Lack of Operational Resources in Water Utilities | A Challenge in Developing Countries

 

George Ndongwe.

 

By George Ndongwe, Utility Management Expert

Having worked in the water sector for the past 26 years as a utility manager and a consultant on various assignments in sub-Saharan Africa, I have observed various challenges faced by water utility managers, and a  lack of key operational resources is a significant one.

Operational resources can be viewed as the equipment/machines, tools, workers, and facilities – physical areas that the utility needs to meet its obligations to its customers.

In the water sector and for the purpose of this article, I would like to consider the following as key operational resources:

  • Human resources
  • Financial resources
  • Infrastructure or physical resources 
  • Water resources

Human resources refers to the staff that the utility employs in its various operational areas. Utilities need sufficient suitably qualified, competent and committed staff. Most utility managers have to make do with staff that does not have requisite skills to meet demands for their jobs. From my experience, 30 to 40 percent of utility employees do not have the skills needed to carry out their jobs. This adversely affects productivity in the utility. Cash-strapped utilities, and those struggling to attend to basic day-to-day demands, find it difficult to equip their staff with requisite skills and competencies to enable them to leverage available technologies as well as to meet the ever-changing needs of their customers. Also, civil service rules and mentalities provide too little incentives to motivate staff to perform well.

Financial resources are the lifeblood of any business. In general, these resources must cover the cost of providing services, maintaining the infrastructure and building new components. Internally generated revenue comes from the sale of water and sanitation services. This is most often insufficient due to a combination of inadequate water and sanitation tariffs, inability to collect what is billed, and not billing much of what the utility provides. Inadequate tariffs, and/or regulators’ reluctance to permit raising tariffs to appropriate levels, are some of the major challenges limiting a utility’s revenue generation capacity. Illegally connected customers go unnoticed. Much consumption is not well-metered, leading to consistent underestimation of what the utility provides. 

Also, the cost of providing services is often higher than necessary due to operational inefficiencies  in water resources capture, water treatment, distribution and sales. 

Externally sourced funds are usually used for major infrastructure projects and are accessed through government-guaranteed loans from development partners and institutions. These are generally in the form of grants and sovereign loans guaranteed by governments. Though this has been the main source of funding for capital improvements for most utilities, this form of funding is usually unpredictable. 

Without a predictable cash flow, utilities cannot plan for operations and maintenance (O&M) let alone infrastructure renewal and expansion. Most utilities that I have worked with are unable to consistently secure these financial resources. Utilities are unable to fully fund their O&M and capital costs through either internally generated funds or from external sources. Internally generated funds are often insufficient even for daily O&M needs of the utility; hence the need for government funding, occasionally supplemented with (expensive) short-term loans from banks, and generally not keeping up with the maintenance needed to avoid premature system failures.

Physical resources or infrastructure for a water utility include water and wastewater treatment plants, transmission, distribution and collection systems, and movable assets such as motor vehicles and associated machinery. Though they can be considered stable, physical assets have a lifespan within which they can function properly, and after which they need renewal or replacement. A utility must maintain its resources in order to continuously provide service delivery. Most water utilities in the developing world struggle to function with  aged infrastructure well beyond its useful life. As a result, breakdowns are quite common and emergency “fixes” are more expensive than planned improvements. It is not uncommon in the developing world to come across utilities whose transmission and distribution infrastructure is more than 50 years old, leading to high levels of water losses and consequently high costs and lost revenue.

Water resources for utilities are increasingly characterized by reduced quality and quantity – the latter due to climate change. This problem is compounded with increasing demands for water due to rapid population growth in most urban centers. Service delivery challenges such as high leakages and reduced water security exacerbate water scarcity. The unit cost of additional water supply continually increases as utilities reach out further from cities and use more expensive alternatives such as groundwater, recycled water and even sea water.

Conclusion

A lack of access to adequate resources can have a profound effect on the fight against the water crisis, particularly in developing countries with limited financial resources, where water availability and economic prosperity are closely linked.

Addressing acute shortages of operational resources in these vital areas are key to sustainable water management as urban populations surge across the African continent.