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Ki-mati. “A friend for life”. Á guas de Moçambique. New Water Management Model. Pre-payment Standpipe - Pilot Project Evaluation Report. October 2004. Introduction.
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Ki-mati “A friend for life” Águas de Moçambique
New Water Management Model Pre-payment Standpipe - Pilot Project Evaluation Report October 2004
Introduction The water supply to people living in outlying areas of Maputo and Matola is done, in most cases, through a public standpipe system, which is permeable to a series of situations which question the technical and economic sustainability of the supply. Taking into account this fact Aguas de Mozambique, together with FIPAG, CRA, AdeM, Maputo and Matola Municipalities and NGO’s are planning new strategies to improve progressively this situation, looking for alternatives to increase the water supply economic return without neglecting the social factor. A seminar about the institutional research for the standpipe management took place in July 2002 and counted with the participation of stakeholders (FIPAG, CRA, AdeM, Maputo and Matola Municipalities and NGO’S). From this seminar came out the idea to develop a normative document to control the standpipe management. To this end it was established a team constituted by the stakeholders, who worked together for the last 2 years in order to develop this document, which was finished in May 2004. In the last 6 months (from April to September) it was developed the Pre-payment Standpipe pilot project, to test and evaluate this alternative standpipe management system. Two models were tested and evaluated: Standpipe Operator Pre-payment (5 standpipes) User Pre-payment (1 standpipe)
Pre-payment Standpipe What is a Pre-payment standpipe? It is a standpipe equipped with a counting system which only allows the supply of water after making the payment. This type of equipment was specially designed to reduce the water wastage and to increase the revenue resulting from the supply service. It consists of 3 components: 1) Standpipe equipped with a counting and supply system specially designed to operate with the pre-payment key. 2) Token or water key and vending terminal. 3) Management Software. 1) Management Software 2) Portable Vending Terminal 3) PP Standpipe with located in the AdeM key This system makes possible the purchase of pre-payment water. It tries to promote the idea that water is a precious good which has to be paid for. It increases the standpipe economic profitability, through the reduction of technical and commercial losses.
Experimentation with two models 1. Standpipe Operator Pre-payment 1..1 Overview At present 5 standpipes operating since July in Maxaquene B District . A standpipe operator, as in the traditional management model, whose function is to charge the users for the water and also to maintain the Standpipe. The Standpipe Operator pays for the water a tariff established by the Mozambican Government (Fipag and Cra) being in this moment 5900 Mt + VAT = 6652Mt/m3 . The Operator sells to the consumer 20 litres = 250 MZM or 1 m3 = 12.500 MZM, this means that the resale price increases in 88% (according to what it was established in the “New Standpipe Management Model”). The analysis of the Pre-payment Installation impact takes into account the commercial data of: 5 traditional standpipes operating 65 days before the installation of the new meters and; 5 pre-payment standpipes operating during the month of August (31 days).
1.2 Economic Results (Operator PP) Invoiced Collected (1) Traditional Standpipes VS (2) Pre-payment Standpipes (1) Traditional Standpipes VS (2) Pre-payment Standpipes During a period of 65 days the 5 standpipes operating according to the traditional management model recorded an invoicing of 8.382.000,000 MZM having been collected only 1.504.000,000 MZM. During a period of 31 days the 5 Pre-payment Standpipes recorded an invoicing of 6.801.100,00 MZM and a collection of 6.801.100,00 MZM.
1.2 Economic Results (Operator PP) Summary • In terms of Average Monthly Invoicing the pre-payment standpipe presents a growth rate of 170% when we compare it with the traditional system. • The impact of this type of equipment is even more important in the Collection Rate. The increase with the pre-payment installation is of 947%, an improvement in the collection rate which moved from 17% to 100%.
1.3 Social Results (Operator PP) After an inquiry to 64 Standpipe users, the result was that : 65 % of the people inquired show that they were satisfied with the initiative; The criticisms to the pre-payment are due to the water pressure available for the PP (according to the pre-payment manufacturer the service pressure should be the same or greater than 2kg/cm2). Satisfaction with the Pre-payment Criticisms to the Pre-payment
2. User Pre-payment 2.1 Overview At present 1 standpipe operating in Urbanização District. 70 contracts done and 70 water keys given. The user buys 20 litres of water = 133 MZM or 1 m3 = 6,652 MZM. The analysis of the Pre-payment Installation impact takes into account the commercial data of: 3 traditional standpipes located at Urbanização District (invoicing relating to April, May, June and July). 1 pre-payment standpipe located at Urbanização District (invoicing relating to April, May, June and July).
2.2 Economic Results (User PP) Summary Map • In terms of Average Monthly Invoicing the User Pre-payment Standpipe shows a growth tax of 179% when is compared with a traditional system. • The impact of this type of equipment is even more important in the Collection Rate. The increase in the pre-payment installation is of 1095%, an improvement in the collection rate which moved from 16% to 100%.
2.3 Social Results (Operator PP) From the user’s survey we find that there are no complaints about this system. The users are satisfied: Because they don’t need a Standpipe Operator to get the water; Because the water is cheaper (they pay the standpipe tariff ).
3. Final Considerations 3.1 General The Standpipe Pre-payment system introduces improvements in the operation, management and control of the Standpipes but also in the service levels and user’s satisfaction.
3. Final Considerations 3.2 Financial/Economic The Pre-payment systems are, economically, very interesting alternatives because they record: An invoicing volume average growth of 1000%. A rate of 100% of collection level, which corresponds to a growth of of 500% if we compare it with the pass years.
3. Final Considerations 3.3 Operational The pre-payment system improves the operation and control conditions in relation with the traditional system. Within the two models experimented, in operational terms, it is better the implementation of the operator model because of the following reasons: - Less users so less failures and less maintenance; - Primary maintenance performed by the Standpipe Operator. - Only one interlocutor with the AdeM per Standpipe.
5. Implementation Plan The main objective of the implementation plan is to equip all the standpipes existing in the system (about 600) with pre-payment equipment and to create the technical conditions to allow their effective operation. Minimum pressure of 2 Kg/cm2 and; Supply availability of 16h per day. Performance of additional repairs to guarantee the conditions of the implementation. Conversion of 100 standpipes per year, AdeM will be in charge of the work. Conversion of 300 standpipes per year, the work will be performed by a company specialised in that field.
7. Revenue Impact 7.1 Based in the average revenue obtained up to now with the pre-payment sales operating at the moment, and taking into account that 600 standpipes will be installed, it is estimated an annual additional profit of 8.477.531,00 MZM. 7.2 The maintenance costs for the pre-payment system are very difficult to tabulate, being lower than the maintenance costs for the traditional standpipes.
16 “Working together for a future with more quality water”