Reaching the Urban Poor with Sustainable Services

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Reaching the Urban Poor with Sustainable Services:

Informal Service Providers versus Water Utilities

S.I. Karimi*, H. Seur * and R. Werchota **

* Water Services Trust Fund, P.O. Box 49699, Mara Road, Upper Hill, Nairobi, Kenya.

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** GTZ, WSRP, P.O. Box 19512-00202, Nairobi, Kenya

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Abstract

In many African cities and towns, water and sanitation services are provided by informal service providers (ISPs). Especially the populations of planned and unplanned low income areas are dependent on the services provided by tanker truck owners, cart sellers and community-managed water and sanitation schemes.

The formalisation and regulation of these informal service providers has become the topic of an important debate within the water and sanitation sector. Some policy makers and professionals argue that formalisation and regulation of ISPs will result in improved service delivery and the empowerment of urban communities. Others maintain that formalisation will result in the fragmentation of the sector, preventing the urban poor from benefitting from the services, economies of scale and pro-poor cross-subsidies only large professional water utilities can offer.

This paper tries to address the question whether the important role played by the informal service providers justifies their formalisation. The analysis is based upon a number of case-studies carried out in low income urban areas of Zambia and Kenya.

The paper concludes that although the formalisation of ISPsshould not be pursued, utilities could improve their service delivery to the urban poor by adopting some of the approaches developed by non-governmental organisations (NGOs) community-based organisations (CBOs) and ISPs.

Key words

Urban poor;water supply; informal service providers;water utilities;formalisation; regulation

Setting the Scene: The Importance of Informal Service Provision

Until the 1990s, the provision of water supply and sanitation services to low income urban areas has been largely neglected in Sub-Saharan Africa as well as in parts of Latin America and Asia. Most governments, local authorities and water utilities were neither able to cope with rapid urban growth and sprawling informal settlements, nor were they able to maintain existing infrastructure in planned low income housing estates. To some extent there existed unwillingness among politicians, policy makers and professionals to address the deteriorating living conditions in the low income urban areas. After all, somehow the urban poor managed to get their water somewhere.

Indeed, in many poorly serviced urban slums and planned areas, individuals, groups and organisations had seen the need to improve the situation or had discovered a new and growing market. In many sub-Saharan African countries these informal service providers (ISPs) (Amis et al., 2001; Nickson and Francheys, 2003; Batley and Moran, 2004; Allen et al. 2004)managed to improve the public health situation by responding to the demand for improved and affordable water supply and sanitation services.

Walking through the towns and cities of many sub-Saharan African countries, one cannot fail to notice the presence and importance of the tanker trucks, donkey carts and hand carts that are used to supply water to underserved areas or to remove sanitation waste. Talking to residents of Ouagadougou, Lusaka, Kampala, Nairobi, or Dar es Salaam may reveal that they fetch their water from a community-managed water scheme or that they use a communal toilet.

According to Collignon and Venzina (2000), informal and/or small-scale private water providers serve much of African, Asian and Latin American cities. In some African cities they serve up to the 70-80% of the urban population.

The Discussion

This paper aims to answer the question whether the important role played by ISPs in supplying the urban poor justifies recognising these providers and giving them a legal status.

Yes, ISPs havemanaged to improve the water supply situation, but they have been unable to end the urban water and sanitation crisis. Cholera outbreaks still occur and in some cities and towns the dependency upon informal service delivery has facilitated the creation of cartels.

This paper analyses the strengths and weaknesses of both the informal and formal sector; the ISPs and water utilities. Whilst recognising the importance of ISPs and the neglect of the urban poor by Governments and water utilities, we show that providing sustainable and affordable access to safe water and adequate sanitation can only be achieved by or through regulated water and sanitation utilities.

We first argue that it is important to make a distinction between private ISPs and community-managed ISPs. This allows us to analyse the differences between both types in terms of their objectives, impact and shortcomings as well as the,often unsuccessful, efforts that have been made to use or adapt them so they can be instrumental in improving service delivery in low income areas.

The last part of the paper focuses upon the lessons utilities can learn from ISPs and the approaches that have been developed by various water utilities to successfully extend their services to the low income settlements within their service area.

The Emergence of a Niche: Why many Water Utilities have Failed to Reach the Urban Poor

The importance of ISPs can only be appreciated if we analyse why many licensed water utilities have not managed, or not attempted, to extend their services to the low income urban areas. The poor performance of utilities in these areas can be explained as follows:

-Some utilities simply lack the necessary know-how, funds and human resources to design, implement and operate pro-poor water supply and sanitation schemes.

-Many water utilities lack the required entrepreneurial skills and spirit; Instead of approaching low income urban areas with pro-poor strategies, specialised units and adapted solutions, many utilities prefer to avoid risks and mainly focus on collecting revenue from their metered customers.

-The fact that low income urban areas are not perceived as a business opportunity but rather as a burden or risk can be largely attributed to a lack of knowledge about socio-economic conditions of areas which are often labelled “settlements for the urban poor”. The presence of private ISPs in urban slums provides an indication that these areas constitute an important market for water kiosks as well as for domestic and commercial connections. A utility can only respond to the specific needs of slum dwellers or the residents of dilapidated council estates, if it is willing to study local conditions and willing to work with residents, local organisations and local authorities.

-Most utilities do not have a customer care concept which is adapted to the specific needs of residents of unplanned settlements. Many slum dwellers are unaware of their rights and responsibilities and the utility is perceived as a distant organisation which only provides services to well established neighbourhoods. A pro-poor customer care concept requires a certain degree of service decentralisation.

-Many utilities are indeed centralised organisations without a strong presence in low income areas. Their absence in these areas explains why maintenance and repair requirements needs are not identified and why reported damage is not responded to.

-Poor service levels tend to result in low customer satisfaction levels and low collection efficiencies. Low collection efficiencies tend to confirm the view of utility staff that low income areas are best be ignored.

-The low income urban areas are seen by many utilities and other stakeholders as no-go areas for utilities and as the arena and responsibility of ISPs, NGOs and CBOs. This image is increasingly strengthened by the policies and interventions of multi-lateral aid organisations (Moretto, 2007).

-Sometimes regulation prevents utilities from developing and implementing a sustainable pro-poor strategy which is rooted in realistic tariffs. Instead of considering the commercial objectives of utilities as well as the willingness and ability of customers to pay for water and sanitation, some regulators give in to political pressure by keeping domestic tariffs low whilst embracing the adage; ‘the poor (kiosk customer) should not pay more’. Adopting such a politically motivated pro-poor discourse can prevent water kiosks from becoming sustainable.

-Unlike NGOs or private ISPs, which can cherry-pick their project locations, the utility has the obligation to supply all people living within its service area.

-Local water cartels may prevent a utility from extending its services to certain areas.

Need to Distinguish between Community-Managed and Private Informal service providers

A critical analysis of the current role of ISPs in urban water supply and sanitation, requires making a distinction between community-managed water supply and sanitation providers or schemes (Moretto, 2007) and private informal service providers (e.g. yard tap owners selling water to neighbours, hand or donkey cart, water resellers, tanker truck operators, operators of private water supply schemes, private pit exhausters, etc.). Although they tend to operate in the same urban setting, we show that they differ when it comes to their values, objectives, strategies and operations. What both types have in common is that they are informal, i.e. they are not formally recognised or authorised by government (Moretto, 2007). For example, in Tanzania, Kenya, Zambia and Rwanda, ISPs operate outside the regulatory framework but often within the service area of the licensed water provider.

However, in spite of their informal or even illegal status, most ISPs - private and community-managed - continue to operate and extend their services. ISPs operate with the tacit consent or even with the active support of the local authority and the licensed provider. They receive this support because they are able to offer services in areas which are not connected to the official distribution network, or because they provide a necessary fallback in connected areas that frequently experience supply interruptions.

Community–Managed Water Supply: The Chipata Water Trust (Lusaka, Zambia)

Although Chipata Compound, a large unplanned urban settlement with an estimated population of 92,000, lies within the service area of the Lusaka Water and Sewerage Company (LWSC), the licensed provider, almost all residents fetch their water at one of the water kiosks of the Chipata Compound Water Trust.

Residents of Chipata Compound (Seur and Kangwa, 2005), described the water supply situation prior to the inauguration of the water supply scheme in 1997, as “extremely poor”. Only occasionally (and usually unexpectedly) had residents been able to fetch treated water from thenetwork operated by the Lusaka City Council (LCC). As no maintenance work had been carried out for decades, residents had witnessed the gradually dilapidation of the entire system. Sometimes Chipata had gone several days without any supply of treated water. Not surprisingly many households had responded to the worsening situation by digging wells within their yard.

A priority assessment carried out in 1995 by the NGO Christian Aid Research Education (CARE)International clearly showed that improving water supply was perceived by residents as their main priority. The Department For International Development DFID-funded project, implemented by CARE, was commissioned in 1997. CARE considered the Chipata scheme to be a pilot scheme. Similar schemes were to follow soon as the water supply situation in some unplanned areas of Lusaka was even worse.

As in the other unplanned settlements where Trusts were established, the population of Chipata Compound was given the opportunity to participate in all phases of the project. For instance, most kiosks were constructed by local masons trained by the project. The Residents Development Committee (RDC) was established by the LCC within the framework of the project.

The water project resulted in a remarkable improvement of the water supply situation. In 2005,Chipata had water supply 8 hours/day and the population was served through 49 water kiosks; one kiosk for every 1,735 residents.

Currently 8large unplanned areas, with an estimated population of over 600,000 persons (i.e. 34% of the entire population of Lusaka), are served by independent and unregulatedWater Trusts. The Trusts are professionally managed by a trained team recruited from within the area and they are controlled by the community.

Although the Trusts operate within the service area of the LWSC, they are operated as independent utilities; water is obtained from boreholes within the area.

Although the schemes are characterised by their community participation and community management concept,they have also adopted commercial principles; costs have to be covered and the schemes have to meet future maintenance and replacement costs.

With their community participation concept the project and Trusts hadindeed managed to instil, within the communities involved, a strong sense of psychological ownership. Most residents talked enthusiastically about their water schemes (Seur and Kangwa, 2005), comparing the current situation with the problems they faced before the construction of their kiosks, blaming the LCC and the LWSC for not answering their pleas.

Private ISPs: Slum Water Lords in Mathare, Kibera and Kiang’ombe(Nairobi, Kenya)

Almost all residents of Kibera and Mathare, two of the largest slums in Nairobi (Kibera has an estimated population of 270,000), rely on the services provided by informal water vendors. Although the Nairobi City Water and Sewerage Company (NCWSC) has made several attempts to serve parts of these settlements, the company failed to make residents pay for the water consumed and was unable to prevent the proliferation of illegal connections.

According to residents, poor management of the water supply infrastructure by the NCWSC has resulted in the emergence of water cartels. These cartels make illegal connections and sell NCWSC waterto residents through a number water vendors. Whereas the owner of a domestic connection in Nairobi pays KSh 18/m3, a Mathare resident pays KSh 92/m3 (KSh 2 for a full 20-litre jerrycan). During shortages the price goes up to KSh 920/m3. For the cartels the slums represent a thriving water market.

Some cartels – e.g. the Mungiki, the Kamjeshi and the Talibans - are known even outside their area in which they operate. In addition to water some cartels also provide other “services” such as electricity and security. The provincial administration, which has identified four cartels currently operating in Kibera, admits that in the slums the cartels operate like a state within the state and are in full control of water and electricity supply. According to an NCWSC staff membercartels will do everything possible to protect their interests and do not shun violence: “Sometimes our plumbers and meter readers do not even dare get into these areas”. Most residents feel they cannot complain about exorbitant levies and unwanted services as they fear reprisal by the cartels.

In June 2007, the water utility took a bold step against the cartels by implementing mass disconnections. This to the surprise of the NCWSC, led to protests from area residents who argued that although they were extorted by the cartels, they needed water and therefore appreciated the fact that at least they had a source of water. The utility responded by creating a few public standpipes where residentswere allowed to fetch water free of charge, until the utility had managed to bring the situation under control. The standpipes were operated by local vendors. An interview with these vendors revealed that they had decided to join one of the cartel’s “gangs”enabling the cartel to continue controlling the local water market. The gangs and their vendors were indeed determined to prevent the utility from moving intotheir territory. As one vendor put it, “This is a profitable business and we will not allow a utility to come in and subsidize the prices” Some gangs and vendors are even known to cause artificial shortages so as to increase the price of water.

Keeping the Licensed Provider Out: The Kiang’ombeCase

Early 2007, the Mavoko-EPZA Water Company, based in Athi River, organised a public meeting (baraza in Swahili) with the residents of Kiang’ombe, one of the informal settlements within its service area. Although the meeting was well attended many participants were reluctant to express their views in public. Others, and some elders in particular, emphasised that the area is growing and that slum dwellers, like other Kenyans, have the right to safe and affordable water.

Picture 1: Kiang’ombe area at the outskirts of Nairobi