Market orientation for water utilities

WHO reports that for every eight seconds, a child in low income countries dies of a water related disease. Furthermore, as of 1994, only 46 per cent and 34 per cent of Africa’s total population were adequately served with water supply and sanitation, respectively (Warner, 1997). One major problem leading to this sad phenomenon is the magnitude of funds needed to raise the water supply/sanitation (watsan) coverage, against the background of poverty in the low income countries. However, another major factor leading to the low coverage is institutional ineptitude in planning and managing the demand for public health services (Davey et al, 1996). Many water utilities in urban areas of the low income countries operate their systems with Unaccounted-For-Water (UFW) of between 36-62 per cent (Warner, 1997). UFW is a fraction of water produced but not billed for, and is a measure of the efficiency of the water utility. UFW is made up of physical system losses and commercial losses. The high figures of UFW for the water utilities translate into high production costs with low sales. To compound the problem, many African water utilities do not even collect all the money billed for, leading to the ever-increasing arrears. As a result of the above-mentioned factors, these water utilities are too cash-trapped to maintain the existing infrastructure, let alone improve service levels.