When informal water providers get formal: who pays?

In low income areas in African cities, where the poor cannot afford to pay the bill, water is often supplied by informal providers. Focusing on a study case in Kenya, a new article by Akosua Boakye-Ansah, Klaas Schwartz and Margreet Zwarteveen, explores what happens when water utilities work with informal providers: by delegating tasks to local water elites, they reproduce the inequalities they sought to eliminate.

Urban water supply in most African cities remains characterized by low coverage and erratic supply, with the wealthier inhabitants enjoying better services than those residing in low-income areas. Water utilities operating in these cities associate low-income areas with widespread illegal water connection and low payment of bills. This difficulty in properly accounting for and billing the water delivered to low-income areas is the main reason that most water utilities consider service delivery to these areas a burden. Subsequently, they prefer to expand services to those areas where tariff collection is easier, and immediate financial returns are more promising.  The resulting gap in water supply in these low-income areas is often filled by informal modes of water supply. Meanwhile, services of these informal providers are usually at odds with existing rules and regulations guiding formal water delivery in cities and are thus considered illegal. As part of efforts towards improving water services to low-income areas, the activities of these informal providers are currently being acknowledged through various formalization approaches.

In our recently published paper, we investigate one such formalization approaches. This approach which consists of partnerships between the utility and the informal providers, allows the utility to partially withdraw from service provisioning to the low-income areas. We show through a case study in Kenya that, whereas initially the concept of formalization was opposed by formal water utilities, formalization through such partnerships has become an acceptable approach for water supply in low-income areas.

The study: different mechanisms to delegate water services for the poor

The study involved the evaluation of partnerships formed between formal water utilities and informal providers in low-income areas within three Kenyan cities. Through the evaluation, we discovered three mechanisms through which the formal water utilities partner with the informal providers to serve consumers in these communities. All three mechanisms involved water utilities delegating the last chain of water supply to the informal providers; however, the level of delegation differed with each mechanism.

The partnerships were formed through the use of two technologies; the water kiosk and yards and an organisational arrangement; the Delegated Management model (DMM). While the attendants/operators associated with the water kiosks technology provided a good entry-point for the formal water utilities to form partnerships with existing informal providers, the landlords or landowners on whose lands the yard taps were constructed also provided another type of partners for the water utilities.

Meanwhile the use of the DMM involved a deeper level of delegation. Here the utility sells bulk water to agents; referred to as master operators (MOs). The master operators then take up the responsibility for the onward supply of water to community members, through water kiosks, yard taps or individual household connections. In all three mechanisms, the partners (the kiosks attendants, landlords and master operators) are responsible for collecting payments and paying the utility.

What we found: shifting the risk further down

The combination of the technical and organisational designs seems to present the needed fit between development requirements and the practices of the urban poor. Through the partnerships, informal water providers that used to control water distribution and services delivery in the low-income areas have been absorbed into the formalized groups designated to arrange water provision. This effectively opened up the low income areas to the water utilities, leading to improvements in some aspects of access.

However, in making the partnership work, it seems that the water utilities pay more attention to the financial aspects of their cooperation. Indeed, the two lead partners in the newly formed partnerships, the utility and the now formal providers, primarily look out for themselves. The utility has conveniently shifted the risks associated with their services (mainly the risk associated with cost recovery) in the low-income areas to the master operators, kiosks operators and landlords. The informal providers, who also have the responsibility of protecting their investments while maintaining good working relationships with the utility through the payment of bills, also secure their own earnings by shifting all losses to the consumers. Instead of allowing residents to impact decisions, these partnerships seem to be making room for the ‘local elites’ to wield more influence and wealth, thereby maintaining or even reinforcing the very inequalities the interventions sought to eliminate in the first place.

Read the full article here:

Boakye-Ansah, A. S., Schwartz, K., & Zwarteveen, M. (2019). From Rowdy Cartels to Organized Ones? The Transfer of Power in Urban Water Supply in Kenya. The European Journal of Development Research, 1-17.

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