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Key Text Improving Water Utility Services through Delegated Management: Lessons from the utility and small-scale providers in Kisumu, Kenya

Author: Water and Sanitation Program, World Bank
Date: 2009
Size: 16 pages (779KB)

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Summary

How can adequate water and sanitation services be provided in poor urban areas? Partnerships with small-scale providers are increasingly important as utilities struggle to serve a growing population, particularly the poor. This field note from the World Bank's Water and Sanitation Program explores a successful delegated management approach being used in Kisumu, Kenya’s third largest city. The model rests on principles of transparency, clear contractual arrangements and the right financial incentive for all parties.

Efforts to provide water and sanitation to the urban poor have been fragmented and inadequate. Utilities struggle to perform optimally and institutional arrangements for water supply are weak. A project in Nyalenda, an informal settlement in Kisumu, demonstrates the advantages of a delegated management model (DMM). The Kisumu Water and Sewerage Company (KIWASCO) sells bulk water to agents contracted to operate and manage part of the network in Nyalenda. The combination of technical design and delegated management make the KIWASCO model unique.

By delegating to private operators, KIWASCO reduces administrative costs and brings services closer to the customer. Customers can select from private connections, shared standpipes or commercial kiosks. The one-time connection fee has been reduced and can be paid in instalments.

The technical design rationalises the network by shifting from a jumble of ‘spaghetti’ lines to a structured network.
The management design improves customer orientation and decentralises services to the community level. Private operators, unlike utility staff, can be contacted out of working hours. While the utility defines standards and terms of ownership, operators can invest in expansion of the network.
It is practically impossible for frontline utility staff to collude with customers, since they have no interface with end-consumers and no access to household meters.
Consumers still receive the utility’s high quality water and can direct complaints to the utility. Contracted operators have the legal backing of the utility to address vandalism and illegal connections.

Private operators have been able to run a viable business in Kisumu while making water more affordable. One has invested in network expansion though a combination of internal revenue and donor support. In future, the utility should consult with communities before construction begins and communicate clearly. KIWASCO should contract an NGO for this phase, build the capacity of its own staff to engage with communities and hire social scientists. Further implications include the following:

Vandalism and illegal connections continue to undermine the DMM. These issues are not exclusive to this model, or to the water sector. The DMM approach is novel because private operators and utility share the risks and work together to fight them.
Existing water vendors may be to blame for vandalism and thefts, but are starting to regularise their connections. There is more work to be done in engaging with vendors. Working with the police allows utilities and operators to identify and disconnect illegal connections.
KIWASCO formed an elected oversight committee to interact with the community. In hindsight, they should not have relied entirely on this voluntary committee to mobilise the community and should have defined its role more clearly.

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Source: World Bank, 2009, 'Improving Water Utility Services through Delegated Management: Lessons from the utility and small-scale providers in Kisumu, Kenya', Field Note, Water and Sanitation Program, World Bank, Washington D.C.
Organisation: Water and Sanitation Program, World Bank (WSP), http://www.wsp.org