WATER SERVICES PROVIDERS ASSOCIATION (WASPA)

WASPA ANNUAL CONFERENCE , NAIROBI - SEPTEMBER 2011

ENG. DAVID ONYANGO

MANAGING DIRECTOR

KIWASCO

DATE: September, 2011

SERVICE TO THE POOR

THE CASE OF DELEGATED MANAGEMENT MODEL (DMM) IN

NYALENDA, KISUMU

Structure

1.0 Introduction2.0 Delegated management Model Concept 3.0 Implementation of DMM

• Mobilization & Project Goals• Construction • Selection, Contracting, & Training of MO• Tariffs & Operations of DMM

4.0 Benefits to KIWASCO & Customers5.0 Lessons Learnt 6.0 Challenges7.0 Conclusion

• Kisumu is Kenya's third largest city, with a population of around 520,000 people.

• 60% of the population lives in informal settlement

• KIWASCO is mandated to operate water and sewerage services in Kisumu Municipality covering an area of 297km2.

• KIWASCO is a limited liability company owned by the Municipal Council of Kisumu. Has been in operations since 2003.

1.0 Introduction

• Since inception, KIWASCO realised that 60% of its customers lived in the various informal settlements - Nyalenda being the largest – population of about 100,000.

• KIWASCO was losing over 80% of water produced and most of this was in the informal settlements.

• Residents in the informal settlements were noted to pay more than 10 times the cost of water in other areas leading to poor access.

• High incidences of water-related diseases reported e.g. Cholera, typhoid, due to poor water quality arising from leaks.

• Vandalism became a very serious problem due to lack of ownership of the water infrastructure in the informal areas.

2.0 Situational Analysis in Informal Areas (Pre-DMM)

• Given the situation it became apparent that a new approached be developed to tackle the problem.

• After extensive consultation, a new Model named Delegated Management Model (DMM) was thought to be an appropriate solution.

• So What is DMM?

So?...

• The DMM concept is a partnership between KIWASCO and the community in water service delivery

• It involves identifying resellers of water within the informal settlements and selling water to them in bulk through a master meter.

• The resellers referred to as Master Operators (MO) then meter and sell the water to the community at some profit.

• Master Operators collect revenue from their connected customers (community) and in-turn pay KIWASCO.

2.1 Delegated Management Model (DMM)

2.2 Delegated Management Model Pictorial

2.3 Relationships in DMM

Utility

MO(CBO, NGO,

Individual)

Consumer(Kiosk, Stand pipe, Individual)

Sells water in bulk to MO

Retails Water to consumers & maintains MO lines

Regulates service standards and price

Also arbitrates disputes

Pays for Water Consumed

Pays utility for water bought

• Extend Water supply lines into the informal settlements, to provide quality potable water at affordable prices

• Reduce water losses from KIWASCO main supply lines arising from illegal connections and vandalism

• To pilot a model capable of providing piped water to slums for replication in other parts of the city

• Extend Water supply lines into the informal settlements, to provide quality potable water at affordable prices

• Reduce water losses from KIWASCO main supply lines arising from illegal connections and vandalism

• To pilot a model capable of providing piped water to slums for replication in other parts of the city

3.1 Project Goals

3.0 Implementation of DMM in Nyalenda

3.2 Mobilisation & Outreach

• The concept was introduced to the community in meetings where the benefits were explained to:

o Leaders (Community & Political) o Consumers, and o Administration

• The community had a chance to interrogate the concept at these interactive gatherings. Some of the questions helped further refine the concept.

• At the end of community mobilisation, a project implementation committee was formed with representatives from the community, local administration and KIWASCO.

3.3 Construction

• This involved construction of 5No 50mm diameter Master Operators’ pipes running 600 meters into the settlements.

• On each line, 12No chambers with a capacity for 15No meters were constructed.

3.3 Construction

• Meter points were installed in the chambers

• The chambers are lockable and keys are in the hands of the MO

• Construction was done using local artisans and labourers under the supervision of the project implementation committee.

3.4 Contracting of Master Operators (MO)

3.5 Contracting of Master Operators (MO)

Added Advantage

• Bank Statement

• Gender sensitivity

• Plot ownership

3.6 Selection of Master Operators

• MO were selected in a two-stage process. Each stage intended to identify strong suitable CBOs, individuals, or associations capable of realising the project.

• The first stage:

Open invitation through the pressCommunity Vetting through Project Committee of all respondents

to confirm residence in locality.

• Second Stage

Interview by KIWASCO to elicit information on the group, its membership, qualifications, business experience, source of finance, experience in water sector or plumbing, etc

• The group that finally emerged top was selected to be the MO.

Prior to signing a contract, the selected MOs were taken through training by Kenya Water Institute (KEWI) on:Prior to signing a contract, the selected MOs were taken through training by Kenya Water Institute (KEWI) on:

3.7 Training of MO

The training lasted a week.

3.8 Contracting

•A formal contract was entered into between KIWASCO and MO. The contract defined rights, obligations and responsibilities for both parties.

Contract Covers:

• Asset ownership,

• O&M responsibility

• Tariff to be applied

• Regulation

• Asset extension

All Master Operators must charge the same rates as outlined in the tables below:

3.9 Tariffs

Water Consumption

KES

0-6 m3 180 (min flat rate)

7-20 m3 35 per m3

21m3 and above 50 per m3

Water Consumption

KES

0 -10 m3 400 (min flat rate)

11m3 and above 45 per m3

MO Domestic Tariff MO Kiosk Tariff

Other Costs Associated with Water Connection (Comparison of MO vs. KIWASCO)

Item MO prices (KES) KIWASCO prices (KES)

Meter rent 70/month 150/monthConnection Fee 1,500 4,000Deposit (Domestic)

1,000 (refundable) 1,800 (refundable)

Deposit (Kiosk) 5,000 (refundable) 10,000 (refundable)

• The first lines started operating in 2006 and 2 more lines added in 2008.

• 8No More lines to be added in 2011• During their operation the following progress has been recorded:

3.10 Operation of DMM

2008 2011Line Kiosks H. holds TOTAL Kiosk

sH. holds Total

1 9 65 74 39 60 682 17 17 34 14 215 2293 12 7 19 52 156 2084 16 19 35 - 68 685 22 4 26 20 41 616 - - - 30 52 827 - - - 3 62 65

76 112 188 158 654 781

One would observe a huge growth in household connections compared to kiosks.

•A recent evaluation of the project revealed that each kiosk serves about 50 households. Household population is estimated as 8 persons.

•The project serves about 64,000 people.

•There are however some 688 customers who are still served by KIWASCO directly

•NRW has reduced to about 6.8%

3.11 Billing & Collections

Year Billing Collections

2006 398,885 379,040

2007 1,139,425 1,038,130

2008 2,481,260 2,191,461

2009 4,290,783 3,935,910

2010 5,229,570 4,597,479

2011 5,429,690 5,006,489

4.0 Benefit of DMM to KIWASCO and Customers

• Improved system monitoring leading to reduction of Non-Revenue Water.

• Reduced tariffs, Penetration of services and Improved health in the informal settlements

• Created employment and enhanced business skills in the community

• Reduced staff-resident interface hence low opportunity for corruption

• Reduced costs to KIWASCO (Timely billing & collection)

5.0 Lessons Learnt Technical and managerial competence of MO are key to

successful sustainable operations of DMM

Community participation and support is central to ownership of DMM

Community mobilization in implementation offers an opportunity to marry technical solutions with social concerns.

Pilot projects require strong communication program during implementation and in post-implementation

Communication must have clear messages to galvanize the people and address emerging concerns.

5.0 Lessons Learnt continues Hand-holding and buck-stopping by the WSP is

essential at early stages of the operations

The contract should aim to equitably distribute and allocate risks between parties to the contract.

Entrepreneurial spirit is required in the MO

Need to provide financial incentive to the well performing MOs to spur growth

6.0 Challenges Resistance by some community members because of

disagreement with MO at personal level Lack of teamwork and transparency in some MO leading to

instability in management Lack of framework to deal with NRW from MO operations Continued unplanned nature of the informal settlements Some MOs have inadequate experience in financial management Occasional complaints of over-billing MOs debts to KIWASCO Lack of adequate infrastructure to allow transfer of all customers

to the same platform Elimination of remaining spaghettis

7.0 Performance of project against the goals

Extend Water supply lines into the informal settlements, to provide quality potable water at affordable prices – Achieved.

Reduce water losses from KIWASCO main supply lines arising from illegal connections and vandalism – Achieved.

To pilot a model capable of providing piped water to slums for replication in other parts of the city – Achieved.

7.0 ConclusionFrom Boutique to Mass market . . . The DMM was a success measured against its

goals It is a robust platform for service delivery to the

poor if properly planned and implemented. It is easily scalable to other informal settlements. It requires focused attention through pro-poor unit

to manage its operations. It can be blended with new technologies e.g

Pre-paid meters.

Thank you very much for your kind attention!