Sourcebook on Deterring Corruption and Improving Governance In Urban Water Supply and Sanitation April Charles Kenny

Low coverage… …Short supply periods …High NRW …Low collection ratios …High staffing ratios …and a corruption problem? Modal Quality of WSS in Africa:

14% Connected… …1 public tap per 2,000 people… …High prices… … And a vendor cartel paying off officials. Jakarta in the 80s:

India’s Water and Sanitation Suppliers Bribes to falsify meter readings (75% of time)… …Bribes to illegally connect …Payments to politicians recouped through substandard construction (1- 6%) …Kickbacks to ensure timely approval and payment (6— 11%) …Bid rigging (15%) …Payments for positions India in the 00s:

Corruption “Hotspots” in a Utility GOVERNMENT PUBLIC UTILITY CUSTOMERS REGULATOR DONORS PRIVATE CONTRACTORS Capital Projects -Planning and Budgeting -Tendering and Procurement -Project Selection -Project Planning and Design -Construction -Supervision Gov’t Officials Utility Managers Human Resources Suppliers and Contractors Utility Employees Connections & Commercial Operations Donor Financing Stores, travel & use of company property

The “Long Chain” Government Electricity UtilityPublic / Consumers Accountability to citizens Service and tariff specifications Short route of accountability Officials, e.g. Department Regulator Monitoring Units Autonomy Incentives

Strengthening the Chain (I) Government Water UtilityPublic / Consumers Accountability to citizens Service and tariff specifications Short route of accountability Officials, e.g. Department Regulator Monitoring Units Autonomy Incentives Accounting controls Financial management and budgeting Commercial controls Human resources Procurement of supplies and services Stores Use of company property and money Compact on service targets and allowed resources Checking provider performance and monitoring the provider …The Supply Side

Supply Side Approaches in the Utility… DetectReduce Ghost workers  Surveys  Labor productivity  Deliver paychecks in person  Payroll system  ID cards  Collect paychecks in person Corruption in procurement  Multiple sole source awards  Unusual or unexplained (or both) delays in procurement process  Unreasonably short time frame for bid proposal to be submitted  Unnecessarily prescriptive specifications  E-procurement  Probity advisors and auditors  Opening bids in public  Outsourcing procurement to trusted agency Bribes for connections/ under- reporting  Unmet demand for connections within grid area  Customer surveys  Complaint hot-lines  Incentives to improve accuracy of readings and collections  Changing meter reader’s routes regularly  Remote meter reading Accounting systems  Qualified audit report  Billing system and accounting system not integrated  Modern, integrated MIS systems  Independent audits  Sanctions for qualified audit reports

Strengthening the Chain (II) Government Water UtilityPublic / Consumers Accountability to citizens Service and tariff specifications Short route of accountability Officials, e.g. Department Regulator Monitoring Units Autonomy Incentives Project planning, selection, and evaluation Procurement procedures Project supervision Promoting probity in PSP procurement and supervision Empowering citizens Information How citizens can influence providers and government Empowering citizens Information How citizens can influence providers and government …The Demand Side

Billing and metering… …HR Reform …Auditing accounts …Even Corporate Reform and Citizen oversight… Are hardly novel… …So why are we still here? An Old Agenda

…. Zambia PE Work Decades of Reform promises… …Limited Execution… …Poor Results… … Because of the political economy of provision.

Can We Measure Outcomes? …Yes, by looking at development impact BadGood Staff/1,000 Connections224 NRW72%8% Coverage Area25%90% Metered Coverage13%100% Supply Duration (hrs/day)1024 Collection Ratio48%100%

Can We Really do Something About It? Phnom Penh Water Supply Authority Staff/1,000 Connections224 NRW72%8% Coverage Area25%90% Metered Coverage13%100% Supply Duration (hrs/day)1024 Collection Ratio48%100%

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