Water supply and sanitation in Mozambique

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Mozambique: Water and Sanitation
Data
Water coverage (broad definition)	43%
Sanitation coverage (broad definition)	32%
Continuity of supply (%)	n/a
Average urban water use (l/c/d)	n/a
Average water tariff (US$/m3)	n/a
Share of household metering	Low
Annual investment in WSS	n/a
Share of self-financing by utilities	Low
Share of tax-financing	Low
Share of external financing	80% (1995–2005)
Institutions
Decentralization to municipalities	No
National water and sanitation company	Asset-holding company for urban areas
Water and sanitation regulator	CRA
Responsibility for policy setting	Ministry of Public Works and Housing
Sector law	No
Number of urban service providers	1
Number of rural service providers	n/a

Water supply and sanitation in Mozambique is characterized by low levels of access to an improved water source (estimated to be 43%), low levels of access to adequate sanitation (estimated to be 32%) and mostly poor service quality. However, Mozambique has also introduced an innovative public-private partnership for urban water supply that has operated to the apparent satisfaction of the government since 1999. Under this partnership assets in 13 cities are owned by the government through an asset-holding company, while operations are delegated to a private company, Aguas de Mozambique, which is jointly owned by a public Portuguese firm and local investors. The Ministry of Public Works and Housing is in charge of policy setting, and a regulatory agency is in charge of regulating the private contract for service provision. In the five largest cities - Maputo (the capital), Beira, Quelimane, Nampula and Pemba – Aguas de Mozambique provides services under a hybrid lease/management contract. In 2004 the contract was extended to include the cities of Xai-Xai, Chokwe, Inhambane and Maxixe. In the remaining four cities, public municipal companies operate and maintain the systems. While the strategy for urban water supply in Mozambqique is well defined, there are no clear strategies for rural water supply or for sanitation.

The Mozambique MDG status report for water and sanitation notes that the sector as a whole still strongly depends on donor financing and that donors finance about 80% of all investments between 1995 and 2005. The main donors in the water sector are the World Bank, the African Development Bank, Canada, the Netherlands, Sweden and Switzerland. According to the World Bank, the urban asset holding company is “achieving full cost recovery and can graduate from government subsidies”. In rural areas, however, revenues are by far insufficient to recover operation and maintenance costs. The government aims to "gradually" achieve full cost recovery for water supply.

Contents 1 Access 2 Service quality 3 History 3.1 National Water Policy of 1995 and institutional reforms 3.2 Private sector participation since 1999 4 Responsibility for water supply and sanitation 4.1 Policy 4.2 Regulation 4.3 Service provision 5 Financial aspects 5.1 Tariffs 5.2 Cost recovery 5.3 Investment 5.4 Financing 6 Efficiency 7 External cooperation 7.1 World Bank 7.2 Switzerland 7.3 African Development Bank 7.4 Other donors 8 External links 9 References

[edit] Access

Only about 43% of the Mozambican population has access to an improved water source, and only 32% has access to adequate sanitation. Consequences on living conditions are multiple, ranging from poor health to lower productivity due to the time needed to fetch water.

Figures on access are controversial. For example, the WHO/UNICEF Joint Monitoring Program for water and sanitation estimates access to an improved source of water supply at 72% in urban areas and 28% in rural areas. These figures are based primarily on data from the 2003 Demographic and Health Survey. However, the Ministry of Public Works uses the water access figures of 38% in urban areas and 40% in rural areas. The numbers for rural access are derived from the number of boreholes and an estimated average number of households using a borehole.^[1]

		Urban (37% of the population)	Rural (63% of the population)	Total
Water	Broad definition	72%	28%	43%
	House connections	18%	2%	8%
Sanitation	Broad definition	53%	19%	32%
	Sewerage	4%	0%	1%

Source: Joint Monitoring Program WHO/UNICEF(JMP/2006). Data for water and sanitation

There are also conflicting figures about what are the target figures to meet the MDGs for water and sanitation by 2015. According to a World Bank document it means urban access to water increasing to 78% and rural access increasing to 56%.^[1] However, according to a MDG status report it means increasing access to 70% in both urban and rural areas.^[2]

[edit] Service quality

There are few published reliable data on water and sanitation service quality in Mozambique. Many water systems provide water intermittently. However, four cities - Beira, Pemba, Quelimane and Nampula – have achieved continuous or almost continuous water supply as a result of private sector participation, increasing the hours of water supply per day from 9 hours (Beira and Quelimane) and 17 hours (Nampula and Pemba) in 2002 to 22–24 hours in 2007. Water supply in Maputo remains intermittent, increasing only slightly from 12 to 14 hours.^[3]

[edit] History

[edit] National Water Policy of 1995 and institutional reforms

In 1995, Mozambique approved a National Water Policy that emphasizes community participation and, for urban water supply, private sector participation. In 1998 the World Bank approved its First National Water Development Project in support of the National Water Policy. Other donors provided co-financing for the project. In 1998 two key institutions were created to implement the National Water Policy: The regulatory agency CRA and the Asset Holding Company FIPAG. The government also approved a water tariff policy aiming at cost recovery.

[edit] Private sector participation since 1999

In 1999 the government competitively awarded a hybrid lease/management contract for seven cities to an international consortium called Aguas de Moçambique (AdeM), which was led by the French firm SAUR and included Aguas de Portugal. For Maputo and Matola the contract consisted of a 15-year lease and for the other cities of a 5-year management contract.^[4] AdEM also included a 30%-shareholding by a Mozambiquan holding company called Mazi of Mozambique. AdeM’s financial bid was substantially lower than that of the closest competitor. According to a World Bank study, it ultimately proved to be unrealistically low. By 2001 AdeM had encountered serious financial difficulties, exacerbated by the floods of 2000, and in December 2001 SAUR terminated its involvement. Subsequently FIPAG and AdeM’s remaining partners led by Águas de Portugal (AdeP) renegotiated the contracts, introducing higher fees and improvements in the specification of service obligations and procedures.^[3]

In 1999 the World Bank approved the Second National Water Development Project ^[5] In December 2001 SAUR withdrew from the consortium, ceding its leading role to Aguas de Portugal.^[6] In 2004 the five-year management contract for the smaller cities has been extended by three years. The contract was subsequently extended by another year and terminated in March 2008.

Also in 2004, FIPAG entered into a three-year contract with the Dutch company Vitens under which the latter provided management support services and training in four small southern cities – Xai-Xai, Chokwe, Inhambane and Maxixe. Another contract between FIPAG and Vitens was signed in 2006 for services in five additional cities in central Mozambique – Tete, Moatize, Chimoio, Manica and Gondola. These contracts were considered transitional arrangements to prepare the services for more conventional delegated management. While Vitens’ obligations under the first contract were similar to those in AdeM’s Management Contract, its services were provided free of charge and its staffing arrangements were quite different. While AdEM management changed constantly and its expatriate-only team was based in Maputo only, according to a World Bank study, Vitens used an innovative staffing model with only the team leader residing in Mozambique, assisted by short-term experts from the Netherlands. The Dutch team developed a close working relationship with Mozambican team members, thus strengthening local capacity.^[3]

The World Bank’s 2006 completion report of the first project "rated the outcome for the project satisfactory, its sustainability likely and its institutional development impact substantial".^[7]

[edit] Responsibility for water supply and sanitation

[edit] Policy

The National Directorate of Water in the Ministry of Public Works and Housing is in charge of policy for water supply. Concerning urban water supply, Mozambique’s sector strategy is based on a delegated management framework – a public-private partnership set up, whereby assets are owned by the government and operations are managed by the private sector under a concession, lease or management contract.^[8] The Water Supply Investment and Asset Fund - the Fundo de Investimento e Patrimonio do Abastecimento de Agua (FIPAG) – is an asset holding company in the urban water sector through which the operation of water services was delegated to private lessees.

While the strategy for urban water supply is well defined, there is no clear strategy for rural water supply or for sanitation.^[9]

[edit] Regulation

The water sector is regulated by the Conselho de Regulacao do Abastecimento de Agua (CRA), with the objective to set tariffs and service quality targets, monitor compliance with the targets, review investment programs and to hear complaints by users and municipalities. CRA does not have yet the mandate to cover sanitation service.

Its main mission is “to ensure a balance between the quality of the service, the interests of consumers and the financial sustainability of the water supply systems.”^[10]

[edit] Service provision

FIPAG is the owner of water and sewerage assets in 13 cities. In the five largest cities, it has delegated service provision to a private company, Aguas de Mozambique. In the remaining cities, public municipal water companies operate and maintain the systems.

[edit] Financial aspects

[edit] Tariffs

No detailed and up-to-date data on water tariffs in Mozambique are available. In 2001 water tariffs in Maputo (excl. VAT) stood between 2350 (US$0.11/m3)and 7700 Meticais (US$0.36/m3) for residential customers, depending on the level of consumption.^[11] CRA introduced real average tariff increases of 5 to 10 percent per year in the service areas of the private company AdeM over the period 2002 2007 with the objective of achieving full cost recovery. Due to the contract structure, these increases benefited the public asset holding company FIPAG, not the private operator. FIPAG’s financial performance improved steadily as a result of the tariff increases.^[3]

[edit] Cost recovery

The government aims to gradually achieve full cost recovery for water supply, as stated in its 1998 water tariff policy. According to the World Bank, the urban asset holding company FIPAG is “achieving full cost recovery and can graduate from government subsidies”.^[8] On the other hand, the Mozambique MDG status report for water and sanitation notes that the sector as a whole still strongly depends on donor financing.^[12] In rural areas revenues are by far insufficient to recover operation and maintenance costs.^[13]

[edit] Investment

There are no reliable data on actual investments in the sector. It has been estimated that the water sector requires annual public investments of US$82M to reach the MDGs, compared to US$67M annually that have been “planned”.^[14] According to the World Bank, in 2007 Mozambique’s delegated private sector management approach has attracted about US$ 350 million to urban water over the last six years.^[8]

[edit] Financing

The Mozambique MDG status report for water and sanitation notes that the sector as a whole still strongly depends on donor financing and that donors finance about 80% of all investments between 1995 and 2005.^[12]

[edit] Efficiency

Because of the poor condition of the networks, illegal connections and vandalism of meters, unaccounted-for water remained over 50 percent in most areas in 2007. Collection ratios ranged from 84% to 97%. According to a World Bank study, staff productivity in Maputo (5.4 employees per 1000 connections) compared very favorably with large water companies in the Africa region. Staffing ratios were still high in the other areas, but were improving as the number of connections increased.^[3]

[edit] External cooperation

[edit] World Bank

A first World Bank project (1998–2006) supported building capacity, rural water supply , water resources management, and the preparation of a new urban water supply strategy through a US$36M credit. This strategy, implemented during the second water project (2004–2009), supported large-scale civil works for urban water supply systems in five cities – Maputo (the capital), Beira, Quelimane, Nampula and Pemba through a US$75m credit.^[8]

The Water Services and Institutional Support Project, a US$30M project approved in 2007, aims to increase water service coverage in the cities of Beira, Nampula, Quelimane, and Pemba under the delegated management framework and to establish an institutional and regulatory framework for water supply in smaller cities and towns.^[15]

Mozambique Water Private Sector Contracts project is a US$6M Output based aid project approved in 2007 that aims to provide subsidized water connections for domestic consumers in Maputo, Beira, Nampula, Quelimane, and Pemba. This project is implemented by FIPAG and expects to subsidize the construction of more than 30,000 shared yard taps which would impact approximately 468,000 people.^[16]

[edit] Switzerland

Since 1979, Switzerland is backing governmental efforts in the fields of rural water supply in the Northern provinces, training (training institutions, scholarships, human resource department) and institutional support to central and provincial authorities.

The Swiss program was revised in 2003 to focus more on promoting, documenting and disseminating innovative experiences and bring them to the national debate in partnership with other donors such as the World Bank and the European Union. The main focus will remain the rural population of Northern Mozambique. Swiss aid is partially channeled through NGOs such as Helvetas in Cabo Delgado Province, CARE in Nampula and Cabo Delgado provinces, and WaterAid in Niassa and Zambezia provinces. The Swiss aid budget for water and sanitation in Mozambique is about US$3M per year.^[17]

[edit] African Development Bank

The African Development Bank (AfDB) supported the water and sanitation sector with four investments projects since 1981. It provides US$19.6M of co-financing for the second national water supply project. In April 2009 it approved the Niassa Provincial Towns Water and Sanitation Project in Cuamba and Lichinga towns, supported by a US$27 million loan.^[18]

[edit] Other donors

• The Nordic Development Fund, which does not exist any more, provided co-financing for the first World Bank project.
• The Netherlands provide US$10M of co-financing for the second national water supply project.
• Canadian CIDA is involved primarily in rural water supply and sanitation. (WB ICR)
• Swedish SIDA is involved primarily in water supply in the Pungwe river basin. (WB ICR)

[edit] External links

• FIPAG
• CRA

[edit] References

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