Is Public Private Partnership on Urban Water a Panacea to be

replicated or a Blind-ally ?

Borama Case study

SHABA (Water Company)

Major Concepts of this presentation

• Examine whether it portrays a replicable success story.

• What factors have contributed to the success• To what extent it can be replicated to other

urban centers in Somaliland.• What are the challenges and the lessons

learned

Why PPP?

• In 2000 Borama experienced very serious shortage of water

• This crises drew the attention of various stakeholders (Community leaders. Business community, civil society organizations, local and regional authorities

• Pioneered by Amoud University Borama Citizens workshop was organized on August 2000

Workshop Objectives

• To identify Borama town water problemsTo identify Borama town water problems

• To find solutions for the problems To find solutions for the problems identifiedidentified

• To work out immediate and long-term plan To work out immediate and long-term plan of action to alleviate the chronic water of action to alleviate the chronic water shortage in Borama.shortage in Borama.

Outcome of the Citizens Outcome of the Citizens workshopworkshop

• Borama water system has infrastructural Borama water system has infrastructural limitation, there is a need for expansion.limitation, there is a need for expansion.

• lack of all stakeholders’ involvement and lack of all stakeholders’ involvement and ownership had a consequential result of ownership had a consequential result of poor management and sustainability poor management and sustainability problemsproblems..

Pre-PPP activities

• Responding to the workshop recommendations Responding to the workshop recommendations UNICEF with USAID fund made renovation and UNICEF with USAID fund made renovation and extension of the water system.extension of the water system.

• Efforts were made to improve management of water Efforts were made to improve management of water Agency ( Public Authority)Agency ( Public Authority)

• Borama water Board was established to oversee the Borama water Board was established to oversee the Water Agency.Water Agency.

• The board failed to make the required improvementThe board failed to make the required improvement

Factors that contributed to the PPP acceptance

• Failure of the community oversight trigged the PPP option• Ministry of Water and UNICEF was instrumental for the

sensitization of PPP.• Two workshops on the PPP funded by UINCEF and facilitated by

MOW&MR had a great influence on most of the stakeholders including community leaders in general and business community in particular

• Some of the business community showed their willingness to be involved and go to partnership with the public in the water sector

Establishment of the Private Company

• Participatory and transparent : All stakeholder were invited to a public meeting and acquainted them with the selection process

• Application of interest were requested• 73 members submitted their application of interest at

the given deadline.• 19 applicants responded timely and deposited the

required amount.• The new company SHABA was established.

Before PPP

Involving Partnership

Required Situation

Why consider success (Conti..)• Water availability, for 24 hours• Increased household connections from 250 to 6947

( Nov.2011)• Transparent management and financial system (BIMS

and AIMS with Support of Info Africa)• Sustainability in terms of operation ,repairs and

maintenance assured.• Additional revenue for Municipality 3% of sales.• Affordable prices for different levels

Why consider success

• Increased coverage and water borne diseases Increased coverage and water borne diseases drastically reduced ( Previously (2) outbreak of drastically reduced ( Previously (2) outbreak of Diarrhea per yearDiarrhea per year

• Improved services ( timely respond to complains, Improved services ( timely respond to complains, breakdowns. etc)breakdowns. etc)

• Concern for social responsibility ,support to Concern for social responsibility ,support to education(monthly contribution to Amoud education(monthly contribution to Amoud University)University)

Other major related Benefits• Increased access to water, especially to poor

communities.• More willingness from private sector to WATSAN( A

new PPP on slaughter management established in Dec.2009)

• There is also a local initiative to establish PPP in Electricity.

• Effective operation and maintenance of water supply Equipments

Before PPP

Indications of System Failure

What were the indicators of system failures?

Table: 1 Efficiency of the major towns in Somaliland and Somalia 2002 ( Source Study funded by EU-UNICEF by Hydroconseil)

Baidio Berbera Borama Burao Hargeisa Bossaso

Technical Efficiency

% NA 83% 40% 76% 67% 81%

Billing efficiency

% NA 83% 75% NA 100% 106%

Technical X billing

% NA 61% 30% 76% 67% 81%

Collection efficiency

% NA 56% 80% NA 80% 111%

Unaccounted for water

% NA 61% 76% NA 47% 5%

Number of staff

Nr 49 55 44 45 272 14

Number of staff per 1000 connections

Nr 153.1 71.2 338.5 75 37.6 12.7

Table : 2 System failure - Distribution and coverage( Source EU-UNICEF study by Hydroconseil) 2002

Coverage Berbera Borama Burao Hargeisa Bossaso Daidoa Total

Average

Monthly distribution

M3

30,000 6,000 14,364 120,000 19,430 ?

Per capital L/day. capital 40 2.4 1.9 11.4 6.5 ? 12

Kiosks No. 28 32 0 504 7 9 680

Kiosks Consumption

M3/month.

3,500 9,000 8,667 N/a 1,617 3,720 26,503

House Connections No. 773 130 600 7,241 1,100 320 10,164

HC/1,000 inhabitants No. 30.9 1.5 2.4 20.7 11.0 4.0 13

Figure1: System Failure : Connections per 1000 population

(Source EU-UNICEF study by Hydroconseil 2002)

Borama Water Distribution 2002 source hydroconseil

After PPP

Indicators of Success

Table: 5 Performance indicators of SHABA water company (Borama)Compared with Water Agency(before PPP)

2002 2008 2009 2010 Remarks

Technical efficiency 40% 90% 91.79% 90%

Billing Efficiency 75% 100% 100% 100%

Technical X Billing efficiency 30% 90% 91.72% 90%

Collection efficiency 80% 92% 92.3% 97%

Number of staff 44 42 42 45

House hold Connection 130 4320 5072 5998

Staff per 1000 house hold connections 338.5 9.7 8.2 7.5

Household connections per 1000 inhabitants

1.5 48 52.4 59.9 Assumption (100,000)

Yearly operational ration 0.769 0.83 0.83 Operation/ Revenue

Figure1: Connections per 1000 population (Source Hydroconseil 2002)

Sales and Loss 2003 and 2008

Motors of change• Aspiration for change: The desire to reverse the

negative situation of Public Management of water.• Partnership• Supportive National water policy• Committed District authorities( Social problems on

Borehole sites) • Supportive Water Agency Manager and staff • Donor support• Participatory approach• Leadership

What is to be replicated

• Participatory approach ( Stakeholders workshops)

• Sensitization workshops

• Company formation

What factors can support What factors can support replicationreplication

• Supportive national water policy in place.Supportive national water policy in place.

• Donor support is available.Donor support is available.

• Aspiration for change.Aspiration for change.

• Commitment of local and Regional Commitment of local and Regional authorities?authorities?

• Leadership ?Leadership ?

Will this success stalland end in Blind-ally?

• Inadequate investment of hardware by the public ( Boreholes, Water aquifer development) can hamper the success .

• Insufficient capacity building to the public partners.

• Lack of long term water resource plan.

Weaknesses and threats

• Dependence on external support ( Sustainability Issue)

• No risk sharing mechanism was put in place.• It has no pro-poor property(Lease agreement)• Political risks• Security gaps• Public ownership ?

Lessons learned• PPP improves service delivery (efficiently and

effectively)• Ensures the sustainability of the services and

facilities (operations, repairs, maintenance)• In the present situation donor support is required

and resources for future investment to be assured before starting PPP (lease)

• Tariff setting and adjustment formula to be specified in the contract.

Recommendations for future PPPs

• Policy and regulatory framework is to be developed.• Somaliland context should be kept in mind• Empowerment of planning and oversight capacity of

public partners• Lease contracts might not be the best option where

public has not the capacity for capital investment or external investment is not assured.

• Donor support will be crucial in promoting PPPs with pro-poor property particularly in rural water.

THANK YOU