NATIONAL WATER SUPPLY AND SANITATION COUNCIL
Urban and Peri-Urban Water Supply and Sanitation Sector Report 2017
NORTHERN
Kasama Chinsali
Mansa MUCHINGA LUAPULA Solwezi
Ndola
NORTH-WESTERN COPPERBELT Chipata EASTERN Kabwe CENTRAL Mongu Lusaka WESTERN LUSAKA
Choma
SOUTHERN
WSS Sector Report 2017
Table of Contents
List of Abbreviations and Acronyms...... ii
Chienge Kaputa Foreword...... v Mpulungu Nsama NchelengeMbala Mporokoso Nakonde Executive Summary...... vi
Mwansabombwe Kawambwa Mungwi Isoka
Chipili Chinsali Mafinga Mwense Luwingu KASAMA Solwezi Mansa 1 Summary of Performance for CUs for the Year 2017...... 1 Chilubi Shiwan'gandu Chama Ikelenge MANSA Samfya New Institutional Arrangements Chembe 2 Water Sector: ...... 11 Mwinilunga Lunga Milenge Mpika SOLWEZI Chililabombwe Mufulira CHINGOLA Chitambo Lundazi 3 Service Provision to the Low Income Areas...... 15 KITWE Manyinga Lufwanyama Kalulushi NDOLA Chavuma Luanshya Masaiti Serenje Mambwe CHIPATA 4 The National Water Supply and Sanitation Council (NWASCO)....19 Mpongwe Zambezi Kabompo Mufumbwe Kasempa Mkushi Kapiri Katete Mitete Ngabwe Petauke Mposhi Chadiza Vubwi Lukulu KABWE Luano Nyimba Sinda 5 Integrity in Water Supply and Sanitation Service Delivery...... 33 Kalabo Kaoma Chibombo Sikongo Chisamba CU Headquarter Limulunga Nkeyema Mumbwa ufunsa Luampa Chilanga Chongwe Serviced To wn 6 Progress on Meeting Service Level Agreements and MONGU Shibuyunji Luangwa Itezhi-tezhi LUSAKA Chambeshi WSC Nalolo Kafue Adherence to Service Level Guarantees...... 37 Namwala Mazabuka Senanga Chikankata Eastern WSC Shangombo Mulobezi Monze Chirundu Kafubu WSC Siavonga Kalomo Lusaka WSC Pemba 7 Comparative Performance of Commercial Utilities...... 43 Sioma CHOMA Gwembe Lukanga WSC Sesheke Mwandi Kazungula Sinazongwe Luapula WSC Mulonga WSC 8 Performance of Private Schemes...... 85 Zimba Nkana WSC Livingstone North Western WSC Southern WSC 9 Regional Benchmarking of Large WSS Utilities...... 87 Western WSC
10 Conclusion...... 93
i WSS Sector Report 2017 List of Abbreviations and Acronyms
CEO-Chief Executive Officer LPWSC-Luapula Water and Sewerage Company
CHWSC-Chambeshi Water and Sewerage Company LWSC-Lusaka Water and Sewerage Company
CU-Commercial Utility MCA-Millennium Challenge Account
DANIDA-Royal Danish Embassy MDGs- Millennium Development Goals
DTF-Devolution Trust Fund MEWD-Ministry of Energy and Water Development
ESAWAS-Eastern and Southern Africa Water and Sanitation MLG-Ministry of Local Government
EWSC- Eastern Water and Sewerage Company MWSC-Mulonga Water and Sewerage Company
GF-General Fund MWDSEP-Ministry of Water Development, Sanitation and Environmental Protection GIZ-Deutsche Gesellschaft fuer Internationale Zusammenarbeit NRW-Non-Revenue Water KfW- Kreditanstalt fuer Wiederaufbau NUWSSP-National Urban Water Supply and Sanitation Programme KWSC-Kafubu Water and Sewerage Company NWASCO- National Water Supply and Sanitation Council LA-Local Authority NWSC-Nkana Water and Sewerage Company LGWSC-Lukanga Water and Sewerage Company
ii WSS Sector Report 2017
NWWSC-North-Western Water and Sewerage Company WWG-Water Watch Group
O&M-Operation and Maintenance WWSC-Western Water and Sewerage Company
PEF-Performance Enhancement Fund ZABS-Zambia Bureau of Standards
PS-Private Scheme ZAWAFE-Zambia Water Forum and Exhibition
PTI-Part-time Inspector ZEMA-Zambia Environmental Management Agency
SI-Service Indicator ZPPA-Zambia Public Procurement Authority
SLA-Service Level Agreement
SLG-Service Level Guarantee
SWSC-Southern Water and Sewerage Company
WARMA-Water Resources Management Authority
WSC-Water and Sewerage Company
WSS-Water Supply and Sanitation
iii WSS Sector Report 2017
Ensuring Better Services and Fair Value
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iv WSS SectorU r b aReport n a 2017n d P e r i - U r b a n W a t e r S u p p l y a n d S a n i t a t i o n S e c t o r R e p o r t 2 0 1 7
F o r e w o r d
The year 2017 came with some relief after going through a challenging 2016. That notwithstanding, the year 2017 had its own challenges. The cholera outbreak The economy stabilised with interest rates and inflation dropping. Further, there that hit Lusaka in the latter part of the year was one such challenge that brought was consistency in power supply and also sufficient water resources both ground out the need for sound ground water management, safe sanitation and proper and surface. waste disposal. Ultimately, protection of water resources by utilising nature- friendly solutions should be prioritised. With the foregoing, the sector saw a positive trend in a number of indicators such as improved water supply and sanitation service coverage, increased collection The high Non-Revenue Water (NRW) remained daunting to the sector despite it efficiency and cost coverage. This has been possible because of our relentless showing a slight positive trend. Efforts to curb it have not yielded the much desired efforts together with those of the Government, Commercial Utility (CU) Companies results. Implementation of the National NRW strategy has been slow due to lack of and the Cooperating Partners. resources and concerted efforts among various sector players. NWASCO resounds the call for all stakeholders to join forces in combating the alarming levels of NRW. Remarkable in the year was that the average sector performance met the Workable solutions need to be found to overcome the aforementioned challenges. benchmarks for hours of supply and Operation and Maintenance (O&M) cost coverage, calling for a revision of such benchmarks to make them more challenging Corporate Governance was another issue that had a negative impact on the for the CUs, as we propel the sector to greater heights and meet the national operations of the CUs. It is regrettable that all, apart from two CUs, operated targets and aspirations of Government. without a Board of Directors. This is not only unacceptable but it also does not support the critical pillar of good Corporate Governance in the sector. Efforts to enhance maintenance management systems (MMS) through the development and implementation of annual maintenance plans for CUs for their Our aim as NWASCO is for the country to achieve that which has been set out in assets yielded results of reduced down times. It is a requirement for each CU the 7th National Development Plan and ultimately Vision 2030. to have a MMS in place. This, coupled with the GIS mapping of water supply installations which we are spearheading through the NWASCO Water Data Centre, will go a long way in improving the management of water supply and sewerage assets.
In a bid to expedite customer complaints resolution, the MyWatSan Quickfix, an Kelvin Chitumbo integrated complaints platform, which was launched in 2017, took root with at least 5 CUs fully utilising the system. Director-NWASCO v WSS Sector Report 2017
Executive Summary
This 2017 Urban and Peri Urban Sector Report gives the reader an insight attainment of 7th National Development Plan targets on WSS and the Vision on the new institutional setup after the creation of a new Ministry of Water 2030. Chapter Six is a synopsis of the performance of the CUs on the Service Development, Sanitation and Environmental Protection. It also brings to the Level Guarantees and Agreements. fore salient topics such as Integrity Management. The performance of the water service providers for the period 1st January to 31st December 2017 is Chapter Seven is the main thrust of the report which elaborates the also highlighted in this report. performance of the Commercial Utility companies. Out of the nine key indicators on which CU performance is assessed, there was improvement in This Report is structured as follows: Chapter one provides a summary of five namely Collection efficiency, Operation and Maintenance cost coverage, the performance of the Water supply and sanitation sector focusing on the staff efficiency, water and sanitation coverage. urban and peri urban areas. Chapter Two elaborates the new institutional setup and functions following the creation of Ministry of Water Development, Chapter Eight is a review of the performance of the Private Schemes while Sanitation and Environmental Protection. Chapter Three and Four focus on Chapter nine highlights the performance of large Water Supply and Sanitation the activities of the Devolution Trust Fund (DTF) and National Water Supply Service providers across the Eastern and Southern Africa regions. An and Sanitation Council respectively. indication of the future outlook is presented as a conclusion in Chapter Ten of the report. Chapter Five discusses integrity in water and sanitation service delivery with emphasis on the effect of corruption on service delivery and ultimately
vi WSS Sector Report 2017 1
SUMMARY OF PERFORMANCE FOR COMMERCIAL UTILITIES FOR THE YEAR 2017
1 Summary of Performance for CUs for the Year 2017 WSSWSS Sector ReportReport 2017
The summary of the performance of Commercial Utilities (CUs) for the period Table 1: National Urban Water Supply and Sanitation Coverage st st 1 January to 31 December 2017 is highlighted in this chapter. The detailed 2016 2017 analysis is in Chapter Seven. Total Urban Population 6,545,693 6,696,266 Most of the indicators in this report are based on the Minimum Service Levels Total Urban Population Served with Water 5,463,632 5,696,834 (MSL) which are part of the licence conditions for the CUs. Additional indicators Total Urban Population Served with 4,096,005 4,239,686 have been included to provide a broader understanding of the performance Sewerage of the CUs. National Urban Water Coverage 83.5% 85.1% National Urban Sanitation Coverage 62.6% 63.3%
1.1 NATIONAL URBAN WATER SUPPLY AND SANITATION COVERAGE
Commercial Utilities are the main providers of water and sanitation services in urban and peri urban areas. Currently there are about 6.696million people living in the CUs’ service areas, of which 1% are serviced by Private Schemes. These are companies that provide water supply and sanitation services primarily to their employees as a fringe benefit.
Table 1 depicts the National Urban Water Supply and Sanitation Coverage, which is a combination of coverage for the CUs and the Private Schemes. The overall coverage for both water and sanitation increased slightly. This translated into an addition of 233,202 people served with potable water and 143,681 persons accessing sanitation services during the reporting period.
It must be noted that 59.6% of the population served with water supply was through household connections while 56.2% of sanitation was through septic tanks. The increase in population served with sanitation was largely as a result of capturing customers on septic tanks and through customer verifications.
2 WSSWSS Sector ReportReport 2017 Summary of Performance for CUs for the Year 2017
1.2 PROFILE OF COMMERCIAL UTILITIES A general overview of each CU in terms of its age and size using various parameters, is presented in Table 2.
Table 2: Commercial Utility Profiles, 2017
Commercial Utility Abbreviation Start of No. of Total Population No. of Connections No. of Staff Operations Towns/Centres in Service Area Serviced Lusaka WSC LWSC 1989 6 2,395,736 102,320 923
Nkana WSC NWSC 2000 3 794,906 62,120 610
Kafubu WSC KWSC 2000 3 711,537 62,428 597
Mulonga WSC MWSC 2000 3 519,796 55,345 439
Lukanga WSC LGWSC 2006 8 432,478 26,466 251
Southern WSC SWSC 2000 21 475,808 53,496 441
Chambeshi WSC CHWSC 2003 12 352,850 21,499 235
North Western WSC NWWSC 2000 8 270,764 15,771 130
Eastern WSC* EWSC 2009 10 310,926 19,724 151
Western WSC WWSC 2000 10 216,385 14,829 146
Luapula WSC LPWSC 2009 7 215,080 7,517 80
*Operated as Chipata WSC from 1992, covering only Chipata Town
3 Summary of Performance for CUs for the Year 2017 WSSWSS Sector ReportReport 2017
1.3 OVERVIEW OF SECTOR PERFORMANCE Table 3 summarises the performance of the CUs in nine key performance indicators. It should be noted that the performance of a CU is compared to the previous year, against the benchmark and against the sector average. Table 3: Overview of Sector Performance
4 WSSWSS Sector ReportReport 2017 Summary of Performance for CUs for the Year 2017
1.4 CU PERFORMANCE RANKING The performance ranking of the CUs is shown in Table 5. In order to provide readers with the performance trends, the rankings for the previous four years Commercial Utilities are ranked according to indicators and respective have also been reflected. It must be noted that a CU moving down in the weightings shown in Table 4. A higher weighting reflects how critical the ranking does not necessarily mean that it performed worse than the previous indicator is to the quality of service and financial viability of the CU. period, but it could also mean that it was outperformed (see Table 3). Table 4: Performance Indicators and their Weighting Factors Table 5: Ranking of CUs Indicator Weighting Ranking Ranking Ranking Ranking Ranking CU 1 Water Quality 20 points 2017 2016 2015 2014 2013 2 Collection Efficiency 20 points SWSC 1 1 1 2 3 3 Metering Ratio 15 points MWSC 2 2 8 5 5 4 Hours of Supply 15 points NWWSC 3 3 2 3 1 5 O+M Cost Coverage by Collection 15 points LWSC 4 5 4 1 2 6 Water Coverage 15 points EWSC 5 4 3 4 4 7 Non Revenue Water 10 points KWSC 6 7 9 6 10 NWSC 7 6 6 7 6 8 Staff Efficiency 10 points LGWSC 8 8 5 10 9 9 Sanitation Coverage 05 points CHWSC 9 11 11 11 11 To arrive at the ranking, the total score is derived by aggregating the result WWSC 10 10 7 9 7 of: LPWSC 11 9 10 8 8 Southern, Mulonga and North Western Water and Sewerage Companies [The indicator weighting] x [the score in relation to the average and benchmark (1,3,5 in Table 3)] x [the CU performance (in Table 3)] maintained the top-three positions for the second-year running.
SWSC deserves due recognition for having maintained the 1st position for three consecutive years.
5 Summary of Performance for CUs for the Year 2017 WSSWSS Sector ReportReport 2017
1.5 Recognitions of CUs for Exemplary Performance CU Commercial Utilities are recognised for exemplary performance in specific Area of recognition MOST BEST areas and indicators. The recognition is made in two categories, namely: IMPROVED Non-Revenue Water Southern WSC Nkana WSC 66 Category 1: Best performer in an indicator Water Quality Southern WSC Lukanga WSC 66 Category 2: Most improved towards or above the benchmark given North Western WSC that performance is above the average sector performance. Metering Ratio Nkana WSC Eastern WSC In this regard, the highest performing CU may not be recognised as Water Service Coverage Mulonga WSC Lusaka WSC the best performer if the performance is dropping more than a given Sanitation Service Coverage by Mulonga WSC Nkana WSC threshold (acceptable tolerance limit) from the previous period. Whereas Network the most improved from the previous period may not be recognised if the Hours of Supply Southern WSC Western WSC performance is below the sector average. The best performer is excluded from Category 2, unless in very exceptional circumstances where the Staff Efficiency Mulonga WSC Kafubu WSC magnitude of improvement, far exceeds the rest. Further, it is important to Collection Efficiency North Western WSC Chambeshi WSC
note that CU recognitions are looked at separately from the ranking. The O&M Cost Coverage by Collection Lusaka WSC Kafubu WSC performance recognitions are shown in Table 6. 1.6 rewarding CEO’s Performance Table 6: Recognition of CUs for Exemplary Performance Chief Executive Officers (CEOs) play a critical role in driving the company’s vision, Area of recognition CU mission and objectives. Thus, the CEO’s Award is given in order to motivate the Most Improved CEOs to take responsibility for the performance of their companies. Significance of improvement in all indicators Nkana WSC collectively with minimum downward trend The performance assessment for the CEO award is based on the ability of the Best in Servicing Peri-Urban Areas CEO to: Performance in implementing projects and general Eastern WSC management of water kiosk operations i. Build a high performing management team; Best Submitted Data ii. Give the company strategic direction and implement a clear plan of creating Completeness and accuracy of data submitted in Nkana WSC value for the company; the NWASCO Information System and least queries raised for verification iii. Drive continuous improvement in the performance of the CU;
6 WSSWSS Sector ReportReport 2017 Summary of Performance for CUs for the Year 2017
iv. Mobilise resources for capital projects; 1.7 Sector Achievements and Challenges v. Ensure successful implementation of both short and long term company objectives. Achievements The notable achievements during the period under review were: Further, the CEO for each CU nominates the top two fellow CEOs in order of • Water Supply and Sanitation coverage continued to increase; hierarchy, based on their assessment of the contribution made by the nominated • Average collection efficiency almost reached the acceptable CEO in advancing the company they represent. benchmark; • Billed revenue increased and cost coverage by collections 2017 CEO of the year award improved; • Average staff efficiency related to personnel costs and collections/billing improved; and • Water quality compliance improved.
Challenges/Concerns The sector challenges included the following:
1st Position 2nd Position • Most CU Boards remained unconstituted against good corporate Eng. Charles Shindaile Eng. Kanyembo Ndhlovu governance principles - absence of boards could have affected Southern WSC Mulonga WSC focus of MDs in the management of the utilities particularly that some MDs operated without new employment contracts after expiry of their contracts. ; • Delayed payments of bill for water and sanitation services, particularly by Government institutions; • Ring-fencing of funds for metering and sanitation was not adhered to; • Inadequate coordination in developmental planning between CUs 3rd Position 4th Position Eng. Mushany Kapusana Eng. Kenneth Chense and planning authorities; and Lukanga WSC Luapula WSC • The outbreak of Cholera in the latter part of the year, particularly in Lusaka.
7 Summary of Performance for CUs for the Year 2017 WSSWSS Sector ReportReport 2017
1.8 CU OPERATING ENVIRONMENT AND COMMENTS ON NKANA WSC PERFORMANCE Operating Environment 66 Operates in three predominantly mining towns on the Copperbelt Province The CUs operate under varying conditions which may impact their performance. namely Kitwe, Kalulushi and Chambishi; Therefore, the operating environment and comments highlighted hereunder should 66 Major raw water sources susceptible to industrial pollution; be taken into consideration when analysing the performance of CUs and making 66 Fairly high economic activity; and comparisions. 66 The bulk of infrastructure is under major rehabilitation and expansion.
LUSAKA WSC Comments Operating Environment 66 Improved in nearly all indicators with a quantum leap in metering ratio; 66 Services the capital city, Lusaka and five other districts (Luangwa, 66 Need to improve supply to low-income areas such as Wusakile, Chamboli, Chongwe, Chirundu, Kafue and Chilanga) in Lusaka Province; Chibuluma and Mindolo-North. 66 The Province includes two new districts of Rufunsa and Shibuyunji that 66 Need to improve collections even further to the above the acceptable were not yet serviced; benchmark. 66 High economic activity; 6 6 The bulk of infrastructure needs major rehabilitation and expansion; and KAFUBU WSC 66 Good complement of highly qualified staff. Operating Environment
Comments 66 Operates in three towns (Ndola, Masaiti and Luanshya) on the Copperbelt 66 The overall costs reduced but need to concert efforts to reduce personnel Province; costs; 66 Medium economic activity; 66 Embarked on projects in Chongwe to counter the effects of the drying dam; 66 Poor quality of the raw water in the Southern part of Ndola; and 66 Had a number of major infrastructure projects still underway to improve 66 The bulk of infrastructure is under major rehabilitation and expansion. service provision which necessitated water supply interruptions, particularly in Lusaka; Comments 66 High failure of/and challenges with prepaid meters continued. The CU 66 Had major infrastructure projects underway that necessitated water supply embarked on replacing them with post-paid meters, but need to improve interruptions; metering ratio; 66 Experienced numerous sewer blockages in Luanshya, as well as Masala 66 Instability of Board membership could have had a negative impact on and Kabushi Townships in Ndola, which need to be addressed; 66 Had extreme water supply challenges in most parts of Ndeke Township decision making; and in Ndola; 66 Need to improve water quality monitoring. 66 Need to improve customer care and collections; 8 WSSWSS Sector ReportReport 2017 Summary of Performance for CUs for the Year 2017
66 Need to be up-to-date with audits of financial statements; and Southern WSC 66 Need to improve metering ratio. Operating Environment 66 Has the highest number of service towns/centres (21) – Choma, Livingstone, Kalomo, Monze, Zimba, Kazungula, Pemba, Mazabuka, Batoka, Gwembe, MULONGA WSC Namwala, Maamba, Munyumbwe, Sinazongwe, Sinazeze, Nega-Nega, Operating Environment Siavonga, Mbabala , Magoye, Chikankata and Chisekesi; 66 Operates in three predominantly mining towns on the Copperbelt Province 66 The province includes Chikankata district that was not yet serviced; (Chingola, Chililabombwe and Mufulira); 66 Medium to low economic activity; and 66 Major raw water sources susceptible to industrial pollution; 66 Fairly good but inadequate infrastructure. 66 Fairly high economic activity; and 66 The majority of infrastructure needs rehabilitation and expansion. Comments 66 Improved in a number of indicators; and Comments 66 Need to improve water supply in Kamunza and Harry Mwanga Nkumbula 66 Need to improve metering ratio further; Townships in Monze and Kanyelele area in Siavonga. 66 Need to improve water turbidity levels in Chingola and Mufulira; and 66 Had extreme water supply challenges in most parts of Twatasha, Chambeshi WSC Maiteneke, Lulamba and surrounding areas in Chingola. Operating Environment 66 Operates in 12 towns (Kasama, Mpika, Chinsali, Nakonde, Isoka, Mbala, Lukanga WSC Mpulungu, Luwingu, Mporokoso, Kaputa, Mungwi and Chilubi) in the Operating Environment Northern and Muchinga Provinces, spread over a wide geographical area; 66 Operates in eight towns in the Central Province namely Kabwe, Mumbwa, 66 Northern and Muchinga Provinces include new districts of Mafinga, Serenje, Mkushi, Kapiri Mposhi, Chibombo, Chisamba and Itezhi-tezhi; Shiwan’gandu and Nsama that were not yet serviced; 66 The province includes three new districts of Luano, Ngabwe and Chitambo 66 Low economic activity; and that were not yet serviced though incorporated on the operating license; 66 The bulk of infrastructure is under major rehabilitation and expansion. 66 Medium economic activity; and 66 Relatively new infrastructure in all towns but dilapidated sewer infrastructure. Comments 66 Met the benchmark for collection efficiency and improved cost coverage; Comments 66 Improved water supply coverage; 66 Improved water supply coverage; 66 Need to improve hours of supply in general; 66 General stability in all indicators; 66 Need to improve billing efficiency to reduce the number of unbilled 66 Need to improve collection efficiency; and customers; and 66 Need to improve supply to areas such as Makululu Compound in Kabwe 66 Placed on NWASCO turnaround programme to improve performance. 9 Summary of Performance for CUs for the Year 2017 WSSWSS Sector ReportReport 2017
North Western WSC Eastern WSC Operating Environment Operating Environment 66 Operates in eight towns in North-Western Province; namely Solwezi, 66 Operates in ten towns (Nyimba, Chipata, Petauke, Katete, Chadiza, Kasempa, Mwinilunga, Zambezi, Manyinga, Kabompo, Chavuma and Mambwe, Lundazi, Vubwi and Sinda) in the Eastern Province and Chama Mufumbwe including two mining areas of Kalumbila and Lumwana; in Muchinga Province. Vubwi is yet to be serviced; 66 The Province includes three new districts of Ikelengi, Kalumbila and 66 Relatively new infrastructure in almost all towns; and Mushindamo that were not yet serviced, apart from Kalumbila mining area; 66 Seasonal, medium to low economic activity dependent on farming periods. 66 Medium to low economic activity with potential for growth; and 66 Fairly good state of infrastructure, but needs expansion. Comments 66 General improvement in service levels mainly due to completion of Comments infrastructure projects; 66 Maintained 100% metering ratio despite adding new connections; and 66 Persistent water hardness in Petauke which led to blockage of distribution 66 CU was placed on Special Regulatory Supervision (SRS) to address weak pipes; internal controls and deteriorated hours of supply in some areas. 66 Experienced high turbidity in Chipata, Chadiza, Katete and Lundazi in the first half of the year which escalated treatment costs; and 66 Need to address the numerous stuck and under-registering meters which Western WSC affected NRW. Operating Environment 66 Operates in 10 towns in the Western province (Kaoma, Mongu, Kalabo, Luapula WSC Senanga, Lukulu, Sesheke, Sichili, Mwandi, Shang’ombo and Limulunga); Operating Environment 66 The Province includes six new districts of Mulobezi, Sikongo, Nalolo, 66 Operates in seven towns in Luapula Province namely Mansa, Samfya, Sioma, Mitete, Nkeyema that were not yet serviced; Nchelenge, Kawambwa, Mwense, Chiengi and Milengi, although in Chiengi 66 Low economic activity; and and Milengi service was not yet provided; 66 Inadequate infrastructure needing major overhaul. 66 Extremely low economic activity; and Comments 66 Very low customer base. 66 Improved hours of supply in parts of Mongu; Comments 66 Need to address the declining metering ratio; 66 Made significant improvements in hours of supply; 66 Improve on billing efficiency to reduce the number of unbilled customers; 66 Needs immediate investigation and redressing of extremely high NRW; and 66 There is need to improve on management capacities and 66 Operational sustainability is unhealthy hence, placed on a NWASCO 66 Placed on NWASCO turnaround programme to improve performance. turnaround programme as a form of redress.
10 WSS Sector Report 2017 2
WATER SECTOR: NEW INSTITUTIONAL ARRANGEMENTS
11 New Institutional Arrangements WSSWSS Sector ReportReport 2017
2.1 INITIAL SETUP OF THE WATER SECTOR to the MEWD shall be put in place” (GRZ, 1994) and in line with the sector principles, the institutional setup for the water sector, as shown in Figure 1, Zambia has been undergoing water sector reforms since the early 1990s. One of became as follows: the major challenges was multiplicity of actors without a clear mandate. Developing the institutional framework took a very consultative process that involved all key 66 All water resources management functions became the responsibility of the stakeholders. The chief objective was to create new institutions which would be then Department of Water Affairs (DWA) under MEWD. While all functions able to provide cost-effective and sustainable WSS services throughout Zambia. related to provision of water supply and sanitation services became the responsibility of the LAs under the overall supervision and support from In November 1993, the then Ministry of Energy and Water Development (MEWD) the then MLGH. under the National Water Policy Development Initiative undertook an extensive 66 Through commercialisation, the LAs outsourced the management of WSS consultative process that culminated in a policy document for the water sector. services to private enterprises formed by joint ventures with other LAs called The National Water Policy was adopted in November 1994 as a framework for commercial utilities. future development of the water sector. 66 Regulatory functions were given to NWASCO while executive functions were retained within the then MLGH. The foreword of the National Water Policy states “Our vision for the contribution 66 The Department of Infrastructure and Support Services (DISS) later renamed of water to the improvement of the quality of life has now been elaborated. The Department of Housing and Infrastructure Development (DHID) under the aims and aspirations expressed in this document will however, remain a distant then MLGH coordinated interventions and mobilised resources for WSS. dream if the identified strategies are not put into practice. Only successful implementation of this policy will justify the time, human and financial resources With the institutional framework in place, this needed to be translated into law spent in its preparation”. through the elaboration of a new legislation since the 1948 Water Act did not include WSS. In order to implement the reforms, a guide was required for the entire process. Thus, the seven sector principles outlined in the 1994 National Water Policy were adopted In 1997, the Water Supply and Sanitation Act No.28 was passed which established as a first step to the implementation of the water sector reforms that included: the Regulator NWASCO and provided for the formation of water supply and 66 Separation of water resources functions from water supply and sanitation; sanitation utilities called Commercial Utilities (CUs) by the LAs as either private 66 Separation of regulatory and executive functions within the water supply or public companies. and sanitation sector; and In 2010, an attempt was made to revise the 1994 National Water Policy but the 66 Devolution of authority to local authorities (LAs) and private enterprises. new National Policy only covered water resources management and development The institutional structure for the WSS sector draws its authority from the Cabinet and left out the detail on water supply and sanitation. Following the promulgation decision of 1994 among which was “…a regulator NWASCO to be responsible of the 2010 National Water Policy, the Resources Management Act No. 21 of 2011 12 WSSWSS Sector ReportReport 2017 New Institutional Arrangements
was enacted to replace the 1948 Water Act and establish the Water Resources and Environmental Protection and Pollution Control policies and associated Management Authority. The WSS Policy is under development to elaborate aspects matters. of water supply and sanitation. Concurrently, the WSS Act No. 28 of 1997 is being Institutions/bodies under the Ministry are: revised to address the shortfalls in its administration. 66 National Water Supply and Sanitation Council (NWASCO) – Established by the Water Supply and Sanitation Act No. 28 of 1997 for ensuring efficiency and sustainable water supply and sanitation service provision. 66 Water Resources Management Authority (WARMA) – Established by Resources Management Act No. 21 of 2011 – for management, development, conservation, protection and preservation of the water resource and its ecosystems; 66 Zambia Environmental Management Agency (ZEMA) - Established by the Environmental Management Act No. 12 of 2011 for protection of the environment. The Statutory Instrument No. 112 of 2013, of EM Act No. 12 of 2011, The Environmental Management (Licensing) Regulations of 2013: Sets limits and standards for environmental protection. 66 Water Commercial Utilities (CUs) – established under Companies Act Cap 388 of the Laws of Zambia by the Local Authorities to provide water supply and sanitation services. All CUs are licensed and regulated by NWASCO. NWASCO also regulates Private Schemes that provide water supply and sanitation services to their employees as a fringe benefit. Figure 1: Old Institutional Arrangement 66 Environmental Protection Fund - established under section 82 of the Mines and Minerals Act; Regulations, 1998 (S.I. No. 102 of 1998). The Fund 2.2 NEW INSTITUTION ARRANGEMENTS is fuelled by moneys collected from mining projects. Its objective is to assure that developers conduct environmental impact assessment in accordance Due to the need to better manage the water sector, a new Ministry of Water with the Mines and Minerals (Environmental) Regulations 1997 and to assure Development, Sanitation and Environmental Protection (MWDSEP) was funds for the rehabilitation of mining areas where a holder of a mining licence established and Gazetted on 18th November 2017 to preside over among others, fails to do so. Water Resources Management and Development, Water Supply and Sanitation,
13 New Institutional Arrangements WSSWSS Sector ReportReport 2017
Figure 2 shows the new arrangement in the water sector. are their shareholders. Responsibilities and functions of the shareholders, Boards and Management should be distinct and followed. For CUs in Zambia, working without the Boards has been a particular problem and calls for strengthening good corporate governance. The clear separation of responsibilities between Central and Local Governments and the CUs, on one hand, as well as between the Regulator and the CUs on the other hand allows streamlining of efforts to implement the Sector Policy and avoid undue interference. 66 In 2007, articles of association were changed by the CUs to accommodate a circular from Government to change the board composition to 10 members which included the Mayor, Provincial Local Government Officer and the Town clerk among others. This prescribed composition of members does not provide an appropriate mix of skills, technical or analytical experience that is of benefit to the Board and the CU. Also the number of Board members should not be prescriptive but allow CUs to have numbers that will suit their structure and income. Further, with the new system of the Mayor being executive officer and senior most citizen in a town, s/he should be exempted from board and play an oversight role. Figure 2: New Institutional Arrangement 66 The appointment of the Board of Directors of the Regulator and that of the regulated by the same authority may have implication when the license of 2.3 ISSUES FOR CONSIDERATION the CU is suspended or cancelled which require the Board of the CU to exit The new institutional arrangement has enhanced synergies in the sector, however, or when the decision of the regulator is challenged. This would require an the following issues would require further consideration: independent appellant process. 66 The Commercial Utilities, though owned by Local Authorities, are duly 66 The Local Authorities as sole Shareholders of the CUs are expected to registered under the Companies Act, Chapter 388 of the Laws of Zambia. mobilise investments resources for the CUs. This should be done through This means they legally exist as private and limited companies. They must their parent Ministry of Local Government. However, MWDSEP has now therefore, adhere to the company legislation as applied to all such companies assumed this role which may create unclarity on the ownership of the assets and should be treated as separate entities from the Local Authorities who and thus, weakening the responsibility of Shareholders.
14 WSS Sector Report 2017 3
SERVICE PROVISION TO THE LOW INCOME AREAS
15 Service Provision to Low Income Areas WSSWSS Sector ReportReport 2017
3.1 THE DEVOLUTION TRUST FUND 3.2. SUPPORT TO THE COMMERCIAL UTILITIES
The Devolution Trust Fund (DTF) was established by the National Water The DTF has been supporting CUs through three main portfolios of: Supply and Sanitation Council (NWASCO) in 2001 as provided for in the Water 66 General fund water supply -to facilitate increased access to safe and Supply and Sanitation (WSS) Act No. 28 of 1997. The DTF has operated as adequate drinking water; a basket fund since 2003 assisting licensed Commercial Utilities (CUs) to 66 General fund sanitation -aimed at facilitating increased access to improve and extend WSS services especially to low-income urban areas. appropriate sanitation.; and 66 Performance Enhancement Fund (PEF) - tailored to improve and sustain the operational efficiencies of Commercial Utilities.
The DTF devoted much of 2017 to facilitation of the development of the sector financing mechanism. In the period under review, the consultancy forthe development of the financing mechanism was concluded and a roadmap to implement the activities for the second phase was proposed. It is envisaged that the water sector financing mechanism shall be operationalised in 2018.
Nonetheless, the DTF also endeavoured to complete the few ongoing projects. In the year under review, the completed projects comprised 503 domestic customer meters and 46.7km of water supply network that benefitted 60,725 people as follows:
3.2.1 General Fund - Water Supply The DTF only funded one project of out of the three emergency proposals that were submitted for consideration in the year under review. This was for improvement of water supply in Nyimba District and was financed from the residue funds.
The DTF Basket Fund has been assisting CUs extend service since 2003
16 WSSWSS Sector ReportReport 2017 Service Provision to Low Income Areas
Three projects as shown in Table 7 were completed in the year bringing the total number of completed projects to 81 out of the 83 funded to-date.
Table 7: Completed Water Supply Projects No. CU Project Scope of work Cost Beneficiaries Area (K)
1 Lusaka- • 13.2km of water supply 1,775,003 22,225 Kabanana network installed (LWSC) • 305m3 water tank installed.
2 Solwezi- • 15km of water supply 2,166,039 35,000 Mushitala network installed (NWWSC) • 3 bulk meters installed • 2 Production Borehole boreholes drilled and equipped • Booster station rehabilitated • Construction of new 500m3 Storage tank • New pump-set installed at Booster station • 40 valve chambers constructed
3 Nyimba- • 18.5km of water supply 2,506,623 3,500 Nyimba network installed (EWSC) • 500 domestic customer meters installed. • 50 network valve chambers constructed
TOTAL 6,447,665 60,725
The two projects that could not be completed in the year included Mikiloni and DTF projects have improved water supply access in low-income areas Mandanga Water supply Projects in Chingola and Mongu Districts respectively.
17 Service Provision to Low Income Areas WSSWSS Sector ReportReport 2017
3.3 CUMULATIVE output 3.4 FUTURE OUTLOOK
The cumulative total output of infrastructure to the sector consisted of DTF shall continue to be the secretariat of the Technical Working Group for 49,865 domestic customer metered connections, 450.7kms of water supply the ongoing sector institutional reforms, in consultation with the Ministry of network, 551 water Kiosks, 15 water boreholes to augment water supply in Water Development Sanitation and Environmental Protection, to facilitate certain locations, and a total 708m3 storage capacity. Furhtermore, 8.5kms of and ensure the realisation of a sustainable sector financing mechanism for sewerage network, 741 household toilets, and a new sewerage pump station the Zambian Water Sector. The future existence and operations of the DTF were added to the sanitation infrastructure. The sanitation projects also include shall be defined once the framework for the sector funding is concluded and construction of 16 biogas plants (intermediate settlers) from where household agreed. Thus, much effort for the DTF shall be dedicated towards facilitating were also drawing energy for cooking through burning the cumulated methane the engagements among the stakeholders and implementation of the roadmap gas. The total beneficiaries as at the close of the 2017 period were1,179,506 . for a sustainable financing mechanism to be adopted.
Table 8 below shows the cumulative totals since commencement of operations of the DTF.
Table 8: Progress in Meeting Water Supply Targets Mobilised as at 31st Expenditure as at December, 2017 31st December, 2017 (K’000) (K’000) Cumulative 207,115* 183,501 Funding
Target Actual Population (Dec, 2017) covered as at 31st December, 2017 Cumulative 1,198,706 1,179,506 Population
*This amount remained the same as no new funds were mobilised in the year
551 water kiosks have been constructed under DTF funding 18 WSS Sector Report 2017 4
THE NATIONAL WATER SUPPLY AND SANITATION COUNCIL (NWASCO)
19 NWASCO WSSWSS Sector ReportReport 2017
4.1 INTRODUCTION To Undertake Continuous Regulatory OBJECTIVE 1 The National Water Supply and Sanitation Council (NWASCO) is a statutory Enhancement body established by the Water Supply and Sanitation Act No. 28 of the Laws 66 Established a baseline for the status of sanitation service delivery in of Zambia to regulate the provision of water supply and sanitation services Kabwe, Central Province and Mansa, Luapula Province to enhance for efficiency and sustainability. sanitation regulation. 66 Developed a guideline for separation of costs related to water and NWASCO currently regulates seventeen licensed WSS providers which are sewerage services for improved pricing and revised the tariff model. eleven Commercial Water Utilities and six Private Schemes (see Chapter 1 66 Held a meeting with other local Regulators for increased collaboration & 7). in enforcement. The highlights of the various activities undertaken by NWASCO in the 2017 To Ensure Enhanced Efficiency and Financial period are given in this section while details can be obtained from its Annual OBJECTIVE 2 Viability of Commercial Water Utilities Report. 66 Developed and signed turnaround strategies with Chambeshi, Western and Luapula WSCs to improve institutional efficiency and effectiveness. 4.2 IMPLEMENTATION OF THE FOURTH STRATEGIC PLAN 66 Implemented national Geographical Information System (GIS) for the NWASCO progressed with the second-year of implementation of its fourth sector to improve asset management. Strategic Plan formulated for the period 2016-2020 and anchored on four 66 Promoted adoption of ICTs in billing by CUs for improved operational Strategic Objectives. At the close of 2017, the execution of planned activities efficiency. was assessed at 84% while the overall progress against the five-year period was assessed at 43%. In the reporting period, notable activities implemented To Ensure Improved Service Delivery and OBJECTIVE 3 under the four Strategic Objectives were as follows: Sustained Sector Progression 66 Implemented the revised water quality guideline to include critical 50 60 Overall Cumulative Progress to Final KPI 70 84 aspects of the ISO 17025 standard. 80 43% 30 6 90 Overall Progress 6 Ensured increased access to water supply and sanitation services and metering ratio. 0 100 0% 20% 40% 60% 80% 100% 2017 Overall Performance
20 WSSWSS Sector ReportReport 2017 NWASCO
4.3 MONITORING SERVICE PROVIDERS To Improve Operational Efficiency and OBJECTIVE 4 Effectiveness of NWASCO Part IV of the Water Supply and Sanitation Act No. 28 of 1997 provides for 6 6 Implemented the communication strategy to raise visibility of NWASCO. NWASCO to appoint inspectors to conduct inspections on any water and/ or 66 Utilised Inspections to disseminate information and obtain feedback sanitation provider in order to monitor compliance to the provisions of the Act. from consumers via live community radio features. 4.3.1 Renewal of Service Level Guarantees and Service Level 66 Officially launched the integrated complaints platform (single web- Agreements based interface for complaints reporting) - www.mywatsan.co.zm Service Level Agreements (SLAs) are signed between WSS providers 6 6 Branded one car with complaints handling message. and NWASCO to stipulate the programmes put in place by providers to 66 Held consumer roadshow in Chipata, Eastern Province on the status progressively reach the minimum service level as defined by NWASCO. of WSS service delivery. Service level Guarantees (SLGs) stipulate the standard of service guaranteed to customers at any time in a given period. Thus, both the SLAs and SLGs are moving targets progressing towards the minimum acceptable levels and are adjusted and signed every three years.
New SLAs and SLGs for Lukanga WSC were signed during the period under review.
Integrated complaints platform - MyWatSan Quickfix in use by a customer Service Level Guarantees and Agreements are signed with CUs
21 NWASCO WSSWSS Sector ReportReport 2017
4.3.2 Inspections which was to be in effect for an initial period of six months, NWASCO and the Part IV of the Water Supply and Sanitation Act No. 28 of 1997 provides for CU agreed on some key milestones to be achieved by the CU. NWASCO to appoint inspectors to conduct inspections on any water and/ or Chambeshi, Western and Luapula were placed on a turnaround programme sewerage provider in order to monitor compliance to the provisions of the Act. to improve operations following the establishment of the baseline data through NWASCO conducted annual detailed inspections on all the 11 Commercial inspections. Utilities and six Private Schemes and the following were the highlights of the findings: i. Commercial Utilities CUs generally showed commitment to improving and extending service delivery through the various infrastructure development projects implemented, using both government and internally generated funds as well as from cooperating partners.
Water and sanitation projects in most CUs recorded considerable progress with some being completed in the reporting year. Notably, EWSC completed the Nyimba East Water Supply Project while the Katete Water Supply Project NWASCO training CHWSC staff under turnaround programme was commissioned. Also completed were the Mushitala Water Supply Project under NWWSC, and New Chibombo Boma Water Supply Improvement Project under LGWSC. Projects under WWSC saw the retendering process completed ii. Private Schemes for Mwandi and Muoyo water supply projects. Some Private Schemes showed commitment to improving service provision to their consumers while others were overwhelmed by the growing demand However, there were areas of non-compliance generally in all CUs that for water and sewerage services. Zambia Sugar and Kaleya Smallholders included non-adherence to the Service Level Guarantees for hours of supply, invested in increasing water production which resulted in increased hours water quality and delays in making new connections for paid-up customers. of supply.
In particular, NWWSC was placed under Special Regulatory Supervision (SRS) Lafarge Cement and KCM Nampundwe, which have had challenges in after serious concerns were raised from the detailed inspection conducted. meeting requirements concerning water quality and hours of supply, engaged These included weak internal controls which threatened the sustainability of Lusaka Water and Sewerage Company with a view to handing over assets the company and resulting in deterioration of service provision. Under the SRS and operations for WSS service provision to the CU.
22 WWSSSS Sector RReporteport 2017 NWASCO
4.4 SANITATION SURCHARGE Table 9: Implementation of Sanitation Surcharge
To complement the efforts being undertaken by CU Year Total Amount Total Amount Projects Implemented In 2017 the Government to fund the water sector to ensure Awarded Collected Spent To-Date accelerated access to water and sanitation services, To-Date (K) (K) NWASCO introduced the sanitation levy/ surcharge in 2007. The surcharge entails that all customers are The Surcharge was suspended due to failure by the CU to abide by the charged as part of the tariff structure at an assessed Lusaka WSC 2007 24,313,667.89 10,575,751.68 requirement. No funds were collected rate of between 2.5% to 5% of the monthly water bill. and no new projects were undertaken The revenue collections from the sanitation levy are ring during the year under review. fenced so as not to be used to cover operating costs. Replacement of collapsed sewer lines Nkana WSC 2010 17,442,407.71 10,381776.6 The funds are dedicated to fund sanitation extension in parts of Kitwe and Kalulushi projects particularly in the peri urban areas. However, Extension of the network to Riverside in isolated cases, water projects with a clear link to Mulonga WSC 2011 8,330,850.54 994,505.88 in Chingola. improvement of sanitation may be considered. The proposed projects are presented to NWASCO annually Replacement of sewer lines in parts of Kafubu WSC 2014 3,713,004.61 999,876.89 for a “no objection” before utilisation of the funds. Masala in Ndola Rehabilitation of sewer network in The sanitation surcharge is awarded to the CUs on a Southern WSC 2015 3,192,157.24 1,167,678.35 Monze. case by case basis depending on their level of cost
coverage. NWASCO reserves the right to suspend the Laying of sewer network in Kapiri Lukanga WSC 2015 1,397,881.00 362,304.39 sanitation surcharge for CUs that do not adhere to the Mposhi to connect 250 customers. terms and conditions of the surcharge. North CU was yet to submit a concept of 2016 1,114,509 0 Table 9 shows the status of the implementation of Western WSC sanitation projects for approval. sanitation surcharge by the seven CUs which have been awarded the surcharge:
23 NWASCO WSSWSS Sector ReportReport 2017
4.5 TARIFF ADJUSTMENTS One of NWASCO’s core functions is the consideration of water and sewerage tariff applications. Comprehensive tariff applications are approved for a minimum period of one year and a maximum multi-year period of three years. To implement approved multi-year tariffs, a CU must seek a “no objection” from NWASCO annually, which is granted subject to meeting at least 75% of prior-given tariff conditions. Tariff adjustments are made after analysis of proposed cost structures to ensure that only justifiable costs are considered.
4.5.1 Comprehensive tariff adjustments Comprehensive tariffs consider the full cost structure of the Utility in arriving at a desired tariff level. In the year under review, NWASCO approved two comprehensive tariff adjustment applications for the period 2018 to 2020. Table 10 outlines the comprehensive tariff adjustments:
Sanitation surcharge ringfenced for works to improve service delivery 4.5.2 Applications for ‘no objection’ for the implementation of approved tariff adjustments Five out of the nine applications for “no objection” to implement approved tariffs for 2018 were granted during the reporting period as outlined in Table 11.
The decision to grant no objections to implement the approved 2018 tariff was postponed for Lusaka, Nkana, Kafubu and North Western WSCs for failure to meet the tariff conditions within the stipulated timeframes.
24 WWSSSS Sector RReporteport 2017 NWASCO
Table 10: 2018 Approved Tariffs - Comprehensive Average Average % Projected Cost CU % Applied Selected Tariff Conditions for 2018 Approved Coverage for 2018 for • Install 5,000 new meters • Increase connections by 700 Southern WSC 9.8% 7.5% 113% (FC) • Adhere to Service level Guarantees on hours of supply particularly in Kanyelele Township in Siavonga and Kamunza Township in Choma
• Increase number of connections by 900 Eastern WSC 46.7% 16% • Maintain 100% metering 95%(O&M) • Ensure that no meter remains stuck for more than 3 months
Table 11: 2018 Approved Tariffs- ‘No Objection’ Average % Projected Cost CU Selected Tariff Conditions for 2018 Approved Coverage for 2018 • Fully adhere to Service Level Guarantees throughout the tariff period on water supply hours Chambeshi WSC 14.5% 100% (O&M) • Meter 3,741 connections
• Increase number of connections by 2,000 Luapula WSC 17% 73% (O&M) • Maintain Water Compliance above 95% throughout the tariff period
• Increase number of connections by 2,000 Lukanga WSC 15% 103%(FC) • Install at least 3000 customer meters
• Increase number of water connections by at least 3,000 Mulonga WSC 12% • Increase number of connections by at least 1,000 for sewerage 124%(FC) • Install at least 10,000 customer meters
• Adhere to Service Level Guarantee for service hours throughout the tariff period. Western WSC 15% 108% (O&M) • Increase sewerage connections by at least 200
*Full Costs (FC) = O&M cost + Depreciation + Finance charges+ Allowable Provisions
25 NWASCO WSSWSS Sector ReportReport 2017
4.6 INCREASING AWARENESS AND ENGAGEMENT OF CONSUMERS on WSS, for Junior and Senior secondary school pupils as part of the commemoration activities. NWASCO is mandated to inform the public on WSS issues, hence activities 66 World Water Day-whose theme was “Water and Wastewater” was targeted at the consumers and stakeholders were undertaken. commemorated in Kitwe, preceded by a two days exhibition and later a march past. NWASCO used the opportunity to educate consumers of 4.6.1 Water Watch Groups their services through a quiz. Water Watch Groups are voluntary consumer groups established and supported 66 Global Hand Washing Day-whose theme was “Our Hands, Our Future” by NWASCO to act as intermediaries between the consumers and service was commemorated at Mwachisompola Community Health Assistants providers by ensuring unresolved complaints are actively attended to by the Training College in Chibombo district. CU or escalated to NWASCO. The WWGs undertook various sensitisation 66 World Toilet Day- NWASCO released a press statement in line with the activities such as radio programmes, door to door outreach and drama shows. theme which was “Water and Waste Water”. The WWGs dealt with more than 200 complaints in the year.
4.6.2 Consumer Roadshow In a bid to increase visibility of the NWASCO brand and be consumer oriented, a roadshow was held in Chipata, Eastern Province which drew an audience of over 300 people. Other than creating visibility for NWASCO, the road show aimed at marketing NWASCO’s services on a very personal level and reinforce its role of protecting consumers.
4.6.3 National Events 4.7 CROSS-CUTTING ISSUES - HIV and AIDS and Gender Mainstreaming NWASCO participated in a number of National Events as follows: NWASCO, with assistance from GIZ, continued to carry out different 66 53rd Zambia International Trade Fair- whose theme was “Innovation for programmes to support CUs on issues of HIV and AIDS and Gender Industrialisation”. The presence of NWASCO at the Trade fair gave the mainstreaming. A training for focal persons of CUs was held, aimed at consumers an opportunity to air their grievances on WSS and to learn increasing the knowledge levels of participants on gender and HIV and AIDS more about NWASCO and its relationship with Commercial Utilities. and equip them for effective mainstreaming using Joint in Circuit method. The 66 World Consumer Rights Day- whose theme was “Building a Digital meeting provided an opportunity to provide input to the Gender and HIV and World Consumers can Trust”. NWASCO contributed to the debate topics AIDS mainstreaming Handbook for the CUs. 26 WWSSSS Sector RReporteport 2017 NWASCO
4.8 REGULATORY ENHANCEMENT the submissions from the stakeholders and also to prepare the document for further legislative processes at the Ministry of Water Development, Sanitation 4.8.1 Legal Reforms and Environmental Protection and the Ministry of Justice. NWASCO embarked on reviewing its Principal Act, the Water Supply and Sanitation Act, No.28 of 1997. The Principal Act was amended in 2005 by the 4.8.2 Complaints Handling Water Supply and Sanitation (Amendment) Act, No. 10 of 2005 and several subsidiary legislation was promulgated pursuant to the enabling provisions of In line with NWASCO’s mandate to advise Utilities on procedures of handling the Principal Act. complaints, an integrated complaints handling platform dubbed MyWatSan Quickfix, was developed and deployed that enables customers from any CU The reforms to the Principal Act have been necessitated by the need to address: to report complaints through a single web-based interface (mywatsan.co.zm). 66 Inadequacies of the existing legal and institutional frameworks; The platform includes automatic escalations for unresolved complaints against set resolution timeframes. Customers are also able to submit complaints via 66 Update and enhance good corporate governance principles and other voice calls and sms using a short code 5252 over all mobile networks. regulatory principles and practices that have developed over time taking into account the period that the Act has been in existence since its Out of the 11 CUs, only five CUs namely Chambeshi, Eastern, Lusaka, promulgation; Southern and Western Water and Sewerage Companies were using MyWatSan 66 All the lacunae in the Act so as to make the legislation efficacious to all QuickFix platform. A total of 958 complaints were report by the end of the the end-users. This also includes addressing the need for interpretation period. of key technical terms in the Act so as to prevent adverse interpretations; 66 Harmonise with other pieces of legislation related to WSS such as the 4.8.3 Sanitation Pricing Strategy Water Resources Management Act, No.21 of 2011, the Environmental The WSS Act in section 4(2) (d) (iv) provides for NWASCO to develop guidelines Management Act, No. 12 of 2011 and the Local Government Administration for setting of tariffs for water and sanitation services. One of the key principles Act, Cap. 281 of the Laws of Zambia ( as amended by Act No. 17 of 2016); that NWASCO has set out for tariff setting is the financial sustainability of CUs 6 6 Strengthen enforcement provisions in the Act, adequate due process and using the cost-plus method. This entails providing sufficient revenues to cover other regulatory interventions. operation and maintenance costs for a sustainable water supply and sanitation A repeal and replace process has been considered as most appropriate in service and eventually full costs. the reforms. A gap analysis and drafting of the Water Supply and Sanitation The current tariffs are set in such a way that only the water revenues are Services Bill was undertaken followed by a stakeholder consultation on the considered in covering the justified costs. The sewerage tariffs are calculated Bill as required under the Business Regulatory Act, No. 3 of 2014. as a percentage of the water tariff (ranging from 20% to 45%) depending on Further processes were undertaken on the proposed bill taking into account the CU’s estimate of the costs incurred in providing sewerage services. This
27 NWASCO WSSWSS Sector ReportReport 2017
prompted NWASCO to develop a specific tariff for sewerage services as onsite and offsite sanitation for both rural and urban areas. CUs can delegate opposed to using a proportion of the water bill to cover the actual costs of to private operators or community based organisations (CBOs) through a such services. A guide, embedded in the tariff model, was also developed to permit issued by NWASCO. assist the CUs to fully separate costs of water and sewerage. This will enable more focus on sanitation service provision. 4.8.6 Sanitation Surveys The NWASCO Strategic Plan contains an objective to improve sanitation 4.8.4 Pricing for Trade Effluent regulation. In this regard, two surveys were undertaken in Kabwe and Mansa, The NWASCO tariff setting guidelines do not provide a charge of trade/ to establish the baseline of sanitation service delivery. The surveys mainly industrial effluent based on the quality into public sewer system. Like domestic focused on collecting information about the types, location, state and availability customers, commercial properties are charged sewerage as a percentage of sanitation facilities in the urban and peri urban areas. The survey also of water consumed but with a higher percentage. The NWASCO tariff setting included solid waste disposal practices. model has been modified to accommodate trade effluent charging as follows: Out of a total of 28,498 properties visited in Kabwe, only 5,962 were connected Tier 1: to the Lukanga WSC sewer line while 56% were using pit latrines which √√ BoD and SS concentration defined based on site assessment/laboratory were poorly constructed. Only 6% of households visited were utilising waste test. collection facilities. √√ Initial no: ‘Handful up to a dozen’ large companies for whom pre-treatment In Mansa, out of a total of 20,514 properties visited, only 483 were connected is an option. to the Luapula WSC sewer network, leaving about 98% on onsite sanitation. Tier 2: For onsite sanitation, 83% were pit latrines of which about 37% were poorly √√ Concentration assessed on standard levels. constructed with mud and other sub-standard materials. Of all the housing √√ Similar number in terms of categories, but multiple number of customers. units visited, only 2% were utilising waste collection facilities. √√ Dry cleaners, food processors, private tankers at WWTP.
Tier 3: Household and “domestic equivalent” pay no extra –over charge and all Tier 1 – 2 pay the standard Tier 3 charge.
4.8.5 Regulating Onsite Sanitation and Rural Water Supply In line with the NWASCO Strategic Plan, frameworks for provision and regulation of both onsite sanitation and Rural WSS have been developed. NWASCO will amend the licence for CUs to cover water supply as well as Sanitation survey covered all areas to establish status of services 28 WSSWSS Sector ReportReport 2017 NWASCO
4.8.7 Eastern and Southern Africa Water and Sanitation Regulators Association (ESAWAS) NWASCO is a member and the seat of secretariat of the Eastern and Southern Africa Water and Sanitation (ESAWAS) Regulators Association which is a network of WSS regulators cooperating to enhance effective regulation.
In the reporting year, NWASCO participated in the regulatory Peer Review of the Lesotho Electricity and Water Authority (LEWA) in Lesotho. The Peer Review is a hands-on interrogation of the regulatory systems and practices of the host against good regulatory systems and practices. This was the fifth peer review ESAWAS 11th AGM hosted by NWASCO in Livingstone undertaken by ESAWAS, with NWASCO having been peer reviewed in 2015. 4.8.8 Local Regulatory Collaboration NWASCO hosted the 11th ESAWAS Annual General Conference and Meeting in In a bid to enhance collaboration among regulatory agencies, the fourth annual Livingstone under the theme ‘Water Integrity and SDG6- Designing Appropriate meeting with Regulators whose theme was “Innovations in Regulation” was Regulation’. The two-day conference attracted about 78 participants from held and sponsored by the Business Review and Regulatory Authority (BRRA). across the region and was officially opened by the then Minister of Water Other institutions represented were: Patents and Companies Registration Development, Sanitation and Environmental Protection, Honourable Lloyd Agency (PACRA), Zambia Information and Communications Technology Kaziya. The deliberations on the theme focused on the establishment of Authority (ZICTA), Independent Broadcasting Authority (IBA), Workers water integrity committees within institutions, collaboration in enforcement Compensation Fund Control Board (WCFCB), Zambia Revenue Authority with agencies such as Supreme Auditors, Anti-Corruption and civil society (ZRA), Zambia Medicines Regulatory Agency (ZAMRA), Radiation Protection groups, and implementing indicators for monitoring corporate governance Authority (RPA), and Disaster Management and Mitigation Unit (DMMU). and water integrity. A number of resolutions were made and included: 66 BRRA should develop capacity on issues of Regulatory Impact Assessments, assist with a format for submitting information especially for purposes of one stop shop innovations and provide information requirements for E-Registration. 66 There was need for MOUs among the Regulators to harmonise the mandates and therefore avoid duplication and unnecessary referrals. 66 ZICTA to audit IT systems being used by different Regulators to ensure ESAWAS Peer Review team with LEWA staff in Lesotho there were no risks of the prevailing challenges of cyber-crime. 29 NWASCO WWSSSS Sector RReporteport 2017
4.8.9 Chief Executive Officers’ Forum 4.9 Resource Centre Activities The Forum is a platform for CU Chief Executive Officers to interact with The Resource centre was created by NWASCO in 2011 as a mechanism for NWASCO and the MWDSEP on issues ranging from good practices to knowledge and efficiency management in the CUs and the sector as a whole. challenges facing the water sector. A number of key stakeholders were called The Resource Centre is also the secretariat for ZAWAFE. The following were upon to give expert advice that included the Ministry of National Development the activities supported and undertaken by the Resource Centre: Planning. 4.9.1 Zambia Water Forum and Exhibition Two meetings were held focusing on the following issues among others: The Zambia Water Forum and Exhibition (ZAWAFE) brings together local 66 Policy direction on the New Ministry of Water Development, Sanitation and international stakeholders to explore and find implementable solutions and Environmental Protection and the new institutional arrangement; to water sector challenges and share good practices. The 6th ZAWAFE was 66 Settling of outstanding water and sanitation bills by Government held in June under the theme ‘Water, Sanitation and Sustainable Development institutions; Goals: What is Zambia doing?’ and was attended by 350 delegates and 40 66 Effects of Load shedding and installation of prepaid meters at treatment exhibitors participated.. plants by ZESCO; 66 Plans for Water and Sanitation infrastructure projects for new districts 4.9.2 Support to Commercial Utilities and integrated planning in the towns. The Centre also conducts capacity building trainings on demand for CUs and 66 Pollution of sources of water; and other providers and coordinates industrial attachments for students to the water 66 Impact of climate change. Utilities as a way of closing the gap between Industry and academics. The 4.8.10 Human Resource Forum Resource Centre also coordinates Research and Development. The following were the activities undertaken in the year under review: The intricate and overarching nature of the roles of an HR Department is one that NWASCO has taken cognisance of and hence plans have been put in place to ensure that HR practitioners in the CUs are given necessary knowledge to 4.9.2.1 Support to Students and Capacity Building enable them effectively handle the challenges and other experiences being The Resource Centre engaged four training institutions namely; University faced in their respective CUs. of Zambia, Copperbelt University, Natural Resources Development College and Lusaka Business and Technical College to enter into an understanding In view of this realisation, an HR Forum was held for HR practitioners from all for students’ industrial attachment at CUs. The programme is envisioned to the 11 CUs. Among the topics discussed were: the Role of Human Resource attract students to work in the sector after graduating. About 46 students in a Dynamic Institution, Organisational Behaviour, Collective Bargaining, were attached to the different CUs for Industrial Training. Students are also Conflict and Dispute Resolution Mechanisms, Contract Management and engaged through guest lectures as part of the outreach programme. Guest Performance Monitoring. 30 WSSWSS Sector ReportReport 2017 NWASCO
lecturing was done at Mulungushi University. Further, the Resource Centre 4.9.3 Water Data Centre hosted students from the University of Zambia, School of Engineering on an NWASCO initiated the Water Data Centre (WDC) to support CUs in collecting industrial learning visit which gave them an opportunity to understand the spatial data on their network and customer locations. The WDC was co-funded sector set up and the water reforms. by the participating utility companies and GIZ.
Water networks were mapped in a total of 35 Towns from 5 CUs under phase 1 4.9.2. 2 Training and Support to Commercial Utilities namely SWSC, NWWSC, LPWSC, CHWSC and EWSC which encompassed The Resource Centre conducted in-house trainings for four CUs namely; information about the location and types of pipes, valves and water meters. Mulonga, Chambeshi, Luapula and Western WSC. As a result, the developed detailed maps provide the CUs with tools and For Mulonga WSC the training was focused on Customer Care and a total information for better decision making and improved planning for various of 70 staff were trained. Individual performance improvement plans were interventions on the water distribution systems, water loss management and then developed as part of the training outputs, whose implementation was hydraulic modelling. followed up.
For the other three CUs, the training was conducted as part of the ongoing Recovery Programme for the three CUs. The recovery programme was designed with the support of the Africa Development Bank (AfDB), to assist the three CUs improve performance and ultimately service delivery. The training focused primarily on Integrity Management and setting of performance indicators.
4.9.2.3 Research and Development The Resource Centre offers financial support to students conducting research in key areas that are relevant to the operations of the CUs as part of its R&D component. Two studies on water quality were conducted which investigated the presence of heavy metal levels in drinking water in Chingola and their potential health impact. The other study looked at the presence and sources of manganese in drinking water in the same town. The findings of the former research were disseminated at the 6th ZAWAFE conference. Figure 3: Water distribution system in Nyimba, Eastern Province 31 NWASCO WSSWSS Sector ReportReport 2017
4.9.4 Recovery Programme Western, Luapula and Chambeshi WSC have for years struggled to improve operational efficiency and financial viability. Hence a 3 years Recovery Programme aimed at improving institutional efficiency, effectiveness and capacity was implemented, with the support of the African Development Bank. Each CU signed an initial 6 months performance agreement (effective October 2017) with NWASCO highlighting the performance indicators and the activities to be undertaken to achieve them. Further, the CUs also highlighted the activities to be undertaken by NWASCO in order to support them in the process of achieving those performance indicators.
Under the performance agreements the CUs were required to: 66 Increase Billing Efficiency 66 Increase Billing Money 66 Achieve collection efficiency of at least 85% during the period 66 Improve Water quality Monitoring 66 Reduce NRW Interventions are required to improve CU sustainability and service provision 66 Improve Asset Management 66 Increase Hours of Supply in each district
This programme is part of NWASCO’s regulatory framework and builds on the existing regulatory tools and instruments. It would therefore, require increased monitoring.
32 WSS Sector Report 2017 5
INTEGRITY IN WATER SUPPLY AND SANITATION SERVICE DELIVERY
33 Integrity in WSS Service Delivery WSSWSS Sector ReportReport 2017
5.1 INTRODUCTION Table 12: Pillars of Integrity No. Pillar Some Requirements Responsible Water integrity has become top of the agenda as countries position themselves Stakeholders towards the attainment of the sustainable development goals and the vision 1 Transparency • Publicise proposals and plans in GRZ, NWASCO, 2030. This is because lack of integrity and presence of corruption can lead accessible formats CUs, Anti to failure to attain these objectives. • Develop advocacy and encourage Corruption media reporting Comission (ACC), The water supply and sanitation sector is facing severe integrity risks such • Combine tools and adapt to local Media institutions environment as corruption, unsustainable practices and non-ethical working environment. • Publish research findings on Integrity and anti-corruption are some of the least addressed areas in the corruption governance of water supply and sanitation service delivery. Water integrity 2 Accountability • Audit finances and make results Auditor is either neglected or not systematically factored into the formulation and public General, CUs, • Develop formal and informal GRZ, NWASCO, implementation of Policy. Institutions and structures tend to be weak creating monitoring ACC an enabling environment for non-integrity issues. • Encourage and protect whistle- blowers Integrity needs to be addressed at policy formation, implementation, monitoring • Promote a culture of public service and punish abuses and evaluation to ensure that strong structures are created at all levels. 3 Participation • Develop complaints systems with CUs, NWASCO, Concerted effort is required from all stakeholders in the fight against corruption feedback loops Customers and all other non-integrity issues. • Include water users associations in decision making • Build capacity in stakeholder in- 5.2 PILLARS OF INTEGRITY volvement • Address gender disparities There are four main pillars of integrity propounded by the Water Integrity Network,(WIN). Institutions in the water supply and sanitation sector need to 4 Anti- • Build links and joint action with anti- ACC, NWASCO, Corruption corruption bodies CUs, GRZ ensure that they uphold these pillars in order for integrity to be rooted and • Legislate to recognise human rights thrive. The pillars and concerned stakeholders are elaborated in Table 12. to water • Zero tolerance for corruption • Publish conflict of interest rules
34 WSSWSS Sector ReportReport 2017 Integrity in WSS Service Delivery
5.3 EXPERIENCES OF THE COMMERCIAL UTILITIES official receipt.
The WSS sector in Zambia has not been spared from corruption and lack 66 Doing private jobs using company name and resources. of integrity. The areas prone to lack of integrity and practical examples of 66 Employing people who are not qualified for the job in exchange for money. corruption incidences are highlighted below: 66 Under and over banking of collected money from billing of water and 66 Meter readers conniving with customers to understate meter readings. sanitation services. 66 Plumbers conniving with customers by tempering with the meters and 66 Absence of Boards of Directors to develop and oversee implementation installations to reduce consumption volumes. of company policies and strategies. 66 Plumbers diverting company materials to their private jobs. 66 Getting inflated invoices for purchase of materials with a purpose to share the proceeds with the suppliers. 66 Leaking information to bidders on the price ceiling for contract. 66 Sneaking missing tender documents into the tender box after preliminary evaluation. 66 Writing off water bills as though the customer was not receiving a service. 66 Payment for favours to get service connection quickly. 66 Taking well-functioning equipment for repair. Money meant for repair is shared between repairer and officer in charge. 66 Accepting shoddy work in exchange of money. 66 Requesting imprest to get something not appearing on the request (personal gain). 66 Buying used equipment purporting it to be new. 66 Using of un-carbonated receipts to understate the receipt amount – pull the carbon paper slightly so that a figure does not appear on the copy. 66 Making own receipt books to be issued to customers instead of company Well-functioning equipment can be taken for repair for deceitful gain
35 Integrity in WSS Service Delivery WSSWSS Sector ReportReport 2017
5.4 STRATEGIES TO ENHANCE INTEGRITY There are a number of ways to combat corruption in the sector. Cardinal among them should be strategies that seek to strengthen institutional structures so as to create an enabling environment. Such strategies aim at preventing rather than reacting to non-integrity issues. NWASCO has placed emphasis on two strategies namely: Risk Management and Good Corporate Governance. This has been demonstrated in the development of a Corporate Governance Guideline, Anti-Corruption and integrity and Risk Management guidelines as well as some capacity building initiatives in Water Integrity Management.
5.4.1 Risk Management Risk management involves understanding, analysing and addressing risk to make sure organisations achieve their objectives. The process of risk management should include identification and analysis of integrity risks. Strategies to address and monitor them should also be put in place. Southern WSC sharing strategies to enhance water integrity
5.4.2 Corporate Governance 5.5 CONCLUSION Corporate governance is the system of rules, practices and processes by which Good corporate governance and Risk Management are fundamental elements a company is directed and controlled. It provides the framework for attaining a of Integrity management. They provide instruments to detect and manage company’s objectives, it encompasses practically every sphere of management, integrity risks, as well as to prevent and sanction violations of rules. Policy from action plans and internal controls to performance measurement and Makers, Regulators and CUs need to integrate integrity aspects into their corporate disclosure. All stakeholders must ensure good corporate governance regular management approaches. is strengthened in the water sector. Transparency, Participation, Accountability and Anti-corruption are critical determinants of how water services are governed. They need to be included, in a systematic way, in water policy formulation and implementation. Without integrity, the SDGs and the Zambian Vision 2030 will be unattainable. 36 WSS Sector Report 2017 6
progress on meeting service level agreements and adherence to service level guarantees
37 Progress on Meeting SLA/Gs WSSWSS Sector ReportReport 2017
6.1 INTRODUCTION Table 13: Service Level Indicators (SI)
To ensure that CUs give a progressively better service to their Service Indicator Measurement
customers, NWASCO has formulated guidelines on Minimum SI 1 Coverage of the Service Area % of population served with drinking water. Service Level (MSL). MSLs are simply standards which define the No. of tests carried out and test results within the acceptable minimum level of service which providers must achieve SI 2 Drinking Water Quality national standards for drinking water. over a specified timeframe. The guidelines have eleven indicators Water supply hours per day and hours to attend (shown in Table 13) used to set Service Level Guarantees SI 3 Service Hours to customers per week. (SLGs) and Service Level Agreements (SLAs). SLGs compel Billing, meter reading sequences, conditions for CUs to provide a certain agreed-upon minimum level of service SI 4 Billing for Services payment of bills by the customer. to their customers at any given time while SLAs set-out stepwise interventions that a CU will undertake to attain the desirable sector Complaints from clients, the response time on any SI 5 Client Contacts other contacts with customers. benchmarks of service provision. It is a requirement that SLGs Interruption of Water Supply Unplanned interruption of supply or sewer are displayed at all customer service points for the information SI 6 and Blockage of Sewer evacuation due to maintenance and repair work of the public. Pressure in the Network and Minimum flow rate of 7 litres/min required at Minimum Flow Rate at the customer connection As a license condition issued under the WSS Act No. 28 of 1997, SI 7 Customer Point for Water all water and sanitation service providers are required to formulate Supply and maintain SLGs and SLAs which NWASCO monitors. No. of unjustified disconnections and the SI 8 Unjustified Disconnections compensation to be paid by the provider to the The service indicators have timeframes (measured from customer commencement of operations of a particular Utility) within which The number of times sewage floods a connection they are to be attained and it is thus important to determine the SI 9 Sewage Flooding per year < 5 progress made by the CUs towards attaining the acceptable In terms of BOD , COD, Nitrates, Phosphorous, SI 10 Quality of Discharged Sewer 5 benchmarks. The eleventh indicator is support to institutions which etc is not measurable. Support to Public Institutions Activities put in place by the water providers SI 11 to Curb Wastage and Settle Bills Promptly
38 WSSWSS Sector ReportReport 2017 Progress on meeting SLA/Gs
6.2 Progress made in achieving Service Level Agreements and Adherence to SERVICE LEVEL Guarantees
Service Level Agreements /Guarantees are signed for specific towns under each CU. Every town has its own target for the three-year period in the SLA that enables the CU progress towards the acceptable benchmark. The analysis therefore considers achievement of individual targets such that failure in one town may translate into overall non-achievement of the Service Indicator.
Key: √ Achieved x Not achieved
SI 1 Service Coverage – Proportion of population serviced with water
Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG x √ x √ x x √ √ √ x √ SLA x √ x √ x x x x x x x
Water service coverage is largely influenced by movements in number of domestic connections and population growth. Although nearly all CUs increased number of domestic connections, only NWSC and MWSC met both the SLG and SLA targets. On the other hand, CHWSC, NWWSC, WWSC and LPWSC successfully met their targets for the SLG but failed to meet targets for the SLA.
SI 2 Drinking Water Quality – Assessment through compliance to Water Quality Monitoring Guideline Due to its impact on the health of consumers, CUs are required to guarantee their customers an overall compliance of 95%.
Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG x x x √ √ √ x √ √ √ x SLA x x x √ √ √ x √ √ √ x
A year after the introduction of some aspects of ISO/IEC 17025 in water quality monitoring chain, most CUs demonstrated that they had embraced the concept. As such, there was an improvement in adherence to water quality monitoring with MWSC, LGWSC, SWSC, NWWSC, WWSC and EWSC meeting the acceptable benchmark. More details on this aspect are shown in Chapter 7.
39 Progress on Meeting SLA/Gs WSSWSS Sector ReportReport 2017
SI 3 Service Hours- water supply hours per day and hours to attend to customers per week This service indicator depicts the average duration of water supply at the customer connection and is specific to an area. In addition, CUs are also expected to have offices accessible to customers for a minimum number of hours per week. Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG x x x x √ x x x x √ √ SLA x x x x x x x x x x √ Although hours of supply were generally stable, only LGWSC, EWSC and LPWSC managed to adhere to their SLGs. The rest of the CUs had places that received water supply for hours significantly below the guaranteed levels. However, none of the CUs managed to achieve targets enshrined in their SLAs.
SI 4 Billing for Services – Billing, meter reading sequences, conditions for payment of bills by the customer, metering ratio The billing for services indicator specifies the frequency at which CUs should read customer meters and distribute bills, the conditions related to payments of bills by customers and the number of customers with water meters. Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG x √ x √ √ x x √ x √ x SLA x x x x x x x √ x √ x As all CUs have already met the indicators related to billing and payment conditions, the analysis in this section focuses on metering. Only EWSC and NWWSC managed to attain metering targets stated in both the SLGs and SLAs. On the other hand, NWSC, MWSC, and LGWSC achieved the metering targets of their SLGs but not the SLAs.
SI 5 Client Contacts - Complaints from clients, the response time on any other contacts with customers This service indicator specifies the timeframes CUs are expected to take to respond to customer complaints or any other contacts with customers. Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG x √ x x √ √ x x √ x √ SLA x √ √ x x √ √ x x √ x √ Most CUs did not resolve some of the complaints presented before them within specified timeframes. Only NWSC, LGWSC, SWSC, WWSC and LPWSC managed to resolve complaints in reasonable time. Most failures in complaints resolution related to water supply interruptions and new connections. KWSC in particular, delayed resolving sewer blockages in Ndola and Luanshya. 40 WSSWSS Sector ReportReport 2017 Progress on meeting SLA/Gs
SI 6 Interruption of Water Supply & Blockage of Sewer - Unplanned interruption of water supply or sewer diversion due to maintenance or repair The service indicator reflects the proportion of the population in the CUs’ service area that is subjected to interruptions in water supply or blockage of sewer for a specified duration. Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG x x x x √ x x x x x x SLA x x x x √ x x x x x x CUs experienced unplanned interruptions of water supply and blockage of sewer lasting more than 20 hours, the details of which are in Section 7.2.2.2. SWSC continued to have unplanned interruption of sewerage services due to sewer blockages in Livingstone most of which were caused by misuse of sewerage facilities by customers.
SI 7 Pressure & Flow in the Network for Water – Minimum flow rate of 7 litres/min required at customer connection Pressure and flow in the network for water service indicator specifies the maximum acceptable proportion (<5%) of connections in a service area with water flow rate of less than 7 litres per minute. Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG √ √ √ √ √ x √ √ x x √ SLA √ √ √ √ √ x √ √ x x √ Area based low pressure challenges were experienced in service areas under SWSC, WWSC and EWSC. For the rest of the CUs, the pressure challenges encountered were within the acceptable limit.
SI 8 Unjustified Disconnections – No. of unjustified disconnections and the compensation paid by the provider to the customer This service indicator specifies the maximum acceptable proportion of the total connections for a CU that should be subjected to unjustifiable disconnections which is less than 0.2% of the customer base. Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG √ √ √ x √ √ √ x √ √ √ SLA √ √ √ x √ √ √ x √ √ √ Consumers who are unjustifiably disconnected from their water and sanitation services are entitled to a written apology and/ or compensation equivalent to one month’s billing. Consumers have the right to be heard and explained to in case they have misunderstandings with their billing. From the complaints escalated to NWASCO, only MWSC and NWWSC had significant complaints of customers subjected to unjustified disconnections. 41 Progress on Meeting SLA/Gs WSSWSS Sector ReportReport 2017
SI 9 Sewage Flooding – The number of times sewage floods a connection per year < 5 The Sewage Flooding service indicator specifies the maximum acceptable proportion of connections that can be flooded with sewage in a year which is less than 0.5% of the total connections.
Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG √ √ x x √ x √ √ √ x √ SLA √ √ x x √ x √ √ √ x √
KWSC, MWSC, SWSC and EWSC recorded significant number of complaints related to sewage flooding. KWSC and SWSC in particular, saw prolonged and recurrent sewage surcharging problems.
SI 10 Quality of Discharged Sewage – In terms of BOD5, COD, Nitrates, phosphorus, and others.
Lwsc Nwsc KWSC MWSC LGWSC SWSC CHWSC NWWSC WWSC EWSC LPWSC SLG x √ √ √ √ √ N.R x x √ N.R SLA x √ √ √ √ √ N.R x x √ N.R
LWSC, NWWSC and WWSC failed to meet the standards for sewage effluent discharges as required by ZEMA. CHWSC and LPWSC did not submit returns for their discharge points.
6.3 CONCLUSION There is generally slow progress in meeting the SLG and SLA targets of the various indicators. Only indicators 7, 8 and 9 (Pressure and flow in the network for water, unjustified disconnections and Sewage flooding respectively) showed a significantly progressive picture with other indicators showing that customers are often subjected to inconsistent services. This calls for more effort by CUs and resources to be dedicated to the water sector if the vision of a water secure future is to be realised.
42 WSS Sector Report 2017
COMPARATIVE PERFORMANCE OF commercial utilities (CUs)
43 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.1 OVERVIEW WSS services as a fringe benefit to their employees. The comparative performance of Commercial Utilities (CUs) during the period, 1st January to 31st December, 2017 is presented in this chapter. 7.1.2 Clustering of Commercial Utilities CUs are clustered according to size, based on the water production volumes and Performance analysis is undertaken to establish where a Utility is coming from number of connections in the licensed areas, as shown in Table 14. Clustering (past trends), how it has performed against others (comparative performance) allows the performance of CUs to be compared in the context of similar sized and how it has performed against good practice (acceptable performance/ Utilities. benchmarks). CUs with more than 50,000 connections and water production above 50million m3 Comparative performance is necessary to induce competition as CUs operate per year are placed in Cluster 1. CUs with connections between 20,000-50,000 as monopolies in their respective areas. Each CU is thus motivated to improve and water production between 10million-50million m3 per year are in Cluster 2. on its previous performance, as well as, outperform others. CUs with connections less than 20,000 and production less than 15million m3 The comparative information can be used by both stakeholders to plan appropriate per year are in Cluster 3. As the CUs grow in size, the limits set for the cluster interventions and by consumers to appreciate the performance and challenges could be revised. of their respective providers. Table 14: Clustering of CUs Cluster CU Total Population No. of Water Production 7.1.1 Total Population in Service Areas of the CUs in Service Area Connections (million m3) There are eleven CUs in Zambia licensed to operate in the urban and peri-urban LWSC 2,395,736 102,320 85.6 areas, within the boundary of a given district. Each CU services an entire province NWSC 794,906 62,120 51.2 except the Copperbelt Province which has three CUs operating in three districts 1 each, while Muchinga and Northern Provinces are serviced by a single CU. KWSC 711,537 62,428 56.9 MWSC 519,796 55,345 48.9* The total population in the CU serviced areas for the reporting period was estimated at 6.696 million. This may differ from that reported by the Central LGWSC 432,478 26,466 14.5 Statistical Office (CSO) because of the difference in the delineation of rural and 2 SWSC 475,808 53,496 21.7 urban areas. Some of the CUs’ licensed operating areas overlap with what is CHWSC 352,850 21,499 11.9 defined as rural by CSO. For example, CSO classifies as almost entirely rural, NWWSC 270,764 15,771 5.3 districts such as Manyinga in North-Western Province, Masaiti on the Copperbelt EWSC 310,926 19,724 5.4 Province and Mwense in Luapula Province, yet these are part of the CUs’ serviced 3 areas. WWSC 216,385 14,829 6.8 LPWSC 215,080 7,517 5.1 Out of the 6.696 million total estimated urban population, about 0.8% resides in areas serviced by six Private Schemes which are business entities that provide TOTAL 11 CUs 6,696,266 441,515 313 *See 7.2.1.4 Water Production 44 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2 PERFORMANCE ANALYSIS undertaking network and production project works which entailed shutdowns CU performance is measured in the following five broad categories of of facilities that limited the pace of adding new connections. indicators: Table 15: Total Connections 66 Operational; Total Total Non- Total Total CU Domestic Domestic Connections Connections 6 6 Financial; 2017 2017 2017 2016 66 Staff Efficiency; LWSC 93,417 8,903 102,320 97,008 66 Service Level; and NWSC 58,729 3,391 62,120 60,554 66 Corporate Governance and Management. KWSC 59,815 2,613 62,428 61,438 MWSC 53,306 2,039 55,345 52,951 7.2.1 OPERATIONAL INDICATORS LGWSC 24,673 1,793 26,466 25,145 The effectiveness and efficiency of a CU in providing water and sanitation services is assessed using operational indicators. These comprise Water and SWSC 50,589 2,907 53,496 50,803 Sanitation Coverage, Non-Revenue Water (NRW), Metering Ratio, Energy CHWSC 20,164 1,335 21,499 20,146 Efficiency and Maintenance Efficiency. The primary data used in calculating NWWSC 14,626 1,145 15,771 14,169 operational indicators include number of connections, population, water WWSC 13,463 1,366 14,829 13,288 production figures, energy usage and maintenance works. EWSC 18,120 1,604 19,724 20,227 LPWSC 6,931 586 7,517 7,355 7.2.1.1 Total Connections From Table 15, the total number of connections increased by 18,431 in the Total 413,833 27,682 441,515 423,084 reporting period. Domestic connections increased by 16,924 while the non- domestic connections increased by 1,507.
The highest number of new domestic connections were reported by LWSC- 5,312, SWSC-2,693 and NWWSC-1,602 in Clusters 1, 2 and 3 respectively. The reduction in connections recorded by EWSC was due to a database clean-up in Chipata.
LPWSC barely made any increase in new connections due to the limited spread of the network that requires investment for extension. KWSC was A water kiosk is counted as a single connection 45 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.1.2 Water Supply Coverage The ratio of urban population with access to safe and reliable water Chart 1: Water Supply Service Coverage
97.3% Very Good 100% 100% 96.2% 85.4% 88.0% 86.7% Benchmark for service 82.4% 84.3% Good >90% 81.1% 78.4% 80.3% coverage (water supply 80% Acceptable 80 – 90 % 82.7% and sanitation) 62.9% Unacceptable <80% 60% Water coverage represents the proportion of population serviced by domestic 37.6% connections through individual household connections, kiosks, public stand 40% posts and shared/yard taps. It is important to note that due to increases in population figures, the coverage in percentage terms may not depict the actual 20% growth in people served. Therefore, Chart 1 and Table16 show the water 0% supply coverage in percentage and absolute terms, respectively.
Eight CUs met the acceptable benchmark of 80% except LGWSC, WWSC and LPWSC. The overall sector coverage improved slightly from 82.7% to 84.3%. 2016 2017 % Average in 2016 % Average in 2017 In percentage terms, LGWSC had the highest increase in coverage largely attributed to the addition of 30 new public standposts which tend to serve more persons. However, in absolute figures, LWSC made the most increase in population served.
Public standposts serve more consumers Water coverage increased on average
46 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
Table 16: Population Served with Water Supply Proportion of Proportion of Proportion of Proportion of Population Population Population Population Total Population Total Population Serviced by Serviced by Serviced by Serviced by CU Population Served Population Served Household Public Standposts Household Public Standposts 2016 2016 2017 2017 Connections & Kiosks Connections & Kiosks 2016 2016 2017 2017 LWSC 2,327,832 1,929,604 42.8% 57.2% 2,395,736 2,046,139 43.0% 57.0% NWSC 777,149 739,942 69.7% 30.3% 794,906 764,998 70.0% 30.0% KWSC 709,622 571,055 86.8% 13.2% 711,537 577,382 87.6% 12.4% MWSC 509,984 493,292 77.8% 22.2% 519,796 505,597 78.9% 21.1% LGWSC 429,977 321,420 45.1% 54.9% 432,478 339,087 41.3% 58.7% SWSC 462,848 396,625 83.5% 16.5% 475,808 418,590 83.4% 16.6% CHWSC 341,909 270,636 59.1% 40.9% 352,850 283,283 63.4% 36.6% NWWSC 264,731 223,773 34.6% 65.4% 270,764 234,810 37.1% 62.9% WWSC 207,656 131,722 71.3% 28.7% 216,385 136,125 72.7% 27.3% EWSC 299,315 255,934 49.4% 50.6% 310,926 256,123 49.5% 50.5% LPWSC 214,670 76,733 78.1% 21.9% 215,080 80,953 79.2% 20.8% Total 6,545,693 5,410,736 59.4% 40.6% 6,696,266 5,643,087 59.6% 40.4%
It is desirable that CUs serve the population through individual connections. Kiosks/public standposts are ideally a stop-gap measure in consideration of the affordability of individual connections. However, they are used as an alternative mode of service provision where it is not feasible to lay a network for individual connections, such as unplanned high density (peri-urban) areas.
The proportion of persons served by individual household connections remained almost the same from the 2016 period as shown in Table 16. LWSC, LGWSC, NWWSC and EWSC were the only CUs that continued to have over 50% of the population serviced by Kiosks and public standposts. LWSC and LGWSC had the highest number of public water points of 880 and 203, respectively. It is worth noting that LWSC had an estimated 38% of the population serviced by Water Trusts in 10 peri-urban (high-density) areas (Chibolya, Kanyama, Freedom, Kalikiliki, Garden, Ng’ombe, Mtendere East, Chazanga, Chipata and Chaisa).
47 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
The ratio of urban population with 7.2.1.3 Sanitation Coverage implementing new water connections. The drop in coverage for EWSC and access to adequate sanitation WWSC was attributed to a database verification. Sanitation coverage consists of the population serviced by offsite (centralised For sanitation coverage, the accuracy of the figure is hampered by the system) and septic tanks only. Other onsite facilities, such as pit latrines, are unreliability of data on the number of households on septic tanks. Table 17 not considered as acceptable for urban sanitation. therefore, shows the sewerage connections on the billing database, which MWSC remained the only CU above the acceptable benchmark of 80%. The is more reliable. The total connections on the sewer network increased by average sanitation coverage increased slightly to 62.5%, as shown in Chart 2. 3,182. CHWSC reported a drop as a result of a high number of non-functional connections. A few CUs recorded increases in the sanitation coverage. A sanitation survey undertaken for LPWSC in Mansa established 483 connections on the main Table 17: Total Sewer Connections Total Sewer Total Sewer system. SWSC captured more data on customers with septic tanks while CU Connections 2016 Connections 2017 LWSC 32,137 32,276 Chart 2: Sanitation Service Coverage 48,794 50,480 100% NWSC 81.8% KWSC 45,009 45,148 73.7% 74.3% 80% 71.1% MWSC 52,234 53,826 59.4% 62.5% LGWSC 8,602 9,948 60% 61.8% SWSC 12,906 12,961 39.7% 41.8% 33.6% CHWSC 7,353 4,549 40% 31.3%31.9% 21.6% NWWSC 904 919 20% WWSC 735 1,456 EWSC 1,794 1,706 0% LPWSC 91 483 Total 210,559 213,752
2016 2017 % Average in 2016 % Average in 2017
48 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
Table 18 shows the proportions of people serviced by septic tanks and those on the network. Table 18: Population Serviced with Sanitation Proportion of Proportion of Proportion of Proportion of Total Population Population Population Total Population Population Population Served CU Population Served Served on Served by Population Served Served on by Septic Tanks 2016 2016 Sewer Network Septic Tanks 2017 2017 Sewer Network 2017 2016 2016 2017 LWSC 2,327,832 1,729,967 17.1% 82.9% 2,395,736 1,765,843 17.3% 82.7% NWSC 777,149 538,811 90.0% 10.0% 794,906 590,366 86.6% 13.4% KWSC 709,622 498,711 75.4% 24.6% 711,537 505,599 74.5% 25.5% MWSC 509,984 409,916 98.1% 1.9% 519,796 425,066 98.2% 1.8% LGWSC 429,977 170,005 30.9% 69.1% 432,478 171,775 37.6% 62.4% SWSC 462,848 259,201 33.6% 66.4% 475,808 282,562 31.0% 69.0% CHWSC 341,909 141,926 42.0% 58.0% 352,850 147,605 21.3% 78.7% NWWSC 264,731 55,069 10.3% 89.7% 270,764 58,530 10.7% 89.3% WWSC 207,656 75,892 19.1% 80.9% 216,385 72,629 22.3% 77.7% EWSC 299,315 107,424 13.4% 86.6% 310,926 97,460 14.0% 86.0% LPWSC 214,670 56,187 1.5% 98.5% 215,080 68,504 6.8% 93.2% Total 6,545,693 4,043,109 44.4% 55.6% 6,696,266 4,185,939 43.8% 56.2% CUs need to strive to extend the sewer network as a means of protecting ground water from contamination. Less than 50% of the population served was on the sewer network for all CUs except NWSC, KWSC and MWSC.
Waste stabilisation ponds for treatment of sewage
49 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
Joint Monitoring Programme Service Ladders Table 19: The new JMP ladders for drinking water and sanitation services The Joint Monitoring Programme (JMP) uses service ladders to benchmark The new JMP ladder for drinking water services and compare progress across countries, and these have been updated and SERVICE LEVEL DEFINITION expanded to facilitate enhanced monitoring. The new ladders build on the Drinking water from an improved water source that is located on SAFELY established improved/unimproved facility type classification, thereby providing premises, available when needed and free from faecal and MANAGED continuity with MDG monitoring, and introduce additional criteria relating to priority chemical contamination the level of service provided to households. Drinking water from an improved source, provided collection time BASIC is not more than 30 minutes for a round trip, including queuing. Drinking water from an improved source for which collection time Improved drinking water sources are those which by nature of their design LIMITED exceeds 30 minutes for a round trip, including queuing and construction have the potential to deliver safe water. Improved sanitation Drinking water from an unprotected dug well or unprotected facilities are those designed to hygienically separate excreta from human UNIMPROVED spring contact. Drinking water directly from a river, dam, lake, pond, stream, SURFACE WATER canal or irrigation canal There is a call for countries to align their reporting of indicators with the ladders Note: Improved sources include: piped water, boreholes or tubewells, protected dug wells, protected springs, promulgated by JMP in Table 19. For NWASCO reporting, the proportion of rainwater, and packaged or delivered water.
persons served by individual household connections represent safely managed The new JMP ladder for sanitation services (ladder 1) while kiosks/public stand points represent both Basic and Limited SERVICE LEVEL DEFINITION (2 and 3 ladders respectively). In order to separate basic from limited ladder, Use of improved facilities that are not shared with other SAFELY households and where excreta are safely disposed of in situ or studies need to be conducted on people drawing water below or above 30 MANAGED transported and treated offsite minutes for a round trip. From past experience, it is easier to use distance to Use of improved facilities that are not shared with other BASIC estimate access other than time which is so much dependant on the interviews households with correspondents or persons accessing the services. Use of improved facilities shared between two or more LIMITED households For sanitation, more separation need to be done to suit the ladders. Currently, Use of pit latrines without a slab or platform, hanging latrines or UNIMPROVED NWASCO reports on safely managed, basic and limited ladders (ladders 1, 2 bucket latrines and 3 respectively) with most of the proportion of persons served falling under OPEN Disposal of human faeces in fields, forests, bushes, open bodies DEFECATION of water, beaches or other open spaces, or with solid waste ladders 1 and 2 (not shared). Note: improved facilities include flush/pour flush to piped sewer systems, septic tanks or pit latrines; ventilated improved pit latrines, composting toilets or pit latrines with slabs.
Source: Progress on drinking water, sanitation and hygiene: 2017 update and SDG baselines 50 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2.1.4 Water Production Most CUs did not experience significant change in the volume of water Water production reflects the volume of water treated and distributed into a production from the previous reporting period. network. MWSC and NWSC experienced a notable drop in production due to service Water production figures in chart 3, are looked at in relation to the water losses shutdowns for maintenance purposes. CHWSC experienced drying up of raw depicted in Chart 5. With good operational efficiency, an increase in water water sources in Mungwi, Isoka and Mporokoso, as well as low power voltage production should only be necessitated by an increase in customer base and/ in Kasama. or improved hours of supply. CUs should therefore aim at reducing NRW first before considering to increase production.
Chart 3: Water Production 100 85.6
80 Water production reflects volume of water treated and distributed 3 56.9 60 51.2 48.9 Metered connections compared to the total connections
million m 7.2.1.5 Metering Ratio 40 Metering is required in order to measure the amount of water consumed, as 21.7 well as charge consumers according to their consumption. It is one of the 20 14.5 11.9 5.3 6.8 5.4 5.1 important tools for controlling NRW.
0 Benchmark for Metering Ratio Acceptable 100% Chart 4 shows that the average metering ratio dropped to 74% with only NWWSC and EWSC having maintained the acceptable benchmark of 100% metering, despite adding new connections. The total number of new metered 2016 2017 connections was 13,190 which brought the total metered connections to 328,492. The high number of meter replacements, continued to hamper the increase in metering ratio. Source: Progress on drinking water, sanitation and hygiene: 2017 update and SDG baselines 51 Comparative Performance of CUs WWSSSS Sector RReporteport 2017
SWSC and NWSC made the highest increase in metering of 5,583 and 3,559 In line with the change in metering ratio, LWSC, WWSC and LPWSC had a connections, respectively. drop in the proportion of metered water sold. Overall, the bulk of water sold metered increased to 67.5% from the previous period. CHWSC continued LWSC, KWSC, WWSC and LPWSC experienced reductions in metering to be the only CU with a higher proportion of water sold unmetered, as ratio. WWSC and KWSC each removed over 1,500 damaged meters from evidenced by having less than 50% metered connections. SWSC despite the the system. LPWSC dropped below the acceptable benchmark as they added high metering ratio, had a high proportion of water sold which was unmetered new connections without meters while some stuck meters were removed from due to unmetered commercial customers who tended to be high consumers. the system, similarly for LWSC. Table 20: Proportions of Water Sold- Metered and Unmetered Chart 4: Metering Ratio Proportion Proportion Proportion Proportion Total Total 100% 100% of Sold of Sold of Sold of Sold 97% Water Water 100% CU Water Water Water Water Sold Sold Metered Unmetered Metered Unmetered 80% 80% 78% 2016 2017 80% 76% 74% 2016 2016 2017 2017 70% 67% 64% 75% LWSC 45.89 61% 39% 45.94 60% 40% 60% 49% NWSC 22.22 74% 26% 26.63 78% 22%
40% KWSC 20.16 64% 36% 20.54 67% 33% MWSC 32.84 71% 29% 29.70 75% 25% 20% LGWSC 7.96 74% 26% 6.92 80% 20% SWSC 13.66 53% 47% 14.01 53% 47% 0% CHWSC 7.07 26% 74% 6.01 31% 69% NWWSC 3.48 100% 0% 3.25 100% 0% WWSC 3.01 66% 34% 3.37 58% 42% 2016 2017 Average 2016 Average 2017 EWSC 3.19 100% 0% 3.11 100% 0% LPWSC 1.35 100% 0% 1.18 94% 6% Table 20 shows the proportions of water sold as metered and unmetered. The metered volumes are derived from meter readings while the unmetered Total 160.83 65.6% 34.4% 160.66 67.5% 32.5% sold volumes are estimated from the applicable flat rate tariffs for each CU.
52 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2.1.6 Water Loss Performance Indicators Water losses have principally been reported as Non-Revenue Water (NRW) Chart 5: Non-Revenue Water (NRW) in percentage (%) terms. While this is undoubtedly better than setting no 90% 77% targets at all, it discriminates against utilities with low consumption (low system 80% 64% loading), higher than average operating pressures (due to topography), and 70% 60% NRW calculations which include leakage on customers’ private pipes. 48% 52% 49% 51% 49% 50% 46% 42% 39% 39% 49% NRW, when compared with the total quantity of water put into supply, fluctuates 40% 35%
widely in time and cannot, therefore, be expressed in a single fixed figure 30%
such as percentage, without extensive qualification. To be truly meaningful, 20%
the water lost, expressed as a percentage (Chart 5), should always be related 10%
either to the distribution system (length of water network) or to service points 0% (customer connections).
7.2.1.6.1 Non-Revenue Water (NRW) Non-Revenue Water (NRW) is the difference between the quantity of treated 2016 2017 Average 2016 Average 2017 water distributed in the network and the quantity of water billed as shown in LGWSC, CHWSC, NWWSC, EWSC and LPWSC had worsened NRW due to Chart 5. NRW consists of technical (leakages) and commercial losses (illegal lower billed volumes in comparison to the previous period against production. connections, unbilled customers, wastage on un-metered customers’ premises The high NRW for LPWSC calls for immediate investigations and redressing etc). In the absence of metering, the volumes could be unreliable estimates. of the matter. Good <20% Benchmark for NRW Acceptable 20-25 % Unacceptable >25%
The average NRW did not change from the 2016 period and none of the CUs met the acceptable benchmark of 25%. Only two CUs, NWSC and WWSC, recorded reductions in NRW. For NWSC, the billed volume increased Metering is a tool for helping reduce NRW significantly against a drop in production while metering ratio also increased. 53 Comparative Performance of CUs WWSSSS Sector RReporteport 2017
7.2.1.6.2 Network Failures per 100km annual real losses to unavoidable annual real losses (UARL), the basis for Network failures per 100km in Table 21 shows how porous the network is, in developing a leakage management strategy. According to IWA classification, contributing to water losses. If leakages are repaired in good time, a porous the lower the ILI, the better is the Utility’s performance. It also allows inter- network may not necessarily lead to increased water losses. company and inter-country comparisons.
NWSC, SWSC, EWSC and LPWSC had considerably high network failures per Table 22: IWA Infrastructure Leakage Index Categeories 100km. LWSC did not have major breaks in the network but small leakages. Litres/connection/day Technical LPWSC had the highest number of failures per 100km. (when the system is pressurised) at an average Performance ILI pressure of: Category Table 21: Network Failures per 100km 10m 20 m 30 m 40 m 50 m CU 2016 2017 A 1 - 4 < 50 < 100 < 150 < 200 < 250 LWSC 12 0 B 4 - 8 50-100 100-200 150-300 200-400 250-500 NWSC 22 113 C 8 - 16 100-200 200-400 300-600 400-800 500-1000 KWSC 3 48 Developing Country Situation D > 16 > 200 > 400 > 600 > 800 > 1000 MWSC 86 24 Category Comments/Recommendations LGWSC 71 92 Further loss reduction may be uneconomic unless there are A shortages; careful analysis needed to identify cost effective 125 123 SWSC improvement CHWSC 39 19 Potential for marked improvements; consider pressure NWWSC 10 56 B management; better active leakage control practices, and better network maintenance WWSC 13 19 Poor leakage record; tolerable only if water is plentiful and cheap; 17 120 EWSC C even then, analyse level and nature of leakage and intensify LPWSC 35 165 leakage reduction efforts Horrifically inefficient use of resources; leakage reduction D 7.2.1.6.3 Water loss per connection and length of water network in programs imperative and high priority litres/day IWA Infrastructure Leakage Index classification and comments on categories The International Water Association (IWA) has developed the ILI (Table 22) as a method of performance comparison which can be used by a water Utility to measure its own success. The index is calculated from the ratio of current
54 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
Table 23 shows the ILI for CUs. The technical performance of CUs is compared Table 24 is used to check whether CUs are conforming to the loss in litres/day/ to the IWA Guidelines in Table 22. connection standard, within the categories that they fell in. A loss of greater Table 23: CU Infrastructure Leakage Index than 1,000 litres/day/connection is unacceptably high. CU 2016 2017 Table 24: Water loss per connection and length of water network in LWSC 44.1 42.2 litres/day NWSC 67.1 52.9 Water Loss Water Loss KWSC 70.2 68.9 per length per length Water Loss per Water Loss per of network of network Connection per Connection per MWSC 53.6 46.2 CU per day per day Day 2016 Day 2017 LGWSC 39.2 47.3 2016 2017 (L/con/day) (L/con/day) SWSC 12.9 12.9 (L/km/day) (L/km/day) CHWSC 32.1 32.4 LWSC 61,250 55,795 1,086 1,061 NWWSC 7.3 8.8 NWSC 111,027 87,852 1,373 1,083 WWSC 59.9 60.7 KWSC 80,974 80,355 1,634 1,596 EWSC 8.7 11.9 MWSC 92,670 76,227 1,086 948 LPWSC 70.9 88.3 LGWSC 13,590 16,560 655 781 Because of the increase in NRW, NWWSC fell from category B to C. EWSC SWSC 9,722 9,892 398 392 and SWSC maintained the category C status while the rest remained in D. CHWSC 8,704 8,957 770 745 The comparably low ILI for NWWSC and EWSC could be attributed to 100% 4,193 5,253 313 360 metering, relative good infrastructure and low NRW. NWWSC WWSC 32,643 46,769 720 637 EWSC 6,716 10,745 263 319
LPWSC 25,173 31,714 1,164 1,435 IWA Infrastructure Leakage Index classification and comments on categories In general, the magnitude of losses per day increased both per length of network, as well as per connection. LWSC, NWSC, KWSC and LPWSC had unacceptably high losses per connection per day. NWSC, KWSC and MWSC If leakages are repaired in good time, water losses can be contained had the highest losses per length of network per day. 55 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.1.6.3 Lost Revenues due to NRW in 2017 The total revenue lost increased further by about K38.16million from the To appreciate the magnitude of water losses, the NRW figures were translated previous period. At the benchmark of 25% NRW, the acceptable loss would into monetary terms, as shown in Table 25. have been about K432.6million against the actual of K848.9 million. In terms of monetary losses, LPWSC’s situation is extremely dire at more than 3 times Any loss of revenue in business is unacceptable. However, in the water sector, the billed amount. This poses an urgent threat to financial viability. a benchmark of 25% has been set as acceptable loss. If NRW is not reduced to the acceptable benchmark, the magnitude of loss becomes even greater as the business expands. CUs must strive to come up with strategies of realising some of the lost revenue.
Table 25: Estimated Revenue Lost due to NRW in 2017 Metering Total Billing NRW NRW (ZMW) NRW (ZMW) Ratio (ZMW) (in %) 2017 2016 LWSC 63.7% 269,520,860 46% 232,542,416 210,987,983 NWSC 80.4% 157,141,146 48% 144,932,173 193,953,620 KWSC 69.7% 117,714,196 64% 208,378,189 195,343,733 MWSC 80.3% 144,026,700 39% 92,885,098 91,673,792 Water lost cannot be translated into revenue LGWSC 76.2% 37,236,222 52% 40,572,415 25,479,640 SWSC 78.5% 64,611,415 35% 35,280,326 30,598,954 CHWSC 48.8% 19,896,556 49% 19,366,866 14,284,090 NWWSC 100% 23,098,447 39% 14,719,042 10,210,220 WWSC 67.3% 19,396,476 51% 19,856,926 15,083,346 EWSC 100% 21,682,869 42% 16,014,646 11,236,435 LPWSC 97% 7,300,581 77% 24,357,956 11,889,756 Total 881,625,469 848,906,053 810,741,569
56 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
Chart 6: Per Capita Production 350 7.2.1.7 Production and Consumption in Litre per Capita per Day 270 300 265 Chart 6 and 7 show the average amounts of water produced and consumed per 250
person per day, respectively. An analysis of the two charts reveals the degree 200 183 173 160 to which CUs are able to meet the required water consumption standards. 142 150 115 137 152 117 115 100 According to the World Health Organisation (WHO) guidelines, 50litres is the 62 58 acceptable minimum water consumption required per person per day for basic 50
hygienic considerations. However, this is a bare minimum and poses health 0 risks. NWSC, KWSC, MWSC, SWSC, WWSC and CHWSC met the minimum recommended consumption volume of 50 litres per day.
Production per person served (l/c/d) 2016 The low consumption per l/c/d for EWSC, LPWSC and NWWSC could be Production per person served (l/c/d) 2017 attributed to their high metering and low sewerage coverage which may Average 2016 Average 2017 result in low water usage. When metered, customers generally become more Chart 7: Consumption: Litre/Capita/Day cautious with water usage. Where sewered sanitation coverage is low, people 120 resort to facilities which use little or no water. 100 95 80 80 80 70
60 53 52 55 55 38 38 40 32 29 26 20
0
2016 2017 Average Average Sewerage coverage can impact the volume of water consumption 2016 2017
57 Comparative Performance of CUs WWSSSS Sector RReporteport 2017
7.2.1.8 Specific Energy Chart 8: Specific Energy: kW-hr per cubic metre Energy consumption has traditionally been reported as a monetary figure which 1.20 also includes costs related to fuel used in the running of vehicles and other 0.99 1.00 0.89 0.84 machinery not directly related to water production or waste water treatment. The 0.81 0.80 0.76 0.72 main contributor to the energy cost however is energy used in pumping operations. 0.78 0.61 0.62 0.58 It has become important for Utilities to single out this part and report it separately 0.60 3 0.43 0.38 so as to help Utilities monitor their energy usage and therefore develop energy 0.40 0.35
efficiency strategies aimed at using energy more sustainably and efficiently. kWh/m 0.20
It should be noted that specific energy in kWh/m3, in Chart 8, cannot be used to 0.00 compare one Utility to another because of the different operating environment and technologies used in treatment processes. The operating environment includes type of source used i.e. surface, groundwater or both, distribution method used 2016 2017 Average Average i.e. gravity or pumping, and length of distribution system. It is however possible for 2016 2017 Utilities to benchmark their individual treatment plants with those employing similar technologies in other Utilities. A downward trend for specific energy is desirable. Chart 9: Specific Energy: ZMW per kW-hr 1.00 Only WWSC had a significant reduction in Specific Energy as a result of increased 0.90 production due to improved borehole yields but with lower energy consumption 0.80 0.70 0.63 from the previous period. 0.58 0.60 0.55 0.57 0.47 0.47 0.50 0.45 0.46 0.43 0.39 0.38 Chart 9 shows the specific energy per kilowatt hour. The specific energy per 0.40 0.36 0.35
kilowatt hour must be looked at in comparison to the electricity tariffs per kilowatt ZMW/ kWh 0.30 hour (revised in the last quarter of 2017) which were as follows: Commercial - 0.20 0.10 K0.54, Social - K0.49, Maximum Demand1-K0.35, Maximum Demand2- K0.30, 0.00 Maximum Demand3- K0.25.
The significant reduction in NWWSC was attributed to reduced use of generator sets following electricity power supply stabilisation in the country. The increase 2016 2017 Average Average 2016 2017 in all the other CUs is mainly attributed to the increase in the electricity tariff. 58 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2.1.9 Maintenance NWSC had the least number of sewer blockages due to the replacement of main A good Maintenance Management System (MMS) is required for a CU to reduce sewer lines in Kitwe and Kalulushi. EWSC had the most number of blockages down time. A good MMS entails good planning, record keeping, skilled personnel in Kapata Township in Chipata due to the old age of the network. KWSC had an to undertake maintenance, effective monitoring and evaluation of systems and increase in the number of blockages particularly in Masala Township in Ndola. processes. 7.2.1.9.2 Plant Utilisation: Water and Sewer Plant Utilisation in Table 27 reflects the operational efficiency of the plant in 7.2.1.9.1 Sewer Blockages relation to the design capacity. A low level of plant utilisation could indicate This indicator (Table 26) measures sewer blockages per 100 connections and inadequacies in maintenance. Fully utilised plants could signal the need for per 100km of sewer network, to show the density of blockages. A high number new investment to expand infrastructure. WWSC continued to have the highest of blockages may reflect a poor state of the sewer network. Blockages may also utilisation of water plants, partly atrributed to the refurbishment of some boreholes indicate bad usage practices (such as dumping solid waste in manholes) and also in Mongu under the Emergency project. NWSC could have an overwhelmed overloading of the network. sewage plant, which might compromise the quality of effluent.
Table 26: Sewer Blockages Table 27: Plant Utilisation: Water and Sewer Sewer Sewer Sewer Sewer Plant Plant Plant Plant Blockages/ 100 Blockages/ 100 Blockages/ Blockages/ Utilisation Utilisation Utilisation Utilisation CU CU Connections Connections 100km 100km Water Water Sewer Sewer 2016 2017 2016 2017 2016 2017 2016 2017 LWSC 10 13 616 817 LWSC 76% 77% 77% 42% NWSC 4 1 392 97 NWSC 73% 71% 150% 150% KWSC 2 13 119 995 KWSC 58% 58% 39% 10% MWSC 3 3 164 139 MWSC 64% 58% 100% 82% LGWSC 18 10 1103 670 LGWSC 29% 29% 5% 5% SWSC 12 12 1052 1,052 SWSC 75% 73% 10% 9% CHWSC 4 2 325 112 CHWSC 53% 41% 7% 11% NWWSC 17 13 1036 785 NWWSC 63% 66% 10% 10% WWSC 4 7 860 2,634 WWSC 81% 85% 100% 100% EWSC 36 47 1988 2,763 EWSC 55% 58% 21% 26% LPWSC 33 4 400 227 LPWSC 69% 79% 34% 34% 59 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.1.9.3 Maintenance Ratio The number of unplanned maintenance works with those that were actually carried out is compared in Chart 11. i. Planned Maintenance In order to ensure that CUs have developed and are implementing Chart 11: Maintenance Ratio- UnPlanned Maintenance Maintenance Management Systems, the number of planned maintenance 100% 100% 100% 100% 100% 91% 93% 94% 96% works with those that were actually carried out is compared in Chart 10. CUs 87% 83% 95% should ensure that they have robust Maintenance Management Systems that 80% 75% they adhere to and carry out at least more than 85% of the works. 60% NWSC, MWSC, CHWSC, NWWSC, EWSC and LPWSC carried out at least 85% of their planned maintenance works. On average, the maintenance 40% ratio improved, though slightly. NWSC and MWSC had the highest number 20% of planned maintenance works of over 15,000. 0% 0% Chart 10: Maintenance Ratio- Planned Maintenance
99% 98% 100% 95% 94% 87% 86% 88% 82% 80% 2016 2017 Average 2016 Average 2017 80% 87% 63% All CUs had less than a 1,000 unplanned maintenance works except EWSC. 60% 51% LPWSC did not undertake any unplanned maintenance works. Apart from 40% NWSC and LPWSC, all the CUs carried out more than 85% of the unplanned 26% maintenance works. 20%
0%
2016 2017 Average 2016 Average 2017 Proper maintenance can avoid loss of infrastructure
60 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
ii. Planned vs Unplanned Maintenance To further appreciate the volume of maintenance works that CUs undertake, the quantity of unplanned works undertaken was compared to the planned works. Unplanned works generally arise from unexpected disturbances to the infrastructure/facilities
Chart 12: Planned vs Unplanned Maintenance Works
100%
80%
60%
40%
20%
0%
Unplanned Works Planned Works
KWSC still had the highest proportion of unplanned works which may indicate infrastructure challenges or poor planning. In comparison, SWSC, MWSC and NWSC had almost negligible unplanned works which could be attributed to well-planned works.
Well planned maintenance works can reduce unplanned repair works
61 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.2 SERVICE LEVEL INDICATORS vii. Recording of data in a prescribed format These portray the quality of service a company is rendering to its customers. viii. Adherence to sampling, sample handling and testing protocols Three major ones include water quality, hours of supply and resolution of ix. Evidence of feedback to stations and evidence of corrective action customer complaints. x. Qualification and competence of personnel Providers are required to meet at least 80% of the criteria, failure to which 7.2.2.1 Water quality they are rated red \ D. Water quality is very important due to the health impact it has on the consumers. The two types of parameters considered are bacteriological (total and faecal b) Number of samples tested in relation to minimum required coliforms) and physiochemical (Chlorine residue, pH, turbidity and colour). The second stage of assessment considers the number of analysed samples Chlorine residue test is given prominence under physiochemical because of for each prescribed parameter against the required minimum tests in a its relation to the bacteriological aspect of water. particular network. This assessment step requires that service providers analyse at least 95% of all samples required for each parameter for each For water quality monitoring, the water quality assessment criteria in line with network serviced. Failure by more than 5% in any single network is considered ISO/IEC 17025: 2005 standard (General requirement for the competence as non-compliance with a rating of orange \ C. of testing and calibration laboratories) is used. The overall compliance is assessed through a sequential three-step process as below: c) Number of tests meeting the national drinking water standards This is the final stage of assessment and considers the number of test results a) Confidence level that meet the national drinking water standards specified in ZS 190: 2010 for The confidence level step is the first stage of assessment and evaluates each particular parameter from all samples analysed. the credibility of the whole water quality monitoring chain with respect to ten equally weighted key criteria that are likely to influence the correctness of test If the overall compliance score is at least 95%, it is rated green \ A or else results. The criteria are: a yellow \ B rating applies. i. Availability and accessibility of laboratory quality manual and Standard Rating Performance Operating Procedures (SOPs) ii. Availability and state of water testing equipment Benchmark D < 80% at competence level stage iii. Calibration of water testing equipment for Water C < 95% samples analysed iv. Laboratory operating environment Quality B < 95% to National Drinking Water Standards v. Availability of fit-for-use chemicals and reagents A ≥ 95% to National Drinking Water Standards vi. Reporting ethics (data manipulation, selective reporting, etc.)
62 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
Table 28 shows the performance of providers in the reported year. 7.2.2.2 Hours of Supply Chart 13 shows the range of supply hours by the CUs per day. Table 28: Water Quality Analysis Compliance Good 20-24 hours Confidence Overall CU to number Remarks level Rating Benchmark for hours of Acceptable 18-20 hours of samples supply (Cluster 1 & 2) Inadequate pH tests Unacceptable <18 hours LWSC 86% < 95% C conducted Good >18 hours NWSC 93% >95% B Benchmark for hours of Acceptable 16-18 hours supply (Cluster 3) Quality manual in soft Unacceptable <16 hours copy, some equipment not KWSC 69% N/A D calibrated, no evidence of feedback to stations Chart 13: Hours of Supply MWSC 98% > 95% A
LGWSC 90% >95% A 22 20 20 20 20 19 SWSC 85% >95% A 18 18 17 17 16 Inadequate reagents to 15 15 CHWSC 80% N/A C conduct chlorine residue tests 10 Lapses in feedback to NWWSC 87% >95% A stations 5 WWSC 87% >95% A
Limited competence of staff 0 in districts, inadequate EWSC 80% >95% A sampling procedures and testing protocols
Poor laboratory environment LPWSC 68% N/A D and state of equipment Min Supply Hours Max Supply Hours Av. 2016 Av. 2017
63 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
Only NWSC, MWSC and CHWSC did not meet the acceptable benchmarks 7.2.2.2.2 Discontinuous Hours of Supply in their respective clusters. Discontinuous Hours of Supply shows the proportion of connections without 24 hours of supply in Table 29. Apart from CHWSC, hours of supply generally remained the same or improved and was mostly attributed to stability of power in the year. WWSC improved Table 29: Discontinuous Supply water production in Mongu. LPWSC commissioned infrastructure projects under the BADEA support. Under CHWSC, the hours of supply were affected Proportion of Proportion of Proportion of Proportion of Connections Connections by the reduced water production. Connections Connections with with CU with 24 hours with 24 hours Discontinuous Discontinuous 7.2.2.2.1 Minimum Supply Hours Supply Supply Supply Supply The least number of hours were supplied in areas such as: 2016 2017 2016 2017 66 parts of Chelstone, Avondale, parts of Mtendere and PHI in Lusaka under LWSC; LWSC 1% 99% 23% 77% 66 Mindolo North-Section D&F and Chamboli-section P in Kitwe, and NWSC 10% 90% 14% 86% Chambishi Mine Area and Zambia Compound in Chambishi under KWSC 8% 92% 6% 94% NWSC; 66 parts of Mushili and Manangwa in Ndola, and Mpatamato in Luanshya MWSC 19% 81% 16% 84% under KWSC; LGWSC 11% 89% 9% 91% 66 parts of Twatasha, Lulamba and Chabanyma in Chingola under MWSC; SWSC 45% 55% 57% 43% 6 6 Makululu in Kabwe and Munengo and Chilimboyi in Mumbwa under CHWSC 13% 87% 1% 99% LGWSC; NWWSC 8% 92% 8% 92% 66 Manungu in Monze, Kamunza in Choma and Kanyelele in Siavonga under SWSC; WWSC 31% 69% 41% 59% 66 Newtown in Kasama, parts of Tazara and Prefabs in Mpika and Rural EWSC 44% 56% 58% 42% compound in Chinsali under CHWSC; LPWSC 21% 79% 18% 82% 66 Urban-Extension and Magrade in Solwezi under NWWSC; 66 Imwiko, St Johns and Boma Area in Mongu, and Kaoma under WWSC; EWSC and SWSC had the highest proportion of connections with 24 hours 66 Parts of Moth-East Extension, East Rise and Chimwemwe in Chipata of supply and an increasing trend. In line with the negative change in hours under EWSC; and of supply (7.2.2.2) for CHWSC, the proportion with discontinuous hours of 66 St Mary’s and Lupili in Kawambwa, Mwense in general and parts of supply increased. Surburbs in Mansa under LPWSC.
64 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2.2.2.3 Interruption of Service Table 30: Interruption of Service Major interruptions in water supply lasting for more than CU Area Details 48 hours continuously were experienced in a number of All areas supplied from areas as shown in Table 30. Iolanda 86-days of drastic rationing necessitated by project works. station in Kafue LWSC Nyumbayanga and Five days interruption due to pump failure at Leopards Hill pump parts of Woodlands station.
Chongwe Shutdown of plant for two days to allow turbidity to clear. Shutdowns for repair works of about 4 days due to a damaged pipe NWSC parts of Kitwe by a truck. Mpatamato- Section 22, KWSC Shutdowns necessitated by project works lasting about 1 week. Luanshya, Northern part of Ndola Nearly a week of interruption due to pump failures at the Kafue MWSC Parts of Chingola Waterworks. 2-weeks interruption due to drying of the raw water source- SWSC Zimba Sianankanga dam
Luwingu Failure of the pump at the Booster Station for five days CHWSC Electric fault at the main treatment plant which lasted for over five Mporokoso days Prolonged period of erratic supply to about 60% of the customers NWWSC Solwezi due to ripping-off of pipes by a road contractor Failure of pumps at the water works affecting supply in some parts Mongu for about two days WWSC Main boreholes collapsed causing interruption of over two weeks to Kaoma half of the town. Mwense Three days of interruption caused by pump failure. LPWSC Intake was submerged from heavy flows in the Mansa river which Major plant shutdowns were necessitated by Mansa caused about two-days of interruption. project works
65 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.2.3 Customer Complaints Complaints figures are important in gauging customer satisfaction regarding the service received from the provider. By regulation, CUs are required to keep a record of customer complaints and resolve them within a stipulated timeframe. Customer awareness plays a critical role in ensuring that complaints are reported and resolved.
A reduction in the number of complaints could indicate improvement in service and/or that customers are losing confidence in providers not attending to their complaints.
As per Table 31, the number of complaints recorded increased by 5,976 from the 2016 period. However, the overall complaint resolution dropped further from 88% to 86%. WWSC had the highest complaints per 100 connections of 56 while NWWSC had the least of 4. Only LGWSC and LPWSC resolved over 95% of the complaints. CHWSC had the least complaints resolution rate.
LWSC, LGWSC CHWSC and WWSC had the highest Table 31: Customer Complaints increases in complaints of over 2,000 while EWSC and Total Total Total Total Complaints Complaints NWWSC reduced by a similar margin. Customer Customer Complaints Complaints per 100 per 100 CU Complaints Complaints Resolved % Resolution Connections Connections The majority of complaints were related to water 2016 2017 2017 2017 2016 2017 supply interruptions, (LWSC, CHWSC, MWSC, SWSC, LWSC 32,897 35,521 33,531 94% 34 35 LGWSC and WWSC), metering, (LWSC, EWSC NWSC 8,030 7,645 7,075 93% 13 12 KWSC and NWWSC), billing, (NWWSC) and others KWSC 12,164 10,640 8,708 82% 20 17 linked to water supply e.g water quality, (KWSC, MWSC 8,780 10,604 8,467 80% 17 19 LPWSC, LGWSC, NWSC and WWSC). LGWSC 7,201 9,236 9,236 100% 29 35 SWSC 5,837 6,190 4,955 80% 11 12 CHWSC 2,040 4,725 2,747 58% 10 22 NWWSC 2,617 594 463 78% 18 4 WWSC 4,887 8,273 5,198 63% 37 56 EWSC 7,339 4,441 3,204 72% 36 23 LPWSC 3,539 3,438 3,384 98% 48 46 Some complaints related to water quality TOTAL 95,331 101,307 86,968 86% 23 23 66 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2.3 FINANCIAL INDICATORS into 0.4% growth. WWSC and LPWSC recorded the highest jumps of 49% and 42%, respectively. LPWSC reactivated all the disconnected customers Financial indicators illustrate viability and sustainability of CUs by analysing which were over 2,000. revenues and costs.
7.2.3.1 Billing and Revenue Billing for water and sewerage services shown in Table 32 is the revenue that the CUs get for providing water supply and sanitation services and excludes other charges such as reconnection fees, penalties and meter charges.
Table 32: Billing for Water and Sewerage Total Billing Total Billing CU Water and Sewer Water and Sewer (ZMW) 2016 (ZMW) 2017 LWSC 251,898,941.61 269,520,859.70 NWSC 141,998,330.13 157,141,146.19 KWSC 107,514,767.76 117,714,196.41 MWSC 143,408,160.41 144,026,700.44 LGWSC 33,735,517.67 37,236,222.36 SWSC 56,577,552.22 64,611,415.27 CHWSC 17,842,492.89 19,896,555.81 NWWSC 21,960,176.93 23,098,446.83 WWSC 13,005,118.62 19,396,476.06 EWSC 18,485,936.23 21,682,868.79 LPWSC 5,136,374.00 7,300,580.96 Total 811,563,368.47 881,625,468.82 The total billing in the sector increased by about K70million from 2016 period with all CUs recording an increase. The highest jumps in terms of absolute figures were recorded by LWSC, NWSC and KWSC of more than K10million. CUs get revenue for providing WSS services MWSC recorded the lowest increase of less than K1million, which translated 67 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.3.1.1 Collection Efficiency CHWSC and NWWSC from collection of some debts owed by Government The collection efficiency is the proportion of billed amounts (shown in Table institutions. 32) that are collected (including arrears and advance payments made in the The drop in collection efficiency recorded by WWSC was due to a significant period). The calculation considers collections and billing for water supply and increase in billing but without a corresponding increase in collections. sewerage only. Other charges are not included. 7.2.3.1.2 Collection Efficiency over three years Very Good >95% It must be noted that the figure for collection efficiency spikes upwards when Good 90-95% Benchmark for outstanding amounts and/or advance payments made are added to current Collection Efficiency Acceptable 85 – 90 % collections. Therefore, by calculating collection efficiency over a three-year Unacceptable <85% period, distortions are evened-out to give a more reflective picture of the collection efficiency as shown in Chart 15. Chart 14: Collection Efficiency Seven CUs met the acceptable benchmark of 85% over a three-year period 120% 103% 104% with SWSC, and NWWSC having met the very good benchmark of 95%. 100% 91% 90% 92% 85% 80% 84% Chart 15: Collection Efficiency over three years 76% 76% 80% 69% 73% (2015 - 2017) 76% 60% 120% 104% 40% 100% 95% 93% 88% 85% 86% 85% 83% 80% 20% 80% 67% 65% 0% 60%
40%
2016 2017 Average 2016 Average 2017 20%
Six CUs met the acceptable benchmark of 85%. On average, the collection 0% efficiency improved significantly from 76% to 84% but did not meet the acceptable benchmark. This was majorly attributed to jumps by LWSC, KWSC, 68 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2.3.1.2 Trade Receivables and Payables Table 33: Trade Receivables and Payables Trade receivable is a legally enforceable claim for payment held by a business Trade Trade Trade Trade against its customer/clients for goods supplied and/or services rendered. Trade CU Receivables Payables Receivables Payables (ZMW) 2016 (ZMW) 2016 (ZMW) 2017 (ZMW) 2017 receivable is shown in a Statement of Financial Position as an asset. Trade payable is money owed by a business to its suppliers shown as a liability on LWSC 65,757,654 31,552,016 92,784,552 27,837,499 a company’s Statement of Financial Position. NWSC 92,671,790 250,758,219 105,416,847 47,554,453 KWSC 163,757,307 154,711,819 251,074,913 58,133,790 Failure to manage Trade Receivables and Payables may affect the working MWSC 92,030,944 77,674,323 104,737,403 14,526,891 capital for the business in terms of poor liquidity which may result in its inability LGWSC 29,303,056 28,521,740 55,806,659 60,606,020 to meet operational obligations when they fall due thereby straining supplier SWSC 19,686,689 21,100,270 20,095,766 23,284,676 relationships. The desired trend is that both trade receivables and payables CHWSC 23,093,370 97,377,694 30,582,841 103,225,376 should be reducing. NWWSC 26,027,857 17,606,976 23,934,202 6,187,000 Table 33 shows that trade receivables increased by 37% while trade payables WWSC 11,622,939 16,385,579 20,364,119 19,035,919 reduced by 46.3%. KWSC, LGWSC and LPWSC had significant increases in EWSC 4,671,056 6,132,754 7,736,180 6,562,157 trade receivables while NWSC, KWSC and MWSC had significant reductions LPWSC 3,144,022 7,333,477 16,200,000 14,155,793 in trade payables. Total 531,766,683 709,154,868 728,733,482 381,109,574
Trade receivables and payables must be managed for good operational sustainability
69 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.3.1.3 Average Tariff and Unit Operation Cost Chart 16: Unit Operation Cost and Average Tariff Water and sewerage tariffs are raised periodically to move the CUs towards 12 full cost recovery through user charges in line with the National Water Policy of 1994. NWASCO approves all tariff adjustments and has the responsibility 10 of ensuring that only justified costs are passed on to the customers. Thus, the justified operational costs of providing water and sanitation services have 8 a direct bearing on the price of water. 6.90 7.11 6.97 6.60 6 5.61 6.11 6.19 For financial viability, the average tariff (billing/m3) should be equal to or higher 5.71 5.55 4.80 5.40 than the unit operation cost. The unit operation cost includes the cost related 4 4.73 4.40 to sewerage whereas the average tariff does not incorporate the revenue from the sewerage service. For CUs that are not 100% metered, the average 2 tariff is calculated by converting an assessed consumption of water using the rising block tariff. 0
As shown in Chart 16, for all CUs, the average tariff was able to cover their O&M costs except for LGWSC, EWSC, NWWSC and LPWSC. For LPWSC, Unit Operation Cost 2016 Unit Operation Cost 2017 the non-coverage of costs was mainly attributed to their low customer base Average Tariff 2016 Average Tariff 2017 while for EWSC it could be attributed to the high O&M costs. Sector Average tariff Sector Average O&M cost
Only the justified costs of operation are passed through the tariff The tariff at a kiosk is set low as a social consideration
70 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2.3.1.4 Computation of a Metered Customer Bill for Water Consumption Only The cost drivers of CU activities in the cost structure are specific to their operating environments, hence the tariffs differ. It must be noted that, consumption of up to 6m3 is considered a lifeline, therefore the tariff per cubic meter is priced at, or below, the rate of cost recovery. Cross-subsidisation in the tariff structure compensates for the lifeline band.
Table 34 shows computation of a metered domestic customer bill for water only using the rising block tariff at different consumption volumes. This does not include fixed meter charge (at K10) or sewer charges (range 20% to 30% of water bill).
LGWSC and NWWSC had the lowest priced water for all consumption volumes up to 6m3. MWSC had the lowest water bill for consumption of 30m3 and 60m3. The highest tariffs for consumption of 6m3 was in LWSC while EWSC had the highest for 30m3 and 60m3. Table 34: Computation of Domestic Customer Bill using Rising Block Tariffs for Water Consumption only 2016 2017 Water Bill of 6 m3 Water Bill of 6 m3 Water Bill of 30 m3 Water Bill of 60 m3 Water Bill of 30 m3 Water Bill of 60 m3 CU (Low (Low (Medium consumption) (High consumption) (Medium consumption) (High consumption) consumption) consumption) (in K) (in K) (in K) (in K) (in K) (in K) LWSC 24 137 297 29 171 372 NWSC 18 116 264 22 140 317 KWSC 19 119 258 23 149 322 MWSC 20 110 247 24 124 278 LGWSC 17 104 251 21 128 309 SWSC 23 170 383 27 196 441 CHWSC 19 124 324 23 149 387 NWWSC 19 167 410 21 185 452 WWSC 20 146 328 24 180 408 EWSC 20 167 401 24 200 481 LPWSC 21 159 363 27 199 423 Average 22 152 353 26 182 419
71 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.3.2 Cost Analysis 7.2.3.2.1 Operation and Maintenance Costs Cost containment is very critical in service provision. The major operation costs (personnel, chemical, maintenance and energy) have an impact on the viability of a CU. The ‘Other Cost’ component includes administrative costs and other direct costs such as operational consumables, services by sub-contractors and vehicle running. Operational costs are normally analysed during tariff adjustments in order to remove unjustified costs that may otherwise be passed on to the consumers. CUs operate under varying socio-economic conditions hence the differences in their costs. That notwithstanding, the proportion of the various cost elements to the overall costs and the trends are of essence. For certain cost categories such as chemicals, a reduction may not necessarily be desirable as this may mean a compromise in the quality of water rather than cost containment. Energy costs include electricity and fuel. Table 35 and Chart 17 show the actual cost of operation in the reporting year.
Table 35: Costs of Operation and Maintenance Personnel Cost Chemicals Cost Energy Cost Maintenance Cost Other Cost Total O&M Cost (in '000 K) (in '000 K) (in '000 K) (in '000 K) (in '000 K) (in '000 K)
CU % % % % % % 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 change change change change change change
LWSC 143,767 130,221 -9.4% 7,289 6,824 -6% 29,655 31,333 6% 3,618 4,799 33% 34,554 28,167 -18% 218,883 201,344 -8% NWSC 48,262 55,396 14.8% 14,031 11,249 -20% 17,636 20,460 16% 6,678 6,278 -6% 17,406 18,722 8% 104,013 112,105 8% KWSC 42,887 41,173 -4.0% 4,294 5,442 27% 18,155 20,696 14% 2,027 2,810 39% 8,923 9,734 9% 76,286 79,855 5% MWSC 45,979 53,614 16.6% 7,226 7,254 0% 15,128 14,933 -1% 8,850 9,308 5% 22,626 27,205 20% 99,808 112,314 13% LGWSC 20,897 20,752 -0.7% 1,360 1,905 40% 4,218 5,268 25% 1,301 1,951 50% 5,134 6,552 28% 32,909 36,427 11% SWSC 29,538 36,112 22.3% 3,114 4,134 33% 8,233 9,976 21% 1,497 2,348 57% 7,507 9,639 28% 49,889 62,209 25% CHWSC 13,287 13,806 3.9% 534 478 -10% 3,460 4,743 37% 429 446 4% 2,299 2,442 6% 20,009 21,915 10% NWWSC 14,017 16,629 18.6% 500 846 69% 1,577 1,381 -12% 935 3,085 230% 4,549 5,533 22% 21,578 27,473 27% WWSC 9,108 10,415 14.4% 184 222 21% 1,302 1,540 18% 237 1,583 567% 1,537 2,366 54% 12,368 16,125 30% EWSC 17,408 20,117 15.6% 539 1,633 203% 1,813 1,785 -2% 1,432 1,022 -29% 3,226 4,244 32% 24,417 28,801 18% LPWSC 8,266 8,685 5.1% 267 472 77% 616 1,038 69% 114 383 236% 1,006 784 -22% 10,269 11,362 11% Red- negative trend, Green- positive trend ( major shifts only) 72 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
Personnel Costs The significant increase in costs for six CUs was attributed to an increase in Personnel costs include wages and salaries, training and other staff-related costs for: services by subcontractors for MWSC; administrative purposes for costs such as medicals, recruitment and provision for retirement benefits. SWSC and EWSC; and operational consumables for LGWSC, WWSC and NWWSC. Overall, the personnel cost increased by only 3.4%. However, SWSC significantly increased salaries for unionised staff hence the huge jump. Cost Proportions Chemical Costs The cost proportions in Table 35 are shown in Chart 17. The overall cost of chemicals marginally increased by 2.9%. EWSC had the It is desirable that the proportion of costs attributed to personnel is not more highest increase production of surface water in Katete district which required than 40% of the total O&M costs. None of the CUs were within the threshold the use of additional chemicals to treat surface water such as aluminium sulphate. LGWSC increase the usage of Aluminium Sulphate due to poor of 40%. LPWSC and WWSC had the highest proportion of personnel costs quality raw water. at 80% and 74%, respectively.
The drop in CHWSC was as a result of reduced production. NWSC Chart 17: O&M Cost Proportions experienced low turbidity levels hence lower usage of Aluminium Sulphate and also had a reduction in water production. 100%
Energy Costs 80% Energy costs generally increased by 11.2% mainly due to a hike in electricity tariffs. 60%
40% Maintenance Costs
Maintenance costs generally reduced across most CUs except for NWSC 20% and NWWSC which reported significant increases. The reductions could be attributed to cashflow challenges to undertake major works. 0%
Other Costs Other costs for LWSC and LPWSC dropped due to a reduction in costs for administrative purposes and operational consumables, respectively. Personnel Costs Cost of Chemicals Cost of Energy Maintenance Costs Other Costs
73 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.3.2.2 Operation and Maintenance Cost Coverage by Collection at less than 50% cost coverage, implying a major deficit in sustainability of This indicates the extent to which the level of collection is able to cover all operations. SWSC had a higher increase in costs compared to the increase the operational costs. in collections, hence the cost coverage dropped. Good >150% 7.2.3.2.3 Full Cost Coverage by Collection Benchmark for coverage Acceptable 100 – 150 % of O&M Cost Full costs includes all O&M costs plus depreciation, finance charges and Unacceptable <100% allowable provisions such as pension. The analysis in Chart 18 does not include income from other fees (such Chart 19 shows that the Full Cost covered by Collection increased to 84% but as penalties, meter charges, surcharges), Government and Cooperating was still below the benchmark of 100%. LWSC was the only CU that covered Partners. 100% of full costs in the reporting period. It must be noted that almost all CUs The sector average for Operation and Maintenance (O&M) Cost coverage (except NWSC, KWSC and MWSC) had a minimal amount of other costs in by Collection increased to above the acceptable benchmark of 100%, as a addition to O&M, hence the picture remained largely the same as Chart 18 result of improved collections. In addition, the costs for LWSC reduced. Five CUs met the acceptable benchmark. However, LPWSC continued to struggle Chart 19: Full Cost Coverage by Collection.
Chart 18: O&M Cost Coverage by Collection 140% 140% 116% 122% 120% 120% 112% 109% 107% 100% 92% 105% 87% 97% 84% 84% 100% 78% 88% 88% 80% 74% 73% 82% 82% 92% 66% 67% 80% 69% 59% 55% 60% 49% 60% 49% 40% 40% 20% 20% 0% 0%
2016 2017 Average 2016 Average 2016 2017 Average 2016 Average 2017 2017
74 WWSSSS Sector RReporteport 2017 Comparative Performance of CUs
7.2.3.2.4 Operation and Maintenance Cost Coverage at 85% All CUs had an increase in billed revenue in the year (see Table 32 on Billed Chart 20 shows the cost coverage assuming an acceptable benchmark Revenue). At the acceptable collection efficiency benchmark, only LWSC, collection efficiency of 85% of the billed amount. NWASCO uses the NWSC, KWSC, MWSC and WWSC would have covered their O&M costs. benchmark collection efficiency to arrive at a tariff that will cover O&M costs at The approved O&M Cost Coverage for the tariff versus the actual achieved a certain level. NWASCO desires an upward trend in cost coverage to ensure in the reporting period is shown in Table 36. sustainability of the CUs and therefore recommends an adverse variance of not more than 10% of the approved costs. The ability to meet the approved Table 36: 2017 Projected O&M Cost Coverage as per Approved cost coverage levels is driven by good cost containment versus generated Tariff revenue. CUs and their Boards must adhere to the approved tariff revenue Cost Coverage Achieved Projected O&M and cost structures. CU (at Actual O&M Costs and Cost Coverage Actual Revenue at 85%)
Chart 20: O&M Cost Coverage at 85% Collection. LWSC 100% 114% 160% NWSC 100% 119% 140% 125% KWSC 117% 125% 114% 119% 120% 109% 102% 106% MWSC 121% 109% 100% 87% 88% 103% LGWSC 98% 87% 77% 80% 71% 64% SWSC 107% 88% 60% 55% CHWSC 99% 77% 40% NWWSC 104% 71% 20% WWSC 95% 102% 0% EWSC 86% 64% LPWSC 59% 55% Cost Coverage at 85% Collection Cost Coverage at 85% Collection 2016 2017 LWSC, NWSC, KWSC and WWSC performed in line with the expected cost Average Average 2016 2017 coverage as approved for the tariff. The under performance by the rest of the CUs could be attributed to a high adverse variance for costs or lower revenue realised against the tariff projections.
75 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.3.2.5 Operational and Maintenance Cost Coverage by Total Revenue Chart 22 shows the full cost coverage by total revenue. The full costs include Charts 21 and 22 depict the financial performance of the CUs. Total revenue depreciation and finance charges and the revenues include net billed amounts, includes net billed amounts, other income such as penalty fees, interest, other income such as other fees (meters charges, connection/ reconnection subsidies and recurrent (income) grants. and security deposits), interest, subsidies and recurrent (income) grants.
Chart 22: Full Cost Coverage by Total Revenue Chart 21: O&M Cost Coverage by Total Revenue 140% 160% 150% 128% 141% 137% 117% 140% 134% 120% 130% 110% 123% 105% 104% 115% 114% 99% 120% 109% 126% 100% 95% 88% 86% 88% 86% 95% 92% 100% 90% 88% 80% 72% 80% 60% 60% 40% 40% 20% 20%
0% 0%
2016 2017 Average 2016 Average 2017 2016 2017 Average 2016 Average 2017
Eight CUs were above 100% O&M costs by Total Revenue. LPWSC continued LWSC, KWSC, MWSC and WWSC were able to cover the Full Cost by Total to improve with cost coverage above 80% due to operational grants. For Revenue. sustainability, CUs need to seriously concert efforts to improving collection efficiency.
76 WWSSSS Sector RReporteport 2017 Comparative Performance of CUs
7.2.3.3 Financial Ratio Analysis LWSC and MWSC were within the acceptable range of Current Ratio. Only This section presents Profitability, Liquidity and Activity ratios to provide more NWSC and WWSC had notable improvements in the Current Ratio. Most CUs information on whether each CU is applying its assets in an efficient and had a declining ratio due to a marked increase in current liabilities. profitable manner. One major ratio from each of the above classes appropriate to WSS sector was analysed as highlighted in Table 37. ii) Profitability Ratios The Net Profit Margin is the ratio of net Income to Turnover and indicates Table 37: Financial Ratios how much of each Kwacha of Turnover is left over after all expenses. (Net Non-Current Asset Current Ratio Net Profit Margin Turnover Profit Margin = Net Income/ Turnover). 2016 2017 2016 2017 2016 2017 Only LWSC, MWSC, SWSC and WWSC operated profitably in the period LWSC 2.25 2.56 -11.60% 26.75% 0.64 0.61 under review. Nevertheless, there was improvement in the Net Profit Margin NWSC 0.34 0.63 -30.01% -16.15% 0.25 0.22 for all CUs except LGWSC. KWSC 0.63 0.55 12.18% -1.10% 0.27 0.60 MWSC 2.13 2.08 9.59% 5.13% 0.76 0.80 iii) Activity Ratios LGWSC 0.67 0.66 -0.26% -3.65% 0.11 0.10 Non-current Asset Turnover is the ratio of turnover to fixed (non-current) SWSC 0.72 0.73 8.19% 8.70% 0.31 0.27 assets. The ratio indicates the ability of the company’s management to put the fixed assets to work to generate sales. (Fixed Asset Turnover= Turnover/ CHWSC 0.71 0.38 -11.62% -8.00% 0.09 0.10 Fixed assets). NWWSC 1.64 0.80 -13.33% -3.03% 0.34 0.46 WWSC 0.54 0.77 8.18% 23.03% 0.28 0.38 It is desirable that the trend is for CUs to have higher ratios than in the previous EWSC 0.36 0.15 -26.26% -20.62% 0.25 0.30 year. LPWSC had not yet valued their assets. LWSC, NWSC, LGWSC and LPWSC 0.36 0.04 -37.35% -8.51% - - SWSC added new assets without a corresponding increase in turnover hence the negative trends. i) Liquidity Ratios The Current Ratio is the ratio of current assets to current liabilities: it indicates a company’s ability to satisfy its current liabilities with its current assets (Current ratio = Current assets/ current liabilities). For current ratio, a range of 1 to 3 is acceptable for the water sector and indicates that a company is able to meet its financial obligations partially or in full as they fall due. 77 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.4 STAFF EFFICIENCY INDICATORS NWSC and SWSC had the desirable proportion of staff qualifications. NWWSC These measure the output of personnel in relation to various aspects of had the smallest proportion of staff with basic education while WWSC and operations such as billing, connections and personnel costs. KWSC had the least proportion of staff with degrees/diplomas.
7.2.4.1 Human Resource Development 7.2.4.2 Gender Mainstreaming The number of personnel working in the sector has been disaggregated by Chart 23 shows the personnel qualifications in the sector. gender to show the extent of participation of women and men. Chart 24 shows Chart 23: Personnel Qualifications the proportion of male to female at the various organisation levels.
923 610 597 439 251 441 235 130 146 151 80 Chart 24: Gender Proportions at Organisation Levels 100%
800 80% 700
60% 600
500 40% 400 20% 300
0% 200 100
0 M F M F M F M F M F M F M F M F M F M F M F Basic Education Certificate level Degree/Dip. Level LWSC NWSC KWSC MWSC LGWSC SWSC CHWSCNWWSCWWSC EWSC LPWSC The total number of staff in the sector increased marginally from 3,944 to Managerial Supervisory Other 4,003. Of the total personnel in the sector, 22% were degree and diploma holders, 49% were certificate holders while the rest had basic education. There was barely any change in the proportions of women participation at the The Zambian water sector is labour intensive, hence it is desirable to have various organisational levels. Of the total staff in the sector, 84% were men. a higher proportion of skilled staff with certificates and diplomas who tend to At managerial level, the women’s participation was 24%, at supervisory level be more of field workers. 78 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
Chart 25: Staff per 1,000 Water Connections 23% and 14% at lower levels. This scenario demonstrated that the sector was 15 still below the 30% threshold of female participation. 11 11 10 10 7.2.4.3 Staff per 1,000 Connections 10 10 9 9 This indicates the number of employees servicing 1,000 connections. The 8 8 8 8 computation includes staff on at least a year’s contract.
Staff efficiency can be measured as “staff per 1,000 water connections” as 5 well as “staff per 1,000 water and sewer connections” (Chart 25 and 26). CUs must endeavour to keep the staff per 1,000 water connections within the acceptable benchmark highlighted below to be efficient. 0 The combined staff efficiency for water and sanitation is derived from the total number of staff divided by the total number of water and sewer connections, assuming that the time spent on a water connection is the same as that on 2016 2017 a sewer connection. Chart 26: Staff per 1,000 Water and Sewer Connections 15 Benchmark for staff per Good 5 1,000 water connections Acceptable 6-8 (Cluster 1) Unacceptable >8 10 9 10 9 Good 9 8 Benchmark for staff per 7 7 7 1,000 water connections Acceptable 10-14 7 5 6 (Cluster 2 and 3) Unacceptable >14 5 4
Only MWSC, in Cluster 1, met the ‘acceptable benchmark’ of 8 while all CUs in cluster 2 and 3 met the acceptable benchmark of 14 or below. SWSC, NWWSC and EWSC met the ‘good benchmark’ of 9. 0
For staff/1,000 water and sewer connections, the CUs in Cluster 1 and 2 with
higher sewer connections, had a better staff efficiency. 2016 2017
79 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.4.4 Billing and Average Personnel Cost per Staff per Month Chart 27: Billing/Staff/Month 35 Billing per staff per month is the billing attributable to one member of staff 30 27.3 per month. A higher figure indicates better staff efficiency. On the other hand, 24.3 average personnel cost per staff per month reflects the cost attributed to each 25 21.5 staff. Charts 27 and 28 must therefore, be analysed in relation to each other. 20 16.4 14.8 15 12.4 12.2 11.1 12.0 Ideally, for sustainability, the billing per staff per month must be higher than the 10 7.6 '000 ZMW '000 7.1 average personnel cost per staff per month meaning that what the CU pays 5 each employee, must be lower than the revenue the employee is bringing into the company. The desirable trend in the sector is for billing to cover at 0 least three times the personnel costs in order to cover other cost categories.
Only LPWSC could not cover its personnel cost from the billed revenue. However, only NWSC, KWSC and MWSC had the desirable ratio of 3 to 1 2016 2017 for billed revenue to staff costs. The CUs need to strive harder to increase Chart 28: Average Personnel Cost/ Staff /Month billing and contain personnel costs for improved efficiency. 14.0 11.8 12.0 10.7 11.1 10.2 10.0 9.0 8.47 7.6 8.0 6.9 6.8 8.31 5.7 5.9 6.0 4.9 '000 ZMW '000 4.0
2.0
-
Av./staff/month Av./staff/month Average 2016 Average 2017 In over 17 years, the water sector has only had one female CEO 2016 2017
80 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
7.2.4.5 Summary of Staff Efficiency Drawing from Charts 27 and 28, Table 38 gives a consolidated view of staff efficiency. Table 38: Overview of Staff Efficiency
Staff Cost Billing/ Av. Personnel Collection/ in relation Staff / CU Cost/Staff/Month Staff /Month to Billing Month (K) (K) and (K) No. of Staff
connections Collection Staff/1000 water
LWSC 923 9 11,757 24,334 22,162 0.51 NWSC 610 10 7,568 21,467 14,877 0.45 KWSC 597 10 5,747 16,431 12,441 0.42 MWSC 439 8 10,177 27,340 23,255 0.41 LGWSC 251 9 6,890 12,363 9,916 0.64 SWSC 441 8 6,824 12,209 12,585 0.55 CHWSC 235 11 4,896 7,056 6,342 0.74 NWWSC 130 8 10,660 14,807 15,428 0.70 WWSC 146 10 5,945 11,071 8,085 0.66 EWSC 151 8 11,102 11,966 10,982 0.98 LPWSC 80 11 9,047 7,605 5,791 1.41 Average 0.60
For staff cost in relation to billing and collection, the desirable target for the sector is 0.4 (or 40%) or less. All CUs improved from the previous period, except SWSC and MWSC. CUs need to concert efforts towards increasing collections. Women participation in the sector needs to be encouraged
81 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.2.5 CORPORATE GOVERNANCE and Management INDICATORS iii) Status on Corporate Documents It is the role of the Board of Directors to ensure that the CUs have the corporate Adherence to good corporate governance enhances performance of the CU. documents and ensure they monitor their implementation. Only five CUs had It is the role of the Board and management to steer the Utility in the strategic audited accounts for 2016. direction of the company and thus achieve its objectives.
In order to assess the performance of the Board and Management, it is important to focus on corporate decisions and expenditure on the Boards of Directors.
7.2.5.1 Performance of the Boards The performance of the Boards was based on the number of Board meetings held, the key decisions made during the meeting and budgetary control as shown in Table 39.
i). Budgetary Control Budgetary control is one of the key functions of the Board. A budget variance Sector meetings are used to highlight performance of providers of ±10% is acceptable. All CUs had favourable variances beyond the acceptable limit except NWWSC which could be attributed to continued cash flow constraints. However, the aspect of over budgeting cannot be completely ruled out.
ii). Board Meetings Board Meetings should be held once in a quarter and costs maintained within 1% of the total O&M for big CUs ( Cluster 1) and 1.5% for the smaller ones (Cluster 2 and 3). All the CUs operated without Boards of Directors throughout the year save for Lusaka and Nkana WSCs. This is against the tenets of good corporate governance. Board expenditure incurred by the CUs without the Boards were on Annual General Meetings (AGMs).
82 WSSWSS Sector ReportReport 2017 Comparative Performance of CUs
Table 39: Corporate Governance Indicators
Approved Corporate Documents Full Board Meetings Budget 2016 Annual Total Board Variance CU Strategic Approved Report with Investment Meetings Meetings Expenditure Attendance against Plan Budget Audited Plan Held Planned as a % of Approved Accounts O&M Costs LWSC √ √ √ √ 92% 7 4 0.4% 29%
NWSC √ √ x √ 80% 4 4 0.4% 41%
KWSC √ √ x √ N/A N/A N/A 0.0% 38%
MWSC √ √ x √ N/A N/A N/A 0.0% 32%
LGWSC √ √ √ √ N/A N/A N/A 0.3% 33%
SWSC √ √ √ √ N/A N/A N/A 0.0% 13%
CHWSC √ √ x √ N/A N/A N/A 0.0% 17%
NWWSC √ √ √ √ N/A N/A N/A 0.0% 0%
WWSC √ √ x √ N/A N/A N/A 0.0% 13%
EWSC √ √ √ √ N/A N/A N/A 0.0% 41%
LPWSC √ √ x √ N/A N/A N/A 1.7% 18%
83 Comparative Performance of CUs WSSWSS Sector ReportReport 2017
7.3 Quality of Submitted Information Table 40: Quality of Submitted Information
As part of the license conditions, all service providers are required to submit Quality of submitted information in the an annual report by 31st January, with accurate data, via an information system NWASCO Information System Utility developed by NWASCO. The Annual Remark Report All CUs submitted the data on time as illustrated in Table 40. LWSC, KWSC, Timely. Lusaka WSC Poor LGWSC and CHWSC submitted data that raised a number of queries and Major clarifications required. resulted in changes. Nkana WSC Good Timely. Timely. Kafubu WSC Poor Major clarifications required. Mulonga WSC Good Timely. Timely. Lukanga WSC Poor Major clarifications required. Timely. Southern WSC Good Minor clarifications required. Timely. Chambeshi WSC Poor Major clarifications required. Timely. North Western WSC Fair Number of clarifications required. Timely. Western WSC Fair Number of clarifications required. Timely. Eastern WSC Good Minor clarifications required. Timely. Luapula WSC Good Minor clarifications required. Field inspections are used to verify data
Note: All submitted data is checked for accuracy and completeness. Where data is found to be otherwise, verifications are done with the CU, as well as with data collected during inspections. The data presented in this report are therefore complete and accurate.
84 WSS Sector Report 2017 8
PERFORMANCE OF private schemes
85 Comparative Performance of Private Schemes WSSWSS Sector ReportReport 2017
8.1 Introduction Table 41: Performance of Private Schemes Population Hours of Hours of Water Quality Water Quality The Private Schemes are companies that provide Coverage Private Scheme in Service Supply Supply Compliance Compliance % WSS services primarily to their employees. The Area 2016 2017 2016 2017 WSS services are run as an auxiliary function but Lafarge Cement 3,342 100 22 22 93% 82% not on a commercial basis. There are currently six Kaleya Small Holders 3,376 100 24 24 98% 99% licensed private schemes: KCM - Nampundwe 6,075 100 5 6 96% 99% 1. Lafarge Cement ZESCO 22,013 100 20 20 96% 98% 2. Kaleya Small Holding Zambia Sugar Plc 18,496 100 24 24 93% 95% 3. KCM – Nampundwe Kafue Sugar 446 100 24 24 66% 57% 4. ZESCO Total 53,747 5. Zambia Sugar; and 8.2 Coverage 6. Kafue Sugar Over time, the population in the areas operated by the Private Schemes has increased significantly ZESCO operated in three Schemes at Itezhi owing to expanding settlements. Hence Private Schemes have increasingly provided a service to these Tezhi (Central Province), Kafue Gorge (Lusaka settlements aside from their employees. The overall coverage for WSS for Private Schemes’ serviced Province) and Victoria Falls (Southern Province). areas was 100%.
The regulatory performance requirements for 8.3 Hours of Supply Private Schemes are minimal, relating mainly to The hours of supply remained largely constant for most of the providers. KCM-Napumundwe slightly service level aspects of coverage, hours of supply increased hours of supply in Site and Service, however Kasunka, 90-houses and Circuit had the least and water quality. The performance of the Private hours of supply at 4. Kafue Gorge under Zesco had the lowest hours (2) in Camp3. Schemes is shown in Table 41. 8.4 Water Quality Compliance ZESCO, Kaleya Small Holders and KCM-Nampundwe maintained water quality compliance above the acceptable benchmark of 95%. The compliance by Kafue Sugar and Lafarge worsened in the period. Kafue Sugar did not undertake the required number of tests and Lafarge did not meet the standards for residue chlorine.
86 WSS Sector Report 2017 9
REGIONAL BENCHMARKING OF LARGE WSS UTILITIES
87 Regional Benchmarking of Large WSS Utilities WWSSSS Sector RReporteport 2017
9.1 INTRODUCTION 9.2 REGIONAL BENCHMARKING PERFORMANCE BOUNDARIES The Eastern and Southern Africa Water and Sanitation (ESAWAS) Regulators ESAWAS uses ten Key Performance Indicators (KPIs) for regional Association is a network of regional water supply and sanitation Regulators benchmarking, grouped into three main components namely, that seeks to enhance the capacity of members to deliver quality and effective a. Quality of Service- relating to the extent and assurance of the service; regulation through cooperation and mutual assistance. b. Economic Efficiency - relating to the viability of the service provider; and c. Operational Sustainability – relating to operational efficiencies. The eight members are the Water Services Regulatory Board (WASREB) of Kenya; the Water Regulatory Council (CRA) of Mozambique; the Rwanda Performance boundaries for regional benchmarking were defined by Utilities Regulatory Authority (RURA) of Rwanda; the Energy and Water Utilities considering the minimum average performance of the Utilities, as well as the Regulatory Authority (EWURA) of Tanzania; the National Water Supply and minimum for the acceptable benchmark among the countries. The weights Sanitation Council (NWASCO) of Zambia, the Lesotho Electricity and Water were arrived at by a process of normalisation of the various weights defined Authority (LEWA) of Lesotho, the Agency for Regulation of Electricity, Potable by the different regulators. Table 42 shows the framework used for regional Water and Mines (AREEM) of Burundi and the Zanzibar Utilities Regulatory benchmarking. Authority (ZURA) of Zanzibar. Table 42: Benchmarking Performance Boundaries ESAWAS undertakes an annual benchmarking exercise to compare the Component KPI Good Acceptable Poor performance of the largest or single Utility in the Member countries across Water Coverage >90 90-75 < 75 the region. Benchmarking is a key regulatory tool for assessing and improving Quality of Sewerage Coverage >70 70-40 < 40 the performance of WSS Utilities by comparing the performance of a Utility Service Water Quality >95 95-90 < 90 against itself from past trends, against others and against good practice. Hours of Supply >20 20-16 < 16
However, in the Eastern and Southern African region, the largest Utility tends O&M Coverage >150 150 – 100 < 100 to have no peers within the country, while some countries only have a single Economic Collection Efficiency >95 95 – 85 < 85 WSS provider, thus making reasonable comparison of performance difficult. Efficiency Staff Cost <30 30-35 >35 Hence the need for regional benchmarking introduced by ESAWAS in 2014. Staff/1,000 Water and This section presents a summary of the third ESAWAS benchmarking report Sewerage <5.0 5.0 – 8.0 >8.0 Operational for the period 2015/2016, encompassing eight Utilities in the region, including Connections Sustainability Lusaka WSC. Metering Ratio >95 95 – 85 < 85 NRW < 30 30 – 35 >35 88 WWSSSS Sector RReporteport 2017 Regional Benchmarking of Large WSS Utilities
9.3 REGIONAL PERFORMANCE OF UTILITIES Only the largest or single Utilities in each country were selected for benchmarking. These are: Nairobi City Water and Sewerage Company (NCW&SC) of Kenya; Dar Es Salaam Water and Sewerage Corporation (DAWASCO) of Tanzania; Lusaka Water and Sewerage Company (LWSC) of Zambia; Águas da Região de Maputo (AdeM) of Mozambique; Water and Sanitation Corporation Ltd (WASAC) of Rwanda; Water and Sewerage Company (WASCO) of Lesotho, National Water and Sewerage Corporation (NWSC) of Uganda and Zanzibar Water Authority (ZAWA) of Zanzibar.
Burundi did not participate in the benchmarking exercise as it was still setting-up the regulatory framework, while Uganda was able to participate through the Water Utility Regulation Department (WURD) under the Ministry of Water and Environment, although it does not yet have an autonomous Regulator.
9.3.1 General Data on Utilities All the Utilities are publicly owned companies. The general profile about the Utilities is shown in Table 43.
Table 43: General Profile of Benchmarked Utilities Utility Abbreviation Country Areas of operation Year Established
Lusaka Water and Sewerage Company LWSC Zambia Lusaka city; Kafue; Chongwe; Luangwa; Chilanga 1989
Águas da Região de Maputo AdeM Mozambique Greater Maputo City 1999
Nairobi City Water and Sewerage Company NCW&SC Kenya City of Nairobi 2003
Dar Es Salaam Water and Sewerage Corporation DAWASCO Tanzania Dar Es Salaam city; Kibaha; Bagamoyo; 2005
Water and Sewerage Company WASCO Lesotho Maseru + 15 urban centres 2010
Water and Sanitation Corporation WASAC Rwanda Kigali + all urban centres in the country 2014
National Water and Sewerage Corporation NWSC Uganda Kampala + 169 towns 1972
Zanzibar Water Authority ZAWA Zanzibar Zanzibar 2006
89 Regional Benchmarking of Large WSS Utilities WWSSSS Sector RReporteport 2017
The key background data about the Utilities is shown in Table 44.
Table 44: Key background data on Benchmarked Utilities Utility Population in Number of Annual Water Population in Number of Annual Water the Service Water Production the Service Water Production Area Connections (m3/yr) Area Connections (m3/yr) 2014/15 2014/15 2014/15 2015/16 2015/16 2015/16
NCW&SC, Kenya 3.89 Million 312,426 201,861,138 4.07 Million 333,326 200,352,109
LWSC, Zambia 2.25 Million 94,184 80,564,003 2.33 Million 97,008 84,330,000
DAWASCO, Tanzania 4.59 Million 142,960 88,367,060 5.19 Million 156,059 103,982,762
AdeM, Mozambique 2.17 Million 245,180 75,828,468 2.22 Million 255,202 73,151,000
WASCO, Lesotho 0.51 Million 85,131 18,748,694 0.61 Million 90,544 23,858,512
WASAC, Rwanda 2.65 Million 156,618 41,061,229 2.65 Million 175,646 42,187,531
NWSC, Uganda 5.49 Million 418,031 96,415,644 7.50 Million 472,193 102,775,678
ZAWA, Zanzibar 1.50 Million 82,641 40,000,000 1.54 Million 85,525 60,000,000
90 WWSSSS Sector RReporteport 2017 Regional Benchmarking of Large WSS Utilities
9.3.2 Utilities Performance Comparison The summary of the Utilities performance in the 2015/16 period is shown in Table 45. The detail of performance is available on the ESAWAS website (www. esawas.org).
Table 45: Summary of Utility Performance Component KPI NCW&SC LWSC DAWASCO AdeM WASCO WASAC NWSC ZAWA Kenya Zambia Tanzania Mozambique Lesotho Rwanda Uganda Zanzibar
Water Coverage 80.6% 82.9% 55.1% 63.1% 62.2% 95.4% 78.3% 77.6%
Quality of Sewerage Coverage 49.4% 12.7% 6.9% - 5.8% - 8.4% 10.1% Service Water Quality 98.3% 98.2% 100% 99.3% 95.4% 95.4% 97.9% 57.7%
Hours of Supply 18 17 17 13 18 15 18 20
O&M Cost Coverage 91% 115% 190% 113% 103% 140% 135% 59.7%
Economic Collection Efficiency 98% 77% 80% 93% 81% 102% 97% 35% Efficiency Staff Cost vs O&M Costs 54% 66% 36% 30% 39% 30% 41% 33%
Staff/1,000 Water 6.23 6.96 5.19 3.30 5.56 4.18 5.81 7.76 and Sewerage Connections Operational Sustainability Metering Ratio 96% 67% 98% 81% 100% 100% 99.6% 6.6%
NRW 39.1% 45.6% 53.1% 41.8% 46.9% 38.5% 28.0% 53.3%
The best performing KPIs were Water Quality, Hours of Supply, O& M Cost Coverage and Staff/1,000 W&S Connections where not more than two Utilities did not meet the acceptable benchmark.
The worst performing KPIs continued to be Sewerage Coverage and NRW where only one Utility met the acceptable benchmark.
91 Regional Benchmarking of Large WSS Utilities WSSWSS Sector ReportReport 2017
Finally, Chart 29 shows the ranking of the Utilities by using a Water Utility 9.4 CONCLUSION Performance Index (WUPI). WASAC, Rwanda emerged as the best performer In the 2015/16 reporting period, the general picture of performance can be in all the three components aggregated, followed narrowly by NWSC, Uganda. summarised in the three components as follows:
66 Quality of Service – the Utilities made a lot of effort to improve/maintain Chart 29: WUPI - Overall Water Quality Compliance above the minimum acceptable benchmark. 73.0% WASAC However, Water Coverage, Sanitation Coverage and Hours of Supply NWSC 72.9% barely improved or stagnated. This underscores the urgent and critical NCW&SC 53.2% need for Governments to direct investments to these areas if the SDGs
DAWASCO 42.2% are to be met.
AdeM 38.9% 66 Economic Efficiency – All Utilities had improved revenue despite an 34.6% WASCO increase in costs hence the increase in O&M Cost Coverage by billing. However, collection efficiencies of less than 85% and high staff costs LWSC 27.5% posed a threat to the viability of the Utilities. This calls for innovations and ZAWA 14.0% strategies by Utilities to contain costs and improve collections. 0% 10% 20% 30% 40% 50% 60% 70% 80% 66 Operational Sustainability – All Utilities continued to perform well in 2015/16 2014/15 managing staff efficiencies. There was also laudable effort to maintain or increase metering ratio to 100%. However, NRW remained unacceptably NCW&SC, Kenya and DAWASCO, Tanzania improved in the ranking from high and worsening. Utilities, especially those with high metering ratio, second-last and last positions to third and fourth positions, respectively. must concert efforts to closing every loophole for water losses. WASCO, Lesotho and LWSC, Zambia dropped in performance from second and fourth positions, respectively.
92 WSS Sector Report 2017 10
CONCLUSION
93 Conclusion WSSWSS Sector ReportReport 2017
10.1 INTRODUCTION
This report has provided insight into the performance of each water and sanitation service provider and the sector in general. As mandated by the Water Supply and Sanitation Act No. 28 of 1997, one of NWASCO’s functions is to disseminate information on the performance of the water sector to the public.
In the reporting period, the sector recorded positive progression in all except for three indicators namely Non-revenue Water, hours of supply and metering ratio. The first two remained unchanged while the metering ratio recorded a downward trend from the previous reporting period.
It is worth mentioning that following the introduction of 10 integrity parameters for water quality based on the ISO 17025, CUs continued to record good progress as they put in place systems and procedures for better water quality monitoring and quality assurance. Outcome No.3 of Chapter 10: Improve access to clean water
10.2 PROGRESS TOWARDS ATTAINING NATIONAL GOALS Strategy 1: Enhance provision of adequate safe water and sanitation The Seventh National Development Plan was launched in June 2017 for the Water quality improvement has been key to NWASCO’s regulation of WSS period 2017 - 2021 to supersede the Revised Sixth National Development and therefore providers continued to improve in terms of adherence to the Plan. Development Outcome number 3 of Chapter 10 in the document which Water Quality Monitoring Guidelines. is “Improved Access to Water Supply and Sanitation” highlights the strategies Strategy 2: Improve availability of water and sanitation infrastructure put in place for the planned period aimed at improving access to clean water All CUs were implementing infrastructure developments in the reporting period. and good sanitation thereby improving the living conditions of citizens. With the many projects being implemented i.e. the Millennium Challenge Under the development outcome number three, there are five strategies as Account, World bank, KfW, European Investment Bank, AfDB under LWSC, follows: the AfDB projects in Chambeshi WSC, Luapula WSC, Western WSC, the European Investment Bank under Mulonga WSC, Danish Government under
94 WSSWSS Sector ReportReport 2017 Conclusion
Kafubu WSC, Direct Government funding to Lukanga WSC, Chambeshi WSC 10.3 SECTOR PROGRESSION OVER 15 YEARS – URBAN & PERI and Southern WSC, and many others, the water supply and sanitation services URBAN AREAS should be able to improve in the urban and peri-urban areas. However, more should be done in the rural areas. Further, from the coverage rate achieved Chart 30: Sector Progression over 15 years
and population growth rate, there is need for concerted efforts in order for the 120% Country to attain aspirations contained in the Seventh NDP and eventually Water Service the Zambia vision 2030 and the SDGs. 100% Coverage
Sanitation Strategy 3: Enhance research in water supply and sanitation services 80% Coverage Research and development in the sector was promoted through the NWASCO 60% Cost coverage by Resource Centre and engagement of the academia as reported in Chapter Collection 4. Several challenges being faced by the sector need to be shared with the 40% NRW academia in order to find lasting and workable solutions.
Strategy 4: Promote alternative financing for water and sanitation 20% Metering Ratio During the period under review, NWASCO spearheaded some consultancy 0% work that looked at the financing mechanism in the WSS sector. It is clear from the level of financial resources being injected in the sector that more should be done in mobilising additional resources. NWASCO will continue to advocate for a more sustainable financing mechanism for the sector. 66 Water and sanitation coverages continued to steadily increase owing Strategy 5: Enhance provision of adequate solid waste management services to the infrastructure development projects that CUs have been Solid waste management has a major impact on sanitation and NWASCO implementing with funding from the government of the republic of acknowledges the efforts being made government to form a solid waste Zambia, corporation partners and internally generated funds. utility company in Lusaka. Due to the linkages the solid waste management 66 Though CUs made noticeable efforts in curding NRW such as invested portfolio has to the water and sanitation sector, NWASCO stands ready to in developing capacity in their staff and infrastructure rehabilitation, assist in the regulation of the business aspects of the solid waste management NRW has remained more or less unchanged over the years. Only two sector. During the period under review, a pilot regulatory framework was being CUs recorded reductions in their NRW in the 2017 period. As CUs move developed between NWASCO and Copwaste on the Copperbelt Province.
95 Conclusion WSSWSS Sector ReportReport 2017
towards putting in place key requirements for managing NRW 10.4 PROJECTIONS UP TO 2030 – URBAN AND PERI-URBAN AREAS such as the creation of units dedicated to NRW management, Chart 31 demonstrates that if progression is maintained at the same rate, the universal metering, customer database clean-ups and network Country is likely to meet its Vision 2030 targets for urban and peri-urban water mapping, more concerted efforts will be required. supply and sanitation coverage of 100% and 95% respectively. However, the 66 Metering progression stalled as a number of CUs were faced indicators slackened against the previous years’ projection thereby highlighting with the challenge of replacing old meters which malfunctioned the need for concerted efforts in order for the sector to maintain a sustained as opposed to installing the meters on new connections. positive projection. 66 The sector has recorded a steady Chart 31: Projections up to 2030 growth in cost coverage in all 100% CUs. In order to attain full cost coverage and thus improve the 2023 2025 2029 financial viability of the CUs Vision 2030 Target Water 80% Coverage however, there is need for CU to
exercise cost prudence and for Vision 2030 Target customers, government institutions Sanitation Coverage 60% and individual customers alike, to Projected water coverage promptly attend to their obligations.
40% Projected sanitation coverage
Cost coverage projection 20%
Projected NRW
0% Projected Metering
Improve access to good sanitation
96
WSS Sector Report 2017 Urban and Peri-Urban Water Supply and Sanitation Sector Report 2017
Ensuring Better Services and Fair Value
NATIONAL WATER SUPPLY AND SANITATION COUNCIL
164 Mulombwa Close, Fairview P.O. Box 34358, Lusaka- ZAMBIA Tel: (+260) 211 226941-2 / 977790138 Fax: (+260) 211 226904 Toll Free for Complaints: 5252, www.mywatsan.co.zm E-mail: [email protected] 100 www.nwasco.org.zm