CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
by Matte Sepo, Zambia, July 1998
THEME = SOCIAL CONDIT.
The Zambian government is inviting investors to acquire equity
shares
in the country's water and sanitation sector,
which is currently undergoing reforms
following many years of inefficiency
The participation of the private sector is key to success of the water supply services, which have deteriorated in quality and quantity under former president Kenneth Kaunda's command economy.
Deficiencies in water and sanitation in Zambia, are a significant and growing problem, substantially lowering the quality of life for many people and creating dangerous hazards. High morbidity and mortality from diarrhoea diseases and parasitic infections, are particularly critical in densely populated squatter compounds.
Accessibility to adequate and safe drinking water supply among the people is very low - 4.27 million customers (i.e. 43% of Zambia's total population) are connected to piped water in urban and rural areas. As regards sanitation - just 3.12 million customers (i.e. 35% of Zambia's total population) have access to a satisfactory service.
As a consequence of low expenditures for capital investment, operation and maintenance during a period of more than twenty years, most water and sanitation schemes in this southern African country of over nine million people, are not in a good state, and according to findings of a 1991 national inventory and rehabilitation study, a minimum of 100 million dollars is required to revamp the sector throughout the country.
Apart from re-investment, the study also found that councils lacked qualified and experienced manpower in the areas of engineering, accounts and management. Councils also suffer losses through leakages and inoperative mechanical and electrical plant in both urban and rural centres. Low billing and water revenue collection inefficiencies, have also been cited.
Recognising the need for institutional reform, Zambia launched the water sector reforms in March 1993, to commercialise the water reticulation and sanitation services.
The government of Zambia has, therefore, concentrated on developing economic policies aimed at promoting growth, creating an environment conducive to the attainment of high rates of investment, and the promotion of competition, productivity and efficiency.
The reforms, which are a concerted effort of the Zambian government and external support agents like the German technical organisation, GTZ, and the Norwegian aid agency, NORAD, entail that the government stops taking care of 46 mainly rural district schemes, and those from 22 municipal and city councils.
Currently, the operation and management of the water supply schemes in the rural districts is run by the Ministry of Energy and Water Development, while the municipal and city council systems are looked after by the Ministry of Local Government and Housing, and until October 1993, whatever revenue was collected from these water schemes, had to be forwarded to the government treasury. Presently, only two water firms, Chipata Water and Sewerage Company, in Eastern Province; and the Lusaka Water and Sewerage Company in the capital, Lusaka, have been operating commercially under the Companies Act, long before the reforms were undertaken.
President Frederick Chiluba's open market-inclined government, has since established a Programme Coordinated Unit (PCU) to oversee the implementation. The secretariat, the Water Sector Development Group (WSDG), started its work in February 1994, and it is envisaged that by the end of this year, the formation of commercially-viable water utilities will have reached advanced stages.
The institutional framework adopted by the Zambian government, is that the PCU should be transformed into a statutory body, to be called the National Water and Sanitation Council, to perform the regulatory functions, while the Ministry of Local Government and Housing should create the Department of Infrastructure and Support Services, to monitor and co-ordinate investment into the sector.
Zambia has invited the private sector to acquire shares, but water supply and sanitation utilities will be owned by the public. The policy of the state is not to privatise but to commercialise the sector. The government says the private sector can exploit the various options of private sector participation, which includes, among others, concession and management contracts.
"A local authority may enter into partnership with the private sector through equity sharing. In this arrangement, the local authority will maintain maximum shareholding", said Dennis Mwanza, head of WSDG which has its headquarters in Lusaka.
Local authorities have been allowed to sell shares of up to 49%, to the private sector. The Lusaka Water and Sewerage Company is already exploiting the private sector initiative to develop bulk water supply.
The Zambian authorities expect to see the new water companies under the water and sanitation sector reforms, achieve financial viability within five to ten years from the time of their formation.
END
CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
PeaceLink 1998 - Reproduction authorised, with usual acknowledgement