Zonal Management Tor

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Model Terms of Reference

www.adb.org/water

Implementing Zonal

Management Approach toUrban Water Supplies

May 2006


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TABLE OF CONTENTS

Abstract

A. BackgroundB. Objectives

C. Scope

D. MethodologyD1. Policy and the Political Enabling EnvironmentD2. Technical, Financial and Organizational AnalysisD3. Project Management and ProcurementD4. Operational Management

E. Implementation Schedule

F. Human Resource Inputs

G. Financial Resources

H. Reports and Deliverables

Appendices1. Questionnaire for Water Utility (International Consultant)2. Questionnaire for SSPWP Piped Water Operators (Domestic

Consultants)3. Questionnaire for SSPWP Water Vendors (Enumerators)4. Questionnaire for Bottled Water Supplier (Enumerators)5. Questionnaire for Consumer Survey (Enumerators)


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Model Terms of Reference

Implementing Zonal Management Approach to Urban WaterSupplies

Abstract

RATIONALESome 700 million people in the Asia and Pacific region still lacks access to improved water supply.

People who are not connected often spend 15% of their household income for water. They buy their water fromneighbours at inflated costs, or get it from standpipes or stand-posts, where access to water is only available forshort durations.

The core issue is getting connected to piped water promptly and on affordable terms, especially for the poor. Onceconnected, people are likely to pay only 12% of their household income for piped water.

Unfortunately, it is not so easy to improve operational performance of the whole distribution network.

A possible solution would be to sub-divide the network into smaller, more manageable hydraulically isolated zones.

This would enable operators to focus resources and efforts within each zone, thereby increasing the chances ofimproved performance, reduced levels of NRW, increased water conservation through effective consumer revenuemetering, and more. The savings resulting from these service efficiencies could be directed to adjacent zones andthe process progressively repeated until the whole network has been covered and overall performance improved.

This is the zonal approach to urban water supplies.

OBJECTIVESThe zonal approachs main objectives can be summarized as follows:

24 hour piped water to all Affordable water Conservation of resources Sustainability of service Speedy Implementation of development

SCOPEThe zonal approach should not be implemented in isolation but must always be part of an integrated package thatincludes:

Policy and the Political Enabling EnvironmentGovernment endorsed and civil society informed policy on service levels, tariffs, tariff revisions, subsidies,private sector participation, etc.

Technical, Financial and Organizational AnalysisCovers water source and hydraulic zone selection, water audit, and assessment of financial viability,organizational and social aspects, and environmental impact.

Project Management and ProcurementProject and utility management covering the development of people through leadership and strongmanagement, with managers free to manage without political interference, as well as the procurementof services.

Operational ManagementBased on management at the lowest practicable level, for example sub-zone caretakers.


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A. Background1. In the Asia and Pacific region, some 570million people still need to receive improved watersupply and about 1,820 million people still need toreceive access to improved sanitation to reach theMillennium Development Goals (MDGs).1 To

achieve the MDG targets by 2015, manydeveloping member countries (DMCs)acknowledge that it is important to reach Target10 on water and sanitation by 2010, because theeconomic impact of improved piped water supplyon health and education is significant.2 WhileADB-supported projects in some DMCs, forexample Phnom Penh in Cambodia and Dalian inthe PRC, have achieved 24-hour water supply,many utilities in other DMCs have low levels ofcoverage. At five persons per connection, theeffective water supply coverage with piped

connections in 20013 was 10% in Dhaka, 32% inHo Chi Minh City, 31% in Jakarta, 32% in Manila,and 46% in Delhi. People who are not connectedoften pay water vendors about 15% of theirhousehold income for delivery of water, buyingwater from their neighbours at inflated cost, orgetting water from standpipes or stand-postswhere they only have access to water for a veryshort time each day and have difficultytransporting it to their homes. In all cases, the coreissue is getting connected to piped water promptlyand on terms affordable to those living in peri-

urban areas, especially the poor. Once connected,people are likely to pay only 12% of theirhousehold income for piped water.

2. The main issues in urban water supply indeveloping countries may be summarized as: High non revenue water (NRW). Levels are

typically 40-60% of production and often NRWcannot even be measured. Problems usuallyinclude leakage from old pipes and poorlyconstructed connections, illegal connections,illegal sale of water to vendors, poor metering /

reading / billing, and wastage from standpipes. Intermittent supply. In most of South Asia,

intermittent supply (such as 2 hours of pipedwater per day) is the norm. When asked why,the typical answer is there is not enoughwater. The example of Male in Maldives,where there is 24 hour piped supply at anaverage consumption of only 6m3 perhousehold per month, proves that this is not avalid answer.

Low piped water coverage. Typically, directpiped water connections to consumer housesin Asian cities only cover around 35% of thepopulation, with the remainder relying onstandpipes and water vendors, etc.

High price and limited access to water for thepoor. Typically the poor pay around $20 permonth for about 6m3 of water per monthfrom vendors, or travel long distances each dayto collect water from a standpipe but eventhen they may not get water. Typically the richpay $4 per month for 30m3 / month for pipedwater. High connection charges alsodiscriminate against the poor who cannotafford to pay them in advance unless, forinstance, there are facilities for payment byinstallments.

Deterioration of water sources. Groundwaterlevels in some cities are falling fast with

groundwater quality becoming increasinglysaline in some places. Where surface watersare polluted by industry, it is expensive to findmore remote good quality alternative sourcesand to transport this good quality water tocities.

Long implementation periods for projects. ADBand World Bank funded water supply projectstypically take 8-10 years to fully implement,whereas NGOs, the private sector, or localauthorities may take as little as one year for asimilar but smaller project. Time is of the

essence if the MDG targets are to be achieved.

3. Typical situations for the urban poor andthose living in peri-urban areas are: (i) utility pipedwater is not close and communities rely on small-scale water providers (SSWPs) or develop their ownsources; (ii) the utility only serves the area throughstandpipes/stand-posts, limiting per capita wateravailability and increasing inconvenience; (iii) theutility can serve the community but the cost of aconnection is so high and the terms so inflexiblethat only a few can afford to connect to pipedwater.

4. Improved operational performance of thedistribution system would lead to real benefits notonly for existing consumers through improvedservice levels and greater cost-efficiencies, butwould also enable people who currently are notconnected to the network to be supplied withwater from direct connections. Improvedoperational efficiency and an increased customer


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base would also encourage the utility to reduceconnection fees. Targeting the poor for such newconnections would materially assist in theachievement of the MDG water sector targets.

5. It is notoriously difficult to improveoperational performance of the whole distribution

network at the same time, but by sub-dividing itinto smaller, more manageable hydraulicallyisolated zones and systematically focussingresources and efforts within each zone to improveperformance can increase the chances of successand yield significant improvements in a shorttimescale. Benefits and savings in a zone can thenbe directed to adjacent zones and the processprogressively repeated until the whole network hasbeen covered and overall performance improved.This philosophy is termed the zonal approach tourban water supplies.

6. Further source development may not beneeded or could be deferred if NRW can bereduced to a more reasonable level, say to 20% ofwater entering the zone. Zones could cover up to 1million people, with caretakers appointed to betotally responsible for all services inside each sub-zone (


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informed policy on service levels, tariffs, tariffrevisions, subsidies, PSP, etc.

Technical, Financial and OrganizationalAnalysis: Water Source and Hydraulic Zone Selection

data collection on water sources, systemcoverage and characteristics of the

distribution system from existing utilityrecords, followed by analysis to identify theselected special zone.

Water Audit - how many are served byhouse connection, stand-post, tanker,tricycle, pushcart, bottled water supplier?What amounts do they receive, how muchdoes it cost them and what is the waterquality? What is the role of small scalewater providers (SSWPs) in connectingpeople to piped water through small pipedwater networks (SPWNs)?

Financial Viability - differential tariffs,automatic tariff revisions based on policyimplementation, 100% collection efficiency,etc.

Organizational and Social Aspects allocation of appropriate staff to thespecial zone and arrangements forstakeholder liaison.

Environmental Impact projected impacton sanitation and wastewater disposal.

Project Management and Procurement project and utility management covering the

development of people through leadership andstrong management, with managers free tomanage without political interference, as wellas the procurement of services.

Operational Management: - based onmanagement at the lowest practicable level,for example sub-zone caretakers.

Policy and the Political Enabling Environment:12. A clear understanding of policy on servicelevels, tariffs, tariff revisions, subsidies, and PSP is

an essential pre-requisite. In addition, nothingshould be attempted unless the zonal approachand its objectives are first endorsed at the highestpolitical level in the country as well as at thehighest local authority level. There should also be aguarantee of no political interference at any stagein the consulting, procurement, contracting ormanagement processes. Transparency must play akey part in this and so it may be appropriate toinvite a strong independent organization such as a

well-respected NGO as well as the media andacademics to give implementation of the zonalapproach a high public profile at all times.

Technical, Financial and Organizational Analysis:13. Water Source Analysis: The quantity,quality, reliability and sustainability of existingsources of water for the whole city should beassessed, including private and public dug wells,tubewells with hand-pumps, and motor drivenpumped tubewells. If a city-wide assessment is notviable then it should be undertaken in potentialspecial zones as part of the hydraulic analysis.

14. Hydraulic Analysis: The hydraulic analysisseeks to identify where hydraulically isolated zonesalready exist or can be readily developed. Ideallyeach zone should be served by a reservoir or can

be monitored by a limited number of cross-boundary zonal meters. Existing data, howeverpoor, will be the basis of the initial hydraulicanalysis to determine how to divide the city intoappropriate hydraulic zones of, for example, aboutone million people. As further data is obtainedduring project implementation the hydraulicanalysis can be refined. It is sensible for the firstzone selected for attention to be adjacent to anyexisting 24 hour service area. When a suitable zonehas been identified then good maps and plans of itwill be needed, and if not available should be

prepared step by step in the subject zone. Inaddition, data on the age, size, material andcondition of pipes, valves and meters is desirable.

15. Water Audit: Data collection and analysisof water services begins with a comprehensivewater audit. Ideally this should be carried out forthe whole city, but if this is impracticable then itshould be focused on the special zone. Theobjective of the audit is to ascertain how manypeople are served by piped connection to theirhome, whether from the utility or some SSWP orhome association, and how those not served bypiped networks obtain their water supply. ADB hasalready prepared a model TOR for this activity,including questionnaires.

16. Financial Analysis: This element of theanalysis is important because it evaluates theprojected financial impact of implementingtechnical measures and adopting a new tariff for24 hour supply based on the new service levels,


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improved collection efficiency, reduced NRW level,and expanded customer base within the specialzone. The analysis also includes the cost ofprojected capital investments in pipes, meters,valves etc., as well as operational costs.

17. Organization Analysis: An assessment ofthe institutional organization is necessary todetermine and agree with the utility which staffwill work in the special zone, how they will be paidand for how long. Utility staff would effectively beseconded, and once under the full control of thespecial zone management, revised remunerationand rules of work would apply. The objectivewould be to develop people seconded from theutility and thereby encourage sustainability.

18. Social Analysis: It is important that peopleinside the special zone are represented during the

project, possibly through an NGO, home ownerassociation or local authority. The revised role ofwater vendors and SSWPs, consumer costs,consumer service levels, etc., will all need to beassessed and the proposed improvementsexplained to these community representatives soresidents are kept fully informed at all times. Ingeneral, it is important that the zone represents alarge number of people not currently served by apiped water system to their home.

19. Sanitation, Wastewater and EnvironmentAnalysis: Consideration must also be given to theexisting environmental situation, includingsanitation and wastewater facilities, and specificallythe impact that the increased customer base andchanged consumption patterns will have onsewerage and wastewater collection, treatmentand disposal within the special zone. For instancethe volume of sullage water may increase or thedemand for water-borne sewerage may rise aspeople are connected to the piped water supplynetwork. Policies and design principles thereforeneed to be agreed and various options studied.Wherever possible, the treatment, disposal or re-use of wastewater within the zone should beadopted as a good principle to follow.

Project Management and Procurement:20. The critical parameter for success of thezonal approach is that time is of the essence. Thismay necessitate having new rules for recruitmentof consultants, procurement, contracting and

management so that decisions can be delegatedand contract disbursements made quickly.

21. Transparency and competition are also vital,as there will be a need for parallel developments totake place with different contractors in acompetitive environment. Provided there is

transparency in the contract award process andthere is seen to be real competition amongcontractors, then this should help to eliminatedelays and corruption.

22. Project management and utilitymanagement are both key ingredients to thesuccess of the zonal approach but are not thesame thing. There is little sense in developing utilitystaff to manage a project, as it is more efficientand practical to appoint consultants to do that andbe responsible for all design work and contract

documentation, bid evaluation, constructionsupervision and recommend approval of payments,providing effective continuity for implementationin other zones. However, the Project Managerwould be answerable to the Zone Utility Manager,who ideally would have extensive experience in themanagement of utility operations but also have aprivate sector background. The Zone UtilityManager would be supported by competent staffin personnel, accounting, commercial operations,engineering, social development, public relations,and environmental affairs. Close co-ordination

between the Project Manager and the Zone UtilityManager will be essential at all times.

23. No large procurement packages or civilworks contracts are envisaged. If large quantities ofpipe or other materials and equipment are to beprocured then at least two suppliers should becontracted on the same negotiated price basis.Appropriately sized and packaged pipe-laying andfittings installation contracts would be awarded tocontractors who would work in parallel for thesame negotiated contract rates. Close LocalAuthority liaison over the excavation, reinstatementand resurfacing of roads would need to be well co-ordinated. Public notices would clearly specify to allconcerned stakeholders what is happening, whenand why. Procurement, as well as covering theinstallation of replacement and additional pipesand valves, etc., may also include the appointmentof specialist companies, for example, to undertakeleakage detection surveys on a performance


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contract basis, or repair leaks or replace metersunder a schedule of rates contract.

Operational Management:24. A good surrogate performance indicatorfor the effectiveness of a city water supply is the

percentage of the population receiving 24 hourpiped water to the home. Thus in the special zonethe objective will be to connect nearly everyone toa piped water supply. Apart from the utilityproviding direct connections, SSWPs can play amajor role here by obtaining a bulk supply fromthe existing utility distribution system and providepiped water to those using standpipes or watervendors by constructing SPWNs. However, thisshould be seen as an interim measure only until theutility can extend its network and take over theSPWN. SSWPs should therefore be represented in

the staffing structure of the special zone.

25. As well as the special zone itself, each sub-zone must be capable of hydraulic isolation, withall inflows and outflows monitored by introducinga District Metering System. All consumers would beprovided with new water meters, which would beread regularly by the sub-zone caretakers and billsissued simultaneously every month. Payment ofwater bills would be made easy with no-onehaving to go further than one kilometre to paytheir water bill. Utility staff would computerize all

billings and cash payments, and analyse the resultsfor each sub-zone. Any excessive or low usagewould be investigated. Adequate resources wouldbe available to each sub-zone to repair leaks,replace meters, etc. Sub-zone improvements wouldbe progressive so that 24 hour supply is establishedone sub-zone at a time. Where appropriate,elevated tanks would be constructed to provideadequate pressure and a 24 hour supply. Regularanalysis of the district and consumer meters wouldenable NRW to be calculated. Where it isconsidered to be high, inspections and leakdetection exercises would be performed in the sub-zone to control it so that the NRW of each sub-zone is of the order of 20%.

26. Operational management of the specialzone should be based on the devolution of zonemanagement to the lowest practicable level, forexample to the sub-zone caretaker level. Allcaretakers will be accountable to District Managerswho will report to Area Managers and who in turn

will be accountable to the Zone Utility Manager. Ifthere are not many sub-zones, then the roles ofDistrict Manager and Area Manager can becombined. All operational activities such as valveoperations would be the responsibility of utilitypersonnel, and not the consultant or contractors. Aweekly report will be prepared by all managers at

each level detailing achievements made againsttargets. The Utility Manager will issue a weeklysummary report for the whole zone, as well as amonthly report for public access on the internet.An annual Development and Performance Reportwill be prepared for each Special Zone, so thatwithin three years one special zone has beendeveloped covering up to one million people witheveryone connected to a 24 hour piped watersupply and NRW at 20% or less. Work on a secondspecial zone should commence two years after thestart of the first one.

D. MethodologyD1. Policy and the Political Enabling Environment27. The consultant will hold discussions withauthorized representatives of national and localgovernment to clearly define policy on service levels,tariffs, tariff revisions, subsidies, and PSP. Inparticular, the consultant will seek firm guaranteesof no political interference in the process, and

reach agreement on government monitoring andapprovals requirements. Process transparency isessential to establish credibility and so thedissemination of information on policy and theenabling environment should be fed into thestakeholder consultations to be held during theanalysis stage to discuss technical options and togive implementation of the zonal approach a highpublic profile.

28. Sensitivity needs to be exercised in theseconsultations as there could be strong political

resistance to providing water services to illegallyestablished areas within the city, especially ifviewed as being at the apparent expense ofimproving service levels for existing consumers.Inevitably there could also be resistance from thosecurrently benefiting from an ample supply of waterat minimal cost if they see such costs likely to riseor their supply curtailed. Political buy-in andsupport at the highest levels is critical to thesuccess of the zonal approach, and without it


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progression to the project implementation stageshould be deferred.

D2. Technical, Financial and OrganizationalAnalysis(i) Water Source and Hydraulic Zone Selection29. The consultant will collect data from allexisting databases, reports, maps and drawings ofthe distribution network to obtain ascomprehensive an understanding as possible of thesupply situation concerning water sources, systemcoverage, as well as characteristics of thedistribution system. Where records are poor ornon-existent the consultant will undertakesupplementary surveys to obtain sufficientinformation to enable an analysis to be undertakenof the system in order to identify the location and

size of potential special zones. Potential zones willbe prioritised in terms of the ease and cost ofhydraulic isolation and monitoring, proximity toexisting 24 hour supply areas (indicative of theadequacy of water resources), the number ofunserved poor in the zone, etc. The consultant willdevelop a set of selection criteria and a weightingsystem acceptable to the relevant authorities toprioritise selection of the special zone.

(ii) Water Audit30. The water audit will utilize existing dataalready gathered, supplemented by surveysundertaken by the consultant in the potentialspecial zones. The main steps in the audit processare:(i) Undertake surveys of the water utility, SSWPs

and consumers in the potential zones, andanalyze the results to assess the size andlocation of the target market and the capacityof existing SSWPs to meet the unfulfilleddemand.

(ii) Hold stakeholder consultation with the targetcommunities, the utility, SSWPs, localgovernment representatives, NGOs, etc., anddevelop appropriate SSWP registrationprocedures, including time-bound licenses andMemoranda of Agreement with theMunicipalities and formal utility leading toultimate transfer of responsibility for serviceprovision to them.

31. The surveys will be undertaken by domesticconsultants who will be responsible for the surveylogistics and supervising the enumerators (thesecould be students) undertaking the surveys in theseparate geographic areas in the city. The domesticconsultants will pre-test the sample questionnairesfor all the surveys before use by the enumerators.

The domestic consultants will also be responsiblefor interviewing all existing SSWP piped waternetwork operators. Enumerators will undertake 5%sample consumer surveys in each targetcommunity within a zone, as well as interviewingSSWP water vendors and bottled water suppliersoperating in each of their areas. Formal permissionto survey will be obtained from the localgovernment by the domestic consultants and acopy provided to each enumerator, who will alsoas a matter of courtesy introduce themselves to theleader of each community in which they operate.

An international consultant will have overallresponsibility for the surveys, will interview thewater utility company, analyze all results and makerecommendations.32. The domestic consultants will brief theenumerators regarding (i) location, (ii) how tosample for interview, (iii) who to interview, (iv)length of interview, (v) number of interviews perday, (vi) transport, (vii) total time to completeinterviews, (viii) payment for work, (ix) clarifications,(x) testing of survey, (xi) permit to survey and (xii)

the questionnaire. Enumerators will also documentany anecdotal information given to them about thewater industry, and which may not correspond toany question asked.

33. Quality control on the surveys will bemaintained by random field checks undertaken byboth the domestic and the internationalconsultants. The name of the person beinginterviewed, their address and the name of theperson undertaking the interview and the date ofthe interview must be recorded on eachquestionnaire completed. If an enumerator isfound to be falsifying results they will not be paidand all work already undertaken by them will berepeated by a new enumerator interviewingdifferent people.

34. Questionnaires will be prepared as listedbelow and will be translated into the locallanguage by the domestic consultant: ADB hasalready prepared a model TOR for this activity


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including questionnaires (see Appendices 1 to 5 forexample questionnaire templates).

35. Questionnaire Water Utility (Appendix 1).Apart from details of individual customers this willidentify the recipients of bulk sales includingSSWPs, sub-divisions, homeowner associations, etc.

Its focus will be on identifying the water sourceand for each type of customer (non-domestic,house service connection, standpipe, etc.) the totalnumber of connections, the volume sold permonth and the revenue gained per month. It willprovide information on production volume versusconsumption volume to determine NRW, and willnote the extent of 24-hour piped water coverage.The international consultant will carry out theinterview.

36. Questionnaire SSWP Piped WaterNetwork Operators (Appendix 2). The domesticconsultant will carry out interviews with everySSWP in each survey area. The questionnaire willseek essentially the same information as for theutility except the quality of the service to thecustomer such as direct connection or hose anddrums will be determined. The method andfrequency of payment is an important output fromthis interview.

37. Questionnaire SSPWP Water Vendor(Appendix 3). If water vendors operate in a surveyzone, then at least three different vendors of eachtype (water tanker, motorized tricycle, pedaledtricycle, rickshaw, pushcart, etc.) should beinterviewed by the enumerator to estimate thetotal number of vendors of each type operating inthat zone. Pertinent information sought includestheir source of water (to be visually checked),means of transport of water, number and type ofcustomers, average distance transported, volumesold and revenue gained. It is important toestablish how much the vendor pays at source forthe water and to whom it is paid.

38. Questionnaire SSPWP Bottled WaterSupplier (Appendix 4). The enumerator willinterview at least five different bottled watersuppliers in his/her survey zone and estimate thetotal number of bottled water suppliers and type(for example mixed goods shop, sole purposebottled water shop, treatment and sale on site,deliveries of bottled water, etc.) in that zone. Thefocus of the interview is to obtain information

about the source of water, type of treatmentprovided, volume of water sold per month, pricepaid and the total revenue.

39. Questionnaire Water Consumer(Appendix 5). The enumerator must obtain a 5%representative sample of all water users in his/her

zone, identifying those served by the utility and bySSWPs, and surveying them in numbersproportional to their prevalence. The focus will beon water source (consumers may get water frommore than one source), access to water, waterquality, reliability of supply, availability of supply,volume consumed per month and cost per month.It is important to record the number of persons ineach household. This survey must include arepresentative number of non-domestic consumers,especially industrial users.

40. Analysis of results will be preceded byobtaining any clarifications required from thedomestic consultant and the enumerators. Thedomestic consultant will also collate andsummarize answers to all the questions. Theinternational consultant will then consider thepoints of interest, deriving the following basic datafrom the summary of results:

Coverage % with 24 hour supply to individualhouse connection by utility

Coverage % with individual house connectionby the utility

Coverage % including all utility domesticconnections and standpipes.

Coverage % with piped water in home (allwater providers).

Average household consumption per month bydifferent sources of supply

Average household cost per month by differentsources of supply.

Total monies paid by SSWPs at source permonth.

Average price of utility water. Average prices of SSWP water (networkoperator, vendor, water bottler). Revenue turnover (a) utility, (b) SSWPs

(network operator, vendor, bottled watersupplier).

Volume of sales (a) utility, (b) SSWPs (networkoperator, vendor, bottled water supplier).

Official NRW figure from utility. Comparison of cost and consumption - piped

water versus non-piped water


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Proportion of utility water volume sold to non-domestic consumers

Proportion of utility water revenue derivedfrom non-domestic consumers

Comparison of average tariff for utility water:domestic versus non-domestic

Proportion of all piped water where utilitymaintains the reticulation

Rating of customer satisfaction with utility.41. The main purpose of the assessment is tofocus on those not served with piped water and toassess the costs and benefits to them of switchingto a piped water supply, as well as the feasibility ofdoing so through an SSWP contract. The findingswould be presented and discussed at a stakeholderconsultation to guide the zonal approach program,enhance cost recovery and institutionaldevelopment to promote service sustainability,

encourage water conservation (including reductionof NRW), and ensure that as far as possible theurban poor are connected to piped water serviceswithin their ability to pay.

42. Following completion of the analysis, keyfindings will be disseminated to all stakeholders.About two weeks later, a one-day stakeholderconsultation will be convened for all stakeholders.The morning would be devoted to presentation ofresults, analysis of the surveys and discussion of thefindings, concluding with an overview of options

for the way forward. The afternoon would bedevoted to discussion of those options and todeveloping a consensus on the preferred wayforward. The stakeholder consultation will befacilitated by a domestic consultant skilled in suchwork, or by a well respected and capable localperson.

43. In cases where the formal utility decides foreconomic or technical reasons not to extend itsservices into some areas within the zone, thepotential for SSPWPs to provide the service in the

interim will be explored. ADB has prepared amodel PPTA ToR for mainstreaming SSPWPs whichcan be used if this approach to serve those areas isadopted. The following is a summary of theprocess to formally recognise the SSPWP by themunicipal authorities and also the formal utility toensure that the area will not be re-developed orthe water services network extended into it for aspecified number of years. Formal recognition willprovide security of tenure to the SSPWP and enable

plans to be developed with confidence and servicespriced to obtain an appropriate return on capitalduring the period of tenure and enable themaximum number of poor to be connected. Thiscould be achieved through a simple registrationprocedure, such as issuing a license detailing thearea of license jurisdiction, the obligations of each

party, reporting requirements and their frequency,periodic audits, remedies for failure to conform tothe license, an appeals process, the licenseduration, periodic license reviews, exit strategies orextension options at the conclusion of the licenseperiod. At the end of the license term the assetswill be transferred to the formal utility. Areasonable license fee could be charged to coveradministration costs. The terms of the licensewould also have to be approved by the formalutility. A separate Memorandum of Agreementshould be drawn up between the SSWP and the

formal utility to cover such issues as: appropriatetechnical standards and materials, provision of abulk water supply, maximum/minimum dailyvolumes, tariff, metering details, remedial actionsin the event of supply deficiencies, periodic reviews,etc. The municipal license and the utility agreementwould also safeguard the position of the SSWP inthe event of a regulatory body being subsequentlyset up to control the sector.

44. The license and Memorandum ofAgreement should be relatively simple documents,

with bureaucracy kept to a minimum. The localconsultant, with support from the internationalconsultant, will develop an appropriate licenseformat and a Memorandum of Understandingacceptable to the Municipality and the formalutility following consultation with existing SSPWPs.

(iii) Financial Viability45. The consultant will develop a simple Excelspreadsheet financial model to simulate the currentstatus of water supply in the special zone and toinvestigate projections of the impact of technicalimprovements such as reduced NRW, progressiveachievement of 24 hour supply and theintroduction of a new tariff, and the expandedpiped water customer base. Estimates will be madefor input into the model of the necessary capitaland recurrent operational expenditures to deliverthese projected new levels of service and tomaintain them. Different scenarios will benstudiedby the consultant and recommendations made


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regarding the optimal strategy tonimplement thezonal approach in the special zone. For instance,the selection of specific subzones that can yieldearly results and be used as demonstration areaswould serve to promote the strategy and resolveany major issues.

46. A key factor to take into consideration willbe the response of existing consumers to increasedtariff levels in the 24 hour supply sub-zones. Theconsultant will investigate price elasticity anddevelop a strategy for linking service levelimprovements to progressive tariff increases, andwill also make recommendations on the rate ofsuch tariff increases. For instance, to avoid majorcustomer dissatisfaction one strategy might be toonly increase tariffs initially by a small marginabove inflation so customers do not experience asudden increase in their water bills, followed by a

more rapid rate of annual tariff increases. Muchwill depend on existing tariff levels, and wheretariffs are currently unsustainably low it will bedifficult to increase them even by a reasonableamount if the increase represents a majorproportion of the original tariff. A balance willhave to be sought between moving towards a fullcost-recovery tariff and the impact on customerattitudes and responses.

(iv) Organizational and Social Aspects47. The selection and allocation of appropriatestaff from the utility to work exclusively with theconsultant in the special zone will have a majorimpact on the success of the zonal approachstrategy, as they will have extensive detailed localinformation on the distribution network and itscustomers. The consultant will prepare a staffingstrategy in consultation with the water utility forthe secondment of selected staff and theirintegration into the project team. The strategy willalso include a training programme and knowledgetransfer plan to develop the skills of the secondeesand also to ensure the long-term sustainability ofthe special zones and ultimately the whole networkas the zonal approach is implemented. A keyoutput of the strategy will be the development ofpeople through leadership and strongmanagement. The strategy will also define lines ofcommunication, operational responsibilities andreporting procedures (for example decisions onvalve operations, etc.), and arrangements forliaison with all stakeholders.

48. Stakeholder consultation and, in particular,the provision of information to and feed-back fromlocal residents on what is happening and overallprogress and achievements is very important andwill require the consultant to develop strong linkswith the various stakeholders. The consultant will

then develop a consultation strategy that promotesgood co-ordination and liaison and that fullyrepresents the views of people directly affected bythe work. This could possibly be achieved throughthe appointment of an NGO, home ownerassociation or the local authority to act as therepresentative of the local community.

(v) Environmental Impact49. The consultant will assess the impact ofimproved service levels and an increased customer

base on the environment of the zone. This willspecifically include the impact of increased sullageor grey water and the potential for increased use ofwaterborne sewerage facilities on the existingsewerage, sanitation and drainage systems and thegeneral environment within the zone. This shouldalso include consideration of revised waterconsumption patterns and the potential for theremoval of coping strategies for intermittent watersupply, for example ground tanks, pumps andoverhead tanks, etc. The consultant will alsoinvestigate appropriate solutions to any problems

identified, and develop policies and design criteriato satisfactorily address them. Findings andrecommendations will be discussed with theappropriate organizations responsible, and a reportprepared detailing the proposed improvementstrategy to up-grade the zonal environment andminimize potential detrimental impacts.

D3. Project Management and Procurement50. As the Project Manager, the consultant willbe fully responsible for the detailed planning andmanagement of the project as well as for all designwork and the preparation of contractdocumentation. This will include the undertakingof feasibility studies, outline and detailed designsfor contracts, preparation of contract documentsas well as notices and adverts, bid evaluationsincluding the development of evaluation criteriaand weightings, construction supervision andcommissioning. As part of his constructionsupervision duties the consultant will check and


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review requests for payments by contractors andrecommend approval of those payments, andundertake periodic inspections to identify defectivework and subsequent inspections to ensure thatremedial work has been completed satisfactorily.The consultant will also issue SubstantialCompletion and Taking-Over Certificates, etc., and

ensure that record drawings have been preparedand are accurate.

51. The consultant will be answerable to, andwill liaise closely with, the Zone Utility Manager,who should be free to manage without politicalinterference and would be supported by a smallcore of competent staff with expertise in relevantdisciplines, including commercial operations,engineering, public relations, and environmentalaffairs. Where existing contractor selection andappointment procedures are considered

unnecessarily lengthy then the consultant willpropose and agree with senior utility managementappropriate new or revised rules and recruitmentprocedures so that decisions can be delegated,contract disbursements made quickly, andmanagement streamlined. Any revised or new rulesshould promote transparency and competition,and should also help to eliminate delays andcorruption.

52. The consultant will be responsible forpackaging the work required into contracts that

encourage more local suppliers and contractors tobid for the work. Where there are largeprocurement or construction requirements thenthe work will be split into packages such thatsmaller contractors can be contracted on the samenegotiated price basis. This will encouragecompetition, mobilize and develop local resourcesand speed up the contracting process and servicedelivery. The consultant and contractors will liaiseclosely with local authorities concerning theexcavation, reinstatement and resurfacing of roads.

D4. Operational Management53. Operational management of the specialzone will be based on the devolution of zonemanagement to the lowest practicable level: thesub-zone caretaker. All caretakers will beaccountable to District Managers, Area Managersand ultimately to the Zone Utility Manager. Weeklyreports will be prepared by all managers detailingachievements made against targets. The Utility

Manager will issue a weekly summary report forthe whole zone, as well as a monthly report forpublic access on the internet. An annualDevelopment and Performance Report will also beprepared for each special zone.

54. Each sub-zone will be capable of hydraulic

isolation, with all inflows and outflows monitoredby a District Metering System. All consumers willbe provided with new water meters, which will beread regularly by the sub-zone caretakers and billsissued simultaneously every month. Utility staff willcomputerize all billings and cash payments, andwill analyse the results for each sub-zone, with anyexcessive or low usage investigated.

55. District and consumer meters will beanalyzed regularly to determine NRW and toidentify trends. Inspections and leak detection

exercises will be performed in the sub-zone todetermine the physical leakage component fromnight-time tests, followed by leakage detectionsurveys in areas where high leakage is occurring.The aim will be to progressively reduce NRW until itis at its lowest practicable level in each sub-zone,aiming for an overall level of no more than 20% inthe special zone. Meter analysis and surveys will beundertaken regularly to determine base leakagelevels, monitor the situation and identifyunacceptable increases in demand that wouldtrigger more detailed surveys and leakage

detection and repair programs. Adequate resourcesshould be available in each sub-zone to repair leaks,replace meters, etc., and progressively improvesub-zones so 24 hour supply is established onesub-zone at a time.

E. Implementation ScheduleReview policy and the politicalenabling environment

0.5 months

Surveys of utility, consumers and

SSWPs

1.0 months

Clarifications and preparation ofwater audit results

0.5 months

Hydraulic analysis and special zoneselection report

1.0 months

Stakeholder consultation andreport of findings

1.0 months

Development ofregistration/license procedures

0.5 months

Financial Analysis (during 1.0 months


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stakeholder consultation period)Organizational and social analysis(during license development)

0.5 months

Environmental Impact (duringstakeholder consultation period)

1.0 months

Project Management andProcurement

31.5 months

Operational Management permanentTotal Implementation Period 36.0 (thirtysix) months

F. Human Resource InputsEnumerators (or students) 1 person

month/communityDomestic water supplysurvey consultant

2 personmonths/community

Stakeholder consultation

facilitator (inc. preparation)

1 person

week/communityDomestic financialconsultant

2 person months

Domestic water designconsultants

12 person months

Domestic specification/contract drafting consultants

6 person months

Domestic sociologist/community liaison specialist

6 person months

Domestic watersupply/resident engineers

36 person months

Leakage/metering specialist 12 person months

International consultant 24 person months(Note: Seconded utility personnel and sub-zonecaretakers not included)

G. Financial ResourcesEnumerators, consultants, facilitator $Local transport $Project office and facilities $Stakeholder consultation $Reports / communications $

Total $

H. Reports and Deliverables:1. Water Audit and Hydraulic Analysis Report forZone ______________Date

Part A. Summary of Results of Surveys(Domestic Consultants)Part B. Analysis of Results (InternationalConsultant)

This two- part report will be due for completionnot later than three months after the start of theassignment.

2. Financial Viability and Implementation StrategyReport for Zone _________DateLocal/International ConsultantThis report will be due not later than four monthsafter the start of the assignment.

3. Environmental Impact Report for Zone___________DateLocal/International ConsultantThis report will be due not later than four monthsafter the start of the assignment.

4. Report of Stakeholder Consultation on WaterSupply in Zone ___________DateInternational ConsultantThis report will be due not later than four monthsafter the start of the assignment.

5. SSWP License and Memorandum ofUnderstanding for Community _____DateLocal/International ConsultantThe license and MoA will be due not later thanfour and one half months after the start of theassignment.

6. Staffing and Training Strategy Report for Zone_________DateLocal/International ConsultantThis report will be due not later than four and onehalf months after the start of the assignment.

7. Final Report for Zone _________DateLocal/International Consultant


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This report will be due in draft format one monthbefore the end of the project, with the final reportsubmitted 2 weeks after the receipt of comments.

Appendices1. Questionnaire for Water Utility (International

Consultant)2. Questionnaire for SSPWP Piped Water

Operators (Domestic Consultants)3. Questionnaire for SSPWP Water Vendors

(Enumerators)4. Questionnaire for Bottled Water Supplier

(Enumerators)5. Questionnaire for Consumer Survey

(Enumerators)


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Questionnaire

for Water Utility

Name of Water Utility Date

Name of Person who answered this questionnaire Position

1. Name of City

2. Population in City 3. Population in Utility Service Area

4. Population Served by Utility (Direct) 5. Population Served by Utility (Bulk Supply / Indirect)

6. Population Served by House Connection 7. Population Served by Shared Connection

8. Population Served by Standpipe or Community Tank 9. Population Served by Utility Tanker

10. Numberof HouseConnections

a. Metered b. MeterNotWorking

c. NotMetered

11. Number ofSharedConnections

a.Metered

b. MeterNotWorking

c. NotMetered

12. Number ofStandpipes

a. Metered b. Meter NotWorking

c. Not Metered

14. Number ofCommunityTanks

a. Metered b. Meter NotWorking

c. Not Metered

13. Numberof UtilityTankers

a. Capacity oftankers

15. Numberof BulkConnection

s


c. NotMetered

16. Number ofConnections toIndustry/ Other


c. NotMetered

17. Number of House Connections with 24 Hour Service 18. Percentage of Service Area with 24 Hour Supply

19. Number of Sources of Treated Water for PipedSupply

20. Production sources metered and working

Appendix 1


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21. NRW for Utility%

a. Leakage % b. Mis-Metering % c. Illegal Connection % d. Illegal Sale of Water%

22. Number of Meters replaced in last 12 months 23. Total Consumption by House Connection Per Month m3

24. Total Consumption by Shared Connections PerMonth m3

25. Total Consumption by Standpipe or Community Tank per Monthm3

26. Total Consumption by Utility Tanker Per Month m3 27. Total Consumption by Bulk Supply to Small Private PipedWater Operators/Vendors Per Month m3

28. Total Consumption for Municipal Use Per Month m3 29. Total Consumption by Industry/ Other Per Month m3

30. Total Money Billed Per Month for House Connections*

31. Total Money Billed Per Month for Shared Connections *

32. Total Money Billed Per Month for Standpipes orCommunity Tanks *

33. Total Money Billed Per Month for Utility Tanker Services *

34. Total Money Billed Per Month for Bulk Supply toSmall Private Piped Water Operators/Vendors *

35. Total Money Billed Per Month for Industry/Other *

36. Number of new connections installed in last 12months (domestic)

37. Number of new connections installed in last 12 months (non-domestic)

38. New connection fee and terms of payment(domestic)*

39. Accounts receivable in equivalent months of billing

40. Number of people employed by utility.

*Please indicate in local currency.

NRW =Non-revenue Water = Production - Consumption%Production

Consultant to independently and randomly check domestic meters (40), industrial meters(10), and accounts on computer (100).

Name of Consultant Interviewer


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Questionnaire

for SSWP - Piped Water Network OperatorsName of Company/Organization if any Date


1. Location of Piped System 2. Total Population Served by the System

3. Population Served by House Connections 4. Population Served by Shared Connections

5. Population Served by Standpipe or Community Tank 6. Source of Water

7. Cost of Water at Source $/m3 8. Volume of Water Received at Source m3

9. NRW % 10. Number of House Connections

11. Number of Shared Connections 12. Number of Standpipes and Community Tanks

13. Population Receiving 24 Hour Supply by House Connection 14. Consumption Per Month from House Connections m3

15. Consumption Per Month from Shared Connections m3 16. Consumption Per Month from Standpipes or Community Tanksm3

17. Money Received Per Month from House Connections * 18. Money Received Per Month from Shared Connections*

19. Money Received Per Month from Standpipes or CommunityTanks * 20. Water Treatment Provided by the System

22. License or Agreement with Local Authority21. How Long in Business

Yes

No

* Please indicate in local currency.

NRW =Non-revenue Water = Production - Consumption%Production

Name of Consultant Interviewer

Appendix 2


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Questionnaire

for SSPWP -Water Vendors

Name of Company/Organization if any Date


1. Location of vendor 2. Population served by vendor

3. Population served by tanker 4. Population served by pushcart/tricycle

5. Businesses served by vendor 6. Source of water

7. Cost of water at source* 8. Average distance for delivery of water (km)

9. Volume of water delivered per day by tanker m3 10. Volume of water delivered per day by pushcart / tricycle m3

11. Revenue received per day for water delivered by tanker * 12. Revenue received per day for water delivered bypushcart/tricycle *

13. Number of tankers in your business 14. Number of pushcarts / tricycles in your business

15. Fuel cost per day for power cycles * 16. Fuel cost per day for tankers *

17. Approval of local government

Yes

No

18. License fee to pay *

19. How long in business 20. Average capacity of tanker m3

21. Average capacity of full load in pushcart or tricycle (liters)


Name of Enumerator

Appendix 3


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Questionnaire

for SSPWP - Bottled Water Suppliers

Name of Company/Organization if any Date


1. Location 2. Source of Water

3. Cost of Water at Source 4. Treatment Provided On-Site

5. Volume of water sold per day 6.. Revenue in one day*

7. Proportion sold to business 8. Average household volume purchased per day

9. Average household cost per day 10. License fees to Local Government

11. How long in business 12. Smallest volume sold /cost

13. Largest volume sold / cost 14. Business growing or static

15. Delivery services / distance 16. Approx cost loading % for delivery*

17. Costs per month in power, chemicals, rent, staff etc*


Name of Enumerator

Appendix 4


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Name of Person who answered this questionnaire Date

2. Who supplies you with water

Water Utility Water Vendor1. Location

Small Private Piped Water Own Well3. What is the source of water 4. Is the water treated

5. How much water do you use per month /per day m3 (last twobills)*

6. How much does this cost you per month / per day (last two bills)*

7. How many people in your household 8. How much bottled water do you use per day (liters)

10. How far do you go to access water9. How much does the bottled water cost you per day *

Home

< 100m

> 100m

11. How is the water quality 12. How is the service from the utility

Good

Fair

Poor

Good

Fair

Poor

13. For how many hours per day is water available 14. Is the supply reliable

15. How is the service of the Small Private Piped Water Operator 16. How is the service of the water vendor

Good

Fair

Poor

Good

Fair

Poor

17. If you get water from the utility is the supply metered and working 18. If you dont have piped water then when do you expect it

19. What is your monthly power bill 20. Are there pipe leaks in your street

21. Are there water leaks in your home


Name of Enumerator

Appendix 5

Zonal Management Tor

Documents

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