Supporting the Policy Environment for Economic Development
SPEED+

Decree 51/2015 for the Licensing of Private Water Suppliers

Private water providers (PWPs) are an essential component of the water supply network, particularly in urban areas, and often offer the only option for consumers. The Regulation for Licensing of Private Water Providers in the Supply of Potable Water (Decree 51/2015) has been in force for 18 months, but implementation has only begun in one municipality (Matola), where there have been very few licensing applications from PWPs.  More effective implementation of the Decree requires broader dissemination of the new regulatory framework, better tools for licensing authorities, and the establishment of minimum technical standards and tariffs to govern privately supplied water systems.

There is limited understanding of the new regulatory framework among licensing authorities, PWPs and the general public, which poses a constraint to effectively rolling out licensing to existing PWPs and scaling up private investment in expanding access to clean and affordable water. To help build greater awareness of the new Decree, SPEED+ will support DNAAS and AFORAMO to implement a dissemination campaign, already approved by USAID, which will include:

  • Three regional seminars targeting district and municipal licensing authorities, PWPs, and interested new investors.  Seminars will take place in Maputo for the Southern Region, Pemba for the Northern Region, and Beira for the Central Region.  The Maputo seminar will be held in October, and the Pemba and Beira seminars are expected for October/November; and
  • Informational material that includes (a) a clear and attractive format for publishing the text of the Decree, (b) a set of guidelines for the implementation of the Decree at district and municipal levels, including a summary of the roles and responsibilities of all GRM entities working in the water sector, and (c) a step-by-step guide to licensing procedures for public authorities and new or existing PWPs.  The materials will be distributed to district and municipal authorities who will also make them publicly available.  They will also be shared with AFORAMO and published on SPEED+, AFORAMO and DNAAS websites.

Effective implementation of Decree 51/2015 requires the development of technical standards to ensure that private water systems meet public health and safety requirements. Technical standards govern water quality and testing, distribution infrastructure, operation and maintenance regimes, and inspection requirements.  Service standards are needed to ensure minimum acceptable standards for quantity and availability of water, and to ensure PWPs deliver service equitably to consumers.  SPEED+ will provide technical review and recommendations to DNAAS as they draft and finalize the technical and service standards for PWPs.  SPEED+ will also provide assistance with participatory review processes with beneficiaries and PWPs/AFORAMO, presentations to Ministry and National Water Council, and final integration and harmonization of the standards for final approval.

DNAAS, AFORAMO and CRA have requested SPEED+ support to develop a tariff model to establish tariffs for PWPs. SPEED+ will engage consultants to develop a tariff model for the projection and calculation of PWP tariffs that enjoys broad stakeholder consensus built through extensive dialogue with AFORAMO and participatory consultation with public and private sector stakeholders.  The tariff model will ensure cost recovery for operations and infrastructure development; service quality and equity for consumers; incentives for efficient use of water; return on investment and reasonable margin of profit; and stable and simple to understand costs to consumers.  The tariff model will be accompanied by a set of implementation tools and training that enable CRA and AFORAMO to successfully complete an initial cycle of tariff adjustment. The consultants will also assist with the creation of a PWP Service Evaluation Report Model and a benchmarking system to manage inter-PWP competitiveness and encourage a virtuous cycle of improving efficiency and effectiveness. Following approval by DNAAS, CRA and MOPHRH, SPEED+ will assist with dissemination of the model to PWPs and potential investors. The study should start early September 2017, with results expected by mid-2018. 

SPEED+ will assist DNAAS to create a training plan for district and municipal staff to carry out licensing and monitoring activities as required under Decree 51/2015, and to identify funding for implementation.  This will include an evaluation and recommendation for the most efficient approach for selection and development of trainers (consultants or civil servants, national or provincial based). SPEED+ will develop a training manual and training modules. SPEED+ will facilitate a training of trainers and assist DNAAS to roll out the training to district and municipal authorities nationwide, including on-line training modules.  The training will include identification of required personnel and their roles and responsibilities for licensing and database management; procedures and timelines for processing licenses; performance monitoring of licensed providers; enforcement of technical standards; tariff setting; procedures for coordination with GRM Water Asset Management Administrations; and reporting requirements to CRA and DNAAS.  Training will be supported by the information material developed with SPEED+ support including the guidelines for implementation and step-by-step procedures for issuing licenses.

SPEED+ will assist DNAAS to complete an updated and accurate inventory and GIS mapping of the number and location of PWPs operating nationwide. Although prior inventories have been completed in 2010 and 2013, the data is outdated and incomplete.  Prior inventories covered the Greater Maputo area only, and showed rapid on-going expansion of the number of PWPs.  A current and complete inventory will provide DNAAS with vital information to inform PWP licensing decisions.  It will also be important in developing water policy and regulation, identifying investment priorities, and targeting development activities to increase potable water supply to urban and rural areas. Data will be captured and managed in the National Information System for Water and Sanitation (SINAS) which is being upgraded to enable consistent maintenance and updating of information. USAID provided approval for this activity last year. The procurement process for contracting a survey firm was launched on August 15, 2017 and the work is scheduled to begin in early October 2017.