Urban and Peri-Urban Water Supply and Sanitation Sector

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.......................................................................... vi 1 Summary of Performance for CUs for the Year 2013 ..................... 1
1.1 National Urban Water Supply & Sanitation Coverage ................2 1.2 Operating Conditions of CUs ......................................................3 1.3 Overview of Sector Performance................................................4 1.4 CU Performance Ranking...........................................................5 1.5 Rewarding CEO’s Performance .................................................7 1.6 Comments on Performance for each CU ...................................8
2 Providing WSS Services in Newly Created Districts .....................11
3 Service Provision to the Low Income Areas ..................................15 3.1 The Devolution Trust Fund (DTF) .............................................16 3.2 Support to the CUs ...................................................................16 3.3 Impact on the Ground ...............................................................17 3.4 Future Outlook ..........................................................................18
4 The National Water Supply and Sanitation Council (NWASCO) ...19
4.1 Introduction ...............................................................................20 4.2 Implementation of Third Strategic Plan ....................................20 4.3 Monitoring Service Providers....................................................21 4.4 Sanitation Surcharge ................................................................22 4.5 Tariff Approvals .........................................................................22 4.6 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
CU Commercial Utility
DTF Devolution Trust Fund
EWSC Eastern Water and Sewerage Company
GF General Fund
KfW Kreditanstalt für Wiederaufbau
LA Local Authority
MCA Millennium Challenge Account
MDGs Millennium Development Goals
MLGH Ministry of Local Government and Housing
MWSC Mulonga Water and Sewerage Company
NRW Non Revenue Water
NWASCO National Water Supply and Sanitation Council
NWSC Nkana Water and Sewerage Company
NWWSC North-Western Water and Sewerage Company
ii
PEF Performance Enhancement Fund
SUWASA Sustainable Water and Sanitation in Africa
WASAZA Water and Sanitation Association of Zambia
WDM Water Demand Management
iii
WWG Water Watch Group
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 Council 164 Mulombwa Close, Fairview P.O. Box 34358, Lusaka- ZAMBIA Tel: (+260) 211 226941-2 / 977790138 Fax: (+260) 211 226904 Toll free for Complaints: 5252 E-mail: [email protected]
www.nwasco.org.zm
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
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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
2013
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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 2013 Total Urban Population 5,760,541 5,965,575 Total Urban Population Served with Water
4,812,279 5,006,510
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
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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
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1.3 OVERVIEW OF SECTOR PERFORMANCE
The performance of CUs in nine key performance indicators is summarised in Table 3.
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T
r
e
n
d
Collection
efficiency
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: • Increase in water supply and sanitation services coverage • Increased metering ratio • Improvement in water quality compliance
Challenges/Concerns: The sector challenges included the following: • Drying of dam reservoirs and low yields from boreholes
due to climate variability and anthropogenic activities • Frequent breakdown of machinery due to dilapidated state
of infrastructure and/or lack of maintenance • Frequent power outages • High water losses
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 Weighting 1 Water Quality 20 points 2 Collection Efficiency 20 points 3 Metering Ratio 15 points 4 Hours of Supply 15 points 5 O+M Cost Coverage by Collection 15 points 6 Non Revenue Water 10 points 7 Staff Efficiency 10 points 8 Water Coverage 05 points 9 Sanitation Coverage 05 points
Metering remains key to good service delivery
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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
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 Data Completeness 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
Staff Efficiency The best staff efficiency Mulonga WSC
Collection Efficiency 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 Performance CUs 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 3 LWSC 2 6 4 8 SWSC 3 4 3 1 EWSC 4 2 5 5 MWSC 5 3 2 2 NWSC 6 7 7 6 WWSC 7 8 11 11 LPWSC 8 10 9 10 LGWSC 9 5 6 4 KWSC 10 9 8 7 CHWSC 11 11 10 9
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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.
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LUSAKA WSC Operating 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 WSC Operating 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 WSC Operating 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.
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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 WSC Operating 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 WSC Operating 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 WSC Operating 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 WSC Operating 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.
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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 WSC Operating 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 WSC Operating 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 WSC Operating 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
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2
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
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Providing Water Supply and Sanitation Services in Newly Created DistrictsWSS Sector Report 2013
Commercial Utility Previous No. of Districts
No. of New Districts
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
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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
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3
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
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
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 Targets Mobilised as at
31st December 2013 (K ‘000)
Expenditure as at 31st December 2013
(K’000) Funding 193,569 137,950
Population covered as at
(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
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4
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 1 To 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 4 To 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 Inspections NWASCO 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.
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4.3.2 Status on the suspended license for ChWSC Chambeshi 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)
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
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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
Average % Approved Major Specfic Tariff Conditions for 2014 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.
Average % Approved Major Specfic Tariff Conditions for 2014 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
NWASCO WSS Sector Report 2013
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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 Models In 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 Exhibition The 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
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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 Groups Water 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 Boards The 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 Projects Sustainable 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.
NWASCO WSS Sector Report 2013
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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 of eradicating inefficiency.
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.
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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
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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
Clarifications if any
Within 1 Week send information to clarify issues or make adjustments
Start of process Community
Screening by NWASCO
1 Week
Pricing for Water Supply and Sanitation WSS Sector Report 2013
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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 Quality No. of tests carried out and test results within the national standards for drinking water.
SI 3 Service Hours Water supply hours per day and hours to attend to customers per week.
SI 4 Billing for Services Billing, meter reading sequences, conditions for payment of bills by the customer.
SI 5 Client Contacts Complaints 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 Unjustified Disconnections No. of unjustified disconnections and the compensation to be paid by the provider to the customer
SI 9 Sewer Flooding The 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 11 Support 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
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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 LPWSC SLG √ √ √ √ x √ x √ √ √ x SLA √ √ √ √ 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
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SI 2 Drinking water quality – Assessment through number of tests conducted and compliance to standard Due 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 LPWSC SLG √ 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 LPWSC SLG √ √ √ √ x x x √ √ √ x SLA 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
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SI 4 Billing for Services – Billing, meter reading sequences, conditions for payment of bills by the customer, metering ratio
NWSC MWSC KWSC LWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG √ 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 customers This 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 LPWSC SLG √ √ √ √ 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.
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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 – Minimum flow rate of 7 litres/min required at customer connection
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 LPWSC SLG √ √ √ √ √ √ 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 LPWSC SLG √ √ √ √ √ √ √ √ √ √ √ 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 Unjustified Disconnections – No. of unjustified disconnections and the compensation paid by the provider to the customer
SI 9 Sewage Flooding – The number of times sewage floods a connection per year < 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
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 CUs Each 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
Comparative Performance of CUsWSS Sector Report 2013
Table 12: Clustering of CUs
7.1.2 Clustering of Commercial Utilities CUs 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
7.2 PERFORMANCE ANALYSIS
7.2.1 OPERATIONAL INDICATORS The 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 Connections The 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
CU Total
Domestic 2013
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%
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
CU Total
Population 2012
Connections 2012
posts & Kiosks 2012
Connections 2013
public stand posts & Kiosks
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 access to adequate sanitation
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%
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.
Comparative Performance of CUs WSS Sector Report 2013
44
Table 15: Population Serviced with Sanitation
CU Total
Population 2012
Population Serviced
2012
Total Population
2013
45
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

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