Case for Effective Regulation and Service Delivery Acceleration

1. Case for Effective Regulation and Service Delivery Acceleration WISA Africa Water and Sanitation Zambezi Sun Hotel, Victoria Falls, Zambia Osward M Chanda Director –Nwasco 21st November, 2007

2. 11.5 Million Rural Urban 46% 54% 70% in low income/ Peri-urban area 66% 20% 3.7 Million EXTENT OF URBAN POOR IN ZAMBIA Leverage support to areas with maximum impact –PU

3. Separation Regulation/ Executive Functions WSS Separation Water Resources/ Water Supply and Sanitation (WSS) Devolution to Local authority And private enterprises Policy Framework 7 sector principles Full cost Recovery through user charges Appropriate Technology for local conditions Effective Institutions through HRD Increased GRZ Spending on WSS

4. Institutional Framework for Water Sector 1.Water Resources 2.Sector Leader MLGH Water Supply & Sanitation MEWD Parliament Municipality Regulated CU Private Private Private Zambian Company 49% participation on capital Management, leasing etc. contract Professional Service Providers

5. Clustering Service Providers 1 WSS Providers Urban Pop.:4.9M Served Pop: 3.3M (67%) Com. Utilities:10(90%) Municipality: 13(9%) Private Schemes:6 (1%) 1 Cross Subsidising between larger & smaller poorer towns through mergers Inclusion of poor urban areas - benefits of economies of scale

6. Turning Around Public Utilities Institutional Setup Delegate Operations Municipality Professional Providers Commercialised/PSP Gives sufficient Independence & Promote Professionalism SeveralCommercial Units Allows for Competition Independent Professional Regulatory Agency ENABLING ENVIRONMENT THROUGH REGULATION • Gradual tariff adjustment to cost covering levels • Clear Minimum Service Level Requirements with Targets • Support: performance management systems & Recruitment of Magt • Good Management Information System from Utility to Regulator Enhance good Corporate Governance

7. Challenges to Meeting MDG in UWSS Commercialise service delivery in the remaining 22 Local Authorities Realising that the Difference will be made in PU areas areas. Active Involvement of CUs in resource Mobilisation for investment Improved Corporate Governance Addressing the Human Resource issues WSS Inst. HAVE TO WIN THEIR RESPECT: Products & Quality of Service, Relationship

8. Power and Responsibility - Water + Sanitation ACT - Statutory Instruments - Minister of Water - High Court -Appeal Arbitration - Statutory not ministerial body - Own budget from fees - Transparent selection of staff - Private sector salaries - Reports to Parliament / MEWD Large Autonomy • - Personnel 16 • Fees 2% of provider’s Turnover • Part-time Inspectors Small size Lean Structure Institutional set-up of Regulation

9. Licensing of providers / SI Tools for regulation Determine service areas and key responsibilities Tariff negotiation Sustainability and efficiency Publication of sector reports Promote comparative competition / efficiency Trust Fund –urban poor Service to the poor Guidelines on Provision of services Minimum Service Level Business Plan Investment Plan Tariff adjustment Corporate Governance Reporting by provider Interactive Information System Baseline data on Urban poor WSS ACT 1997

10. 11 Indicators for Minimum Service Level (SI) SI 1 Coverage of Service Area 12 Years / 75 - 90% of Population SI 2 Drinking Water Quality 4 Years for sufficient testing SI 3 Service Hours 16-24 h/d continuity, opening of Kiosk 12h/d, pay stations 40h/w SI 4 Billing for Services 10 years for 100% metering SI 5 Client Contacts 4 years to response time targets SI 6 Water Supply Interruption and de-blockage of sewer Emergency supply after 48 h of interruption of water supply SI 7 Pressure in the Network 6 years 7 lt/min Min. Flow Compensation Payment SI 8 Unjustified Disconnection SI 9 Sewage Flooding Reporting on sewer flooding SI 10 Quality of Effluent 4 years for tests - programme SI 11 Support to Public Institut. 1 year for 100% metering

11. Annual Reporting of Performance +ve performance trends in CUs

12. Defining service area in the license/ jurisdiction of local authority Extending service delivery into low income areas is integral part of investment plan from providers Provider remains responsible for quality and tariffs of other players (NGO, communities) within licensed area Providers have to offer sufficient adequate outlets Kiosk – commercialized public stand posts ALLOCATING RESPONSIBILITIES FOR SERVICE PROVISION TO THE POOR Combine commercial and social goals !!! Involvement of Professional Provider in management of low-cost systems

13. STANDARDS FOR SUSTAINABLE SERVICE PROVISION TO THE POOR Devolution Trust Fund Basket Fund targetted at the Urban poor Over 700,000 Got access to water between 2003-2007 • Access, price and quality of Water are regulated • Low Cost Technology • Community Involvement • Vendors from Community • Water Sale by Volume; payment by quantity

14. Investments properly timed and targeted Need for good information system on performance Autonomous operation units (CU's) Set Targets for Performance Reward or Penalise Provider Coherent policy and legislation from the start Independent regulator - interest for the poor In Conclusion

15. Thank you for your Attention!