Regulation of Commercially Operated Water and Wastewater Companies

Project description

Title: Supporting Water Sector Development in Tanzania – Regulation of Commercially Operated Water and Wastewater Companies
Commissioned by: German Federal Ministry for Economic Development and Cooperation (BMZ)
Country: Tanzania
Lead executing agency: Ministry of Water
Overall term: 2004 to 2016

Context

The Tanzanian Energy and Water Utilities Regulatory Authority (EWURA) started its work in 2006. This was the first step towards independent regulation of the Tanzanian water sector.

Objective

The regulation of Tanzania’s commercially operated water and wastewater companies is improved.

Approach

The project has supported the Energy and Water Utilities Regulatory Authority of Tanzania (EWURA) since its creation, and in particular has been promoting development in the area of economic regulation. Regulatory models and instruments are being developed and their implementation supported in partnership with EWURA. This work includes the formulation of strategic guidelines (for drawing up business plans, managing assets and ensuring water quality) and the development of cost-covering tariffs for urban water supply systems. The objective is to transform the urban water supply system, which has been operated as a subsidised state-run business to date, into an efficient sector geared towards meeting commercial necessities. The project is working together with the Association of Tanzanian Water Suppliers (ATAWAS) to this end.

The project is also working to introduce decentralised inspectorates and inspection guidelines to make the regulatory authority more efficient and effective. In addition, guidelines for applying for credit from commercial banks were developed with the Ministry of Water to make water utilities more independent.

The new MajIs information system is the central database for monitoring the provision of urban water supply services. Monitoring of water utilities’ pro-poor (poverty reduction) initiatives has been further developed within MajIs based on a survey of water supply and sanitation systems in the poor urban areas of 20 regional cities. One pilot project is testing the regulation of informal service providers (private water trucks and wells) in Dar es Salam.

Results achieved so far

EWURA guidelines on setting tariffs, drawing up business plans and managing assets have been finalised, and have been introduced at water companies. Regional water utilities submitted business plans based on the new guidelines for the first time in 2012. In the field of urban water supply, the use of the new Majls system has allowed data to be collected from companies supplying small and medium-sized towns and cities with water as well as from regional utilities. The baseline study on water supply and sanitation in poor areas completed in 2011 has provided the first sound data on the quality and quantity of services provided to people living in poor urban areas and on the services provided by informal water suppliers. Thanks to better data availability and new definitions of access to drinking water, it has been demonstrated that supply rates in urban areas, especially in Dar es Salam, are well below the levels indicated by the Ministry of Water.

THIS THEMATIC AREA IS A COMPONENT OF THE FOLLOWING PROGRAMME