Ensuring sustainable access for the poor through internal revenue generation – Water & Sanitation Lusaka 2007 Kelvin Chitumbo - NWASCO Overview Background of NWASCO How NWASCO ensures increased access On the road to full cost recovery Experiences & Recommendations 1994 sector Policy with 7 principles 1997 Water + Sanitation Act 2000 Establishment of NWASCO Establishment of CU and Private Partic. Separation Regulation/ Executive Functions WSS Effective Institutions through HRD Increased GRZ Spending on WSS VISION of Government! UNIVERSAL COVERAGE Institutional set-up of Regulation Power and Responsibility - Water + Sanitation ACT - Statutory Instruments - MEWD - High Court Arbitration Large Autonomy Small size Lean Structure - Statutory not ministerial body Own budget from fees Transparent selection of staff Private sector salaries Reports to Government / MEWD - Personnel 15 - Fees < 2% provider’s turnover How NWASCO promotes increased access for the poor By creating incentives for the CUs to expand their services to the urban poor? Basket fund – DTF / Appropriate technology Low regulated tariff Tax on consumers eg. Sanitation Tax LWSC Cross subsidy between towns / Customers How NWASCO promotes increased access for the poor Through specific license conditions Service level guarantees (hrs of service, etc) Business / Investment plans (expansion) Insistence on metering – large volume consumers to pay full cost (demand mgt.) Tariff conditions – Review performance of utility before tariff application approval The road to full cost recovery Enshrine the principle in the Water Policy Aim at full cost recovery in the long run and Government & CP funding in the meantime Get a grip on tariffs through regulation “Unlock” water in the system and raise revenues through metering & rising block tariffs Cross subsidize low consumption levels for basic water needs Experiences & Recommendations Efficiency improvements of utilities do not automatically translate into improved access for the urban poor For sustained performance improvement of utilities, effective regulation and monitoring is key With effective regulation access of the poor as well as full cost recovery from user fees are achievable in the long run Experiences & Recommendations With the right technology and management approach – accelerating coverage in “poor” areas is possible at low cost per person served Cost coverage should be restricted to O&M for poor areas Subsidies outside the tariff is usually a failure Subsidies between customer categories and towns key!