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Rwanda private water suppliers set terms for lower rural tariffs

Friday October 28 2016

Private water contractors supplying Rwanda's rural areas have given the government a list of demands they say will have to be met before they can deliver water at friendlier consumer tariffs.

This is after residents in far-flung areas supplied by private water operators decried tariffs that are in some cases up to four times what consumers in major urban centres pay for a cubic metre.

Rwanda Today recently found out that rural families pay between Rwf450 and Rwf1,400 per cubic metre while their urban counterparts served by the Water and Sanitation Corporation (Wasac) pay only Rwf323.

“We have provided government with detailed calculations indicating what is involved in the tariffs we charge; the expenses we incur in terms of operation, district charges, tax and others. People just look at the price per cubic metre and think it’s huge without looking at the costs involved,” said Cyprien Sebikwekwe, who chairs the forum of rural water operators.

READ: Users in rural Rwanda pay more for water provision

Operators have blamed the costs on huge water supply capital investments associated with running and maintaining largely dilapidated rural water networks. This, they say, forces them to pass the costs on to users through high charges and tariffs, posing a challenge to the majority of rural poor families who resort to unsafe water sources.

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The situation has also created a huge disparity and inequity in accessing water among the rural and urban citizens as disadvantaged rural communities are denied affordable supply in the absence of significant incentives claimed by operators.

Private operators say that approximately more than a third of the existing rural water systems are dilapidated, causing huge water losses, while at the same time making water supply services to operate well below operating costs.

They suggest however that with incentives like cheap electricity for water pumping, tax reduction on their services as well as the equipment required in the water supply, treatment and network maintenance, the costs can get reduced, impacting on the tariffs.

“We are waiting to hear from government after we gave Rura detailed information with regard to the mismatch in our calculations,” said Joseph Usabimana one of the operators.

Attempts to get comment from Rwanda Utilities Regulatory Authority (Rura) officials, recently mandated to look into the issue, were futile by press time.

Rwanda Today has learnt that a nationwide consultation with different stakeholders in the water supply sector, local authorities and the regulatory body, was ongoing, including systematic examination of available data based on which a review of tariffs would be agreed and validated.

Government seeks to achieve 100 per cent of water supply and sanitation coverage by 2017.

But a huge funding gap for construction, rehabilitation and management of water supply infrastructure stands as a barrier likely slow the pace at which the objective get achieved.

The World Bank estimates that the country’s funding gap to meet the goal of 100 per cent water supply by 2017 is Rwf300 billion.

This is inclusive of budget prioritisation from the government as well as support from the major development partners. About 20 operators are in the rural water supply business across the country running water schemes on hilly terrain requiring pumping in most instances using diesel fuel and expensive electricity, hence incurring high production and operation costs.

With most of this water infrastructure operated under short-term agreement between operators and respective districts, they fail to deploy substantial investments in terms of extending or even maintaining them.

Rural water supply services, unlike the urban centres served by the government incentivised Wasac, are regulated by respective districts.