Model Terms of Reference
Mainstreaming Small Scale Private Water Piped Network Providers
RATIONALE
Many water utilities fail to provide adequate water services to the poor. As a consequence, many of the poor are forced to rely on alternative service providers, paying up to as much as 15% of their household income for water. They buy water from their neighbours at inflated cost, or get water from standpipes or stand-posts where access to water may only be for a very short time each day.
Small scale private water providers (SSPWPs) serve a significant proportion of the poor in many urban areas, even up to 40% of poor households in some cities. More often than not, they are small family businesses that are well integrated in the community and provide service at competitive prices. The poor families who consume their water also know what quality of water they’re getting, and pay for it accordingly.
Unfortunately, SSPWPs are not formally recognized and receive little or no financial support. Urban water supply and sanitation (WSS) projects invariably ignore the role and contribution they can make in the planning and delivery of municipal services.
In 2004, the Asian Development Bank published the results of regional studies on SSPWPS. The studies concluded that city officials, water utilities, and local banks should work with small network entrepreneurs to bring water supplies to the poor and disadvantaged immediately on an agreed interim basis until the water utility was able to do so. The study also recommended that small networks should be included in city development strategies and formalized with licensing and exit strategies and takeout agreements, with minimum standards set to recognize risk and payback requirements.
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OBJECTIVES
Small scale piped water providers should be mainstreamed or integrated into the design of public and private sector loans to
- legitimize their contribution in providing water services, and focus financial support on delivery of piped water supplies to the poorest members of society
- undertake a rapid diagnostic survey and stakeholder consultation to assess the potential market and capacity of existing SSPWPs
- develop appropriate registration procedures, licenses, and agreements with municipalities and formal utilities under which the SSPWP can operate
- identify suitable financing mechanisms
- identify and agree on the appropriate materials and construction standards
- draft suitable bidding documents and templates to encourage transparent competition and awarding of contract licenses
- develop an appropriate technical/financial performance monitoring system
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SCOPE
There are five steps leading up to the appointment of the SSPWP piped network operator, followed by a sixth step to cover regular technical performance and financial monitoring:
- Undertake rapid diagnostic surveys of consumers, the water utility, and SSPWPs. Analyze the results to assess the size and location of the target market and the capacity of existing SSPWPs to meet the unfulfilled demand.
- Hold stakeholder consultation with the target communities, the utility, SSPWPs, local government representatives, NGOs, etc., and develop appropriate registration procedures, including time-bound licenses and Memoranda of Agreement with the Municipalities and formal utilities leading up to ultimate transfer of responsibility for service provision to them.
- Develop a financing structure and mechanism appropriate to the local situation.
- Identify materials and standards appropriate to the community and the lifetime of the project, and obtain approval from the relevant authorities.
- Prepare bidding documents including evaluation criteria and procedures, SSPWP appointment process and award contract license.Develop monitoring system covering appropriate technical/financial performance criteria.
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LINKS
- Outline of TOR
- Detailed TOR
- Appendices
- Questionnaire for Water Utility
- Questionnaire for SSPWP Piped Water Operators
- Questionnaire for SSPWP Water Vendors
- Questionnaire for Bottled Water Suppliers
- Questionnaire for Customer Survey
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