N27.1b required to meet Water MDG target in Osun state

The Osun state Government must expend a total sum of N27.1b over the next five years to rehabilitate and expand its ailing urban water schemes in order to meet Millennium Development Goals target for water supply for urban residents in the state.

This is the major finding of a report of a recent study undertaken by the Bread of Life Development Foundation, a non governmental organization on steps that need to be undertaken to improve the operational performance of the  Osun State Water corporation (OSWC) and  restructuring the public utility for better service delivery

The study which was conducted with the support of the European Union Water Supply and Sanitation Reform Programme (EU-WSSSRP) State Technical Unit in Osun State has two specific tasks:

1. Review the organisational, financial, commercial and technical structure including PSP assessment of OSWC and make recommendations for improvement as considered appropriate with a view to making its operations more efficient and effective leading to sustainability.

2. Recommend and develop restructuring plan for Osun State Water Corporation to improve efficiency and effectiveness

This study which reviewed the operational performances of the OSWC 14 water schemes discovered that the major problems hindering the effective performance of the OSWC are aged equipments, inadequate funding, and understaffing, poor maintenance culture, lack of basic operational tools, political interference, low tariffs and poor revenue collection.

A copy of the report is attached.

Major recommendations of the 87 page study report are stated below:

1.      The OSWC should be transformed from a public utility to a corporatized water utility.

2.      A new company to be known as Osun State Water Company should replaced the OSWC

3.      The provision in the OSWC draft law for a 16 member Board makes the Board unwieldy and a big drain on the OSWC resources. The Board of the new Osun state Water Company should have eight members-

a.      A Chairman to serve on a part time basis

b.      The Managing Director to serve as the Board Secretary

c.       The Director in charge of Urban Water Supply in the Ministry of Water Resources and Rural Development.

d.      An Engineer or water professional nominated either by the Osun State Chambers of Commerce, Industry, Mines and Agriculture.

e.       A representative of the Trade Union overseeing the OSWC staff, to represent workers interest.

f.        Three other persons nominated on geopolitical basis to represent Water Consumers Associations in Osun State                  .

4.      The new Osun State Water Company would determine its staffing needs, and conditions of service not subject to the State Civil Service rules. All positions in the new Osun State Water Company should be advertised and filled from either staff from the existing OSWC, or suitably qualified members of the public. Present staff of the OSWC that cannot fit into the new Osun State Water Company should have the services transferred to the Osun State Civil Service.

5.      The new Osun State Water Company should enter into Public –Public- Partnerships with Lagos Water Corporation Training School, Kaduna State Water Board Training School for the training and retraining of its staff.

6.      The new Osun State Water Company should enter into Public –Public- Partnerships with well performing Water Utilities in Africa such as Ugandan National Water and Sewerage Corporation (NWSC),Rand Water, South Africa, Kaduna State Water Board for study and exchange programmes for its staff.

7.      The new Osun State Water Company should sponsor its staff for training programmes in urban water supply and management issues in nationally and internationally recognized institutions such as the National Water Resource Institute Kaduna, and the Loughborough University in United Kingdom.

8.      Government should have a steady working arrangement with Power Holding Company of Nigeria to regularly maintain existing power line to all water works.

9.      The new Osun State Water Company should  establish a Customer Service Centre

10.  The sum of N27.1b has to be expended to rehabilitate and expand the operations of            the OSWC over the next five years in order to increase access to water by citizens of             the state in the context of the Millennium Development Goals.

a.      The population of Osun state according to 2006 census was 3,423,525 with a projected      increase at 2.99% or 3% per annum

b.      Projected access to water as per Osun state water and sanitation reform policy 2008 is about 4 % per annum.

c.       Projected investment cost on water as per our projected expansion plan is N15.960 billion or inflation adjusted cost of N27.113 billion.

d.      As, projected, the financial investment cost per person being served with water will cost an average of N3, 000 per annum.

11.  In a nutshell, the total sum of N27.1b have to be massively injected into the OSWC by the Osun State Government in form of subventions over the next five years, after which the Osun State Water Company will be expected to be self sustaining,  with powers to draw up its budget, source for finances, award contracts, operate a policy of Sustainable cost     recovery of in the minimum operating and maintenance cost, fix tariff with the approval         of the proposed Osun State Water Regulatory Board, as well as the powers to determine         non civil service based employee compensation, including salaries and benefits. Any financial contribution by the Osun State Government after 2012, will be treated as either grants or repayable loans.

12.  Between 2009-2012, the OSWC should have full control over its Internally Generated Revenues; with the approval of its Board, it should utilize 50% of the revenue collected dedicated for its Operation and Maintenance costs, and the remaining 50% reserved for capital projects

13.  The OSWC should implement a Community Education and Enlightenment Programme (CEEP) to ensure public participation in its activities. This involves:

14.  Private firms should be contracted to maintain the OSWC production facilities, and service lines under a service contract, as OSWC presently lacks the technical personnel to undertake this assignment.

15.  The OSWC should also go into partnership with the private sector for set up of Independent Power Plant (IPP) and production of energy to boost productions.

16.  Performance Indicators and target should be adopted by the OSWC for the purposes of monitoring and evaluating its level of service delivery.

17.  The present water tariff of the OSWC was fixed in January 1997, and has not been reviewed since. Obviously this needs to be reviewed in line with inflationary trends and economic realities.

18.  The present water tariff of the OSWC is presently considered too low and the management of the Osun State Water Company should after necessary public consultation increase its  water tariff by 50% for domestic consumers living in Bungalows, community stand pipes and Government owned primary schools, while it should be increased by 100% for other categories of users

19.  The management of the Osun State Water Company should appoint a consultancy firm to:

a.      Enumerate all household water connections in the state and affix tags on the premises of such households.

b.      Enumerate all stand pipes in the state and through Global Positioning System generate maps on the locations of such stand pipes.

c.       Enumerate all metered connections in the state and affix tags on the premises of such metered connections

d.      Enumerate all commercial and industrial water users in the state.

e.       Conduct a water supply poverty mapping of Osun state, determining affordability and willingness to pay in the process.

f.        Determine the no of functional stand  pipes in all communities within each Local Government within the State.

20.  The Computer Unit of the Osun State Water Company should be saddled with the tasks of bill generation, through the following measures:

a.      Updating credit posting on payment

b.      Accommodation new consumers into the system

c.       Adjustments to consumers file

d.      Categories of customers to different billing regimes with a view to adopting monthly billing for areas connected on rising main

21.  Thirty firms drawn from the Water Consumer Associations or the private sector should be appointed (based on performance contracts) for each of the 46 no commercial offices to distribute water bills and enforce payment of water tariffs by water consumers.

22.  All water tariffs should henceforth be paid directly into designated banks by water consumers.

23.  The 46 WCAs/private firms appointed to distribute water tariffs will be paid not more than 20% commissions of revenues derived from tariffs collected through the Banks in each of the commercial offices.

24.  Private firms should be appointed (based on service  contracts) for each of the 30 no commercial offices to distribute water development levy bills of N1,500 and enforce

25.   A comprehensive staff appraisal should be carried out for OSWC. This way, the functions and roles of each position in the departments can be mapped to the number, qualifications and experience of staff required.

26.  A training needs assessment should be carried out for staff of OSWC and this should be instituted in order to develop workable capacity development programme for each cadre of staff.

27.  On the job training, exchange programmes with well performing water utilities in the country, study tours and short subject specific capacity building courses should be promoted to enhance the capacity of OSWC`s staff.

28.  Staff of the corporation should be exposed to modern trends in the operation and management of water supply schemes.

29.  Staff rationalization where necessary in order to strengthen zonal offices and Commercial offices that are viable for revenue generation.

30.  Leak Detection system should be established to monitor the service and distribution system against vandalisation

31.  To address the issue of aged plant and equipment, a thorough inventory of the water schemes should be carried out so that the status of the plants and equipment can be determined and recommendations made for their refurbishment or replacement

32.  Domestic customers should be classified into rural and urban customers while those in the cities can also be classified into low, medium and high density customers with differing tariff rates.

Babatope Babalobi

April 18, 2008