Existing Solutions

Capacity building, SME, subcontracting, enterprise development, water utility performance, maintenance

educational

Technical

Policy

The “Support Program to SMEs of public works, maintenance of water distribution systems” was initiated and financed by the Centre for the Development of Entreprise (1,200,000 euros), which is a a branch of the European Union, with the support of the African Water Association (AfWA). The program aims at improving water supply network performance in seven target countries (Botswana, Djibouti, Ghana, Ivory Coast, Kenya, Senegal and Zambia) by subcontracting maintenance tasks to national SME’s.

The consortium composed of consulting companies G2C environnement-Hydroconseil has been selected for the implementation of the program. The main objective is the capacity building of SME executives on the following topics:
•    Mastering technologies for leakage detection
•    Analysis and data interpretation on the condition of water distribution facilities
•    Optimization of networks operation and lifespan
•    Water resource management by reducing losses
•    Reducing operation costs to allow for capital investment

The program implementation and its objectives rely on the following 5 stages:

Preliminary analysis of water utilities and identification of beneficiary SMEs in public and hydraulic works
•    Technical audit of water supply and operation facilities
•    Development of training modules for SMEs
•    Capacities strengthening of SMEs
•    Support to development of business plans to secure contracts with water utilities
•    Finally, consolidation of the knowledge gained during program implementation is also a key issue

The program has been undertaken in seven target African countries Botswana, Djibouti, Ghana, Ivory Coast, Kenya, Senegal, Zambia characterized by large water utilities overwhelmed by network maintenance tasks leading to slow reaction time, lowering service levels and profitability.

The program was initiated in a meeting between the African Water Association (AfWA) and the Centre for the Development of Entreprise (CDE) in Addis Abeba in 2006.

The initial driver was the observation by AfWA that 40% of equipment in the water sector was no more operational after 10 years. This is mainly due to wrong technological choices, lack of proper maintenance policies and lack of qualified manpower.

The entity which carried out the implementation of the program was the consortium formed by two French consulting companies G2C environnement and Hydroconseil, led by project Director Claude Jamati, who has a vast experience of water utility operation and a thorough knowledge of African countries.

The vital relays for the program locally were the national coordinators in each target country. They were selected and appointed by the G2C-Hydroconseil consortium and were high-profile members of the team, with previous careers in relevant ministries or utilities.

The program was successfully carried out in the seven target countries between 2008 and 2011. The contract awarded to the G2C-Hydroconseil consortium is completed and validated.

The general problem to solve is poor performance of water utilities in terms of network efficiency, non-revenue water, asset management, service levels, customer satisfaction and profitability.

The initial driver was the observation by AfWA that 40% of equipment in the water sector was no more operational after 10 years. This is mainly due to wrong technological choices, lack of proper maintenance policies and lack of qualified manpower.

Water utilities being overwhelmed with multiple issues and limited manpower, the improvement lever was the initiation of a subcontracting mechanism to local SMEs while at the same time bringing potentially-adequate SMEs on this new market through capacity building on specialized topics.

The program implicated more than 10 water supply and waste water utilities

It implicated more than 50 beneficiary SMEs with national extension potential in several countries

It identified more than 15 activities which may be sub-contracted by utilities

It produced 7 CDs (one per country) containing technical and management capacity building modules, adapted to local contexts

It produced newsletters largely disseminated throughout AfWA and water sector institutions in Africa

It produced a toolkit to allow for continuity of the process and extension at national or local levels throughout the African continent

It generated 3 million euros of signed contracts and 8 million euros of contracts in preparation

The aim of the program was to initiate the dynamics of subcontracting between water utilities and SMEs. Tanglible impacts in the long-term are but expected to expand both in terms of business volumes and improvement of water utility performance.

Success indicators in the long-term will be measurable both in terms of business volumes (number of utilities subcontracting, number of SME with contracts, total amount of contracts) and improvement of water utility performance (NRW, OPEX, reaction time, etc)

All water utilities operating large networks characterized by difficulties to undertake timely network maintenance tasks leading to slow reaction time, lowering service levels and profitability, in countries lacking external local companies to support such operations. Generally speaking, similar solutions could be replicated throughout the African continent and also in Asia and South America.

Creating favourable conditions for service subcontracting dynamics from water utilities to specialized SMEs, and bringing SMEs to this market will result in quicker and more efficient maintenance works at competitive prices, thus helping the water utilities to maintain their service levels and performances.

Upscaling this solution would require the attention of Governments so as to establish discussion directly between the relevant Ministry and the CDE so as to consider the implementation of such programs on a nationwide basis.

The project mobilised 1,200,000 euros and was carried out over 3 years. In case of replication, experience of the operation and existing modules will allow faster implementation.

In all the target countries, it was observed that the local private sector (SMEs) was very keen to work in a more regular fashion with large regional or national water utilities. The SMEs namely appreciated the access to information about the utilities’ organization, works and figures.

Most of the water utilities considered that a more organised and systematic sub-contracting mechanism for maintenance activities was an interesting option for them to reduce their operation costs and improve their performance. These utilities have shown an openness to understand the difficulties of small companies with irregular jobs in maintaining themselves and their difficulties to access classic tenders.

The team of international and local experts of the G2C-Hydroconseil consortium mobilised by the CDE have been true catalysts to establish firm discussions and engagements between water utilities and the SMEs. The weight of an international institution and its representatives does play a role in bringing together the actors of such a program.

A key success factor is to ensure understanding, consent and full implication of the target water utilities at the early stages of the project. The most successful and appreciated workshop was the one where the water utility practically took over the workshop program and presented their vision and needs.

A few drawbacks were also observed – lack of engagement from some water utilities towards the SMEs after the workshops, slowness to issue contracts and projects after the workshops even when willingness has been expressed, reluctance and difficulties of the SMEs to invest in parts and equipment without clear guarantees of securing jobs.

An interesting mechanism is to ensure total transparency throughout the program so as to be able to consider the preliminary selection of SMEs for the CDE program as a pre-selection process for the subcontracting framework as well leading to a restricted competitive process afterwards.

There has been interest expressed by supporting institutions in some of the target countries to replicate the solution locally. There is no commitment as such yet.

Centre for the Development of Enterprise (CDE)
52 avenue Hermann-Debroux – 1160 Brussels, Belgium
Sid Boubekeur, Head Regional Field Office for Southern Africa, Gaborone, Botswana
sid.boubekeur@cde.int
www.cde.int

G2C environnement
2 avenue Madeleine Bonnaud – 13770 Venelles, France
Kevin Nirsimloo, Project Director
k.nirsimloo@g2c.fr
www.altereo.fr

Hydroconseil
198 chemin d’Avignon – 84470 Châteauneuf de Gadagne, France
Bernard Collignon, CEO
collignon@hydroconseil.com
www.hydroconseil.com

Project newsletter 1 ENG
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Project newsletter 2 FR