Unaccounted For Water

Our Friday meeting (4/4/08) with the CWSB was informative. They broke down for us most of the major projects they are considering and went through the general layout of water supply in the Coast province.

Our proposal is to build distribution pipelines in Kayafungo, Kenya. Kayafungo is a rural location in the Kalifi district of the Coast province. The groundwater is salinated, the above-ground water-sources are seasonal and the rainfall is concentrated in two short rainy seasons. These factors make piped water the only complete solution for the Kayafungo community. The ultimate source for piped water would be Mzima Springs—a source of great pride to Coastal Kenyans. Mzima Springs is located in a national reserve that is apparently rather beautiful (we are planning a trip out there next week!).

Water from Mzima Springs travels 200 km to Mombasa on the Mzima Springs pipeline, which was built in 1953. We would take water off the Mzima Springs pipeline at Mariakani, which is about 10 km from Mombasa. There is currently a pipeline being built from Mariakani about 17 km to a hill called Mwijo, where there is a 1500 cubic meter tank being constructed. The problem is that the pipeline to Mwijo doesn’t have enough pressure to make it up a small hill a couple of kilometers after Mariakani. The government is currently engaged in building a giant, empty tank and a pipeline to nowhere.

To fill the tank, it would be necessary to entirely re-do the line they are currently building and replace it with a high-diameter pipeline pressurized by an even larger tank near Mariakani. This larger tank would fill overnight off of the Mzima Springs line so as to not deprive Mombasa of critical water. The capacity of the Mzima Springs pipeline has dropped dramatically in recent years due to “unaccounted for water” and Mombasa does not receive consistent water supply—water to the entire city of Mombasa actually cut out while we were in the meeting and was out for most of the afternoon.

Unaccounted for water is a generic name for leaky values, broken pipes, theft or any other un-paid-for water. Unaccounted for water is generally combated through effective maintenance. Maintenance requires capital, but if you are not collecting money for your water, you don’t have capital. Thus is the cycle borne: corruption, theft and poor management lead to under-collection of revenues, under-collection leads to fewer maintenance and expansion projects, without maintenance, infrastructure degrades and leaks increase, which leads to even greater under-collection…

This is illustrated by a story told to us by a Mombasan friend. In Mombasa, there are people who push huge carts full of 20 liter jerry cans around the city to sell for use in the home. People who don’t have reliable water supply from the city fill up tanks on their roofs with these jerry cans at a huge mark-up. The local water service provider could under-cut these carters and install cheaper water in the homes, but they don’t have enough capital to do so. The service provider’s revenues are based on how much water they sell, but they collect for only 50-60% of the water that passes through their pipes. The reason? The carters have poked holes in the pipeline and steal their water. I don’t know if this is true or not, but it certainly sounds plausible.
Another thing working against the CWSB is that their tariffs were set in 1999. This may not seem like very long ago in the States, but inflation in Kenya has been significant since that time—prices for certain goods have increased by as much as 100% since the elections. Thus, the revenues they do collect are too low. Raising tariffs, however, will simply encourage more people to steal.

As they told me this story, I thought of my work for NERA Economic Consulting. One of the things that I do at NERA is help to set the tariffs for electric and natural gas service providers. We deal with many of the same issues at NERA, although we are removed from the on-the-ground impact of our work: I don’t go to the service territories of the utilities we work for to see if their electricity is more reliable after one of our projects. It was a strange moment when, sitting at the table with the CWSB engineers, I realized that one of the primary reasons we are having trouble getting water to Kayafungo is poor tariff design and bad regulation in the Coast Province as a whole—which is exactly something I would work on at NERA.