Institutional Strengthening Activity
The mere availability of infrastructure does not guarantee that people will connect to the network, properly use and maintain facilities, pay their bills, or manage water and human waste safely to prevent contamination and disease. Nor does it guarantee that utilities and service providers will offer services and billing options that meet the needs and income flows of their customer base. Technical solutions for the provision of water, sanitation, and solid waste management services are not sufficient in isolation; social and institutional approaches are essential to ensure that targeted populations actually benefit from infrastructure investments.
In Lusaka’s peri-urban areas, where 47.2 percent of households live in extreme poverty,[[Cogswell, Lynne. 2008. Development of Sanitation Marketing Strategy and Hygiene Promotion Program for Peri-Urban Settlements of Lusaka, Zambia. Market Analysis report prepared for the World Bank Water and Sanitation Program / Africa Ministry of Local Government and Housing, Lusaka Water and Sewerage Company. The definition of “extreme poverty” used here was defined by Zambia’s Central Statistics Office in 2003 using local currency: K32,861 per month per adult (equivalent to $7/month per adult in 2003 dollars).]] there was a significant risk that low-income populations would not connect or be able to afford water and sewer services. And yet, expanding water and sewer coverage to peri-urban populations was critical to securing the health benefits of the compact. The affordability of the water and sanitation services was thus a significant risk to the sustainability of MCC’s investments. Furthermore, the infrastructure that delivers water and sanitation services must remain in good working condition in order to continue delivering expected benefits. As noted above, the water utility (LWSC) is responsible for delivering water and sewer services in Lusaka and nearby cities, while the city council (LCC) is responsible for delivering drainage services in Lusaka. They own the respective infrastructure that was upgraded and rehabilitated through MCC’s compact investments, and the responsibility of operating and maintaining these networks falls to them.
To mitigate risks associated with the affordability of services for the population, as well as the challenges of operations and maintenance of water, sanitation and drainage infrastructure, the compact invested in improving the institutional capacity of LWSC and LCC. The Institutional Strengthening Activity funded technical assistance to improve asset management, strategic planning, environmental management and maintenance. It supported both LWSC and LCC in developing policies and structures to provide appropriate, affordable, and sustainable services to poor and underserved populations. It also sought to help LWSC and LCC promote behavior change to encourage connections, service uptake, and custodianship of the infrastructure throughout the city (prevention of vandalism, water theft, illegal dumping, etc.). The Institutional Strengthening Activity included support for the design and implementation of IEC and sanitation marketing campaigns and provided capacity building for LWSC and LCC to continue messaging to residents who benefit from (and pay for) their services. Finally, the Institutional Strengthening Activity included a $6 million grant program to support innovation in water, sanitation, solid waste and drainage-related activities.
Just as Lusaka’s physical environment posed challenges for MCC’s infrastructure investments, the institutional environment proved a challenging context for the compact’s investment in local capacity development. Staffing issues limited the capacity of LWSC and LCC to absorb technical assistance and strengthen the institutions. LCC employed rotational staffing strategies that were a legacy of the model imposed by the British Civil Service prior to independence.[[In rotational staffing, employees are reassigned or “rotated” to a new position every few years. In organizations like the civil service with staffing needs across a wide geography, these rotations often involve a move from one city or region to another. Assignments typically have different job specifications and build flexibility rather than specialization or a linear progression of skills.]] Originally designed to limit opportunities for corruption, rotational staffing makes it hard to build effective teams, departments, and functional units. Employees may not stay in a position long enough to build up expertise, and frequent transfers shift staff members without regard to the continuity of any training that has been provided. LWSC underwent several changes of senior leadership and board members over the course of the compact, as well as a reduction in the status of its units responsible for non-revenue water and asset management.
Assistance to Lusaka Water and Sewerage Company (LWSC)
When the compact was signed, LWSC had recently completed a financial turnaround, resulting in a financial surplus in 2009. Long-standing support from the World Bank for institutional reform had brought commercialization of services with significant improvements in service delivery. The utility held little debt, and it had undertaken operational measures to improve cash flow. However, its water and sewer assets were in a dire state, requiring large-scale rehabilitation and expansion to meet the needs of Lusaka’s growing population. To support MCC investments in improving the infrastructure, the compact funded tools and trainings for LWSC staff to reduce maintenance costs and extend the useful working life of the water and sewer systems.
Only after the compact started did it become clear that the apparent financial turnaround was more a matter of accounting than of structural change. LWSC’s definition for operating cost coverage had reflected a substantial underestimation of the true maintenance costs, and the utility operated in the red for much of the compact’s five-year timeline. The wide gap between true full-cost recovery and actual costs suggested a large degree of deferred maintenance. This financial situation was likely exacerbated by external factors—like drought and power reliability—that affected the amount of water LWSC could sell. The overall effect limited the efficacy of the technical assistance provided through the compact.
Compact-funded assistance to LWSC comprised of technical training and improvements in four key areas: asset management, environmental management and monitoring capabilities, reduction of non-revenue water, and social inclusion and gender mainstreaming.
Although LWSC had a basic awareness of the importance of asset management, that awareness had little influence or impact on actual practices. The asset management team sat low in the utility’s hierarchy and was not consulted as a routine advisor in LWSC’s business processes. The degraded state of the water and sewer infrastructure made managing these assets even more complex: it was difficult for LWSC to (1) know where their pipes were and what condition they were in; (2) identify needed expansion, maintenance, and repair projects and prioritize between them; and (3) allocate limited resources strategically (staff, funding, materials). A technical assistance contract funded through the Institutional Strengthening Activity helped LWSC rethink their asset management practices, take an inventory of their assets, install diagnostic equipment and ultrasonic monitoring devices throughout the water distribution system, set up a computerized register to track assets, and link all this information to a decision support system. This comprehensive, integrated approach was designed to allow LWSC to plan maintenance, asset renewal and capital programs in an affordable and systematic manner. It was intended to enable better service in terms of water pressure, water quality, and customer service, as well as improved transparency and ability to meet regulatory and reporting requirements. The technical assistance also helped LWSC analyze various maintenance options—doing the work in-house, hiring a third party via a performance-based contract, or a combination of the two—to determine which would be the most effective.
Improved governance of the water sector had brought environmental policies and regulations that LWSC struggled to comply with given the degraded state of its sewers and sewage treatment assets. The result was an administrative burden, requiring LWSC to apply for exceptions, exemptions, temporary waivers, and undergo frequent reviews - none of which would have been necessary if the utility was functioning properly. Accordingly, the compact invested in strengthening LWSC’s environmental management and monitoring capabilities, specifically for treated sewage and water quality. The compact funded the provision of environmental monitoring laboratory equipment and technologies as well as complementary training for operationalizing the laboratory. It also helped introduce an environmental information management system for LWSC and integrated it into the utility’s corporate culture and business systems.
Reducing non-revenue water was critical to the sustainability of LWSC’s business model. The Infrastructure Activity, discussed above, undertook efforts to reduce physical losses; the Institutional Strengthening Activity took on the challenge of commercial losses. The overall objective was to reduce non-revenue water by 23 percentage points,[[It was not possible to estimate the relative proportion of physical and commercial losses when targets for non-revenue water (NRW) reduction were set early in the compact. As reported above under the explanation of results for the Infrastructure Activity, the final overall NRW reduction fell short of the target due to combination of implementation challenges and data quality issues.]] ultimately improving the financial position of the utility. The compact funded a customer database clean-up exercise, which was expected to yield the largest non-revenue water reduction by correcting billing and administrative records to give LWSC more accurate information about their customers. For example, among commercial customers alone, more than 160,000 discrepancies were identified between the records on file and the updated information collected via survey. For the most part, the outdated records meant the commercial customers were being under-billed for their water usage. LWSC worked to correct these “variances,” but progress was slow due to lack of staff support and coordination. By the compact’s end date, approximately 60,000 records were updated. The database clean-up of all incorrect records that had been identified prior to and after the end of the compact was completed mid-August 2019. Specifically, a total of 181,067 records were updated and LWSC is developing a strategy for continuing the NRW and database clean-up activities as part of its regular operations to ensure sustainability of the compact investments.
LWSC’s largest debtor was the Government of Zambia, whose unpaid water bills were a significant contribution to non-revenue water. Resolving this issue was a key to improving LWSC’s financial situation. It was addressed through a condition precedent that required the GOZ to pay the water utility $11 million to clear their outstanding arrears—a debt accumulated as of 2013 from unpaid water bills of Government institutions, including the University Teaching Hospital (Lusaka’s largest hospital), police barracks, and national GOZ offices. Over the course of the compact, MCC and MCA investigated the complex problems behind these unpaid bills, arriving at a variety of solutions that included installing individual water meters at GOZ institutions, fixing the leaky pipes that were driving extremely high water bills, and even seeking approval from NWASCO[[The National Water and Sanitation Council (NWASCO) is the independent utility regulator.]] for an extraordinary rate increase if these issues were not being addressed appropriately by the GOZ. The rate increase was never requested during the compact, as MCC determined that government-funded efforts to address the underlying problems were adequate. Over the five-year compact period, GOZ payments of arrears to the water utility totaled nearly $22 million,[[Including the $11 million paid to clear arrears that were outstanding at the start of the compact, as required by a condition precedent.]] and as of 2018 LWSC was legally empowered to collect arrears directly from the GOZ institutions incurring those bills. At the compact’s completion, outstanding arrears stood at approximately $5.1 million.[[The outstanding arrears at the end of the compact reflected unpaid arrears identified in the last internal audit in October of 2017. The Government’s dependence on audits to trigger arears payments and comply with the ongoing condition precendent was the driver behind the move to legally empower LWSC to collect arrears directly.]]
Improving LWSC’s abilities to provide better and targeted services to the poor and to promote behavior change is central to ensuring that customers connect to the network and stay connected. Widespread inability or unwillingness to pay for improved services threatens the connection rates required to realize health, time, and income benefits or to ensure proper functioning of the infrastructure. A technical assistance package for social inclusion and gender mainstreaming and for IEC capacity in LWSC supported the utility to develop the structures, policies, capacities, and procedures needed to provide appropriate, affordable and sustainable services that are aligned with the income flows of the poor and underserved populations present in the peri-urban areas. This package included support for LWSC to develop a Social and Gender Policy and a revised Peri-Urban Policy setting out utility priorities for extending and maintaining services in peri-urban areas. It supported the establishment of new customer engagement approaches for frontline staff, the development of Customer Engagement Guidelines, and a revised Credit Control and Debt Management Policy clarifying the utility’s pro-poor approaches to bill payment and debtor management. The work also supported LWSC to develop flexible payment mechanisms, extending payment plans for debtors and allowing billing systems to receive micro-payments electronically (e.g., mobile money), an approach well-suited for households that rely on daily wage payments. Other priority measures include text messaging for bill-payment reminders and outreach to customers at risk of disconnection, shifting away from disconnection as the default solution to customer debts. The technical assistance consultant also worked with LWSC to build capacity on designing and implementing IEC and sanitation marketing materials and campaigns.
Compact-funded technical assistance emphasized capacity building and participatory approaches aimed at building strong ownership and leadership by LWSC staff. By the end of the compact, LWSC had developed workplans, formulated an implementation strategy extending three years beyond the end of the compact, appointed staff, and integrated social inclusion, gender mainstreaming and IEC and sanitation marketing priorities in the 2019 budget process in order to sustain these initiatives going forward. LWSC staff also gained training, some hands-on experience, and a portfolio of IEC and sanitation marketing materials to promote the utility’s water and sanitation services. As of closure in November 2018, the compact had supported LWSC in reaching approximately 248,000 people with messaging on water and bill management, toilet maintenance, sanitation, and hygiene.
While the social inclusion and gender mainstreaming and IEC efforts resulted in new policies and extensive outreach, limited investment in these actions prevented the work from reaching its full potential. The lack of funding for formative research led MCA to rely on work donated by another organization (Water and Sanitation for the Urban Poor, WSUP) to inform the design of IEC and sanitation marketing messages. This partnership filled a key gap, but it also translated to delays and shortcuts in message design and pre-testing. In particular, WSUP’s research did not cover the four Ps—place, price, product, promotion—that are a core part of effective sanitation marketing campaigns, and messaging was unable to adequately cover this content. In sum, the original budget for this work was inadequate, and therefore MCC and MCA expended considerable effort trying to cover the resource gap.
The social inclusion and gender mainstreaming and IEC technical assistance to LWSC was further hampered in the first year by contractor under-performance. By the compact’s end, the work achieved the results noted above, but the technical assistance consultant lacked sufficient time to support LWSC in piloting many of the new policies. LWSC successfully rolled out the flexible e-payment and micro-payment mechanisms, and was keen to take over IEC implementation and other pilots under the technical assistance consultant’s oversight, but the consultant did not have the budget to support this. Despite these missed opportunities for institutional learning, LWSC appeared eager to continue the work: the utility passed the aforementioned 2019 budget funding the implementation strategy that will allow it to continue operationalizing the new policies and practices developed under the compact.
Assistance to Lusaka City Council (LCC)
As the local governing body in Lusaka, LCC is divided into eight departments that provide a wide range of municipal services. Stormwater and drainage management fall to the Engineering Department, while the Public Health Department is responsible for solid waste management. In an urban setting like Lusaka, the efficacy of the stormwater drainage infrastructure depends on a number of factors including the design approach, the quality of construction, and appropriate management of solid waste. The city must ensure effective removal of debris from the drainage channels in order for the drains to collect, convey and dispose of stormwater, ultimately reducing the frequency and severity of flooding as well as addressing the impact of stormwater on downstream communities. In addition, an effective program of corrective and preventive maintenance is imperative to sustain the benefits of the drainage infrastructure. Prior to the compact, LCC struggled to fulfill these responsibilities. The effects of chronic understaffing and poor development of existing staff, even at senior levels, were reflected in ineffective operations and an absence of long-term planning.
Technical assistance to LCC under the compact therefore focused on defining the flooding and solid waste management problems in Lusaka and developing a road map to mitigate them. After assessing the local government’s capacity to manage the drainage system and municipal solid waste,[[This assessment considered capacity for operations, maintenance, and capital improvement.]] the activity conducted an options analysis to identify a variety of plausible strategies that would promote the sustainability of MCC’s investments in drainage infrastructure. Building from these evaluations and from a Lusaka drainage investment plan[[Drainage Investment Plan for Priority Areas in Lusaka, Zambia, 2011, U.S. Army Corps of Engineers. http://www.mcaz.gov.zm/wp-content/uploads/2016/05/Lusaka-Drainage-Investment-Plan_Final_18-Mar-2011.pdf]] prepared with MCC support during the development of the compact, the technical assistance program developed a Stormwater Management Master Plan for LCC. This comprehensive 25-year plan covered all areas of the city and included a root cause analysis of flooding problems throughout the greater Lusaka region. It proposed a menu of technical options to reduce flooding and explicitly incorporated all of the drainage infrastructure funded by the compact.
In addition to technical assistance on long-term strategic planning for stormwater, the compact built up LCC’s capacity to manage drainage infrastructure and services in and around the city. These institutional strengthening activities focused on the twin pillars of drain maintenance and solid waste management. The compact developed a drain maintenance regime that would enable LCC to maintain the city’s stormwater system sustainably, efficiently, and effectively.
The question of how best to keep trash out of the drains was more challenging. Previous efforts had failed to secure adequate solid waste management for the residents of Lusaka. Waste collection practices varied from neighborhood to neighborhood: while LCC collected trash and cleaned drains in some areas, other areas were served by private contractors authorized by LCC. Many parts of the city had no official waste collection, and the insufficiency of Lusaka’s solid waste removal services left some neighborhoods with no options for appropriate waste disposal at all. After weighing the strategies outlined in the aforementioned options analysis, the GOZ ultimately issued a Cabinet Memo to create an autonomous solid waste management company independent of LCC. (LCC retained responsibility for maintaining the drains.) The decision to corporatize solid waste management and “ringfence” this function was made in part to address the challenges of relying on rotating municipal staff. Early in the compact, MCC had tried to stop or defer the transfer of key staff members away from the solid waste management team at LCC, but was unsuccessful. Given the revised approach to tackle solid waste management, MCC modified one of the conditions of the compact that originally required the GOZ to provide a total of $6 million to support LCC’s drainage maintenance. MCC revised this condition so that the $6 million government contribution could support both the establishment and operations of an autonomous solid waste management company and the establishment of an improved drainage maintenance unit under LCC.
Similar to the compact-funded assistance to LWSC, the compact supported LCC in strengthening its environmental management and compliance systems in order to enhance the sustainability of the compact’s investments and contribute to the health and wellbeing of residents. This assistance included protocols for proper handling and safe disposal of materials removed from the drains during maintenance activities (including solid waste, silt, and other debris). It also supported staff development at LCC by introducing occupational health and safety practices to maintenance crews.
Like LWSC, LCC also benefitted from technical assistance on social inclusion, gender mainstreaming and IEC to improve service provision in peri-urban areas with regard to solid waste management for drain maintenance. Technical assistance helped the newly-established autonomous waste management company set out and work towards the goals of affordable, sustainable solid waste services across diverse customer segments, identify community engagement guidance, and define waste collection contracting opportunities for community-based enterprises in order to leverage their significant role in collecting waste in hard-to-reach areas. The new solid waste management entity also adopted lessons learned from the compact-funded LCC information, education and communication campaigns and developed and costed its own Information, Education and Communication Strategy.
The activity also supported LCC on community engagement through the development of guidelines, staff training and piloting in the areas where compact-funded drains were constructed to engage communities around the maintenance of the drains. The technical assistance supported LCC to build capacity to identify IEC needs for solid waste management and drainage; and to develop and manage systems that promote behavior change, uptake of solid waste services and care of physical assets in low-income peri-urban areas. As of November 2018, the LCC campaign had reached nearly 95,000 people[[A compact-funded Centers for Disease Control and Prevention report from May 2015 indicated that the total population in this area was 188,000 people.]], over 8,000 market stalls, and numerous school and community groups. Technical assistance placed emphasis on capacity building and participatory approaches built strong ownership and leadership in LCC; the approaches and tools provided by the technical assistance were adopted by LCC departments well beyond those occupied with drainage and solid waste and were applied to other development projects in Lusaka. LCC retained community mobilizers for IEC efforts out of its own budget and continued implementing campaigns at the time of compact-end. Nevertheless, IEC to promote behavior change and curb illegal dumping in the drains was largely unsuccessful during the compact given the absence of solid waste services in Lusaka and it will continue to be ineffective until solid waste services are available and affordable to the communities along the drains. Once the solid waste management entity is operational, it is expected that the urban and peri-urban areas in Lusaka Province will have solid waste collection and cleaning services, as well as related recycling, transfer and disposal services. Unfortunately, this entity was only stood up at the end of the compact and service delivery had not commenced.