Government of Zimbabwe National Action Committee (NAC) – National Water, Sanitation and Hygiene (WASH) Sector
Zimbabwe WASH Sector Public Private Partnership (PPP) Framework
Stakeholder Consultative Report
On
Documentation of Ongoing PPP Initiatives/Models in 8 districts
August 2015
WASH Sector PPP Strategic Framework Field Report Page 1
Contents List of Tables ...... 2 1. Introduction ...... - 3 - 2. Ongoing Financial Brokering and Supply Chain Financing Support Systems ...... - 3 - 2.1. WASH Inputs Manufactures ...... - 4 - 2.2. WASH Inputs Wholesalers ...... - 4 - 2.3. Local Dealers or Outlets ...... - 5 - 2.4. Local WASH Service Providers i.e. Latrine Builders and Village Pump Mechanics . - 6 - 2.5. Consumers of WASH services – Communities and Households ...... - 6 - 3. On-Going Business Models ...... - 6 - 4. Current PPP Enabling Factors ...... 16 5. Key Sector Practices that Threatening Sustainable PPP Approaches ...... 19 6. Proposed PPP Approaches Roll out Strategies ...... 22 7. PPP Approaches Marketing Themes ...... 23 8. Current PPP Implementation Challenges ...... 24 9. PPP Business Case ...... 26
List of Tables Table 1; PPP Business Models, Best Practices and Lessons Leant ...... 8 Table 2: Current District Specific Identified PPP Enabling Factors ...... 17 Table 3: PPP Inhibiting Sector Practices ...... 20 Table 4: PPP Roll Out Strategies ...... 22 Table 5: PPP Marketing and Communication Thematic Areas ...... 23 Table 6: Current PPP Implementation Challenges ...... 24
Figure 1: General PPP Enabling Factors ...... 16 Figure 2: Overall PPP Roll Out Inhibiting Factor ...... 19
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1. Introduction This report is one of the key deliverable of the key deliverables of the step by step process of developing the WASH Sector Public Private Partnership Framework. Its overall objectives is to present a discussion on the findings from the stakeholder consultative process aimed at collecting stakeholder inputs and suggestions in the process of developing the WASH Sector PPP framework. It is important to note that this report is not part of the WASH Sector PP Framework but is a collection of stakeholder suggestions onto key supposed components of the WASH Sector PPP Framework. The collected stakeholder inputs will be subject to the Project Management Team (PMT) interrogation and appraisal for their viability and possible inclusion into the main WASH Sector PPP Framework. It is also important to note that other important aspects of the WASH Sector PPP Framework have already been attended to during the October 2014 stakeholder consultative workshop held in Harare. These key areas include:
Discussion of the concept and different forms of PPP including the identification of the possible PPP model the Zimbabwe WASH Sector can possibly consider for adoption. Justification for adoption of the PPP approaches in the WASH sector in Zimbabwe. A SWOT analysis of the PPP approaches in the Zimbabwean WASH sector. Specifically this report intends to highlight findings from the stakeholder consultative process on the following issues.
Assessment of the on-going financial brokering and support systems to all the WASH Supply chain players. Review ongoing district business models for the best practices and lessons learned. Review ongoing supply chain actors financing mechanisms for the best practices and lessons learnt (manufacturers, wholesalers, distributors.) Reviewing ongoing community based financing mechanisms for best practices and lessons learnt. Review best practices and lessons learnt from existing MOUs models in all local authorities and develop a generic model. It is also important to note that conclusion of this stage will lead to the implementation of the following planned processes:
Participatory development of the PPP communication and information management strategy. Drafting and presentation of the PPP Strategic Framework. Finalization and presentation of the final WASH Sector PPP Strategic Framework.
2. Ongoing Financial Brokering and Supply Chain Financing Support Systems The assessment of on-going financial brokering or financial support services focused on the following key players along the WASH inputs supply chain:
WASH inputs supply manufacturers. WASH Inputs wholesalers. Community based WASH Inputs retailers. Community based WASH outputs and services providers. These comprise the Latrine Builders and the Village Pump Mechanics (VPM). Households and communities as the final end-users or consumers of WASH inputs and services.
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Field evidence also revealed that WASH inputs are largely seasonal and the development of the WASH Sector PPP Strategic Framework need to take this into account. WASH inputs are in higher demand during the off-agricultural season. The onset of the agricultural season means rural communities whose livelihoods are basically agriculture based will invest most of their time and household resources in agricultural activities. It was also established from field evidence that WASH inputs can be classified in two major categories based on their respective demand and consumption patterns i.e. fast and slow moving inputs.
Fast moving inputs – these have shorter shelf life span and include multi-purpose inputs and they are largely used in construction of sanitation facilities key among them being cement, fly screen, reinforcement wire and of late especially in Zaka District plastic squatting pans. Their prices are also fairly low and can be accessed by most rural households and consumers. Slow moving inputs – these are mainly inputs that are used in construction, rehabilitation, operation and maintenance of water supplies/facilities. Once manufactured to standard and fitted correctly, these last long. These include leather cup, nuts and bolts and gauze wire. It is also important to note that wholesaler who traded in WASH related products classified these products as general hardware commodities. The need for WASH sector promotion of the WASH commodities to a level where they can be classified, viewed and traded as such cannot be overemphasized. 2.1. WASH Inputs Manufactures Currently there are no financial brokering or support systems that are targeted at manufacturer of WASH inputs in Zimbabwe. Field evidence indicated that there has been no efforts to develop any business linkages between the WASH inputs manufacturers with the exception of Bikita District that has made efforts to link V&W Engineering with the local dealers in the district. However, the linkages were never followed up to levels of establishing any concrete business linkage strategies or mechanisms. The initiative was abandoned at the introductory stages. It is also important to note that sector business linkages with the manufacturers were reported to be more pronounced at national level and Implementing Partners (IP) Head Office levels where direct bulk purchases of WASH inputs are done. However, the linkages are just limited to procurement and supply of WASH inputs and do not involve development of business relations that incorporate Public Private Partnership strategies. Proposals where that WASH inputs manufactures needs to develop business linkages with wholesalers that involve supply of WASH inputs on credit. Operations of credit lines will enable wholesalers to also on-supply to retailers on credit. It is important to note that operation of credit line are also in place for other goods. 2.2. WASH Inputs Wholesalers In all the districts visited wholesalers existed and operated from either the District main business centres (Growth Points or Towns &Cities). The following are some of the immediate examples: . In Makonde District, Stockday Hardware operates from Chinhoyi and has made supply chain linkages with community based retailers in Makonde District. . In Hwange district business linkage have been made between local wholesalers such as Ziscosteel with community based dealers. . In Gweru District linkage were developed between Clemkwa Hardware (Gweru) and the local dealers in the project area.
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. In Lupane District community based dealers were linked to MC Hardware located at Lupane Growth Point. . In Zaka District although N. Richards was operating from Jerera Growth Point and was trading in WASH related supplies no informal nor formal linkages had been initiated with the local retailers or their representative board, the Agro-Dealers Association. Field findings revealed that there were no financial support packages targeted at Wholesalers. However, the major concern was lack of collateral on goods supplied to local dealers. In Gweru it was reported that one dealer was given materials worthy almost a thousand dollars in September 2014 and had not made any payment at the time of visit. Suggestions were therefore not for a financial support package targeted at the wholesalers but introduction of other support mechanisms such as the promotion of MOUs between the two parties focusing mainly on issues related to defaulting of consignments by the local dealers.
Strategies such as those where community based structures such as SAGS, community health clubs etc mobilize community resources in advance and to place bulk orders with the Wholesalers through the local retailers can a long way in promoting the PPP roll out and develop local culture of paying for WASH inputs. In Makonde for example communities and households through the SAGs coordination raise money for sanitation inputs. Once the required target is reached the communities approach a local Dealer who then pleases an order with Stockday Hardware in Chinhoyi. If the order is enough to fill a delivery truck Stockday Hardware will provide free transport.
This arrangement represents a win-win situation along the supply chain actors i.e. from household up to the supply.
Conclusively there were no financial brokering of financial support services targeted at the Wholesalers, save for the interventions by DWSSC in linking the wholesalers to the local retailers and the communities.
Recommendations were for a mechanism through which wholesalers obtain WASH inputs from manufacturers and in turn provide the lower level retailers on credit as well.
2.3. Local Dealers or Outlets There were no direct financial brokering mechanism directed at local dealers. However the following interventions were initiated to improve the local dealers stocking levels of WASH related inputs and spares in the various districts: Provision of subsidies such as free transport for bulk purchases. Stockday in Chinhoyi provides free transport for purchases bulk enough to make a full load of their delivery van. Where purchases do not feel a full load local dealers are requested to provide fuel. In Hwange District the project vehicle is used to transport supplies to the local dealers as a strategy to maintain lower and affordable selling prices to the consumers. Local project implementing structures mobilize community resources for bulk buying of spares and inputs from the local dealers. The dealer will then place a demand led order with the suppliers thereby avoiding any loses. Encouragement and operation of local dealers through an association that ensure development of local business relationships, linkages and alliances.
Recommendation from almost all the DWSSC members were that in dare cases, the Rural District Councils should subsides the operation of the local dealers through the following strategies:
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Transporting stocks from wholesalers to the retailers operating premises. The local authority should create performance based incentives for wholesalers and retailers who are actively participating in marketing of WASH products through strategies such as discounting their licence fees.
2.4. Local WASH Service Providers i.e. Latrine Builders and Village Pump Mechanics There is no direct financial support to local private partners such as latrine builders and village pump mechanics. However, there are project activities that amount to support mechanisms that include the following: Provision of free training to local private partners. Provision of free tools e.g., latrine and VPM tool kits. Allowing the private partners to charge service fees for construction of WASH facilities.
However, it is important to note that project guidelines such as the need for standardized uniform charges for toilet construction or borehole repairs were reported to affect the efficient operation of a PPP business practices.
It is critical that irrespective of the level of business operations, the need to observe basic PPP principles such as the different transactional priorities/interest of different participants is paramount. The business profit motive needs not to be over understated neither is the quality service delivery focus of the consumer.
2.5. Consumers of WASH services – Communities and Households Field data suggest the existence of a couple of financial support packages at WASH inputs and services consumer level i.e. the communities and households. There is provision of minimal subsidies to the most vulnerable households especially for the construction of latrine construction. Free health and hygiene education to create demand for sustainable WASH services. Local mobilization of resources through local savings clubs ad cooperative that are facilitated through SAGs and Community Health Clubs as a strategy to pre-finance for the households that cannot afford a once off payment. This also ensure maintaining lower inputs prices through bulk purchases from wholesalers with the assistance of the local dealers. Operation of credit non-financial credit schemes where in areas such as Hwange and Chiredzi, building brigades supply construction material and construct household sanitation facilities on credit. The benefitting household will be afforded space to pay at their own pace.
3. On-Going Business Models Presentation of the ongoing district based business models and the identification of the lessons learnt and best practices is based on the following general understanding of what constitutes a business model: A business model should be characterized by a clear supply chain from suppliers of raw material, manufacturers, distributors, wholesalers, retailers and final consumers. Along the supplier chain the profit motive is predominant from the supplier to the local retailer. The final consumer interest is to get good quality products and services at the most affordable costs and standards. There is need for minimal distortions along the length and breadth of the supply chain especially on the issues of pricing and quality of the end product.
Additionally, sustainable business model to have: A product demand creation and evaluation process.
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An efficient product/service demand response strategy or mechanisms such as an efficient service delivery or product distribution and transportation systems that ensure timely availability of the service or product to the customer. An efficient coordination and regulatory framework to provide guidelines on issues such as quality and standards of products and services.
Field results showed that there was a general lack of common understanding on what model and form the PPP sub-component was supposed to take i.e. key issues such as the key WASH products and services to be included in the PPP initiatives and who constituted the public or the private partners in the PPP initiatives were not commonly well understood or implemented by all the eight (8) different IPs. The general conceptualization was that the PPP initiative entailed linking the local dealers to wholesale suppliers of WASH inputs. There was no clarity on what could constitute the linkage process besides the general introduction of the two players to each other.
Table 1 summarises some of the bits and pieces of the business models and the resultant best practice and lessons learnt from the initiatives tried by the IPs in the respective districts. It is envisaged that the best practices and lessons learnt will form the basis of crafting the national WASH Sector PPP Strategic Framework.
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Table 1; PPP Business Models, Best Practices and Lessons Leant District Business Model Best Practice Lessons Learnt Bikita Stakeholder Awareness and Conscientisation Attempts to link the local supplies with the There is need for the At project inception, a stakeholder sensitization workshop was held to introduce the Rural WASH manufacturers (V&W) through establishing owners to participate Project in general and the Public, Private Partnership (PPP) component in particularly. Besides the a business alliance although this was never on their own so that local communities and other government departments, business people within the district were followed to its logical conclusion. they can make also invited to the meeting. Use of locally existing business linkages binding business and support structures e.g. the organisation commitments. Demand Creation of local retailers into an existing Agro- There is need for all Capacity building of community based mobilization structures particularly the SAGs who were Dealer Association. stakeholder common responsible for creation community demand for WASH inputs through community triggering Capacity building of local private sector understanding of the processes. participants inform of latrine builders & PPP concept and its VPMS. implication in the Demand Response Mechanisms Capacity building of SAGs that became WASGH sector Capacity building of the local level private partners (training of Village Pump Minders (VPMs) actively involved in mobilising labour for programming. and Latrine Builders, SAGs), to handle the increased demand in construction of sanitation the construction of sanitation facilities facilities from the triggering at household level. However, similar capacity building efforts are not instead of raising funds. However, the main targeted at other stakeholders such as the local retailers who may require business management disadvantage of this initiative is that it skills training. threatens the viability of one being a latrine Linkages with other supply chain stakeholders e.g. an awareness meeting between the districts builders based retailers and the V&W as one of the water component and spares manufacturers in Establishment of community based business Zimbabwe was carried out. VPMs and Latrine Builders were initially not linked to the suppliers of linkages e.g. Mr. Dube a retailer at Chikuku various WASH components but efforts are being made to create the linkages so that they become Business Centre established informal aware of which spares are available and where. business linkages with latrine builders as Local retailers initiated linkages with other community based supply chain actors (latrine builders soon as the he realized the increase in and VPM e.g. the retailer at Chikuku business centre has formed informal linkages with latrine demand for WASH inputs. builders and VPMs who provide him with market needs of the WASH inputs. The Rural District Council has a resolution At district level, all relevant government ministries/departments are part of the DWSSC together on making it mandatory that communities with the Implementing Partner(s) (IPs). The local suppliers and wholesalers are however not part pay for spare parts and other related costs of the committee. required for borehole operation and Although they are aware of the various key components/ stakeholder of the model such as the maintenance costs. Local Retailers, Wholesalers and Manufacturers there is no clear linkages between these various The involvement of communities at all components of the PPP model. The suppliers of sanitation components were not involved in the levels of programme implementation has implementation process. create a sense of ownership of water points. As a result, there are evidence of increased communities willing to raise funds to purchase spares and repair of broken down boreholes. Ministry of Health and Child Care has a policy of zero subsidies for sanitation facilities construction and maintenance. Zaka The district opted to implement the PPP component in partnership with the existing Agro Dealer Use of existing business development There is need for WASH Sector PPP Strategic Framework Field Report Page 8
District Business Model Best Practice Lessons Learnt Association in the district. The members of the association used to work mainly with suppliers of structures i.e. the Local Agro-Dealers comprehensive PPP agricultural inputs such as seeds, fertilizers and chemicals. The modus operand of the agricultural Association. The project built the PPP awareness to all inputs scheme was such that suppliers of agricultural inputs would deliver their products to the agro initiative on the existing structure, i.e. the stakeholders in the dealers on credit. The dealers would in turn sell these inputs to the farmers and make monthly agro-dealers instead of starting new District especially payments to the suppliers. At the end of the season, the manufacturers would take back all initiatives. This resulted in the cutting down the DWSSC outstanding stock that could not be sold. of time and the use of experienced members. personnel. There was no RDC The model also included demand generation for WASH inputs through creation of local community The local authority sold borehole spares to resolution on the based mobilization, health and hygiene education structures through community triggering. the community at a minimal cost. This PPP implementation created awareness among the local although there has The model also include training of local artisans (latrine builders) who could respond to the communities that they should play a part in been earlier RDC generated demand for WASH services as a result of the community led total sanitation approaches. the operation and maintenance of WASH resolutions on CBM. infrastructure. The model intended to address marketing of all WASH inputs i.e. those for operation and The programme managed to create clear maintenance of water supplies and the construction of sanitation facilities. relationship between the EHT, communities and the local dealers. Communities mobilise funds and place orders to the local dealers with the assistance of the EHTs. The dealer in turn order the inputs as per the requirements of the communities. The inclusion of the local authority in the DWSSC means that interest of elected councillors will represented and this will support consensus building on PPP in the district. Communities have been capacitated to attend to minor maintenance of the water points are aware of where to source the requisite spare parts. Chiredzi The model in Chiredzi focused mainly on the provision of sanitation focused inputs particularly Focusing on inputs that are on demand and Where market cement for the construction of sanitation facilities. The water components were not included in the can demonstrate the feasibility of PPP and opportunities exist, chain because the demand for the spares was very low if not non-existent. The few existing community willingness to pay for there is no need for boreholes within the wards were either new or had been recently been rehabilitated through the on- construction and maintenance WASH mobilizing going Rural WASH Project. Also there are still some borehole spares that were left by other IPs who facilities. entrepreneurs. They were previously involved in WASH activities within the district that are being distributed freely to Retailers and wholesalers PPP awareness just become the communities. and mobilization activities. spontaneous. What is The PPP model being implemented in the district aimed at linking the wholesalers, the retailers and Formation of building brigades that address critical is creating a the local communities (end-users) exclusive of the manufactures. multiple issues over and above the latrine viable business construction. opportunity. It is At project inception, the DWSSC engaged and mobilized the business community to supply cement Use of SAGs as local institutions for important to note to the local communities. demand creation for WASH inputs and that this is indicative WASH Sector PPP Strategic Framework Field Report Page 9
District Business Model Best Practice Lessons Learnt services through triggering. of the fact that with VPMs and Latrine builders were selected and trained in their respective spheres of operation. Local resource mobilization strategies proper business Trained Latrine Builders formed building brigades comprising of between four and five builders. through formation of savings clubs and linkages and support They construct sanitation facilities at individual households. These teams share the proceeds from cooperative whose scope of work include services that address the builder’s fees payment equally among themselves. Payment in kind such as the use of goats and supporting members to finance provision of the current domesticated guinea fowls is accepted. The household and the building brigades agree on the WASH facilities and services. bottlenecks to a valuation of the items. The brigade approach was adopted to address two major strategic objectives Capacitation of VPMs, latrine builders and sustainable self- i.e. SAGs to respond to the generated demand propelling WASH Expediting the latrine construction completion times. for WASH services and facilities. inputs supply chain Peer education and skills perfection through learning from each other during latrine Selling the PPP concept through full that encompasses PP construction. council meetings. elements, Shortage of tools meant they had to share the few that were availed through the Rural Council resolutions in support of the PPP introductions and WASH project. which outline that basic operation and adoption of PPP in maintenance is the responsibility of the the WASH sector are As a strategy to create local demand for WASH inputs SAG were also elected and trained and were communities. feasible. responsible for facilitating community triggering. At inception, most wards within the district had no The council sale spares to the communities The current sanitation facilities, but after the training of SAGs and triggering, most households started so that they develop a culture of buying. community led total constructing their own toilets. Institutionalization of flexible payment sanitation approach terms for WASH services provision such as has the strengths to Resource mobilization for financing procurement of WASH inputs and services including payment the payment in kind to local private partners trigger and create a of local artisan was facilitated by the SAGs through the formation of Income Generation and – a latrine builders brigades in one ward sustainable demand Savings Clubs. Each household was responsible for the digging of the pit at the homestead and was paid in form of a goat that was for WASH services. moulding bricks. Some households in various wards teamed up to mould brick together then share subsequently sold and the proceeds were Focus should not be the bricks once they were cured. used for procurement of additional builders’ on formal and tools. registered local In order to accommodate the resource constrained households, the trained VPMs and Latrine dealers but also Builders charge a uniform fees which was agreed during project implementation. targeted local individuals with the Due to limited business supply chains in the new resettlement areas, individual entrepreneurs correct invested their personal resources to stock inputs especially cement to locals at a profits. This is a entrepreneurial skills demonstration of how demand creation can bring spontaneously business opportunities. This was and the resources to taking advantage of the absence of formal local retailer or dealers and lack of formal linkages provide WASH between the wholesalers in Chiredzi and Triangle and the local consumers. spares and inputs. Makonde The model involved the formation of a PPP Coordination Tasking Force led by the Ministry of Formation of a Coordination Task Force Creation of business Small Enterprises and Cooperative Development at District level. with clear leadership structures - Ministry relationships is more of Small Enterprise & Cooperatives critical than The model also has a clear supplier chain from Wholesaler down to the final consumer at Development is the lead agency of the PPP formalized community level consumers. sub-component and incidentally appears to arrangements such as be the most appropriate lead agency. signing of MOUs. At wholesaling level, Stockday Hardware was mobilized as one of the key wholesalers and a MOUs The signing of MOUs between the DWSSC Stockday Hardware was entered into. Stockday Harware is based in Chinhoyi Town and has demonstrated capacity to and the Wholesalers although it excludes is providing free or
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District Business Model Best Practice Lessons Learnt stock all the WASH inputs. An agreement was reached between DWSSC and the wholesaler for the other key stakeholders such as the local subsidized supply of the WASH materials to the local retailers at ward and community level. It is important to level retailers and other WASH service transportation of note that the MOUs is between the DWSSC and Stockday Hardware as the wholesaler and does not providers that include Community Health stock to local cover all supply chain service actors down to community based retailers and the end-users such as Clubs, SAGs, Water Point Committees etc. retailers irrespective water point committees, SAGs etc. Recruitment of latrine builders who already of the absence of had building skills and had been relying on formal agreements or At community level, business linkages were also established between the local retailers and the building as their livelihoods. Training in formalized business WASH inputs and spares users. SAGs and Community Health Clubs mobilize financial resources for latrine construction was an added advantage relationships. procurement of inputs particularly for sanitation facilities and place orders or make advance to an already existing skill and livelihood payments to the local cooperating retailer. The local retailer in turn places orders with Stockday base. Hardware that could be inclusive of his other product lines. The beauty of the arrangement is that all the involved supplier chain partners are exposed to minimal risks. For example retailers are not exposed to risks associated with overstocking or defaults in customer payments. Customers are also assured of the products as and when they want them.
The wholesaler provides free transport to retailers if they buy certain quantities of materials and the retailer may be asked for a minimal contribution if their purchases do not reach a given threshold e.g. by fueling the delivery vehicle.
In order to generate local demand for sanitation inputs and services, the DWSSC established and trained SAGs and Community Health Clubs who were responsible for community triggering. Water Point Committees were also established in all the project wards e.g. 420 committees had been established. The DWSSC intends to link these committees with the retailers so that they can procure their borehole spare parts through them following the strategy currently used for the SAGS for sanitation inputs.
As strategy to respond to the generated demand, the project supported capacity building of locally based Latrine Builders and VPMs responsible for construction of sanitation facilities and maintenance of water supplies respectively. 10 latrine builders per ward were trained from 8 wards bringing the total to 80. Latrine builder training resulted in the reduction of construction cost from $80 to $40 per unit. Trained latrine builder had previous building knowledge and experience and were provided with tool kit.
The training of VPMs has also resulted in the cost of borehole repairs coming to $20 from a high of $100. The number of VPMs is currently low and the programme aims to have 10 VPMs per ward.
In summary the model involved the following cycle of interventions: (1) identifying retailers with capacity, zeal and financial resources to participate in the initiative: (2) creating linkages with local retailers and capacitating the community structures such as VPMs, SAGs, Latrine Builders and WPCs: (3) identifying willing and prepared wholesalers to link with in the PPP initiative e.g. Prepared to provide transport and credit facilities to the retailers: (4) MoUs to link the various chain
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District Business Model Best Practice Lessons Learnt players from community entities, retailers, wholesalers and the DWSSC and (5) putting in place monitoring tools to track how chain is working Kwe Kwe The district model focuses more on the supply of WASH inputs to the communities. The existence of a clearly laid out ideal Where there is no supply chain although it may have gaps natural business In terms of the overall implementation of the business model, the implementation strategies adopted here and there. The supply chain is fraught feasibility the following approaches at each of the business development stages. with weak linkages as evidenced by the fact entrepreneurs natural 1. WASH Inputs Demand Creation/Generation that wholesalers and retailers have not resist to invest their SAGs and community health clubs were formed and trained to facilitate community triggering. This signed any MoUs and no credit facilities are resources in those resulted in increased community demand foe WASH inputs to construct WASH facilities. extended to the retailers. areas e.g. there is a general lack of Resource Mobilisation for Procurement of WASH inputs. attention to water SAGs mobilised household and community resources including financial resources required supplies related procurement of WASH inputs and materials through the establishment of community based income inputs and spares as generating activities. the Rural WASH project is currently Supply and Procurement of WASH Materials and Inputs rehabilitating the After mobilising community resources, the SAGs also responsible for identification and negotiating facilities at no costs. with the local retailers on the amount of inputs required and the prices. Once these have been agreed upon, orders are placed and the materials are delivered at a predetermined price. However, each individual household is responsible for paying the Latrine Builders.
The DWSSC identified wholesalers/suppliers based in Kwe Kwe town to participate in the programme. These urban wholesalers are supposed to meet with the rural traders so that they can agree on the materials to be supplied by the wholesalers. Wholesalers and retailers were identified but unfortunately, these were not formally linked.
Construction, Rehabilitation, Operation and Maintenance of WASH facilities VPMs and Latrine Builders were trained were selected and trained to facilitate the construction and rehabilitation, operation and maintenance of water facilities. Latrine builders were also trained to facilitate the construction of sanitation facilities. WPCs were established and trained to be responsible for preventive operation and maintenance of water facilities. The WPCs are responsible for engaging the trained VPMs to undertake the necessary borehole repairs. The same committee are also responsible for the raising of the required finances to pay the VPMs upon successful completion of the works.
The Enabling Regulatory Framework Conclusively, the supply chain has weak linkages as there are no MOUs between the various players in the chain. The model being implemented in the district principally addresses the supply side of materials but does not address the business side in terms of profitability and access to credit facilities and financial resources. There is not much activities in terms of borehole repairs in the area since the programme is currently repairing existing boreholes. Although generally indications are that the cost
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District Business Model Best Practice Lessons Learnt of repairs undertaken by the VPMs and Latrine Builders have generally come down, this was not a direct result of market forces but rather due to the guidelines from the programme. Gweru PPP Initiatives Coordination Mechanism Establishment of the PPP component The PPP component is coordinated by the Ministry of Small to Medium Enterprises (SMEs) as the coordination mechanisms with Ministry of lead institution. Small and MEDIUM Enterprise and Cooperatives Development as the lead Identification and Assessment of the Supply Chain Actors agency. The district identified urban wholesalers of WASH materials and also dealers in the project areas. Clearly defined model. All stakeholders in Training workshops were held and Ministry of SMEs was responsible for providing the technical the chain are aware of their roles and assistance to the dealers. responsibilities The training of a large pool of latrine Capacity Building of Supply Chain Actors builders and village pump minders means The Ministry OF Small and Medium Enterprise is responsible for training the dealers and suppliers that the pricing of their activities is of WASH materials. determined by market forces. This is a result of stiff completion among the trained Demand Creation cadres. SAGs were formed and capacitated to mobilize communities to construct sanitation facilities. The district is advocating that there be no subsidies in the WASH sector Provision and Procurement of WASH inputs The programme has been gender sensitive The identified wholesalers and retailers were formally linked and currently, wholesalers are as evidenced by the presence of trained extending credit facilities to the retailers. The credit facility is in the form of supply of the required female latrine builders. This also ensures materials to the retailers without them paying for the said materials. Payment is normally done at the that the areas will always have qualified end of each month based on the sale of the WASH materials. The model makes use of the Ward latrine builders are women are less nomadic Water Sanitation Sub-Committee (WWSSC) who should communicate with the DWSSC once compared to men. sanitation awareness has been undertaken and demand for wash materials has been created. The The involved of ministry of SMEs means WWSSCs are then linked to the local dealers who are part of the programme. These dealers will in that wholesalers and local dealers will turn liaise with the wholesalers for the materials required. The materials are then given to the dealers receive training in basic business ethics. on credit. Once these have been sold, the dealers will then pay back the wholesalers. Mostly it is the sanitation materials that are given on credit since these are fast movers. Water components are not fast movers due to a number of reasons that include the fact that the programme is currently repairing the boreholes and also it takes some time for boreholes to breakdown.
Response Mechanisms to Increased Demand for Sanitation Services Others structures required for the smooth functioning of the model were also put in place and these included the selection and training of VPMs, Latrine Builders and Water Point Committees.
The DWSSC summarised the PPP roll out steps as follows. Develop a model Capacitate the dealers Encourage government to own WASH projects Capacity building of business persons to be an ongoing process
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District Business Model Best Practice Lessons Learnt Lupane PPP Component Coordination Mechanisms Incorporation of the local retailers in the Cooption of the local retailers and wholesalers in the DWSSC. Mr. M. Sibanda a stockiest based at DWSSC PPP activities. Lupane Centre was c-opted into the DWSSC as strategy to ensure transparency and confidence Capacitation of SAGs, VPMs and latrine building on the part of the Retailers and entrepreneurs. builders. Creating linkages between suppliers and Stakeholder Identification local dealers The DWSSC initially identified two suppliers based at Lupane growth point to be part of the PPP Encouraging the suppliers to stock water model. One of the supplier, Mr M. Sibanda was then co-opted into the DWSSC to allow for smooth component inputs operation of the model. After the identification of suppliers based at the Growth Point, the DWSSC Incorporating a suppliers into the DWSSC then identified ward based retailers and linked them up with growth point based suppliers. Suppliers and dealers’ willingness to accept grain and livestock in exchange for WASH Demand Creation for WASH Inputs inputs Ward based institutions such as the Sanitation Action Groups and Water Point Committees were put Equating inputs prices in local dealers with in place. The programme at grassroots level is mainly driven by the SAGs who are responsible for suppliers in Lupane. creation of awareness and linking up with the local dealers for the procurement and delivery of The implementing partner and RDC buys WASH materials. borehole spares from the identified
suppliers. Procurement of WASH inputs and materials Gender balancing in latrine builders; 30% The PPP model being implemented in the district aimed at linking the suppliers at the growth point of the builders are female with retailers in the various wards were the programme is being implemented. Materials are delivered upon placement of an order to avoid locking resources in non-moving stock. Local traders Giving subsidies to the most vulnerable accept payment in kind from the local communities. Even those based at the growth point who are only; 3 bags of cement per household and part of the programme accept payment in kind. 89 latrines have been built for the vulnerable. Response Mechanisms to Generated Demand Selling of borehole spares even during Latrine Builders and Village Pump Minders were also identified, trained in their respective fields project implementation. and were then issued with tools of their respective trades. Training of VPMs and latrine builders.
Enabling Regulatory Framework The growth point based suppliers have signed MoUs with their counterparts based at community level. These in turn have also signed MoUs with the community.
The major challenge with this arrangement is that the market for the barter items may not be readily available. Hwange Stakeholder Identification Considering latrine builders and VPMs as The sub-committee indicated that they engaged a number of wholesaler based in the town to become local private partners whose motive is more part of the programme. The idea was so that these Hwange based entities would then be able to than just WASH service provision but decentralise and operate in the wards or at least to create linkages with ward based dealers. business orientation with a profit or at least a livelihood motive. The following organisations were engaged; Zisco Steel, United Builders (UB), Plate Glass (PG) and The signing of MoUs between the DWSSC Mr Fix. Of these organisations, only Zisco Steel is very active in the programme. The idea was for and wholesalers.
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District Business Model Best Practice Lessons Learnt these organisations to take the WASH materials to the wards so as to assist with transport costs and The sharing and assigning of roles and reduce the final cost of the products. responsibilities to various local level After engaging the urban based entities, the DWSSC then engaged the community based dealers to entities. For instance, the SAGS are become part of the supply chain. responsible for community mobilisation. Flexible payment terms and accepting of Demand Creation grain and livestock as payment for WASH The activities of the SAGs has resulted in the creation of demand for sanitation materials and this in inputs. turn has led to ward based suppliers to order and stock these inputs. Capacitation of various chain players such as training of VPMs and latrine builders. Enabling Regulatory Framework These wholesalers signed MoUs with the DWSSC. However, there is no formal link between the wholesalers and the community based dealers. The DWSSC indicated that it is in the process of engaging the wholesalers and community based retailers to facilitate the creation of formal and mutual working relationship.
Procurement of WASH Inputs At the time of visit, the ward based retailers were ordering their WASH inputs from Bulawayo, which is more than 300 km away but still managed to land a bag of cement at a cheaper price comparing to ordering from Hwange based wholesalers, about 80 km away. The following items were in stock both in the wholesales and at the community based retailing outlets. Cement and reinforcement wire. Suppliers were reluctant to stock water components since these were considered slow movers.
Response Mechanism to Increased Demand The DWSSC has put in place local and capacitated level structures such as SAGs, WPCs, Latrine Builders and Village Pump Mechanics. The programme has trained a number of VPMs and Latrine Builders and as a result, the cost of borehole repairs and latrine construction has drastically gone down. VPMs have been provided with the necessary tools to carry out the repairs while the Latrine Builders have been advised to buy own tools from the local blacksmiths who are producing quality but affordable tools
Payment Modalities For WASH Service Delivery Payment terms are flexible with communities being afforded the chance to pay in instalments and also to pay in kind.
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4. Current PPP Enabling Factors Discussion with the IP, DWSSC and community based informants revealed high levels confidence on the feasibility of PPP implementation in the WASH Sector. General factors are summarised in Figure 1 and Table 2 demonstrates district and IP identified enabling factors.
Figure 1: General PPP Enabling Factors
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Table 2: Current District Specific Identified PPP Enabling Factors District Feasibility Indicators Bikita The Government of Zimbabwe through the Ministry of Health and Child Care (MoHCC) has maintained the zero-subsidy policy for provision of sanitation facilities except minimal subsidies for the most vulnerable members of the community. Training of a fairly large number of community based artisans (VPMs and Latrine Builders) is theoretically expected to result in lower and affordable costs for WASH service provision, operation and maintenance on the part of the consumers. The project demand creation for WASH facilities through the community led total sanitation approach with its major component of triggering created awareness and immediate demand for WASH services among the local communities. Training of local artisans (Latrine builders and VPMs) enhances local livelihoods especially when they ca employ the skills in multiple local income generating activities. There is doubtful community commitment and willingness to pay for sustainable WASH services provision as demonstrated by community based resource mobilization strategies. Zaka The existence of an agro dealer association whose members are scattered throughout the district and who have been involved in similar initiatives means that already there is an existing framework upon which to build the model. The Rural District Council used to sell the WASH materials to the communities which means communities are already aware of the need to buy the spares. The programme has managed to train a number of Latrine Builders, VPMs and establish WPCs in all areas. Chiredzi The willingness of the local authority to provide transport for delivery of WASH materials to the remote parts of the districts. The level of enthusiasm shown by members of the community in the construction of sanitation facilities after the triggering mechanism. This is despite the fact that most communities are resource poor. The local business community is willing to be part of the rural WASH programme and is willing to assist where possible. Local retailers that have been approached by the DWSSC have been stocking the recommended WASH materials and selling at reasonable prices. Acceptance of payment in kind has greatly facilitated the roll out of the PPP model The availability of functional SAGs within the communities and the formation of the building brigades. The programme has trained a fairly large number of VPMs and Latrine Builders who are charging reasonable fees for their services. They are skilled negotiating skills. Makonde The fact that business persons (mainly the wholesalers and retailers) are prepared to work with DWSSC in the implementation of the PPP in the WASH sector. The district has managed to set up community structures such as VPMs, SAGs, Latrine Builders and WPCs which are a critical component in the PPP model. Kwe Kwe The district has managed to create working relationships with wholesalers and retailers of various WASH materials. A number of VPMs, Latrine Builders, SAGs and WPCs have been trained and are currently executing their duties successfully. The SAGs and WPCs are coordinating the mobilization of resources for the procurement of WASH materials and also for the payment of VPMs in the case of WPCs. Government departments/ministries are part of the programme hence there is information flow from the grassroots to the decision makers which can influence policy. Gweru The willingness of the wholesalers to participate in the programme and extend credit facilities to local dealers even though the credit lines are not secured. The active participation of the key stakeholders as evidenced by the Ministry of Small to Medium Enterprises in the training of wholesalers and local dealers. Well established and functional ward level institutions such as the WWSSC, SAGs, WPCs, trained Latrine Builders and Village Pump Mechanics. A clearly defined WASH PPP model in the district means most members of DWSSC are well aware of their duties and functions. Lupane The incorporation of suppliers at the growth point into the DWSSC facilitates the easier flow of information and materials since the suppliers becomes aware of the requirements well in advance. The willingness of the WASH inputs suppliers at all levels to accept payment in kind has greatly assisted the acceleration of the construction of WASH infrastructure. The training of a number of latrine builders and pump mechanics means that the cost of service will come down. These trained personnel include women who are less nomadic compared to men.
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Hwange There is increased business opportunity for both the wholesalers and community based retailers. The willingness by the wholesalers and community based retailers to stock some materials particularly the sanitation materials. The fact that the DWSSC has managed to put in place local level institutions which are actively participating in the programme are responsible for the creation of demand for WASH materials. Most members of the DWSSC are active participants in the programme and are well versed with their roles and responsibilities. The programme has managed to capacitate the latrine builders and VPMs who are now capable of negotiating with communities on the amount to be paid and the terms of payment.
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5. Key Sector Practices that Threatening Sustainable PPP Approaches The positive impact of the identified PPP success factors on the roll out of the PPP approaches will be hampered by the identified overall (Figure2) and district specific (Table 3) inhibiting current and on-going sector practices. The needs for strategic options to mitigate their negative impacts cannot be overemphasized.
Figure 2: Overall PPP Roll Out Inhibiting Factor
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Table 3: PPP Inhibiting Sector Practices District Identified Threatening Sector Practices Bikita Central procurement of the required inputs by various stakeholder in the sector. These organisations include local authorities, central government and the implementing partners. Some implementing partners continue giving out free WASH related products to members of the communities hence discourages community from taking own initiatives once the boreholes break down. The infrequent borehole breakdown and low VPM to borehole ratio means that trained personnel may move to other areas to seek livelihood opportunities thereby disrupting the programme. There is general inadequate documentation of strategic information such as records of spare parts consumption by the local dealers. Pricing of WASH products becomes prohibitive as one move away from main centres to remote localities due to logistical challenges. Zaka The retailing of the WASH products directly to members of the public at the same price as that which the retailers procure the same may seriously undermine the participation in the programme by the retailers for example N. Richards Wholesalers that sales at retail prices. Provision of free WASH materials by some implementing partners. The non-inclusion of members of parliament in the DWSSC even as ex-oficio members means that during election periods, they may preach something at tangent with the PPP initiatives. DDF repairs boreholes for free especially with allocation under the RCDF allocation. Chiredzi Central procurement of the required inputs by various stakeholder in the sector. These organisations include local authorities, central government and the implementing partners. Some implementing partners continue giving out free WASH related products to members of the communities hence discourages community from taking own initiatives once the boreholes break down. The low number of boreholes within the wards means that VPMs have very little activities hence cannot derive a livelihood from such. Makonde Central procurement of the required inputs by various stakeholder in the sector. These organisations include local authorities, central government and the implementing partners. Free provision of water spares during project implementation contradicts the concept of PPP. Kwe Kwe The implementing partner(s), local authority and even government departments undertake central procurement of their WASH materials hence may threaten the implementation and viability of the PPP roll out. Some implementing partners are still giving out free WASH related products to members of the communities hence these now see no need to buy own materials. Pricing of WASH products becomes prohibitive for the retailer to stock due to low turn-over and logistical problems. Gweru Some implementing partners continue giving out free WASH related products to members of the communities hence discourages community from taking own initiatives once the boreholes break down. The programme is currently repairing the boreholes and members of the communities are not contributing in any form. The infrequent borehole breakdown and high VPM to borehole ratio means that trained personnel may move to other areas to seek livelihood opportunities thereby disrupting the programme. Pricing of WASH products becomes prohibitive as one move away from main centres to remote localities due to logistical challenges. Lupane Central procurement of the required inputs by various stakeholder in the sector. These organisations include local authorities, central government and the implementing partners. Hwange Placement of bulk orders with Hwange based wholesalers to the total exclusion of local retailers may result in local retailers being reluctant to participate in the programme Central procurement of the required inputs by various stakeholder in the sector. These organisations include local authorities, central government and the implementing partners. Provision of free WASH materials as is currently happening where the programme is providing free borehole spares.
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6. Proposed PPP Approaches Roll out Strategies The following are the key recommended actions for PPP approaches rollout. It is important to note that these proposed actions will feed into the consolidated WASH Sector PPP Framework roll out in the main Strategic document.
Table 4: PPP Roll Out Strategies District Proposed Priority Roll Out Actions Bikita There is need for manufacturers to supply their products to wholesalers on credit so that the payment by wholesalers will be done after a period of say 30 days. This is in view of the current liquidity challenges facing the economy. The wholesalers will also extend such a facility to the local traders. There is need for Government and IPs to procure their inputs from local dealers so that dealers will feel that they are part of the process rather and also realise decent returns. This will in turn encourage these dealers to stock some items especially the borehole spares which are generally slow movers. There is need for members of the DWSSC to act as sales agents for local wholesalers and dealers so that communities will buy their requirements from dealers who are active participants in the programme. The local authority should create incentives for those wholesalers and dealers who are actively participating in the programme through discounting their licence fees. Zaka That there is need for the wholesaler at Jerera Growth Point to sell WASH products to retailers participating in the programme at a discounted price. This will enable the retailers to put a mark-up and sell the products at reasonable prices. There is need for DWSSC/and or the local authority to assist the dealers with the transportation of goods to their respective outlets. The local authority or the DA’s office should assist the dealers with transport to Jerera especially when there are meetings to do with WASH since most of them are struggling to raise money for transport. If possible, there is need for financial assistance to the dealers so that they are able to fully stock their shops with the requisite products. There is need for the manufacturers of various WASH components to be engaged so that they can sell their products to wholesalers and retailers at reasonable prices. There is need for effective triggering to create demand. In ward 10 after triggering no demand has been created for sanitation. One SAG leader said community members had not seen the need for sanitation facilities. Chiredzi There is need for the local authority to deliver the WASH inputs in the remote areas so that prices charged by retailers remain reasonable. There is need for the local authority to incentivise the business communities through tax concession. Local businesses should be encouraged to perform their corporate social responsibilities through setting up outlets in remote areas. There is need for clearly defined PPP framework and guidelines so that all DWSSCs, private sector stakeholder and IPs are in the clear as to their roles and responsibility in the roll out of the scheme. Makonde There is need for the DWSSC to draft and sign MoUs with different players if the model is to succeed. There is need for DWSSC to encourage communities to pay at least something towards the construction and repair of WASH infrastructure. The DWSSC should assist with transportation of WASH inputs so that prices are reasonable and are uniform. There is need for the PPP concept to be fully explained at all levels. Kwe Kwe There is need to empower all stakeholders so that they are able to identify opportunities of PPP approach in their respect spheres. Members of the communities should be asked to pay a certain amount/percentage even towards the construction of new boreholes. There is need the PPP approach to be de-mystified and simplified through disaggregation of the various components so that all stakeholders can easily understand the concept. The NAC should capacitate the structures of District Development Fund so that slow moving WASH materials are stored at the various DDF depots for onwards sale to retailers. Gweru There is need for the local dealers to provide some form of security for the materials advanced on credit basis or at least for the DWSSC of the implementing partner to act as a guarantor. This has been necessitated by the fact that one dealer was given materials worthy almost a thousand dollars in September 2014 and had not made any payment at
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the time of visit. There is need for manufacturers to supply their products to wholesalers on credit so that the payment by wholesalers will be done after a period of say 30 days. This is in view of the current liquidity challenges facing the economy. The wholesalers will also extend such a facility to the local traders. Manufacturers should also be engaged and be part of the supply chain so that they can in turn extend credit facilities to the wholesalers. There is need for ready markets for goods tendered as payment by members of the local communities so that the local dealers can easily liquidate the items. Lupane Members of the DWSSC proposed the following activities if the PPP approach is to succeed in the sector. There is need for the establishment of markets for the commodities used in the barter trading. According to the sub-committee, the following steps should be taken when rolling out the PPP in the WASH sector: Meetings local suppliers. Meetings communities. Identification of materials to be supplied. Identifying storage facilities Community triggering. MoU drafting. Hwange There is need for manufacturers to supply their products to wholesalers on credit so that the payment by wholesalers will be done after a period of say 30 days. There is need for IPs and various other organisations to order their WASH materials from the ward based retailers so that these can also realise decent returns. The current set up where large orders are placed with wholesalers and local retailers are only asked to participate when materials are being ordered by the communities does not augur well with the success of the model. There is need for the DWSSC to formalise the linkages between wholesalers and retailers for the mutual benefit of all.
7. PPP Approaches Marketing Themes Although the PPP communication and information management strategy component will be covered in the next stage of the WASH Sector PPP Strategic Framework development process, Table 5 summarises some of the DWSSC proposed PPP marketing and communication thematic areas.
Table 5: PPP Marketing and Communication Thematic Areas District PPP Approaches Marketing Thematic Areas Bikita Accessibility of goods Locally available materials. Zaka Accessibility of goods. Use of locally available materials. Chiredzi Disease prevention as opposed to treatment. Ownership of water infrastructure by the local communities. Makonde Retailer growth through stock turnover, reputation and capital base increase. Increased profits on the part of the wholesalers to counter the liquidity crunch. Alternative use of locally available goods. Improved sanitation. Sustainable WASH interventions. Inclusivity, benefits to be realised by all. Kwe Kwe There are benefits to be derived by all players in the supply/value chain.
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Gweru Creation of value chain amongst all key stakeholders for the benefit of all. Lupane Availability of WASH materials at local level and at affordable prices. Increased profitability due to selling of WASH products. Affordable cost of constructing sanitation facilities and easier repair of borehole and less down time. Hwange Increased business and returns at all levels.
8. Current PPP Implementation Challenges
Table 6: Current PPP Implementation Challenges District PPP Approaches Marketing Thematic Areas Bikita Communities are not aware that boreholes spares are now available locally. Some partners in the district are still giving out inputs for free. Most implementing partners are not creating a market for spares for local business persons since most of their procurement is centrally controlled at the respective head offices where spares are then sourced directly from manufacturers. Local retailers can potentially over charge the communities for the WASH spares especially in the remote areas far away from the main centres. The Rural WASH programme rehabilitated 250 boreholes which will take at least two years for spares to wear out thus affecting the turn-over of borehole spares for the retailer business. Some of the IPs left a lot of boreholes spares which are currently being given for free to the communities. This means that it will take some time for the communities to procure these parts from local retailers which tends to discourage retailers from stocking spares. The frequency of borehole breakdown is rather low meaning that VPMs cannot derive a livelihood from borehole repairs and also members of the community assume that that their provide community service since their also benefit from the borehole water. There is no financial support being extended to the local wholesalers and retailers which means that their operations are constrained and this in turn affects the stocking of borehole spares are which generally slow movers. Dealer days/ open market days where sellers of various products from all over the district, from other districts and provinces is a serious threat to the local dealers involved in the PPP programme. Zaka There are no formal linkages between the agro dealers, wholesalers and manufacturer of WASH materials. Turnover of WASH inputs particularly the water components is rather very low resulting in most dealers not being interested in stocking them. District Development Fund is still giving free spare parts to the communities. N Richards is selling WASH materials directly to the public at the same price that dealers buy the inputs thereby seriously compromising the operations of these dealers. . The local wholesaler N Richards runs promotions and community members win building materials for schools. Materials e.g. pit lining with stones. This reduces purchases of cement. The set price for village pump minder is very minimal. Tools given are not adequate and not durable. Trained village pump minders do not have the tools of the trade. The market is giving out poor quality tools and when they break down the pump minders need more work to get income to replace the tools. Too many pump minders have been trained. A sustainable livelihood needs to be created for those that have been trained. Wholesale do not have wholesale prices for WASH inputs even when bought in bulk. The presence of the wholesale threatens the retailers business. Both retailers and the general public can purchase from the wholesaler. There is a lack of the strategic link between the sector and the product. There is limited product knowledge and use. Lack of continuous financial support for the PPP component.
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While promoting private sector participation, key players are flooding communities with subsidised WASH inputs. Community member have begun using locally available materials such as pit lining with stones. Chiredzi Transport of the WASH materials is very costly due to poor state of the road and in some cases distance covered. Most transporters would rather transport cotton or sugar cane where returns are decent. The high cost of transport has resulted in retailers selling the inputs at very high prices. PPP is a new concept hence it has no framework or guidelines to create uniformity. Resistance from other villages with individuals who do not want to abandon the behaviour of open defecation. There is no financial support to local retailers who have to buy the WASH inputs using their own resources. Other local traders who are not in the PPP supply chain are selling cheaper cement which is not recommended hence have affected the turnover of those who are selling the recommended cement as the communities prefer the cheaper cement. Makonde The communities in which the programme is being implemented have limited resources so most members find it difficult to raise the required amounts for construction of sanitation facilities and borehole repairs. The road network in the district is very poor so transportation of inputs is very difficult. This has a bearing on the final selling price of the items. Market days where people from all over the district and province(s) is a serious threat to the local retailers since some of the traders will bring cheaper (though sometimes inferior products) to the area. The implementing partner is still rehabilitating the boreholes and all spare parts are provided for. This is rather contrary to the PPP initiative which require communities to undertake and make payments for repairs. Retailers in some areas have no capacity to stock the required WASH materials and the situation is compounded by the fact that generally WASH materials have low turnover especially the borehole components. Mapping out a business case for retailers is rather difficult. There is no financial support or lines of credit to the retailers. Political environment sometimes conflicts with the rolling out of PPP as some politicians may preach things which are in contradiction to the PPP concept. There is no council resolution to support the PPP concept. The PPP concept is not fully understood at all level. Kwe Kwe The supply chain is fraught with weak linkages as evidenced by the fact that wholesalers and retailers have not signed any MoUs and no credit facilities are extended to the retailers. Retailers do not necessarily source their materials from those urban suppliers who have been identified by the DWSSC but rather source from wherever they can get favourable terms. The concept is not viable to the wholesalers and retailers since most of the products are slow movers hence have very low turnover. There is no financial support between manufacturers and wholesalers and between wholesalers and retailers. The PPP concept is rather new to them so it is affecting the implementation progress. Gweru The margin from the sale of cement is rather low meaning that local dealers may not realise decent returns from stocking the commodity in small amounts. There are no formal MoUs between suppliers and local dealers meaning that in the event of the local dealers defaulting, the wholesalers have limited avenues to recover the money owed. Also tied to this is the fact that there is no security tendered by the dealers for the goods supplied meaning that in the event of the dealer defaulting, it’s very difficult for the wholesaler to recover the money. There is no clearly defined policy framework governing the operations of PPP in the WASH sector and the local authority has not made any resolutions with regard to the operations of the PPP model in the district. Wholesalers do not enjoy credit facilities from the manufacturers meaning that in the event that a local dealer defaults, serious cash flow challenges will be experienced. There is poor business practices by most of the local WASH dealers at ward level as evidenced by the using their personal accounts for business operations. Some WASH dealers at ward level have no capacity to even manage what they are given as advance stock.
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Community members would like to pay for the services in kind. The challenge is however to agree on the valuation of the product tendered by the members against the value as assessed by the service provider. There is no guarantor of business MoUs between suppliers and WASH dealers. Lupane There is no ready market for items that are used in the barter trading of WASH inputs meaning that the liquidity of the suppliers is severely constrained. There is a low uptake of WASH materials as evidenced by the fact that it takes about 3 months to sell 50 bags of cement. This is because most members of the communities are resource poor. The suppliers at all level also face serious liquidity challenges as there is no financial assistance from manufacturers or lines of credit. Hwange Due to the drought that the district is experiencing, the local communities are not prioritising the construction of sanitation materials as their major worry is to secure food. This in turn has led to the local suppliers stocking the outlets with food staff which are fast movers. Indications are that communities cannot afford the cost of the WASH inputs since most of them have very limited resources. The implementation of the barter deals are proving to be difficult since retailers and communities are failing to come up with agreed values of the bartered items. Linked to this is the unavailability of local markets for the same items. Water components are not being stocked since these are very slow movers and currently the programme is providing these spares for free. The price of inputs, particularly cement is said to be rather high compared to the income base of the communities. Elderly cannot afford to pay for cement.
9. PPP Business Case Based on the issues raised above the following are some of the key issues on the WASH Sector PPP roll out business case:
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1 SNV NETHERLANDS DEVELOPMENT ORGANIZATION: WASH Input Supply Chain Study Report Gutu And Mberengwa Districts Water, Sanitation and Hygiene Promotion for the Millennium Development Goals (EuropeAid/129509/C/ACT/Multi) Sanitation, Water & Hygiene in Rural areas of Zimbabwe: An Empowering & Sustainable Approach for the Millennium Development Goals
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