2010年-世界发展银行全球_Internal_Delegation_Contracts_for_Water_in_Uganda___An_Innovative_Approach_to_Establishing_a_Successful_Public_Utility_4页_709kb

Summary of GRIDLINES: Internal Delegation Contracts for Water in Uganda

Core Content

The document discusses the transformation of Uganda's National Water and Sewerage Corporation (NWSC) into a successful public utility through the introduction of internal delegation contracts. These contracts, inspired by public-private partnership (PPP) principles, were designed to motivate local managers and improve operational efficiency and financial sustainability.

Main Viewpoints

• Innovative Approach: The NWSC adopted an internal delegation model, where local managers formed private-sector-like partnerships to operate systems under contract with the utility. This model was inspired by previous management contracts with external private operators.
• Performance-Based Incentives: Local managers' pay was linked to performance, with bonuses and penalties based on key operational indicators such as nonrevenue water, bill collection, and labor productivity.
• Operational Improvements: The reforms led to significant reductions in nonrevenue water and water losses, and improved bill collection. These improvements were more pronounced in secondary cities than in Kampala.
• Customer Access Expansion: A free connection policy introduced in 2005 allowed the poorest households to access piped water, leading to a doubling of connections between 2004 and 2008.
• Financial Viability: Despite no significant tariff increases, NWSC achieved operating profits for six consecutive years starting in 2003, due to efficiency gains and increased customer base.
• Employee Motivation: The reform emphasized the importance of motivating employees through financial incentives, which were more effective than traditional public management approaches.

Key Information

• Background: NWSC was a poorly managed state-owned utility, with over half the urban population lacking access to piped water and poor service quality.
• Previous Contracts: Two short-term management contracts (one with a German firm, one with Suez) were implemented in Kampala but had limited success due to design flaws and poor implementation.
• Internal Delegation Contracts (IDAMCs): Introduced in 2003, these contracts transformed NWSC's regional branches into quasi-private, autonomous business units. Each branch signed a two-year contract with a local partnership, which was responsible for operations, while NWSC retained control over investments and tariffs.
• Performance Indicators: The IDAMCs were based on five key performance indicators: cash operating margin, nonrevenue water, working ratio, bill collection, and percentage of inactive connections. Performance fees were also tied to administrative cost savings.
• Labor Productivity: Improved from 36 staff per thousand connections in 1998 to 6 in 2008, largely due to voluntary redundancy and recruitment of more qualified staff.
• Challenges: NWSC faced challenges in monitoring local partnerships and ensuring accountability. A "checkers system" was introduced to address these issues, leading to the dismissal of three partnerships.
• Government Support: The long-term sustainability of NWSC depends on government support, as tariffs cover only part of the investment costs. The government has financed the investment program, leading to taxpayer-funded infrastructure.

Lessons Learned

• Employee Motivation is Key: Financial incentives and penalties are essential for improving performance in public utilities.
• Adaptation to Local Context: The success of the reform was due to its adaptation to local conditions and culture, rather than a one-size-fits-all model.
• Centralized Oversight: Headquarters must maintain strong oversight and provide essential support functions, such as financial control and benchmarking.
• Sustainability Concerns: The reliance on government funding for investment raises questions about long-term sustainability, depending on fiscal space and effective resource utilization.

Key Figures

• Philippe Marin: Senior water and sanitation specialist at the World Bank.
• William Muhairwe: General Manager of NWSC, leading its reform since 1998.
• Silver Mugisha: Chief manager of institutional development and external services at NWSC.
• Josses Mugabi: Young professional at the World Bank.

Conclusion

The Ugandan model of internal delegation contracts demonstrates that public utilities can achieve significant operational and financial improvements by adopting private-sector-like practices. It highlights the importance of performance-based incentives, strong leadership, and centralized oversight in the reform process. The experience serves as a valuable case study for other developing countries looking to improve their urban water utilities.