Overview of Water Sector Reforms

1
Overview of Water Sector Reforms

• Briefing Notes for Conceptualization Workshop
• By
• McLawrence G. Mpasa
• Programme Coordinator NWDP II
• Date 08th February 2007

2
Contents

• Introduction
• Background to Water Sector Reform
• Reforms under NWDP I
• Reforms under NWDP II
• UWSS
• WRM
• RWSS
• Town Water Supply and Sanitation
• Market Centres
• Policy Frameworks
• Way Forward (for the Sector)
• Workshop Objectives

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Introduction

• The Water Sector has been under going broad
  reforms since 1994.
• This has involved both the hardware and software
  aspects of providing and managing water supply
  services.
• The Reforms have been taking place in both
  the Urban, peri-urban and Rural areas.
• Phase I of the Reforms took place under the NWDP
  I from 1996 to year 2003 and the second phase
  is to take place under the NWDP II from 2007 to
  2011/12

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Background to Sector Reforms

• Prior to 1995, the MoIWD, through the
  District Water Supply Fund, apart from providing
  infrastructure and services to rural areas, was
  also responsible for the provision of potable
  water in all the urban centres, except for the
  Cities of Blantyre and Lilongwe.
• At the same time, the Ministry, through the
  WRB had a Policy holding and Regulating
  function, an arrangement which was not
  conducive to the efficient delivery of
  services.
• Early 1994, the Government recognized this
  weakness and initiated a study which was
  known as the Water Services Sector Study.
  This was funded by the World Bank and
  resulted in the development of the National
  Water Resources Management Policy and Strategies
  (NWRMPS) document, which was adopted by
  Government in May 1994.

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Phase I Sector Reform

• This study revealed that in order to achieve
  sustainability of the existing water and
  sanitation facilities, hence increase coverage
  there was need to address the management of
  the sector in a holistic manner rather than
  treating Infrastructure Development Programmes
  (maintenance and rehabilitation) as stand alone
  components.
• The study Specifically revealed that proper
  Water Resources Management and Water
  Supply Service delivery was constrained
  by
• Inappropriate Sector Institutional Arrangements
• Weak and Inadequate Legislation
• Lack of coherent Policy Framework and Investment
  Strategies
• The main Output of the Study was the
  Water Resources Management Policy and
  Strategies Document (May 1994)

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Overall Recommendations

• The overall Recommendations of the Study
  were that there
• should be
• Separation of Service Provision from Policy
  Holding and Regulatory functions by
  Government.
• Water should not only be treated as a
  Social Good but also as an Economic Good and
  that water should also not be over
  exploited, wasted, or polluted
• Malawi should design and adopt an Institutional
  Reforms for the Sector with 4 No key elements in
  mind
• Management at the lowest appropriate level,
• Simplification of relevant Legislation

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Overall Recommendations Contd

• The organization of effective operations
  management Structures and Systems that are
  decentralized and rely on maximum Private
  Sector Participation involvement of
  Communities.
• Introduction of Performance Management systems
  that will ensure accountability and
  sustainability of the end user and to the higher
  Authorities
• Improved Integration on the development of
  the water Supply and Sanitation - (IWRM)
• Development of Human and Financial
  Resources - (necessary for the efficient
  management of the sector

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Some Main Outputs

• Apart from infrastructure development, some of
  the Main Outputs
• of this Study were
• The creation of the 3 No. commercially
  oriented Regional Water Boards,
• Development of the New Waterworks Act No.17 of
  1995 to govern the Water Industry.
• Formulation of the Water Resources Board
  - (for the Effective Regulation of the Water
  Sector),
• Transfer of Water Borne Sanitation to Water
  Boards
• Development and Promotion of District Based,
  Community Managed Approach to rural Water Supply
  and Sanitation, and
• Community Involvement in the Protection and
  Management of Catchments

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Sector Reforms (NWDP II)

• Initiatives outlined above were achieved through
  the National Water Development Project (NWDP)
  I. The National Water Development Programme
  (NWDP) II is a programme aimed at building on
  the achievements of NWDP I.
• The primary objective of this program is to
  implement projects that will assist the GoM
  achieve improved management of the nations
  water resources and the delivery of efficient,
  reliable and sustainable water supply and
  sanitation services for the benefit of an
  increasingly large population overtime.
• The key implementing Agencies include the MoIWD
  and the five Water Boards and will run for a
  period of 5-6 years, beginning from year 2007 to
  2012-13. The first 12-18 months from this
  year will be for Program Preparation there after
  implementation

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NWDP II Contd

• The program has five major project components,
  and each of these have sub-components. Each
  Sector Institution, under the Program
  Coordination Unit (PCU), will manage the Program
  Preparation and later Implementation.
• These main Components and Key Players are
• Urban Water Supply and Sanitation (UWSS) -
  Joint PIU (BWB LWB)
• Water Resources Management (WRM) WRM PPT
• Rural Water Supply and Sanitation RWSS PPT
• Town Water Supply RWBs
• Market Centres RWBs

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1.0 Urban Water Supply Sanitation (UWSS)

• This Project Component has five main
  sub-components and these
• are
• Rehabilitation and Renewal Works for
  Blantyre and Lilongwe Water Boards
• Urban Water Sector Reform
• Legal Framework (Legislation)
• Institutional Framework
• Organizational Framework
• Financial Framework
• Regulatory Framework
• Infrastructure Development
• Change Management
• Provision of Water to Low Income Areas
• Consensus Building to garner support for the
  Reforms
• Review Of Business Plans for BWB LWB

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Drivers of UWSS Reform

• Efficiency
• The private sector is often considered
  to provide greater levels of efficiency when
  running water supply projects than the
  Public sector. The increased efficiency results
  from many factors, including
• Focus on cost-effectiveness and low
  operating costs, including greater flexibility in
  personnel management.
• Commercial approaches to problem solving and
• Insulation from political consideration.
• Technology and Know-how
• Governments may look up to private
  sector to provide new technology and know how
  both in capital works to be constructed
  and in operation and/or management

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Drivers of UWSS Reform contd

• Better Management
• Better management know-how will include
• the efficient running and financing of the
  utilitys operations,
• management of customer relationships,
• improvement of customer services,
• commercial dealings with sub-contractors and
  suppliers,
• Structuring and re-structuring of management
  teams,
• Establishing of effective lines of internal
  decision making and communications.
• Financing
• Water systems can be extremely
  expensive to develop and refurbish.
  Governments would wish to involve private
  sector to make service delivery more
  cost-effective and economically
  sustainable in the context of demographic
  growth and industrial development.

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UWSS Reform

• Objective
• Create an appropriate Environment for
  possible deeper form of Public Private
  Partnership (PPP) Arrangement
• Steps
• Introduce Service Contract (for BWB LWB)
• Aims
• Attain Operational Efficiency
• Improve Customers Services Delivery
• Carry out mid-term review (after 24-30 months) to
  determine if the desired results (improved
  Performance conducive Sector Environment
  and/or Market Conditions) are achieved
• Proceed with Service Contracts or introduce
  deeper form of PPP

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Expected Outputs

• Reduced UfW
• Improved technical and operational Efficiency
• Better Customer Service and Responsiveness
• Improved Financial Financial Efficiencies
• More Investments into infrastructure to attain
  improved Service Coverage
• Enabling Environment for sustainable Improvements

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PPP Transaction

• New Water Operating Co. to manage BWB and LWB
• Malawian Investors
• Management Employees Share Ownership
• GoM to
• Retain Asset Ownership
• Be responsible for approving financing capital
  works
• Ensure provision of services to LIA
• Operating Co to list of Stock Market
• NB Cabinet Paper prepared

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Provision of Water to Low Income Areas

• Main Objective
• Achieve improved access to potable
  Water Supply and Sanitation
• Services to people residing in an Un-Planned
  areas by increasing service
• coverage and reduced walking distances
  through Private Sector
• Participation.
• Technical Sub-component (Investment)
• Increase Water Service Coverage
• Rehabilitation/Upgrading/Extension
• Institutional and Financial Sub-component
• Management Structure and Systems
• Financing Requirements and Arrangements (for
  Sustainability of all the three sub-components)
• .
• Sanitation and Hygiene Promotion (to based
  around the National Sanitation Policy of 2005)
  Sub-component.

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2.0 Water Resources Management (WRM)

• Institutional and Technical Support
• Pilot Catchment Management and Development
• Lake Malawi Level Control
• Water Resources Investment Strategy
• Construction of Multi-Purpose Dams (for Water
  Supply, Irrigation and Electricity)
• Enabling Legislation (New Water Act) for the
  National Water Policy

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3.0 Rural Water Supply Sanitation (RWSS)

• In an effort to support and strengthen
  the Decentralization process, this Project
  Component has four main sub-components and these
  are
• Hygiene and Sanitation Promotion (HSP)
• Preparation of Implementation Manual for Piped
  Water Supply and Water Point Sources
• Design of Programme to Strengthen the Rural
  Water and Sanitation Mapping System and
  Prepare ME Programmes to keep track of
  changes in the National Coverage
• Technical and Environmental/Catchment Audit

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4.0 Town Water Supply

• Design and Construction Supervision of the
  Rehabilitation,
• Upgrading and Extension Works of
• Zomba and Mangochi Water Supply Schemes (SRWB)
• Kasungu Water Supply (CRWB) and
• Mzuzu Water Supply Scheme (NRWB)

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5.0 Market Centres

• This Project Component has two main sub-
  components and these
• are
• Pre-feasibility Studies for 61 No Potential
  Market Centres
• 17 No in the North
• 19 No in the Centre and
• 25 No in the South)
• Feasibility Studies, Preliminary Design, Business
  Planning and Construction Supervision of
  the Potential Market Centres

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Policy Frameworks

• National Growth Development Strategy
• An overarching operational strategy for
  attaining VISION 2020, and aims at reducing
  poverty through attainment economic growth
  (Promotes Public Private Partnerships)
• Decentralization Policy (1998)
• Strategy for Empowering and Developing Capacity
  at District level as a pillar for improving
  Planning, Financial Management and
  Accountability
• Water Resources Policy (August 2005)
• Tool for achieving sustainable provision of
  water supply for All and sustained services
  delivery equitably for social-economic
  development at an affordable cost
• National Sanitation Policy (Draft)
• Tool to guide the Country on how to
  implement Sanitation, and clarify Roles and
  Responsibilities for Improved health.

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Way Forward

• Short/Medium Term
• Operationalization of Policies
• Enacting of Enabling Legislation
• Reduction of Non-Revenue Water
• Rehabilitation, Upgrading of Priority Works
• Cost Management Efficiency Improvements
• Setting up Operations Management Sytems and
  Structures to support the Decentralization
  Process
• Capacity Building at levels (National, District
  Community)
• Long Term
• Community Operation Management of
  Infrastructure, and Catchment
• Development of New Raw Water Sources
• Enhanced involvement of Private Sector in the
  Sector

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Objectives of the Workshop

• Brief Key Stakeholders and Policy Makers on the
• Some of the key developments within the
  Sector (focusing NWDP II)
• Innovative Approaches and Options available for
  achieving improved Operational and
  Management Efficiency in Service Provision
  to the Urban and peri-urban Areas before engaging
  a wider public
• Get key Stakeholder and Policy Maker Feedback and
  Input into the envisaged Sector Reform
  initiatives
• Assist the Sector develop Strategy and Roadmap
  to improving
• the Management of the Nations Water Resources
• Service provision to the Urban, and peri-urban
  areas,
• Making safe water easily available to as many
  people as possible overtime