Balancing Coverage and Financial Sustainability in Pro-Poor Water Service Initiatives: A Case of a Uganda Project

Abstract

This article examines the Affordable Basic Water Project implemented by Uganda's National Water and Sewerage Corporation (NWSC). Three alternatives to the NWSC service provision scenario are developed using a linear programming model, with the focus on different mixes of three service provision technologies: yard taps, public water points, and public water points with prepaid meters. The alternative scenarios allow better service coverage and improved financial sustainability, compared to the design proposed by the NWSC. The scenarios demonstrate a tradeoff between social acceptability and operational feasibility/payment collection criteria.

ACKNOWLEDGMENTS

The authors are grateful to Dr. Sanford Berg, Distinguished Service Professor and the Director of Water Studies for the Public Utility Research Center, University of Florida, for his input into this article.

Notes

^aMailo land tenure accounts for 65% of Kampala area and about 80% of the area in the city covered by informal settlements (NWSC and AquaConsult 2003b). The specificity of mailo land tenure facilitated the growth of informal settlements and prevented effective water and sewerage provision to such settlements. Mailo tenure originated in early 1900s and was used by colonialists as a way to indulge local elite. The individuals receiving this land often lacked the means to till the area so they settled tenants. In 1975, all land in Uganda was declared to be the property of the state, and mailo landowners were converted into lessees of the state for the period of 99 years. The decree also gave the former mailo landowners the right to evict tenants after issuing a 6-month notice and compensating tenants for any land improvements. However, mailo landowners have not have any mechanisms of controlling the nature and extent of illegal settlements and they rarely take the steps to evict tenants (Place and Otsuka 2002).

^aExchange rate as of July 31, 2008 (Yahoo! Finance 2009).

^aNet returns for each technology are defined here as returns, r_i , reduced by operation and maintenance costs, w_i , and investment cost, c_i , estimated over the life span of the project.