BUSINESS STRATEGY: PREPAYMENT NWSC’s pre-paid experience By Joseph Ndegeya Briefly put: Pre-paid metering has enabled the National Water and Sewerage Corporation of Uganda to provide lifeline tariffs in their provision of water to the poor through pre-paid metering. Kampala, the capital city of Uganda, is estimated to have a resident population of about 2 million people. This number is believed to double during the day due to the influx of the labour force that works within the city but reside in the neighbouring districts of Wakiso, Mpigi and Mukono. Different sources also report that between 40% and 70% of the resident population lives in the over 20 informal and un-served settlements scattered within the city. The sanitation situation in these areas is appalling. The land-tenure system and inappropriate technologies have led to the construction of very poor latrines (or no latrines at all). These have contaminated the alternative water sources and, no doubt, have led to the disease epidemics common in these areas. National Water and Sewerage Corporation (NWSC) is responsible for providing piped water and transportation of sewage and its treatment in the City. Kampala Capital City Authority (KCCA) is responsible for protecting the springs and ensuring adequate sanitation. In Kampala, access to safe water is at 70% but for the informal settlements, this figure is believed to be a dismal 17%. The main reasons for this are the absence of water distribution networks in these areas, or if present, the high costs charged by yard-tap owners and kiosk operators. Thus, the slum dwellers resort to alternative and unsafe sources of water, which include springs (both protected and unprotected) and shallow wells. Recent studies by KCCA show that the number of households using alternative sources is significant; and more than 90% of the water samples from these alternative sources are contaminated by E-coli bacteria (from nearby latrines, leaking sewers and solid waste that carries significant faecal matter), putting the users at risk of disease. Cholera epidemics have been common, the most recent outbreak in Kampala having been in November 2006. NWSC has been involved in the implementation of numerous initiatives targeting the urban poor consumer category and therefore possesses good institutional experience of successes and constraints within its ranks. In 2006 the corporation established a branch in Kampala Water dedicated to ensuring that pro-poor activities are planned for and implemented within the Kampala Water operational framework. The Urban Pro-Poor Branch Manager Mr. Gerald Ahabwe (left) illustrating to residents of an informal settlement how to use a pre-paid standpost 34 mandate of the branch is to put in place infrastructure to provide services to the informal settlements. In doing this, emphasis is put on demand creation through community sensitisation and stakeholder collaboration to ensure service ownership for sustainability. We also work with stakeholders to identify urban poor communities as well as put management frameworks in place for urban pro-poor facilities. The pre-paid meters which the urban pro-poor branch has been installing have turned around the water supply situation in informal settlements. Before the branch was established, NWSC had already installed a social tariff for water at public water pipes (UGX 1,236/m³, US$ 0.5 /m 3 ) in the tariff structure. However, the urban poor were unable to benefit from this special consideration because these standpipes were operated by private persons who have always charged an exorbitant fee for vending water. The corporation had no means of controlling the price at which operators were selling water. Due to the land tenure system in these areas, places where public standpipes can be installed under the direct control of the Local Community with an appropriate tariff system are very limited. In addition to higher charges, the vendors were not always available to sell water; Water utility managers from Pakistan and Bangladesh toured the Pro-Poor Branch to see the operations of the pre-paid meter. The author is on the extreme left METERING INTERNATIONAL ISSUE - 1 | 2014