1 Nakuru Water and Sanitation Services Company Meeting between the Staff of NAWASSCO, SUWASA, the WSTF and Nairobi Iron Mongers in Nakuru on the Prepaid Meters Project Minutes of the Meeting (08-05-2012) Prepaid yard tap being constructed in Manyani Area NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 2 1. Table of Contents 1. Objectives of the Project Planning and Coordination Meeting ......................................... 4 2. Participants......................................................................................................................... 4 3. Key Achievements and Planned Activities ......................................................................... 4 Current Project Status ............................................................................................................ 4 Perceptions Regarding the Pilot Prepaid Meters Project ....................................................... 5 Completed Activities............................................................................................................... 5 Planned Activities ................................................................................................................... 6 Project Management Related Activities............................................................................. 6 Preparing NAWASSCO for the Operation of the Prepaid Meters ...................................... 6 Customers, Tokens & Billing ............................................................................................... 7 Technical works .................................................................................................................. 7 Sensitization & Education of Users .................................................................................... 8 Role of the WSTF Field Monitors ............................................................................................ 8 4. The Community Sensitization and Education Programme ................................................ 9 The Prepaid Meter Itself .................................................................................................... 9 5. Emphasis on Project Operation.......................................................................................... 9 Project Activities during the Project Operation Phase ......................................................... 10 6. Monitoring & Evaluation .................................................................................................. 10 7. Key Objectives & Outputs of the Project ......................................................................... 11 Objectives of the Project ...................................................................................................... 11 Key Outputs of the Project ................................................................................................... 11 8. The Project Challenges Logbook ...................................................................................... 12 9. Sale and Recharging of Tokens......................................................................................... 12 The NAWASSCO Meter readers ............................................................................................ 12 Integration with MPESA........................................................................................................ 12 10. Additional Demand for Prepaid Meters ........................................................................ 12 11. Prepaid Yard Taps or Prepaid Communal Taps ............................................................. 13 12. Per Capita Investment Costs ......................................................................................... 13 13. Involving the Regulator (WASREB) ................................................................................ 14 From Traditional to Prepaid Meters: Creation of New Customers ...................................... 14 Disadvantages of prepaid yard taps ..................................................................................... 14 NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 3 Advantages of prepaid yard taps .......................................................................................... 14 14. Creating a Strong Presence in the Low income Areas .................................................. 15 15. Next Meeting ................................................................................................................. 15 Appendix 1: Prepaid Meters Project Work Plan .................................................................... 15 Appendix 2: Financial Projections on Cost Recovery ............................................................ 15 NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 4 1. Objectives of the Project Planning and Coordination Meeting The main objectives of the meeting, which was held at the headquarters of the Nakuru Water and Sewerage Company (NAWASSCO), can be summed as follows: Bring the key stakeholders (partners) of the around one table in order to ensure that objectives and strategies are shared. Discuss the DRAFT work programme and make necessary changes. Discuss the roles and responsibilities of all the partners. To visit the proposed prepaid meter stand-posts sites (WSTF only). In order to closely monitor the progress made and the challenges faced, the WSTF proposes that a next meeting will be held in approximately one month, around the 7th of June (2012). 2. Participants The meeting was attended by the following persons: Eng. James Ng’ang’a, Technical Manager, NAWASSCO. Mrs. Emma Mutuku , Customer Care, NAWASSCO. Mrs. Grace Hallonda, SUWASA. Mr. Eric Adams, Team Leader, Development Innovations Group (SUWASA Nexus Project). Mr. Nick Wahome, Development Innovations Group (SUWASA Nexus Project). Mr. Harshes Patel, Nairobi Iron Mongers. Mr. Edward Kungu, Architect, WSTF/GIZ. Mr. Han Seur, GIZ, Advisor to the WSTF. Han Seur and Edward Kungu represented the WSTF as all senior staff members of the WSTF as well as the Field Monitors were attending a WSTF management course. 3. Key Achievements and Planned Activities Current Project Status NAWASSCO stated that the Company can guarantee that water supply will be sufficient in the Manyani Area to render the pilot prepaid meters project successful. NAWASSCO has developed and is implementing a water rationing (redistribution) programme which will affect the other pilot areas that will benefit from the prepaid meters/taps. In these areas there may be need to install a number of strategically placed tanks to ensure sufficient pressure and a more constant supply. NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 5 Perceptions Regarding the Pilot Prepaid Meters Project The landlords, landladies and tenants seem to be looking forward to the installation of the prepaid meters/taps. A number of landlords, landladies and tenants were interviewed in Manyani Area: The landlords/landladies emphasized that the prepaid meters will make it so much easier to manage their taps as it will no longer be necessary to control consumption and to pay/manage a (usually high) water bill. Access to safe water will cease to be the responsibility of the landlord as every tenant can decide to register and obtain his or her own token. Tenants mentioned the fact that water (when not being rationed) will be available 24/7 and that they no longer depend on the landlord or on the capacity of other tenants to pay their part of the water bill. In this context it is important to note that landlords, in order to prevent being faced with a high water bill, often restrict access to their yard tap. Some landlords actually tell their tenants to go fetch at the nearest water kiosk or use the services of (informal) water resellers. Others decide to sell water by the (20-litre) jerrycan. Such strategies are often used by landlords and landladies to prevent water consumption on their plot to enter a higher tariff bracket. Some plots get disconnected as the landlord/landlady is unable to make his/her tenants pay the (additional) amount required to settle NAWASSCO’s bill. The prepaid yard taps are expected to put an end to disconnections. Completed Activities Within the framework of the Prepaid Meters Pilot Project the following activities have already been undertaken: The sites for the 15 pilot prepaid meters in Manyani Area have been identified and the landladies, landlords and (most) tenants are aware of the project. The areas for the up-scaling phase (80 additional prepaid meters) have been identified (Runda, London, Free Area, Keratina, Kaptembwa). Water will be sold by NAWASSCO at the prepaid yard tap/meter for a retail tariff of 1 KSh/20-litres. All the prepaid meters, hand-held devices, computer software (etc.) have been ordered from Elster-Kent in South Africa and have been delivered. An additional 80 prepaid meters, handheld recharging devices and 6,000 tokens have been ordered. These prepaid meters will be installed in the five (5) up-scaling project areas NAWASSCO has the computers available that meet the specifications required for the installation of the prepaid meters management software. The Project Task Team has been established. NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 6 The Project Task Team is composed of NAWASSCO staff, SUWASA, WSTF (staff and Field Monitors), Nairobi Iron Mongers staff, the Public Health Officer, Chiefs, community leaders, members of the Manyani Landlords Association. Planned Activities The following activities will be undertaken during the coming weeks (period May 15th – June 1st): Project Management Related Activities Preparation of the adapted Prepaid Meters Project Work Plan. This was the main activity of the Project Planning and Coordination Meeting (see Chapter 1) which was held in Nakuru on the 8th of May. The adapted Pilot Project Work Plan is presented in Appendix 1. Signing of the Memorandum of Understanding between NAWASSCO, SUWASA and WSTF. Harmonization of the various budgets that are used to finance the project. This activity requires the close cooperation between the WSTF, NAWASSCO and SUWASA. The main objective of this exercise is to ensure the efficient and transparent use of the available funds. Preparing NAWASSCO for the Operation of the Prepaid Meters Addendums to the Job Descriptions will be prepared by the Project task Team for staff members who are responsible for the inspection & maintenance of the system (at all levels) and for the staff members of NAWASSCO who are selling water using the Job descriptions can be used during the training. Nairobi Iron Mongers will install and test the computer software and provide training for NAWASSCO staff and for recharging agents (for the time being the NAWASSCO Meter Readers from the Zone Offices will be responsible for token recharging). The NAWASSCO Staff Training Programme will consist of the following elements/activities: o Training on the installed computer software. o Training on the hardware (i.e. the prepaid meters and the hand-held recharging devices). NAWASSCO will create a technical team which is responsible for the maintenance and repair of the prepaid meters system. This team will be trained by Nairobi Iron Mongers. The training provided by Nairobi Irion Mongers will focus upon the head-held devices but equally on the prepaid meters themselves. The Project Task Team should provide additional training on customer care and the procedures that are specifically developed by the project for NAWASSCO (e.g. how to apply for a prepaid yard tap or for a token). NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 7 Note: It is important that all field staff members who are involved in the prepaid system are closely supervised to prevent fraudulent behaviors and the emergency of by-passes and/or illegal connections which can undermine the viability/sustainability of the prepaid system, Customers, Tokens & Billing NAWASSCO will carry out a detailed inventory of all potential customers of the prepaid system (i.e. all tenants and households of resident landlords/landladies). As soon as a household registers as a new prepaid (token) customer, the Company will ask the new customer to provide full personal and household details and to present an ID. Subsequently a digital photo of the customer is taken which is kept in the same digital file which becomes part of NAWASSCO’s customer database. NAWASSCO has already developed a database register. The Project Task Team will develop an easy and transparent procedure which customers have to follow if they want to apply for (1) a prepaid yard tap or for (2) a token. Technical works All 15 pilot prepaid yard taps will be constructed and their prepaid meters installed (see pictures 1 and 2). The architect of the WSTF, Edward Kungu, will make final adaptations in the design of the fetching bay upon which the prepaid meter/tap is placed. All existing water meters will be disconnected. The timing of this activity is important as disconnections should not take place before the prepaid system is operational as people need access to safe water. But either should the company allow for the coexistence of the two types of connections. The project can and should be commissioned immediately after the completion of the technical works, the testing of the software component of the project and after the successful completion of the training. Picture 1: Fetching bay of the prepaid yard taps NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 8 Picture 2: The Elster-Kent prepaid meter Sensitization & Education of Users Design and implementation of the community mobilization, sensitization & education programme. SUWASA is currently working on the community outreach programme which will be based on the programme developed for the experiences acquired in Manyani. The programme will mainly target landlords/landladies and tenants. As an initial step the Project Task Team will develop a set (3) of laminated posters (size A4) that will be provided to all landlords/landladies and tenants who live within a yard that has a prepaid yard tap. These posters will address the following issues: o Poster 1: How to apply for a prepaid yard tap and how to obtain a token. o Poster 2: How to use the prepaid yard tap and how to recharge the token. o Poster 3: Customer care and complaints. Role of the WSTF Field Monitors The roles and responsibilities of the three (3) Field Monitors of the WSTF (a Social, Finance and Engineering Field Monitor), who are all part of the Project Task Team, can be summed up as follows: Assisting the WSP with the implementation of the WSTF-funded project. (If required) capacity building of WSP staff. Training (e.g. of kiosk- and public sanitation facility operators). Monitoring of the project on behalf of the WSTF. NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 9 Reporting progress & challenges to the WSTF enabling the Fund to include the innovations and solutions that were developed during the implementation and operation of the projects it has funded in its toolkits and procedures. Field Monitors are not responsible for the implementation and operation of the WSTFfunded projects. They provide support to a project which is owned by the Water Service Provider. 4. The Community Sensitization and Education Programme The community education programme should consist of the following elements/activities: The Prepaid Meter Itself: How does the prepaid meter work? How to use the prepaid yard tap? Keeping the prepaid yard tap in tip-top condition. Keeping the prepaid yard tap clean; a shared responsibility. Why it is rather futile to vandalize the prepaid meters (no money or valuable materials inside). How the Company can identify by-passes by monitoring consumption (?) How to report damage and poor- or non-functionality? How to manage your prepaid yard tap (targeting landlords & landladies). Customers should be discouraged to use small receptacles for fetching water as this leads to increased wear and tear, decreased battery life and to more water wastage. Preferably users should use a container with a minimum size of 10 liters. The sensitization programme should also include explanations on the NAWASSCO rationing programme. 5. Emphasis on Project Operation It would be wrong to consider the Manyani Area Prepaid Meters Pilot Project a success as soon as the prepaid system has been successfully commissioned or inaugurated. All project participants in the meeting implicitly or explicitly emphasized the need for the introduction of user-friendly and sustainable water supply systems. This implies that during the (postimplementation) operations phase of the project the following aspects and concerns are sufficiently addressed and monitored: The technical condition of the prepaid meter/yard taps also in relation to the maintenance and repair program of NAWASSCO. The hygienic condition of the prepaid meter/yard tap. NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 10 Are landlords/landladies monopolizing tokens or do they have other reasons for and means of restricting access? Consumption levels (including an analysis of the periods during the day when consumption levels are high or particularly low). Are by-passes common? Access to water credit. (Are the hand-held devices easy accessible to the owners and users of tokens). Are customer care and customer complaints procedures adapted to the needs and wishes of the urban poor? Challenges will be recorded in the Project Challenges Logbook (see also Chapter 8). The Project Task Team will develop the necessary tools and procedures to carry out the necessary operation monitoring activities. Project Activities during the Project Operation Phase The following activities will be undertaken during the project operation phase: Technical and software aftercare will be provided by Nairobi Iron Mongers. The Project Task Team will assess the demand for additional (non-project) prepaid meters/yard taps. The team will also assist the Company with the development of a strategy and a set of procedures and other tools which enable NAWASSCO to take advantage of the expected demand for prepaid meters. The (social) marketing of prepaid meters/yard taps approach will be rooted in a careful analysis of the advantages and disadvantages of the prepaid system as well as in the careful calculation of the total as well as the per capita investment costs of the pilot project and of the up scaling phase in areas like London and Free Area. 6. Monitoring & Evaluation The monitoring and evaluation phase of the Prepaid Meters Pilot Project in Nakuru will focus upon the analysis of the commercial, social and technical viability of the prepaid meters system. This analysis will be carried out by the entire Project Task Team. The lessons learnt will be used to improve the approaches and tools that were developed and implemented during the project or to develop new ones. NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 11 7. Key Objectives & Outputs of the Project Objectives of the Project With the Prepaid Meters Pilot Project in Nakuru NAWASSCO should achieve the following objectives: 1. A public health and social objective: the urban poor have affordable access to safe water. 2. A technical objective: the system is easy to maintain and therefore sustainable. 3. A commercial/financial objective: the system allows for the coverage of all operation and maintenance and replacement costs. 4. An environmental objective: the system does not have a negative impact upon the (micro) environment and water wastage is reduced. 5. A corporate image objective: NAWASSCO is being perceived by residents, customers and the Sector as being innovative and as caring for the needs of all people residing within its service area, including the urban poor. 6. A sector/regulatory objective: The project is in line with the sector reforms and adheres to the standards, guidelines & regulations sets by the regulator, WASREB. Key Outputs of the Project If we call the project in Manyani Area the pilot phase of the overall project we can call the phase during which prepaid meters are installed in a number of additional low income areas in Nakuru the project up-scaling phase. The key outputs of the Prepaid Meters Pilot Project in Nakuru are: 1. The successful construction, installation, commissioning and operation of 15 pilot phase prepaid meters in Manyani Area and an additional 80 in 5 other low income areas of Nakuru (up-scaling phase). With these prepaid yard taps the Company is able to achieve the above-mentioned objectives in a number of (sub-) areas. The up-scaling phase will start immediately after the commissioning of the pilot phase in Manyani. 2. The development, during the project of the tools (procedures, training programmes, posters, etc.) which can be used by NAWASSCO and by other WSPs who intend to introduce or up-scale prepaid meters. This implies that the project ensures that all lessons learnt (as recorded in the Project Challenges Logbook; see next chapter) are translated in improved tools that will facilitate the preparation, implementation and operation of future prepaid meters projects. All tools will be placed in WSTF’s Toolkit for Urban Water Supply Projects. This toolkit is in the public domain. The project will allow the WSTF to up-scale prepaid meters through its Call for Proposals. The project (both the Manyani and the project up-scaling phase) will be complete in early September (2012). NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 12 8. The Project Challenges Logbook In order to ensure that during the up-scaling phase of the NAWASSCO project and the upscaling of prepaid meters/yard taps country-wide valuable lessons learnt are not lost, the project will introduce a Project Challenges Logbook. This logbook should not only contain a list of challenges but equally the solutions that were developed to overcome these challenges. In other words, dealing with specific challenges may result in the development of specific procedures, training activities, sensitization posters, technical designs, etc. The WSTF proposes that the Technical Field Monitor of the WSTF establishes and updates the logbook. 9. Sale and Recharging of Tokens All token holders are regarded as customers of the WSP. Previously only the landlord was considered to be a NAWASSCO customer. NAWASSCO proposes a deposit of KSh 300 to be paid by each prepaid customer (token holder). Of this amount KSh 100 would be water credit and KSH 200 a refundable deposit. The NAWASSCO Meter readers Currently NAWASSCO plans to have the hand-held recharging devices be kept at the Zone Offices in the project areas. In other words, initially the Company itself will act as the recharging agent. Staff members of NAWASSCO (preferably not Meter Readers as they would be tempted to abuse the system) based at the Zone Offices will, therefore, be trained to operate the hand-held recharging devices. The Meter Readers will be told that they will have to move around in the project areas. The additional tasks the Meter Readers will be given will be described and included in the addendum to their Job Description. Integration with MPESA The project will also consider the integration of the MPESA and other mobile payment systems into the token recharging concept. In this context it is important to emphasize that the WSP should not force its customers to adopt a specific payment system (e.g. the MPESA mobile payment system) as this is likely to have serious legal implications. 10. Additional Demand for Prepaid Meters Within the framework of the Prepaid Meters Project in Nakuru only a limited number of prepaid meters/yard taps will be installed. It can be expected, however, that the pilot project, especially if it is perceived as being successful by landlords/landladies, will trigger the demand for additional prepaid meters. How should the Company address this demand?: NAWASSCO can submit a proposal for additional prepaid meters/yard taps WSTFfunded project as long as demand can be categorized as being pro-poor. This means NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 13 that the prepaid meters should be installed in yards where tenants with low incomes reside. NAWASSCO could apply for financing from Family Bank to purchase more meters, handheld devices and tokens. NAWASSCO could sell prepaid meters to its customers. Customers could pay the required amount at once, in installments or the Company could have its customers cover the installation costs by adding a fee to its monthly water bill. 11. Prepaid Yard Taps or Prepaid Communal Taps In Manyani Area each prepaid meter has been installed within a yard. On average 20 households will use the prepaid mater/tap. According to MajiData the average household size in the low income urban areas of Nakuru is 3.4 (source: MajiData). This means that the 15 prepaid meters will be used by on average 51 persons. According to SUWASA approximately 65 households are required in order to achieve full cost recovery. This means that more than plot - 2 to 3 plots - will have to have share the same prepaid yard tap/meter. The introduction of communal prepaid meters (access is restricted to token holders as the prepaid meter/tap is shared by a specific number of registered households residing on 2 to 3 participating plots) faces the challenge of finding appropriate (accessible) sites for the prepaid meters. All token holders should have easy (24/7) access to the plot where the prepaid meter is located. which In this context it is important to mention that many plots in Nakuru are fenced and have only one access gate. During the pilot phase (in Manyani Area) the Project Task Team will assess the possibility to make some of the prepaid meters accessible to the residents of more than one plot. 12. Per Capita Investment Costs The investment costs at plot level (i.e. excluding the investment made in computer software, training, hand-held recharging devices, etc.) can be summarized as follows (see Appendix 2 for more detailed analysis of costs) : No. 1 2 3 Description The cost of the fetching bay (materials and labour) The cost of the prepaid meter (including its installation Total: Cost (in KSh) 6,275 66,000 72,275 The cost of a token which can be used by one household is approximately KSh 1,000. Assuming a population per plot of 51 persons this amounts to a total per capita investment cost of KSh 1,417. This amount is more or less similar to the per capita investment costs of water kiosk-based water supply schemes. NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 14 13. Involving the Regulator (WASREB) From Traditional to Prepaid Meters: Creation of New Customers The introduction of prepaid meters in yards where a number of tenants (and resident landlords/landladies) share such facilities as a yard tap, toilets and showers or tenants has significant implications for both the WWSP and the tenants. Whereas in case of a “normal” post-paid meter-based system there is only one customer – in most cases the landlord or landlady – the transition to a prepaid meter system effectively means that every token holders becomes a customer. This means that tariffs can be adapted to the needs and abilities of this new type of customer. Using a traditional meter in most cases makes the landlord responsible for paying the bill and, therefore, managing consumption. Especially if a WSP has a social tariff, a landlord/landlady often feels that he/she has to restrict access to the yard taps or use other means to limit consumption. If the quantity consumed exceeds the social bracket the tenants often face problems paying their part of the bill. The question is whether the introduction of prepaid meters is compatible with the human right to water. After all, why should a WSP make its poorer customers prepay their water, whereas customers, those who can afford a domestic connection, are given the opportunity to post-pay? In this context it is important to list the advantages and dis-advantages of prepaid meters/yard taps also vis-à-vis the traditional metered yard tap. Disadvantages of prepaid yard taps The main disadvantages of the prepaid meters can be summed up as follows: Water fetched has to be prepaid. Even if a tenant has no money available water can be fetched. There is no need for tenants to visit offices or shops (recharging agents) to recharge their token. It is technically difficult to link the prepaid yard taps to a shower of flushing toilet. Customers may attempt to create by-passes in order to get access to (the prepaid system, however, allows for the monitoring of consumption levels and, therefore, the detection of irregularities). The system is more fragile in the sense that airflows affect the functionality and reliability of the system. Landlords may attempt to control the number of tokens within their own yard. Advantages of prepaid yard taps The main advantages of the prepaid meters can be summed up as follows: Water is always accessible (if the WSP is supplying 24/7). The tenants has his or her own token and is therefore, not dependent on the landlord/landlady. NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012 15 Landlords/landladies may attempt to charge more for safe water than the approved tariff. The prepaid yard tap provides unrestricted access. The WSP can ensure that token holders fetch water for the approved tariff. Since tenants have to pay (themselves) for every drop they fetch water wastage is likely to be minimal. Collection efficiency is 100%. 14. Creating a Strong Presence in the Low income Areas Access to safe water, according to the new Constitution is a human right. This means that WSPs have the obligation to serve all people living within their service area, including the urban poor. Ensuring the water supply schemes and system that serve low income areas are sustainable requires establishing a strong and lasting presence in these areas. The WSP should aim to provide technical maintenance and repair but also customer care services. Having a continuous presence in the low income areas, which means that specific staff members are responsible for the delivery of well described services in a specific area, has the following advantages? Routine inspections and maintenance of the network and connections can prevent water wastage and the emergency or proliferation of illegal connections. Tailor-made customer care services can be provided to low income residents. Tailor made (social) marketing programmes can reach the target population. Rendering the prepaid yard taps more accessible by making it easier for customers to recharge the tokens. 15. Next Meeting The WSTF proposes that the next NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers meeting takes place around the 7th of June (2012). This meeting will be organized by NAWASSCO and take place in Nakuru. Your suggestions are welcome. Appendix 1: Prepaid Meters Project Work Plan Appendix 2: Financial Projections on Cost Recovery NAWASSCO/SUWASA/WSTF/Nairobi Iron Mongers Minutes of Meeting May 2012