1. WATER SERVICES PROVIDERS ASSOCIATION (WASPA) WASPA ANNUAL CONFERENCE , NAIROBI - SEPTEMBER 2011
SERVICE TO THE POOR
THE CASE OF DELEGATED MANAGEMENT MODEL (DMM) IN NYALENDA, KISUMU
ENG. DAVID ONYANGO
MANAGING DIRECTOR
KIWASCO
DATE: September, 2011

2. Structure 1.0 Introduction 2.0 Delegated management Model Concept
3.0 Implementation of DMM
Mobilization & Project Goals
Construction
Selection, Contracting, & Training of MO
Tariffs & Operations of DMM
4.0 Benefits to KIWASCO & Customers
5.0 Lessons Learnt
6.0 Challenges
7.0 Conclusion

3. 1.0 Introduction
Kisumu is Kenya's third largest city, with a population of around 520,000 people.
60% of the population lives in informal settlement
KIWASCO is mandated to operate water and sewerage services in Kisumu Municipality covering an area of 297km2.
KIWASCO is a limited liability company owned by the Municipal Council of Kisumu. Has been in operations since 2003.

4. 2.0 Situational Analysis in Informal Areas (Pre-DMM)
Since inception, KIWASCO realised that 60% of its customers lived in the various informal settlements - Nyalenda being the largest – population of about 100,000.
KIWASCO was losing over 80% of water produced and most of this was in the informal settlements.
Residents in the informal settlements were noted to pay more than 10 times the cost of water in other areas leading to poor access.
High incidences of water-related diseases reported e.g. Cholera, typhoid, due to poor water quality arising from leaks.
Vandalism became a very serious problem due to lack of ownership of the water infrastructure in the informal areas.

5. So?...
Given the situation it became apparent that a new approached be developed to tackle the problem.
After extensive consultation, a new Model named Delegated Management Model (DMM) was thought to be an appropriate solution.
So What is DMM?

6. 2.1 Delegated Management Model (DMM)
The DMM concept is a partnership between KIWASCO and the community in water service delivery
It involves identifying resellers of water within the informal settlements and selling water to them in bulk through a master meter.
The resellers referred to as Master Operators (MO) then meter and sell the water to the community at some profit.
Master Operators collect revenue from their connected customers (community) and in-turn pay KIWASCO.

7. 2.2 Delegated Management Model Pictorial

8. Utility Consumer MO 2.3 Relationships in DMM (CBO, NGO, Individual)
Regulates service standards and price
Also arbitrates disputes
Sells water in bulk to MO
Pays utility for water bought
Consumer
(Kiosk, Stand pipe, Individual) MO
(CBO, NGO, Individual)
Pays for Water Consumed
Retails Water to consumers & maintains MO lines

9. 3.1 Project Goals 3.0 Implementation of DMM in Nyalenda
Extend Water supply lines into the informal settlements, to provide quality potable water at affordable prices
Reduce water losses from KIWASCO main supply lines arising from illegal connections and vandalism
To pilot a model capable of providing piped water to slums for replication in other parts of the city

10. 3.2 Mobilisation & Outreach
The concept was introduced to the community in meetings where the benefits were explained to:
Leaders (Community & Political)
Consumers, and
Administration
The community had a chance to interrogate the concept at these interactive gatherings. Some of the questions helped further refine the concept.
At the end of community mobilisation, a project implementation committee was formed with representatives from the community, local administration and KIWASCO.

11. 3.3 Construction
This involved construction of 5No 50mm diameter Master Operators’ pipes running 600 meters into the settlements.
On each line, 12No chambers with a capacity for 15No meters were constructed.

12. 3.3 Construction Meter points were installed in the chambers
The chambers are lockable and keys are in the hands of the MO
Construction was done using local artisans and labourers under the supervision of the project implementation committee.

14. 3.4 Contracting of Master Operators (MO)
Must
Be a registered group
Have experience in water sector and Plumbing
Come from the community
Have expertise
Have a source of finance
Basic level of Education
Have an organisational/ group structure in place

15. 3.5 Contracting of Master Operators (MO)
Added Advantage
Bank Statement
Gender sensitivity
Plot ownership

16. 3.6 Selection of Master Operators
MO were selected in a two-stage process. Each stage intended to identify strong suitable CBOs, individuals, or associations capable of realising the project.
The first stage:
Open invitation through the press
Community Vetting through Project Committee of all respondents to confirm residence in locality.
Second Stage
Interview by KIWASCO to elicit information on the group, its membership, qualifications, business experience, source of finance, experience in water sector or plumbing, etc
The group that finally emerged top was selected to be the MO.

17. Budgeting and record keeping Billing Revenue collection Management
3.7 Training of MO
Prior to signing a contract, the selected MOs were taken through training by Kenya Water Institute (KEWI) on:
Budgeting and record keeping
Billing
Revenue collection
Management
Line maintenance
Customer care
Quality surveillance
The training lasted a week.

18. 3.8 Contracting
A formal contract was entered into between KIWASCO and MO. The contract defined rights, obligations and responsibilities for both parties.
Contract Covers:
Asset ownership,
O&M responsibility
Tariff to be applied
Regulation
Asset extension

19. 3.9 Tariffs Item MO prices (KES) KIWASCO prices (KES) Meter rent
All Master Operators must charge the same rates as outlined in the tables below:
MO Domestic Tariff
MO Kiosk Tariff
Water Consumption
KES
0-6 m3
180 (min flat rate)
7-20 m3
35 per m3
21m3 and above
50 per m3
Water Consumption
KES
0 -10 m3
400 (min flat rate)
11m3 and above
45 per m3
Other Costs Associated with Water Connection (Comparison of MO vs. KIWASCO)
Item
MO prices (KES)
KIWASCO prices (KES)
Meter rent
70/month
150/month
Connection Fee
1,500
4,000
Deposit (Domestic)
1,000 (refundable)
1,800 (refundable)
Deposit (Kiosk)
5,000 (refundable)
10,000 (refundable)

20. 3.10 Operation of DMM
The first lines started operating in 2006 and 2 more lines added in 2008.
8No More lines to be added in 2011
During their operation the following progress has been recorded:
2008
2011
Line
Kiosks
H. holds
TOTAL
Total 1 9 65 74 39 60 68 2 17 34 14
215
229 3 12 7 19 52
156
208 4 16 35 - 5 22 26 20 41 61 6 30 82 62 76
112
188
158
654
781

21. One would observe a huge growth in household connections compared to kiosks.
A recent evaluation of the project revealed that each kiosk serves about 50 households. Household population is estimated as 8 persons.
The project serves about 64,000 people.
There are however some 688 customers who are still served by KIWASCO directly
NRW has reduced to about 6.8%

22. 3.11 Billing & Collections Year Billing Collections 2006 398,885
379,040
2007
1,139,425
1,038,130
2008
2,481,260
2,191,461
2009
4,290,783
3,935,910
2010
5,229,570
4,597,479
2011
5,429,690
5,006,489

23. 4.0 Benefit of DMM to KIWASCO and Customers
Improved system monitoring leading to reduction of Non-Revenue Water.
Reduced tariffs, Penetration of services and Improved health in the informal settlements
Created employment and enhanced business skills in the community
Reduced staff-resident interface hence low opportunity for corruption
Reduced costs to KIWASCO (Timely billing & collection)

24. 5.0 Lessons Learnt
Technical and managerial competence of MO are key to successful sustainable operations of DMM
Community participation and support is central to ownership of DMM
Community mobilization in implementation offers an opportunity to marry technical solutions with social concerns.
Pilot projects require strong communication program during implementation and in post-implementation
Communication must have clear messages to galvanize the people and address emerging concerns.

25. 5.0 Lessons Learnt continues
Hand-holding and buck-stopping by the WSP is essential at early stages of the operations
The contract should aim to equitably distribute and allocate risks between parties to the contract.
Entrepreneurial spirit is required in the MO
Need to provide financial incentive to the well performing MOs to spur growth

26. 6.0 Challenges
Resistance by some community members because of disagreement with MO at personal level
Lack of teamwork and transparency in some MO leading to instability in management
Lack of framework to deal with NRW from MO operations
Continued unplanned nature of the informal settlements
Some MOs have inadequate experience in financial management
Occasional complaints of over-billing
MOs debts to KIWASCO
Lack of adequate infrastructure to allow transfer of all customers to the same platform
Elimination of remaining spaghettis

27. 7.0 Performance of project against the goals
Extend Water supply lines into the informal settlements, to provide quality potable water at affordable prices – Achieved.
Reduce water losses from KIWASCO main supply lines arising from illegal connections and vandalism – Achieved.
To pilot a model capable of providing piped water to slums for replication in other parts of the city – Achieved.

28. 7.0 Conclusion From Boutique to Mass market . . .
The DMM was a success measured against its goals
It is a robust platform for service delivery to the poor if properly planned and implemented.
It is easily scalable to other informal settlements.
It requires focused attention through pro-poor unit to manage its operations.
It can be blended with new technologies e.g Pre-paid meters.

29. Thank you very much for your kind attention!