Presentation- Tenth Roundtable on Financing Water- Side Event 2b

1. Development of Performance Improvement
Pathways for Water and Sanitation Service
Providers
23rd November 2023
Gilbert Akol ECHELAI
2ML Consulting/Losai Management
KEY TAKE-AWAYS FROM THE STUDY

2. PRESENTATION OUTLINE
1. Background to the assignment
2. Key Findings of the Study
3. Proposed Performance Improvement Pathways

3. BACKGROUND

4. BACKGROUND
The overall goal of the
assignment:
Develop Innovative
Performance
Improvement tools (utility
performance pathways)
Specific objectives
• Undertake case studies of Water and
Sanitation Operators (Utilities) on their
performances, key challenges and
development patterns leveraging on
the case studies
• Develop key drivers for improved
performance based on experience
from the selected operators
• Develop appropriate operating
environment for implementation of the
performance improvement tools
Objective

5. BACKGROUND
Scope - Taxonomy
Classification Description Countries
Ownership National/State Owned Uganda, Burkina Faso, Senegal,
Tunisia, Mali, Nigeria, Ghana,
Privately owned Cote D’Ivoire, Senegal, Tunisia,
County/Region Kenya, Zambia
Municipal Dept/Unit Namibia, Egypt, Malawi
Geographical
Coverage
National Uganda, Mali
Urban in a
region/State
Nigeria, Kenya, Zambia, Malawi,
Egypt
City based Namibia
Services
Offered
Water Only Egypt, Nigeria, Cote D’Ivoire, Mali,
Ghana
Water and Sanitation Namibia, Uganda, Burkina Faso,
Kenya, Zambia, Malawi
Sanitation Only Tunisia, Senegal
Multi-Utility (Water,
Sanitation, Electricity
and solid waste)
Gambia

6. Emerging global threats :-climate change, global pandemics, and urbanization
Increasing pressure on already inefficient water and sanitation service provision
In Africa, access to piped water in urban areas reduced from dwindled from 43% in 1990 to
33% in 2015 – worse in some countries e.g. Nigeria
Poor performance by the service providers, limited coverage, poor service, low revenues, HR
capacities, etc,
In the urban areas access to sanitation is worse – low sewerage connection and non-sewer
sanitation
Sanitation sub-sector is riddled with scattered and overlapping mandates, split across MDAs
Low investment in infrastructure
Rationale
Climate change
Urban population on
the increase
Access to
Sanitation – very
low
BACKGROUND

7. KEY TAKE-AWAYS

8. KEY TAKE-AWAYS
Focus Area Key Finding Focus countries
Enabling Environment 13 Utilities have the policy and legal frameworks
(87%), although many not fully implemented
Gambia, Egypt, Algeria, Burkina Faso
30% of utilities have a regulator Mali, Ghana, Kenya, Zambia, Gambia
Strategic Focus Strategic focus: Mission, vision, core values,
business plans, strategic plans and performance
objectives defined only for some utilities
CAMWATER, AWCO in Egypt, ONEA
in Burkina Faso, ONAS in Tunisia, etc
Oversight. Many utilities have guidelines for board
appointment, but few boards are evaluated
NCWSC Kenya, ONEA Burkina Faso,
ONAS Tunisia, LWSC Zambia
Limited implementation of rewards and sanctions
systems across the utilities
NWSC, NCWSC, LWSC
Enabling Environment

9.  Computed based on population served through
piped supply, yard taps, water kiosks & multi-
dwelling units as % of total population in service
area.
 To align with SDG 6, African utilities are working
towards 100% water coverage;
 Increase coverage of improved supply to
100% in both urban and rural areas
 Increase coverage of piped water supply to
100% of the urban population
 The average water coverage for analyzed utilities
is 86%
 Only LWSC, ONEA and SODECI have exceeded
the average.
0
10
20
30
40
50
60
70
80
90
100
Ghana Malawi Cote d'Ivore BurkinaFaso Uganda Zambia Kenya
GWCL BWB SODECI ONEA NWSC LWSC NCWSC
Water
Coverage
(%)
Utilities
Water coverage
Service Coverage
KEY TAKE-AWAYS

10. KEY TAKE-AWAYS
WSSP NRW MR PC/TC EC/TC CE OCCR
Burkina Faso`s ONEA 29.8% 100% 26% 19% 93% 107%
Kenya`s NCWSC 45% 100% 62% 3% 95% 102%
Ghana`s GWCL 46.3% 87% 19% 21% 97% 78%
Zambia`s LWSCL 46% 70% 61% 20% 86% 121%
Malawi`s BWB 50% 100% 22% 40% 105% 80%
Gambia`s NAWEC ND ND ND ND 100% 57%
Nigeria`s KADSWAC 45.7% 16% 41 24% 55% 85%
Ivory Coast`s SODECI 21% 100% 17% 13% 90.4% 81%
ONAS Tunisia 36.8% ND ND ND ND ND
Uganda`s NWSC 35% 100% 41% ND 96.2% 127%
Sample Average 36.6% 36% 19.88% 9 93%
Study Recommendation (Good) <20% 100% 30-35 N/A >95% >150%
Study Acceptable Recommendation <25 100% N/A >95% 100%-150%
Unfavourable >20% <100% >35% N/A 100% <100%
Commercial Operations

11. Except for Tunisia the rest have less
than 50% of sewerage connections
Solution for most Countries is non-sewer
sanitation
Institutional Gaps of urban sanitation –
lack of institutional home or duplication
Utilities not fully embraced Non-Sewer
Sanitation
KEY TAKE-AWAYS
Services for the
Urban Poor

12. 77%
23%
Resilience budgets
Utilities with a resilience budget Utilities without a resilience budget
8%
54%
15%
23%
Responsibility for resilience measures
Not specified Member of top management
Separate department (1-4 staff) Fully fledged department (>5 staff)
Enabling Environment
KEY TAKE-AWAYS

13. PERFORMANCE
IMPROVEMENT PATHWAYS

14. Government must define clear, coherent policies Covering both Water and Sanitation
Clear institutional arrangements for urban water and sanitation service delivery – ownership of
service provider, geographical coverage and type of services
Granting autonomy to the utilities – financial, management and technical
Give guidance on how cost achievement will be achieved
Clarity on the role of the private sector
Definition of how urban WASH services will be regulated
Who sets and approve tariffs
PERFORMANCE PATHWAYS
Enabling Environment

15. Parallel pipes
7%
Looped piped
network
7%
Multiple water
treatment plant
and
transmissions
36%
Adequately
trained repair
crews
22%
Water quality
surveillance
activities
7%
Additional/back
up storage
tanks
7%
Arrangements
for emergency
water supplies
7%
Parallel pipes
7%
PERFORMANCE PATHWAYS
Resilience and Services for the Poor
PRO-POOR SERVICES
• Pro-poor tariff policies
• Alternative pro-poor service delivery
initiatives
• Delegated service management
• Appropriate technologies and novel
approaches

16. Item KPI Sub-KPI Weight
Enabling environment 10
Existence and implementation of a policy framework Policy 3
Clear definition of roles and responsibilities for different institutions Institutional 3
Existence of regulatory framework but also autonomous agency Regulation 2
Legislation defining or establishing different institutions such as regulator,
service provider etc, Legislation 2
Utility Performance 35
Organization and Strategy 8
Existence of a professional Board of Directors, appointed through an open
mechanism and periodically evaluated Board appointment 2
Performance contracts for Chief Executive and Management Team Performance contract 3
Existence and implementation of business plans and strategic plans B. plans/strategies 1
Utility under a performance contract with Government and reviewed annually Contractualization 2
Technical Operations 10
Service Area receiving water and number of hours of supply per day Coverage ratio 2
NRW ≤ 25% NRW 4
Water Treatment Efficiency and Treated Water Quality Water treatment 3
Percentage of service area covered by the Distribution Network Distribution 3
Commercial services 10
Billing Efficiency > 100% Billing efficiency 3
Collection Efficiency > 95% Collection efficiency 4
Metered customers > 90% Metering ratio 3
PERFORMANCE PATHWAYS

17. Human Resources Management 7
The proposal is to have at least a staff per 1,000 connections of 2. Staff per 1,000 connections 3
How much of the staff move on annual basis for whatever reason Staff retention 2
The performance pathways has proposed an average age of 35 Average age 2
Financial Management 20
The proposal is to have an average staff cost of ≤35% of O&M Costs. This affords the utility the scope to free
up resources for system maintenance, rehabilitation, and replacement. Personnel costs 4
This should at least be within 140%-150% of the O&M costs. The latter indirectly reflects the Revenue
Collection Efficiency of ≥90% (i.e., revenue salvaged from current billed monies by utilities. Cash Flow Operating Costs Coverage. 6
The OCCR should be ≥150%. This affords the utility higher credit rating, as it shows that the tariff employed
by the utility, enables it to meet more than just operational expenses, but also equips it to service debt
repayments. Besides the latter, the utility is well positioned to meet some of its capital expenditures. OCCR 7
This should be in the range of 1-1.75, because as a measure of liquidity, it indicates the utility`s expenses
that constitute an investment. Since these investments create useful assets, a higher ratio (i.e., greater than
1) means the utility is investing more of its money in long-term value. However, a higher ratio means that a
utility is committing lots of its monies into projects and has the potential of impinging on the utility`s liquidity
position. If the utility expends a lot on projects, it runs the risk of tying revenue in fixed cost structures,
rendering itself cash-strapped to finance operations.
CapEx Vs OpEx 3
Sanitation 15
Sanitation coverage for piped & non-piped systems (separately for pop. served), as % population in service
area 5
Safely managed sewage & faecal sludge, as % vol. of wastewater/sludge generated in service area 7
Zero Open Defecation 3
Water and Sanitation Services to the urban poor 10
Existence of a pro-poor unit for serving the urban poor 5
Innovative solutions i.e., delegated management, existence of water ATMs etc 3
Time taken to access water from point water sources, (hours). 2
Utility Resilience 10
Existence of utility long term resilience strategy and financing mechanism 3
Existing of an Emergency Response Unit 3
Budgetary provisions for utility resilience 4
TOTAL 100

18. THANK YOU!!