Management Models with the Most Potential

Examples to be considered include:
Small to medium sized towns whose water departments/boards/associations operate their own systems (i.e. employ their own staff or hire a local company to carry out routine operations), and either individually or collectively obtain professional support.

Large towns or aggregated medium sized towns whose water departments/boards/associations individually or collectively contract operators who can operate the system and have most of the specialized skills needed to resolve problems and improve operational efficiency and financial management. Examples include more comprehensive services such as Design/Build/Lease, Build/Own/Transfer, and Build/Own/Operate arrangements.

Multi-village/town schemes representing a special case for which there may be a need to separate bulk water supply from village/town distribution systems.

Some of the management models already documented by the WSP and the RWSTG are introduced below.

Local government/community management with professional support

The autonomy and single raison d’ĂȘtre of Autonomous Municipal Water Boards and Water User Associations overcome many of the problems associated with Municipal Water Departments and Public Water Utilities. They are self-regulating to the extent that: revenues can be retained for reinvestment in the system, accountability to users is direct, oversight of planning and operations is strong, service matches acceptable tariff levels, and operational decisions are based on the needs of the water supply system rather than other political considerations. Financing is largely through federal government transfers, with the community contributing a predetermined percentage of the capital costs. The WSP and the RWSTG are focusing on case studies where the community manages the system through water boards/associations, where operators are accountable to the water board/association (sometimes as employees but preferably as contracted private operators), and where professional support services have proved effective.

There is growing consensus that smaller systems under local government/community management require professional support. Locally based operators can perform routine operations well, but what is missing is the professional support needed to maintain good service at a reasonable cost and to expand facilities to meet demand. For example, professional technical and financial skills are required for (i) planning, design and construction management of new/rehabilitated systems and planned expansions; (ii) ongoing strategic planning to reduce unaccounted-for-water and increase sales through distribution extensions, new connections and tariff management; (iii) advice on maintaining treated water quality, reducing operating costs and resolving operational problems; and (iv) advice and oversight on accounting, financing and external auditing.

One of the professional support models under porno gratis review by RWSTG/WSP is franchising. Under a franchise arrangement the franchisor develops an operating plan and procedures under a brand name or logo which becomes synonymous with high quality service, and commits to ongoing support and guidance to small-scale private operators in critical areas of management and operation and maintenance, in exchange for a share of the revenue. Although composed of many independent units with relatively small revenue bases, a franchise network has the power and resources of a much larger enterprise. By introducing an individual with entrepreneurial flair as the operator/franchisee, there is also a built-in incentive to operate the water supply efficiently and in a business-like way. Franchising also best leverages the skills of the limited number of experienced water managers and operators found in most countries.

Full service management models
Several full service management models are being implemented / piloted by the World Bank. These include Design-Build-Lease (DBL) contracts, and Build-Own-Operate contracts. Under a typical DBL contract the municipality arranges the lease agreements, and a private company designs, constructs and manages operation and maintenance. The lease agreement for operation and maintenance may be for a group of towns over a 10 to 15 year period. If the lease fee covers debt service, then full-cost recovery is possible. One of the main challenges to BOT type contracts is how to ensure coverage of the smallest, poorest towns whose revenue base is too small to attract the private sector, for example $20,000 per year for a community of 5,000 (20 liters per capita per day at $0.50/m3).

BOO contracts are less well documented than most of the other full service contracts, but represent a dynamic and potentially sustainable model based on private sector financing. Under a BOO contract the investor is committing to cost recovery through connection fees and the water tariff. Investors will only take this risk under the right kind of market conditions and incentives, possibly including different types of direct subsidies to attract initial interest in smaller towns.