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

•
Mobilization & Project Goals
• Construction
• Selection, Contracting, & Training of MO
• Tariffs & Operations of DMM

• 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.

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.

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?

• 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.

Regulates service standards and price
Also arbitrates disputes
)
(Kiosk,
Stand pipe,
Individual
Pays utility for water bought
Pays for Water Consumed
Retails Water to consumers & maintains MO lines
Sells water in bulk to MO
MO

• 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

3.2 Mobilisation & Outreach
• The concept was introduced to the community in meetings where the benefits were explained to: o Leaders (Community & Political) o Consumers, and o 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.

• 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.

• 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.

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

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

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.

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
• Management
• Customer care
• Billing
• Revenue collection
• Line maintenance
• Quality surveillance
The training lasted a week .

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

3.9 Tariffs
All Master Operators must charge the same rates as outlined in the tables below:
MO Domestic Tariff MO Kiosk Tariff
Water
Consumption
0-6 m 3
KES
180 (min flat rate)
Water
Consumption
0 -10 m 3
KES
400 (min flat rate)
7-20 m 3 35 per m 3
21m 3 and above 50 per m 3
11m 3 and above 45 per m 3
Other Costs Associated with Water Connection (Comparison of MO vs. KIWASCO)
Item
Meter rent
MO prices (KES)
70/month
KIWASCO prices (KES)
150/month
Connection Fee 1,500
Deposit (Domestic) 1,000 (refundable)
Deposit (Kiosk) 5,000 (refundable)
4,000
1,800 (refundable)
10,000 (refundable)

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:
6
7
4
5
1
2
3
Line Kiosks
9
17
12
16
22
-
-
76
2008
H. holds TOTAL
2011
Kiosks H. holds Total
65
17
74
34
39
14
60
215
68
229
7
19
4
-
19
35
26
-
52
-
20
30
156
68
41
52
208
68
61
82
3 62 65
112 188 158 654 781

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%

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

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)

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.

5.0 Lessons Learnt
 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





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

 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.

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.