REGULATING AND MONITORING THE TECHNICAL & FINANCIAL ...€¦ · Christophe Le Jall é We would also...

supplying piped water services in small towns in developing countries

REGULATING AND MONITORING THE TECHNICAL & FINANCIAL PERFORMANCE OF SMALL SYSTEMS

SUPPLYING PIPED WATER SERVICES IN SMALL TOWNS IN DEVELOPING COUNTRIES

REGULATING AND MONITORING ThE

TEChNICAL & fINANCIAL PERfORMANCE OfSMALL SYSTEMS

Understanding, implementing and applying monitoring mechanisms to improve the quality and support

the regulation of water services

––

Daniel Faggianelli, Acqua-OING Denis Desille, programme Solidarité Eau

Steering Committee:• FrenchDevelopmentAgency:

Aymeric Blanc, Janique Etienne, Alain Rotbardt

• SeineNormandieWaterBasinAgency:Anne Belbéoc’h

• Gret:frédéric Naulet• SyndicatdesEauxd’IledeFrance:

Marc Vézina

We would like to thank the following contributors to this document for their reviews and feedback:

• FrenchDevelopmentAgency:Bertrand Clochard, Karine frouin, Stéphanie Oudot, Lionel Goujon

• SeineNormandieWaterBasinAgency:Liliane Chauffrey

• Gret: Jacques Monvois• ProgrammeSolidaritéEau:

Christophe Le Jallé

We would also like to thank the following contributors for sharing their experiences and vision of water supply services:The300 members of the Community of Practice on the monitoring of water supply services-reseaux-aep.org–whoparticipatedinthethreee-conferencesheldinMarch,MayandSeptember2011,aswellasthe150 participants of the workshopsconductedin2011inBenin,BurkinaFaso,Mali,MauritaniaandChad.

Translation from French to English:NicolaBrodrick

Reviewed by:DavidSchaub-Jones

DisclaimerThe views expressed in this publication are those of the authors and do not necessarily reflect the views of AFD or its partner institutions.

Photos:- Cover page and page 43: G. Aubourg- : V. Dussaux

Preface Insmalltownsindevelopingcountries,thoseresponsiblefortheday-to-daymana-gementofdrinkingwaterschemeshavearangeofchallengestoaddress,suchasensuringthesmoothrunningandsustainabilityoffacilitiesandequipment,ensu-ringthefinancialstabilityofthewaterschemes,meetingsocialandenvironmentalrequirementsandensuringthetransparencyoftheservice.Asaresult,thelifespanofthesesystemscanbeexceedinglyshort(fromafewweekstoaroundtenyears).

Although local operators have the skills and expertise required tomanagewaterschemes,technicalandfinancialmonitoringmechanismshaveproveneffectiveinhelpingbothtoimprovethequalityandtoextendthelifespanofthesewaterser-vices.Thesemechanismsthusplayanimportantroleinincreasingaideffectiveness.

Theaimofthisdocument,bornoutofongoingdiscussionsbetweenpractitionersfromaroundfifteendifferentcountries,istosharelearningfromthedifferentmoni-toringmechanismscurrentlyinuse.Analysisfocusesonhowmonitoringcanbothsupportregulationandhelpimprovetheperformanceofwaterschemes.Thisdocu-ment alsoprovides guidelines fordecision-makers interested inputting a similarmechanisminplace.

ThispublicationistheculminationofafruitfulcollaborationbetweentheFrenchDevelopmentAgencyandarangeofdifferentactors,whoareusingtheirexperiencetohelpdevelopthewatersectorinanumberofemerginganddevelopingcountries.

Jean-Yves Grosclaude DirectorofTechnicalOperationsFrenchDevelopmentAgency


Regulating and monitoring the technical & financial performance of small systems

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Table of ContentsPreface..................................................................................................................................................................................................................................................................... 3Introduction.................................................................................................................................................................................................................................................. 7Piped water services in small towns........................................................................................................................................................... 8Theactorsandtheirresponsibilities................................................................................................................................................................. 8Challenges.......................................................................................................................................................................................................................................................... 9Monitoring mechanisms.................................................................................................................................................................................................. 10Theaimofmonitoring........................................................................................................................................................................................................... 10Monitoringactivities................................................................................................................................................................................................................. 10Theimpactofmonitoringonthequalityofwaterservices........................................................................... 11Monitoringmechanismeffectivenessandsustainability..................................................................................... 12Financingthecostofmonitoring...................................................................................................................................................................... 13Understanding and using monitoring indicators.............................................................................................................. 14Accessindicators.............................................................................................................................................................................................................................. 14Consumptionindicators....................................................................................................................................................................................................... 15Userqualityofserviceindicators..................................................................................................................................................................... 16Technicalindicators.................................................................................................................................................................................................................... 16Economicandfinancialindicators.................................................................................................................................................................... 17Pricingindicators............................................................................................................................................................................................................................. 21how monitoring supports regulation..................................................................................................................................................... 23Theregulationofwatersupplyservices.............................................................................................................................................. 23Monitoring,atoolusedforregulation..................................................................................................................................................... 24Tariffregulation.................................................................................................................................................................................................................................. 24Servicequalityregulation............................................................................................................................................................................................... 25Competitionregulation......................................................................................................................................................................................................... 27Consumerprotection................................................................................................................................................................................................................ 28how monitoring supports other functions.................................................................................................................................. 30Contributingtothemanagementofthewaterservicessector............................................................... 30Facilitatingthemobilizationoffinance.................................................................................................................................................. 31Poolingtheresourcesofseveralwaterschemes................................................................................................................. 32Implementing a monitoring mechanism.......................................................................................................................................... 33Preliminaryactivitiestobeconducted.................................................................................................................................................. 33Monitoringresourcesrequired............................................................................................................................................................................... 36Themonitoringcontract.................................................................................................................................................................................................... 37Evaluationofthemonitoringbody’sactivities........................................................................................................................ 39Conclusion................................................................................................................................................................................................................................................... 41Annex: details of monitoring activities in Mali................................................................................................................. 44



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IntroductionInthesmalltowns(orruralareas)ofdevelopingcountries,thequalityofanypipeddrinkingwaterserviceofferedtousersisoftenunsatisfactoryandthelifespanoftheseservices,inparticular,canbeexceedinglyshort(fromafewweekstoaroundtenyears).Theseshortcomingsarecausedbyanumberofinstitutional,technical,financialandorganizationalchallenges.

Withaviewtoimprovingthequalityandsustainabilityofwaterservices,anumberofmonitoringmechanismshavebeenpiloted,someofwhichhaveproducedhighlypositiveresults.Today,thereisawiderangeofmonitoringexperiencetobefoundinseveralcountries.In2011,thisexperiencewassharedanddiscussedduringthreee-conferences(involving300participantsfrom15countries),aswellasinnationalworkshopsheldinfiveAfricancountries(Benin,BurkinaFaso,Mali,MauritaniaandChad)andattendedby150watersupplypractitioners.Thecontributionsofthesee-conferenceandworkshopparticipantshaveinformedthedraftingofthisdocument,whichisdividedintosixchapters:

‘Piped water services in small towns’ providesanoverviewofthewaterservicesenvironment,describingthelocalsectorstakeholdersandoutliningthetypicalchal-lengesencounteredinmanagementoftheservice.‘Monitoring mechanisms’ explainstheaimofmonitoring,howitisappliedandas-sociatedchallengesaroundeffectiveness,financingandsustainability.‘Understanding and using monitoring indicators’ lists themonitoring indicatorsrequiredtooverseethemanagementofasmall-pipedwatersupplynetworkanddetailshowtheseindicatorscanbeusedbylocalstakeholderstoimprovethequal-ityoftheservice.‘How monitoring supports regulation’ providesadefinitionofregulationandana-lyzestheextenttowhichmonitoringmechanismscansupportcertainregulatoryfunctions.‘How monitoring supports other functions’ sets out to identify other potentialbenefitsofmonitoringwaterservices,inadditiontoimprovingservicequalityandassistingwithregulation.Finally, ‘Implementing a monitoring mechanism’ providesrecommendationsforimplementingamonitoringmechanismforwaterservicesinsmalltowns.

Thispublicationisintendednotonlytoprovideinformationonmonitoringanditsvariousadvantages,butalsoasatoolforusebysectorstakeholderswishingtoputsuchamonitoringmechanisminplace.



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Piped water services in small townsThe acTors and Their responsibiliTiesManycountriesapplytheprincipleofsubsidiaritytowaterservices,meaningthatresponsibilityfortheserviceisassignedasclosetotheusersaspossible.Theappli-cationofthisprincipleusuallyinvolvesfourgroupsofstakeholdersinthemanage-mentanddevelopmentofpipedwaterservices.

The state:Thestateisinchargeoforganizingthesectoranddefiningtherulestobeobservedbyallstakeholders,atthesametimeasensuringeffectiveservicede-livery.Whereserviceshavebeenimplementedthroughnationalfunding,thestatemayeitherretainownershipoftheinfrastructureandtransferresponsibilityfortheservicetoapolitical-administrativelevelclosertotheusersoralsotransferowner-shipoftheinfrastructurealongsidetheresponsibilityforserviceprovision.

The authority responsible for water services (contracting authority): In manycountries, responsibility for water supply is assigned to a devolved political ad-ministrative authority. This authority is responsible for outsourcing activities todifferentactorstoensuretheserviceoperatescorrectlyandwatercoveragetargetsare achieved.This authorityappoints the serviceoperator and setsout the rulesforusingtheserviceinaccordancewiththenationalregulatoryframework.Italsoverifiesservicequalityandundertakesthemeasuresnecessarytoensureitsviabil-ity.Inparticular,thisauthorityidentifiesandmobilizesfinancingfortherenewalofinfrastructureandforinvestmentinserviceextension.Thisauthorityishereafterreferredtoasthe‘WaterServicesAuthority’(WSA).

The water service operator:Theauthorityultimatelyresponsibleforservicedeliv-ery(WSA)candelegatemanagementofwaterservicestoathirdparty(publicorprivatecompany,smallentrepreneur,association,etc.).Thisauthoritymayalsode-cidetomanagetheservicein-housethroughitstechnicalandadministrativeteams.

The users:Theusersarethebeneficiariesoftheservice.Inreturnforthisservice,theypayasetamount(thewatertariff)whichgoestowardsrecoveringoperatingcostsandanycostsassociatedwithwaterschemerenewal.Inmostcases,thepriceofwaterisproportionaltothevolumeofwaterconsumed;although,insomerareinstances,thiscanalsobeafixedamount.Usersmustadheretotherulesforusingtheserviceand,inexchange,havetherighttoreceiveinformationregardingmanagementoftheservice.



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challengesTheaimofawaterserviceistosustainablydistributewatertousersinsufficientquantitiestomeettheirneedsandtodosoinanenvironmentallyresponsibleman-ner.Aswaterservicesfrequentlyencounterchallenges,thispublicserviceobjectiveisalongwayfrombeingsystematicallyachieved,particularlyinsmalltowns.Therearetwotypesofchallengesthatcanarise.

Ontheonehand,theservicehastodealwithissues aroundinfrastructure design and construction quality. Decisionstakenduringthedesignphaseofawatersupplyprojectcanimpactonboththeoperationoftheserviceanditscosts.Forinstance,over-sizinggenerallyleadstohigheroperatingcosts;thiswillalsoincreasethecostof hydraulic or electromechanical infrastructure,whichwill not be optimized tomeetusers’actualneeds.Inaddition,thechoiceofservicelevel(standpipesorpri-vateconnections,watertreatmentornot,etc.)impactsthevolumesconsumedandhencetheproductioncostofwater.

On theotherhand, theservice isalsooften facedwithgovernance issues.Evenwhereawaterservicehasbeendesignedandconstructedbyqualifiedprofessionalsandsatisfiesuserdemandatanaffordabletariff,thesustainabilityoftheserviceisregularlyputatrisk.Theissuesmostcommonlyencounteredareasfollows:

• Theactorslackthenecessaryskillsorcapacities(theoperatorisunprofes-sional,thecontractingauthorityis incapableoffulfillingitsrole,usersareunawareoftheirrightsandresponsibilities,etc.).

• Thewayinwhichtheserviceisorganizedisunsuitableorinadequate(thecontractualframeworkisnon-existent,poorlyunderstoodorlacksbalance,nocontrolsystem,etc.).

• Financialaspectsarenotdealtwithsatisfactorily(fundingrequiredforre-newalisnotmobilized,reservesarenotsecured,tariff-settingdoesnottakeallserviceoperatingcostsintoaccountnordoesitincorporateequity,therearetransparencyissueswiththewaytheserviceaccountismanaged,etc.).



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Monitoring mechanismsThe aim of moniToring Theaimoftechnicalandfinancialmonitoringistoimprovethequalityandsustain-abilityofpipedwaterservicesinsmalltowns.Monitoringisconductedbyanactor(oractors)notinvolvedintheday-to-daymanagementofthewaterservice.Theirroleconsistsof(i)collectingmanagement-relateddata,(ii)analyzingthisdatatoproduceobjectiveandrobustserviceperformanceindicators,(iii)reportingthere-sultsobtainedandprovidingrecommendationsforspecificserviceimprovements.Ultimately,theaimofmonitoringisto:

• Assist the Water Services Authority with service-related decisions andmanagementcontrol.

• Support the operator with the technical operation of the network and(commercialandfinancial)activitiesrelatingtomanagementoftheservice.

• Provide users with informationonthequalityoftheservicetheyreceiveinexchangeforpayingthewatertariff.

moniToring acTiviTiesManyofthelarge-scalemonitoringmechanismsthathavebeenimplemented(no-tably,inWestandCentralAfrica)involvethefollowingactivities:

1. Atechnical inspection thatconsistsofvisitingagivensitetoassesstheconditionofthevariouspiecesofelectromechanicalequipmentandhy-draulicinfrastructureusedinwaterproductionanddistribution.

2. Afinancialanalysis oftheaccounts,including(ornot)publicationofac-countingstatements.

3. Amanagement assessment usingobjectiveperformanceindicators.4. A presentation of findings, in the field if possible, to allwater service

stakeholdersinaformatadaptedtothecharacteristicsoftheservicebeingprovided.

5. Areport, for theperiodunderconsideration,whichprovidesafinancialand technical assessmentofhow the service isbeingmanaged,with adetailedbreakdownandstatisticalanalysisoftheindicators.

6. Continuously available and telecommunications-basedback-up support toprovideassistancetothedifferentactorsuponrequest.

Theseactivitiesareundertakenonaregularbasis,usuallyeverysixmonths(ade-taileddescriptionoftheseactivitiesandassociatedresourcerequirementsispro-videdintheAnnex).



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The impacT of moniToring on The qualiTy of waTer servicesCertaincountrieshavenowbeenconductingwaterservicemonitoringlongenoughtoenabletheadvantagesofthistypeofmechanismtobeclearlydefined(inMali,monitoringactivitieswerefirstinitiatedatthebeginningofthe1990s).

Themainadvantageofmonitoring isthat ithelpssignificantly reduce the num-ber and duration of service interruptions.Asaresultoftherecommendationsre-ceivedfromtechnicalaudits,preventivemaintenanceundertakenbyoperators isimproved. In theeventof abreakdown, themonitoringbody is the key contactimmediately contacted, either to conduct remote diagnostics or to facilitate andexpeditethedeliveryofspareparts.

Monitoringhasthefurtheradvantageofbeingabletoimprove the financial stabil-ity of the service,bothbyreducingoperatingcostsandbyimprovingthecollectionrateofusercharges.Themonitoringofwaterservicesinsmalltownsisasystemati-callyprofitableinvestmentthatsavesmorethanitcosts.

Inruralareas,wherelocalauthoritieshavelimitedfiscalcapacity,thewaternet-workisoftentheonlymarketactivitythatgeneratessubstantialfinancialresourc-es.Small-pipednetworks’reservesforequipmentrenewalcansoonbecomebothhighlycovetedandthesourceoftension.Inthesesituations,monitoringhelpstoincrease and secure reservesheldinbankaccounts,whichoftenrequiremultiplesignatures:suchasthoseoftheWSA,operatorandusers’association.

Monitoringisalsoapowerfultoolforprovidinginformation on the water service:bypresentinginformation,intheappropriateformat,tothedifferentstakeholders,itimprovesunderstandingofthewaterserviceandthechallengesfaced.Inparticular,asfarastheusersareconcerned,itprovidesaregularreminderoftheneedtopayforwaterconsumptionatafairprice;itexplainshowmoneyreceivedfromtheus-ersissubsequentlyused(tofinanceoperatingandrenewalcosts)andfacilitatestheacceptanceofanypriceincreases.

Whilstmonitoringcanhelpimproveunderstandingoftheissuesassociatedwiththeservice,itcanalsoparticularlyempower the usersnotonlytovoicetheirexpecta-tionswithregardtoserviceimprovements,butalsotodiscussanybreakdownsorabusivepracticesonthepartoftheoperatorwiththeWSA.

Lastly,monitoringisatoolthatassistswithtransparency and conflict resolution.Publicreportingservestoremindeachactoroftheirrespectiveresponsibilitiesandobligationsandtheresultingdialogueisbasedonindisputableperformanceindica-tors,helpingtostreamlineandfocustheinevitabledebates.



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In the challenging environment of developing-country small towns, monitoringhelps strengthen the capacities of all water service stakeholders: the operator’sknowledgeandskillsareprogressivelyimproved;thelocalauthority’sunderstandingoftheperformanceindicatorsisenhanced,enablingthemtodetectservicefailuresandimposesanctions;finally,thosepayingtousetheservicearemoreawareoftheviabilityoftheservicetheyreceive.

moniToring mechanism effecTiveness and susTainabiliTyMonitoringisonlyeffectiveifthereisrigorousdatacollectionandanalysisandifthemonitoringbody’s recommendations are fully takenonboardby the serviceoperatorandWaterServicesAuthority(WSA).Toensuretheeffectivenessofmoni-toring,thereareaminimumofthreeconditionsthatmustbemet.

• Ensure the monitoring body has the requisite skills and experience.Moni-toringactivitiesrequireabroadrangeofexpertise:technical,financial,com-municationandintermediation,inparticular.Themonitoringbodyappoin-tedthusneedstobehighlyversatile.

• Guarantee the legitimacy of the monitoring body. The monitoring bodyreportsonthequalityofservicesandprovidesrecommendationsthatshouldbe recognized as fair and not challenged. Themonitoring body thereforeneedstohaveindisputablelegitimacy.Inordertofurtherenhancethislegi-timacy,themonitoringbodyshouldbeappointedbya(nationalorregional)authoritythatisitselflegitimate(i.e.thereliabilityofthismonitoringbodyneedstobeunanimouslyrecognizedbyallactors).

• Ensure consultation forms part of monitoring activities. It is essentialthatmonitoringresultsarepresentedanddiscussedwiththedifferentlocalstakeholdersinvolvedinservicedelivery(users,contractingauthorityandservice operator). When conducted regularly, such consultation can helpimproveunderstandingofservice-related issues, remindeachstakeholderoftheirresponsibilitiesandresolveconflictandmisunderstandings.

Inadditiontobeingeffective,amonitoringmechanismalsoneedstobesustainable.Tothisend,therearetwovitalaspectstobeconsidered.

• Share monitoring costs.Whenthecostofmonitoringhastobemetinfull,even occasionally, by a single small town, this can prove prohibitive. Tooptimizemonitoringcostsandarriveatanacceptablecostforeachwaterservice,poolingfinancialresourcestosharethecostofmonitoringbetweenseveralsmalltownswithinthesameregionisoneofthekeystoensuringfinancialviabilityofthemonitoringservice,regardlessofhowitisfunded.

• Encourage cross-subsidies between large and small-scale services.Wheremonitoringisfundedthroughthewatertariff,itisnecessarytoensurethat



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theamountpaidtocoverthecostofthemonitoringbody’sremunerationisinproportiontothesizeofthewaterschememakingthepayment.Inthisway,largerschemesbearpartofthemonitoringcostforsmallschemesthatwouldbeunabletoaffordalltheassociatedchargesontheirown.

financing The cosT of moniToring In2011, inthesmall townsof theSahel (inparticular inMali,ChadandNiger),waterservicemonitoringcostbetween¤0.03and¤0.09perm3ofwatersold,orbetween4and12%ofthepriceofwater.Thiscostvariesinaccordancewiththetypeofactivitiesthemonitoringbodyisrequiredtoundertakeandwithlocalgeo-graphicconditions.Therearedifferentpossiblefinancingoptionsavailabletorecoverthecostofmonitoring:

• Asurchargeaddedtothewaterprice(users).• Anationalwaterfund.• Thecontractingauthority’sbudget(raisedfromlocaltaxation).• Thestatebudget.• Asurchargeaddedtootherpublicservices(energy,telecommunications,etc.).• Etc.

FinancingmonitoringcoststhroughthestateorWSAbudgetmaynotalwaysprovetobesustainable.Forpracticalreasons,manyactorsconsiderthatthecostofmoni-toringshouldbeaddedtothewatertariffandthusbornebyusers.However,thissolutionisonlysustainableif,forexample,asystemofcross-subsidybetweensmallandlarge-scaleservicesisputinplace.Thisisinkeepingwiththefactthaturbanwaterservicesarealreadyfrequentlycalledupontosupportruralservices(thusreduc-ingthedifferenceintarifflevelsbetweenthetwotypesofservice).

Monitoring is a profitable investment.The,initiallyadditional,costofmonitoringalmostalwaystranslatesintoalong-termsavingforusers:regularauditsofthewa-tersupplyservicemeansthatback-upsupportisprovidedthathelpsoptimizeop-eratingcosts.InChad,anumberofcommunesintheregionofMoundoudismissedthemonitoringbodyinordertosavecosts.However,theyweresoonfacedwithuncontrolledoperatingcoststhat,inturn,causedproductioncoststosoar.Certaincommunesthusvoluntarilyrequestedthatthemonitoringbodyreturn.Themoni-toringbodyhassinceassistedthesecommunestofirststabilizeandthenreducethecostoftheirservices.



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Understanding and using monitoring indicators AWaterServicesAuthorityisinchargeofcheckingthequalityandsustainabilityoftheserviceonbehalfofcitizens.Inordertofulfillthisresponsibility,therearevariousdecisionsithastomake. Inparticular,theWSAisresponsibleforsettingthepriceofwater,takingintoaccountboththesocialsituationofthehouseholdsandthetechnicalandfinancialcharacteristicsoftheservice.Bydefiningobjectiveindicatorsandobservingtheirevolutionovertime,monitoringenablestheWSAtoassesshowwellthewatersupplysystemisoperating,informtheusersandmakedecisionsthatwillensurethesustainabilityofaqualityservicebasedonreliableandobjectiveinformation.Note: The indicators listed below are not intended to be exhaustive. They do, how-ever, create a coherent set of data that can be used for detailed reporting on the quality and sustainability of a water supply network.

access indicaTors

» Number of water pointsWhat do we measure?Thenumberofwaterpointsisdeterminedbyidentifyingallworkingtaps:stand-pipes, privatehousehold and administrative connections (those in administrativeoffices,schools,placesofworship,etc.).How to use this indicatorTrackingtheevolutionofprivateconnectionsmakesitpossibletoassesstheextenttowhichusersareinterestedinconnectingtotheservice.Thisindicatorinformsimprove-mentplansandenablesvariousprice-settingscenariostobetested.Whilststandalonewaterpointssuchaswellsorhandpumpsareseparatefromsmall-pipednetworks,itisalsousefultotakearegularinventoryofthesetoprovideacomprehensiveoverviewofthedifferentlevelsofservicethatco-existwithinthesamearea.

» Population coverageWhat do we measure?Coverageisanindicationofthenumberofpeopleusingtheservice.Thisindicatorisobtainedbyidentifyingallthosehouseholdswithaccesstothenetwork,whetherthroughaprivateconnectionorstandpipe.How to use this indicatorExpressedasapercentageof thetotalpopulation, this indicatorenablesnetwork



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developmentneeds tobeassessed soas toextend the service to thosewhoarewithoutaccess.Mostsmalltownsareexperiencingrapidpopulationgrowth,whichoftenmeansthattheproportionofhouseholdswithaccessisdecreasingovertime.Insuchcontexts,theWSAneedstoregularlyinvestinextendingthenetworkandincreasingproductioncapacity.

consumpTion indicaTors

» Meter readingsWhat do we measure?Meterreadinginvolvescollectingandreportingthedataprovidedbymeterssitu-atedthroughoutthewaternetwork.Thedatatoberecordedincludes:thevolumeofrawwaterextractedfromthewaterresource(boreholemeter),thevolumesofdrinking water consumed by each type of user (meters for private connections,administrative connections, standpipes), the running time of electro-mechanicalequipment,electricitymeterreadings,etc.How to use these indicatorsRegular network meter readings are not only used for billing purposes, but alsoforestablishingtheutilizationrateofthevariousitemsofequipmentoveragivenperiodoftime(vitalformanagingfundsforequipmentrenewal).Itisverydifficulttomanageawatersupplyservicewithoutthedatathesedifferentmetersprovide.Shouldameterbreakdown,itneedstoberapidlyreplacedtoensurethereliabilityandcontinuityofdata.

» Average consumptionWhat do we measure?Averageconsumptionistheaveragevolumeofwaterconsumedeachdaybyeachuser.Thisisexpressedinlitersperuserperdayandisestimatedbydividingtheaveragedailynetworkconsumptionbythenumberofusersthenetworksupplies.How to use this indicatorThis indicator isparticularly importantforforecastingandcarryingoutneedsas-sessmentsforfutureprojects.Forexample,intheSahel,averageconsumptiononnewnetworksisaround8litersperuserperday,risingto12litersperuserperdayafter2to3years;thetargetforaverageconsumptionis20litersperuserperday.



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user qualiTy of service indicaTors

» Water qualityWhat do we measure?Abasicmeasureofwaterquality is obtainedby analyzing the levels of residualchlorineinwaterdeliveredbythepipednetwork.Thecharacteristicsofrawwaterandanywatertreatmentsappliedcanalsobeassessed(alongwithanyadditionalanalysisconductedonthepHandconductivityofthewateroronthepresenceofcertainelements,suchasfluorine,ironandmanganese).How to use this indicatorSufficientquantitiesofchlorinemeanthewatercontainsnopathogenicbacteria.

» Continuity of serviceWhat do we measure?Continuityofserviceismeasuredbothbythepressureavailabletotheend-user(>0.5kg/cm²)andbythenumberandlengthofserviceinterruptionsoveragivenperiod.How to use this indicatorContinuityofserviceisanindicationofthenetwork’scapacitytoprovidewater,withoutinterruption,everydayoftheyear.Itisnecessarytodistinguishbetweenlongserviceinterruptions(severaldays)andsmaller,regularserviceinterruptions(afewhoursaday):theformermeansusersarecompelledtolookforother(oftenunsafe)sourcesofsupply;whenthelatteroccurs,usersmayonlybeabletousethenetworkforalimitednumberofhoursperday,buttheydostillhaveaccess.

Technical indicaTors

» Condition of the infrastructureWhat do we measure?Essentiallymeasuredthroughvisualinspections,thisindicatorisusedtoestablishtheremaininglifespanofinfrastructureandwhetherthisisbeingproperlyutilized.How to use this indicatorRepairscanbescheduledassoonasafaultisobserved.Throughthisindicator,itisalsopossibletooptimizethepreventivereplacementofequipmentthatisnear-ingtheendofitsusefullife.Forinstance,itispossibletopreventserviceoutagebyschedulingthesaleofanelectricitygeneratorthatisreachingtheendofitslife(between8,000and10,000hoursofoperationforasmallmodel)andtheprocure-mentofanewgenerator. In thesameway, forwardplanningcouldalso includeprocurementofanewpump,ofanewchlorinationsystem,etc.



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» Network efficiencyWhat do we measure?Networkefficiencyiscalculatedbydividingthevolumeofwaterbilledbythevol-umeofwaterproduced.How to use this indicatorThisindicatorisrelatedtonetworkmaintenanceandhelpsidentifyleaksorprevi-ously undocumented connections.Network efficiency is over95%onnewnet-works.However,thiscanfallovertimeandleakdetectionisrecommendedshoulditdropbelow90%.

Over the period you pumped: 23 005 m3 of water

Over the period you sold: 19 757 m3 of water

Distribution losses for the period are: 3 248 m3 of water

Efficiency of volumes pumped and sold is: 85.88%

Our recommendation: Check for possible leaks on the network

Extract from the 2AEP consulting firm monitoring report for Yélimané, Mali, December 2008

economic and financial indicaTors

» Energy costsWhat do we measure?Thisindicatorprovidesthecostsofenergyconsumptionthroughtheuseofequip-ment.Thisincludes,forinstance,thecostofdieselusedbyagenerator(ortheelec-tricitybill,iftheserviceisconnectedtotheelectricitygrid,etc).How to use this indicatorThisindicatorisimportantasenergycostsoftenaccountforasignificantportionoftheoverallservicemanagementcosts.Energycostsalsoprovideagoodindicationofthestateofequipmentanditsoperatingconditions.Forexample,ifagenerator’senergyconsumptionishigherthanthelevelestimatedbythemanufacturerwhenoperatingatfullcapacity,thegeneratoriseithernotworkingproperlyorfuelisbe-ingmisappropriated.Itisalsopossiblethatitisnotworkingatoptimalcapacityorthattheinitialoutputofthepumpitisdrivinghasdropped.Areviewofthepump-ingsystem,energyproductionandmaintenanceproceduresmayhelpresolvethistypeofissue.

» Lifespan of infrastructure and equipmentWhat do we measure?Thelifespanindicatesthenumberofyears(orhoursofoperation)theinfrastructureorequipmentisdesignedtolast.Whenanitemreachestheendofitslifespanitbecomesobsoleteandhastobereplaced.



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How to use this indicatorMonitoringlifespanenablestheWSAtoplaninvestmentinaccordancewithfinanc-ing,supplyandconstructionprograms.Italsomakesitpossibletodefinethemostrelevantfinancialstrategies(reserves,loans,donorsubsidies,etc.).Bywayofex-ample,thelifespanofthemostcommonlyusedequipmentisasfollows:

• Lifespanof7years:pumps;DCtoACconverters(solar).• Lifespanof15years:standpipeequipmentandadministrativeconnections.• Lifespanof20years:solarpanels.• Lifespanof20to50years:majorinfrastructure,inparticularwatertanks

andprimarynetwork.• Lifespanproportionaltotheruntime:electricitygenerators,thelifespanof

whichisusuallyestimatedtobe10,000hours.

» Renewal fundWhat do we measure?Thisisabankaccountintowhichfundsaredepositedonaregularbasistoensurethatthenecessaryfinancialresourcesareavailableforreplacingequipmentonceithasreachedtheendofitsusefullife.Thesefundsdonotnecessarilyhavetobere-strictedonlytorenewal,however,andmayalsobeusedtofinancefuturenetworkextensions.How to use this indicatorThesustainabilityoftheserviceisdirectlylinkedtothemanagementoftheinfrastruc-turerenewalfund.Thesefundscanvaryfrom30to70%ofthesalepriceofwater,dependingonthetypeofinfrastructureandtheformofenergyused(solar,windorthermal).Thus,verylargeamountsneedtobemanagedeachyear.Decisionsmadewithregardtomanagementofthisfundcanhaveasignificantimpactonthesustainabilityoftheserviceandpriceofthewater.Regardlessofthehowthefundismanaged(bytheoperatororWSA),andgiventheimportanceoftheseresources,therearesomesimpleprecautionsworthtaking,suchasrequiringtwosignaturesforanywithdrawalsmadefromtherenewalfund,consultationwithusers’associations,etc.Insomecases,thestatemaycoverpartoftherenewalcosts.Forinstance,inChadandMali,thestatefinancesequipmentwithalifespanofovertwentyyears(withtheexceptionofsolarpanels);however, thesefinancial resourcesarenotalwaysavailablewhenrequired.

» CostsWhat do we measure?Costscoveralltheexpensesrequiredtoruntheserviceonanongoingbasis.Theyaredividedintoseparate ‘categories’andinclude:salaries,managementexpenses,fuel,consumableitems(filters,oil),thecostsofwatertreatmentandqualityanaly-sis,maintenancecosts,losses,renewalfundsandfundstocoverunpaiddebt.



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How to use this indicatorThe evolution of costs over time is an indicator of sustainability. Any increase in spending should result either from a conscious management decision or a rise in the cost of raw materials. This increase can lead to tariff adjustments or to the devel-opment of a new investment strategy (for example: switching to thermal or solar energy). Moreover, the cost structure can vary significantly depending on the type of energy used. Similarly, monitoring costs can also vary depending on the number of services monitored and their geographical dispersion (travel expenses for attend-ing public reporting meetings).

» Production cost per m3

What do we measure?The production cost per m3 is determined by dividing the total costs in the operating account by the total number of m3 sold.How to use this indicatorThis indicator is used to calculate the service tariff charged to users. The produc-tion cost of water varies in accordance with the type of infrastructure used and, in particular, in accordance with the decisions made during the network design phase and the type of energy chosen to harness the water resources. In the example of Yélimané, Mali (see box), the service is fundamentally profitable, thus its sustain-ability is ensured.

Water Scheme: Yélimané

Operating assessment For the period: 01/07/2008 to 30/12/2008

Your total operating expenses: 6 058 296 F

Your infrastructure renewal costs: 1 440 849 F

Your total costs: 7 499 145 F

Your turnover: 10 775 160 F

Your profit: 3 276 016 F

Over the period, one m3 of water cost you: 380 F

Average sale price at the meter was: 545 F

For every m3 sold, you earned: 166 F

Extract from the 2AEP monitoring report for Yélimané, Mali, December 2008



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» RevenueWhat do we measure?Revenuereferstoallthefinancialresourcesgeneratedbytheservice.Theseinclude:thesumofbillandinvoicepaymentsreceivedovertheperiodbrokendownbyin-voicetype,subsidiesreceived,interestoninvestment,exceptionalincome.How to use this indicatorComparingrevenueandcostsmakesitpossibletoassesstheoverallfinancialstabil-ityoftheservice.

» Inventory statementWhat do we measure?Compilinganinventorystatementconsistsofestimatingthefinancialvalueofprod-uctsheldinstock:fuel,materialspurchasedinadvance,materialsforinfrastructureconstruction,etc.How to use this indicatorDrawnupattheendofeachaccountingperiod,theinventorystatementisusedtomakecorrectiveadjustmentstotheoperatingaccountsandtoprepareannualac-countingstatements.

» Available cash flowWhat do we measure?Attheclosingofaccountsattheendofanygivenaccountingperiod,theamountoffinancialresourcesavailable(totaloffundsinthebankandcashinhand)iscalcu-lated;thissumistheavailablecashflow.How to use this indicatorAlthoughcashflowprovidesanindicationoffinancingcapacitiesatagivenmomentintime,itcannotbeusedtoassesstheservice’sself-financingcapacity,whichhastobereviewedinmoredetail.

» Self-financing capacityWhat do we measure?Tocalculatethisindicator,extraordinaryincomeisaddedtothenetoperatingre-sults(profitorloss)andexceptionalcostsaresubtracted.How to use this indicatorSelf-financingcapacityprovidesanindicationoftheservice’spotentialtogenerateinternalfinancialresourcesoveragivenperiodoftime.



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pricing indicaTors

» TariffsWhat do we measure?Thetariffisthepriceatwhichwaterissoldtotheuser.Thistariffisoftenmadeupofanumberofcostcomponents:thesalepriceofwaterbyvolumepertypeofuser;anywatermeterstandingcharges,fees,taxes,etc.How to use this indicatorThepriceatwhichwaterissoldtotheuseriscalculatedonthebasisofthecostsofwaterproductionanddistribution,towhichmonitoringcostsandanytaxesarealsoadded.Itisalsonecessarytoincludefundsforinfrastructureextensionandrenewalorfortherepaymentofanyloanstakenouttofinancetheinitialinvestment.Whensettingthetariffs,theWSAneedstofindthebestcompromisebetweentwoseeminglycontradictoryaims:(1)ensuringthefinancialstabilityoftheserviceand(2)providinguserswiththegreatestpossibleaccesstotheservice.However,onerequirementalwaysremainsthesame:totalserviceexpenditure(includingexten-sionandrenewalfunds)mustneverexceedtotalincome.Tariff-settingpracticesshouldalsotakeintoaccounttheprincipleofequitybetweendifferenttypesofuser.Forexample,tariffsforstandpipeusersshouldbelowerthanthetariffschargedtouserswithprivateconnections.Astheseusersreceivediffer-entlevelsofservice,theprincipleofequityneedstobeapplied.Tariff-setting also enables theWSA todemonstrate its commitment topro-poorpricingmeasures.Theabilityofeachusertoaccesstheserviceshouldbetailoredtotheirspecificneeds,regardlessoftheirsocialsituationorrevenue.Contributionspaidbytherichesthouseholdsshouldbeusedtoreducethecostoftheserviceforthepoorest,nottheotherwayround.

» Average bill collection periodWhat do we measure?Thisindicatorshowstheaveragetimetakenbyuserstopaytheirwaterbill.Thebillcollectionperiodisthenumberofdaysbetweenthedatethebillisissuedandthedatepaymentisreceived.How to use this indicatorItisgenerallyacceptedthatthebillcollectionperiodshouldnotexceed30days.



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» Bill collection rateWhat do we measure?Thebillcollectionrateistheratioofbillspaidtobillsissued.Thisrateiscalculatedforeachuserandforeachtypeofuser(privateconnections,administrativecon-nections,etc.).How to use this indicatorAnalysisoftheproportionofbillsoutstandingenablestheoperatorandotherstoidentifythecategoriesofuserleastable(orwilling)topayandtothenimplementsuitablecorrectivemeasures.



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How monitoring supports regulation Note: The task descriptions listed in the four tables within this chapter are based on those developed by Trémolet, S. and Binder, D. (2010), The Regulation of Water and Sanitation Services in DCs, French Development Agency, Paris.

The regulaTion of waTer supply servicesRegulationis“the permanent and careful control conducted by a public entity on activities that have a value for the community1.”Watersupplytendstobeacap-tivemarket,wherecompetitionisonlyrelevantatthebeginningorendofperiodswherethemanagementofservicesiscontractedout.Furthermore,waterserviceshavearangeof impacts–socialandeconomic, inparticular.Assuch,theaimofregulationisto‘control’differentelementsoftheservice,notably:

1. Thetariffscharged.2. Thequalityoftheserviceprovidedtousers.3. Meansofcompetition.4. Consumerprotection.

Toeffectivelycontroleachoftheseelements,regulationcanbebrokendowninto4tasks:1. Collectinformationanddata.2. Controltheapplicationofexistingrules.3. Definenewrules.4. Ensurerulesareappliedandresolveconflicts.

Regulation,therefore,focusesonanumberofdifferentissues,thenatureanddetailofwhichcanvarydependingonthecountryandnationalstrategy.Regulating,itself,involvesavarietyoftasks,mostofwhichrequiretheinputandcooperationofanumberofdifferentactors:

• Atthelocallevel–forinstanceforcollectingandsubmittingthewaterser-vices-relateddatarequiredbytheregulator.

• At oneor severalhigher levels (regional, national, etc.) – for instance foranalyzingserviceperformancesoastocompareoperators,initiatecorrectivemeasures,imposepenalties,definenewrules,etc.

1.OGUS,A.(1994),Regulation:LegalFormandEconomicTheory,OxfordUniversityPress,Oxford.



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Thereare, in fact,different levelsof regulation: local regulation,national regula-tion, etc. With regard to small towns specifically, regulation, where it exists, isoftenpoorlystructuredandbasedonunclearobjectives.Furthermore,thoseactorsexpectedtocontributetothisprocessusuallylackthetoolsrequiredtodosoef-fectively.

moniToring, a Tool used for regulaTionRegulationofwatersupplyservicesrequiresinformationthatisbothrelevant(i.e.clearandusefultothepersonforwhomitisintended)andregularlyupdated.In small towns, the challenge lies in ensuring sufficient capacity is in place to col-lect and analyze relevant and reliable data on the management of water services so that this is then forwarded to the different regulatory actors involved.Inthisrespect, the advantagesofhavingmonitoringmechanisms for small townwaterservicesaretwofold:

• Theydirectlyprovidelocalactorswithbothreportsandadetailedunders-tandingofhowservicesareoperating.ThisenableslocalregulationastheWSAisabletocontrolthequalityofservicesprovided.

• Thereliableandregularlyupdatedinformationthatmonitoringproducesalsoenablesaregulator(locatedateitherregionalornationallevel)toproducestatusreportsonthelevelofcompliancewithsectorrulesandstrategies.

Tariff regulaTionTheaimoftariffregulationistofindacompromisebetweenthefinancialstabilityoftheserviceandthepriceusersarewillingtopay.Anytariffregulationmustalsocomplywithobligationssetoutintheexistingrules.Thisthereforemeansensuringnon-discriminationandequitybetweenusersthatpayfortheservice,whilstalsoensuringthereispropercostrecoveryandfairremunerationfortheoperator.Thetablebelowshowshowmonitoringisabletoperformsomeofthetasksre-quiredforeffectivetariffregulation:

• Collectinginformationandcontrollingtheapplicationofexistingtariffrulesareanintegralpartofmonitoring.

• Themonitoringbodyaloneisunabletodefinenewrulesorapplypenaltiesasthesetasksaretypicallyneitherwithinitsscopenorauthority.Never-theless,themonitoringdataitproducesprovidesanobjectiveanddetailedoverview,whichcaninturnbeusedtoinformdecisions.

• Certaintariffadjustmentsandinnovativerisk-sharingmeasures(suchasthepoolingoftherenewalfundsofseveralwaterschemes)couldbeundertakenwiththesupportofthemonitoringbody;however,thiswouldrequireprioragreementandwillingnessonthepartoftheWSAs.



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Tasks required for Tariff regulaTion… …are They performed by moniToring?

Collect information and data

Obtain data on current and future costs and revenues Yes

Obtain information on the willingness and capacity to pay for different service levels

Yes

Control the application of existing rules

Verify that authorized tariffs are applied Yes

Define new rules

Modify tariff levels

In partMonitoring recommends, but does not impose, tariff modifications

Modify rules on tariff structures and payment methods

NoBut the monitoring data can be used by the regulatory body to take appropriate decisions and action

Ensure rules are applied and resolve conflicts

Apply penalties in case of non-application of tariffs in force

Maintain financial equilibrium in the sector by tariff adjustments or innovate risk-sharing measures

In partCertain corrective and innovative measures can be proposed and coordinated by the monitoring body

service qualiTy regulaTionInadditiontoregulatingtariffs,itisalsoessentialtoregulatethequalityoftheser-vice.Thisregulationneedstoaddressnotjusttheserviceprovidedtotheusers,butalsotheworkundertakentomaintainandpreserveinfrastructureandequipment.Monitoring provides a number of indicators (for instance, average consumption,energy expenditure perm3, fuel consumption perm3 pumped, etc.) that can becomparedtotheprevailingstandards.Thus,thetwotasksto‘obtaindataoncurrentlevelsofservice’and‘ensureservicequalitystandardsareapplied’,aresystemati-callyincludedaspartofmonitoringactivities.



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Tasks required for service qualiTy regulaTion …

… are They performed by moniToring?


Obtain data on current levels of service Yes

Compare operator performances (benchmarking)

DependsOn the scope of the monitoring activity: monitoring can be used to compare operators’ performance

Conduct technical audits Yes


Ensure that service quality standards are applied Yes

Verify that coverage targets are met

DependsOn the scope of the monitoring activity

Define new rules

Define or review quality standards No

But monitoring data can be used by the regulatory body to take appropriate decisions and actionAdapt existing rules

to needs


Apply penalties in case of quality targets not being met

In partShould monitoring reveal that an operator has failed to meet his targets, the monitoring body can recommend penalties or specific demands for improvement (as described and authorized in the legal rules). These would then be applied by the WSA. If it is the WSA itself which is at fault, this can only be resolved by the regulatory body.

Demand quality improvements to ensure targets are met

Redefine quality targets where required

NoBut monitoring data can be used by the regulatory body to take appropriate decisions and action



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Furthermore,whilstmonitoringdoesnotdirectlyfocusoncomparingoperatorperformanceoronverifyingwhethercoveragetargetsaremet,thesetwotaskscouldbeperformedbymonitoringifthe‘basicscope’ofthemonitoringactivityweretobeexpanded.Lastly,althoughredefiningtargetsforservicequalityisinevitablytheremitoftheregulatorybody,monitoringcanassistwiththetaskofapplyingpenaltiesandcor-rectivemeasuresbyrecommendingandhelpingtoimplementappropriateaction.

compeTiTion regulaTion Competitionregulationaimstoreducetheriskofmonopolyandassociatedabusivepractices.Althoughtherewouldappeartobelittlecompetitioninthewatersector(giventhatitisonlyintroducedperiodicallyshouldoperatorsbidforcontracts),itcanbemajorissueindevelopingcountries,especiallyforinformaloperatorswhosometimescoverlargepartsofthewatersupplyservicemarket.Thisisparticularlythecaseinlargeurbancenters,butcanalsoaffectoperatorsinsmalltowns.Regulationofcompetition,therefore,focusesontwotypesofactors:a)themanagerinchargeofoperatingthewaterserviceandb)anyinformaloperators(particularlywaterresellers)whomainlyoperateoutsidetheserviceperimeterofformalwa-tersupply,inunplannedsettlementsandneighborhoods.Asaresult,monitoringislimitedinitsabilitytoassistwithcompetitionregulation.Monitoringisdesignedtoauditthequalityofanexistingservice,insidetheserviceperimeter,andnotinfor-malserviceoffers(andrelatedpractices)outsideofthisperimeter.Thus,monitoringisabletocontributelittletotheregulationofcompetition,asitisrestrictedtocol-lectinginformationfromtheformalserviceoperatoronly.



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Tasks required for compeTiTion regulaTion…



Obtain information on illegal conduct and monopolistic behavior

YesFor operators during technical audits and audits of operating accountsNoFor informal operators as this would require studies of areas outside the service operator’s perimeter

Obtain information on the number of operators and their methods of access to resources


Conduct enquiries on monopolistic abuses and predation practices

NoThis type of enquiry is costly and falls outside the scope of monitoring activities

Define new rules

Organize bid invitations DependsSome operators or contracting authorities use a monitoring consultant for this type of activity, although it falls outside the initial scope of monitoring activities

Approve contracts for bulk purchase by the operator

Approve, or not, consolidation among several sector actors

NoBut the monitoring data can be used by the regulatory body to take appropriate decisions and action (these two issues rarely need to be addressed in small towns)


Resolve conflicts between operators in a situation of competition

consumer proTecTionConsumerprotectionisafunctionthatcanbe(butisnotalways)includedinregula-toryobjectivesandwhichfocusesonresolvingcustomercomplaints.Monitoring mechanisms are not designed to collect and handle complaints.Nevertheless,customerfeedbackcanbecollatedduringthepublicreportingofmonitoringresults,aslongasmeetingsareheldon-siteandattendedbyusersofthewaterservice.



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Tasks required for consumer proTecTion…



Organize consumer surveys

In partSatisfaction surveys do not form part of monitoring activities. Nevertheless, user feedback and complaints are collected through the public reporting of monitoring results.


Audit systems and procedures in order to educate consumers and share information

In partMost small-piped water supply operators do not have the financial resources to fund consumer education programs. However, the public reporting of monitoring results greatly assists with this.

Define new rules Define customer service standards

NoBut monitoring data enables the regulator to review these standards using regularly updated field data.


Ensure customer service standards are applied

In partMonitoring recommends, rather than imposes, the application of standards. The authority responsible is in charge of ensuring these standards are applied.

Resolve conflicts between consumers and regulated companies

In partThe public reporting of monitoring results provides an opportunity for discussion which can facilitate the resolution of conflicts.



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How monitoring supports other functions conTribuTing To The managemenT of The waTer services secTor Centralized,consolidatedandprocessedattheregionalornationallevel,monitoringinformationaboutwaterservicescanbefedintovariousdatabasesforusebythesector,inparticulartoimproveknowledgeandunderstandingofsmall-pipednet-worksandtoupdatesectorstandardsandbenchmarks.

» Improve knowledge and understanding of small-piped networksByanalyzingtheevolutionofmonitoringindicators,eitherovertimeorwithinagivengeographicalarea,itispossibletogainabetterunderstandingoftheactualchallengesfacingsmall-pipednetworks.Thesecouldrelate,forinstance,to:actualuser consumption; technical issues faced by the operators (such as the viabilityandlifespanofequipment);services’financialissues(capacitytoself-finance,tariffincreases,latepaymentandoutstandingbillspercategoryofuser,pricingstructure,etc.).Cross-analysescanalsobeuseful, suchas forexample,analyzingtariff in-creasesandpricingstructuresforserviceswithinthesameregionthatusedifferenttypesofenergysource.Thescopeforanalyzingaggregatedmonitoringdataisvastandcanarguablymeettheneeds of all actorsworkingwithin the sector: consulting engineers for con-ductingfeasibilitystudies,detailedtechnicalstudiesandfeasibilityreports;socio-economistsforvalidatingtherelativevalueofpreliminaryfieldsurveyandstudydata(suchas‘willingness-to-pay’surveys);governmentswantingtodeterminetheexactvolumesextractedfromthewaterresource,etc.The fact thatmost small towns are experiencing rapidpopulation growth, alongwithchangesinpracticesandincreasesinuserdemand,makesitallthemoreim-portanttoensuremonitoringdataisregularlyaggregatedandanalyzedatregionalornationallevel.

» Update sector standards and benchmarksThe refined and regularly updated data thatmonitoring provides on small-pipednetworksconstitutesanunprecedentedsourceofinformationforgovernmentsea-gertoensuretheirstrategicframeworksandsectorplanningarealignedtothefieldrealities.Forinstance,anaverageconsumptionof4to6litersperuserperdayisinconsistentwithnationalstrategiesbasedonaconsumptionrateof20litersperinhabitantperday.Using thedataprovidedbymonitoring, overly theoretical orobsoletenational frameworkscanbe identifiedanddiscarded.Regularlyupdating



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sectorframeworks–withthehelpofmonitoring–makesitpossibletoestablish,amongstothers:installationdesignandsizingrulesthatarebasedonrealisticneedsassessmentsfordifferenttimeframes;adapteddesignstandardsthatmaximizetheprofitabilityofequipment;provenandsustainablemechanismsforfinancingfutureextensions.Tobeeffective,itisimportantthatmonitoringdataisaccumulatedoveraperiodofseveralyears.However,maintainingacentralizeddatabaserequiresstrong,long-termcommitmentatnationalleveltoprovidethenecessaryhumanandfinancialresourcesrequired.

faciliTaTing The mobilizaTion of finance

» Facilitating access to bank loansTherearecurrentlyveryfewbanksinterestedinthewatersectorinsmalltowns:visibilityofthesectorislowandthecreditworthinessofsmall-pipednetworkoper-atorshasnotbeendefinitivelyproven.Localstakeholdersinvolvedinwaterservices(theWSAandoperators)rarelyapproachsuchfinancialinstitutionsastheyhavenoorlittleexperienceofrequestingbankloans.However,monitoringdatacanbeusedtohelpthemgainaccesstothistypeofcredit.Themonitoringmechanismcanpro-videproofofawaterservice’sfinancialviability,thusmakingbanksmoreinclinedtograntloanstowaterinfrastructuremanagers.ExamplesofthishavenotablybeenseeninLaos,Cambodia,Kenya,BurkinaFasoandNiger.

» Encourage the private sector to invest in water servicesForaprivateoperator,whoseroleislimitedtomanagingthewaterservice,financingequipmentandinfrastructureisoftenconsideredtoogreatarisk.Theprivatesector’swillingnesstotakeonthistypeofriskreasonablydependsonthereturnoninvest-mentthatcanbemade.Monitoringdataenablesapotentialinvestortoassessthepotentialviabilityoftheservice:ifthelevelofriskisacceptable,theoperatorwillbemoreinclinedtoinvestinserviceinfrastructure.Financialviabilityassessmentsarebasednotonlyonfinancialinformationheldinthemonitoringdatabase,butalsoonthequalityofinfrastructuredesign.

» Build a relationship of trust with development partners (donors)Sustainabilityisacommonrequirementofthosedevelopmentpartners(donors)that support the water sector. As a result, these partners tend to focus theirsupportondevelopingwaterserviceswhosefutureviabilitycanbeguaranteed.Wherenewservicesaretobedeveloped,monitoringprovidesassurancesthatthefuturewaterservicewillbeproperlysupervisedandthattherewillberegu-larreportingonitssustainabilitythroughobjectiveandrobustindicators.Where



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theaimistoimproveexistingservices,theWSAandserviceoperatorcanutilizethemonitoringdatatoobtaindetailedinformationonthequalityandsustain-abilityoftheservicesundertheircharge.Thiscanthenenablethemtobetterconvincedonorstosupportinvestmentinnetworkextensionsorforpumpsta-tionimprovements,forexample.

Certaindonorsonlyprovideassistancetoprojectsincountrieswhereparticipationin amonitoringmechanism is requiredby thenational strategy and,notably, inregionswherethereisalreadysuchamonitoringmechanisminplace.Thesedonorspaycloseattentiontothedesignoffacilitiesandhavebeenknowntorefusetopro-videsupporttoprojectsdeemedtobeincorrectlysized(wherebasedonoverlyhighforecastsofaverageconsumption,forexample).Similarly,certaindonorsrefusetohelpfundwatersupplynetworkextensionsifthemonitoringreportshowsthereisahighlevelofunpaidbills,inadequatepricingorpoorgovernance.Ingeneral,there-fore,asdevelopmentpartnersareheldaccountablefortheuseofpublicfundsgivenasaidtodevelopingcountries,theyneedtoknowthatwaterservicesarecapableofreportingtheirmanagementresults.

pooling The resources of several waTer schemesThereareanumberofadvantagestopoolingfinancialresourcesand,inparticular,topoolingthesavingsaccounts(reservedforfacilityandequipmentrenewalornet-workextension)ofseveraldifferentwaterschemes.Bypoolingresources,awaterschemecansignificantlyincreaseitsinvestmentcapacitywithoutimpactingonitsabilitytofinanceequipmentrenewalasandwhenrequired.Italsoensuresfundsarenotleftdormantindifferentaccountsorlosingvaluethroughinflationorchangesintheexchangerate.

Inorder for suchpoolingof resources towork, both a coherent and transparentsetofrulesandcoordinateddecision-makingarerequired.Inparticular,robustandpreciserecordsneedtobekeptofthepaymentsmadebyeachservicetobeabletoidentifywhoownswhatwithinthecommonfundatanygiventime.Asmonitoringregularlyproducesreportsonthefinancialstatusofeachservice,itisavitaltoolforthemanagementofsuchpooledfunds.

Thepoolingofresourcescanextendbeyondfinancialresourcesandalsoapplytothepoolingofstocksofsparepartsorusingthesamemaintenanceoperator,etc.Asageneralrule,fortheanticipatedeconomiesofscaletobeachieved,thepoolingofseveralwaterschemes’resourcesrequiresstringentaccountingofthecontributionsandeffortsofeach.Monitoringisvitalinhelpingtoachievethis.



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Implementing a monitoring mechanismInordertoimplementamonitoringmechanism,itisimportantthattheessentialservicemanagementandorganizationcomponentsareinplace:

• TheWSAand the operator possess a detailed inventoryof all equipmentandinfrastructurethatincludes:technicalcharacteristics,dateofentryintoservice, condition of materials, suppliers of spare parts, a list – includingthephysicallocation–ofallconnectionsinstalled,plansanddescriptionsoffacilities,etc.

• Theactors’rightsandresponsibilitiesareclearlyallocatedbetweentheWSA,theoperatorandtheusers.

• Thepipedwaterserviceisequippedwithallthetoolsandequipmentrequi-redforcollectingmonitoringdata(e.g.volumetricmeters,metersrecordingtheruntimeofgenerators,acustomerbillingsystem,etc.).

Inaddition,itisalsoworthnotingthatstrongpoliticalwilltosupportanymonitor-ingmechanismisessential.Theviabilityofamonitoringmechanismdependsonitbeingproperlyincorporatedintothelegalandinstitutionalenvironment.Dependingonthepoliciesandstrategiesofagivencountry,specificregulatorytoolsmayberequired,notablytoensuremonitoringisproperlyrecognizedandfinanciallyviable.Asageneralrule,themonitoringbodyshouldbeacknowledgedthroughanapprovalprocesstobeconductedbytheministryresponsibleforwaterservices.

preliminary acTiviTies To be conducTed

» Define the activities of the monitoring body Theactivitiesthatshould,asaminimum,beassignedtothemonitoringbodyaredescribedinthesectionon‘MonitoringActivities’above.Thedetailsofeachoftheseactivitiesneedtobeadaptedtothe localcontext. Inparticular, thescopeofanyback-upsupportactivitywillvaryinaccordancewiththeskillsandknowledgeoftheserviceoperatorandtheWSA.Similarly,forserviceswheretherearedisagree-mentsbetweenlocalactors,moretimewillneedtobespentonpublicreportingmeetingsandonmediation,inparticular,inordertodefuseanytension.Thefrequencywithwhichmonitoringactivitiesareundertakencanalsovary.Forexample,forparticularlyremoteareas,whichareexpensiveforthemonitoringbodytovisitandhavearecordofsatisfactorymanagement,monitoringmaytakeplaceonlyonceortwiceayear.



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Itisalsonecessarytohighlighttheimportanceofreportingandback-upsupport.Theseactivitiesfoster localacceptanceofmonitoringbyencouraginglocalactorstoviewmonitoringasmorethanjustasimplecontrolmechanism.However,itisimportanttobearinmindthattheaimofthemonitoringbodyprovidingthisback-upsupport is solely toassist – theyshouldnever ‘takeover’ thedutiesof thoseprovidingtheservices.Lastly,whereareasof‘serviceexclusivity’exist(seebelow),themonitoringcon-ductedacross that areaneeds tobe standardized, regardlessof the statusof theoperator(associationorcompany).Eachtypeofoperatorshouldberequiredtofulfillthesamestandardsofprofessionalismandbesubjecttothesamecontrols.

» Define the method of remunerationThechoiceofremunerationmethod(whetherafixedamountforallserviceswithinthecontractscope,afixedamountperserviceorapaymentperm3soldorpay-mentperm3produced)determinesthefinancialconsiderationsinanymonitoringcontract.Experiencehasshownthatthemostsustainableoptionisapaymentperm3(soldorproduced)withthischargebeingincludedinthetariffpaidbyusers.Thefactthatthisremunerationisproportionaltoconsumptionalsoactsasanincentivetotheoperatortoprovideafullyfunctionalservice.

» Define the scope of monitoring activities Theoretically,itispossibletosetupindividualmonitoringcontractsforeachschemeandthustoinvoiceeachservicefortheactualcostofthemonitoringactivitiesper-formed.However,thiswouldmakeitextremelydifficulttomonitorthesmallestschemesduetothemonitoringcostinvolved(which,inMali in2010,wasesti-matedtobeanaverageof600eurosperyearpernetwork).Thiswouldprovetooexpensiveformanyofthesmallesttowns.Thecostofmonitoringforsmallschemescanbefinancedthroughasystemofcross-subsidies,wherebythelargerschemespartlysubsidizethemonitoringcostsofsmallerschemes.Thisapproachisparticu-larlysuitedtomethodsofremunerationthatareproportionaltoconsumption:eachservicepaysamonitoringfeethatislinkedtothevolumeofwatersoldandisthusalignedtoitslevelofincome.Inordertoemploysuchacross-subsidyapproach,itisnecessarytoestimatethecostofmonitoringforallthewatersupplyschemeswithinagivenarea.Administrativeboundariesarenotalwaysthemostusefulforestablishingareasforcross-subsidy,however,and,whereservicesareveryspreadout,suchanareacancoverseveraladministrativeregions.Itisadvisable,therefore,toestablishwhetherthemonitoringcostisfinanciallyandphysicallyviableforeachoftheareasunderconsideration.Whenthemonitoringbodyislocatedincloseproximitytotheschemesitoverseesandwhentheseservicessupplyasufficientlylargepopulation(withhighconsump-tionlevelsandthustheresourcestocovermonitoringcosts),theareaofexclusivity



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forsuchmonitoringservicescanbereduced.Thisprincipleofdefiningareducedareaforagivenserviceprovider,yetonethatremainsfinanciallyviableformonitor-ing,isalsoworthconsideringincountrieswhichhavenotyetusedsuchamecha-nismandareinterestedinpilotingthisonasmall-scale.

» Choose the institution that will select the monitoring bodyTheinstitutionchosentoselectthemonitoringbodyshouldbeindependentfromboththeactorsinvolvedinlocalwatersupplyand,inparticular,theoperatorandcontracting authority (WSA). It is important to avoid conflicts of interest and toensurethemonitoringbodyisabletofreelycarryoutitsactivitiesandmakerecom-mendations.Itisthereforenecessarytochooseaninstitutionfromanadministrativelevelhigherthanthatofthecontractingauthority.Anumberofdifferenttypesofinstitutioncouldbechosen:

• ThetechnicaldepartmentoftheMinistryofWater.• Theregulatoryagency.• Afederationofusers’associations.• A federation or group of contracting authorities (for example a national or

regionalassociationofmayors), supportedbystatedepartments.Thisoptionis,however, restrictiveasconsultationbetweenall contractingauthorities isrequiredeachtimethecontractofthebodychargedwithmonitoringexpires.

» Select the monitoring bodiesMonitoringbodiesshouldbeselectedonthestrengthoftheiradministrative,finan-cial,accounting,sociologicalandtechnicalskills.However,itisnotalwayseasytofindentitieswithsuchawiderangeofexpertise.Ideally,monitoringbodiesshouldberecruitedthroughacallfortenders,inwhichashortlistofpotentialmonitoringbodiesisdrawnupbasedontheirskill-sets.

» Facilitate acceptance by local actors of the monitoring processImplementingamonitoringmechanismthroughaprojectthatisconstructingnewinfrastructureisgenerallyeasierthanintroducingmonitoringtoexistingnetworks.Onexistingnetworks,puttingamonitoringsysteminplaceinvolvestacklinganum-berofwell-establishedpracticesandchallenges(suchasawaterpricethathasbeen‘frozen’ for several years, ingrained power balances or hidden profits). However,whenusersaremadeawareoftherulesregardingwatersupplyandsensitivecom-municationscampaignsareputinplace(particularlyinthosecountrieswherewaterisnotyetchargedforvolumetrically)monitoringanditsassociatedcostsareusuallywell-accepted.Regardlessofwhetheraprojectinvolvesconstructingnewnetworksorrehabilitatingexistingwatersupplyservices,itisimportanttoensurethatthereisaparticipatoryapproachinplacethatprovidesdetailedinformationtobothusersandotherstakeholdersfromtheveryoutsetoftheproject.Usersaregenerallywill-



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ingtofinanceamonitoringmechanismifitensuresthetariffstheypayforwaterwillnotbemisappropriated.

» Support deployment of the monitoring bodiesSupportcanbeprovidedtomonitoringbodiesbeforetheybegintheiractivities.Forexample,themonitoringbodymaybeprovidedwithtrainingandappropriatefinan-cialanalysistoolsthatareconsistentwiththoseusedbyothermonitoringagencies.Inordertomakesurethesenewmonitoringbodiesareeffective,theyneedtoworkwithinanagreedframeworktoensurethattheinformationtheyprovideisproperlyformatted,canbeutilizedatnationallevelandenablescomparisonbetweendiffer-entwaterschemesandmonitoringareas.Tothisend,nationalgovernmentagenciesmayprovidemonitoringbodieswithsoftwaretoassistwithdataprocessingandthecollectionandcalculationofindicators.

» Ensure the legitimacy of the monitoring bodyThelegitimacyofthemonitoringbodyisdependentonthewayinwhichitwasappointedandwhetheritisrecognizedbythestate.Ifthemonitoringbodyobtainsofficiallegitimacythroughministerialapproval,itisimportantthatstepsaretakentofurtherreinforcethis.Forinstance,itcanbeparticularlyusefultoinformtheus-ers,theoperatorand,especially,WSAsthatanexternalactorwillsoonstartworkinanygivenlocation.Inaddition,themonitoringbodycanbeaccompanied(atleastoninitialfieldvisits)byrepresentativesoftheregionalbodywithresponsibilityforwatersupplyandanyassociatedlocaltechnicaldepartments.

moniToring resources required

» Human resourcesInordertoensuremonitoringactivitiesarecarriedoutsuccessfully,themonitoringbodyneedstohavethefollowingknowledgeandskillsinplace:

• Technicalskills(electro-mechanics,hydraulics,hydrogeology,plumbing,etc.).• Financialskills(accounting,analysisofaccountingdata).• Communicationskills(reportwriting,organizingandfacilitatingmeetingsofusers).• Intermediationskills(facilitationintheeventofmisunderstandingsbetween

localactors,assistancewithconflictmanagement,mediation).• Knowledgeoflegal,regulatoryandcontractualpoliciesanddocumentsper-

tainingtothewatersectoringeneralandwaterservicesinparticular.



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» Monitoring toolsThemonitoringmechanismshouldideallyemploystandardizedtoolstocollectdataduring inspections,calculateperformance indicatorsandconductanalyses.Moni-toringtoolsareusedtoprovidetheWSAandserviceoperatorswithdashboardsonservicequality,aswellasto informreportingbetweenstakeholders.Thesestan-dardizedtoolsnotablyinclude:

• Technical monitoring tools: methodologies for verification, multi-meters,kitsforphysicochemicalandresidualchlorineanalysis,waterlevelmeasu-rementprobes,stopwatches,etc.

• Financialmonitoringtools:accountingsoftware,softwareforfinancialana-lysis,etc.

• Communication tools: for disseminating the results of monitoring to thegovernment,WSAs,serviceoperatorsandcustomers.

ThetoolsrequiredforeachmonitoringactivityarelistedintheAnnex.Thesecannotonlybeadaptedtothespecificactivitiesputinplaceforeachtypeofservice,butalsobeusedalongsidethemonitoringbody’sownmethodologies.

» Material resourcesThisincludesa4x4vehicle,whichisthelargestexpenditureitembutisalsooftenrequiredforcarryingoutmonitoringvisitstoveryremoteareas.Forareasthatareeasier toaccess, thiscanbereplacedbysmallervehiclesorevenbymotorbikes,especiallywhereservicesaresituatedincloseproximitytoeachother.Officeandcomputerequipmentandotherresources(photocopier,computer,printerandin-ternet access) should be determined in accordance with the specific monitoringrequirements.

The moniToring conTracT

» Length of contractThelengthofthecontractisdependentonthefinancialinvestmentthatneedstobemadebythemonitoringbody.Ideally,thecostofthisinvestmentshouldbeamor-tizedbytheendofthecontract;hence,anappropriatecontractlengthisconsideredtobebetween7to10years,withaminimumdurationof5years.Thismayalsoinvolveatrialperiod,attheendofwhichthemonitoringbodyisconfirmedinitsroleandcanthusinvestinthevariousresources(officeandITequipment,meansoftransport)requiredtocoverthedurationofthecontract.

» Data collection, technical and financial analysesThemonitoringcontract should includeadetaileddescriptionof thedatacollec-tionmethodology.Inparticular,itshouldlistthedatarequiredtocharacterizeeach



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scheme,aswellasthefrequencywithwhichthisdataistobecollected.Itshouldalsospecifywhichindicatorsandtechnicalandfinancialratiosshouldbecalculatedinordertoassessthequalityandsustainabilityofservices.

» On-site reportingTheon-sitereportingofanyobservationsmadeduringmonitoringinspectionsandthepresentationofthemonitoringbody’srecommendationsarebothveryimpor-tantactivitiesandshouldthusbeidentifiedassuchinthecontract.

» The role of monitoring in ‘information support’Partofthemonitoringbody’sroleistosupporttheserviceoperatorandrespondtotheoperator’squestionstothebestof itsability.This ‘informationsupport’role,generallymuchappreciatedbylocalservicestakeholders,isoftenconduct-edinformally.Itis,however,possibletoincludeaspecificclauseinthecontractrequiringthemonitoringbodytobeavailabletorespondtoqueriesandrequestsfromlocalactors.

» Other activitiesAmonitoringmechanismcanalsobeutilizedtosupportactivitiesnotstrictlyrelatedtomonitoring(seethe‘Howmonitoringsupportsotherfunctions’chapter).Someoftheseactivitiescouldpotentiallybeincludedinthemonitoringcontract,butwouldrequirespecificfunding.

» Monitoring reportsThe formatof the report that themonitoringbody is to submit to thedifferentservicestakeholderscanbestipulatedinthemonitoringcontract.Thisreportshouldideallyinclude:

• Figuresontechnicalmonitoringundertaken,includingwaterqualityanalysis.• Figuresonfinancialmonitoring,includingaccountingandfinancialanalysis.• RecommendationsfortheWSAandserviceoperator.• Theprogressagainstobjectivesofthemonitoringbodyitself.• Challengesencountered.• Taskscarriedoutbymonitoringbodystaff.

» Monitoring body staffThelistofmonitoringbodystaffisapprovedbythesignatoryofthecontract,whoreservestherighttorequesttherecallorreplacementofanystaffmemberwhoseworkisnotuptostandard.Should amonitoring body employeebe absent on sick leave formore thanonemonth,thisemployeeistobereplacedbyanothermemberofstaffinaccordancewiththeemployment legislation inforce.Thisreplacementshouldbeat leastas



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equallyqualifiedasthepersonbeingreplaced.Professionalstaffmaynotbereplacedwithoutpriorapproval.If,overthecourseofthecontract,themonitoringbodyhastorecallorreplaceamemberofitsstaff,themonitoringbodyistobearallassoci-atedcosts.

evaluaTion of The moniToring body’s acTiviTiesThemonitoringbody’sworkistoberegularlyassessed.Evaluationshouldbecon-ductedbyeitherthestateorthesignatoryofthecontractandbebasedonobjectiveindicators,suchas:

• Thetimelysubmissionofdocuments.• The relevance of the recommendations provided to the WSA and to the

serviceoperator.• Theavailabilityof themonitoringbody to respond to stakeholderqueries

andrequestsbetweensitevisits(e.g.fromtheWSA,customers,theserviceoperatorandfromanyrelevantwaterauthorities).

• Testscarriedoutonthepotabilityofwater.• Relationshipwithotheractors.



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ConclusionRegulationisessentialasameansofassessingboththequalityofwaterservicesandtheaccessibilityofthisserviceatapriceaffordableforall.Thisisparticularlytrueinsmalltownswherethecapacityrequiredtoensuretheeffectivedeliveryofwaterservices(whetheratthelevelofthecontractingauthorityortheserviceoperator)isnotalwaysavailable.

Regulationencompassesarangeoffunctions(whichvarydependingonthecountryandnationalstrategy),isoftenconductedondifferentlevels(fromlocaltonational)andrequirestheinputandcooperationofanumberofdifferententities(notablytocollectandsubmitwatersupplyservicedata,analyzeserviceperformance,compareservice operators, apply corrective measures, impose sanctions, etc). Regulationthusinvolvesawiderangeofactors:theWSA,theserviceoperator,anydevolvedtechnicaldepartments,nationalwaterauthorities,etc.Tocoordinatealltheseactorsandensureallnecessaryskillsandappropriatetoolsareavailable,itisthereforees-sentialthatthereisaclearinstitutionalframeworkinplace.

Themonitoringofwaterservices(includingtechnicalinspections,financialanalysesof the service,management assessments, on-site reporting, reports andback-upsupportforlocalstakeholders)hasfourmainbenefits.

Firstly, monitoring helps to significantly improve the quality and sustain-ability of service: throughboththe indicatorsprovidedandrecommendationsmadeitprovidesprofessionalsupporttostakeholdersinvolvedinwaterservices,enabling them tobuildupon and further develop their existing capacity. Thissupportmay, forexample,contributetoreducingthenumberanddurationofservice interruptions, tooptimizingoperatingcosts, to improving thefinancialstabilityoftheserviceandtoincreasingandsecuringthesystem’sfinancialsav-ingsandreserves(whicharetheretofinanceequipmentrenewal,inparticular).Monitoring can also serve as a tool for increasing the transparency of watergovernance: thepublic reportingmeetingsheldwithall localactorsprovidearegularremindernotonlyoftheirrespectiverolesandresponsibilitiesbutalsooftheneedtopayafairpriceforwaterconsumed;theyalsohelpexplainhowthismoneyissubsequentlyusedandhelpgainpublicacceptanceforanyfuturepriceincreases.

Secondly,monitoringisaparticularly useful tool for strengthening the regulationofwaterservicesinsmalltowns.Monitoringdata,onceproperlyanalyzed,consti-



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tutesareliableandregularlyupdatedsourceofinformationthatbothenablestheauthoritiesresponsibleforservicedeliverytoeffectivelycontroltheservice,aswellasinforminganyregularregionalornationalreportingoncompliancewithsectorrulesandstrategies.

Thirdly,monitoringonitsownperforms certain regulatory functions.Inparticular,monitoringchecks that tariffscomplywithanynational rulesonpricingandarealignedtoactualoperatingcosts,andthatservicequalitystandardsarebeingmet.Italsoinformsandinstructscustomersontheperformanceandpricingoftheservicestheyreceive,helpsoverseethequalityofwaterdistributedandreportsonthevol-umesofwaterextractedfromthewaterresource.

Lastly,inadditiontosupportingimprovementsintheregulationandqualityofser-viceofpipedwaterschemes,monitoringalsohelps reinforce management within the sector, optimize the mobilization of finance and oversee any initiatives to pool the financial resources that support water services.

Aboveall,amonitoringmechanismproducesanddisseminatesinformation.Undernocircumstancesshouldamonitoringbodybedirectlyinvolvedintheorganiza-tionormanagementofwaterservices,norshouldamonitoringmechanismseektodefineorimposerulesandregulations.Theseactivitiesaretypicallytheremitoftheregulatoryagenciesandnotthemonitoringbody,whichdoesnothavetheauthor-itytoimposeaction,demandchangesinmanagementorapplypenaltiesifrulesarenotbeingrespected.

Inconclusion,monitoringappearstobeanextremelyappropriatetoolforaddressingmanyofthestructuralweaknessesinthemanagementofwaterservicesinsmalltowns. The monitoring and regulation of water services should be designed andimplementedatthesametime,asthesearetwomutuallyreinforcingmechanisms.



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Annex: details of monitoring activities in Mali

acTiviTy descripTion acTor

involved acTiviTy deTails resources required frequency daTa To be

collecTeddaTa collecTion Tools

Activity 1: Technical inspection

Assess the working condition of equipment and infrastructure

Contracting authority

Site visit to assess the condition of hydraulic and electromechanical equipment, read the meters (raw water, generators, dosing pumps, etc.), conduct physicochemical analyses, record production incidents.

Electro-mechanic (Advanced technician with 2 yrs of higher education or Engineer)

Monthly for some activities (quantities of water pumped and sold, pumping duration, etc.). Every six months for the other activities.

• Readings of production and distribution meters.

• Energy consumption.• Water analyses (color, PH, conductivity, iron, Ni, Cl, etc.).

• State of the environment.

• Groundwater level.

• Multimeter.• Chlorine analysis kit.• Water level measurement probe.

• Pressure measurement device.

• Stopwatch.

Activity 2: Financial analysis

Provide accounting assistance to associations

Water service operator

Report on accounting records.Compare cash book entries, bank records, supporting documents and how accounts are accessed and signed off.

Accountant (2 yrs of higher education) Every six months.

• Cash book.• Bank books.• Supplier invoices.• Client invoices.

• Half-yearly visits to the monitoring body’s offices by accountants to present accounting documents.

• Data entry.

Record income and expenditure

Check all information to be provided by the water service operator, as specified in the contract.


• Client invoices.• Information on the breakdown of expenditure by expense type (salaries, energy, repairs, maintenance, etc.).

• Data entry.



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Annex: details of monitoring activities in Mali




Activity 1: Technical inspection

Assess the working condition of equipment and infrastructure

Contracting authority

Site visit to assess the condition of hydraulic and electromechanical equipment, read the meters (raw water, generators, dosing pumps, etc.), conduct physicochemical analyses, record production incidents.

Electro-mechanic (Advanced technician with 2 yrs of higher education or Engineer)

Monthly for some activities (quantities of water pumped and sold, pumping duration, etc.). Every six months for the other activities.

• Readings of production and distribution meters.

• Energy consumption.• Water analyses (color, PH, conductivity, iron, Ni, Cl, etc.).

• State of the environment.

• Groundwater level.

• Multimeter.• Chlorine analysis kit.• Water level measurement probe.

• Pressure measurement device.

• Stopwatch.

Activity 2: Financial analysis

Provide accounting assistance to associations

Water service operator

Report on accounting records.Compare cash book entries, bank records, supporting documents and how accounts are accessed and signed off.


• Cash book.• Bank books.• Supplier invoices.• Client invoices.

• Half-yearly visits to the monitoring body’s offices by accountants to present accounting documents.

• Data entry.

Record income and expenditure

Check all information to be provided by the water service operator, as specified in the contract.


• Client invoices.• Information on the breakdown of expenditure by expense type (salaries, energy, repairs, maintenance, etc.).

• Data entry.



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Activity 3: Management assessment

Check operator’s compliance with obligations

Contracting authority and operators

If applicable, compare the record of service delivery against any specifications in the operator’s contract (rights and responsibilities of the contracting authority and the operator) and check administrative documents.

Economist (4 yrs of higher education), but may also be delegated by the monitoring body.

Every six months.• Pertinent details of any contracts nearing expiry.

• Updated administrative schedule.

Management assessment Operators Compare technical and accounting data. Economist (4 yrs of higher education) Every six months.

• Financial analysis software.

Activity 4: Reports

Mid-term report 1

Contracting authority, operators, users and the state

Mid-term report (half way through the financial year) that includes: the operating account and management assessment.

Electro-mechanicEconomist

Every six months. • Mid-term report. • Computer.

Mid-term report 2

Annual report that includes: operating accounts; management assessment; depreciation calculations; stock values; information on other operations and an overall review.

Every six months. • End-of-year report.

Activity 5: Presentation of findings on site

General meeting in each village

Contracting authority and users, attended by the state

On-site presentation of management results. Economist (4 yrs of higher education) Every six months.

• Presentation of the assessment of management performance to all actors.

• Site visit (vehicle).

Activity 6: Back-up support

Assistance upon request


Assistance provided to different actors (WSA, operator, users) to resolve specific issues. If travel is required, these additional expenses will be invoiced to the actor that made the request.

All monitoring body staff Upon request. • Telephone

Optional Activity

Monthly monitoring Operators Send a series of service operation indicators (e.g. production, water sales, presence of chlorine, etc.).

Monthly or quarterly.



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Activity 3: Management assessment

Check operator’s compliance with obligations

Contracting authority and operators

If applicable, compare the record of service delivery against any specifications in the operator’s contract (rights and responsibilities of the contracting authority and the operator) and check administrative documents.

Economist (4 yrs of higher education), but may also be delegated by the monitoring body.

Every six months.• Pertinent details of any contracts nearing expiry.

• Updated administrative schedule.

Management assessment Operators Compare technical and accounting data. Economist (4 yrs of higher education) Every six months.

• Financial analysis software.

Activity 4: Reports

Mid-term report 1


Mid-term report (half way through the financial year) that includes: the operating account and management assessment.

Electro-mechanicEconomist

Every six months. • Mid-term report. • Computer.

Mid-term report 2

Annual report that includes: operating accounts; management assessment; depreciation calculations; stock values; information on other operations and an overall review.

Every six months. • End-of-year report.

Activity 5: Presentation of findings on site

General meeting in each village

Contracting authority and users, attended by the state

On-site presentation of management results. Economist (4 yrs of higher education) Every six months.

• Presentation of the assessment of management performance to all actors.

• Site visit (vehicle).

Activity 6: Back-up support

Assistance upon request


Assistance provided to different actors (WSA, operator, users) to resolve specific issues. If travel is required, these additional expenses will be invoiced to the actor that made the request.

All monitoring body staff Upon request. • Telephone

Optional Activity

Monthly monitoring Operators Send a series of service operation indicators (e.g. production, water sales, presence of chlorine, etc.).

Monthly or quarterly.

In small towns in developing countries, the management of drinking water supply networks is regularly faced with issues that undermine both the quality and sustainability of services. To address these issues, several countries have introduced technical and financial monitoring mechanisms to measure the quality of services and thus improve governance and performance of water services.This document describes the technical and financial monitoring mechanisms currently in use in these countries. It also provides a detailed understanding of the indicators used and outlines the advantages of monitoring, such as improvements to service quality and support to regulation. This publication also includes recommendations on how to put such mechanisms in place.Intended for national decision-makers, water services authorities, operators and stakeholders, the aim of this publication is to promote a more in-depth understanding of technical and financial monitoring. More than just a supervisory and support tool for small piped water schemes, technical and financial monitoring is key for developing and driving the sector.

REGULATING AND MONITORING THE TECHNICAL & FINANCIAL ...€¦ · Christophe Le Jall é We would also...

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