July 2000

This research project was undertaken to develop appropriate operation and maintenance management arrangement options for rural water supply projects. The management options that were developed are based on grass-roots input from communities and local stakeholders involved in such projects and were developed within the framework set out by the Water Services Act.

An important part of this process was to assess existing management arrangements at completed rural water supply projects in order to improve the understanding of on-the-ground issues affecting project management and to draw lessons based on this analysis. A case study in the Matatiele district of the Eastern Cape was used for this purpose.

All of the completed water schemes that were identified for study had systems of community management in place. Regardless of size or type of scheme, the current institutional arrangements were found to be basically the same:

• an elected water committee of community representatives is responsible for the scheme (acts as a de facto water services provider);
• where schemes can afford to do so, community technical operators and bookkeepers are paid nominal wages to conduct relevant activities on behalf of the volunteer water committee;
• flat monthly water tariffs are. paid by households to the water committee and these funds are used to cover the project's operation costs (Note: there is one exception of a pre- paid project).

The three different types of schemes that were identified were defined according to the following:

• Stand-alone schemes -Schemes with their own source that serve one village. Source is normally a spring protection or borehole. Population served is normally up to 1 000 people.
• Group schemes -Schemes with their own source(s) that serve several villages within close proximity to each other in a distinct geographical area. The source is normally a river weir or borehole with no purification requirements. Population served is normally 1 000 to 5 000 people.
• Subregional schemes -Schemes with their own source that serve many villages spread over large geographical areas that are based on gravity-fed systems that do not require high level technology such as water purification plants or pumping stations. Population served may be as high as 25 000 people in up to 20 villages.

The overall findings in the areas of management, financial, and technical arrangements included the following:

Management Arrangements

• There is overwhelming support for Village Water Committees to act as water services providers.
• Paid staff (albeit 'informally employed') are far more effective and active in carrying out their responsibilities than volunteer committee members, especially with the difficult task of tariff collection.
• The activities of project management and staff management by water committees are presently not well implemented. The effects of this are more noticeable at the larger types of projects (i.e. group and subregional).

Financial Arrangements

• There is a very strong preference by rural customers that the money from their tariffs remains in their community.
• Cost recovery levels by water committees from community households is generally very low (0% to 40%).
• Cost recovery is the most difficult challenge facing community-based water services providers. The challenges of cost recovery increase with the population and geographic size of projects as well as with the level of conflict within project areas.
• Cost recovery at the one project with a pre-paid system is remarkably better than any other project in the district. The pre-paid system ensures that water services are paid for before they can be accessed. The pre-paid system centralises the collection arrangements and puts the onus on customers to pay, and not on the water committee to collect.
• Relying on volunteer committee members or staff for water tariff collection appears inadequate for achieving sustainable and sufficient levels of cost recovery.
• Community households are only willing to pay very low tariffs for gravity-fed water schemes. e.g. one committee felt their cost recovery had failed largely because their tariff was set at R3/household.month and not R2/household. month .
• It is generally acceptable to water committees and their staff in the study area that monthly wages be based on village economy rates, i.e. R100 -R700 per staff member. This level of wages is required to ensure the affordability of water services to rural customers.
• While the more recent Mvula Trust projects have an emergency fund, other projects do not. Even with an emergency fund, water committees worry about the costs of major repairs and future replacements. At community level, there is general consensus that government should pay for those types of costs.
• Committees are reluctant or unable to enforce non-payment policies at household or village levels. Committees feel that they presently lack the necessary authority or official mandate to conduct punitive actions.

Technical Arrangements

• Community-based technical operators appear technically competent to conduct daily operation and maintenance of projects and to make basic repairs.
• The present activities of volunteer technical operators are generally limited to repair work when necessary to ensure the flow of water to tapstands.
• Technically complex problems, such as a problem with a solar pump at one of the projects, are beyond the capacity of community technical operators. There is general consensus that specialised technical repairs need to be contracted out when necessary. Village water committees generally felt that they should make the decisions with regards to subcontracting such activities, but that information with regards to suitable contractors from the water services authority would be useful.
• Report-backs to communities with regards to technical issues and problems assist in building community awareness and ownership.

General

• A broad sense of ownership of projects appeared to be exhibited by both committees and communities.
• Training input into projects, particularly management and technical training for operation and maintenance, appears to have contributed to the relative success of projects in the study area.
• The only project that was not physically working at all had failed largely due to political reasons at community level, compounded by a lack of clear management and technical operation and maintenance (O&M) arrangements.
• While there is general customer satisfaction with the operation of projects, there is also a clear demand for mixed levels of service, e.g. some private tapstands.
• There is presently very poor awareness of local government structures at community level.

From the research findings, a generic scheme model was developed based on the recommended option of further developing community management arrangements at community water supply projects in rural areas similar to the study area. (More specific models for the three different types of schemes defined previously were also developed).

The proposed generic model is based on the following assumptions with regards to financial arrangements:

• The community-based water services provider of a scheme without a bulk service provider would be responsible for covering all normal O&M costs of the water project.
• The community-based water services providers of group or subregional schemes with a bulk service provider would be responsible for covering all O&M costs of the reticulation for their community. These water services providers would also be expected to pay their bulk services providers for bulk water.
• The option of bulk services tariffs being based on pre-paid metering of bulk water should be considered if appropriate. (It may not be appropriate in the case of community-based bulk services providers with low capacity and poor infrastructure which are located far from their support organisation).
• The water services authority, through funding from the equitable share payments, would be responsible for funding the work of support organisations.
• The water services authority would be responsible for financial assistance to community-based water services providers in the case of disasters, emergencies and long-term replacement as required.

Recommendations

The Water Services Act provides an appropriate and applicable framework for the management arrangements of rural water supply. The following points set out the most important recommendations related to community management arrangements in areas such as the case study.

Management Arrangements

• Community-based water services providers are generally the most suitable option for rural water supply projects.
• Village-based water services providers in combination with a separate bulk services provider most appropriately serve subregional schemes as defined in this paper. Several options for bulk services providers have been set out. It is recommended that pre-paid water metering of bulk supply be the basis on which water is sold to village-based water services providers.
• If village water committees are to be contracted as water services providers, they will need to be assisted to develop more formal arrangements with regards to the payment of staff and staff responsibilities.
• Community report-backs, including financial reports, must be formalised as part of the responsibilities of community-based water services providers.
• Structured arrangements to facilitate communication and reporting between community-based water services providers and local government must be developed. The proposed water services forum plays a key role in this task.
• The support function of the water services authority is a key function for ensuring sustainable operation and maintenance of projects. This function can most appropriately be subcontracted to external support organisations by those District Councils with low capacity.

Financial Arrangements

• Cost recovery levels will need to be improved at projects without pre-paid tapstands in order to support more formalised O&M arrangements, which depend on regular and structured activities by paid staff.
• An enforced policy of 'no payment, no water services' would be expected to improve cost recovery dramatically in the long run.
• Water committees of small stand-alone rural water supply schemes can normally accomplish adequate cost recovery based on moral/social pressures from within the community if the management and cost recovery systems are well structured, and if post-project support is provided.
• Pre-paid systems appear most suited to rural water supply group schemes. Pre-paid systems provide the most effective method of cost recovery. However, local post-project support is crucial to ensuring the success of the pre-paid system.
• As the costs for pre-paid tapstands for subregional schemes may be prohibitively expensive, it is suggested that pre-payment be considered at bulk supply level only.
• Post-project support is required to assist community-based water services providers in developing their financial systems.
• External support and monitoring are par- ticularly required with regard to financial record-keeping of community-based water services providers as the current confused bookkeeping and lack of financial reporting by water committees do not encourage an environment in which customers are secure about paying tariffs.

Technical Arrangements

• Community-based technical operators are the most appropriate option for carrying out technical O&M activities for a community- based water services provider. In order for this option to be viable, these positions should be filled by individuals who have received technical training, particularly O&M training, as well as work experience on their scheme.
• Technical operators should be hired and paid on a regular part-time or full-time basis as required to ensure proper maintenance of projects.
• Technical operators need to be managed and to have clear reporting requirements.
• As staff management by water committees is generally poor, external support is thus required for monitoring and supervising the activities of technical operators, particularly maintenance activities.

General

• Water services providers will need to be assisted to implement and manage private connections (where design specifications allow for such upgrading) as part of post-project support.
• Developing a culture of payment within a project area is vital to sustainability. This is aided by developing a sense of community ownership and awareness. The following factors playa critical role in these developments:
• Active and informed participation of community-based structures from the start of rural water supply projects.
• Strong attention to training and awareness interventions aimed not just at committees but at the broader community as well.
• Involvement by both local government and traditional structures at project level.
• A high commitment by water services authorities to developing sustainable projects based on adequate cost recovery will be an important factor in future development and should be encouraged and supported.
• The lack of awareness of local government at rural community level must be dealt with as part of formalising management arrangements. This should be done at project level and supported by broader interventions at district and provincial levels.