1. Service Costs and their recovery in Urban water and sanitation services: A study of select urban areas in AP
Ramakrishna Nallathiga
Associate Professor
National Institute of Construction
Management and Research
Pune – (INDIA)
Presented at the International Conference on “Decentralised Water & Wastewater Management in Asia” held by International Water Association (IWA) at Nagpur on Nov 20-22, 2012

2. Structure Introduction Urban services The Study
Status of Urban Water Supply
Status of Urban Sanitation
Status of Solid Waste Management
Reforms and actions

3. Introduction
Provision of urban infrastructure services, the costs associated and their recovery is long debated
The organisation of services in urban local bodies is itself complex to bring some clarity
Inter-governmental set-up of urban local bodies renders with further complexity
Few studies in major cities/ towns in India point to the service delivery, costs and sustainability
Ruet et al (2002)
Bagchi (2003)
Mukherjee (2009)

4. Urban services
The Municipal Acts of State/Local governments specify the functional domain, which includes the core services of water supply, sanitation, roads, streetlights and solid waste management
There are five categories of urban local governments in AP:
Municipal corporations
Selection and Special grade municipalities
First, second and third grade municipalities
Nagar panchayats
Urban local bodies are caught in the dilemma over expanding services to ever increasing population and pricing them to commensurate the costs of service

5. Study objectives
The broad objective of study was to work out an assessment/ reform framework for user charge levy to recover O&M costs incurred in the provision of urban water and sanitation services rendered by the ULBs in Andhra Pradesh.
The specific objectives include:
To study the existing scenario of user charge collection in the ULBs;
To enable the ULBs in the fixation of user charges appropriately;
To avoid financial un-sustainability of the service delivery
To overcome deficiencies in the delivery of services.
The principles, process and guidelines of user charge levy towards this objective are discussed separately in another paper – Nallathiga (2009) and do not form the discussion of current paper.

6. Study sample Region City/ Town Urban Local Body Water supply source
Sanitation system
Coastal Andhra
Tuni
Municipality
Ground water
Open drains
Rajamundry
Municipal Corporation
River water -
Tenali
Eluru
Canal water
Underground Sewerage
Rayalaseema
Kurnool
Pulivendula
Surface & Ground water
Guntakal
Telangana
Mahabub Nagar
Mancherial
Ramagundam

7. Sample characteristics
Name of Town
ULB Category
Area
(sq km)
Population (No.)
City Class
Tuni
II Grade Municipality
9.85
50,368 II
Rajamundry
Municipal Corporation
44.50
413,616 I
Tenali
Spl Grade Municipality
15.12
153,756
Eluru
12.02
215,804
Kurnool
15.01
342,973
Pulivendula
III Grade Municipality
50,503
Guntakal
I Grade Municipality
51.90
117,103
Mahabub Nagar
14.00
139,662
Mancherial
41.44
49,221
III
Ramagundam
93.87
237,686

8. Status of service, user charges and cost recovery
WATER SUPPLY

9. Water supply source and service
City
Means of Water tapping
Means of Water distribution
Tuni
Tube wells
Individual tap and tankers
Rajamundry
Gravity flow
Individual tap
Tenali NA
Eluru
Kurnool
Gravity flow and lift
Pulivendula
Gravity flow and Tube wells
Guntakal
Mahabub Nagar
Lift
Mancherial
Ramagundam
Diversion and Lift

10. Water supply source and service
City/Town
Water storage
Water distribution
Elevated Reservoirs
Underground reservoirs
Over ground reservoirs
Tuni 4 - 2
Individual tap & tankers
Rajamundry NA
Individual tap
Tenali
Eluru 18
Kurnool 14 1
Pulivendula
Guntakal 10
Mahabub Nagar
Mancherial
Ramagundam

11. Water supply status

12. Water supply cost structure
Share of Various O&M Cost Heads (as % to Total)
TOTAL
ULB
Salaries
Power & Fuel
Consumables
Maintenance
Equipment Hire
Guntakal M 59 8 3 10 20
100
Kurnool MC 70 - 16 14
Mancherial M 41 11 19 18
Ramagundam M 23 2 12 21
Eluru MC 30 45 6 15
Mahabub Nagar M 4 76 1
Pulivendula M 68 13
Tuni M 57
Rajahmundry MC 54 7

13. Water supply user charge
City/ Town
Monthly Charge per connection (Rs)
Guntakal NA
Kurnool 60
Mancherial 75
Ramagundam
100
Eluru 90
Mahabubnagar
Pulivendula 15
Tuni 63
Tenali
Rajahmundry
Sample Average 74

14. Status of service, user charges and cost recovery
SANITATION

15. Sanitation cost structure
ULB
Share of O&M Cost Heads (In Percentage)
TOTAL COST (%)
Salaries
Tools and Equipment
Consumables
Maintenance
Equipment/Vehicle Hire
Guntakal M
39.39
26.38
34.23 -
100
Kurnool MC
99.33
0.67
Mancherial M
93.71
6.29
Ramagundam M
67.90
32.10
Eluru MC
33.71
50.94
0.37
7.49
Mahabubnagar M
18.18
81.82
Pulivendula M
50.00
Tuni M
98.49
0.75
Tenali M
95.60
0.00
4.40

16. Solid wastes cost structure
O&M Cost Heads (In Per centage)
ULB
Salaries
Fuel
Maintenance
Equipment Hire
Spare Parts & Repair
Total Costs
Guntakal
94.33
3.78
0.90
0.28
0.71
100.00
Kurnool
43.05
9.05
0.47
47.12
0.31
Mancherial
89.48
4.48 -
4.29
1.75
Ramagundam
82.17
15.71
1.47
Eluru
85.11
13.48
1.42
Mahabubnagar
89.44
1.25
8.97
0.00
0.35
Pulivendula
95.31
4.69
Tuni
66.83
4.58
26.19
2.39
Tenali
82.64
17.36

17. Status of service, user charges and cost recovery
REFORMS & SUGGESTIONS

18. Scope for service improvement
Service Category
Service Parameter
Current Level
Potential for Improvement
Water supply
Water quantity
Water quality
Access/Service coverage
Water consumption measurement
Adequate
Service deficits in city outskirts
No metering of water supply
low
Improved network
Metering of water supply
Sanitation
Sewage conveyance
Sewage treatment
Sewage disposal
Open drains
No treatment
Open disposal
Covered drains
Primary treatment
Recycle/ reuse
Solid waste management
Waste collection
Waste separation
Waste transport
Waste treatment
Waste disposal
Door to door collection
Separation at disposal site
Organised transport
No waste treatment
Open dumping
Decentralisation
Separation at source
little
Bio-composting
Sanitary practices

19. Feasibility of cost recovery
Service High Medium Low None Water and Sanitation Water Supply √ Sewerage √ Sanitation √ Solid Waste Waste collection √ Waste transport √ Waste treatment √