SUSTAINABLE URBAN WATER SERVICE DELIVERY; FOCUSING ON EFFICIENCY

AND LEADERSHIP

The Experience of National Water and Sewerage Corporation (NWSC)

Address at

INTERNATIONAL WATER SECURITY CONFERENCE _UNIVERSITY OF OXFORD_UK

Dr. William T. Muhairwe

Former Managing Director, NWSC-Uganda

April -2012

Outline

Introduction

Challenges facing Sustainable Urban Water

Service delivery

What was done: The NWSC Experience

Key Achievements and lessons

Conclusion

2

Rapid urbanization

Population explosion

old infrastructure

Climate change

Challenges of sustainable urban water service delivery

Introduction

4

The provision of Water and Sanitation Services is of paramount

importance as it provides the foundation for sustainable development.

Global trends show provision of water and sanitation services is still

inadequate:

1.1 billion people have no access to safe

water services, and 2.6 billion have no

access to adequate sanitation services

The provision of water and sanitation

services in the developing World has

lagged behind that of the developed

countries.

The cost of failing to properly address

water security and its associated risks is

significantly higher than the cost of

addressing it

The question is What are the prevailing

water and sanitation challenges?

Question 1:

In your view why do you think utilities in the third and

emerging economies are lagging behind in WSS service

delivery?

1: Poor leadership

2: Poor management

3: Poor governance and accountability

4: Attitudinal issues (culture. Sit & do nothing syndrome)

5: External interference (political, global crisis)

6: inadequate financing

5

Answers to Question 1:

Interactive voting from participants during the Global

water summit in Berlin April 2011

6

Answers to Question 1…

Why utilities in the third and emerging economies are lagging behind in WSS service delivery? – Response from UNESCO-IHE MWO Course participants June 2011

7

Typical performance of WSS utilities in developing/emerging economies

Low service coverage Inefficient/intermittent water supply : 2-

10 hours of supply/day

Large inefficient work force with

conflicting roles: staff productivity of 30-50

staff/1000c

Poor organisational culture – corrupt field

staff , late coming, drunkenness

Low operational efficiencies: NRW 50-

70%

Monthly deficit (unable to pay staff salaries,

chemicals, power, etc)

Poor customer care High operating expenses (admin, medical,

transport)

Low collection efficiency (40-70%) High debt burden (borrowed money for

infrastructure development & operations)

High level of debtors of about >8 months Poor incentive structure

8

Question 2 - What next ?

If you are a donor, financing institution, NGO, Government, Board of Directors, Manager, customer; with such a utility - what would you recommend of the following?

1: Dissolving the company

2: Full Privatisation (foreign/local)

3: Private Sector Participation (50/50 share)

4: Internal reforms

5: Maintain status-quo

6: No idea

9

Answers to Question 2:

Interactive voting from participants during the Global water

summit in Berlin April 2011

10

Answers to Question 2:

If you are a donor, financing institution, NGO, Government, Board of Directors, Manager, customer; with such a utility - what would you recommend of the following?– Response from UNESCO-IHE MWO Course participants June 2011

11

NWSC´s Experience to WSS Challenges…

12

NWSC Situation in 1998

Quote World Bank at that time: “Over the last 10 years, the GOU in partnership with the World Bank and Other Donors have made significant investments (over US $ 100 million) in the Urban Water and Sewerage sector. These investments have contributed immensely in rehabilitating the existing infrastructure under the NWSC management. Unfortunately, these investments have not been matched with the necessary efficient commercial and financial management capacity that can ensure the delivery of sustainable services in the medium to long-term”.

Low Service Coverage Insufficient water supply

Large inefficient work force with conflicting roles:

Staff Productivity 36/1000 connections

Poor organizational culture -Corrupt Field Staff

High UFW 60 -65% Monthly Deficit - $300,000

Poor Customer Care High operating Expenses (adm, medical,

transport

Low Collection Efficiency (60-70%) High Debt Burden 100 million $

Huge level of Debtors of about 14 months Poor organizational culture i.e. late coming etc

Typical of Watsan Utilities in Developing Countries

NWSC Experience : initiatives undertaken

13

Formulated both Long Term and Short Term Plans

Policy level

Change of the Board and Management

Performance Contracts with Government /Water Boards

Corporate Plans (3-5 years)

Annual Budgets

Operational level

Operational framework through Change Management Programmes

(100 Days)

Service and Revenue enhancement project (SEREP),

Area Performance Contracts (APC),

Stretch out programme

Internally Delegated Area Management Contracts (IDAMCS),

One Minute Management Concept (OMM),

Checkers system

NWSC Case: Key Achievements!!

Performance Indicator 1998 2011

Service Coverage 48% 75%

New Connections per year 3,317 25,633

Total Connections 50,826 272,406

Metered Connections 37,217 271,734

Metering efficiency 73% 99.8%

Staff per 1000 Connections 36 6

Collection Efficiency 60% 98%

NRW 60% 32.8%

Proportion Metered Accounts 65% 99.8 %

Annual Turnover (Billion Shs) 21 132

Profit (Before. Dep) (Billions Shs) 8.0 (loss) 30 (Surplus)

Source: Audited Accounts

ISO certified

WHO

compliant

Various awards

Key Success Factors

Empowerment of staff

Devolution of power from the centre to regional

operations

Incorporation of private management style

Good planning and continuously challenging

management teams with new performance targets

Out sourcing non core activities

Clear oversight and monitoring

Information sharing through benchmarking

Core Services

Advisory Services

Capacity building

Technical Assistance

Organizational behaviour

change

Institutional development

Contract design &

incentive systems

Asset management

Project management

Systems development

Water

Electricity

Industries (Steel

Mills)

Banks

Government

Ministries

Kenya, Tanzania,

Zambia, Mozambique

Nigeria, Yemen

Ethiopia, Pakistan Water

Boards

Southern Sudan

New Delhi & Several

Municipality Water Boards

External Services offered by NWSC

Conclusion 17

Each reform situation is Unique but there are some core underlying

tenets (be it public or private)

1.Autonomy – being independent to manage professionally without

arbitrary interference by others

2.Pricing and Accountability – The price must be right- reduce costs and

increase revenue, being answerable to another party for policy decisions,

the use of resources and for financial sustainability

3.Customer Orientation – Reporting and listening to clients.

4.Market Orientation – Making greater use of markets and the

introduction of market style incentives.

“WE MUST EITHER FIND A WAY OR MAKE ONE”,

HANNIBAL

18 18

Title: Making Public Enterprises Work From Despair to Promise: A Turn Around Account

Author: William T Muhairwe

Co-Published by: IWA Publishing & Fountain Publishers