Impact from management and lease affermage contracts in water supply
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Impact from Management and Lease/Affermage Contracts in Water Supply . 1818 Society Water Chapter September 8, 2006 Klas Ringskog, World Bank consultant Mary-Ellen Hammond, Jr. Professional Associate Alain Locussol, Lead Water and Sanitation Specialist. Outline of Presentation .

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Impact from Management and Lease/Affermage Contracts in Water Supply

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Impact from management and lease affermage contracts in water supply

Impact from Management and Lease/Affermage Contracts in Water Supply

1818 Society Water Chapter

September 8, 2006

Klas Ringskog, World Bank consultant

Mary-Ellen Hammond, Jr. Professional Associate

Alain Locussol, Lead Water and Sanitation Specialist


Outline of presentation

Outline of Presentation

What triggered the study: the Delhi WSS project saga

The political economy of PSP in water supply

Case studies in the PPIAF study

Service coverage/quality before and after PSP

Efficiency of service before and after PSP

Sustainability of service before and after PSP

Lessons learnt


What triggered the study

What triggered the study

  • Delhi Water Supply and Sanitation

    • 15 million people; 1.5 million customers; 240 lpcd

    • Water supplied few hours per day

    • No metering; NRW: 50% NRW; collection: 80%

    • Cash collection covers less 70% of O&M costs

    • 90% of O&M costs spent on energy and staff (17 staff/1,000 connections)


What triggered the study1

What triggered the study

  • DJB financial situation

    • DJB Opex: US$120 million/year

      • CustomersUS$80 million/year

      • GovernmentUS$40 million/year

    • DJB Capex: US$170 million/year

      • GovernmentUS$170 million/year

    • DJB DebtUS$1,500 million

  • Household WSS budget

    • DJB OpexUS$ 80 million/year

    • Coping costs US$120 million/year


What triggered the study2

What triggered the study

  • Project to improve WSS service in pilot areas through Management contracts

  • Strongly attacked

    • Despite extensive consultation process with affected stakeholders

  • By vocal group claiming that it would lead to

    • Privatization and asset sell-off to foreigners

    • Massive tariff increase

    • Massive staff lay-out

    • Exclusion of the poor and that

    • PSP in WSS has never worked elsewhere anyway


What triggered the study3

What triggered the study

  • Government

    • Did little to defend a project it had earlier claimed strong commitment to, but

    • Asked the Bank to provide evidence that Management contracts in WSS do work

  • No such report was available to document how

    • Service has improved

    • Tariff has involved

    • Staff has been affected

    • The poor have been affected


Political economy of water supply psp

Political economy of water supply PSP

Stakeholders:

Politicians

Public utility staff and government officials

Non Government Organizations (NGOs)

Private operators

Consumers


Case studies of ppiaf study

Case studies of PPIAF study

AmmanManagement contract2000-2005

GazaManagement contract1995-2005

Zambia Management contract2000-2004

Antalya Affermage1996-2001

Gdansk Affermage1992-2005

Senegal Affermage1996-2005

BarranquillaLease/affermage1990-2005

CartagenaLease/affermage1995-2005


Case studies of ppiaf study1

Case studies of PPIAF study

Data collected (year before PSP and latest year):

Coverage (water supply and sewerage)

Quality (service hours /bacteriological quality)

Efficiency (non-revenue water/metering/staff productivity)

Sustainability (financial working ratio)


Service coverage quality before and after private operator contract

Service coverage & quality, before and after private operator contract

Case Water coverage before/after Hours of supply before/after

Amman90%100%49

Antalya93%95%1923

Barranquilla60%89%1923

Cartagena74%95%1724

Gaza58%56%...8

Gdansk100%100%2424

Senegal 59%73%1622

Zambia 100%100%1318


Efficiency of service before and after private operator contract non revenue water

Efficiency of service before and after private operator contractNon Revenue Water


Sustainability before and after private operator contract financial working ratio

Sustainability before and after private operator contract Financial working ratio

Financial working ratio


Sustainability productivity and tariff changes in cartagena

Sustainability -Productivity and tariff changes in Cartagena


Lessons learnt

Lessons learnt

Access, quality, efficiency and sustainability have all improved

Another PPIAF study is planned to widen and deepen scope of study

Managing PSP expectations crucial

Adequate investment funding is critical for success of MCs and leases


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