Management Models: Basic Principles and Best Practices

Basic Principles and Best Practices

Small town and multi-village water supplies are usually managed by municipal water departments, autonomous municipal water boards, or water user associations at the local level, or by public water utilities at the regional or national level. Operations may be contracted out to a private company under any of the above management arrangements. Contract options include (i) management contracts (where the company is paid a set fee or a fee plus a share of profits, under a 2-5 year contract); (ii) lease contracts (where the company finances operations and maintenance from water revenues at its own risk, under a 7-15 year contract); or (iii) concessions (where the company finances investments, operations and maintenance from its own revenue at its own risk, under a 20-30 year contract). Supplemental professional support may be provided to water boards/associations and community based operators (i) by consulting engineers and financial advisors on a retainer basis; (ii) by private firms through a franchise arrangement; or (iii) by higher level organizations such as regional or national utilities or NGOs, or an Association of Water User Associations. Other options to improve the quality of service include operator certification and the user of “circuit riders”.

Management model options
One of the objectives of the Small Towns and Multi-Village Initiatives is to study and document the institutional arrangements and key ingredients for success of different management models. Taken together, institutional arrangements and key ingredients for success set out basic principles and best practices, and provide the analytical framework needed to assess management models. Institutional arrangements address issues concerning the roles of the community, the private sector and local government. The following types of questions are addressed: who owns and manages the facilities? what is the legal basis for ownership? who plans, designs and supervises construction or expansion of the facilities? what financing arrangements exit? who operates, maintains, collects revenues, and keeps accounts? who regulates performance of town water authorities and operators? who regulates tariffs and water quality? and who audits accounts?

Keeping in mind the overall objective of increasing consumer access to improved, affordable and sustained services, key ingredients for success can be broadly categorized under financial viability and quality of service. Factors that directly affect the financial viability of a town water supply include financial autonomy and financing so that with revenues can be reinvested and loans can be obtained to renew and expand the system, regulation that allows tariffs to be raised while protecting the consumer, cost effective design and cost effective operations so that water is affordable. Factors that affect service level include political support for the management organization, management stability underpinned by clear film porno legal basis for ownership and management, flexibility to innovate and procure goods/services, technical support to professionally manage the system, accountability to users, and expanding coverage. Typical indicators used to assess the performance of a given system are set out in the World Bank’s┬áBenchmarking Water and Sanitation Utilities: A Start-Up Kit. These include coverage, water consumption and production, unaccounted-for water, metering practices, pipe network performance, cost and staffing, quality of service, billings and collections, financial performance, and capital investment. The collection of quantitative data for performance indicators is one of the objectives of the WSP small towns case studies.

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