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Water
and
Sanitation
Program
An international
partnership
to
help
the poor gain sustained
access
to
improved
water supply
and
sanitation services
ndependent Water
and
Sanitation Providers
in
African Cities
West and Central Africa
Region
Bernard Collignon
(Hydroconseil)
Marc Vézina (IRC)
HYDROCONSEIL
IRC1
Eggfl
WORLD
BANK
INSTITUTE
Deutsche Geseüschaft
für
Tgchnische
Zusammenarbeit (GTZ) GmbH
on behalf
of the
Federal German Ministry
for Economic Cooperation
and Development
ts*
\m
Independent
water and
sanitation
providers in
African cities...
Ubiquitous independent
providers...
Í
When walking through the
low-income neighborhoods
of large African cities, one is
struck by the presence of
countless small artisans going about
their business to perform the most basic
of public services: delivery of water and
removal of sanitation waste.
Whether they are operators of
standpipes or public toilets, water
carters, resellers of water, or latrine
cleaners, these self-employed individual
entrepreneurs and small businesses are
the ones who distribute water for
domestic use and perform sanitation
services for most families in these
neighborhoods. Though the water they
sell may be drawn from the city's piped
water network, these private operators
rarely have any official status. Most of
the time they work for themselves,
independent of the city's water agency
or concessionaire and of the modern
formal sector. In the case of sanitation,
they are virtually the only providers,
since piped sewerage systems are
virtually non-existent in sub-Saharan
Africa.
Mostly unregulated and untaxed,
they belong rather to the non-formal
sector of the economy which
employs 70% to 90% of all urban
workers in Africa.
In contrast to para-statal or
multinational companies that seek
new urban service concessions, these
independent entrepreneurs reap no
monopolistic benefits or rents and
provide a public service free of state
subsidies. They must win their
customers' loyalty and maintain their
equipment on a daily basis. They must
be ready to innovate and adapt in order
to stay in business in this competitive
market. These women and men provide
a public service without any subsidy.
Such independent providers were the
subject of surveys carried out in 10 sub-
Saharan African countries by local
private contractors during July 1998
and July 1999 under the supervision
of the World Bank-UNDP Water and
Sanitation Program (WSP) and the
World Bank Institute, with funding from
the Netherlands and Belgium and
dissemination funds from Germany
(GTZ). The purpose of this study was to
gather information about independent
water and sanitation operators and to
bring them together to better
understand their roles and their needs.
The countries covered were Benin,
Burkina Faso, Côte d'lvorie, Guinea,
Kenya,
Mali,
Mauritania, Uganda,
Senegal,
and Tanzania. This booklet is
a summary of the main report,
available separately.
...who deserve to be
encouraged because they
fulfill the water and
sanitation needs of most
poor families...
Independent providers respond to the
needs and preferences of a clientele
composed primarily of low-income
families. How do they manage to do
this for customers who are said to be
too poor to pay for city water? How can
they provide service coverage to areas
where city water authorities and
concessionaires hesitate to invest?
Most of the urban poor live in
unplanned or poorly planned
subdivisions, often located at the city's
edge,
on difficult terrain (steep hillsides
and valleys) and in undeveloped infill
areas.
These marginal locations
are very difficult to serve through
the usual water distribution and
drainage networks.
The answer is that independent
providers' services are demand-driven
and they deliver them the way
their clientele needs them: reliably,
and in small quantities which remain
affordable when family funds
are tight and income irregular.
The clients they serve have historically
been of little interest to the large
concessionaires, whose primary
objective is to make a profit.
Independent providers serve many
functions in the provision of water and
sanitation services. Some manage one
or more water points or sell individual
buckets of water from door-to-door.
Others are hired to clean out latrines
and pump out septic tanks. Still others
operate small piped water systems and
even,
in Cotonou (Benin), a sewage
treatment plant.
These activities which provide a main
source of income for tens of thousands
of low-income families and generate a
volume of business comparable to that
of the city water companies, despite the
fact they must survive in a difficult
environment, are perceived as
operating outside the mainstream, and
are often subject to the hostility of
Government authorities.
...and are very much in
tune with market-oriented
values now being
promoted
Neither state monopolies, nor
their privatized successors, the
concessionaires, nor non-profit
organizations have been able to keep
up with the burgeoning growth of
Africa's cities, nor the pace of rising
demand for water and sanitation
services in the low-income urban areas.
Even the largest international water
enterprises have had to admit that they
have found it difficult to respond to
demand in squatter
areas,
as
witnessed
by the low coverage of piped water
networks in African capital cities such
as Bamako (Mali), Cotonou (Benin),
and Dar es Salaam (Tanzania). Piped
sewerage is but a distant dream for
90%
of urban Africans.
Over the past 10 years, the gap in
access to basic public
services,
including
water and sanitation, has widened
between low- and high-income urban
areas and between different social
classes. To cope with this problem,
Governments have generally continued
to rely on the tried and tested, standard
issue solution: a city-wide piped network
run by a single, monopolistic operator.
But this monolithic solution does not
match the wide variation in demand for
these services by a wide variety of
households, living in very different
environments and using different
amounts of water that vary
with
the time
of day and from season-to-season.
Moreover, the democratic spirit
sweeping across Africa in recent years
has created pressure to share
responsibility, has put decentralization
at the heart of political debate, and has
spurred the practice of delegation of
responsibility for public services.
Supporting independent providers is
perfectly in tune with current institutional
and economic trends in Africa, and it
does not imply a choice between city-
|T^^^™I
wide entities and independent
operators. The central and municipal
Governments' roles are rather to see
that these 2 kinds of providers
complement each other in the market-
place and that fair competition is
encouraged. Given the choice, users
can be trusted to judge for themselves
where to take their business.
How water
gets delivered
In all African cities, the
primary network, run by a
monopolistic city-wide
operator, coexists with a wide
variety of independent providers who
resell this piped water, either by
delivering it to households by cart or
truck, or by selling it from fixed locations
such as standpipes or cisterns.
There are at least 4 means of
household water delivery:
• Water carriers carry buckets from
door-to-door, a hard day's work for little
money, and one that seems to be
disappearing over the last few years,
possibly due to successful competition
from handcarters.
• Handcarters are particularly in
evidence in Ouagadougou (Burkina
Faso) and Conakry (Guinea): young
men who push handcarts that
can
carry
from 100 to 200 liters of water. Despite
the high rates charged, this service is
frequently used by poor families who
wish to avoid using precious time to
fetch their own water.
• Larger quantities of water — up to
500 liters —
can
be delivered by carters
using animal traction: a horse (as in
Dakar, Senegal) or donkey (as in
Nouakchott, Mauritania). These are
more frequently seen in the cities of
Africa's Sahel region, where draft
animals are raised in abundance and
are not exposed to tsetse flies.
• Water truckers who serve larger
customers by filling the cisterns of villas
and office buildings are more often
seen in Nairobi (Kenya), Nouakchott
(Mauritania), and Kampala (Uganda),
where the flow of piped water
is unpredictable.
There are also several types of
resellers working from fixed sales
locations, and their relationships with
the water company vary:
• Standpipe vendors are small
entrepreneurs who operate a
standpipe installed by the city
water concessionaire.
• Licensed water resellers are micro-
entrepreneurs who have contracted to
resell water piped to their homes and
who may carry out some network
extension investment to do this, as in
Abidjan (Côte d'lvorie).
• Unlicensed household water
resellers are not seen as professionals,
although they do provide water to
a major share of the market in
several cities.
How sanitation
services are
delivered
Í
ln most African cities, most
households — 70% to 90%
overall,
and virtually all poor
households — deal with their
own waste by building their own latrines
or septic tanks or hiring others to do
so.
Since the public sector is generally
not involved in this area, private
providers dominate the market and
offer a range of services tailored to
customers' needs and incomes.
• Septic tank cleaners service
masonry septic tanks and those in
SELF-CONTAINED MINI-NETWORKS IN KAMPALA (UGANDA)
The operation of standpipes in Kampala is generally left to women and older people, whose family members lend
a hand. Most standpipe vendors serve about 200 to 300 users from a single kiosk. While this arrangement appears
uncommercial on the surface, it provides a base from which small water distribution networks have grown.
The more enterprising of these vendors have taken over the management of several kiosks, with a market area
covering a whole community or "village" within the peri-urban area. And some community user associations have
built and operate illegal extensions fed by water from the existing network. However, the water company does not
encourage these initiatives: it requires a security deposit of US$
1
25 and installs its own new connections without
consulting kiosk managers. Hence the incentive to construct completely free-standing water networks, unconnected
to the city system. One independent provider, Kalebu Limits, founded by an engineer and his wife, a marketing
specialist, now operates both city standpipes and 5 small self-contained water networks. They started with a single
network, fed by water pumped from a well with an electric motor, and financed the second one from the profits on
the first. The company also manages a group of 8 coin-operated standpipes connected to the city network.
residential areas, using suction trucks generally offered by pairs of
young
men
of
6 to 10 m3
capacity. from
the
same neighborhood. Theirs
is
• Manual cleaning services
are an
unpleasant
and
unsanitary trade,
Percent
of
households serviced
by
public water networks
,,{
in
10
African cities
|
|
unserviced
by
public services
^^| coverage
by
standpipe
(20
l./day/cap.)
^^| coverage
by
connections
(10
persons/con.)
Cotonou
Ouagadougou
Abidjan
Conakry
Nairobi City
Bamako
Nouakchott
Kampala
Dakar
Dar Es Salaam
0%
20%40%
60%
80%
100%
ter sector employees
by
type
of
employer
in 6
African cities
Truckers
Water utilities
Standpipe managers
Private tanks
handcarters
Bobo Dioulasso
Nouakchott
Ouagadougou
Dakar
Bamako
Port-au-Prince
2000 4000 6000
Number
of
employees
8000
practised with simple tools (shovel,
bucket, rope)
and
generally without
protective clothing.
It
is still the best way
to deal with latrine sludge
in
many
unserviced areas, where roads
are
too narrow
for
trucks
and
where
unlined septic pits
are not
suited
to
mechanical cleaning.
• Masons
who
build latrines
do not
generally specialize
in
this work. Most
masons who build houses can also build
a latrine
at the
same time, unless
the
household chooses simply to dig a ditch.
• Public toilets
and
showers
in the
larger cities have been entrusted
to
independent private operators under
leasing
or
concession arrangements
with
the
municipal authorities. Such
facilities
may be
found
in
most large
public gathering places such
as
train
stations, markets, stadiums,
and
universities. These small enterprises
are
able
to
offer
a
large range
of
services
in response
to
user demand: toilets,
showers, drinking water
sales,
and even
tables where coffee and tea are served.
• Drain
and
latrine ditch cleaning
constitutes
an
important market
for
small enterprises, whether they
use
suction trucks
or
manual labor.
The importance
of independent
operators
Independent distributors
are the ones who provide
water to most families in
African cities, especially in
squatter and illegal
settlements
The city water authority's
or
concessionaire's main
market is the homes, offices,
and businesses with
individual water connections.
But
they
also install and supply water to
standpipes, an invaluable source of
water to poor families, who can buy
water there in small quantities as their
limited means permit,
Standpipes are a good way to link a
large water supplier and the smaller
distributors who are better suited to
provide service at the delivery end,
especially for poor consumers.
Standpipes are a very efficient means
of water distribution, especially in cities
with limited water resources. The table
below shows that the city with the
best coverage of water service is
Ouagadougou (Burkina Faso), despite
its low per capita rate of use (34 liters/
day/capita), because the water
company distributes a considerable
share of its water (35%) via standpipes,
which serve 60% of households. In
contrast, cities such as Cotonou
(Benin), Conakry (Guinea), and Dar es
Salaam (Tanzania), where few
standpipes are in operation, overall
coverage is much lower.
Standpipe water distribution is
especially efficient in Nouakchott
(Mauritania), where individual
standpipe vendors are active investors
in the system, constructing their own
storage tanks to increase their volume
of trade in spite of frequent piped
water cut-offs.
The standpipe, therefore, constitutes
a good way to link a large water
supplier and smaller providers who
are better suited to provide good
service at the delivery end, especially
for poor consumers.
Independent
providers
employ 70% to
90%
of water
workers
In terms of employment, the
role of independent
providers is even more
important than in terms of
volume of business. The water sector
employs 2,000 to
8,000
people in the
capital cities studied, or about 1% to
TURNOVER OF
Turnover of W.Utility
% of total turnover
Turnover: Standpipes
Turnover: Carriers
Turnover: Tanks
Turnover: Trucks
Turnover: Private
Boreholes
% of total turnover
Turnover by capita
Population
Niangologo
(Burkina )
:
12,000
Kay
e s
(Mali)
55,000
Bobo
Dioulass o
(Burkina )
:
450,000
Nouakchott
(Mauritania)
700,000
Ouagadougou
(Burkina )
1,000,000
MAIN OPERATORS IN THE WATER SECTOR
1,000 $
%
1,000 $
1,000 $
1,000 $
1,000 S
1,000 $
%
$/cap/year
22
32%
12
35
0
0
0
6B%
5.8
76
3Î%
73
95
0
0
0
69%
4.4
2,447
6,756
67%
j 75%
415
774
0
0
0
33%
8.?
286
1,481
190
267
0
25%
12.8
13,333
64%
1,309
6,000
0
0
42
36%
20.7
Dakar
(Senegal )
2,000,000
79%
2,669
148
0
0
0
21%
6.7
2/0Q0JQp_Ql
MiuuliBEBfflM
16%
226
629
4,839
3,032
645
:j
84%
5.6
2%
of the labor force. The vast majority
of these 70% to 90% work for
independent providers, and the
remaining
30%
to
10%
for the city water
companies. The carters are the most
numerous, followed by the standpipe
vendors (see chart).
The economic position of
independent providers
Independent providers earn from 20%
to 70% of water sector revenue and the
city water companies from
70%
to 30%,
depending on the city. The independent
Water rates charged by urban standpipe vendors
in 8 African cities (US$/m3)
2,50
2,00
1,50
1,00
0,50
0,00 BeninBurkina
FasoCôte
d'lvorieGuinea Mali Mauritania Senegal Uganda
Purchase price I
|
Minimum sale priceI Maximum resale price
Water sector annual business turnover by type of
employer in 6 African cities
| | Connection fee
^1 GDP per capita
Benin
Burkina Faso
Côte d'lvorie
Guinea
Mali
Senegal
3060 90
USS/month
120150
providers dominate in Port-au-Prince,
a Haitian city of 2 million residents with
conditions similar to the African cities
studied,
and in 2 smaller Sahelian cities,
Niangologo (Burkina Faso) and Kayes
(Mali). But even where the city-wide
utility dominates, the independent
providers earn a substantial share of
water income, from one-fifth to one-
third (see chart).
Water operators
with innovative
solutions,
entrepreneurial
spirit, and
investment
capacity
The study found that in all
the African cities surveyed,
there are many examples of
independent water providers
who have built new partnerships with
local Governments and with water
supply companies in order to offer
services which complement those that
the water companies can offer.
• At the edge of Nairobi (Kenya), a
woman who has owned a borehole for
15 years is managing a piped network
which carries this water to her
neighbors. To distribute water to those
not connected to her network, she has
purchased and manages a few water
tankers that deliver door-to-door.
• Unemployed university graduates
in Dakar (Senegal) are operating a
standpipe that they built with their own
money. They are reinvesting their
earnings in other money-making
activities, such as rental of a sound
system and video showings.
• In Cotonou (Benin), where public
standpipes do not exist, households
connected to the water network
have built standpipes, extending the
pipes up to a kilometer over difficult
terrain (lagoons).
• In Abidjan (Côte d'lvorie),
households with water connections who
resell to their neighbors don't need to
carry it across the street, they use flexible
plastic tubing to do the ¡ob. Reselling
water to neighbors is commonplace in
all African cities, but Côte d'lvorie's
water company is the only one that has
chosen to legalize the practice and
establish contracts with the resellers ¡n
order to improve delivery. Such resellers
are estimated to number in the
thousands and they provide water to
more than 500,000 users. Though the
water company is considered one of the
best in Africa, these resellers are the
only source of water for the
many households in the squatter
neighborhoods who cannot afford an
individual connection. The practice of
reselling household water is growing in
Nouakchott (Mauritania), a measure of
the rapid growth of demand for water
by low-income households.
• A former public servant in Conakry
(Guinea), who began selling water
from a handcart after losing his ¡ob,
today owns 20 carts, which he
purchased one at a time with the profits
he earned. He now rents his carts to
other vendors.
• In Ouagadougou (Burkina Faso)
and Nouakchott (Mauritania),
standpipes serve primarily as water
points for thousands of handcarters
(7,000 in Ouagadougou), who then
take the water into neighborhoods
beyond the reach of the water network
(see chart for standpipe water rates).
A users' association in Bamako (Mali)
decided to delegate the operation of
its water network, including fee
collection,
to an individual vendor. The
vendor is responsible for day-to-day
operations and pays a rent of CFAF
80 per cubic meter of water delivered.
The users' association is responsible
for network maintenance and repair.
• In Gerou, a town of 15,000
residents in Mauritania, more than
50 km of water pipe extensions were
financed by a young go-getter who has
been operating this network for the past
4 years. Though his concession licence
The solution is not to limit or
prohibit independent provider
activity in the delivery of water and
sanitation services, in the name
of protecting monopoly privilege
or social ¡deals. Bringing
independent providers into
partnership with other actors can
lead to new ideas, sources of
energy, and even sources of
financing.
Reducing the obstacles
faced by independent providers
will increase their commitment to
working in partnership.
gives him the authority to distribute
water but no contractual guarantee of
continued ownership of any
infrastructure he may build, he has
financed and built 13 km of secondary
pipeline and 40 km of household
connections serving 1,450 households.
With an annual turnover of about
USS 35,000, how did he finance this
investment, amounting to about
US$ 250,000? By organizing the users
themselves, in groups of about a dozen
households, to save enough to pay for
construction as it was carried out. This
ability to raise funds is all the more
remarkable because the house
connection fee charged by the water
company is considered the main
obstacle to extending the network, since
it typically represents several months'
income for poor families (see charf).
• A group of masons in
Ouagadougou (Burkina Faso) has
chosen to move into a new market
niche by specializing in the cons-
truction of an improved latrine design
proposed by a program to promote
household sanitation. Households
wishing to take advantage of the
program,
which subsidizes
20%
to 30%
of the construction cost, must hire
masons registered with the water
company. In this way, participating
masons have embarked on a new
commercial strategy based on an
innovative product.
• In Dakar (Senegal), hundreds of
individual latrine cleaners go from door-
to-door in the poorest neighborhoods
with their
shovels.
People call them baye
pelle, or 'old men with a shovel', a term
dating from earlier times when laid-off
construction laborers would roam the
streets with their
shovels,
looking for odd
jobs.
Though theirs is a thankless task
and they are looked down
on,
they play
a critical role in maintaining sanitation
systems in areas where the lots are too
small to dig new latrine pits every year.
• A small septic sludge collecting
business in Bamako (Mali) was able to
buy its first truck with a loan of CFAF
10 million.
Two
years later, the company
was able self-finance the purchase of a
second truck; a third truck will be bought
as soon as profits allow. The trucks are
bought second-hand at a quarter of the
price of a new truck. Maintenance and
repair expenses are high but spread out,
an important consideration for
a business that cannot afford to
take chances.
This picture is not specific to
African cities but is found also in
Latin American, Asian, and Middle
Eastern cities.
• In Paraguay, 400 aguateros have
built and managed piped drinking
water networks, after obtaining a licence
to do
so
from the authorities. Their water
rates are lower than those charged by
the water company (though the latter
receives subsidies), and they still
recover all operating costs and enough
of a profit to self-finance both the
initial construction and to density and
extend it.
Evidence of
advantages to
consider...
These stories indicate that
independent providers in
African cities can:
• offer flexible, convenient
services, perfectly tailored to the needs
of
a
diverse clientele, who are not served
by the standard options available from
city water companies;
• mobilize investment capital required
to build piped network
extensions,
mini-
KAMPALA (UGANDA)
CITY COUNCIL
SIMULTANEOUSLY
ENCOURAGES —
AND DISCOURAGES —
PRIVATE
MANAGEMENT OF
PUBLIC TOILETS
Three private operators signed
contracts with the Kampala
city Government to provide
municipal public toilets. There is
a high volume of business: in the
city center, an 8-to¡let facility is
used by 70 persons an hour,
11 hours a day. But at the same
time,
the expansion of toilet
facilities is hindered by the high
cost of repairing the existing
facilities, the high cost of water
delivered by the water company
(US$ 2 per cubic meter of water
for a facility where 16 cubic
meters are used per day on
average), and the imposition of
a monthly municipal tax of US$
1,000 after 3 years of operation.
And then there are the frequent
cuts in water provision. The
owner of one of the private
operators, KKM All Services Ltd,
decided to rehabilitate a well
near his facility in order to have
access to water from a more
reliable source than the city
network. He bought a pick-up
truck fitted with a water tank to
transport water from the
well,
and
undertook to maintain the drains.
He earns about US$ 15,000 a
year from his business, 70%
of whose clientele are
poor households.
ST^^^l
networks, and sludge treatment
stations, and to purchase vehicles and
pumping equipment;
• set fees to recover costs for water
services, even in neighborhoods where
this was previously thought to
be difficult;
• reinvest their profits in order to
expand service delivery.
If these entrepreneurs find that their
market is no longer as profitable, or
detect a temporary or permanent
softening in demand, they can
quickly shift their efforts to match the
change or expand their involvement in
other activities.
They can work within the limitations
of their clients' circumstances, for
example, by adapting their payment
requirements to take into account the
daily and weekly variations in income
of many poor households.
Independent providers are also
appreciated for their commercial
sensitivity to client feedback, The user
is respected and has no difficulty
making herself heard if service quality
is not satisfactory. The user is treated
as a valued client, is spared
administrative hassles, and has
not far to go to be in touch with the
neighborhood water vendor.
Because the sector
is
very competitive,
users have some choice between
different vendors and this competition
keeps value for money
high.
...and preconceived ideas
to re-examine
While users themselves are satisfied with
the level of service and value for money
provided by independent entrepreneurs
in otherwise unserved areas, others
have raised objections to the
involvement of independent providers
in the water and sanitation sector. Their
criticisms may be summarized as
follows:
"Water supply has always been a
public monopoly."
"Water resellers charge much more
than the city water companies."
"Community systems can be run by
the community, without involving private
operators who do not deserve the fees
they charge."
"Vendors outside the system sell poor
quality water."
"Private providers push the public
water suppliers out of the market."
None of
these
statements
is
supported
by the results of this study, and each
needs to be re-examined to see why it
is not
valid.
Monopoly is not
per se a guarantee
of quality service
In Europe, city water monopolies have
emerged relatively recently, following a
period of 400 years of evolution and
fierce competition. City-wide monopoly
systems make sense in the context of
fully industrialized economies where the
desired product is fairly standard:
individual water and sewerage
connections for each residence. But
where this model has been transplanted
to African cities, it encounters a much
wider variety of customers. Many urban
residents need to buy water in small
quantities and are not interested in
f^^^^
filling out forms or dealing with billing
systems. This clientele is more
comfortable buying water from
independent local providers.
Independent providers'
fees match the conditions
of demand from poor
households
Comparing water rates charged by
independent providers with those
charged by water companies fails to
take account of the fact that if water
companies were to extend their
networks into the unplanned areas
where low-income residents live, they
would be forced to raise their rates to
reflect the difficult nature of the terrain.
Also,
the product they would be
offering would not be the same as that
offered by the independent providers,
who sell smaller quantities and deliver
them door-to-door. This group of
customers is justified in its choice of
independent providers, who earn very
little for the often backbreaking work
they do (US$
1
-4 per day on average).
Administrative and
technical constraints
imposed on independent
providers increase the
price of water paid
by the poor
Constraints intended to "protect
consumers" impose additional costs
on independent providers, which are
passed on in the form of higher
prices. Otherwise, independent
providers raise their prices only when
water is scarce, alternative sources are
limited,
or there is collusion among
operators. There is a legitimate
regulatory role to be played by the
public sector, but the objective should
be to promote competition rather
than limit the number of providers.
Non-profit and
community-based water
and sanitation delivery
arrangements can lead to
hidden costs
Projects carried out with external
funding in African cities have often
given responsibility for managing
community services such as water
delivery to non-profit groups. In cases
where these groups are not successful,
their mistakes have proven costly in the
long run. Where they are successful, the
heavy burden of sustaining service has
driven them to seek some means of
remuneration, whether overtly or by
creative accounting practices.
Much time and effort might have been
saved in these cases by giving
management responsibility to
professionals from the outset and
assigning supervision responsibility
to representatives chosen by
the community.
For example, in
Mali,
neighborhood
Users' Associations subcontract
financial auditing and technical
assistance to a Water Supply
Advisory Unit, which, for a fee of
CFAF 20 per cubic meter of water,
periodically audits the accounts and
w
prepares a financial statement.
This gives the associations a source
of reliable financial data and perfor-
mance indicators.
Water quality from
independent providers is
very similar to that of
water companies
The quality of water provided depends
primarily on treatment at the source, in
particular chlorination. Good water
quality depends on the treatment of
water as it leaves the city reservoir, not
at the retail distribution level.
The involvement of the
private sector can support
and promote the delivery
of public water services
Private sector involvement is not
necessarily synonymous with anarchy
nor does it keep public water companies
out of the market. On the contrary,
strong private sector involvement
at the distribution level requires
strong public sector performance
at the production level, in terms
of good production-level performance
indicators, good long-term coordination
with distributors, and ability to
guarantee a stable and favorable
regulatory environment.
Overcoming
obstacles
Exclusion from public
works contracts
Many independent entre-
preneurs, including those
involved in the water and
sanitation sector, would like
to be able to participate in bidding for
civil works contracts to extend piped
networks or to build pits and tanks, and
for service contracts to collect sludge
or clean drainage ditches. They are
kept from participating by the large
size of job lots and sometimes by
backroom deals between a few large
contractors and the civil servants
awarding the contracts.
Lack of access to this market
marginalizes the small contractors
because such public contracts,
especially externally financed ones,
make up the lion's share of work in the
sector — more than 80%. The lack of
competition in bidding hurts not only
the independent operators but also the
consumers and those paying for the
works, since it results in higher costs for
works and services.
Unprotected investment
Independent providers must be careful
to limit their risks by undertaking only
short-term investments that can be
recouped in a short time, generally less
than 2 years. They do this not out of a
lack of professionalism, but deliberately
and out of necessity, in order to protect
their investment. For example:
• In Cotonou (Benin), most water
network extensions have been made in
unplanned settlement areas, where
land may be expropriated without
compensation from one day to the next.
• In Bamako (Mali), sludge collection
trucks are sometimes confiscated under
vague pretexts and their owners
can never be sure they will recover
their property.
• In Kampala (Uganda), the builders
of 2 small water distribution networks
on the city's edge stand to lose
everything when the water company
decides to move its own network into
the area and sell water at its highly
subsidized rates.
Proposals for
improving the
institutional
context
Í
Independent providers are
not looking for handouts or
grants and often do not
need loans. They do not
expect technical training or social
security benefits. What they would
like most of all is a fair institutional
and legal environment that would be
favorable to more investment and
expansion of activity on their part,
in response to their clients' demand.
They would also like better coordi-
nation with city authorities and
water companies-
Strengthen legal security
Independent providers avoid
long-
term investments because their
property is unprotected when located,
as it is for the most part, in unplanned
SHORTAGE OF
PUBLIC SPACE
The absence or scarcity of
approved dumping areas for
sludge in most of the cities
imposes extra transport and
time costs on the truckers who
collect sludge, which raises
costs to the users. There is also
a need for more authorized
spots for parking while
collecting sludge.
In Bamako (Mali), the lack of
municipal land on which to
build public latrines and
showers is a major constraint
to increasing supply in areas
where demand is high (train
stations, markets). There is no
lack of private operators ready
to finance construction and
handle facilities management.
settlements. This is a major obstacle
to the extension of water supply
services in these settlements, where
expropriation is always a possibility.
Their current vulnerability to punitive
fines and harassment by the
authorities increases their operating
costs and raises the rates they
must charge.
Official recognition and
contractual relationships
with civil authorities
More than anything else, independent
providers are unhappy with the lack of
recognition from municipal and water
company officials for the value of the
services they perform. Coordination
among public and private actors would
clarify the points of mutual interest and
the obstacles to better service delivery,
such as lack of sludge dumping sites.
Users would benefit from better
coordination through a reduction in
costs and better service coverage.
S^^^"'
Transparency and
competition
It is in the consumers' interests for
the authorities to stimulate competition
and transparency, which are driving
forces in ensuring responsiveness to
consumer demand and in keeping
prices low. The public sector has an
important role to play in opening public
contracting to small entrepreneurs,
keeping the market open, avoiding
excessive licensing requirements, and
promoting the financial audit of
water operations.
Recognition of
professional associations
In a number of cities, private operators
have established professional and
trade associations through which
they can address common problems
and advocate common interests.
These include:
• Mali's Union of Water Suppliers
(UEAEP-Mali)
• Côte d'lvorie's Association of Water
Resellers (AREQUAPCI-Côte d'lvorie)
• Benin's Union of Sewerage Entities
(USB-Benin)
• Ouagadougou's Association of
Standpipe Managers.
These associations can play a key
role in improving professional
practices, promoting technical
innovation,
and integrating private and
public service systems.
Municipal authorities can support
such associations by recognizing their
legitimacy and negotiating with them
to establish fair conditions for doing
business. But they should take care not
to confer any sort of exclusive status that
would tend to encourage cartel-like,
price-fixing business practices.
Some
"improvements"
to be avoided
Special loans
Before setting up new
credit facilities for the
private water and sanitation
sector operators, it is a
good idea to check whether lack of
credit is a local constraint. In many
cases, good credit mechanisms
already exist.
Unproductive constraints
The performance of independent
providers depends on their ability to
respond and innovate in response to
market changes. It is counterproductive
to impose administrative constraints on
their activities, such as banning retail
activity near standpipes.
Support that encourages
monopoly behavior
The smooth functioning of the market,
especially competition between
providers, is the best way io keep
providers on their
toes,
ready to improve
services and respond to demand.
Market mechanisms are a powerful
force in this direction, and studies in all
10 capital cities have shown that such
mechanisms have resulted in the
selection of the fittest enterprises,
capable of delivering essential services
to low-income clients while making a
small profit.
Their success has only been possible
through a gradual process of
eliminating all but
the
most capable and
innovative providers. It is important to
trust the market process and avoid the
temptation to interfere.
Better as the enemy
of good
Many project funders (donors, NGOs,
twin or sister cities) have a tendency to
underestimate the role of existing
independent providers or
to
criticize them
as charging too
much,
having
low
service
standards, or operating illegally. Their
vision of the ideal provider can be an
obstacle
in
working effectively
with
those
who are already doing the ¡ob.
Distrust of the
profit motive
When it comes to delivering service
to low-income groups, many
development organizations, in
particular NGOs, have a tendency to
favor associations or community-based
entities in preference to commercial
operations. This preference is not
appropriate in the context of African
cities,
where most households live in
low-income areas, and where basic
services such as water and sanitation
have long been delivered by
independent providers because there
was no other viable alternative. An
aversion to working with private
enterprises has led some funders to
support short-lived associations that
lacked any real community roots and
vanished without a trace, after having
en|Oyed project-related tax benefits.
Unsupervised oversight
Oversight mechanisms are sometimes
proposed for the purpose of improving
service quality (water quality, rates
charged,
hygiene practices). Experience
has shown that the quality of
oversight depends very much on the
independence of the overseer and the
presence of democratic supervision. In
the absence of community scrutiny,
oversight mechanisms can quickly be
subverted by corruption and be used
to support monopolistic behavior by a
few enterprises.
Conclusion
Í
Unplanned settlements,
where a growing number of
urban Africans reside, are
not likely to be connected to
the main city water networks in the near
future.
They will continue to depend on
independent providers for delivery of
water and sanitation services.
Over the past 10 years, the water
and sanitation sectors have been
opened to private financing, and
central authorities have transferred
much responsibility for water and
sanitation services to local authorities.
The
environment has become favorable
for the recognition and support of
independent providers, and for
new contractual arrangements
between independent providers and
public authorities.
For those who choose to look beyond
standard leasing or licensing formulas
and who are willing to give independent
providers an incentive to invest in
all forms of facilities drainage,
standpipes, suction trucks, and sludge
processing plants — there are a
number of options. Constraints which
limit the flexibility of operations are
to be avoided, including administrative
procedures, expropriation without
compensation, punitive fines and
harassment. An effort should be made
to limit the extent of unfair competition
from subsidized public enterprises.
This does not mean a reduction in the
public sector's role, but rather a
refocusing on regulatory functions in line
with the interests of consumers:
• Financial and technical audit.
• Creation of coordination mechani-
sms at the municipal and submunicipal
levels, with a new look at regulations to
make them more realistic and practical
in light of actual conditions in the
unplanned peri-urban areas.
• Increasing professional awareness
and networking through the formation
of trade and professional associations.
Competition is a much better
way to ensure fair rates and
efficient service than
administrative supervision
The country-specific surveys on which the study is based may be obtained by
contacting the individual consultants, who carried out many interviews and
encouraged networking and formation of professional associations of independent
providers.
Jean Eudes OKOUNDEBenin
Mahamane Wanki CISSE Burkina Faso and Mali
Amadou DIALLO Côte d'lvorie and Guinea
Jean Marie SIE KOUADIO Côte d'lvorie
Mohamed FARID
Mohamed MOKTAR
Mohameden FALL
Bill WANPERA
Daouda SAKHO
Adam SYKES
Kenyq
Mauritania
Uganda and Tanzania
Senegal
Tanzania
229 36 02 25
setem.ben@intnet.bj
223 24 72 08
wanki@spider.toolnet.org
224
41
19 82
225 42 80 02
74 25 52
pipal@arcc.or.ke
222 25 94 37
Tenmiya@toptechnology.mr
aquacon@infocom.co.ug
221 827 60 88
daouda@enda.sn
sykes@cats-net.com
Co-sponsored
by the
Water and Sanitation Program and
WBI,
with bilateral funding
from Germany (GTZ), the Netherlands, and AGCD Belgian Cooperation Agency
[or Canada's AGCD and the Belgian Cooperation Agency].
|f^^^!
Water and Sanitation Program
The World Bank
Water Supply and Sanitation Divisi
1818 H Street NW
Washington DC 20433
USA
Tel:
+1 (202) 4739785
Fax: +1 (202) 5223313, 5223228
E-mail: info@wsp.org
Internet: http://www.wsp.org
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Tel:
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E-mail: wspaf@worldbank.org
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Tel:
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Fax:(225)22441687
E-mail: wspaf@worldbank.org
June 2000
The Water and Sanitation Program is
an international partnership to help
the poor gain sustained access to
improved water supply and
sanitation services. The Program's
main funding partners are the
Governments of Australia, Belgium,
Canada, Denmark, Germany, Italy,
Japan,
Luxembourg, the
Netherlands, Norway, Sweden,
Switzerland, and the United
Kingdom;
the United Nations
Development Programme, and The
World Bank.
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