1. WSSB Capacity Enhancement Workshops 1 Session 2: Legal & Institutional Background for Management of Small-Town Water Systems

2. Session Overview 2 1. Uganda’s Decentralization Policy & Strategy 2. Legal Framework for Water PPPs: Local Govt. Act, Water Act, PPDA Act, Drinking Water Standards, & Audit Act 3. Institutional Roles: MWE, Local Authorities, Water Authority Boards, Private Operators, & PPDA 4. Managing Relationships between contracting parties 5. Developing Contract Management Systems 6. Discussion Questions WSSB Capacity Enhancement Workshops

3. 1.-Uganda’s Decentralization Policy 1994 3 Transfer implementation authority to local governments, reducing workload on central government Establish decentralisation and the guiding principle applied to all levels of Government and ensure citizen participation and democratic control Achieve good governance as a requirement for better performance by public servants Bring political & administrative control over services closer to the point where they are delivered in order to improve accountability and effectiveness Free local managers from central constraints & allow them to develop organisational structures tailored to local circumstances Improve services’ fees and the provision of services they finance Improve capacities of local authorities, and boards to plan, finance, manage and deliver services to their constituents WSSB Capacity Enhancement Workshops

4. 2. Key Elements of Legal Framework for Small- Town Water Systems 4 Local Government Act, Cap 243 Water Act 1995 (and t he National Water Policy Document 1999) Public Procurement and Disposal of Assets Act Other Acts: Fiscal Decentralisation Strategy, 2002 Public Finance & Accountability Act, 2003 National Environment Act (Environmental Impact Assessments) WSSB Capacity Enhancement Workshops

5. 2.1-Water Act, Cap 152 of Nov. 1995 5 Sections 45 to 48 of the Water Act allows the Minister of responsible for Water to: Declare areas as Water Supply & Sewerage Authorities Appoint Town Councils to be the Water Supply & Sewerage Authority Transfer responsibility for custody of water supply & sewerage assets and management of systems to the new Authority Establishment of a Water Supply & Sewerage Authority by the Town Council to act as custodian WSSB Capacity Enhancement Workshops

6. 2.2-Key Requirements of Water Act, Cap 152, 1995 Uganda Small-Scale Infrastructure Providers - Water Contract Admin. Training 6 Execution of a performance contract between the Minister of Water And Environment and the town council/Water Supply and Sanitation Board; Procurement of private operator and execution of an operations and maintenance contract; and Monitoring, evaluation and enforcement of operations and maintenance by town council/ Water Supply and Sanitation Board

7. 2.3 Public Procurement & Disposal of Assets (PPDA) Act & Guidelines 7 Procurement of private operators must comply with requirements of the Public Procurement and Disposal of Public Assets Act (PPDA), PPDA Regulations and Guidelines set out the threshold limits applicable to different procurement methods. PPDA Act details pre-qualification, contract award and other procurement requirements. Private operators are currently procured by district based contract committees in accordance with Local Governments PPDA Regulations, or directly by MWE. Water supply projects funded by World Bank’s Global Partnership Output Based Aid (GPOBA) were done under the World Bank Procurement Guidelines WSSB Capacity Enhancement Workshops

8. 3. Key Institutional Roles of Current Framework 8 Ministry of Water & Environment (MWE), Directorate of Water Development (DWD) Local Water Authority Boards Private Operators Others: Public Procurement & Disposal of Public Assets Authority (PPDA) Directorate of Water Resources Mangement (DWRM) WSSB Capacity Enhancement Workshops

9. 3.1 Structure of Water Sector Contracts & Institutional Roles 9 MWE Water Authority Board Customers Private Sector Performance Contract Management Contract Customer Contract WSSB Capacity Enhancement Workshops

10. 3.2 Ministry of Water & Environment, Directorate of Water Development (DWD) 10 Appoints custodians: local water authority boards Prepares Performance Contracts Prepares Model Management Contract Monitors performance of local water boards Provides agreed capital grants or operating subsidies to water authorities, in accordance with performance contract conditions & agreed business plans WSSB Capacity Enhancement Workshops

11. 3.3Local Water Authority Boards 11 Act as custodians of the local water system assets in accordance with Performance Contract Contract Private Operator for management of the water system. Procurement conducted by Local Council Develop the Business Plan for the operation and development of the water system (expansions, new investments, etc.) Monitor performance of the private operator, according to Management Contract’s key performance indicators WSSB Capacity Enhancement Workshops

12. 3.4Private Operators 12 Operate and maintain the local water system, in accordance with the conditions & performance indicators of the Management Contract Billing & Collection from end-users May perform other services if included in contract (e.g. design- build, replacements, OBA, etc.) Report on their performance to the Water Authority Board WSSB Capacity Enhancement Workshops

13. 4.Managing Relationships Between Contracting Parties 13 Monitoring actual performance against set performance indicators Enforcement of Contractual Obligations Investigation & resolution of disputes & complaints Communications on performance with key stakeholders Managing Contract Information for better risk-management WSSB Capacity Enhancement Workshops

14. 5.-The Framework for Contract Management Systems 14 Defining Government’s Contract Management Roles: Identify Government’s contractual obligations Mitigation & Control of Govt’s risks Government’s requirements to monitor private operator’s performance & completion of its contractual obligations Implementing Government’s Contract Management Functions: Providing Contract Management & Monitoring Resources: Human, IT, & other Authorizations required for fulfilling Government’s role Managing non-performance, defaults or disputes WSSB Capacity Enhancement Workshops

15. 6.-Discussion Questions 15 Which laws are the most challenging for each key stakeholder group to comply with: Local Water Authority Boards Private Operators Ministry of Water & Environment Which institutional roles are the most challenging for each key stakeholder group to fulfill: Local Water Authority Boards Private Operators Ministry of Water & Environment WSSB Capacity Enhancement Workshops

16. 16 WSSB Capacity Enhancement Workshops End