Small scale independent providers of water and sanitation to the urban poor : a case of Kampala, Uganda

0~~~~~~~ 30358 . * SMALL SCALE INDEPENDENT PROVIDERS OF WATER AND * SANITATION TO THE URBAN POOR A Case of Kampala, Uganda 0g Water and * Sanitation Program to help the poor gain R C sustaiined access to ihnproved waiter supply opd sailitation servites International Water and Sanitation Centre -~~~~~~~~~~~~~~~adsntto eie  I I  S * SMALL SCALE INDEPENDENT PROVIDERS OF WATER AND SANITATION TO THE URBAN POOR . A Case of Kampala, Uganda 0 0 . Prepared by Bill Wandera . Edited by Elizabeth Obel-Lawson and Bernard Njoroge November 1999 1-  i I I i I I I  . . LIST OF ABBREVIATIONS AND ACRONYMS ADB African Development Bank CIP Commercial Independent Providers DANIDA Danish International Development Agency DWD Directorate of Water Development EEC European E-conomic Commission H/Cs House Connections IDA International development agency * IMF International Monetary Fund KCC Kampala City Council KfW German Technical Corporation NGOs Non-Governmental organizations NWSC National Water and Sewerage Corporation * UEB Uganda Electricity Board PSP Private Sector Program SSiPs Small Scale Independent F'roviders UES Urban Environmental Sanitation VIP Ventilated Improved Pit VVSP-ESA Water and Sanitation Program - East and Southein Africa 0 ii  l F | ,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~  S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TABLE OF CONTENTS LIST OF ABBREVIATIONS AND ACRONYMS ..... ..................... .,,,,.,,,, , .,..,,,,,..,.,..,,...II TABLE OF CONTENTS .H.....bI FOREWORD .V...... . ...... , , , ,, . . EXECUTIVE SUMMARY ........................I INTRODUCTION STUDY METHODOLOGY BACKGROUND TO THE STUDY SECTOR PERFORMANCE OVERVIEW MAIN FINDINGS FACTORS FOR SUCCESS CONSTRAINTS THE WAY FORWARD INTRODUCTION .5 * BACKGROUND KAMPALA CITY PROFIILE WATER SOURCES EVOLUTION OF SSIPS SECTOR PERFORMANCE OVERVIEW .7 WATER SUPPLY SUB-SECTOR SANITATION SUB-SEC'TOR INSTITUTIONAL, LEGAL AND REGULATORY FRAMEWCIRK CHARACTERISTICS OF SSIPS .11 * WATER SUPPLY SUB-SECTOR SANIIATION SUB-SECTOR ENABLING FACTORS, CONSTRAINTS AND THREATS .18 ENABLING FACTORS CONSTRAINTS THREATS THE WAY FORWARD ...................... 21 WATER SUPPLY SUB-SECTOR SANITATION SUB-SECTOR ANNEXES: PROFILES OF SSIPS .22 PROFILE A: WATER TANKERS PROFILE B: WATER KIOSK OPERATORS PROFILE C: PIONEERD OF PRIVATE WATER SYSTEMS PROFILE D: MANAGERS OF PUBLIC FOILET FACILITIES * PROFILE E: CESSPOOL EMPTIER OPERATORS PROFILE F: KATWE ALLIED PROGRESSIVE ASSOCIATION (KAPA) - iii  I I I  S Foreword The urban poor constitute the segment of the population that is the most affected by the lack of access to safe water supply and sanitation. Living in overcrowded areas, the urban poor pays the most for water and sanitation services and suffers the greatest in terrns of impaired health and lost economic opportunities. * Most of the urban poor live in pern-urban and informal settlements that are not served by water and sanitation utilities. Small-scale private operators provide whatever services available to them. The constraints and incentives under which these Small Scale independent Providers (SSiPs) operate are poorly understood. Often considered part of the problem, they are increasingly recognized as part of the solution. This report summarizes the findings of a case study conducted in Kampala, Uganda. The Regional Office for East and Southern Africa of the Water and Sanitation Program (WSP-ESA) with the support of the International Research Center in the Netherlands commissioned local consultant to carry out the study. 1The main purpose was to investgate the potential of SSiPs to improve, expand and sustain urban environmental sanitation (UES) services at affordable cost. The study alongside others conducted in Dar-es-Salaam, Tanzania; and Nairobi and Mombasa, Kenya have helped create a better understanding of the SSiPs. Their diverse types, scale of operatons and comparatve advantages that enable them to serve up to 90% of the urban poor population in many cities in sub-Saharan Africa is much clearer and well demonstrated. S The studies have documented the institutional and legal context under which the SSiPs operate and identified their strengths and weaknesses. Although the studies were undertaken primarily as fact-finding exercises, they have also suggested ways and rneans through which the operations of the SSiPs could be enhanced, It is clear that prograrns to improve services to urban poor will have to recognize them as key actors and potential partners. The study has also shown the need for planners and policy makers to base * their work on understandlig of the markets for water and sanitation at the level of cities and settlements. * 1'/ ( {/> Jean H. Doyen Regional Manager WSP-ESA . 0 . iv  I I I  Executive Summary Introduction This report is based on the findings of a case study of small-scale independent providers (SSiPs) in environmental sanitation and the provision of water to the poor people of Kampala, Uganda. The study was conducted by the Water and Sanitation Program - East and Southerri Africa (WSP-ESA) in December 1998 and January 1999. The main purpose of the study was to investigate the potential of SSiPs to improve, expand and sustain urban environmental sanitation (UES) services at affordable costs. The SSiPs study was part of a wider regional project being piloted in seven African cities. These included Bamnako, Mali; Conakry, Guinea; Cotonou, Benin; Dakar, Senegal; Dar es Salaam, Tanzania; and Mombasa and Nairobi, Kenya. The International Water and * Sanitation Center (IRC) in the Netherlands funded the case study. The specific outputs were: * a greater understariding of the types of service providers and the scale of their operations; * an assessment of the cornparative advantage of independent service providers and why the poor * turn to them; * an understanding of the institutional and legal context in which SSiPs operate; * the identification of strengths and weaknesses of SSiPs to evaluate the potential for further developing their activities; and, * The identification of bottlenecks that hinder the development of SSiPs and recommend ways and means through which they can be overcome. Study Methodology The study was carried out through review of relevant documents from public institutions (both governmental and non- governmental) and donor agencies. This was followed by questionnaire interviews with key Informants; household * users, providers and operators, using transect walk method FocLIs group discussions were then held with operators. Finally, follow-up workshops helped to synthesize the findings and recomrnendations and chart out the way forward. Background to the Study Kampala, the capital city of Uganda, has a population of about one million people (1991 census). It has an annual * growth rate of 6 percent compared to National growth rate of about 4.5 percent. The city's topography - comprising 21 hills and valleys located at an altitude of 1,250 meters above sea level - poses serious challenges to planners when designing Kampala's social infrastructure expansion programs. Almost 30 years after civil strives anc political instability of the 1970s that demonstrated the country there is a weak * enforcement of urban planning regulations and procedures. This has been followed by a breakdown in the delivery of UES services. The situation has resulted in a proliferation of informal settlements throughout Kampala at a rate that has outstripped the capacity of the city administration authority to provide the adequate social services. Formal settlements represent only about 10-15 percent of the total built-up area. Sector Performance Overview In the last ten years there has been an increase in clonor involvement - mainly the World Bank/IDA, ADB, EEC, DANIDA and KfW - in the rehabilitation of urban water supply and sewerage systems in Uganda. UES services in Kampala are unsatisfactory. Water and sewerage services have been characterized by low performance efficiencies, with about half the water supply not generating any revenue, low bills collection efficiency I  levels of around 70 percent and overstaffing. The NWSC has been unable to finance the extension of services to the peri-urban high density, low-income settlements of Kampala. The water and sanitation sub-sector has yet to be reformed and liberalized, Consequently, the public enterprises continue to access cheap investment credits at the expense of the SSiPs, despite the fact that both providers are competing for the same market. Water supply sub-sector The main sources of water supply for Kampala are Lake Victoria, natural springs and boreholes. Only about 30 percent of the city's population have direct access to piped water. The rest depend on point water sources such as shallow wells, protected and unprotected springs and on SSiPs services, The NWSC water system, which consists of treatment, pumping, storage and distribution facilities, has a capacity of about 100 million litres per day inclusive of leakages and other losses. Sanitation sub-sector The sewerage network. serves only rine percent ol the targeted water consumers located mainly in the 'old town', which includes Old Kampala, Nakasero, Kololo, the central commercial districts, Mbuyu and Naguru. On-site sanitation technologies, mainly pit latrines serve the remaining 91 percent of the city's population. About two percent of Kampala's residents have no access to any form ol sanitation service. Main Findings Institutional, legal and regulatory framework The National Water and Sewerage Corporation (NWSC), a public enterprise under the Ministry of Water, Lands and Environment monopolizes the provision of water and sewerage services in the country. Likewise, the Kampala City Council (KCC) has sole respcnsibility for service for on-site sanitation as well as solid waste management. The operation and profitability of SSiPs depend largely on the policies, regulations, tariffs and other conditions imposed by the NWSC. For instance, a recent imposition of US$ 15 dumping charge per trip on all private cesspool operators has greatly slowed down the operations of SSiPs, High water tariffs and frequent disconnection have compelled the SSiPs that operate public flush toilets to supplement their water supply by purchasing pick-ups and water tankers, thus raising their operational costs. Following many years of inadequate, outmoded and scattered legislation for the water sector, the Government of Uganda formulated a new Water Statute that allows for private sector participation. This subject to clearance from NWSC. This requirement has discouraged the development and operation of private boreholes. Moreover, due to limited publicity of the new regulations, SSiPs are hardly aware of their rights or obligations under the revised legal framework. The Public Heaith Act and related legal provisions have not yet been revised and updated to accommodate the SSiPs. This means that in reality, all sanitation SSiPs, including those that are contracted by the KCC to manage public toilets, are acting outside the law. Characteristics of SSiPs Water supply suib-sector Private sector water services in Kampala are in three main categories: kiosk operators, water truckers who transport water in tankers to neighborhoods without municipal water supply, and owners of small water distribution systems connected to boreholes. The price of SSiPs-managed water varies between US$ 0.05 and US$ 0.2 per 20-litre jerrican depending on location and whether the water is vendor-delivered or not. Water Kiosks Kiosks obtain water from secondary distribution networks constructed by communities or NGOs. The kiosk operators are in two distinct categories: the individual standpoint operator who sells water to 200 to 300 users and the 'large scale' operator with a number of kiosks selling water to villages. Registered water kiosks supply only about 20 2  percent of the total demand within this service category alone. The quantity of water sold through water kiosks is 1,010,000 litres per day; most of which goes to the private sector (640,000 litres), Kiosks sell their water at an average price of US$ 3.6 per 1,000 litres. The cost of constructing a water kiosk, including plumbing is US$ 290. Water vending by bicycla is mainly found in neighborhoods oLItside the rnunicipal boundaries. Water tankers * @ There are eight water tankers in the city operating two trips per day on average, working for a totai of 350 days a year. They draw water from the NWSC water distribution network and deliver it to the fringe areas of Kampala outside the network. Each trucK of 10,000 litres capacity initially costs an average of US$ 7,250 and lasts up to ten years. The trucKs purchase water at US$ 1.08 and sell at US$ 4.34 per 1,000 litres, Independent prinmary operators * One entrepreneur marages five private water systems countrywide, two of which are in Kampala serving an estimated total population of 600 people. This SSiP offers both coin-operated kiosks and in-house connection services. The entrepreneur, a professional engineer, reported a pre-tax corporate turnover of US$ 120,000 in 1998. Sanitation sub-sector The liquid waste SSiPs are in two categories: the cesspit emptying services and management of public toilets. Cesspool emptier operators There are five private trucks offering cesspit emptier services in Kampala. They operate an average of one trip per day working for a total of 350 days a year. The NGOs operate two trucks through the city council's public health department, The charge for cesspit-emptying services varies from US$ 15 for NGO-managed services to US$ 60 for * privately run operations. A private cesspool truck costs US$ 32,000 including renovation, license, tax and company registration. Managers of public toilets An entrepreneur has been contracted to operate public flush toilets managed by the KCC Before starting operations, the company invested US$ 38,000 to rehabilitate the facilities (as per contractual requirement). The charge per visit of * SSiPs-managed toilets ranges from US$ 0.05 in the suburbs to US$ 0.1 in the city center. Factors for success SSiPs thrive due to the inability of the monopolistic public enterprises to respond to the dynamics of market demand. Consequently, as lon( as the urban population continues to grow and economic activities become more * sophisticated, the demand for better urban environment services delivery will rise. The potential for strengthening and expanding the SSiPs industry in Kampala is therefore very strong. The study found that the most importanL factors in the success of SSiPs are that they: * have the ability to access peri-urban areas not covered by the public sector enterprises, which consider these settlements to be commnercially weak and hence risky investment options, * are commercially oriented operations that are based on private enterprise and designed to make money The profit motive compels innovative approaches to resolution of difficulties, which in turn ensures sustainability of service. . can easily access high population density communities through provision of standpipes and kiosks, which in turn are able to respond to the needs of the peri-urban service market. * . operate other businesses in addition to provision of urban environmental services. This permits re- allocation of resources whenever necessary to keep the entire group of companies operational - 3  Constraints The main constraints to the expansion of small scale providers of LJES services were identified as: Extemal * Poor infrastructure in informal, low-income settlemnents discourages the municipal utilities from investing in social services, hence limiting accessibility to SSiPs customers. * Poverty limits the viability of heavy investments in certain areas. * The poor construction standards used in some of the public facilities have caused problemrs in maintenance and development needed to handle a growing population. * There is poor law enforcement in the urban environmental service sector, which frustrates the good job done by SSiPs. * Low literacy levels among the urban poor makes them slow to adjust to new ideas from SSiPs. * The taxation systern favors the public utilities, creating negative feelings in the private sector. This results in poor bookkeeping, no auditing and evasion of taxes by SSiPs, * Slow implementation of the liberalization process making SSiPs operate illegally. * Poor access to credit due to lack of information on the existence of appropriate private sector development programs in the country like the DANIDA Private Sector Program (PSP), * A haphazard lega system that favors monopolistic impositions of non-commercial transaction costs by the municipal entities on SS:Ps. These impositions tend to erode the profitability of the SSiPs since there is no mechanism of recovering the charges from the final consumers, who are the poor. Intemal Failure by the SSiPs to form associations, thus precluding a forumn for the exchange of views on generic difficulties, and more importantly denying them the strength of a unified approach in dealing with non-commercial institutional and financial impositions by public enterprises and local authorities. The Way Forward The main strategic issues and recommendations for scaling-up and sustaining water and sanitation services offered by small scale providers are: Areas of intervention * Review of the Country Private Sector Support Programs with a focus on possibilities for SSiPs support in order to identify opportunities for investment schemes that could provide technical assistance for improved management and support for purchase of better equipment. * Accelerate the liberalization of water and sanitation sub-sectors in order to level the playing field between all UES providers and thus create an atmosphere of fair and equal opportunities in provision of UES services. Issues for scaling-up * Focused capacity building to assist the SSiPs access funds as well as technical assistance in enterprise management. * Enhanced campaigns to accelerate public awareness of sanitation and hygiene related diseases and how the SSiPs are assisting the public to reduce their impact. 4  * Introduction Background Uganda is a landlocked country with a total area of 237,000 sq. km of which 44,000 sq. km is lakes and rivers. The 1991 Population and Housing Census estirnated the country's population at 16.7 million with a growth rate of 2.7 * percent of which 90 percent are small holder farrmers. Uganda's favourable climate supports a wide range of agricultural activities that form the base of a predominantly agrarian economy. Uganda historically enjoyed a fairly high standard of iving with one of the strongest and most promising economies in sub-Saharan Africa prior to the political turmoil of the 1970s that ruined the economy over a period of 15 years. The economic and social progress declined tremendously to the extent of heavy loss of lives and complete destruction of the social infrastructure Following the establishnent of a broad-based government led by Yoweri Museveni in 1986 and improvements in security, efforts have been geared towards the achievement of an integrated and self-sustain ng national economic order. This is being realized through the expansion of productive capacity in a mixed economy, where public and * private enterprises co-exist. The economy has also improved dramiatically since the government presented its Rehabilitation and Development Plan and signed the first Structural Adjustment Facility with the IMF in June 1987. Since then Uganda has co-operated with the IMF, the World Bank and an increasing number of bilateral donors who are supporting a vigorous economic recovery prograrn. The establishment of the Uganda Investment Authority as a "one stop shop" to local and foreign investors simplifying * internal investment procedures has resulted in increased industrial production. Much of the registered growth accrues from the manufacturing sub-sector as a response to the current extensive rehabilitation program countrywide Per capita economic growth has exceeded 6 percent per annum since 1993. The agricultural sector has responded vigorously to improved incentives as the currency and trade regimes were gradually liberalized. * City Profile Kampala's topography of 21 hills and valleys necessitates the installation of a sewage drainage system that consists of two retworks, the low and high level networks. Ihe high level network drains effluent originating from the high areas while the low level system serves the low lying zones of the city. Sewage from the low level has to be pumped to join the high level stream in order to reach the treatment plant. There are three such pumping stations in Kampala. Until about 1992, developments in Kampala had largely been informal even in the low population density high-income areas. This was because enforcemernt of urban planninig regulations and procedures had greatly weakened during the period of social unrest that followed immediately after the Idi Amin military coup of 1971. This period saw an unprecedented repatriation of capital by foreign investors that greatly affected the supply of capital financing for private sector operations including real estate development. The breakdown in the delivery of urban environmental delivery affected the low-income earners worst. Like all large cities in developing economies, Kampala has a significant rural urban population located mainly in largely informal settlements tnat have little access to urban social services. However, unlike other cities in similar income brackets, the formal settlements in Kampala represent only about 10-15 percent of total built up area. The * rest is a mix of high and low-income dwellings informally co-existing side by side. Water sources Uganda lies in the River Nile basin and all her water resources are part and parcel of the transboundary watershed. Kampala's water supply is obtained from three mair sources: Lake Victoria, natural springs and boreholes supplying * mainly industries. The lake water supply managed by the NWSC is the most important both in quality as well as 5  volumes distributed. It is extracted through two conventional water treatment and pumping systems, which supply 100 million litres per day. Tne water is punmped to reservoirs and then transmitted to distribution networks, in case of elevated areas, via in-lire booster stations. The NWSC follows the conventional approach to utility development and operation. This means that secondary water as well as sewerage infrastructure is constructed in gazetted road reserves and municipally-recognized social service lanes. This approach precludes the provision of primary water infrastructure in informal settlements, as these do not meet the minimum municipal planning requirements for such installations. Consequently, piped water is supplied to these settlements through tertiary "sphaggetti" networks constructed by inclividuals or communities with NGO support. Most low-income city dwellers reside in informal settlements located in low-lying areas of the city, which are also well endowed with perennial springs and wells. Evolution of SSiPs There are diverse reasons for the start-up of the different SSiPs, ranging from goodwill service to the people, the availability of a market, to inabiiity of the municipal body to provide full coverage. The other factors are related to the fact that SSiPs are better able to respond to market demand than the large monopolistic providers are. The private sector started participating in the water and sanitation sub-sectors in mid 1970s when urban services delivery capacities of public institutions started to deteriorate. However, the political instability, which followed immediately after stifled further growth in PSP. SSiPs growth then accelerated in the 1990s following demand for UES services and improvements in the economy. The same period has also witnessed liberalization of the management of public toilets and latrines in the city thus providing opportunities for SSiPs involvement in the sub-sector. PSP growth in the sanitation sub-sector has accelerated in the 1990s when KCC divested itself from the management of public toilets in the city. All the public toilets in the city are nlow pay facilities managed by a private company. 6  Sector Performance Overview Water Supply sub-Sector The Ministry of Water, Lands and Environment is primarily responsible for the water supply and sewerage sector through the Directorate of Water Development (DWD); and the NWSC. Water and sewerage works in the major towns were mostly installed and expanded in the 1950s and 1960s, but little investment and maintenance was carried out in the sector during the 1970s. Since then, there has been increasing donor involvement in the sector mainly by World Bank/IDA, ADB, EEC, DANIDA and KfW. The main emphasis has been in the rehabilitation of urban water supply and sewerage systems. * Investment planning since the early 1980s has been determined by the Rehabilitation F'rogram of 1982/83- 1986/87which was revised periodically. During that. period, the investment in the sector averaged about US$ 14 million per year with a split between urban and rural areas of 75 percent and 25 percent, respectively. Investment by government has been limited to about 5 percent. The main criteria for selecting water supply and sanitation projects have been: * water rehabilitation in preference to new systems; * emphasis on major population centers; * preference for urban centers with adrninistrative status and potential for industrial and commercial development; * disease control in areas where epidemics have occurred; and, * . alleviation of water shortages in drought-prone areas. There has been a lot of effort in the provision of water services both in rural and urban areas in the past ten years. As a result, urban water svstems have been re-established to the pre-1980 capacities in the larger urban centers with new supplies being constructed in the smaller towns. * The NWSC was established in 1972 to develop and operate water supply and sewerage systems in any specified area of Uganda on a self-supporting basis. The Ministry of Water and Mineral Development has direct responsibility for overseeing its activities. A board heads NWSC and its membership consist of public officials and government representatives. As of June 30,1998, the Corporation was responsible for the water supply and sewerage systems of eleven towns countrywide, including Kampala. In Kampala, water and sewerage services are the responsibility of the NWSC. The water supply area extends beyond the statutory limits of the city into the rural-urban settlement and largely rural neighborhood. It is a conventional water supply system, consisting of treatment, pumping, storage and distribution works. The gross capacity of the system is estimated at about 100 million litres per day, inclusive of leakages and other system losses. No other organization is engaged in this business on this scale at the moment. Financing of the water sector is heavily dependent on foreign aid and often the city's priority water needs have not been addressed adequately and in a timely way. This is partly because donations often come along with philosophies that do not necessarily meet the needs of the beneficiaries. Consequently, water and sewerage services are concentrated in the core urban center, leaving the peri-urban high density, low-income settlements largely unserviced. 0 The NWSC has invested about US$ 120 million in vwater and sewage services over the last 12 years. About US$ 80 million of this amount has been invested in Kampala water service area alone. As a result the practical water production capacity of the city is now 100 million litres per day. This production represents a theoretical capacity to satisfy a demand of one million people who are served through approximately 40,000 water connections, 7  Between 300,000 and 350,000 people are estimated to be on direct supply, representing only about 30 percent of the city's population. The pcpulation without direct access to the network and therefore has to be served from standpoints is about 528,000 to 578,000 people. The services have also been characterized by low performance efficiencies with high levels of non-revenue water averaging 49 percent, low bills collection efficiency levels of around 70 percent, and thus an accumulation ot arrears. This is worsened by over-staffing to a level of 40 staff per 1,000 water connections. The situation has affected the ability of NWSC to finance both minor and major capital works, and extend the service to peri-urban Kampala. The scope for private sector involvement in water operations in Kampala is limited to distribution of whatever supply is made available by the NWSC. The SSiPs therefore concentrate their efforts in the high-density population, low income areas that have difficulties in accessing social services, rnainly due to poverty and the fact that most inhabitants live in rented accommodation, hence have no long-term interest in the local infrastructure development requirements. The total number of registered water kiosks in Kampala is 528. These dispense approximately 1,090 litres per day. This supply represents about only 20 percent of the total demand within this service level category alone. At a minimum demand rate of 20 litres per person per day and an average household size of 4.2 persons and a normal usage of 200-300 persons per outlet, the additional number of kiosks required to meet current demand is estimated at 2,800 standpoints. The existing outlets therefore only represents just about 15- 20 percent of the unsatisfied demand. Sanitation sub-Sector Sanitation in Kampala was better managed in the 1960s than it is today. The preventive health framework has since broken down both in rLural as well as in urban areas, the Public Health Act is no longer applicable due to changed circumstances; and home and environment campaigns are no longer being undertaken. Since the 1960s the sanitation sub-sector has not received the attention needed to sustain service delivery at the required levels. Consequently, planning and implementation of social interventions have weakened in the sub-sector at serious socio- economic cost to the country. The institutional responsibility for sanitation is fragmented. Several government ministries and agencies all appear to play some role in this sub-sector. For instance, in large urban areas NWSC is responsible for on-site sanitation services The KCC is the agency responsible for on-site sanitation management activities of the city. The Ministry of Health working through the Ministry of Local Government is responsible for the "co-ordination" of rural sanitation. Legislation is also scattered in various Acts and Decrees. In the final analysis, neither government ministry nor agency is accountable for sanitation in Uganda. Although there has been significant improvement in capacity of urban authorities to provide environmental sanitation services, the social infrastructure is not yet benefiting the poor. One major cause is the backlog of social needs. The other probabiy more important reason is the low incentive for public institutions to operate commercially, especially when providing services on a monopolist basis. Sewerage The sewerage net wolk serves only nine percent of Kampala's population located mainly in the "old town" which includes Old Kampala, Nakasaro, Kololo, the central commercial districts, Mbuya and Naguru. Septic tanks and other on-site sanitation technologies, principally pit latrines serve the rest of the city's residents. About 10 percent of the on-site sanitation user population is served by septic tanks, mainly in high and middle income housing areas like Muyenga, Busiga and Makindye which are not served by the NWSC sewer network. Some houses and even industries in areas served by sewers use septic tanks because of unfavourable gradient to the nearest sewer, or because the cost of connection to the nearest sewer being unaffordable as the house owner is required to meet the cost of the lateral sewer line. 8  . The KCC provides a septic tank emptying service at a fee of about US $ 57 per trip. In addition NWSC owns vacuum tankers, although these are not generally available for septic tank emptying due to the prior need to undertake sewer maintenance work. The operation of septic tanks is not always satisfactory, For example, in swampy areas, effluent flows over ground and in high population clensity areas, there is often inadequate room for the necessary soak-away making for a very * unsanitary household environrnent. Pit latrines - of which 12 percent are private and 67 percent shared - serve about 79 percent of the population. In the more sparsely populated suburban area, they are in generally good condition. Each latrine normally serves one household. In the densely populated areas like Katwe, Kifumbira and Kivulu however, where the facilities are more * likely to be shared, the latrines are heavily loaded and only marginally mnaintained. in locations where the water table is high, like in parts of Ndeeba and Kamwokya, the pits are rarely more than two meters deep. Some resourceful designs even include "pits" above ground. This is the "upstairs" toilet popularly found in most low-lying areas of the city. Currently, only the private sector and PAPSCA project provides community support to the urban poor on * management of pit latrines. No authority regulates planning and construction as well as operation of pit latrines. Consequently, these feacilities are neither professionally constructed nor properly used. Cesspool tank operators therefore usually avoid emptying pit latrines because of the danger they present to equipment. The density of development frequently rules out space for new latrines, so that once the existing facility is full, sanitary disposal becomes impossible. ! * The sanitation situation in Uganda consistently deteriorated between 1974 to 1994 with latrine coverage, for instance, dropping from 95 percent to 43 percent respectively. The socio-economic consequences of this problem are quite disastrous. Mortality rates have increased, sanitation- related diseases now account for up to 50 percent of reported outpatient complaints nation-wide, and morbidity rates fromn sanitation-related ailments have risen, accounting for millions of lost workdays. Environmental degradation, especially in urban areas have accelerated. A survey carried out by both KCC and NWSC in the wake of the cholera crisis in 1997 revealed that 98 pE)rcent of all springs are feacal contaminated. Epidemic outbreaks like dysentery (Kamwokya 11 1996) and Cholera (Gaba, 1997) are frequent Given the hiliy topography of Kampala that compels the installation of expensive sewage pumping stations and siphon * sewers, it is unlikely that NWSC will be able to expand the sewer network to cover the entire city in the foreseeable future. Institutional, Legal and Regulatory Framework The overall policy objective of government for the water resource management sub-sector is: "To manage and * * develop the water resources of Uganda in an integrated and sustainable manner, so as to secure and provide water of adequate quantity and quality for all social and economic needs with the full participation of all stakeholders so as not to leave the future generations any worse off than ourselves". For many years the legislaticn and regulation of the water sector was inadequate, outmoded and scattered under different decrees and acts. Provisions were therefore difficult to locate, which sometimes led to illegal action. Government thus initiated a water sector legislation study, which led to the formulation of a new Water Statute. However, efforts to publicize the new regulations among key stakeholders have been limited by financial constraints. Consequently, SSiPs are hardly aware of their rights or obligations under the revised legal framework, leaving room for public enterprises tc impose unfavorable conditicins upon themri. 9  The NWSC remains the monopolistic primary provider of water and sewerage services in Kampala. Consequently, the operation and profitability of SSiPs depends largely on the policies, regulations, tariffs and other conditions imposed by this public enterprse. For instance, a recent imposition of a US$ 15 dumping charge per trip on all private cesspool operators has greatly slowed down the operations of SSiPs. The high water tariffs and frequent disconnection imposed by the NWSC have compelled operators of water-borne public toilets to purchase pick-ups and water tankers to ensure water supply for the public toilets, thus raising operational costs of SSiPs, The Public Health Act and some other related legal provisions - like the regulation that provides KCC with absolute monopoly over the management of sanitation are yet to be revised and updated. Theoretically, therefore all sanitation SSiPs - including those that have signed contracts with the KCC itself for the management of public toilets in the city - are actirig outside the current aw. The water and sanitation sub-sector has yet to be reformed and liberalized. The public enterprises will continue to enjoy access to cheap investment credits at the expense of the SSiPs, irrespective of the fact that both providers are competing for the same market. Law prohibits developrnent of private water schemes within the city boundaries without prior clearance from the NWSC. Most applications for the development and operation of private boreholes are usually rejected by the NWSC. The social impact of the structural adjustment policies of the government has exacerbated poverty to the extent that in some extreme cases, even where services exist at subsidized rates the people still use unapproved sources of water. The market for SSiPs is therefore still fragile, being limited especially by socio-economic difficulties of peri- urban dwellers. The main weaknesses of existing institutional arrangements could be summarized as: * Lack of clearly defined corporate policies and of medium and long-term investment planning. * Low collection efficiencies leading to inadequate cost recovery, which has resulted in unsatisfactory standards of operat:on and maintenarice. * Divided responsibi'1ty for production and financial management functions with overlapping and inadequate coordination. * Inadequate decentralization of various core functions. * Inadequate integration in the approach to the provision of water. * Supply sanitation and health education. * Development of projects without due consideration to appropriate service standards and affordability; and * Over-staffing, aggravated by absence of a comprehensive manpower policy. 10  . * Characteristics, of SSiPs Water Supply sub-Sector Water Tanker Operators * Kampala currently has eight privately operated water tankers. The trucks are each operated by a driver and assistant who are paid an average monthly wage of US$ 108 each. The trucks are invariably acquired second-hand, typically from oil companies. They are then refurbished and converted to water bowsers. Bulk water sales by tanker delivery was necessitated by the chronic water shortages in Kampala in the wake of the 1979 war of liberation that overthrew the Idi Amin regime. The tankers draw water from three municipally designated filling stations connected to the NWSC water dfsrit:iltion network. The filling stations are manned privately by attendants who pay a tariff of US$ 0 36 to NWSC and re-sell to the water tankers at US$ 1.10 per 1,000 litres, The general operational background of these trucks is as follows: * The average initial cost of each truck of capacity 10,000 litres is US$ 7,250. This type of truck lasts up to 10 years if regularly maintained. * * The demand for truck-delivered water services is in the fringe areas of Kampala with no NWSC supply network. Both residences and construction sites are customers. * The rnarket is seasonal with highest consumption being registered during the dry season, which lasts for about seven months a year, working six days a week, Consumption during peak demand is three truckloads per day per vehicle. * Off-peak supply during the wet season when most access roads are only marginally usable together with rainwater harvesting interferes with the tanker operations, and results in about one trip per week per truck. * The trucks purchase water at US$ 1.08 and sell at US$ 4.34 per 1,000 litres. * EBalance Sheet per Yeir (in USS) . *Costs per Year Deprec iation Cost of rruck (10 ;'rs) 750 Operalioinal costs iWages 2,592 Maintenance 4,200 Repairs 2,000 Licensing 600 Taxes and Fines 200 * Purchase of water Peak season 5.443 Off-peak 216 Sub-Total 16.001 * ~ ~~~ wales Peak Season 21,874 fl-peak 868 Sub- Total 22,872 Net balance per truck 6,741 * Net balance 8 tnrchs 53,928 11  Constraints * Existence of several non-commercial operators like the police, fire department, foreign embassies and oil companies, which create market distortions that tend to limit the clientele available to the private operators. * Accessibility to the markets is marde difficult due to poor road network in the urban fringe where most customers reside. This is partially responsible for the high operating costs as the vehicles tend to breakdown rnore often, * Lack of investment capital to purchase new trucks limits operators to second-hand vehicles that are prone to frequent breakdown, thus reducing operational time input. Weak revenue bases tend to undermine the operators' capacity and chances for business development. * The non-commercial trucks, which are normally in better mechanical conditicin and therefore make more trips under poor road condit ons, do not pay taxes apart from the ones that belong to the oil companies. This gives these operators a large unfair advantage over the private operator who must pay all taxes prior to being permitted to operate (see Profile A as an annex). Water kiosk operators, Projects for rehabilitation and expansion of water supplies in Kampala have so far focussed on strengthening the water production, storage and transmission infrastructure. The strategy has been optimal utilization of existing secondary and tertiary water network capacities while consolidating the financial position of the NWSC. Although it is expected that the NWSC would ultimately be in a position for sustainable installation of the secondary infrastructure from its internal revenue, this capacity has not yet been achieved. Communities in the urban fringe areas of Kampala therefore have no access to pipe-distributed water supply unless secondary networks are constructed either with support of NGC1s or directly by the communities themselves. The provider installs seconcary distribution networks from which connectio)ns for in-house, yard tap and kiosk supplies are made. * All the kiosks are commercially operated and allocated to applicants on a 'first come first serve' basis with particular affirmative action being reserved for the elderly and women groups. The tertiaiy supply lines including the rnains connections are installed by the NWSC (on request), who charge the service to various water consumers. * There are a total of 542 kiosks in the Kampala WSA. Of these up to 80 percent are active and the rest are off supply for reasons ranging from non-payment of account to ownership issues. In addition to these are several suppliers not necessarily registered as standpoints, but who do sell water regularly and therefore operate as providers. These account for less than 5 percent of the total capacity. * According to NWSC records, the total amount of water supply dispensed through these outlets is 1.09 million litres per day distributed as follows: '000 litres per day Private sector 640 r iGOs 34 Iristitution 80 Community Groups 3.36 T ntal 1.090 The quantity of water sold through kiosks is therefore 1,010 litres! day. The NWSC tariff at the kiosks including taxes is US$ 0.36 per 1,000 litres. The kiosks sell the water to users at an average price of US$ 0.01 per 20-litre container. This amount is equivalent to US$ 3.6 per 1,000 litres. The amounts actually charged vary from US$ 0.05 -0.2 per 20-litre container 12  0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ * depending on location. Areas with inadequate water resources (e.g. few springs) attract a relatively higher price for water than areas of plentiful alternative sources of supply. . The charges to the ultimate consumer also vary according to whether the consumers draw the supply directly or are supplied by pu!shbike vendors. 'Vendor-supplied water is more costly. The research resources available couLd not permit a standard survey to determine the frequency distribution of the prices charged within the water supply area, Transect surveys among both operators and consumers indicate that the price charged increases with distance from the city center. In the core area, where connection densities are high, the vendor charges are on average US$ 0.150/20 litres. In the peripheral, poor, densely populated areas, the charges build up to US$ 0.3 for 20 litres. The vendor market has riot bee!n investigated because the service they provide is only supplementary to kiosks. * * The cost of constructing a water kiosk including plumbing is US$ 290. The operators are required to pay a deposit of US$ 109 to the NWSC before supply is connected. The average selling price is US$ 0.01 per 20-litre jerrican. This works out at US$ 3.6 per 1,000 litres. The kiosk owners employ relatives - invariably without pay - to operate the systems. Balance Sheet per Year (in lJS$) Costs per 'ear Depreciation Cost of construction l5 years) 30,624 Deposits 57.552 * Repairs 23,760 Purchase of w3ter from util,ty 143,226 vAT 1.369,600 siles Retail sales (US$ 0.09 per 20 litres) 8.056,463 Nef Balance 6.431, 701 The kiosks operate in the following categories: i) Comrnunity-based outlets usually linked to Local Council network ii) Institutional outlets catering for schools, markets, etc. iii) Profit-driven private sector providers. Profile B (see annex) slows how the community in Bweyogerere, a suburb located 7 kilometers from the city center, installs and manages their kiosk network. Constraints * The NWSC has recently imposed a deposit of US$ 125 on all applications for new connections, irrespective of the ownership ol the local distribution network. This means that low-income applicants are further constrained by this burden. * The NWSC sometimes connects new consumers to the network without prior community clearance, thus causing financial loss in form of pipes to the Water Users' Groups.