Urban and Peri-Urban Water Supply and Sanitation Sector

NATIONAL WATER SUPPLY AND SANITATION COUNCIL

Urban and Peri-Urban Water Supply and Sanitation

Sector Report 2013

T a b l e o f C o n t e n t s Abbreviations and Acronyms ........................................................... ii Foreword ............................................................................................ v Executive Summary.......................................................................... vi1 Summary of Performance for CUs for the Year 2013 ..................... 1

1.1 National Urban Water Supply & Sanitation Coverage ................21.2 Operating Conditions of CUs ......................................................31.3 Overview of Sector Performance................................................41.4 CU Performance Ranking...........................................................51.5 Rewarding CEO’s Performance .................................................71.6 Comments on Performance for each CU ...................................8

2 Providing WSS Services in Newly Created Districts .....................11

3 Service Provision to the Low Income Areas ..................................153.1 The Devolution Trust Fund (DTF) .............................................163.2 Support to the CUs ...................................................................163.3 Impact on the Ground ...............................................................173.4 Future Outlook ..........................................................................18

4 The National Water Supply and Sanitation Council (NWASCO) ...19

4.1 Introduction ...............................................................................204.2 Implementation of Third Strategic Plan ....................................204.3 Monitoring Service Providers....................................................214.4 Sanitation Surcharge ................................................................224.5 Tariff Approvals .........................................................................224.6 Regulatory Enhancement .........................................................25

5 Pricing for Water Supply and Sanitation ........................................27

6 Progress on Meeting Service Level Agreements and Adherence to Service Level Guarantees ........................................31

7 Comparative Performance of Commercial Utilities .......................39

8 Performance of Private Schemes....................................................71

9 Conclusion ........................................................................................73

i

Abbreviations and Acronyms

AGM Annual General Meeting

CEO Chief Executive Officer

ChWSC Chambeshi Water and Sewerage Company

CU Commercial Utility

DANIDA Royal Danish Embassy

DBSA Development Bank of Southern Africa

DTF Devolution Trust Fund

ESAWAS Eastern and Southern Africa Water and Sanitation

EWSC Eastern Water and Sewerage Company

GF General Fund

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

KfW Kreditanstalt für Wiederaufbau

KWSC Kafubu Water and Sewerage Company

LA Local Authority

LGWSC Lukanga Water and Sewerage Company

LPWSC Luapula Water and Sewerage Company

LWSC Lusaka Water and Sewerage Company

MCA Millennium Challenge Account

MDGs Millennium Development Goals

MMEWD Ministry of Mines, Energy and Water Development

MLGH Ministry of Local Government and Housing

MWSC Mulonga Water and Sewerage Company

NRW Non Revenue Water

NUWSSP National Urban Water Supply and Sanitation Programme

NWASCO National Water Supply and Sanitation Council

NWSC Nkana Water and Sewerage Company

NWWSC North-Western Water and Sewerage Company

ii

O&M Operation and Maintenance

PEF Performance Enhancement Fund

PS Private Schemes

PTI Part-time Inspectors

RBI Regulation by Incentives

SI Service Indicator

SLA Service Level Agreement

SLG Service Level Guarantee

SWSC Southern Water and Sewerage Company

SUWASA Sustainable Water and Sanitation in Africa

WASAZA Water and Sanitation Association of Zambia

WDM Water Demand Management

WSC Water and Sewerage Company

iii

WSS Water Supply and Sanitation

WWG Water Watch Group

WWSC Western Water and Sewerage Company

ZPPA Zambia Public Procurement Authority

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without prior permission of the copyright owner. © 2014, NWASCO

National Water Supply and Sanitation Council164 Mulombwa Close, FairviewP.O. Box 34358, Lusaka- ZAMBIATel: (+260) 211 226941-2 / 977790138Fax: (+260) 211 226904Toll free for Complaints: 5252E-mail: [email protected]

www.nwasco.org.zm

Printing supported by:

F o r e w o r d

The 13th edition of the Peri Urban and Urban Sector Report came with a lot of zeal as it was preceded by the review of the benchmarking system of the National Water Supply and Sanitation Council (NWASCO). In building on the achievements of 13 years of regulatory service, during the reporting year, we made a resolve to heighten our benchmarking system by introducing new indicators and refining some of the existing ones. The result of this is a more rigorous system that will encourage Commercial Utilities to work even harder, more elaborate information for decision making and continued consumer engagement and protection through relentless information dissemination.

2013 was a great year for NWASCO as we invested in research and development to revise our guidelines and develop new ones. Among the new guidelines developed was the Anti Corruption and Integrity guideline aimed at curbing corruption in the sector. The Corporate Governance and Tariff Guidelines were revised to help promote good governance in the sector and improve the analysis of tariff adjustment applications respectively. The implementation of these guidelines will go a long way in ensuring affordable, sufficient safe, clean water and adequate sanitation.

Our resolve to rebrand entails increased visibility and relevance to the consumer, particularly the underserved, through an easily recognisable brand. This is based on the premise that regulation is at its most effective when consumers give feedback on the services they receive in order to compel improvements in service delivery. The new brand is anchored on ensuring the delivery of better services through consumer feedback and the balancing of the needs of both consumers and providers.

I must acknowledge that all Commercial Utilities strived for high performance and therefore, the competition was stiff for the first position. With investment interventions in Kafubu, Eastern and Nkana Water and Sewerage companies and the efforts from Lusaka and Luapula, Water and Sewerage companies, scooping the first position will be anyone’s game in the near future.

The creation of new districts brings with it an opportunity to accelerate service provision and/or upgrade the level of service to piped water and sewerage facilities. The role of the Devolution Trust Fund in this regard cannot be overemphasised as most of these districts are characterised by low income households.

CU managements need to be steadfast and focused on continuous improvement to ensure consumers get value for money.

With the strides achieved in urban water supply and sanitation service provision, NWASCO shall endeavour to venture into new avenues such as collection of information on the level and quality of service provision in rural areas. Finally we pledge to redouble our efforts with vigour to steer the water sector to the heights desirable for all which is universal access to water supply and sanitation services.

U r b a n a n d P e r i - U r b a n W a t e r S u p p l y a n d S a n i t a t i o n S e c t o r R e p o r t 2 0 1 3

Kelvin Chitumbo Director-NWASCO

v

U r b a n a n d P e r i - U r b a n W a t e r S u p p l y a n d S a n i t a t i o n S e c t o r R e p o r t 2 0 1 3

This report is mainly intended to highlight the performance of the water supply and sanitation providers namely the Commercial Utility companies and the Private Schemes during the period 1st January to 31st December 2013. It is worth noting that the reporting period has now been changed from 1st April to 31st March to a calendar year, (January-December).

The report has nine chapters: Chapter one is a summary of the performance of the water supply and sanitation sub-sector, details of which are given in chapter seven which is the main chapter of the report. Chapter two focuses on implementation of various aspects of sector policy. In this edition, provision of water supply and sanitation services to the newly created districts has been discussed. Chapter three and Four are dedicated to the operations of the Devolution Trust Fund and the National Water Supply and Sanitation Council respectively. The topical subject for this report is “Pricing for Water Supply and Sanitation Services”, outlined in chapter five. Chapter six gives an analysis of the CUs’ compliance to Service level Guarantees and Agreements. The operations of Private schemes are elaborated in chapter eight. Chapter nine give a summary all the salient issues in the report as well as an indication of the future outlook.

Performance assessment is based on nine indicators namely Water Quality, Collection efficiency, Metering Ratio, Hours of Supply, O&M cost coverage by collection, Non Revenue Water, Staff efficiency, Water and Sanitation Coverage. It is delighting to state that positive trends were noted in all indicators save for Non Revenue Water, Collection Efficiency and O&M cost coverage.

The year also saw increased funding to water supply and sanitation sub sector compared to the previous years. However, this is far from meeting the enormous investment needs of this sector. As a regulator, we remained committed to discharging our duties.

Executive Summary

vi

SUMMARY OF PERFORMANCE FOR

COMMERCIAL UTILITIES FOR THE YEAR

2013

1

This Chapter summarises the performance of Commercial Utilities (CUs) for the period 1st January to 31st December 2013. The detailed analysis is presented in Chapter Seven.

The indicators in this report are based on the Minimum Service Levels (MSL) which are part of the license conditions. Additional indicators have been included to provide the reader with a broader understanding of the CUs’ performance.

Table 1: National Urban Water Supply and Sanitation Coverage

Summary of Performance for CUs for the Year 2013 WSS Sector Report 2013

1.1 NATIONAL URBAN WATER SUPPLY AND SANITATION COVERAGE

Commercial Utilities are the main providers of water and sanitation services in urban areas. Currently there are about 5.97million people living in the CUs’ service areas of which 1% are serviced by seven Private Schemes. Private Schemes are companies that offer water supply and sanitation services mainly to their employees as a fringe benefit.

Table 1 depicts the National Urban Water Supply and Sanitation Coverage which is a combination of coverage for the CUs and the private schemes. Coverage for the CUs alone is shown in Chapter 7 while that for the Private Schemes is depicted in Chapter 8. During the reporting period, 194,231 more people were served with potable water supply while 201,396 persons accessed sanitation services.

2012 2013Total Urban Population 5,760,541 5,965,575 Total Urban Population Served with Water

4,812,279 5,006,510

Total Urban Population Served with Sewerage

3,302,408 3,503,804

National Urban Water Coverage 83.5% 83.9%National Urban Sanitation Coverage 57.3% 58.7%

Service lines can span many kilometres in order to reach people

2

Table 2: Operating Conditions of Commercial Utilities

* Support considered for the reporting period only. DTF funded projects are elaborated in Chapter 3.

Summary of Performance for CUs for the Year 2013WSS Sector Report 2013

1.2 OPERATING CONDITIONS OF COMMERCIAL UTILITIES

A general overview of the operating environment of the CUs in terms of geographic coverage, economic activity in the area of operation, state of infrastructure and external support are illustrated in Table 2 and Section 1.6. The performance of each CU should be understood within the context of its operating environment.

Commercial Utility Abbreviation Start of Operations No. of Connections No. of Towns Serviced

No. of Staff External Support *

Lusaka WSC LWSC 1989 85,832 5 838 World Bank

Nkana WSC NWSC 2000 51,868 3 360 AfDB

Kafubu WSC KWSC 2000 54,906 3 308 JICA

Mulonga WSC MWSC 2000 48,641 3 355 -

Lukanga WSC LGWSC 2006 20,326 6 204 -

Southern WSC SWSC 2000 38,273 16 330 -

Chambeshi WSC CHWSC 2003 15,830 12 196 -

North Western WSC NWWSC 2000 10,509 8 109 -

Eastern WSC EWSC 2009 14,324 8 143 Germany

Western WSC WWSC 2000 11,260 7 113 DANIDA

Luapula WSC LPWSC 2009 4,762 7 56 DANIDA

3

Table 3: Overview of Sector Performance

1.3 OVERVIEW OF SECTOR PERFORMANCE

The performance of CUs in nine key performance indicators is summarised in Table 3.


4

NonRevenue

Water[%]

T

r

e

n

d

Water Quality

[% compliance to

number of

samples] #

T

r

e

n

d

Metering

Ratio [%]

T

r

e

n

d

Water

Service

Coverage

[%]

T

r

e

n

d

Sanitation

Coverage

[%]

T

r

e

n

d

Hours

of

supply

T

r

e

n

d

Staff Costin relation toBilling andCollection*

T

r

e

n

d

Collection

efficiency

[%]

T

r

e

n

d

O+M Cost

coverage

by

collection

[%]

T

r

e

n

d

LWSC 42 95 70 87 71 20 0.48 98 123 5 3 1

NWSC 60 95 61 95 65 15 0.44 69 100 3 2 4

KWSC 61 93 68 87 64 17 0.52 63 91 1 3 5

MWSC 39 93 61 95 81 18 0.32 87 121 6 1 2

LGWSC 42 94 67 69 28 20 0.62 80 79 1 3 5

SWSC 39 98 63 89 45 21 0.42 97 122 5 1 3

CHWSC 67 85 34 71 21 10 0.85 78 64 0 0 9

NWWSC 28 98 100 83 31 23 0.54 97 106 6 2 1

WWSC 64 96 66 49 40 13 0.83 99 82 2 1 6

EWSC 40 97 100 84 43 20 0.73 87 76 5 1 3

LPWSC 64 95 95 20 14 9 1.51 91 42 2 1 6

Av. 48(w) 94 (s) 67 (w) 82.7(w) 57 (w) 17 (s) 0.54 (w) 88 (w) 108 (w)

Worse than the relevant average and benchmark not achieved (1 point) (w) weighted average

Better than the relevant average but benchmark not achieved (3 points) (s) simple average

At least “acceptable” benchmark achieved (5 points)

# The water quality compliance indicator calculation incorporates the compliance to standards and the required number of samples

* See page 67 (or section 7.2.4)

Achievements:The notable achievements during the period under review were:• Increaseinwatersupplyandsanitationservicescoverage• Increasedmeteringratio• Improvementinwaterqualitycompliance

Challenges/Concerns:The sector challenges included the following:• Dryingofdamreservoirsandlowyieldsfromboreholes

due to climate variability and anthropogenic activities• Frequentbreakdownofmachineryduetodilapidatedstate

of infrastructure and/or lack of maintenance• Frequentpoweroutages• Highwaterlosses

1.3.1 Sector Achievements and Challenges 1.4 CU PERFORMANCE RANKING

CUs are ranked according to indicators and respective weightings shown in Table 4. A higher weighting reflects how critical the indicator is to the quality of service and financial viability of the CU. The ranking is arrived at as follows:

Below relevant average and benchmark not achieved -1 mark

Better than relevant average but benchmark not achieved -3 marks

Acceptable benchmark achieved – 5 marks

These are multiplied by indicator weightings and the CU’s performance score for each indicator in Table 3. The resulting scores for each indicator are then aggregated.

However, the computation for NRW is treated differently. Because a negative trend is desired, the performance score was subtracted from 100 and the result multiplied by the mark and the weight.

Table 4: Performance Indicators and their Weighting Factors

Note: Where no benchmark is defined, the relevant sector average is used.

Indicator Weighting1 Water Quality 20 points2 Collection Efficiency 20 points3 Metering Ratio 15 points4 Hours of Supply 15 points5 O+M Cost Coverage by Collection 15 points6 Non Revenue Water 10 points7 Staff Efficiency 10 points8 Water Coverage 05 points9 Sanitation Coverage 05 points

Metering remains key to good service delivery


5

Table 5: Ranking of CUs

In order to provide readers with the performance trends, the rankings for the current and previous three years have been reflected in Table 5. It must be noted that a CU moving down in the ranking does not necessarily mean that it performed worse than the previous period but rather that it was outperformed.

Once again, North Western WSC has emerged best CU amidst very tight competition. The giant Lusaka WSC made remarkable improvement jumping from 6th to 2nd position dislodging EWSC hence scooping the Most Improved CU award! Congratulations!

LPWSC moved from 10th to 8th position, while MWSC and LGWSC were pushed to 5th and 9th position respectively from 3rd and 5th positions.

AREA OF RECOGNITION

CRITERIA CU

Most improved Significance of improvement in all indicators collectively Lusaka WSC

Best in Servicing Peri-Urban Areas

Performance in implementing projects and general management of Kiosk operations Eastern WSC

Best Submitted DataCompleteness and accuracy of data submitted in the NWASCO Information System and least queries raised for verification

Nkana WSC

Non Revenue Water The best in managing NRW North Western WSC

Water Quality The Best in achieving the water quality compliance requirements and meeting the benchmark Southern WSC

Metering Ratio The most improved in increasing metering of customers Luapula WSC

Water Service Coverage

The most improved in increasing coverage and above sector average Lusaka WSC

Sanitation Service Coverage by Network

The most improved in increasing coverage and above sector average Nkana WSC

Hours of Supply The best average hours of supply. North Western WSC

StaffEfficiency The best staff efficiency Mulonga WSC

CollectionEfficiency The most improved in collection efficiency and above the benchmark Western WSC

O&M Cost Coverage by Collection

The most improved in covering costs and above the benchmark Nkana WSC

Table 6: Recognitions for Exemplary Performance

1.4.1 Recognitions of CUs for Exemplary PerformanceCUs are recognised for exemplary performance in specific areas and indicators. Depending on the indicator being considered, recognition is based on the magnitude of improvement toward the benchmark or the best in the category.

CU Ranking 2013

Ranking 2012/13

Ranking 2011/12

Ranking 2010/11

NWWSC 1 1 1 3LWSC 2 6 4 8SWSC 3 4 3 1EWSC 4 2 5 5MWSC 5 3 2 2NWSC 6 7 7 6WWSC 7 8 11 11LPWSC 8 10 9 10LGWSC 9 5 6 4KWSC 10 9 8 7CHWSC 11 11 10 9


6

Ms. Diana Makwaba MD, Nkana WSC

Mr. George Ndongwe MD, Lusaka WSC

Mr. Wencyslouv Makondo MD, Lukanga WSC

1.5 REWARDING CEO’S PERFORMANCE

Chief Executive Officers play a critical role in driving the company vision, mission and objectives. In order to motivate the CEO’s to take responsibility for the performance of their companies, a CEO’s Award is given. The Award focuses on the CEO’s of the utility companies that performed best over the reporting period or, for those still in the job, up until December 31st, 2013.

The performance assessment for the CEO award is based on the following criteria

The ability of the CEO to:

• Build a high performing management team,

• Give the company strategic direction and implementing a clear plan of creating value for the company

• Ensure implementation of both short and long term company objectives.

Further, the CU CEOs nominate the top three fellow CEOs in order of hierarchy, based on their view of the contribution made by the nominated CEO in advancing the companies they represent.

The 2013 CEO of the year award went, yet again, to Mr. George Ndongwe of Lusaka Water and Sewerage Company. He was followed by Mr. Wencyslouv Makondo of Lukanga Water and Sewerage Company. The third position was taken by Mrs. Diana Makwaba of Nkana Water and Sewerage Company.


7

LUSAKA WSCOperating Environment • Services the Capital City, Lusaka and four other districts (Luangwa,

Chongwe, Chirundu Kafue and Chilanga) in Lusaka Province;• High economic activity;• Largest customer base with potential for further growth;• The bulk of infrastructure needs major rehabilitation and expansion; and• Good complement of highly qualified staff.

Comments • Increased the metering ratio; • Increased connections by over 6,000;• Need to improve billing accuracy; and• Need to improve hours of supply in chronically affected areas such as

Avondale, Chunga, parts of Matero East and Chelstone.

NKANA WSCOperating Environment • Operates in three predominantly mining towns on the Copperbelt Province

namely Kitwe, Kalulushi and Chambishi;• Major raw water sources susceptible to industrial pollution;• High economic activity; and• The bulk of infrastructure needs major rehabilitation and expansion.

1.6 COMMENTS ON PERFORMANCE FOR EACH CU

The conditions under which Utilities operate, which may impact on their performance and therefore, should be taken into consideration when analysing their performance are highlighted hereunder together with the comments on performance.

Comments • Improved metering ratio;• Increased sanitation coverage;• Need to do more to improve water supply to low income areas such as

Chamboli and Wusakile; and• Need to concert more efforts towards increasing the collection efficiency.

KAFUBU WSC Operating Environment

• Operates in three towns ( Ndola, Masaiti and Luanshya) on the Copperbelt Province with medium to low economic activity;

• Poor quality of the raw water in the Southern part of Ndola; and • Much of the infrastructure is dilapidated and inadequate to meet current

demands.

Comments

• Made efforts to improve supply to the Southern part of Ndola;• Need to continue improving collection efficiency;• Need to reduce the cost for casual labour which was about 22% of

personnel costs;• Need to improve billing efficiency; and• Need to expedite complaints handling and resolution.

MULONGA WSCOperating Environment • Operates in three predominantly mining towns on the Copperbelt Province

( Chingola, Chililabombwe and Mufulira);• Major raw water sources susceptible to industrial pollution;• High economic activity; and• The majority of infrastructure needs rehabilitation and expansion.


8

Comments• Improved water supply coverage;• Need to find a lasting solution to improving water quality challenges in

Chingola and high turbidity levels across the CU; and• Need to improve complaints handling and resolution.

LUKANGA WSCOperating Environment • Operates in seven towns in the Central Province namely Kabwe, Mumbwa,

Serenje, Mkushi, Kapiri Mposhi, Chibombo and Chisamba.• Low economic activity;• New infrastructure at the water in-take, treatment facilities, reservoirs and

main water lines in all towns; and• Dilapidated sewer infrastructure.

Comments • Reduced water losses;• Need to improve metering ratio;• Need to improve hours of supply in Mumbwa and parts of Mkushi; and• Need to improve water supply and sanitation coverage.

SOUTHERN WSCOperating Environment • Has the highest number of service towns/centres(16)• Has medium to low economic activity and• Fairly good but inadequate infrastructure

Comments • Improved water quality compliance and met the benchmark;• Need to improve hours of supply in parts of Choma such as Shampande;

• Need to improve metering ratio;• Need to contain costs.

CHAMBESHI WSCOperating Environment • Operates in 12 towns ( Kasama, Mpika, Chinsali, Nakonde, Isoka, Mbala,

Mpulungu, Luwingu, Mporokoso, Kaputa, Mungwi and Chilubi) in the Northern and Muchinga Provinces that are spread over a wide geographical area;

• Extremely low economic activity;• Dilapidated and inadequate infrastructure – requires complete overhaul;• High complement of unskilled staff and unable to attract and retain qualified

staff and• Unreliable and poor power supply.

Comments • Improved collections and contained costs• Remained under Statutory Management; and • Urgently need to stabilise the CU

NORTH WESTERN WSCOperating Environment • • Operates in seven towns in North-Western Province namely Solwezi,

Kasempa, Mwinilunga, Zambezi, Kabompo, Chavuma and Munfumbwe with the largest town being a predominantly mining area;

• Medium to low economic activity with potential for growth;• Fairly good state of infrastucture but needs expansion;• High complement of skilled staff but faces challenges in retaining them;

and• Small customer base but with one of the highest tariff in the country.


9

Comments • Improved water supply and sanitation coverage;• Reduced water losses;• Collection efficiency dropped significantly hence affected cost coverage;• Need to continue increasing customer base and;• Institute measures to improve liquidity

WESTERN WSCOperating Environment • Operates in six towns in the Western province (Kaoma, Mongu, Kalabo,

Senanga, Lukulu and Sesheke).• Low economic activity;• Dilapidated and inadequate infrastructure – requires complete overhaul

but being addressed for two towns ( Kaoma and Mongu) with the support of the Royal Danish Government;

• Small customer base; and• Unreliable and poor power supply.

Comments • Improved metering ratio;• Improved collection efficiency;• Need to improve hours of supply in Mongu and Kaoma;• Need to establish a proper customer base owing to the high number of

inactive accounts.

EASTERN WSCOperating Environment • Operates in eight towns( Nyimba, Chipata, Petauke, Chama, Katete,

Chadiza, Maambwe and Lundazi ) in the Eastern Province.• New infrastructure in four of the eight towns with support of the German

Government;• Seasonal, medium to low economic activity dependent on farming periods;

and• Unreliable and poor power supply.

Comments • Improved cost coverage by collection;• Instituted a project to improve sanitation services in Kapata area in Chipata

town; • Need to improve hours of supply in Chimwemwe in Chipata town and

Katete town.• Need to improve sanitation coverage

LUAPULA WSCOperating Environment • Operates in five towns in Luapula Province namely Mansa, Samfya,

Nchelenge, Kawambwa and Mwense;• Extremely low economic activity;• Dilapidated and inadequate infrastructure – requires complete overhaul

but being partially addressed by DANIDA in two towns of Mansa and Nchelenge;

• Very low customer base and• Unreliable and poor power supply.

Comments • Improved metering ratio; • Increased number of water connections by over 1,000;• Increased billing;• Need to continue to increase the customer base; and • Need to direct efforts towards increasing hours of supply


10

2

PROVIDING WATER SUPPLY AND SANITATION SERVICES

IN NEWLY CREATED DISTRICTS

2.1 INTRODUCTION

The Provincial and District Boundaries Act Cap 286 provides that the Republican President may divide Zambia into such Provinces and divide the Provinces into such Districts as may be convenient for the purpose of administration. The Local Government Act Cap 281 provides for the Minister to establish a Council for any District for the purposes of local government. The creation of a district entails provision of improved amenities such as piped water and sewerage facilities, hospitals and roads. Among the functions of the Council is the responsibility for water supply and sanitation service provision. With commercialisation completed, this is now the responsibility of the Commercial Utilities with the Councils currently being the sole shareholders. Rural areas (that have now been declared Districts) have largely been marginalised in terms of development.

Until 2011, Zambia was divided into 9 provinces and 72 districts. The then ruling party, Movement for Multiparty Democracy (MMD) created Mafinga District in 2011 to become the 73rd District. The change in Government in September 2011 saw the Patriotic Front (PF) Party assume power with a strong emphasis on decentralising Government operations for efficient and effective delivery of services to the people. The Government has since created Muchinga Province to become the 10th province and further created 29 more districts across the country to bring the total to 102 Districts as at 31st December 2013.

Providing Water Supply and Sanitation Services in Newly Created Districts WSS Sector Report 2013

2.2 AREAS UNDER COMMERCIAL UTILITIES AFTER CHANGES

Apart from the creation of districts, other changes effected by Government include realigning of districts, dividing of Northern Province into two and change of provincial headquarters of Southern Province from Livingstone to Choma.

Table 7 depicts the current and expected new arrangement in terms of geographic coverage of areas under the CUs.

2.3 ALLOCATION OF RESOURCES TO NEW DISTRICTS

The provision of water supply and sanitation services in the new districts requires huge investments as Government will have to put up piped systems for the people living in these areas. This will increase access to water and sanitation services in the country. The Government has budgeted for the cost to kick start various water and sanitation projects in some of the new districts for year 2014 as depicted in Table 7.

Piped systems will require huge investments

12

Providing Water Supply and Sanitation Services in Newly Created DistrictsWSS Sector Report 2013

Commercial Utility Previous No. of Districts

No. of New Districts

New Districts and Budgetary Allocations

Lusaka WSC 4 7 • Chilanga (K9,020,494), Rufunsa (K8,821,123.63) and• Chirundu (K6,825,233.03)-- realigned from Southern to Lusaka Province

Nkana WSC 3 3 None

Kafubu WSC 3 4 Mpongwe (which was already a district but not covered under Kafubu WSC’s license)

Mulonga WSC 3 3 None

Lukanga WSC 6 11• Chisamba (K10,971,795.26), Luano (K8,085,923.90), Chitambo (K8,255,646),

Shibuyunji (9,438,174.24), Ngabwe(Nil) and• Itezhi-Tezhi realigned from Southern to Central Province

Southern WSC 13 13• Chikankata (K11,225,494.80), Zimba (K10,167,722.65) and • Pemba (K9,963,807.69) -already part of SWSC license• Chirundu & Itezi-Tezhi detached

Chambeshi WSC 12 16 • Mafinga, Nsama (K7,306,977.30), Shiwang’ndu (K8,005,463) and• Chama realigned from Eastern to Muchinga province

North Western WSC 7 9 • Manyinga (K6,853,144.03)

Eastern WSC 8 9 • Sinda (K11,866,523.88) and Vubwi (K14,197,172.52)• Chama removed and realigned to Muchinga province

Western WSC 7 16• Mulobezi (K6,923,317.93), Nkeyema (K8,645,424.60), Sikongo (K7,703,037.03),

Nalolo (K7,581,188.13), Limulunga (K8,627,698.16), Mitete (K6,705,599.94), Luampa (K8,645,424.60), Sioma (K6,733,775.21) and Mwandi (K6,923,317.93)

Luapula WSC 7 11 • Lunga (K5,902,661.15), Chembe (K9,423,537.74), Chipili (K7,398,557.09) Mwansabombwe (K7,656,525.47)

Total 73 102

Table 7: Areas Under Commercial Utilities after Changes and Budgetary Allocations to New Districts

Source: Ministry of Local Government and Housing

13

Northern Province was divided into two to create Muchinga Province, covering six districts as shown in Figure 1. The formation of Muchinga Province identified the need to create another Commercial Utility which process is underway.

Figure 1: Separation between Muchinga and Northern Province and their respective districts

2.4 WAY FORWARD

In order to provide sustainable water supply and sanitation services, there is need to:

• Conduct a comprehensive technical analysis to identify the requirements including sustainable detailed designs for appropriate water supply and sanitation facilities;

• Conduct a comprehensive financial viability analysis to establish cost estimates of providing WSS services;

• Carry out stakeholder consultation on the proposed interventions and plans; and

• Carry out a situation analysis of the pre-requisites of WSS service delivery such as power supply and roads that might hinder the process.

Existing and new Councils would have to pass resolutions to be incorporated in CUs operating in their respective areas to allow the CUs take ownership of the various intended projects. Once the resolutions are passed, applications should be made to NWASCO to amend the respective operating licenses to reflect the changes.

Comprehensive technical and financial analyses should also be conducted as part of the process to detach Muchinga province from Chambeshi Water and Sewerage Company and create a new utility for Muchinga Province.

Providing Water Supply and Sanitation Services in Newly Created Districts WSS Sector Report 2013

14

3

SERVICE PROVISION TO THE LOW INCOME

AREAS

3.1 THE DEVOLUTION TRUST FUND (DTF)

The Devolution Trust Fund (DTF) was established in 2001 by the National Water Supply and Sanitation Council (NWASCO) and operates as a basket fund with a mandate to assist Commercial Utilities (CUs) to improve WSS services especially to low-income areas. The Water Supply and Sanitation (WSS) Act No. 28 of 1997 provided the foundation on which the DTF was established. The DTF became operational in 2003 upon issuance of Statutory Instruments No. 65 of 2001 and its mandate was further enhanced through statutory Instrument No. 50 of 2004.

3.2. SUPPORT TO THE CUS

The DTF has been supporting CUs with both financial and technical assistance on project implementation and management through two financing windows namely General Fund (GF) and Performance Enhancement Fund (PEF). The GF projects are aimed at increasing access to safe and adequate water supply and appropriate sanitation for the low income urban residents while the objective of the PEF projects is to contribute to the operational efficiency and viability of the CUs.

To date, seventy-seven (77) water supply improvement four (4) Sanitation and thirteen (13) Performance Enhancement Fund projects have been financed at a value of K63,318,872, K15, 590, 986 and K21,204,115 respectively. Specific details are outlined here following:

Service Provision to Low Income Areas WSS Sector Report 2013

3.2.1 General Fund - Water

Seven (7) projects namely Petauke under Eastern WSC, Chamboli under Nkana WSC, Chabanyama, under Mulonga WSC Kabompo and Solwezi under North western WSC, Masaiti under Kafubu WSC, and Makululu under Lukanga WSC were completed within the reporting period bringing the total number of completed projects to sixty-one (61) to date.

The projects involved laying of distribution lines construction of kiosks and provision of metered household connections.

Network line layed

16

Service Provision to Low Income AreasWSS Sector Report 2013

3.2.2 General Fund - Sanitation

The two projects, of the four under the first Sanitation Call that were pending completion, from the previous reporting period were completed by November 2013. These were Libuyu in Livingstone under Southern WSC and Kansuswa in Mufulira under Mulonga WSC. In the period under review, a second call for proposals was issued and seven CUs were invited to participate in this call.

The seven participating CUs submitted seventeen (17) project areas under their respective jurisdictions for consideration. These areas were reduced to 6 after comprehensive baseline surveys and field appraisals which were conducted and are planned for further development and implementation in 2014.

3.3 IMPACT ON THE GROUND

The 10 projects that were completed in the reporting period translated into additional infrastructure for the CUs of 41 water Kiosks, 7,552 domestic customer meters, 50.8 kms of water supply network and 50m3 water storage capacity. This brought the cumulative total outputs to date to 468 water Kiosks, 39,625 domestic customer meters, 276.54kms of water supply network and 708m3 of reservoir capacity.

3.2.3 Performance Enhancement Fund (PEF)

One project namely Ndeke Metering in Kitwe under Nkana WSC was completed in the reporting period at a cost of ZMW 2,147,613. A Study for energy efficiency management at Kafubu WSC was concluded in the period under review which culminated into the development of a proposal that is envisaged to be financed in 2014.

Toilets constructed in low-income areas

12-inch bulk meter installed

17

3.4 FUTURE OUTLOOK

The DTF shall continue engaging with the stakeholders to clarify the positioning of the organisation in light of the National Urban Water Supply and Sanitation Programme under the MLGH. The declining funds into the basket would impact the DTF negatively as this could result in some projects not being financed. Additionally, the operations of the DTF would significantly be reduced owing to minimal administrative budget provision. Further, attainment of goals set out in the 2013-2015 Strategic Plan would not be possible.

Table 8: Progress in Meeting Water Supply TargetsMobilised as at

31st December 2013 (K ‘000)

Expenditure as at 31st December 2013

(K’000)Funding 193,569 137,950

Population covered as at

31st December 2013

Cumulative Target

(Dec’ 2014)

Cumulative Target

(Dec’ 2015)Population 949,789 1,099,789 2,8 million

Additionally, two sanitation projects namely Kandundu and Libuyu were completed in the year. A sewerage network of 5.8kms, new pump station, 9 biogas settlers and 390 toilets consisting of 260 prefabricated designs, were constructed in Libuyu Township. The Project also provided for an industrial generator to back up power supply. Kandundu sanitation project involved construction of 3.2kms of sewerage network, 5 biogas settlers, a lager Anaerobic Baffled Reactor (ABR) for treatment of waste water and a Plant Gravel Filter (PGF) for further filtration of the treated waste. These two sanitation projects were additional to Kariba sanitation project that was completed in 2012.

The water projects provided access to an additional 108,333 persons bringing the total number of beneficiaries to 949,789 persons in Zambia’s low income urban areas as shown in Table 8. A further 15,500 people benefitted from improvement of sanitation out of the four sanitation projects.

Access to clean and safe water supply achieved for over 900,000 people

Service Provision to Low Income Areas WSS Sector Report 2013

18

4

THE NATIONAL WATER SUPPLY

AND SANITATION COUNCIL (NWASCO)

NWASCO WSS Sector Report 2013

4.1 INTRODUCTION

The National Water Supply and Sanitation Council (NWASCO), which begun its operations in 2000, is a regulator created for the purpose of ensuring efficient and sustainable Wcater Supply and Sanitation services through the enforcement of the Water Supply and Sanitation Act No. 28 of 1997. The regulator’s critical role is to balance consumer interests by safeguarding them against exploitation whilst ensuring that commercial utilities are viable institutions. Some of the activities undertaken in the year are outlined below.

4.2 IMPLEMENTATION OF THE THIRD STRATEGIC PLAN

NWASCO began implementation of the first year of its Strategic Plan activities for the period 2013 to 2015. The Strategic Plan outlines four major objectives with sub-goals. Some activities done under the four objectives were as follows:

OBJECTIVE 1To improve information dissemination and engagement of the public

• Development of a rebranding and communication strategy to increase the visibility of the regulator to the public

• Workshop with Police Officers in Lusaka to create awareness in WSS legislation

• Revision of timeframes for complaints handling and resolution for both NWASCO and providers to strengthen consumer complaints handling procedures

OBJECTIVE 2 Strengthen and enhance enforcement of regulation• Commencement of the development of regulations to amplify

provisions in the WSS Act. This is being done together with the revision of the WSS Act itself.

• Revision of guidelines to enhance them by incorporating new sectoral developments and worldwide good practices

• Revision of the tariff setting model to improve efficiency of tariff adjustments

• Recruitment of more Part-time inspectors to enhance enforcement on the ground.

OBJECTIVE 3 To enhance performance in WSS service delivery• Four knowledge sharing forums were held to promote knowledge in

various aspects of CU operations

• dentification of other areas in WSS that may need licensing

• Compilation and dissemination of good practices on various WSS aspects to CUs

• Development of strategies for continuity of DTF.

OBJECTIVE 4To improve operations and sustainability for NWASCO and providers

• Development of an ethical charter for the sector

• The revision of the Regulation by Incentives concept to recognise improvements in performance by CUs

• Training of NWASCO staff in specific regulatory areas to enhance core competence in regulation.

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NWASCOWSS Sector Report 2013

4.3 MONITORING SERVICE PROVIDERS

4.3.1 InspectionsNWASCO employs a number of strategies to monitor the compliance of the CUs to the provisions of the Water Supply and Sanitation Act No. 28 of 1997. In addition to the use of WWGs and customer feedback, inspections are the main means through which NWASCO monitors Utilities and verifies various performance reports submitted by Utilities.

The availability and quality of water resources was one of the major challenges that affected the provision of water in the reporting period. More dams dried than in the previous year and this was attributed to both natural and human activities such as bad farming practices, lack of maintenance of dams to mention a few. This not only affected the quantity of water available to the utilities for abstraction but also the quality leading to increased costs of treatment and in many areas, poor quality of the treated water because of inadequate and inefficient treatment plants.

NWASCO inspected all the 11 CUs and 7 Private Schemes during the reporting period. Some of the highlights of these inspections were that for Chambeshi WSC whose operating license was suspended in 2012 for continued non-compliance to license conditions and now under the statutory managership of North Western WSC, was found to be undertaking structural changes aimed at enabling the utility operate more efficiently. Other notable changes in the utility were that the process of putting in place systems and procedures which were lacking and largely contributed to the inefficiencies in the company was concluded.

Some of the major problem areas for the reporting period were as follows:

• In the Northern Province, the construction of township roads left a number of properties without water supply because pipes were damaged during the construction works.

• LWSC experienced un-preceded water rationing mainly due to power outages particularly in Lusaka and Kafue Districts. This was made worse by the delayed onset of the rains and water burst pipes. The areas mostly affected areas included Mutendere, PHI, Kalingalinga, George and Lilanda. A number of other parts of the country were also affected by unstable power supply.

For private schemes, NWASCO continued to monitor the quality of water, sanitation services and hours of supply. Most private schemes during the reporting period showed commitment to improving the quality of the service they provided by intensifying on quality assurance through complying with the requirements of the water quality monitoring guidelines. In the period, the handover process of the responsibility of providing water supply and sanitation services in Maamba District from Maamba Collieries Mine to Southern WSC reached an advanced stage. With the growing population owing to the steadily improving economic activities, the Mine could not cope with the increased demand for water and sanitation services and thus arose the need to handover the provision of these services to the CU of the province, Southern WSC.

Another district under the private schemes that saw an improvement in service provision during the reporting period was Itezhi-Tezhi (serviced by ZESCO) after the completion of the construction of various water and sanitation infrastructure including a treatment plant which works were part of the hydro-power station project. In addition, the government of the Republic of Zambia through Lukanga WSC started a project to rehabilitate and extend pipelines.

21

4.3.2 Status on the suspended license for ChWSCChambeshi WSC, which had its license suspended on 17th December 2012 for non compliance to license conditions leading to deteriorating service delivery, continued to operate under the Statutory Manager, North Western WSC. During this period, systems and procedures were put in place but in order to allow time for the Statutory Manager to stabilise the CU and the period for the statutory manager was extended for another six months.

4.4 SANITATION SURCHARGE

In 2007, NWASCO introduced a sanitation surcharge which is calculated as a proportion of the monthly water bill (up to 3%) of each customer apart from those served by public water points. NWASCO continued to monitor and ensure that the sanitation surcharge funds were ring-fenced and utilised for approved sanitation projects. So far, all the CUs implementing the sanitation surcharge namely; Lusaka WSC, Mulonga WSC and Nkana WSC have utilised some of the funds raised for sanitation projects, see Table 9.

4.5 TARIFF APPROVALS

It is NWASCO’s mandate to approve water and sanitation tariff adjustments. Comprehensive tariff applications are approved for a minimum period of one year and a maximum of three years. To implement multi-year approved tariffs, a CU must seek a ‘no objection’ from NWASCO annually subject to meeting at least 75% of prior- given tariff conditions. Tariffs are approved after an analysis of the proposed cost structure to remove unjustified costs.

Tables 10a and 10b show the level of tariff adjustment applied for by the CUs and the percentage approved by NWASCO for the indicated tariff period. The immediate objective of the tariff approval is to cover Operation and Maintenance (O&M) costs first with progression towards full costs recovery (that is including depreciation, finance costs and specific provisions).

Using the new tariff model, NWASCO as per its mandate to approve water supply and sanitation tariffs, analysed tariff adjustment application from CUs. Six comprehensive tariff adjustment applications were approved by the Council. Comprehensive tariff applications for CUs are approved for a minimum period of one year and maximum period of three years to match CUs business planning cycle. Tariff adjustments of averaging 13% were awarded to the 6 CUs.

No. Commercial Utility

Collected(K ‘million)

Expenditure(K ‘million)

Project Areas

1 Lusaka WSC 14 10.5 Kalingalinga, Kaunda Square, Matero-Maiteneke, Kanyama

2 Nkana WSC 7 5 Kitwe, Chambishi, Wusakile, Counterpart funding for AfDB projects

3 Mulonga WSC 1.5 - Plan to extend service to Riverside in Chingola

Table 9: Utilisation of Sanitation Surcharge Fund

Sewage ponds constructed


22

Approval of tariff adjustment is accompanied by a number of conditions that the CUs are expected to meet to ensure improved service delivery. Among the conditions given to the Commercial Utilities to be met in 2014, some of the common ones included the following;

• Adherance to Service Level Guarantee throughout the tariff period• Improved water quality compliance to 95% throughout the tariff period attached to the 2014 • Ensure that meter charge and sanitation surcharge is ring-fenced throughout the tariff period• Ensure that no meter remains stuck for more than three months

Table 10a: Approved Tariffs- Comprehensive

Comprehensive Tariff Applications

CU Average % Applied for

Average % Approved MajorSpecficTariffConditionsfor2014 Comments

Lusaka WSC 13% 10% • Increase number of connections by 5000 by 31st August 2014• Ring-fence the fixed meter charge and the sanitation surcharge throughout the tariff period.

Expected to meet O&M cost coverage of 124%

Nkana WSC 15% 15%• Retain the 2013 tarifs on the entire Kalulushi town: Wusakile, Chamboli, Ndeke and Ma-

kobo Townsships of Kitwe and Chambishi Towns respectively until supply meets the SLG.• Increase Domestic metered connections by 5000 by 31st August 2014.


Kafubu WSC 13% 13%• Extend service to at least 500 customers in Hillcrest, and Kasenshi infill and Mutombolya in

Luanshya by 30th August 2014• Achieve 100% metering for bulk meters and 80% for customer meters by 30th June 2014.


Mulonga WSC 14% 15%• Improve service hours in Chabanyama, Lulamba and Twatasha in Chingola to the SLG by

30th April 2014.• Achieve 100% metering for bulk meters and 80% for customer meters by 31st August 2014.


North Western WSC 17% 12% • Reactivate all inactive sewer connections in Zambezi and extend to 100 new connections.

• Ring fence 20% of sewerage billing throughout the tariff period.Expected to meet O&M cost coverage of 95%

Luapula WSC 90% 50% • Increase number of connections by 700 by 31st August 2014• Improve service hours for Kawambwa from 3 to 9 hours by 31st August 2014.



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Applications for “No Objection”

CU Average % Applied for

Average % Approved MajorSpecficTariffConditionsfor2014 Comments

Southern WSC 14% 10% • Improve metering to at least 85%• Maintain water quality compliance above 95% throughout the tariff period.


Lukanga WSC 15% 10% • Increase number of connections by at least 1000 by 31st August 2014• Fully meet the 2014 Service Level Agreement.


Eastern WSC 6% 8% • Increase number of connections by 700 by 31st August 2014• Maintain average collection efficiency of at least 85% throughout the tariff period.


Western WSC 30% 20% • Reactivate 900 customer accounts by 31st August 2014• Improve metering to at least 500 by 31st August 2014.


Chambeshi WSC 30% 18%

• Ring-fence the fixed meter charge throughout the tariff period and procure at least 100 meters per quarter.

• Increase O&M cost coverage to an average of at least 85% throughout the tariff period.

Expected to meet O&M cost coverage of 116%.

In a case where a multi-year tariff approval is awarded, the CU has to seek a “No Objection” to implement approved tariffs” for subsequent years from NWASCO. During the reporting period “No Objection” to implement approved tariffs for 2014 for five Commercial Utilities was granted.

Table 10b: Approved Tariffs- ‘No Objection’

The tariff aims to cover the costs for operation and maintenance first


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4.6 REGULATORY ENHANCEMENT

4.6.1 Enhancement of Regulatory Tools The Water Supply and Sanitation Act No. 28 of 1997 in section 4 (2) (d) mandates NWASCO to develop sector guidelines for the development and management of water supply and sanitation services. In 2013, NWASCO completed the development of one guideline on Anti-Corruption and Integrity and the revision of two guidelines Tariff Setting and Corporate Governance. Seven guidelines are pending consultations with key stakeholders. These are new guidelines for Pre-Paid Metering, Ring-fencing, Risk Management, Non-Revenue Water and Sanitation and revised guidelines for Business Plan Writing and Water Quality.

4.6.2 Tariff Setting and Cost of Service ModelsIn the continued quest for effectiveness and efficiency within operations of both NWASCO and Commercial Utilities, the development of the new Tariff Setting Model was completed and implemented. The six CUs that applied for tariff adjustments in 2013 utilised the new model.

In tandem with the revised of the tariff model, NWASCO developed a cost of service model that will assist both NWASCO and the CUs to have a sound basis for determining costs. The two models will be used jointly in future tariff analyses to ensure more reliable outputs.

4.6.3 Zambia Water Forum and ExhibitionThe Zambia Water Forum and Exhibition (ZAWAFE) was held on the 4th and 5th November 2013, under the theme ‘Coping with challenges of water supply and sanitation access in Zambia.’ This was the third successive forum which attracted scholars, students, industry leaders, Private sector, NGOs,

Government leaders, Cooperating partners, Water Providers and consumers. A total of 264 delegates participated in the two days forum while 18 institutions exhibited water and sanitation products and services.

Delegates at ZAWAFE unanimously recommended that more efforts should go towards improving sanitation coverage especially in the Peri Urban areas.

4.6.4 NWASCO Knowledge Centre The Knowledge Centre has been operating since 2011 and is located at NWASCO. The Centre has been spearheading knowledge and efficiency management activities in four CUs namely Lukanga, North Western, Eastern and Western WSCs. In 2013, a Network Location Programme was introduced to assist the CUs in locating and capturing network for the purpose of developing and/or updating water network maps. This will aide improved management of the network and water losses. With support from GIZ, the Knowledge Centre procured Network Locating Tools which were provided to the four CUs and conducted training on the use of the equipment.

4.6.5 Increasing Awareness and Engagement of Consumers In order to meet the objective of improved information dissemination and engagement of the public, NWASCO embarked on a rebranding exercise which culminated into a branding strategy outlining activities aimed at raising public awareness of NWASCO.

Other activities aimed at educating the consumers on regulatory activities included a Media campaign through a column in the Post Newspaper highlighting issues on consumer protection, rights and responsibilities and performance of the water supply and sanitation sector.

The ‘Water Voice’ which is a quarterly publication was produced aimed at


25

communicating with the consumers and getting feedback on the quality of services provided by CUs.

NWASCO increased its presence on social media by providing a platform for consumers to interact and provide feedback on the WSS services. The NWASCO facebook page and Twitter handle propagated messages aimed at informing, educating and influencing best practices on water and sanitation.

These awareness activities resulted in increased consumer feedback on the quality of services and expedited complaints resolution.

4.6.6 Water Watch GroupsWater Watch Groups continued to reinforce NWASCO’s presence on the ground by monitoring the service provided by utilities and resolving secondary complaints. The groups undertook sensitization activities in their respective towns promoting the Service Level Guarantees (SLGs) which mandate water providers to guarantee the services provided and state exactly the level of service entitled to consumers.

There are currently 11 WWGs established and operational in Lusaka, Kabwe, Kapiri Mposhi, Ndola, Kitwe, Kalulushi, Solwezi, Kasama, Mpika, Livingstone and Mongu.

NWASCO received a total of 82 Complaints during the year and were all resolved. The majority of the complaints were received from Lusaka WSC (39). Others were from Kafubu WSC (16) and Mulonga WSC(8). The complaints ranged from disputed billing, erratic supply, non availability of water supply, leakages, blocked drainages, sewage overflows and unjustified disconnections.

4.6.7 CU BoardsThe Boards of Directors for the CUs were appointed in May 2013 after operating

without the boards since November 2011. NWASCO working with the Ministry of Local Government and Housing undertook an induction programme which incorporated training on corporate Governance.

4.6.8 Good Practices Conference GIZ through the multi-country programme WAVEplus has been supporting water sector institutions in Kenya, Tanzania, Uganda and Zambia for the past five years (and more recently, South Sudan) with Human Capacity Development (HCD) measures with the aim of increasing effectiveness and efficiency of these institutions which are mainly water and sanitation service providers, regulators and training institutions, thereby with the hope of contributing to improved service delivery and the performance of the water sectors in the respective countries.

The five countries have benefited from the WAVEplus programme from various training programmes focusing on key areas such as non-revenue water, customer care services, energy efficiency, benchmarking. A WAVEplus programme conference was organised by GIZ in October 2013 in Tanzania with the aim of assessing the impact of these training programmes and also for documenting, presenting and discussing collected good practices from participating countries for the purpose of learning.

4.6.9 Sustainable Water and Sanitation in Africa ProjectsSustainable Water and Sanitation in Africa (SUWASA) - a USAID programme provided support to NWASCO from August 2012 to October 2013. The project included the development of improved cost of service data, assessment and recommendation of an appropriate tariff setting methodology, and a model to be used to assess adjustment applications. Further, SUWASA also worked with NWASCO and the CUs to revise the Corporate Governance Guidelines.


26

5PRICING FOR WATER SUPPLY

AND SANITATION

Pricing for Water Supply and Sanitation WSS Sector Report 2013

Adjustment of tariffs in the water sector is an important undertaking ultimately aimed at moving towards sustainable cost recovery of service provision as enshrined in the 1994 National Water Policy (revised in 2010).The National Water Supply and Sanitation Council (NWASCO) approves tariff adjustments every year tied to performance and conditionalities which in the long run should enable water and sanitation service providers cover their full costs.

5.1 WATER TARIFF GUIDELINES

The Water Supply and Sanitation Act No. 28 of 1997 explicitly confers the right to NWASCO to “develop guidelines for the setting of tariffs for the provision of water and sanitation services” (Section 4 (2) (d) (iv)).

Water supply services are not rendered in a competitive market environment but they take place principally as a natural monopoly (only one supplier per region). This implies that Service Providers would be inclined to charge high monopoly prices (above competitive prices) and lack an incentive to become more efficient if left to themselves. In this monopolistic environment, it is the task of the regulator to set tariffs which;

• cover the necessary costs for sustainable service provision;

• protect the consumers from unfair charges and

• ensure that a certain minimum quantity of water is affordable to all including the very poor.

Each Service Provider has to submit a tariff proposal to NWASCO if an adjustment of the tariff is planned. Based on an analysis of cost of providing the service, performance and efficiency of a provider in service provision, new tariff adjustment is approved by the Regulator.

At the moment there are wide variations in service standards and charged tariffs across the country depending on the level of economic activity for each licenced area. The Regulator closely monitors service standards and associated costs for delivering the services with the aim oferadicatinginefficiency.

5.2 NWASCO’S OBJECTIVES REGARDING THE WATER AND SANITATION TARIFFS

When setting the tariffs, the aim is to achieve a reasonably fair balance among the objectives as listed below:

• Financial Sustainability of Utilities-Providing sufficient revenues to cover the justified costs obligations for sustainable WSS service provision;

• Distributive Justice and Affordability of WSS services-Ensuring a minimum quantity of water is affordable particularly to low income consumers;

• Consumer Protection, Economic Efficiency and Fair Pricing-Protecting the consumers from paying for inefficiencies of service providers and protecting the environment and

• Ensuring that the tariff adjustment process is transparent, simple to understand and predictable.

28

Pricing for Water Supply and SanitationWSS Sector Report 2013

5.3 TARIFFS FOR WATER

In order to achieve cross subsidization (to cater for the poor) and for water conservation purposes, NWASCO has adopted a ‘rising block tariff system’ with at least three blocks for domestic consumers, (Chart 1) such as shown in the following example:

EXAMPLE! Tariff rates per cubic metre:

1st block of 0 to 6 m3 = 2.60 Kwacha/m3

2nd block 6 to 15 m3 = 3.40 Kwacha/m3

3rd block 15 to x m3 = 4.20 Kwacha/m3

or graphically:

The cubic meters of the first block of 6 cubic meters (but not more than 10 cubic metres) represent the lifeline consumption and are billed at a social tariff rate. Providers must focus on metering all customers to ensure that they all pay for actual consumption and not flat tariffs which may be pegged on lower consumption. The rising block tariff is also applicable to commercial and institutional consumers.

5.4 TARIFFS AT KIOSKS AND STANDPIPES

Where a household connection may currently be too costly for the consumer, a water kiosk or stand pipe may be provided, where the water price per cubic metre should not be higher than the social block tariff. Customers should note that the rising block tariff is not applicable for kiosks and stand pipes. The Devolution Trust Fund (DTF) was set up by NWASCO as a “basket fund” to support providers to extend and accelerate access to clean water to urban poor populations. The DTF therefore, assists providers with construction of facilities such as water kiosks.

5.5 TARIFFS FOR SEWERAGE

The tariff for sewerage services is normally calculated as a percentage of the water consumption. Where a customer has own water supply such as a borehole but has a sewerage connection, the charge for sewerage services will be based on consumption of a like customer i.e. a customer with similar characteristics.

5.5.1 Other Fees

Other fees applicable to the customer may include the following:

• Fixed Meter charge - is charged per water bill and is meant for meter

Chart 1: Rising Block Tariff Rates per Cubic Metre of Water

0

1.00

2.50

3.00

3.40

3.80

4.00

4.50

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Household consumption in cubic metre

29

maintenance and replacement. The cumulative amount collected over the useful life of the meter i.e. 5 to 10 years, should at least amount to the cost of the meter to enable meter replacement.

• Connection fee - levied only once when a customer is applying for a new connection. For domestic customers, it may be spread over a period of time to enhance affordability.

• Reconnection fee - levied whenever a disconnected customer due to non-payment of bill is seeking reconnection. It should reflect only the average cost of carrying out a disconnection and reconnection.

• Meter testing fee - charged when a customer requests for meter testing outside the routine testing scheduled by the utility and is only applicable if the meter is not faulty.

• Meter replacement fee - levied when an installed meter has to be replaced due to loss or damage caused by the customer. This does not apply for the first meter installation. No customer should be charged the cost of the first meter. The Provider is supposed to recover the cost of the meter through the fixed meter charge that the customer is required to pay on a monthly basis.

• Security deposit – a refundable deposit that a new customer makes which is equivalent to a sum of three monthly bills. This deposit is refundable as soon as the customer leaves the property.

• Sanitation surcharge - in order to accumulate funds for investments in rehabilitation or new installation of sewage infrastructure the utility may apply for a sanitation surcharge to be levied separately. This is a small charge pegged at less than 5% of the water bill. The money collected is not used for operations by the providers but is used to fund projects to improve sanitation coverage in the Country. The Regulator audits the utilization of the funds collected.

5.6 CONCLUSION

Consumers are urged to actively participate in tariff consultative meetings which providers arrange and announce in public media for their voice to be heard before they send their tariff applications to NWASCO. The consultative meetings must take place between May- July before the submission date of 30th September.

Give date within 1 Week

4 Weeks

1 Week

14 days after decision

Clarifications if any

Within 1 Weeksend informationto clarify issuesor make adjustments

Start of processCommunity

Consultative

Meetings

Negotiationswith big

consumers

Submission ofproposal toNWASCO

Screening byNWASCO

Presentation ofproposal by

CU

Analysis byNWASCO

Communicationof results

to CU

Discussionof resultswith CUs

1 Week

Decision byNWASCO

Council

Possibility ofAppeal

Pricing for Water Supply and Sanitation WSS Sector Report 2013

30

6PROGRESS ON

MEETING SERVICE LEVEL AGREEMENTS

AND ADHERENCE TOSERVICE LEVEL GUARANTEES

6.1 INTRODUCTION

In order to ensure that the water and sanitation service providers give a progressively better service to their customers, NWASCO has formulated Minimum Service Level (MSL) guidelines. MSLs are simply standards which define the acceptable minimum level of service which providers must achieve over a specified timeframe. The guidelines come in two parts with eleven measurable indicators; Service Level Guarantees (SLGs) – that compel utilities to provide certain agreed level of service to their customers at any given time; and Service Level Agreements (SLAs) – that set out stepwise interventions that a utility will undertake to attain the desirable sector benchmarks of service provision.

As a license condition issued under the WSS Act No. 28 of 1997, all water and sanitation service providers are required to formulate and maintain SLGs and SLAs which NWASCO monitors.

All the eleven service indicators have timeframes (measured from commencement of operations of a particular CU) within which they are to be attained and it is thus important to determine the progress made by the CUs towards attaining the acceptable benchmarks.

The Service Level Indicators (SIs) and how they are measured are shown in Table 11.

Table 11: Service Level Indicators (SI)

SERVICE INDICATOR MEASUREMENT

SI 1 Coverage of the Service Area % of population served with drinking water.

SI 2 Drinking Water QualityNo. of tests carried out and test results within the national standards for drinking water.

SI 3 Service HoursWater supply hours per day and hours to attend to customers per week.

SI 4 Billing for ServicesBilling, meter reading sequences, conditions for payment of bills by the customer.

SI 5 Client ContactsComplaints from clients, the response time on any other contacts with customers.

SI 6 Interruption of Water Supply and Bockage of Sewer

Unannounced interruption of supply or sewer evacuation due to maintenance and repair work

SI 7

Pressure in the Network and Minimum Flow Rate at the Customer Point for Water Supply

Minimum flow rate of 7 litres/min required at customer connection

SI 8 UnjustifiedDisconnectionsNo. of unjustified disconnections and the compensation to be paid by the provider to the customer

SI 9 Sewer FloodingThe number of times sewer floods a connection per year < 5

SI 10 Quality of Discharged Sewer In terms of BOD5, COD, Nitrates, Phosphorous, etc

SI 11Support to Public Institutions to Curb Wastage and Settle Bills Promptly

Activities put in place by the water providers

Progress on Meeting SLA/Gs WSS Sector Report 2013

32

6.2 PROGRESS MADE IN ACHIEVING SERVICE LEVEL AGREEMENTS AND ADHERENCE TO GUARANTEES

Service Level Agreements are signed for specific towns under each CU. Every town has its own target for the three year period that enables the CU progress towards the acceptable benchmark. The analysis therefore considers achievement of individual targets such that failure in one town may translate into overall non-achievement of the Service Indicator (SI).

NWSC MWSC KWSC LWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSCSLG √ √ √ √ x √ x √ √ √ xSLA √ √ √ √ x √ x √ x √ x

SI 1 Service Coverage – Proportion of population serviced with water

The demand for new connections continued to be high and a number of CUs responded positively by being able to make connections. The CUs were able to do this because of the numerous rehabilitation and extension projects undertaken. For example, NWWSC with funding from Government through the MLGH and the Land Development Funds (LDF) as well as through the Devolution Trust Fund did a lot of network extension. The investment requirements for the sector however still remain huge.

For CHWSC, coverage for both water and sanitation dropped mostly through damages caused to pipes during township roads construction works. However, projects are underway in most districts of the CU to rehabilitate infrastructure and extend services. For LgWSC, the contributing factor to the delayed completion of projects was as a result of procurement procedures and project scope alterations by the CU; hence could not meet the targets for coverage. LWSC and WWSC could not meet their targets due to limited resources and delayed completion of projects.

AchievedKey: √ Not achievedx

CUs are required to display the guaranteed service coverage figures at all pay points. The table below however only shows water coverage and not sanitation coverage.

Water line damaged during road construction works

Progress on meeting SLA/GsWSS Sector Report 2013

33

SI 2 Drinkingwaterquality – Assessment through number of tests conducted and compliance to standardDue to its impact on the health of consumers, CUs are required to guarantee their customers an overall compliance of 95%.

NWSC MWSC KWSC LWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSCSLG √ x x √ x √ x √ √ √ √SLA √ x x √ x √ x √ √ √ √

MWSC and LGWSC failed to meet both the SLAs and SLGs because most Residual Chlorine results were above the maximum acceptable limits. KWSC had challenges related to the quality of raw water and the poor state of the distribution network which allowed inflow of foreign matter and re-contaminated the water. For CHWSC, their failure to meet this service indicator was mostly due to the inadequate treatment of water.

SI 3 Service Hours- water supply hours per day and hours to attend to customers per week This service indicator depicts the average duration of water supply at the customer connection and is specific to an area. CUs are therefore required to display at all pay points the guaranteed hours of supply for the particular area. In addition, CUs are also expected to have offices accessible to customers for a minimum number of hours per week.

NWSC MWSC KWSC LWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSCSLG √ √ √ √ x x x √ √ √ xSLA x √ √ √ x x x √ √ x x

Unstable power supply to a number of parts of the country meant that the CUs were not able to supply water as per their respective guaranteed hours. The worst affected CUs included CHWSC and LPWSC. Drying dams in CHWSC, SWSC and delayed projects under NWSC affected the meeting of targets.

Drying dams affect hours of water supply


34

SI 4 Billing for Services–Billing,meterreadingsequences,conditionsforpaymentofbillsbythecustomer,meteringratio

NWSC MWSC KWSC LWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSCSLG √ x √ √ x x x √ √ √ √SLA √ x √ x x x x √ √ √ √

The billing for services indicator specifies the frequency at which CUs should read customer meters and distribute bills, the conditions related to payments of bills by customers and the number of customers with water meters.

All CUs except LWSC, met their billing related targets while for metering ratio, six CUs met both their SLA and SLG targets. LWSC and LpWSC made remarkable increase in metering ratio in all their towns. However, LWSC could not meet the target for the SLA but achieved 100% metering in Luangwa and Chongwe Districts and the metering exercise remained ongoing by close of the reporting year in their remaining towns. MWSC, LGWSC, SWSC and CHWSC did not meet the target because of low metering ratios. Numerous billing errors were noted for LWSC especially after the CU changed its billing format.

SI 5 Client Contacts - Complaints from clients, the response time on any other contacts with customersThis service indicator specifies the timeframes CUs are expected to take to respond to customer complaints or any other contacts with customers.

NWSC MWSC KWSC LWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSCSLG √ √ √ √ x √ x √ x √ √SLA √ √ √ √ x √ x √ x √ √

LGWSC, CHWSC and WWSC did not meet this indicator because of delays in connecting paid up customers. For WWSC, this was coupled with delays in the procurement of required materials.

Increasing the metering ratio can be affected by the need to replace defective meters.


35

SI 6 Interruption of Water Supply & Blockage of Sewer - Unannounced interruption of supply or sewer evacuation

SI 7 Pressure & Flow in the Network for Water–Minimumflowrateof7litres/minrequiredatcustomerconnection

The service indicator reflects the proportion of the population in the CUs’ service area that is subjected to interruptions in water supply or blockage of sewer as a result of maintenance or repair works for a specified duration.

NWSC MWSC KWSC LWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSCSLG √ √ √ √ √ √ x √ √ √ √SLA √ √ √ √ √ √ x √ √ √ √

CHWSC continued not to notify its customers during prolonged interruptions in most districts. All other Utilities did endeavour to adequately inform their customers during planned shut downs unless otherwise caused by unexpected power supply disturbances.

Pressure and flow in the network for water service indicator specifies the maximum acceptable proportion (<5%) of connections in a service area with water flow rate of less than 7 litres per minute.

NWSC MWSC KWSC LWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSCSLG √ √ √ √ √ √ √ √ √ √ √SLA √ √ √ √ √ √ √ √ √ √ √

All CUs did fairly well in ensuring that flow rates for water in the network were adequate in most parts of their service areas.

Supply can be interrupted for repair works


36

SI 8 UnjustifiedDisconnections–No.ofunjustifieddisconnectionsandthecompensationpaidbytheprovidertothecustomer

SI 9 Sewage Flooding – Thenumberoftimessewagefloodsaconnectionperyear<5

The Unjustified Disconnections service indicator specifies the maximum acceptable proportion of the total connections for a CU that should be subjected to unjustifiable disconnections which is less than 0.2% of the customer base.


Unjustified disconnections from water supply or sanitation services border on infringement of the customers’ rights. Customers are however at liberty to report such unfair treatment by any CU after which, if the customer was indeed unfairly treated, compensation must be given. In the reporting period, few of such cases were reported.

The Sewage Flooding service indicator specifies the maximum acceptable proportion of connections that can be flooded with sewage in a year which is less than 0.5% of the total connections.


Poor consumer habits contribute to blockages occuring


37

SI 10 Quality of Discharged Sewage – In terms of BOD5, COD, Nitrates, phosphorus, and others.This service indicator specifies the acceptable number of tests required to be done and the quality of the sewage in terms of BOD5, COD, Nitrates, phosphorus etc. discharged by CUs into the environment from their sewage treatment plants. Most effluents from mechanised sewage plants did not meet the quality standard under LWSC, KWSC, NWSC and MWSC while effluents from most of the sewage ponds met the standards.

6.3 CONCLUSION

SLGs and SLAs are among the tools that NWASCO uses to compel CUs to provide good quality water supply and sanitation services to their customers.

A number of CUs were able to extend their services to new areas because of the capital projects they were undertaking. CUs depended largely on government and other cooperating partners to be able to extend their services to new areas. In the reporting year, the investment needs for the sector were not met (see Table 24) resulting in coverage not increasing at the desired rate.

Alhough there were positive scores in most service indicators, there is still need for concerted effort by CUs to do better especially in customer care.

Because the SLGs and/ or SLAs form part of the tariff and license conditions, NWASCO continued to strictly monitor CUs on their compliance to SLGs or SLAs and issued out directives to those that did not comply.

Meeting the acceptable quality for sewage effluent remains a challenge


38

7

COMPARATIVE PERFORMANCE OF

COMMERCIAL UTILITIES (CUS)

Comparative Performance of CUs WSS Sector Report 2013

7.1 OVERVIEW

This Chapter illustrates the comparative performance of CUs during the period 1st January 2013 to 31st December 2013. Since inception, NWASCO has been reporting performance of the utilities for the period 1st April to 31st March. However, with effect from this report, the reporting period has been adjusted to 1st January - 31st December in line with Government’s planning period.

CUs operate as monopolies in their respective areas thus the use of comparative performance is necessary to induce competition; determine the progress made in the sector and allow the various stakeholders to plan appropriate interventions. Performance is measured against the sector benchmarks and averages. Each CU is thus motivated to improve its previous performance, as well as, outperform others. Consumers can also use the comparative data to appreciate the performance and challenges of their respective providers.

Performance is measured in the following five broad categories of indicators:

• Operational; • Financial; • Staff Efficiency; • Service Level; and • Corporate Governance and Management.

7.1.1 Total Population in Service Areas of the CUsEach CU is licensed to operate in a specific area. The total population in the CU serviced areas for the reporting period was estimated at 5.97 million. This may differ from that reported by the Central Statistical Office (CSO) because of the difference in the delineation of rural and urban areas. Some of the CU licensed operating areas (urban and peri-urban) overlap with what is defined as rural by CSO. For example, CSO classifies Mambwe in Eastern Province, Masaiti on the Copperbelt Province and Chilubi in Northern Province almost entirely rural districts yet these are part of the CUs’ serviced areas.

Out of a total estimated urban population of about 5.97 million, about 1% resides in areas serviced by Private Schemes which are business entities that provide WSS services as a fringe benefit to their employees.

40

The Regulator expects continued improvements in provider performance

Comparative Performance of CUsWSS Sector Report 2013

Table 12: Clustering of CUs

7.1.2 Clustering of Commercial UtilitiesCUs are clustered based on the water production volumes, number of connections and population in the licensed areas as shown in Table 12. Clustering allows the performance of the CUs to be compared in the context of their sizes.

CUs with more than 40,000 connections and water production above 50million m3 per year are placed in Cluster 1. CUs with connections between 15,000 and 40,000 and water production between 15million to 50million m3 per year are in cluster 2. CUs with connections less than 15,000 and production less than 15million m3 per year are in cluster 3. As the CUs grow in size, the limits set for the cluster could change.

Cluster CU Total Population in Service Area

No. of connections

Water Production(million m3)

1

LWSC 2,113,152 85,832 98.0

NWSC 718,237 51,868 48.8

KWSC 673,692 54,906 50.1

MWSC 468,579 48,641 58.0

2

LGWSC 399,593 20,326 21.4

SWSC 375,707 38,273 16.5

CHWSC 312,971 15,830 12.2

3

NWWSC 248,640 10,509 4.8

EWSC 265,058 14,324 5.3

WWSC 193,861 11,260 9.0

LPWSC 196,085 4,762 4.0

TOTAL 11 CUs 5,965,575 356,531 324

7.2 PERFORMANCE ANALYSIS

7.2.1 OPERATIONAL INDICATORSThe effectiveness and efficiency of a CU in providing water and sanitation services is assessed using operational indicators. These include water and sanitation coverage, Non-Revenue Water (NRW) and metering ratio. The primary data used in calculating operational indicators include number of connections, population and water production figures.

7.2.1.1 Total ConnectionsThe total number of domestic connections increased by 15,865 while the non-domestic connections increased by 2,474 from the previous reporting period, bringing the overall increase in connections to 18,339.Table 13: Total Connections

CUTotal

Domestic 2013

Total Non-Domestic

2013

Total connections

2013

Total connections

2012LWSC 79,954 5,878 85,832 79,475

NWSC 48,964 2,904 51,868 49,658

KWSC 52,875 2,031 54,906 53,671

MWSC 46,944 1,697 48,641 45,491

LGWSC 19,165 1,161 20,326 19,331

SWSC 35,884 2,389 38,273 36,642

CHWSC 13,777 2,053 15,830 15,097

NWWSC 9,507 1,002 10,509 9,598

WWSC 8,776 2,484 11,260 10,654

EWSC 13,027 1,297 14,324 13,461

LPWSC 4,492 270 4,762 3,634

TOTAL 333,365 23,166 356,531 336,712

41

7.2.1.2 Water Supply Coverage The ratio of urban population with access to safe and reliable water

Benchmark for service coverage (water supply and sanitation)

Very Good 100%Good >90%Acceptable 80 – 90 %Unacceptable <80%

Water coverage is the population serviced by domestic connections only through individual household connections, kiosks, public stand posts and shared taps. The sector average increased slightly from 82.1% to 82.6% as evidenced by increase in the number of connections (Table 13). Seven

CUs met the acceptable coverage benchmark of 80% as shown in Chart 2. The notable increase in NWWSC was mainly due to the completion of DTF projects which included the construction of a total of 7 kiosks and over 900 household connections in Solwezi and Kabombo. LPWSC increased household connections by over a 1,000. However, in absolute terms LWSC made most number of domestic connections with an increase of 4,739.

The drop in CHWSC and WWSC was mainly as a result of township road construction works which inadvertently damaged distribution lines hence cutting off some households.

For some CUs, part of their service area is covered by Private Schemes or Water Trusts: For LWSC, the coverage in Chart 2 includes 65,438 people serviced by Water Trusts in nine peri-urban areas. In addition to the coverage in Chart 2, 3,508 people under LWSC are serviced by two Private Schemes. In SWSC, 65,437 people are serviced by four Private Schemes. In LGWSC, about 5,723 people are serviced by KCM-Nampundwe. In NWWSC, Kasanshi and Lumwana mines service around 500 and 6,000 people respectively.

Chart 2: Water Supply Coverage

86.5%

94.9%

86.7%

94.7%

69.2%

89.2%

70.9%

82.8%

49.1%

83.6%

19.9%

82.1%

82.7%

0%

20%

40%

60%

80%

100%

2012 2013 % Average in 2012 % Average in 2013


42

Kiosks funded by DTF to increase access to water supply

It is important to note that due to fluctuations in population figures, the coverage in percentage terms may not give an appreciation of the actual increase in people serviced. Therefore, the absolute figures in terms of total population served with water per CU are shown in Table 14. An additional 211,513 people were serviced in the reporting period.

Table 14: Population Served with Water

CUTotal

Population 2012

Population Served 2012

Proportion of Population Serviced by Household

Connections 2012

Proportion of Population Serviced by public stand

posts & Kiosks 2012

Total Population

2013

Population Served 2013

Proportion of Population Serviced by Household

Connections 2013

Proportion of Population Serviced by

public stand posts & Kiosks

2013

LWSC 2,026,185 1,727,760 42.7% 57.3% 2,113,152 1,827,466 38.9% 61.1%

NWSC 694,799 647,345 70.2% 29.8% 718,237 681,376 66.8% 33.2%

KWSC 662,112 579,467 85.7% 14.3% 673,692 584,159 85.6% 14.4%

MWSC 464,803 435,165 80.0% 20.0% 468,579 443,692 81.7% 18.3%

LGWSC 389,847 269,649 39.0% 61.0% 399,593 276,628 44.1% 55.9%

SWSC 363,415 320,319 71.2% 28.8% 375,707 335,271 71.6% 28.4%

CHWSC 300,933 225,411 31.0% 69.0% 312,971 221,745 39.2% 60.8%

NWWSC 243,526 189,793 31.9% 68.1% 248,640 205,812 34.6% 65.4%

WWSC 183,446 105,759 60.7% 39.3% 193,861 95,253 73.2% 26.8%

EWSC 246,260 199,040 48.8% 51.2% 265,058 221,495 44.6% 55.4%

LPWSC 185,215 29,764 100.0% 0.0% 196,085 38,944 100.0% 0.0%

TOTAL 5,760,541 4,729,472 56.9% 43.1% 5,965,575 4,931,841 55.9% 44.1%

Over 50% of the population serviced for LWSC, LGWSC, CHWSC, NWWSC and EWSC are served through public stand posts and kiosks. However, overall, about 56% of the population is served by household connections. The ideal situation would be to have the majority of the population served by household connections.


43

Sanitation coverage consists of the population serviced by offsite (centralised system) and septic tanks only. Other onsite facilities such as pit latrines are not considered acceptable for urban sanitation.

7.2.1.3 Sanitation Coverage The ratio of urban population with accesstoadequatesanitation

The sector average barely increased in the last three years, progressing by only 1% per year. There was low extension of the sewer network as most of the efforts were directed towards rehabilitating run down infrastructure. Furthermore, the high investment cost in new sanitation facilities continued to be a limiting factor.

71%

65% 64%

81%

28%

45%

21%

31%

40%43.3%

14%

56%

57%

0%

20%

40%

60%

80%

100%

Chart 3: Sanitation Coverage

2012 2013 % Average in 2012 % Average in 2013

MWSC was still the only CU above the acceptable benchmark of 80% coverage as shown in Chart 3. The increase for LWSC was due to the capturing of more septic tanks.

The coverage dropped for CHWSC, WWSC and EWSC. For CHWSC, the drop was mainly due to road construction works that damaged the network in Isoka, Chinsali, Mpika and Kasama. Similarly for WWSC road construction works also damaged the network in Mongu. For EWSC, the population serviced increased in absolute terms as shown in Table 15, however, the increase in connections was at a slower rate than the growth in population hence the decline.


44

Sanitation options provided to schools

Table 15: Population Serviced with Sanitation

CUTotal

Population 2012

Population Serviced

2012

Proportion of Population on Sewer Network

2012

Proportion of Population

served by Septic Tanks 2012

Total Population

2013

Population Serviced 2013

Proportion of Population on Sewer Network

2013

Proportion of Population served

by Septic Tanks 2013

LWSC 2,026,185 1,400,851 23.6% 76.4% 2,113,152 1,505,676 15.2% 84.8%

NWSC 694,799 432,903 95.8% 4.2% 718,237 467,204 95.8% 4.2%

KWSC 662,112 410,977 94.3% 5.7% 673,692 431,830 87.5% 12.5%

MWSC 464,803 376,512 99.9% 0.1% 468,579 380,553 96.4% 3.6%

LGWSC 389,847 107,629 64.5% 35.5% 399,593 112,938 54.1% 45.9%

SWSC 363,415 156,001 49.5% 50.5% 375,707 169,239 48.0% 52.0%

CHWSC 300,933 74,261 11.1% 88.9% 312,971 64,410 0.8% 99.2%

NWWSC 243,526 67,609 6.1% 93.9% 248,640 78,106 9.9% 90.1%

WWSC 183,446 76,171 6.2% 93.8% 193,861 77,409 10.5% 89.5%

EWSC 246,260 109,384 11.7% 88.3% 265,058 114,677 11.6% 88.4%

LPWSC 185,215 25,247 15.3% 84.7% 196,085 27,093 1.3% 98.7%

TOTAL 5,760,541 3,237,545 52.2% 47.8% 5,965,575 3,429,135 50.6% 49.4%


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Mechanised sewage treatment plant

7.2.1.4 Water Production

Chart 4 reflects the volume of water treated and distributed into a network. Water production figures are looked at in relation to the water losses depicted in Chart 5. CUs should aim at reducing NRW first before considering increasing production. With good operational efficiency, an increase in water production should only be necessitated by an increase in customer base and/ or improved hours of supply.

Production reduced by 12.6million m3 largely due to increased power service interruptions, drying of dams and low yields from boreholes. CHWSC experienced numerous power outages and the drying of the Nakonde Dam. MWSC replaced two rising mains in Chililabombwe and Mufulira which necessitated pumping shutdowns. For SWSC, the reduction in production was due to the collapsing of the dam in Kalomo from February to May 2013 and drying up of Gwembe and Zimba Dams.

7.2.1.5 Non-Revenue Water (NRW)Non-Revenue Water (NRW) is the difference between the quantity of treated water distributed in the network and the quantity of water billed. NRW consists of technical (leakages) and commercial losses (illegal connections, unbilled customers, wastage on un-metered customers’ premises). In the absence of metering, the volumes could be unreliable estimates.

Benchmark for NRWGood <20%Acceptable 20-25 %Unacceptable >25%

98.0

48.8 50.1

58.0

21.416.5

12.2

4.89.0

5.3

0

20

40

60

80

100

millio

n m

3

2012 2013

4.0

Chart 4: Water Production 42%

60% 61%

39%42%

39%

67%

28%

64%

40%

64%

48%

0%

10%

20%

30%

40%

50%

60%

70%

Chart 5: Non- Revenue Water (NRW)

2012 2013 Average 2012 Average 2013

42%


46

NRW worsened from an average of 42% to 48% notably in CHWSC, LPWSC, NWSC and KWSC as shown is Chart 5. The billed volume for CHWSC dropped due to the loss of customers coupled with physical losses following the damage to portions of the water network in a few towns during road construction works. LPWSC installed bulk and domestic meters which assisted with more accurate measurement and also led to the discovery of a severely leaking distribution line in Kawambwa which needed an overhaul. NWSC modified the assumption for calculating the billed volume for fixed customers to align it with the approved tariffs which were much lower than their previous assumptions. KWSC had to do extensive flushing of the system in Ndola after the project works to clear mud. The CU also experienced numerous bursts in the townships from increased pressure after replacement of the Nakaputa main line in Ndola.

It is worth noting that at a certain level of NRW, it becomes difficult to significantly reduce the figure and may be uneconomical. NWWSC continued to be the closest to the acceptable benchmark of 25%.

It is worth noting that at a certain level of NRW, it becomes difficult to significantly reduce the figure and may be uneconomical. This may be the case for NWWSC which though trending towards the acceptable benchmark has had no significant change in the past three years.

7.2.1.6 Lost Revenues due to NRW in 2013Any loss of revenue in business is unacceptable. However, in the water sector a benchmark of 25% has been set as acceptable loss. To appreciate the magnitude of water losses, the NRW figures were translated into monetary terms, as shown in Table 16. This should serve as an incentive for each CU to come up with strategies of realising some of this revenue.

Table 16: Estimated Revenue Lost due to NRW in 2013

CU Metering Ratio

Total Billing (ZMW)

NRW (in %)

NRW (ZMW) 2013

NRW (ZMW) 2012

LWSC 70% 213,037,398 42% 152,378,379 145,840,737

NWSC 61% 96,032,198 60% 143,419,875 54,967,510

KWSC 68% 74,964,279 61% 117,591,330 70,768,730

MWSC 61% 103,210,745 39% 67,132,521 58,124,336

LGWSC 67% 20,176,820 42% 14,476,787 15,834,147

SWSC 63% 36,546,656 39% 23,525,542 25,028,979

CHWSC 34% 8,312,019 67% 16,569,166 5,776,783

NWWSC 100% 18,441,537 28% 7,278,877 5,626,758

WWSC 76% 9,281,509 40% 6,175,115 4,947,668

EWSC 100% 15,623,561 40% 10,425,533 8,581,704

LPWSC 95% 3,109,545 64% 5,437,385 3,683,339

TOTAL 598,736,267 564,410,510 399,180,691

The margin of revenue lost increased to K165 million from the previous period. This was a drastic jump in monetary loss from the reduction of K24 million in the previous period. The substantial loss was owing to the high NRW particularly for NWSC and KWSC. At the benchmark of 25% NRW, the total billing would have been K872 million. If NRW is not reduced to the acceptable benchmark, the magnitude of loss becomes even greater as the business expands.


47

7.2.1.7 Production and Consumption in litre per capita per day

Chart 6 and 7 show the average amounts of water produced and consumed per person per day, respectively. An analysis of the two charts reveals the degree to which CUs are able to meet the required water consumption standards.

According to World Health Organisation (WHO) guidelines, 50litres is the acceptable minimum water consumption required per person per day for basic hygienic considerations. However, this is a bare minimum and poses health risks. Except in EWSC, NWWSC and CHWSC, the average consumption in all CUs was above the minimum recommended amount of 50l/c/d.

Where production per capita is much higher than the consumption per capita, the difference can be because of industrial/ commercial activities (KWSC) and/or high non-revenue water (LPWSC).

In WWSC, the high production per l/c/d could be attributed to other consumers drawing water from connected unmetered customers.

The low production and consumption per l/c/d for EWSC and NWWSC could be attributed to their high metering and low sewerage coverage which may result in low water usage. When metered, customers generally become more cautious with water usage. Where sewerage coverage by network is low, people use onsite facilities which use little or no water.

CHWSC suspended billing for a number of customers due to no supply coupled with reduced hours of supply in some areas resulting in the lower consumption per l/c/d.

57 5763

101

85

65

28 24

123

31

71 74

61

0

20

40

60

80

100

120

140

Chart 6: Consumption: Litre/Capita/Day


141

196

235

358

212

135

205

63

260

66

278

200

182

0

50

100

150

200

250

300

350

400

450

Chart 7: Per Capita Production

2012 production per person served (l/c/d)

2013 production per person served (l/c/d)

Average 2012

Average 2013


48

Metered connections compared to the total connections7.2.1.8 Metering Ratio

Chart 8 shows the metering ratio which is the proportion of the metered connections compared to the total connections. Metering is required in order to measure the amount of water consumed as well as charge consumers according to their consumption. It is an important tool for controlling NRW.

The average metering ratio continued to improve from the 2012 period and reached 67%. In absolute terms, a total of 25,539 new meters were installed in the period. NWWSC and EWSC maintained the benchmark metering ratio

70%

61%

68%

61%

67%63%

34%

100%

66%

100%95%

63%

67%

0%

20%

40%

60%

80%

100%

Chart 8: Metering Ratio


of 100%. LPWSC and WWSC made considerable effort to meter customers with support from DANIDA. LWSC installed over 10,000 prepaid meters in all towns in their service area. NWSC installed over 16,000 meters with funding from the AfDB project and their own resources.

It must be noted that the slow increase in the metering ratio is affected by the need to replace defective meters as opposed to metering new and existing customers.


49

Meters procured to enhance service delivery

7.2.2 SERVICE LEVEL INDICATORS

These portray the quality of service a company is rendering to its customers. Three major ones include water quality, hours of supply and resolution of customer complaints.

7.2.2.1 WaterqualityWater quality is very important due to the health impact it has on the consumers. The compliance level takes into account the number of samples conducted and the percentage of results meeting the water quality standard. Therefore, it is important to note that a low compliance might imply deficiency in the required number of tests and/or non adherence to quality standards.

The two types of parameters considered are bacteriological (total and faecal coliforms) and physiochemical (Chlorine residue, pH, turbidity and colour). Chlorine residue test is given prominence under physiochemical because of its relation to the bacteriological aspect of water.

Seven CUs met the sector benchmark of for water quality as shown in Table 17. WWSC and EWSC received support from Aquaya, a USA based NGO to procure testing equipment and training of water quality staff.

KWSC and MWSC have polluted raw water source that pose a challenge to adequately treat the water. CHWSC experienced challenges in complying with water quality due to non-availability of adequate testing equipment and qualified manpower in the districts. Further, the treatment facilities were inadequate to effectively treat the water in some districts. LGWSC had residue chlorine above the maximum acceptable limit in some districts due to suspected outbreak of typhoid in Kabwe during the rainy season the use of inappropriate dosing equipment and the inherent iron in the water in Serenje.


50

Compliance to water quality standards is stringent

Benchmark for Water Quality Acceptable ≥95%

Table 17: Water Quality Analysis

CUQuality Compliance Overall

Water Quality Compliance

2013

Overall Water Quality Compliance

2012

RemarksChlorine Residual Bacteriological Physio-

chemical

CHWSC 87% 81% 87% 85% 81% Inadequate treatment resulting in high turbidity and bacteriological failures.

EWSC 98% 100% 100% 97% 95%Improved mainly because of training of water quality staff by Aquaya. Still needs to improve in record keeping for Chipata, Katete and Nyimba.

KWSC 89% 91% 100% 93% 95%

The replacement of the Nakaputa falling main resulted in increased pressure in the network which led to numerous leakages in the township and consequently deteriorated the quality of water from post contamination. Very poor raw water quality continued to affect the Southern Zone of Ndola.

LGWSC 85% 99% 99% 94% 96% Residual Chlorine tests failed because the results were above the maximum acceptable limits.

LWSC 88% 99% 97% 95% 91% Though still below the acceptable standard, residual chlorine compliance improved.

MWSC 85% 99% 93% 93% 93% High turbidity was observed in all towns while most residual chlorine test results were the maximum acceptable limit.

NWSC 94% 99% 90% 95% 95% Maintained consistent water quality compliance. However, high turbidity levels were observed in most networks.

NWWSC 99% 98% 98% 98% 99% Maintained consistent water quality compliance.

SWSC 98% 98% 98% 98% 90% Improved in disinfection of water.

WWSC 95% 99% 99% 96% 94% Improved mainly because of training of water quality staff by Aquaya.

LPWSC 94% 97% 93% 95% 98% Inadequate treatment resulting in high turbidity.


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Benchmark for hours of supply (Cluster 1 & 2)

Good 20-24 hoursAcceptable 18-20 hoursUnacceptable <18 hours

Benchmark for hours of supply (Cluster 3)

Good >18 hoursAcceptable 16-18 hoursUnacceptable <16 hours

7.2.2.2 Hours of Supply

Chart 9 shows the range of supply hours by the CUs per day.

The least number of hours were supplied to areas such as Avondale (Lusaka City) under LWSC; Wusakile (Kitwe town) under NWSC; Upper Ndeke (Ndola town) under KWSC; Twatasha (Chingola town) under MWSC; Upper Itala (Mkushi town) under LGWSC; the entire Pemba town under SWSC; the majority of Mpulungu town under CHWSC; Location (Solwezi town) under NWWSC; the majority of Kaoma town under WWSC; the majority of Katete town under EWSC and Kawambwa town under LPWSC.

The average number of hours supplied per day remained generally unchanged for most CUs except for LGWSC, SWSC and CHWSC which dropped.

Interruption of serviceCHWSC experienced interruption of service for the entire Nakonde town for about 5 days due to the drying up of the Nakonde dam to an extent that the CU could not pump any water. The CU mobilised a bowser to ration water to the over 48,000 persons affected. Other interruptions were experienced for more than 48hours in Isoka, Luwingu, Mpika and Kasama due to, among other reasons, breakdowns, ripping off of the network from road works and erratic power supply.

NWSC experienced service disruptions in Kalulushi and Garneton due to pollution at the raw water source – Mwambashi Dam- for over 3 months. Affected customers were served through bowsers in Garneton while the Kalulushi residents were severely rationed from an alternative source in Kitwe. Chamboli and Wusakile Township continued to experience erratic water supply due to insufficient water in the system.

KWSC experienced prolonged severe rationing in the southern part of Ndola during the rehabilitation of Kafubu waterworks and replacement of the

20

15

1718

20 21

10

23

13

20

9

0

5

10

15

20

Chart 9: Hours of Supply

Av. 2012 Av. 2013Min Supply Hours Max Supply Hours


52

Nakaputa main line in Ndola.

SWSC experienced interruption in Kalomo for about one week due to the collapse of the B-Williams dam in February 2013 during the rainy season.

LWSC experienced unprecedented water rationing due to power outages particularly in Lusaka and Kafue towns. This was aggravated by the delayed onset of the rains. Chongwe town was heavily rationed due to the drying up of the dam which was the only source of water for the district. Affected customers were supplied with water by bowser for close to three weeks.

Under LGWSC, Kapiri Mposhi had no water for a prolonged period due to very low levels from the water sources. Serenje rationed water for most of the fourth quarter due to the drying up of the raw water source. Mumbwa did not have water for more than three days due to a pump failure.

NWWSC was forced to pump intermittently, due to the high value of turbidity as a result of road construction works and farming activities that contaminated the river in Solwezi.

Under LPWSC, Kawambwa experienced erratic supply due to pump breakdown and power outages.

WWSC reported interruption of water supply for more than 4 days in November due to power outages caused by a failed transformer. The areas that were mainly affected were Mongu district and Namushakende centre.

EWSC experienced erratic water supply in Chipata district for about three months due to poor/no power supply and low water levels in dam 1, due to delayed onset of the rains. In Katete water was rationed from 8 to below 6 hours per day due to low yields from the boreholes.

Chingola under MWSC experienced supply interruption for about one week due to maintenance works at the treatment plant within the Konkola Copper Mines (KCM) premises.


53

Water network ripped off during road construction works. Cutting off users.

Table 18: Customer Complaints

7.2.2.3 Customer ComplaintsComplaints are critical in measuring customer satisfaction. Customers have the right to complain when they are not receiving the service guaranteed by the provider. Providers are required to keep a record of customer complaints and resolve them within a stipulated timeframe. Customer awareness plays a very important role in ensuring that complaints are reported and resolved. A reduction in the number of complaints could indicate improvement in service and/or that customers are losing confidence in providers not attending to their complaints.

CU

Total Customer

Complaints 2012

Total Customer

Complaints 2013

Total Complaints Resolved

2013

Total Complaints

% Resolution 2013

Complaints per 100

Connections 2012

Complaints per 100

Connections 2013

LWSC 13,522 19,870 18,876 95% 17 23

NWSC 8,941 5,549 2,945 53% 18 11

KWSC 5,066 8,701 7,293 84% 9 16

MWSC 12,522 25,863 16,879 65% 28 53

LGWSC 7,138 6,451 6,451 100% 37 32

SWSC 8,125 7,823 7,820 100% 22 20

CHWSC 3,904 5,900 3,792 64% 26 37

NWWSC 1,007 1,794 1,425 79% 10 17

WWSC 2,842 1,899 1,821 96% 27 17

EWSC 4,272 4,308 3,163 73% 32 30

LPWSC 2,043 3,627 3,096 85% 56 76

TOTAL 69,382 91,785 73,561 80%

The number of complaints recorded increased by 22,403 from the previous period as shown in Table 18, with overall complaint resolution at 80% compared to 89% last year.

Most of the complaints for all CUs were related to issues of interruption of water supply, poor water quality and billing errors. NWSC resolved the least number of complaints due to ongoing works that would assist in resolving the reported complaints once completed. MWSC had the highest number of complaints reported, almost double from the previous period. The majority of complaints for both NWSC (2,318) and MWSC (13,484) were related to sanitation services. The majority of complaints recorded by LWSC (9,004) were related to metering.

LPWSC had the highest number of complaints per 100 connections owing to the high number of complaints reported in relation to its customer base. LGWSC and SWSC must be lauded for resolving all their complaints.

Customers can resort to akward solutions to resolve complaints


54

7.2.3 FINANCIAL INDICATORS

These ascertain viability and sustainability of CUs by analysing revenues and costs.

7.2.3.1 BILLING AND REVENUEBilling for water and sewerage services is shown in Table 19. This is the revenue that the CUs get for providing water supply and sanitation services and excludes any other adhoc charges such as reconnection fees and meter charges.

CU

Total Billing Water and Sewer

(ZMW) 2012

Total Billing Water and Sewer

(ZMW) 2013

LWSC 179,551,661.78 213,037,398.35

NWSC 85,724,774.00 96,032,197.90

KWSC 75,999,469.86 74,964,278.98

MWSC 88,381,000.00 103,210,744.69

LGWSC 17,100,378.00 20,176,820.00

SWSC 31,615,887.17 36,546,655.79

CHWSC 8,312,931.37 8,312,019.00

NWWSC 12,964,051.30 18,441,537.22

WWSC 7,032,550.70 9,281,508.99

EWSC 12,911,995.91 14,747,617.00

LPWSC 2,396,901.00 3,109,545.00

Total 521,991,601.09 597,860,322.92

Table 19: Billing for Water and Sewerage

Benchmark for CollectionEfficiency

Very Good >95%Good 90-95%Acceptable 85 – 90 %Unacceptable <85%

7.2.3.1.1 Collection Efficiency

The collection efficiency is the proportion collected of billed amounts (shown in Table 19). The calculation considers collections and billing for water supply and sewerage only. Other charges are not included.

The average collection efficiency remained at 88% as shown in Chart 10. Only four CUs (Nkana, Kafubu, Lukanga and Chambeshi WSC) were below the acceptable benchmark of 85%. KWSC made efforts to collect from the Government and domestic customers though they were still below benchmark.

98%

69%63%

87%80%

97%

78%

97% 99% 92%91%

88%

88%

0%

20%

40%

60%

80%

100%

120%

140%

Chart 10: Collection Efficiency



55

Because the figure for collection efficiency gets distorted when outstanding amounts and/or advance payments made are treated as part of the current collections; Chart 11 gives a more accurate picture of the collection efficiency by calculating it over a three-year period to eliminate distortions.

Only NWSC, KWSC and LGWSC were below the benchmark of 85% over the three year period.

All the CUs were owed a lot of money by their customers as shown in Table 20. The biggest component of the receivables were that of Government institutions which owed more than 50%. Although the total receivables had reduced by an overall 6% between 2012 and 2013, there is serious need by all CUs to devise better collection strategies to reduce the growth in receivables. To address this problem, LWSC and MWSC have embarked on installing prepaid meters to ensure that payment is made up front. Other CUs such as NWSC, SWSC and LGWSC are planning to install prepaid meters.

The failure by CUs to collect their revenue has led to cash flow problems resulting in growth in trade payables culminating into the failure by CUs to pay their dues to ZRA, NAPSA, ZESCO and other statutory bodies. Suppliers of Chemicals and other inputs are also owed a lot of money. CUs need to ensure that revenue collections are enhanced to ensure that finances are available to cover payables.

CUTrade

Recievables (ZMW) 2012

Trade Payables

(ZMW) 2012

Trade Recievables (ZMW) 2013

Trade Payables (ZMW) 2013

LWSC 80,769,251.00 67,114,552.00 82,093,889.00 35,940,740.27

NWSC 91,368,472.21 87,390,026.02 79,620,596.37 152,965,367.54

KWSC 139,065,248.05 94,937,637.80 137,564,570.32 117,284,687.69

MWSC 43,276,364.88 87,788,770.40 44,897,215.17 61,941,081.96

LGWSC 15,161,629.41 16,752,421.33 15,191,029.76 21,214,004.84

SWSC 10,474,712.00 17,025,738.00 11,905,587.49 16,210,048.94

CHWSC 7,899,579.87 14,460,265.75 9,698,983.36 20,383,964.59

NWWSC 28,845,688.60 9,254,870.00 9,395,242.00 6,900,434.64

WWSC 9,330,390.00 7,673,135.00 9,734,495.00 9,520,653.00

EWSC 7,944,610.20 9,504,737.25 7,753,853.00 10,392,475.00

LPWSC 946,874.00 3,978,481.00 1,191,709.00 4,903,642.00

Total 435,082,820.22 415,880,634.55 409,047,170.47 457,657,100.47

Table 20: Trade Receivables and Payables93%

72%

59%

91%

81%

96%

83%

105%

91%95% 93%

0%

20%

40%

60%

80%

100%

120%

Chart 11: Collection Efficiency over three years(2011-2013)


56

7.2.3.1.2 Average Tariff and Unit Operation Cost Water and sewerage tariffs are raised periodically to move the CUs towards full cost recovery through user charges in line with the National Water Policy. NWASCO approves all tariff adjustments and has the responsibility of ensuring that only justified costs are passed on to the customer. Thus, the justified operational costs of providing water and sanitation services have a direct bearing on the price of water.

For financial viability, the average tariff (billing/m3) should be equal to or higher than the unit operation cost. The unit operation cost depicted in the Chart 12 is higher than the actual unit operation cost for water only due to the difficulty in isolating sewerage related costs. The unit operation cost includes the cost related to sewerage whereas the average tariff does not incorporate the revenue from the sewerage service. For CUs not 100% metered, the average tariff is calculated by converting an assessed consumption of water using the rising block tariff.

LWSC, KWSC, MWSC, LGWSC and SWSC should have been able to cover their O&M costs at the average tariff.

4.06

3.61

2.89

3.73

2.39

3.07

2.35

4.16

2.40

4.13

3.5

2.8

0

1

2

3

4

5

6

Chart 12: Unit Operation Cost and Average Tariff

Unit Operation Cost 2012 Unit Operation Cost 2013

Average Tariff 2012 Average Tariff 2013

Sector Average tariff Sector avearge O&M cost

2.23


57

Chemicals are a key component of operating costs

Table 21 shows computation of a water bill for a metered domestic customer using the rising block tariff at different consumption volumes. This does not include fixed meter charge (range ZMW5 to ZMW8) or sewer charges (range 20% to 30% of water bill).

Tariffs differ because of the varying cost structures attributed to differences in the operating environments of CUs. However, it must be noted that the tariff per cubic meter within the 0-6m3 band is kept at or less than the unit cost of service delivery as a lifeline consumption although this is compensated in the higher bands of consumption.

Table 21: Computation of Rising Block Tariffs for Domestic Customer Water Bill

CU

2012 2013

Water Bill of 6 m3 (Low

consumption) (in ZMW)

Water Bill of 30 m3

(Medium consumption) (in ZMW)

Water Bill of 60 m3

(High consumption) (in ZMW)

Water Bill of 6 m3 (Low

consumption) (in ZMW)

Water Bill of 30 m3 (Medium consumption)

(in ZMW)

Water Bill of 60 m3 (High consumption)

(in ZMW)

LWSC 14 79 172 15 87 189NWSC 10 72 147 10 64 142KWSC 11 70 144 11 72 156MWSC 11 59 134 12 65 146LGWSC 8 54 132 9 62 149SWSC 13 88 197 14 108 251CHWSC 8 54 144 10 62 167NWWSC 13 118 289 13 118 290WWSC 8 51 114 14 85 190EWSC 10 79 181 15 129 309LPWSC 7 43 107 10 70 160Average 12 78 180 13 92 215

The reduction in the bill for 30m3 and 60m3 for NWSC was due to the CU’s decision to widen the bands from the second band onwards. SWSC and EWSC had average increases of about 25% and 40% respectively.


58

7.2.3.2 COST ANALYSIS

7.2.3.2.1 Operation and Maintenance CostsCost containment is very critical in service provision. The major operation costs (personnel, chemical and energy) have an impact on the efficiency of a CU. Other costs include maintenance, administrative costs and other direct costs such as operational consumables, services by sub contractors and vehicle running. Operational costs are analysed during tariff adjustments in order to prevent unjustified costs being passed on to the consumers. Table 22 and Chart 13 are used to analyse the cost of operation.

Red- negative trend, Green- positive trend ( major shifts only)

Table 22: Cost of Operation and Maintenance

Personnel Cost (in ZMW)

Chemicals Cost (in ZMW)

Energy Cost (in ZMW)

Other Cost (in ZMW)

Total Cost (in ZMW)

CU

2012

2013

% c

hang

e

2012

2013

% c

hang

e

2012

2013

% c

hang

e

2012

2013

% c

hang

e

2012

2013

% c

hang

e

LWSC 91,403,638 101,591,453 11.1% 2,585,617 1,858,225 -28% 17,612,040 23,715,482 35% 32,843,811 42,566,155 30% 144,445,106 169,731,316 18%

NWSC 32,180,263 34,137,195 6.1% 5,832,425 6,154,859 6% 11,993,514 11,812,997 -2% 13,288,481 14,404,556 8% 63,294,682 66,509,606 5%

KWSC 23,287,019 29,467,980 26.5% 2,308,809 3,284,653 42% 12,532,566 11,098,714 -11% 6,309,747 7,968,842 26% 44,438,141 51,820,189 17%

MWSC 27,586,139 30,893,811 12.0% 4,618,849 5,308,040 15% 11,363,879 9,885,860 -13% 18,454,984 28,262,660 53% 62,023,850 74,350,371 20%

LGWSC 10,049,015 11,292,442 12.4% 668,787 589,361 -12% 3,654,253 3,691,759 1% 3,719,321 4,863,887 31% 18,091,376 20,437,449 13%

SWSC 11,894,521 15,257,399 28.3% 1,405,105 2,205,103 57% 5,284,401 5,121,914 -3% 4,660,639 6,449,738 38% 23,244,667 29,034,154 25%

CHWSC 4,881,066 6,434,255 31.8% 295,577 304,035 3% 1,226,684 1,096,847 -11% 2,779,787 2,235,480 -20% 9,183,114 10,070,616 10%

NWWSC 7,428,487 8,877,539 19.5% 150,800 163,731 9% 614,660 622,062 1% 3,818,579 3,583,882 -6% 12,012,526 13,247,215 10%

WWSC 5,701,748 7,938,587 39.2% 172,163 159,183 -8% 1,183,281 1,200,807 1% 1,832,449 1,948,723 6% 8,889,642 11,247,299 27%

EWSC 8,255,730 11,452,253 38.7% 336,594 345,957 3% 998,478 1,082,420 8% 5,907,759 4,970,558 -16% 15,498,561 17,851,188 15%

LPWSC 2,732,333 4,581,848 67.7% 99,874 187,202 87% 615,744 671,541 9% 723,858 1,293,406 79% 4,171,809 6,733,997 61%


59

CUs operate under varying socio-economic conditions hence the differences in their cost structures. That notwithstanding, the proportion of the various cost elements to the overall costs and the trends are of essence. For certain cost categories such as chemicals, a reduction may not necessarily be desirable as this may mean a compromise in the quality of water rather than cost containment. Energy costs include electricity and fuel.

Personnel CostsLPWSC effected salary adjustments and improved conditions of service during the period. This was the first adjustment since the formation of the CU in 2009. KWSC effected high salary increases for unionised and non-unionised workers paid gratuities and the cost for casual labour increased by about 40%. SWSC increased salaries and improved conditions of service for all staff. CHWSC had an increase in other personnel related costs incurred as a result of being under Statutory Management. EWSC increased the number of unionised staff by 19. WWSC paid out long service bonus and increased salaries for staff.

Chemical CostsThe increase for KWSC was due to an increase in the volumes produced after the completion of the JICA project and the introduction of gas pre-chlorination at Kafubu dam. For LPWSC the increase was mainly attributed to the introduction of the use of aluminium sulphate in Mansa for the improvised sedimentation tanks. LWSC reduced due to efficient utilisation of chemicals due to newly installed equipment.

Energy CostsLWSC increased energy costs due to an addition of seven boreholes commissioned in Lusaka and Chilanga. KWSC has been running an energy efficiency programme supported by DTF which yielded positive results. The reduction for MWSC was mostly attributed to ZESCO power failures in all

the divisions and breakdowns of machinery at some plants for most of the first quarter of 2013.

Other CostsLPWSC increased maintenance, administrative costs and operational consumables. SWSC had an increase in other administrative costs. LWSC increased costs of operational consumables, vehicle running, repairs to administration buildings and licenses. The increase for MWSC was as a result of an increase in repair and maintenance costs due numerous pipe bursts and leakages. The cost for license for LGWSC increased significantly. CHWSC had a reduction in repairs and maintenance, vehicle running and local business travel costs. EWSC had a major reduction in operational consumables for water.

It is desirable that the proportion of costs attributed to personnel is not more than 40% of the total O&M costs. Only MWSC and NWSC were close at 42% and 48% respectively. WWSC had the highest proportion at 71%.

0%

20%

40%

60%

80%

100%

Chart 13: O&M Cost Breakdown 2013

Personnel Costs Cost of Chemicals Cost of Energy Other Costs


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7.2.3.2.2 Operation and Maintenance Cost Coverage by CollectionThis indicates the extent to which the level of collection is able to cover all the operational costs.

Benchmark for coverage of O&M Cost

Good >150%Acceptable 100 – 150 %Unacceptable <100%

The analysis in Chart 14 does not include income from other fees (such as penalties, meter charges, surcharges), Government and Cooperating Partners.

The sector average for operational cost coverage by collection dropped slightly to 110%. Generally the O&M costs increased while the collection efficiency remained the same. Only LWSC, MWSC, SWSC, NWSC and NWWSC were at or above 100% O&M cost coverage by collection. The sharp drop in the cost coverage for LPWSC was due to significant increase in personnel costs.

123%

100%91%

121%

79%

122%

64%

106%

82%76%

42%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Chart 14: O&M Cost Covered by Collection


113%

108%105%

70%77%

89%

70%

98%

52%

85%

71%62%

42%

92%

89%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Chart 15: Full Cost Coverage by Collection.



61

7.2.3.2.3 Operation and Maintenance Cost Coverage at 85% Chart 16 shows the cost coverage assuming an acceptable benchmark collection efficiency of 85% of the billed amount. CHWSC, LPWSC, EWSC and WWSC were below the benchmark. NWSC and KWSC would have covered their costs at 85% benchmark for collection efficiency.

7.2.3.2.4 Operational and Maintenance Cost Coverage by Total Revenue Charts 17 and 18 depict the financial performance of the CUs. Total revenue includes billed amounts, other income such as other fees, interest, subsidies and recurrent (income) grants.

Apart from LPWSC and WWSC the rest of the CUs were above 100% O&M costs by total revenue.

107%

123% 123%

118%

84%

107%

70%

93%

70%74%

39%

109%

107%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Chart 16: O&M Cost Coverage at 85% Collection.


117%

138%

147%140%

108%

141%

108% 109%

89%

108%

83%

135%

126%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Chart 17: O&M Cost Coverage by Total Revenue



62

Chart 18 shows the total cost coverage by total revenue. The total costs include depreciation and finance charges and the revenues include billed amounts, other income such as other fees (meters charges, connection/ reconnection and security deposits), interest, subsidies and recurrent (income) grants.

Only NWSC, KWSC, MWSC and SWSC covered their full costs with the total revenue.

99%102%

125%

103%

96%

113%

87% 87%

78%

88% 83%100%

102%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Chart 18: Total Cost Covered by Total Revenue


7.2.3.3 FINANCIAL RATIO ANALYSISIn addition to other ratios presented in this report such as collection ratio and cost coverage ratios, this section presents additional Profitability, Liquidity and Activity Ratios to provide more information on whether each CU is applying its assets in an efficient and profitable manner. Three major Ratios appropriate to WSS sector are analysed as follows:

• Liquidity RatiosThe Current Ratio – Which is the ratio of current assets to current liabilities: it indicates a company’s ability to satisfy its current liabilities with its current assets

Current ratio = Current assets/ current liabilities

• Profitability RatiosThe Net profit Margin – Which is the ratio of net Income to Turnover and indicates how much of each Kwacha of Turnover is left over after all expenses.

Net Profit Margin = Net Income/ Turnover

• Activity RatiosThe Fixed Asset Turnover – Which is the ratio of Turnover to fixed assets, the ratio indicates the ability of the company’s management to put the fixed assets to work to generate sales.

Fixed Asset Turnover= Turnover/Fixed assets


63

Current Ratio NetProfitMargin Fixed Asset Turnover

CU 2012 2013 2012 2013 2012 2013

LWSC 1.86 1.70 7.00% -1.00% 0.56 0.68

NWSC 1.27 0.66 12.40% 2.60% 0.89 0.21

KWSC 1.74 1.46 26.00% 20.00% 1.58 1.75

MWSC 0.79 1.05 13.90% 3.30% 0.52 0.61

LGWSC 1.29 0.79 -3.70% -1.40% 2.30 10.01

SWSC 0.63 0.69 19.46% 25.40% 0.18 0.19

CHWSC 1.19 0.61 -5.60% -7.60% 0.23 0.39

NWWSC 2.78 1.59 -2.98% -13.57% 0.22 0.33

WWSC 1.42 2.15 -22.90% -13.50% 0.19 0.20

EWSC 1.20 0.95 -0.38% -4.40% 1.97 0.37

LPWSC - - -16.80% -20.00% - -

For Current Ratio, a ratio of 1 to 3 is acceptable for the water sector and indicates that a Company is able to meet its financial obligations partially or in full as they fall due. From the ratios calculated in Table 23, it is evident that almost all the CUs have to work hard to ensure that their current ratio improves.

The Net Profit Margin for each CU shows that all CUs apart from Nkana, Kafubu, Mulonga and Southern WSCs recorded negative Net Profit Margins indicating that they made losses. A positive ratio would indicate that there were more than enough finances to cover all expenses for the period under review. CUs need to devise cost cutting strategies and improve turnover to improve the ratio.

Some CUs such as LPWSC, WWSC, EWSC and KWSC were yet to finalise the valuation process of the assets that were handed over by the Shareholders at formation resulting in under/over statements of fixed assets. LGWSC and NWSC recorded a huge increase in their fixed assets for the year under review due to capitalisation of new assets from the water supply improvements projects undertaken in the two service areas. CUs are expected to ensure that all their fixed assets are adequately used to increase their turnover. A high Fixed Asset Turnover ratio indicates that a Company is putting its assets to work to generate sales. All CUs generally need to work hard to ensure that fixed assets are not just idle but are being used to generate more sales.

7.2.3.4 INVESTMENT AND CAPITAL ExPENDITUREA total K250 million was allocated to the WSS sector in the 2013 budget for maintenance and upgrading of the water and sewerage infrastructure in urban and peri- urban areas through water and sanitation utility companies, out of which only K68 million (27%) was disbursed.

Table 23: Financial Ratios

Table 24: Annual Investment requirements and disbursements

2012 K' Billion

2013 K' Billion

National Budget 27.698 32.212

Total Budget for WSS 0.242 0.885

WSS as a % of National Budget 1.5% 2.7%

GRZ contribution 0.242 0.477

Total Urban WSS Investment Requirements 1.3365 1.573

Derived from: 2012 Yellow Books, Budget Speeches 2012 and 2013, National Urban Water Supply and Sanitation Programme


64

7.2.4 STAFF EFFICIENCY INDICATORS

These measure the output of personnel in relation to various aspects of operations such as billing, connections and personnel costs.

7.2.4.1 Human Resource DevelopmentChart 19 shows the qualifications of personnel in the sector.

The total number of staff in the sector increased from 2,898 to 3,011. LGWSC and NWSC had the highest increase in the number of staff by 20 and 28 respectively.

The proportion of staff that had basic education reduced from 40% in the previous period to 35%. The proportion of staff that were degree and diploma holders remained at 22%. Certificate holders made up 43%.

7.2.4.2 Staff per 1,000 ConnectionsThis indicates the number of employees servicing 1,000 connections. The computation does not yet include sewer connections. However, it includes all staff on one-year contracts.

Staff efficiency can be measured as “staff per 1000 connections” (Chart 20). CUs must endeavour to keep the staff per 1,000 connections within the acceptable benchmark to be efficient.

Benchmark for staff per 1,000 water connections (Cluster 1)

Good 5Acceptable 6-8Unacceptable >8

Benchmark for staff per 1,000 water connections (Cluster 2 and 3)

Good 9

Acceptable 10-14

Unacceptable >14

MWSC, NWWSC, WWSC and LPWSC improved in the number of staff per 1,000 connections. Only EWSC had declining staff efficiency. In Cluster One, only LWSC did not meet the benchmark. However, all CUs in Cluster Two and Three met the acceptable benchmark.

The combined staff efficiency for water and sanitation is derived from total number of staff divided by the total number of water and sewer connections assuming that same time is spent on a water and sewer connection. The CUs in Cluster One had better staff efficiency because of their large sewerage networks as shown in Chart 21.

0%

20%

40%

60%

80%

100%

Chart 19: Personnel Qualifications

Basic Education Certificate level Degree/Dip. Level

838 360 308 355 204 330 196 109 113 143 56


65

7.2.4.3 Billing and Average Personnel Cost per Staff per MonthBilling per staff per month is the billing attributable to one member of staff per month. On one hand, a higher figure indicates better staff efficiency. On the other hand, average personnel cost per staff per month reflects the cost attributed to each staff. Charts 22 and 23 must therefore be analysed together.

Ideally, the billing per staff per month must be higher than the average personnel cost per staff per month meaning that what the CU pays each staff must be lower than what the revenue that staff is bringing into the company. The desirable trend in the sector is for billing to cover at least three times the personnel costs in order to cover other cost categories.

For CHWSC, the reduction was due to the increase in the number of staff while for KWSC there was an increase in the number of staff and a slight reduction in billing.

10

76

7

109

12

10 1010

12

0

5

10

15

20

Chart 20: Staff per 1,000 Water Connections

2012 2013

7

43

4

7 7

12

9 10

9

12

0

5

10

15

20

Chart 21: Staff per 1,000 Water and Sewer Connections

2012 2013

21.222.2

20.3

24.2

8.29.2

3.5

14.1

6.89.1

4.6

0

5

10

15

20

25

30

Chart 22: Billing/Staff/Month

2012 2013


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Table25:ObservationsonStaffEfficiency

CU

No.

of S

taff

Staf

f/100

0 w

ater

co

nnec

tions Av. Personnel

Cost/Staff/MonthZMW

Billing/Staff /Month

ZMW

Collection/Staff /Month

ZMW

Staff Cost in relation to Billing

and Collection

LWSC 838 10 10,103 21,185 20,788 0.48

NWSC 360 7 7,902 22,230 15,387 0.44

KWSC 308 6 7,973 20,283 12,690 0.52

MWSC 355 7 7,252 24,228 21,133 0.32

LGWSC 204 10 4,613 8,242 6,593 0.62

SWSC 330 9 3,853 9,229 8,963 0.42

CHWSC 196 12 2,736 3,534 2,743 0.85

NWWSC 109 10 6,787 11,080 10,759 0.54

WWSC 113 10 5,854 6,845 6,768 0.83

EWSC 143 10 6,674 9,105 7,921 0.73

LPWSC 56 12 6,818 4,627 4,223 1.51

As depicted in Table 25 ,all the CUs need to improve the revenue base and collections. LWSC, NWSC, NWWSC, MWSC and LGWSC improved the coverage of personnel costs from billing by between 9% and 33% .

An indicator for Staff Cost in relation to billing and collection has been introduced and calculated as 0.6 x (Average Personnel cost per staff per month/Collections per staff per month) +0.4 x (Average Personnel cost per staff per month/Billing per staff per month). The desirable target for the sector is to have a combined weighted average of 0.4 or 40%. The average for the sector was 0.54.

NWSC and MWSC covered thrice their personnel costs from billing.

10.1

7.9 8.0

7.3

4.6

3.9

2.7

6.8

5.96.7 6.8

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Chart 23: Average Personnel Cost/ Staff /Month

Av./staff/month 2012 Av./staff/month 2013

Average 2012 Average 2013

7.25

6.22


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7.3 CORPORATE GOVERNANCE AND MANAGEMENT INDICATORS

Adherence to good corporate governance enhances performance of the CU. It is the role of the Board and management to steer the utility in the strategic direction of the company and thus achieve its objectives.

In order to assess the performance of the Board and Management, it is important to focus on corporate decisions and expenditure on the Boards of Directors. The Boards of Directors (BoDs) for all CUs were appointed by the Minister of Local Government and Housing in May 2013. This was after the CUs had operated without BoDs from November 2011. It is therefore worth noting that most of the BoDs only begun sitting in the third quarter of 2013, thus, some corporate documents may not have been approved before this time.

7.3.1 Performance of the Boards

The performance of the Boards was based on the number of Board meetings held, the key decisions made during the meeting and budgetary control as shown in Table 27.

Budgetary ControlBudgetary control is one of the key functions of the Board. A budget variance of ±10% is acceptable. Only Kafubu and Western had negative budget variance beyond the acceptable limits. The rest of the CU had positive variance which was also outside the acceptable limit of 10%. There is need for the Boards to ensure strict budget adherence so as to avoid eroding the tariff.

Board MeetingsBoard Meetings should be held once a quarter and costs maintained within 1% of the total O&M for big CUs ( Cluster 1) and 1.5% for the smaller ones (Cluster 2 and 3). WWSC, MWSC and LPWSC held more than the acceptable number of meetings despite the Boards being instituted during the latter half of the year. Nevertheless, all CUs were within the acceptable limits for board expenses except for Luapula and Western WSC.

Status of Implementation of Strategic PlanIt is the role of the Board of Directors to ensure that the CUs achieve the targets set out in their strategic plans. Hence monitoring of the implementation of the strategic plan should be done regularly. Most CUs were on course with implementation of their strategic plans.


68

Good Corporate Governance principles must be upheld in the sector

Table 26: Corporate Governance Indicators

CU

Approved Corporate Documents Full Board Meetings

Strategic plan

Approved Budget

Annual report with audited

accounts

Investment plan Attendance Meetings

heldMeetings planned

Total Board expenditure

as a % of O&M costs

Budget variance against

approved

Major Decisions of the Board

LWSC √ √ √ √ 100% 3 4 0.1% 12.0%Approved a number of company policies, Audited accounts for 2012 and budget for 2014

NWSC √ √ √ √ 99% 4 4 0.1% 13.0%Approval of 2013-2015 Strategic plan, Audited accounts for 2012 and budget for 2014

KWSC √ √ x √ 100% 4 4 0.3% -82% Approved company structure and budget for 2014

MWSC √ √ √ √ 94% 6 4 0.16% 38.2%

Appointed Board committees and approved corporate documents such as audited accounts and budget

LgWSC √ √ √ √ 100% 3 2 0.7% 20.0%Approved company structure, Audited accounts for 2012 and budget for 2014

SWSC √ √ √ √ 100% 3 2 0.6% -0.2% Recruited Managing Director

CHWSC x √ x x 99% 2 2 0.5% 25.0%

Approval of the annual plans & budget, approval of appointment of new external auditors to redo audit for 2011, declared water supply in Mpika as a disaster

NWWSC √ √ √ √ 100% 2 2 0.5% 33.9% Approved corporate documents

WWSC √ √ √ x 99% 8 4 1.5% -23% Approved Accounts for 2011 and 2012 and 2014 budget

EWSC √ √ √ √ 99% 2 2 0.50% 12.0% Approved 2014 budget and a number of policies

LPWSC x √ x √ 100% 5 4 1.7% 42.0%

Approved various company policies(Budget, HIV/AIDS, Finan-cial etc), renewed contract for MD, approved organisation structure


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7.4 QUALITY OF SUBMITTED INFORMATION

As part of the license conditions, all service providers are required to submit an annual report timely and with accurate data via an information system developed by NWASCO. All the CUs submitted their reports in time except for NWWSC and CHWSC. This was despite the change in the reporting period but with a deadline to submit being a month after the period under review.

Note:Allsubmitteddataischeckedforaccuracyandcompleteness.Wheredataisfoundtobeotherwise,verificationsaredonewiththeCU,aswellaswithdatacollected during inspections. The data presented in this report are therefore complete and accurate.

Table 27: Quality of Submitted Information

Utility

Quality of submitted information in the NWASCO Information System

The Annual Report Remark

Lusaka WSC Fair Timely. Minor clarifications required.Nkana WSC Good Timely.Kafubu WSC Good Timely.Mulonga WSC Good Timely.Lukanga WSC Good Timely.Southern WSC Good Timely.Chambeshi WSC Poor Late. Major clarifications required.North Western WSC Good Late.

Western WSC Fair Timely. Minor clarifications required.Eastern WSC Fair Timely.Luapula WSC Good Timely.


70

Submitted data is verified during inspections in the field

8

PERFORMANCE OF

PRIVATE SCHEMES

Comparative Performance of Private Schemes

8.1 INTRODUCTION

The Private Schemes are companies that provide WSS services primarily to their employees. The WSS services are run as an auxiliary function but not on a commercial basis. There are currently seven licensed private schemes:

• Lafarge Cement• Kaleya Small Holding • KCM-Nampundwe• Maamba Collieries • ZESCO• Zambia Sugar• Kafue Sugar

It should be noted that ZESCO operates three Schemes at Kafue Gorge (Lusaka Province), Itezhi Tezhi (Central Province) and Victoria Falls (Southern Province).

The process of handing over operations of Maamba Collieries Scheme to SWSC was completed with a Memorandum of Understanding signed between the two parties in November 2013.

The regulatory performance requirements for Private Schemes are minimal, relating mainly to service level issues of coverage, hours of supply and water quality.

Table 28: Performance of Private Schemes

8.2 COVERAGE

The overall coverage for Private Schemes’ serviced areas was about 97%. All Schemes apart from Maamba Collieries had 100% water service coverage.

8.3 HOURS OF SUPPLY

The average hours of supply were still at 24 hours for all Private Schemes except Maamba Collieries and ZESCO that had 10 hours and 20 hours respectively.

8.4 WATER QUALITY COMPLIANCE

All the private Schemes met the benchmark for water quality except for Kafue Sugar and Zambia Sugar Plc. Kafue Sugar has since put in place measures to monitor the quality of water supplied. Zambia Sugar Plc had challenges in meeting the required numbers and quality standards for residual chlorine and bacteriological tests.

WSS Sector Report 2013

Private SchemePopulation in Service

Area

Coverage %

Hours of Supply 2012

Hours of Supply 2013


2012


2013

Lafarge Cement 3,087 100 24 24 91% 96%

Kaleya Small Holders 3,625 100 24 24 97% 97%

KCM - Nampundwe 5,723 100 24 24 98% 99%

ZESCO 20,740 100 20 20 97% 95%

Maamba Collieries Limited 26,651 90 12 10 100% 95.9%

Zambia Sugar Plc 17,087 100 24 24 89% 85%

Kafue Sugar 420 100 24 24 - -

Total 77,334

72

9

CONCLUSION

It is without doubt that the WSS sector has recorded progressive trends over the past 10 years. NWASCO continued to improve regulatory instruments to ensure quality, affordable and sustainable WSS service delivery to the urban dwellers of Zambia.

More indicators were added and some of the existing ones refined to better portray the performance of the sector and expose the challenges that are inherent in the CUs. The creation of new districts has created an opportunity for accelerating service delivery in the rural parts of Zambia in a quest to ensure WSS service delivery to all, as stipulated in the vision 2030.

Commercial Utilities made strides in changing the face of WSS service delivery as was evident in the improvements noted for most performance indicators. However, more emphasis is needed on sanitation service provision to ensure that it catches up with the provision of water. Adherence to the Service Level Guarantees and Agreements also generally improved amidst challenges of power outages and unavailability of adequate water resources in some parts of the country.

It is envisaged that the information contained in this report will be used by various stakeholders to make informed decisions on actions to be taken to avert the sector challenges thereby facilitating an enabling environment for sustainable service delivery and improved quality of WSS service to all Zambians.

Conclusion WSS Sector Report 2013

74

164 Mulombwa Close, FairviewP.O. Box 34358, Lusaka- ZAMBIA

Tel: (+260) 211 226941-2 / 977790138Fax: (+260) 211 226904

E-mail: [email protected]

Urban and Peri-Urban Water Supply and Sanitation Sector Report 2013

10 Over

Years

of Regulating WSS service provision

NATIONAL WATER SUPPLY AND SANITATION COUNCIL