With the field visits safely navigated, the remainder of the Master Class will be spent in working meetings. WSUP has brought together staff from each of its country programmes and many key partners, such as key decision makers of Local Service Providers (LSPs), funders and other key stakeholders.
We have split into two, with one group focusing upon Low Income Community (LIC) units within water utilities and another group upon Faecal Sludge Management (FSM). It was recognised that WSUP has similar activities falling under both headings in all six of its countries, and so we have come together to share learning and make progress together. We are privileged to have with us representatives from Manila Water (Philippines) and the National Office for Sanitation (Senegal), as world leaders on, respectively, supplying water to low income areas and citywide FSM services. I have been listening in on the “LIC” discussions, where the debated has been fascinating and productive.
During day two, the focus was upon identifying what is needed in order to get LIC units right, what challenges are faced in sorting out these key ingredients and which WSUP country programmes have successeful models to share. Some of the most important things to come out of the day were:
• An LIC unit’s goal should be to ensure that everyone who lives in a low-income urban community has access to an affordable, sustainable and regular supply of good quality water which meets locally appropriate standards. Sanitation and hygiene may or may not be included here depending on the LSP’s context and mandates.
• Vigorously debated was the question of whether commercial viability should be expected from the LIC unit. The general consensus was that settling for below-cost-recovery tariffs might be necessary initially and, as service quality is demonstrated, increased revenues may be achievable. There were, however, dissenting voices, who considered that cross-subsidy was inappropriate – but the payment mechanism may need to be different to facilitate low income consumers. Experience of NWSC from Monday and other projects suggests the possibility of generating good returns (after all, LIC areas traditionally pay much more for their water than middle-high income communities).
• Corporate commitment to the LIC unit was unanimously considered the most important factor to the LIC’s success or otherwise. Clear plans and Key Performance Indicators (KPIs) were thought to be the next most important factors for success.
• A key challenge identified was the perception of LIC units and their work. Traditionally, it is considered to be risky, challenging and not commercially attractive and hence the budget may come from donors rather than being a core part of operations, so it may be seen as social work. This affects positioning and status within the LSP, where LIC units typically do not have the same responsibility as other utility departments such as new connection and non-revenue water targets. Interestingly, the ideal situation may be to have no LIC unit in the utility – as in Manila, for example, the pro-poor work has been so mainstreamed into operations that they have no need for an LIC unit.
• External interference was another (tricky to manage) challenge. This could come through political appointments of the key figures in a service provider, or through political and religious leaders stirring up opposition in target communities.
Some real strong points came out in the way our partnering service providers are already doing things in terms of their LIC work:
• In Nairobi’s water provider (NCWSC), water bills can be paid in ‘small bites’, through convenient mobile money applications (including M-Pesa), preventing customers reaching month-end and not being able to afford their bill, hence being cut off. Connection charges also generated interest, as 80% of the cost can be spread over the 24 months following the connection, making it more affordable to get a household connection. The defaulting on these payments is impressively low.
• In Lusaka Water, the LIC unit has around 150 staff in total, demonstrating a real interest in addressing the challenges. However, it could be argued that having so many staff is unnecessary if pro-poor work was streamlined and therefore an important part of every staff member’s work.
• In JIRAMA (Madagascar), the revenue generated by NRW reduction is ring-fenced for use in network expansion, thus ensuring financial sustainability and keeping the work at the heart of operations.
• In NWSC (Uganda) – not a WSUP programme country, but our hosts – there are two domestic tariffs; one for the pre-paid meters, which is cheaper than household connections. This makes sense in the light of the lower level of service delivery (requires walking). It was again highlighted that a key reason for NWSC’s success is the fact they have cut through all middle-men and achieved a direct relationship with the customers, who are reliable payers.
All in all, the discussions were vigorous and could only be briefly halted by our lunch and tea breaks (which yesterday included five different servings of banana – steamed, boiled, fried, fresh and fresh sweet – just to make sure we know we are in Uganda!). This post only captures some of the key learning to come out of the LIC session, and we look forward to more insights that will come out of the sessions today.
POST BY JON DOUGLAS, ACF PROGRAMME SUPPORT OFFICER