forecast done by the above-mentioned project. Table shows the results for a few selected town categories. Table 3.4: Average affordable tariffs, year 2000 Town category Average percapita Average household water 4% of household income Average affordable tariff consumption use l/cd m 3 /month Birr/month Birr/m , , , , Source: -Interim Master Plan Report, Sector Resources Potential and Development Situation Ethiopia is endowed with vast water resources, including many major rivers and lakes. There are 12 major river basins with a total annual run-off of about 122 billion cubic meters with not less than 86% draining to neighbouring countries. With the exception of only two rivers, all the rest are Transboundary Rivers. The rivers flow in deep gorges and are not sui table for transportation services. Their use for drinking water requires pumping to higher elevations and the construction of expensive intake structures. Of the rivers only Baro Akobo is navigable. The low lands of Ethiopia Outline of Master Plans for the Water Sector in Ethiopia

296 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 296 have vast irrigable areas. The flow of the rivers is quite seasonal, something not less than 70% of the annual flow does occur during the rainy season in the months of June, July and August. Ethiopia has 8 major natural lakes and very few artificial reservoirs. Many of the natural lakes are found in the Rift valley lakes region. Many of these lakes are known to have good potential to provide large yields of fish on a sustainable basis. The Rift Valley lakes are also sanctuaries of different species of birds. The lakes, due to their proximity to the large cities are good sources of attraction to national and international tourists. Therefore, it is widely believed that there is the need for storage reservoirs and dams to store water for irrigation hydropower industrial and domesti c use. The 12 river basins with their estimated annual run off is shown table below. (Table 3) Table 3: Annual Run-off from major drainage basins in Ethiopia Ser.No Basin Countries Sharing 1 Abbay Sudan& 2 Tekeze Egypt 3 Mereb Sudan & 4 Baro-Akobo Egypt 5 Omo-Gibe Sudan, 6 Awash Eritrea 7 Rift Valley Sudan, 8 lakes Egypt 9 Genale- 10 Dawa 11 Wabi- 12 Shebelle Somali & Danakil Kenya Ogadden Somalia Ayisha Area Km 2 199,812 82,350 5,893 75,912 79, ,000 52, , ,214 64,380 77,120 2,223 Annual Run off in BM 3 54, nd nd Total 1,117, ,89 Nd=no Outline of Master Plans for the Water Sector in Ethiopia

297 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 297 data Source: WWDSE, Water sector Programme, Executive Summary,,March The potential gross irrigable land in the basins in thousand hectares ranges from close to one million in the Abbay basin followed by about 50,000 in the Baro Akobo basin down to the lowest in the Awash basin 3000 hectares. Ethiopia has an estimated total potential of irrigable land within the range of 3.7 million to 4 million hectares, out of which as mentioned earlier only 200,000 hectares is so far developed, a disappointingly low performance level. Regarding power sector, Ethiopian is endowed with vast energy resources including hydro, biomass, coal, geothermal, national gas wind and solar energy. The gross hydro-energy potential of the country is estimated at 650 Twh of which 25% could be exploited for power. Over 70 billion cubic meters of natural gas, more than 1000 MW of geothermal, several hundred million tons of coal and oil shale constitute the energy potential that is estimated so far. Electric supply is wholly from local generating stations, with hydroelectricity largely accounting for over 90 per cent of the supply. Only 13% of the population has access to electricity. Based on very limited hydro geological data available, the country s usable groundwater is estimated in the order of 2.6 billion cubic meters. The distribution is known to be irregular and unequal, but it is widely believed these resources could be developed for various purposes, including domestic, agriculture and industrial use. Currently it is within the national plan to undertake a detailed ground water assessment for over 12 years. To efficiently utilize the sector resources, capacity building in terms of Finance and HID (Human and Institutional Development) is required. 3.1 Water Supplies and Sanitation Coverage Access to Water Supply by Town Size Figure 3.1.1a below shows access to various sources of water by town-size. Figure 3.1.1a Access to Water, Urban Population (CSA 1994) 100% housing units with access 75% 50% 25% private connection piped water safe water 0% Outline of Master Plans for the Water Sector in Ethiopia Addis Ababa , , , , , ,000 < 2,000

298 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 298 The overall picture is that people in larger towns are better off; the larger the town, the more households have access to those three types of services (i.e. private connection, piped supply and safe supply). The access to safe water supply for the year 1994 and 1998 as reported by Central Statistics Authority (CSA) is shown in Table 3.1.1i. Table 3.1.1i Rural areas, access to safe water, by region, 1994 and 1998 Regional State Type of people* Rural areas, 1994 Rural areas, 1998 Addis Ababa More of 36% 44% Grouped settlement Affar Dominantly nomadic 5% 9% Dire Dawa Grouped settlement 24% 65% Gambela Grouped and dispersed 17% 20% Harari Grouped 11% 35% Tigray Grouped 11% 17% Somali Dispersed and nomadic 9% 18% Amhara Grouped and dispersed 15% 11% Benishangul-Gumuz Grouped and dispersed 15% 13% Oromya Grouped and dispersed, 16% 14% pastorals as well SNNPR Grouped and dispersed 16% 15% pastorals as well Total country 15% 14% Source: CSA 1994 and N: B Type of people included from own observation The coverage figures as reported by regional offices are usually higher. It could probably be due to counting all the constructed schemes irrespective of whether they are functioning or not. One such data are as shown in Table 3.1.1ii. Table 3.1.1ii Water Supply Coverage in Ethiopia Population Regional State (x 10 6 ) Water supply coverage in percent total population of respective regions Urban Rural Urban Rural Tigray Afar Amhara Oromya Outline of Master Plans for the Water Sector in Ethiopia

299 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 299 Diredawa Harari Somali SNNPR Gambella Benshangul-Gumuz Addis Ababa Total Source: Water &Development, Vol. 4 No 18, MoWR Sanitation Coverage As per CSA statistics of 1994 and 1998 the use of latrines has grown from 51% in 1994 to 63% in However, absolute coverage remains low at 8% in However, little available information about the quality of toilet facilities indicates that nearly 50% of latrines are in a poor unsafe structural condition, and more than 50% are in a poor or fair hygienic condition emitting bad odours due to lack of vent pipes. Apparently there is an interest among households to invest an affordable amount in a toilet facility though improved construction practices are inadequate to meet the demand. Likewise, the public services such as sludge collection are not well developed either. The demand for the services is still low. Significant improvement in the quality of the service requires awareness creation, behavioural change and stimulation. 4 Problems and Constraints 4.1 Availability of Water Resources Despite abundant water resources, drought is a recurrent phenomenon in Ethiopia showing that the availability of water in quality and quantity, time and space has remained a major constraint. This situation calls for the need to draw water from the few basins with excess water to basins with water deficit. The complex hydro geological situation and the limited knowledge of groundwater resources make the use of ground water for domestic and other purposes difficult and costly in Ethiopia. The presence of fluoride and nitrate in the ground water of the Rift valley and Dire Dawa administration area respectively are problems requiring quick solution at the earliest possible time. 4.2 Implementation Capacity The country lacks adequate trained and experienced national staff. Large projects are seeking the support of experienced international staff and equipments, which the country is still lacking. Outline of Master Plans for the Water Sector in Ethiopia

300 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 300 Project identification, pre feasibility and feasibility studies, designing and construction are taking 7 to 12 years or longer depending on the size of the pr oject. 4.3 Economic viability and financial limitations One of the major problems affecting economic viability in Ethiopia is the high cost of water supply and sanitation development in particular and water resources development in general. The major contributing factor is remoteness of project areas and lack of appropriate infrastructure. Lack of required foreign exchange for consulting services, purchase of necessary equipment and construction entails relatively long gestation period before schemes become operational. The GNP of the country, which is slightly higher than 100 USD per person, can t support the huge investment requirement in terms of both local and foreign currency. As a result the country is forced to depend on foreign grants and loans to undertake projects/programs under the various water sectors mainly water supply and sanitation and irrigation. 4.4 Technical Problems Lack of technological standards; research oriented appropriate technological options, and their dissemination has hampered water resources development in Ethiopia. 5 Sector Reforms Towards Improved Resources Development and Management 5.1 Ethiopian Water Resources Management Policy The policy was ratified in 1999 with a goal of enhancing and promoting all national efforts towards the efficient, equitable and optimum utilization of the available water resources of Ethiopia for significant socio economic development on sustainable manner. The objective of the policy is sustainable development of water resources for economic and social benefits with due equity. This entails equitable and efficient allocation of water resources, managing and combating drought, combating and regulating floods and conserving of water resources. Some of the principles that are relevant to water supply include: The recognition of water as an economic and social good, The promotion of participation of all relevant stakeholders and user communities in the relevant aspects of water resources development and management and Ensuring of social equity, economic efficiency, systems reliability and sustainability norms. 5.2 National sector Strategy In the Ethiopian context, the National Water Strategy that is finalized in 2002 is understood as a means and way of translating the water policy into action. The strategy is therefore expected to provide guidance to stakeholders in implementing the principles, objectives, and those issues outlined in the Ethiopian Water Resources Management Policy. 5.3 National Sector Development Programme The sector development programme which is at its final stage has developed a 15 year plan, which incorporates a number of projects /programmes identified for water supply and sanitation, irrigation and hydropower sub sectors following a logical step towards improving the performance and effectiveness the water sector. Outline of Master Plans for the Water Sector in Ethiopia

301 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page Integrated and Comprehensive Basin Wide Development Strategy/Approach Ethiopia used to deal with piecemeal projects to solve social and economic problems, mainly in the form of solving emergency problems like droughts and famine. Nowadays, it is realised by all concerned that water Resources is an important and strategic resource that requires strategic management. Ethiopia has accordingly started undertaking Integrated River Basin Master plan Studies since the second half of the 1990 s. The following master plan studies of Ethiopia s major rivers are completed so far: Abbay River Basin Integrated Master Plan Study; Tekezze River Basin Integrated Master Plan Study; Omo-Gibe River Basin Integrated Master Plan Study; Baro-Akobo River Basin Integrated Master Plan Study; and Mereb River Basin Integrated Master Plan Study; The study of the remaining basins will continue as soon as the necessary arrangement in terms of finance and logistics is completed. At present, the study of Wabe shebele and Genale Dawa River Basins is on the go. 5.5 Framework of Cooperation Amongst Riparian States Ethiopia believes that its trans boundary waters development and management could be rationally and reasonably managed if and only if utilization of the water resources is based on equitable principles within the framework of co operation and understanding to be reached with the riparian countries. A few years have elapsed since the Nile riparian states have been active in developing projects/programmes that would enable to develop their water resources in a win-win manner. To this effect, the riparian states have developed two important programmes: 1. Shared Vision Programme Of the seven projects planned for implementation by the seven riparian states, a project on water resources management and investment planning will be carried out by Ethiopia with a goal of building management capacity. 2. Eastern Nile Subsidiary Action Programme/ENSAP/ This programme refers to Ethiopia, Sudan and Egypt only unlike the shared vision programme that involves the seven riparian states. Under this programme, the three countries have proposed projects that are now ready for further investigation through undertaking feasibility studies and design work. The ultimate goal of this co-operative approach for which Ethiopia has been instrumental fro the outset is to reach a standing agreement on equitable utilization of the shared resource (the Nile water). 4.1 Ground Water Assessment Programme This initiation is expected to supplem ent the surface water resources and ease the problems that can arise from shortage of water in the country. With the sector reforms being carried out, it is expected that Ethiopia will continue to demand substantially high volume of water for the projects/programmes being prepared under the Ethiopian Water Sector Development Programme. Therefore, it has become a high time for Ethiopia to assess and manage this very important but inadequately tapped resource for sustainable agricultural, industrial, water supply and other uses. Outline of Master Plans for the Water Sector in Ethiopia

302 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 302 As it is a huge task to go into a national assessment that comprises the entire country, a phased approach for its implementation is agreed upon amongst all stakeholders. The entire National Ground Water Assessment Programme is expected to be completed in 12 years time. It is planned that the latest geological, hydrological, geo chemical and isotropic methods will be used to successfully undertake the proposed programme. 4.1 National Water Supply and Sanitation Master Plan Ethiopia, as part of its efforts to materialize this management approach of the sub-sector, it has now embanked on a project mainly dealing with a 20-years investment plan in water supply and sanitation. The National Water supply and Sanitation Master Plan objectives include among other things; Strategies and plans for improvement and expansion of the rural and urban water supply and sanitation services in the country: Investment schedules for selected short and medium term projects; Feasibilities and detailed designs and tender documents for water supply and sanitation facilities in 10 towns; Recommendations for appropriate institutional, organizational, manpower and training arrangements for the water supply and sanitation; An outline Environmental Impact Assessment (EIA) for the National Water Supply and Sanitation Master Plan. 5.8 Water Fund The establishment of the fund is taken as a radical move towards improving the water resources management of the country, by attempting to avail among the most important resources by mobilizing it from both domestic and external sources. The investment plan referred to the Sector Development Programme under preparation and other national programmes that would fall within the framework of the national strategy are to be supported by the fund. The establishment of the fund is definitely believed to require the co-operation of all sector partners, a condition without which implementation of the national Sector Development Programme could be constrained. 4.1 Ethiopian Water Resources Management Proclamation The water resources management proclamation, which is recently issued, is designed to serve as the basic legislative framework of the country with respect to the management, planning, utilisation and protection of water resources. The issuance of detailed regulations on matters provided in the proclamation will subsequently be prepared to enable effective implementation. One of the major issues that need to be clarified in the regulations is the decentralisation of some of the powers from the Ministry to regional states Water Supply Management Proclamations Regional proclamations pertaining to the establishment and management of urban water supply services are issued by respective Regional Authorities for Addis Ababa, Harar, Amhara, Southern Region and Tigray. Those for Addis Ababa (Proclamation 10/95 re-establishing AAWSA) and Harar (Proclamation?/01) appear to give most autonomy to the authorities, although in the realm of investment decisions, tariff setting and human resource management, a lot of actions shall still be taken. Outline of Master Plans for the Water Sector in Ethiopia

303 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 303 In Oromiya region progress has been made with regulations regarding the management of (rural) community water schemes. Guidelines have been issued by the regional government. Three management options are currently operational in Oromiya: 1. The water committee, managing a single point source; 2. The water board, elected by two or more water committees to jointly running their schemes; 3. Traditional water resource management, referring to indigenous types of managem ent as practiced in the Borana areas. The water committees and boards are legal entities that are accountable to the water user community and to the water department, that can open a bank account and that can sue or can be sued on behalf of the water supply schemes. Synopsis Ethiopia, a very resourceful country in water, is now effectively engaged in undertaking sector reforms. The reforms being taken are believed to enhance the national capacity of the country to improve the overall management of the resources. This will make a change in the performance of the sector, mainly in the areas of irrigation, Water Supply and Sanitation, hydropower development and the general water resources activities. As a matter of national policy, all these who have a stake or concern in the rapid development and rational management of the Ethiopian water resources have been given the chance to involve and make meaningful contribution in the process, ranging from technical/professional to financial assistance. The stakeholders being involved in the process are both national and international based individuals, groups and agencies. Therefore, it has been possible to issue a comprehensively developed water policy, as endorsed by the executive organ of government of the Federal Democratic Republic of Ethiopia. The issuance of the policy has been followed by the ratification of the Ethiopian water law by the Federal Parliament. The reform agenda has still continued to formulate national water strategy and a 15-years sector development program. These two last mentioned exercises will be finalized very soon, especially the national sector strategy which is now at its final stage, is being prepared by synthesizing four separate draft sector strategies in the areas of irrigation, Water Supply and Sanitation, hydropower, and general water resources in to one National Sector Strategy. The various government initiatives being taken to improve the management of the sector and ensure sustainable use is believed to create a conduciv e working spirit among stakeholders and the Ethiopian peoples at large. Government effort towards co-operative approach in the utilization of the trans boundary water resources is expected to be backed by genuine support of the external agencies falling within the domain of both bilateral and multilateral organizations. Although it has been effectively possible to bring on board international sector partners in the process of the various reforms, there is still the need to strengthen this spirit of co-operation and there is still the need to strengthen this spirit of co-operation and concern through objective-oriented series of consultations. Ethiopia, as part of its concerted efforts to realize its planned measures in accordance to the set time tables in the Sector Development Program and that of the initiatives within the cooperative framework of the Nile Basin initiative, will continue to seek the support of international financiers/donors. To go through and effective mobilization of domestic and exter nal technical and financial resources to implement its investment plans such as the National Ground Water Assessment, National Water Supply and Sanitation investment Outline of Master Plans for the Water Sector in Ethiopia

304 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 304 plan, and projects/program included in the 15-years planning document prepared as Sector Development Program is believed to be come among its national priorities. 6 Resource Requirement for improving the low profile 6.1 Financial Requirement As far as estimates on financial requirements are concerned, one may refer to the finalised documents of the Water Sector Development Programme (WSDP) and the ongoing National Water Supply and Sanitation Master Plan projects. Estimates up to year 2015 of the two projects is as shown in Table 6.1i. Table6.1i Comparison of WSDP and ESP Master Plan Excluding Addis Ababa Water Sector Development Programme mbirr totals Physical targets 2015 Urban water supply 1, , % coverage Rural water supply 4,241 5,327 6,138 15,706 >60% coverage Urban sanitation many towns Totals 5,497 6,227 6,486 18,210 ESP - Interim Master Plan Excl. AA totals Physical targets 2015 Urban water supply , , , % coverage Rural water supply , , , % coverage Urban sanitation emergency towns Totals 1, , , , ESP estimates, which take reinvestment and loan repayment into consideration, look less up to the year 2015 when compared to WSDP estimates. Higher investment, re investment, rehabilitation and loan repayment costs are expected to be incurred after year 2015 as per ESP. WSDP costs are not shown per town categories while ESP estimates are more or less distributed amongst town categories. Though changes in the final estimates are expected to be encountered due to relevant adjustments and incorporation of livestock watering, ESP estimates could give indicative financial requirements as subsequently presented Urban Water supply Scenario1: 3% annual income growth rate, and an annual GDP increase of 5.6% (taken as a base situation) Investment Needs = 11.9 billion Birr Scenario 2: A 6% annual income growth, and 8.7% annual GDP growth (Very optimistic view of the future) Investment Needs = 16.3 billion Barr Scenario 3:A zero income growth, and GDP is 2.5% per year (Lower boundary of needs) Investment Needs = 9.4 billion Birr Estimates based on the first scenario are further detailed in subsequent sections. Outline of Master Plans for the Water Sector in Ethiopia

305 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 305 Table6.1.1i: Investment Needs, Urban Water Supply (by town size groups and planning periods ) in million Birr based on a real demand forecast Up to Total 2005 Up to 2025 Town Size Group , , , , , , Total urban <2, The Distribution of Total Investment Requirement for Regions is shown in Table 6.1.1ii Table6.1.1ii: Investment Needs, Urban Water Supply by Region (in Million Birr) Regional state Up-to Total Up-to 2025 Afar Amhara ,629 Benishagul -Gumuz Dire Dawa Gambela Harar Oromiya ,219 1,162 4,701 Southern Region ,696 Somali ,070 Tigray ,030 Total urban 2,194 1,591 2,148 2,936 3,029 11, Rural Water Supply Investment Requirements According to the ongoing National and sanitation Master plan, the preliminary nation-wide cumulative investment requirements of different coverage scenarios up to the year 2025 are presented in table 6.1.1i. Table 6.1.1i Cumulative New-Investment Requirements up to 2025 in Million Birr Nation wide Coverage target yr 2025 Maximum walking distance 1km 2km 60% 11,750 8,140 40% 7,070 4,910 16% 1,570 1,100 Outline of Master Plans for the Water Sector in Ethiopia

306 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 306 The costs include a provision for the rehabilitation of about 1/3 of the non-functioning existing schemes for which this may be possible. Such a cost amounts to about 50 million Birr. However, the costs do not include the cost of planning, design and community development activities. Table 6.1.1ii shows the requirements for re-investments in schemes that have gone beyond their lifetime. For providing sustainable services, schemes require major overhaul or complete reconstruction over several years of operation. Amounts could go up to 1/3 of the total investment cost. Under the stagnant growth scenario, the requirement can exceed those for new investments. Table 6.1.1i Cumulative Re-Investment Requirements up to 2025 in Million Birr Nation wide Coverage target yr 2025 Maximum walking distance 1km 2km 60% 4,320 2,910 40% 3,810 2,580 16% 2,970 2, Urban Sanitation Onsite Sanitation A high-target scenario as illustrated in figure a below can only be achieved against extra costs. An estimation of the value of on-site sanitation facilities that have to be in place to meet the two types of projections: the low one and the high one 50 for all urban towns in Ethiopia are shown in table i. In the case of low-autonomous growth scenario considering that 50% of the facilities are structurally inadequate could reduce the cost to half the desired price. > 80, , , , , , ,000 < 2,000 year % 20% 40% 60% 80% year % Figure a Preliminary Forecast of Year 2025 Urban Sanitation Coverage, High Growth Scenario 1.Technology options and unit construction costs (sub-sructure only) used in the estimate are: septic tank 10,000 Birr, wet pit latrine (need desludging) 3,500 Birr and dry pit latrine 800 Birr. Of all pit latrines, 50% are wet and 50% are dry. The effect on costs of facility sharing has not been accounted for, which may result a significant reduction. The cost figures presented may well be 30% lower and should thus be taken as indicative. Outline of Master Plans for the Water Sector in Ethiopia

307 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 307 The cost difference of over 8billion Birr can be taken as the investment required to satisfy higher access in urban sanitation with adequate facilities. The question remains whether private households would be able and willing to spend that extra money, and how much the government is willing to invest to stimulate households to do so. The figure may be compared with the more or less similar investment need in urban water supply of about 12bBirr. Table i Asset value of urban on-site sanitation facilities in 2025,in Birr Low, autonomous growth scenario 6.2 billion Higher, stimulated growth scenario 14.8 billion difference billion An increased growth in on-site facilities will result in a larger demand for (public) desludging services. The asset value of all desludging truck fleets for domestic and non-domestic customers in the country may be estimated as 480 and 690 million Birr respectively. These add to the cost of on-site sanitation Urban Sanitation with an Introduction of Sewerage When a town grows to a certain size, sewerage may become a feasible option. Housing densities will increase making on-site disposal difficult, while increased numbers of large water consumers (also nondomestic) will make water borne waste disposal possible. Low sewerage coverage Sewerage as sanitation option could be modeled for towns with a current population of more than 30,000. There are in total 36 towns in these groups (excluding Addis Ababa). By 2025 these towns will have 80,000 inhabitants and more. In the calculations of the ongoing master plan, it is assumed that - by % of private house connection owners is connected to a sewer, while also 80% of the non-domestic water users dispose their wastewater through sewers. The required asset values of sewerage (and treatment) to satisfy this scenario for the 36 towns amount to 820 million Birr in 2030, and investment projects up to that value would need to be implemented within the planning period 51. With these service coverage assumptions only 6% of the year 2030 population in these towns would be connected to a sewer system, each generating approximately 120 liters of wastewater per day. Total nondomestic wastewater generation would be in the same order of magnitude. And under this situation, the number of sewage connections will still be small reaching 6000 only for the largest towns (currently with population> 80,000). This is too small to allow for an effective investment. Thus, in this low likely scenario situation, sewerage is only a technic al option for the 10 largest towns towards the end of the planning period. Total related investment in sewerage in the 10 towns amounts to 450 million Birr (to satisfy year 2030 demands). 2.Unit costs for sewerage are 6,000 per domestic connection and 20,000 Birr per non-domestic connection, and include the cost of connections, sewage lines, pump station, force (or rising) main and a lagoon treatment plant. Outline of Master Plans for the Water Sector in Ethiopia

308 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 308 Above year-2025 asset values of on-site sanitation facilities as these should be available under the autonomous and stimulated development scenarios are compared. Furthermore, Table i compares asset values of all sanitation services under the three scenarios (including the sewerage option) for the largest town group. Outline of Master Plans for the Water Sector in Ethiopia

309 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 309 Table i Asset Values of Urban Sanitation Facilities and Services in 10 Largest Towns (in Million Birr)- Year 2025 Scenario: 1. on-site, 2. on-site, 3. as 2, autonomous stimulated growth with sewerage growth On-site facilities 1,760 3,680 3,330 Desludging services Sewerage in 10 towns 290 total 1,850 3,820 3,720 Comparing scenarios 3 and 2 shows that sewerage does decrease the cost of on-site sanitation and related public desludging services Rural Sanitation According to the ongoing Water Supply and Sanitation Master Plan, there would be 9 million rural households that could use latrines by the year 2025 as shown in Table 6.1.4i. The (asset) value of all those facilities in that year is around 7billion Birr, close to the cumulative investment projected over the period for rural water supply. The asset value may give an indication of how much households are expected to invest in household sanitation, and may help in determining budgets for promotion programmes. Such progr ammes would, as for urban households, primarily be directed to the promotion of good quality latrines. Table 6.1.4i Rural sanitation coverage targets, a possible scenario Year: Rural population 54,022,000 61,360,000 77,026,000 92,431,000 Sanitation target coverage a) 8% 11.5% 24% 49% Target household latrines b) 864,400 1,409,000 3,647,000 9,019,000 Asset Value (mbirr) c) 700 1,100 2,900 7,200 RWS coverage 14% 19% 28% 40% a) With 7.5% annual growth in coverage, b) 5 persons and one latrine per household, c) at an average latrine cost of 800Birr HRD Requirements Figure 6.1.5a summarizes the estimates of human power required in planning, design, construction, operation and maintenance. The staff needs in urban water sector may be projected to increase from 20,000 in the year 2000 to nearly 40,000 in the year Figure 3.12 also compares present TWS staff (indicated in the left side of the figure) with operation and maintenance staff requirements. 52 Figures exclude water sellers at public taps. Outline of Master Plans for the Water Sector in Ethiopia

310 Volume II, Papers & Presentations, Small Town Water Supply and Sanitation Page 310 Figure 3.12: HRD Requirements - Urban Water Supply Sector Planning Construction O&M present available Construction capacity Assuming an equal growth in all sectors of the construction industry, then the Ethiopian construction industry can - around only meet the demands of the water sector. This is illustrated in figure In the period , the Ethiopian construction industry can only meet 30-35% of the demands in the water industry unless recent efforts in training technicians and artisans succeed with the cooperation of stakeholders and the donor community. Des pite the fact that international contractors contribute to higher construction costs, they could bridge the construction capacity gap. Figure 3.13: Construction Capacity Requirements Annual Investment (mil. birr) Manpower needs capacity based on present turnover (7 % growth) annual investment need manpower need Although, the limitations in the construction capacity may form a constraint on the institutional feasibility of the base scenario, a closer look to the whole urban sector is necessary to make more conclusive statements. Outline of Master Plans for the Water Sector in Ethiopia

311 Volume II, Papers & Presentations on Small Towns Water Supply and Sanitation Page The Way Foreword In view of the existing situation, the country shall implement the water sector development program and the ongoing National Water Supply and Sanitation Master Plan in order to change the low profile. According to correlations done for selected African countries, the GNP of a country shall be above 250 US dollars per capita in order to cross 50 % water supply coverage line. Sanitation is a bit complicated and has to do with awareness, hygiene education, and household income. Sanitation coverage with a GNP of similar magnitude could therefore be expected to be considerably lower. The enormous resource requirement for improving the existing situation coupled with financial and institutional constraints will make water supply and sanitation development a challenge. If we assume that the GNP of Ethiopia can double in the coming 20 years, it m ay be possible to cross the 50 % coverage line. However the cross cutting issues of reliability and sustainability would require stronger financial and institutional capability. Pursuant to the above, the country needs to: Implement its various reform programs and plans. Strengthen own financial and institutional capacity. Introduce incentive mechanism to mobilize the community, private sector and support organizations Introduce effective monitoring and evaluation system to ensure well-managed progress. Create three fold partnership amongst the government, as the creator of enabling environment; the community, as the owner of WATSAN schemes and facilities and ESAs and NGOs as support organizations. Promote stakeholders cooperation and coordination to ensure integrated and holistic development. Enforce Demand Driven Approach through giving attention to low income groups. Use soft loans for small towns and multi village schemes as exhaustively as possible to make the tariff reasonable. Establish and utilize research and development oriented appropriate technology for spare parts supply and hand pump production locally. Work with the Nile Basin Countries to improve the low water supply and sanitation coverage in the Ethiopian portion of the basin. To this end, the assistance of international donors, the World Bank, African Development Bank and others is crucially required to cope up with the deep rooted problem. Of the total 933 towns 866 could be categorized as small towns and require about 75 % of investment requirement for all towns. The requirement for multi village schemes will also be considerable. In conclusion it is timely and appropriate to join hands for providing soft loan financing for small towns and multi village schemes in order to reach the multitude have-nots with safe water and sanitation. 8. REFERENCES 1. CSA Statistics, Addis Ababa, Ethiopia, : ESPC3 projection with CSA 1999 data, Addis Ababa, Ethiopia, (UNFCCC), Ministry of Water Resources, Addis Ababa, Ethiopia, June Bedada Balcha, Socio-economic Scenarios For Ethiopia, Ethiopia, World Development Report, World Bank, Washington D.C, U.S.A, Interim Master Plan Report, ESP,Addis Ababa, Ethiopia, WWDSE, Water sector Program, Executive Summary, Addis Ababa, Ethiopia, March CSA Statistics, Addis Ababa, Ethiopia, 1994 and A.Mekonen and D.Tarekegn, Ethiopian water Resources Potential, Water and Development Bulletin, Vol.4, No.18, MoWR, Addis Ababa, Ethiopia, June 2000,Pages BNWP, THE TOWN WSS INITIATIVE AND HOW IT BUILDS ON THIS CONFERENCE By Meike van Ginneken Typology of Case Studies / Typologie des études de cas

312 Volume II, Papers & Presentations on Small Towns Water Supply and Sanitation Page BNWP, the town WSS initiative, and how it builds on this conference Meike van Ginneken Addis Ababa, June 15th 686. Bank-Netherlands Water Partnership Mission to improve delivery of water supply and sanitation services to the poor Portfolio targeted interventions that provide incentives for, and support implementation of structural changes Management managed as a cohesive program based on good quality proposals Size 2-3 Million USD/year for 3-5 years Financed by Netherlands Min of Foreign Affairs, executed by the World Bank 687. BNWP program strategy Stimulate innovative approaches Respond to demands of clients Enhance performance of Bank operations Support broad sector reform agenda Link with other sectors Work through various units within the World Bank Engage with a broad array of stakeholders Implement projects and activities PPP to promote handwashing Strengthening community management models Town WSS initiative (aggregation & prof support) Modes of public engagement 688. Pro-poor transaction design for PPP Trends in the desalination markets Scaling up demand response approach Sanitation & hygiene in rural WSS projects Small scale independent providers 689. Town WSS initiative BNWP s largest flagship project Just approved and starting implementation Task managers: Robert Roche & William Kingdom Framework in place, need to fill it up, space for readjustment Strongly embedded in town WSS community Builds heavily on past work by others Engages with partners for leverage, dissemination, quality control, avoiding duplication and joint implementation 690. Town WSS initiative: concept base demand (revenue base) aggregated regional utility multi -village small town village required operational capacity small need for external support medium large operator s capacity OPTIMUM ARRANGEMENTS supply (operator size) Typology of Case Studies / Typologie des études de cas