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Our OA Ambassadors raise awareness in their local communities about global OA movements as well as related opportunities through IWA Publishing. They are representatives of both the International Water Association and IWA Publishing and our joint goals to empower the next generation of water leaders and to shape the future of the water sector. These blog posts highlight their specialty and research focus, as well as expressing the importance of Open Access publishing. 

This blog post comes from Helen Barbosa, a PhD researcher on MAR system at Södertörn University, and this short blog is based on an ongoing article as part of Helen's MSc research fieldwork in Cabo Verde Santa Cruz. Helen is an environmental scientist and water manager, interested in water and development, organization sustainability, and climate change adaptation. Connect with Helen on LinkedIn.

A big thank you to Helen for participating! 

Figure 1, Credit: Author, 2021

Over the past decades, considerable attention has been given to the theme of commercialization of water supply provisioning and it has been applied in many water utilities believing that is the solution to address both social and business interests.  Although there is no singular definition of commercialization, it usually refers to the water utility adhering to two key principles, as often referred by Tutusaus (2019). The first principle is that the water utility must operate on the basis of full cost recovery. This is achieved by charging and collecting tariffs that reflect the true cost of providing water services. The second principle is that the water utility should function as an autonomous, business-like entity, thus “operating at arm’s-length from government agencies and thus avoiding politicisation of the day-to-day management of the utility”.

For water utilities to operate on commercial principles a number of interlinked elements are of relevance. The first element that needs to be considered are the costs of providing services. Usually, a distinction is made between the operational costs of water services provision and the capital (investment) costs of water services provision. The second element concerns the revenue that is generated by the water utility. If the utility is to operate on the basis of cost recovery, the revenue generated through tariffs, taxes and transfers (World Bank, 2017) must be sufficient to cover the costs of providing services. The third element concerns the time period over which costs are to be recovered. As the water services sector is a relatively capital-intensive sector, it is necessary to spread out the recovery of capital costs over a period of multiple years in order to ensure that tariffs remain affordable for consumers. The fourth element concerns the characteristics of the market that the water utility is servicing. These market characteristics include the number of connections the utility services, the density of the population that is being served, the income levels of consumers and the quantities of water that consumers consume. These market characteristics both influence the costs of providing services and the ability of the utility to generate revenue from water sales to consumers. The fifth element concerns the bio-physical and governance context in which the water utility operates. The biophysical context influences the costs of abstracting, treating and distributing water. Availability of good quality water resources reduces water supply costs, whilst pollution and scarcity of water resources may result in relatively high water supply costs. The governance context concerns the socio-political environment in which the utility operates and the legal and regulatory framework to which it is subject. This framework essentially provides the mandate the utility has and the obligations to which it must adhere.

Water utilities are the main instrument governments have to ensure the provision of water supply to its population. As such, water utilities are to provide a basic service that is fundamental for both public health and economic development. A major challenge that many water utilities face is the question how to combine the need to operate on commercial principles with the mandate of ensuring universal coverage of water services. Particularly in developing countries, the market characteristics of the population the water utility is to serve are not favourable for operating on the basis of commercial principles. Particularly in low-income areas, households have difficulties paying water bills. Moreover, these consumers tend to consume relatively small amounts of water. As a result, utility managers often view as “a burden or a risk” (Heymans et al. 2014: 3).

Service differentiation

In trying to achieve both commercial viability and universal coverage of water supply, water utilities have increasingly opted for a strategy of service differentiation (Njiru et al., 2001; Jaglin, 2008; Schwartz et al., 2017). By differentiating the way in which water services are provided to different consumer groups the water utility can tailor water supply provision to both meet the demands and abilities of the consumer, whilst also ensuring that this supply arrangement does not result in a heavy cost burden to the water utility

Subtle service differentiation and the water divide

My fieldwork experience highlights a few stories that elucidate clearly the contrast between the comforting words envisioned by various levels of water frameworks, the chosen models to operate a water company, and what actually happens to an ordinary citizen regarding everyday access to actual water. When I said "actual water," I meant the actual water and not the means (infrastructures) for having access to it. This is illustrated by Maria, Joana, Berta, and many more cases of having networked piped water without having actual access to water on most days of the year.

Two main questions might come to your mind: how does it happen? and why. To answer the how, I must mention that it starts with how water is made available to citizens, and to answer the why question, largely due to customer payment affordability, agency, and power to influence decisions.

During the fieldwork, I visited a couple of houses for sampling purposes. In many of these houses, I could not collect water samples because it was not yet time for water to reach their house. In the meantime, I started talking with the woman about her experience with water service delivery. She explains that she only receives water twice weekly for approximately 2- 3 h. Sometimes the amount of water is not enough to reach this group of networks. In contrast, her neighbor receives water almost every day. It is possible to find different kinds of networks theme on the same street.

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The water distribution plan is made to work mostly to benefit the company's financial interests and to seek financial viability. The water utilities operating in poor municipalities in Cabo Verde, for instance in Santa Cruzuse, purposefully maintain two kinds of water distribution networks, so-called by utility staff, the old network, and the new network.

Those connected to the old network are only supplied with leftover water, and in some low-income areas twice a week. The old network is dependent on manual operation by valve operators to direct and redirect water and pressure to a certain area. Whereas, the consumers connected to the new network receive automatic supplies for a long period, five (5) times weekly.

This means that two kinds of water network arrangements are manipulated to dictate how, when, and for how long the water is supplied to a certain type of consumer in the same city. This also, means that these decisions are not neutral. They are influenced by a constellation of factors, but in this piece, I just want to mention the government responsibility and decisions to adhere to and implement certain water frameworks brough from a more developed and contextually different than Santiago island. 

As a citizen of Cabo Verde and researcher in Water Services Governance i called for more attention on the impact of these water practices while trying to achieve financial viability, in the context of poor municipalities in Cabo Verde.

The government has the right to step out and bridge the current gaps in the urban service of water governance: financial, and infrastructural demands, addressing the water reform impact on people's lives, providing economic empowerment to its citizens, etc ) that are violating the basic human rights consecrated by the constitution of Cape Verde. Otherwise, it is almost impossible to achieve genuine water for all.

Reference used

Heymans, C., Eales, K., & Franceys, R. (2014). The limits and possibilities of prepaid water in urban Africa.
Njiru, C. (2002). Managing urban water services through segmentation, service and price differentiation: findings from sub-Saharan Africa. Loughborough University
Jaglin, S. (2008). Differentiating networked services in Cape Town: Echoes of splintering urbanism? Geoforum, 39(6), 1897-1906.
Tutusaus, M. (2019). Compliance or defiance?: Assessing the implementation of policy prescriptions for commercialization by water operators. CRC Press.
Schwartz, K., Tutusaus, M., & Savelli, E. (2017). Water for the urban poor: Balancing financial and social objectives through service differentiation in the Kenyan water sector. Utilities Policy, 48, 22-31.
World Bank 2020, available from https://rb.gy/v6moqw (retrieved 03 March 2023)