Most people are happy to pay more for better services.
This is a key assumption that drives our strategy to increase the financial sustainability of professionalized hand pump maintenance services in the Central African Republic (read more about our overall strategy for water sustainability and systems change in the first article of this series).
In one city, we’ve already committed to reducing our response time to requests for hand pump repairs to under 72hrs! And for that service, we’re charging a price that includes 100% of the direct, local costs for each repair: labor, replacement parts, and transport.
What’s The Vision?
Reliable water (meeting JMP definition of Basic Access) for all rural water users ensured by local, professional maintenance service providers, with affordable water user tariffs contributing to the sustainable financing of service delivery.
Pushing the envelope to provide more responsive maintenance services
In our post about the professionalization of services, we noted how we were striving to blend the more responsive artisan repair model with the stability of our circuit rider model. Our first attempt at that was a rapid response model in the second largest town of the Central African Republic, Berberati.
Starting in Berberati
We wanted to focus on an area where communities were already familiar with maintenance services, and an area with a higher population density and financial capacity. With a population of 100,000 people and 60+ manually operated water points, Water for Good decided the town of Berberati would be a great location to launch the initiative to adapt our maintenance services to be more responsive: a model we’re calling “Rapid Response” maintenance services.
Before rollout, we started with a financial assessment in order to understand the income generated from the tariffs charged and collected at each of these
We found that more than enough funds were flowing through these water assets to cover their ongoing maintenance and repair expenses.
In addition, we discovered some secondary economies had developed around the water points. These secondary economies for water services included:
- Pump managers who are paid to keep order and collect tariffs at the pump
- Pump attendants who pump the water for customers and collect payment
- Water distribution businesses
- Pre-filled water jugs sales (typically found in locations with wait times of over 1hr at peak times)
These widespread secondary economies indicated that a subset of the water users at each pump had an economic incentive to keep these water points functional and maybe, therefore, would more inclined to pay our local technicians for the full cost of repairs.
Making Changes to Improve Services and Increase Cost Recovery
Using these insights, Water for Good developed two key objectives to improve upon the maintenance services we had already been providing in the form of a Circuit Rider Model.
1. Improve Services
Improving our response time to repair requests (repairs completed within 72hrs) is one of the most critical ways that we see ourselves improving service to communities.
2. Increase the PERCENTAGE paid By Local Communities
We emphasize percentage, rather than total amount because we aim to both increase the amount of revenue coming from community payments, and reduce the unit cost of services (total cost to provide services divided across all the pumps enrolled).
Below, we provide more detail on the implementation of each strategy—down to the nitty-gritty details!
The Nitty Gritty
We are proud of the maintenance program we’ve developed to reach over 1000 water points across 9 prefectures in the Central African Republic, but it’s not perfect! The largest problem? The Circuit Rider maintenance service, as we call it, lacks the capacity to be responsive.
Teams travel on pre-set maintenance routes (or circuits) and target to visit each hand pump enrolled in the service 2-3 times a year. For the most part, these visits provide sufficient preventative maintenance that functionality across all 1000 water points exceeds 85%. However, there can be a long gap in services if a pump fails shortly after a team visits, or if the team does not have the correct parts to make the repair when they make their scheduled visit.
The new Rapid Response model aims to complete repairs within 72 hours!
Communities can request services by phone or by visiting the Water for Good office in Berbérati. A Water for Good administrator and technician will then visit the site, complete an evaluation of the issue, and give the well committee a quote for the cost of service and parts. The committee then pays the Water for Good admin for the service or declines service. If service is accepted, the technicians will then complete the repair within 72 hrs of payment. For communities who do not have the cash on hand immediately, the local office has the discretion to set up an interest-free payment plan with the community.
This service is also structured to give Water for Good visibility on the costs, revenue, and effectiveness of a regionalized service. Water for Good monitors the program through electronic data collected during evaluation and service visits. The local technicians create a formal repair quote, which provides more transparency of the costs, and a portion of those costs that are passed onto communities. In addition, Water for Good admin staff complete bi-annual visits to all sites for an independent assessment of water point management. At the end of 1 year of operation, we will also collect water user feedback on their satisfaction with this service and the prices.
Regarding local government, this service model has a verbal endorsement, announced during a joint meeting in Berberati between Water for Good, and Regional Directorate of Hydraulics and Regional Office of ANEA in Berberati on 24th March 2017.
Increasing Cost Recovery
Water for Good works in some of the poorest and most remote communities on earth. As a result, the costs associated with our circuit rider maintenance program are heavily subsidized. One of our goals with a rapid response model is to reduce the percentage subsidized by philanthropy.
Historically the water points that are in the geographic scope of the Rapid Response program had been paying roughly 17% of the direct costs related to the Circuit Rider program. For the rapid response service, we have set our prices to cover 100% of the direct costs for the repairs.
While 100% is the goal, we also understand that the contexts are challenging for many of these communities. Many are still dealing with complicated economic struggles that have resulted from coming out of a civil conflict, and a country context that remains unstable. We have set up systems for payment plans, and take each repair case into consideration depending on the total cost of the repair, and the overall context of the community.
The main cost drivers of the circuit-rider model are travel costs!
The teams travel thousands of miles a year and are often gone for up to 3 weeks at a time as they complete their preventative maintenance routes (a.k.a. “circuits”). Together, the per diems, fuel, and vehicle depreciation/repair account for nearly 50% of the program costs. In order to make a dent in these major costs, the rapid response program relies on a motorcycle as opposed to a pickup truck and the technician only covers water points within a day’s round trip travel time. This cuts vehicle expense, fuel, and eliminates the per diem expense (food and lodging allowance while teams are on the road).
But, why increase prices? Isn’t Water for Good a charity?
Long-term, Water for Good hopes to transition these services to a local, private enterprise in this town and others that have a good market for these services. We will constantly be assessing the business model in order to determine when to privatize these ventures into locally owned and operated business. We will also be closely monitoring the level of subsidization that is required to make it successful, and engage local and national governments to work towards incorporating rural water service and provision into their long-term visions and budgets for their country.
So, what do YOU think?
Are professionalized services a key to sustainability? How can the public and private sector do better to collaborate on the delivery of professionalized services?
Please join the conversation! Comment below or connect via email: firstname.lastname@example.org.
The series culminates during the World Water Week conference in Stockholm, Sweden at the end of August, where we would love to meet up with other attendees! We will also have representatives at the 41st WEDC conference in Nakuru, Kenya in July, 2018. Contact email@example.com if you’d like to connect!