Consultancy Services For Conducting Commercial Viability Analysis For Community Water Systems In Arid And Semi-Arid Lands at SNV Netherlands Development Organisation

Founded in the Netherlands in 1965, we have built a long-term, local presence in many of the poorest countries in Asia, Africa and Latin America. Our global team of local and international advisors work with local partners to equip communities, businesses and organisations with the tools, knowledge and connections they need to increase their incomes and gain access to basic services – empowering them to break the cycle of poverty and guide their own development.

Water, Sanitation & Hygiene (WASH) Sector

In WASH, SNV aims to impact the lives of under-served communities in rural, peri-urban, and small town areas to improve their health and well-being through contribution to (1) adequate and sustainable access to safe, sufficient, and reliable drinking water; (2) access to improved sanitation and; (3) sustained hygiene behavior  change as part of daily routines. SNV does this through a programmatic approach in the following key areas:

  1. Sustainable Sanitation and Hygiene for All (SSH4A);
  2. Area wide Rural Water Supply Services (ARWSS);
  3. Urban Sanitation & Hygiene for Health and Development (USHHD)
  4. Urban Water Supply Services (UWSS)

ENDING DROUGHT EMERGENCIES – CLIMATE PROOFED INFRASTRUCTURE FOR IMPROVED WATER SUPPLY AND SANITATION IN ARID AND SEMI-ARID LAND AREAS PROGRAMME (EDE-CPIRA)

SNV is implementing the Ending Drought Emergencies – Climate Proofed Infrastructure for Improved Water Supply and Sanitation in Arid and Semi-arid Land Areas programme (EDE-CPIRA). The programme is in partnership with the Water Sector Trust Fund and eight Arid and Semi-Arid Lands (ASAL) – Baringo, West Pokot, Samburu, Mandera, Kajiado, Kitui, Taita Taveta and Kilifi Counties. The objective of SNV in this programme is to pilot Public Private Community Partnerships (PPCPs) as well as other private sector participation approaches in the eight target ASAL counties to address the challenge of non-functionality in rural water systems.

BACKGROUND TO SERVICE DELIVERY MODELS

Kenya is classified as a water scarce country and therefore emphasis is placed on conservation and prudent use of the available potable water resource. Still, both the UN (through resolution 64/292, 2010) and the Constitution of Kenya (2010) recognise access to water and sanitation as a basic human right. Sustainable Development Goal (SDG) no. 6 aims to ensure availability and sustainable management of water and sanitation, while the target is to achieve universal and equitable access to safe and affordable drinking water for all by 2030.

Utilities and sector at large have struggled to address inefficiencies in service delivery, and this has led to huge financial losses, slow growth in access and opportunity cost to the consumers. Water provision at utility level is shrouded by numerous inefficiencies which hamper effective service delivery. This is further compounded by chronic lack of data to measure performance output and set the sector on the right path to growth. It is evident that the limited management skills and non-adoption of contemporary management tools and knowledge contribute to continued inefficiencies in the sector.

Since the water sector reforms of 2002 and Water Act of 2016, Kenya has made substantial progress in increasing access and accelerating investment in the sector. The reform process embraced “socially responsible commercialization” which was anchored on running the water utilities as business entities and ring-fencing revenue for the sector to grow. However, despite the progress in the urban areas, rural water services and in specifically arid and semi-arid areas continue to struggle with inefficiencies and stagnated growth.

A study conducted in 2013 revealed that almost 1/3 of rural water systems were dysfunctional at any point in time while the other 2/3 started to malfunction within 3-5 years of construction. Limited resources available with NGOs and public authorities then were often depleted in repair and rehabilitation of these mal-functional water systems, resulting in minimal resources left available to expand services to un-served rural areas that are mostly inhabited by vulnerable communities. To address this, SNV Netherlands Development Organisation began facilitating forums between government authorities, civil society, and communities to look for practical solutions of addressing these challenges. This resulted in the development of the Public Private Community Partnerships models (PPCPs).

Albeit this resulted in the development of rural water guidelines by the Water Services Regulated Board (WASREB), the key challenges remain fostering better management practices, creating an enabling environment for private sector participation, and strengthening the coordination between water stakeholders. With the emergence of WASREB’s guidelines and proposed service delivery models, the community manged water systems are expected to benefit appropriately. The integration of a climate resilience approach is further expected to open opportunities for the private sector actors in designing, implementing, and adapting suitable climate smart technologies and make service provision affordable and responsive to environmental changes.

Job Description

The overall objective of the assignment is to structure PPCPs that will improve the livelihoods of targeted group by accelerating access to clean and safe drinking water.

The specific objectives are to:

  • Critically analyze the commercial viability of the selected community water systems in Baringo, West Pokot, Samburu, Mandera, Kajiado, Kitui, Taita Taveta and Kilifi Counties. This will include preparing a thorough business case that includes a detailed financial analysis involving current improved scenarios (after intervention), willingness to pay and ability to pay for surveys (e.g., sources and levels of income).
  • Identify existing Private Enterprises that could manage selected water systems on a commercial basis within the target counties mentioned above.

MAIN TASKS OF THE ASSIGNMENT

Preparation of an Inception Report

  • Internalize the ToR’s and review literature on market system development, M4P approach, private sector participation in water service delivery in Kenya.
  • Design and propose a methodology and tools for assessment of commercial viability of water service delivery in selected areas and ability to pay analysis.
  • Prepare an inception report highlighting the methodology and expected content of the final report including the list of charts and graphs that will be included in the final report.

Identification of commercially viable water projects

  • Conduct field visits for rapid assessment of functional and dormant water systems in collaboration with counties staff.
  • Assess the performance of selected water utilities using basic sector benchmarked i.e. non-revenue water, collection efficiency, operating revenues, operational cost, billings, service expansion to water system to make it commercially – and break-even points for the water points.
  • Assess the commercial viability of each water utility (single or cluster of water points) and the risk profile of the selected water systems.
  • Estimate the amount required for each water utility to make it viable (e.g. repairs, rehabilitation, new equipment etc.)
  • Prepare final report on commercial viability of water utility with clear recommendations.

Financial Analysis of the community water systems

  • Conduct financial analysis and projections of the community water systems i.e., main source of livelihood and income levels for the households.
  • Assess the ability and willingness to pay of the target group served by the selected community water systems and ideal charges and fees for water services.
  • Stress testing scenarios for potential pitches to potential private sector firms/enterprises.

Identification of Private Entrepreneurs

  • Develop a simple tool for identification and assessment of potential PE’s for the selected commercially viable water utilities. This includes preparing a simple template for expression of interest (EOI) from the PE’s in consultation with counties.
  • Present a stakeholder analysis of potential private enterprises within the eight target counties
  • Present reports of the findings to SNV, WSTF and the EU for comments and approval.

DURATION OF THE ASSIGNMENT

The assignment is expected to take a total of 3 Months, from July 2021 to September 2021. This duration is inclusive of reporting timeline.

RECOMMENDED APPROACH

The consultant is expected to work very closely with the eight county governments /WSP/WSTF/WASREB and SNV on a regular basis and as may be required from time to time. Feedback from these actors will be incorporated in the subsequent reports/work.

KEY DELIVERABLES

The Consultant shall be responsible for proper planning and delivery of the assignment in close collaboration with SNV and County Government staff. The Consultant will further be expected to deliver the following to SNV:

  1. Inception report based on desk study, incorporating a wider integrated approach, activity plan and timelines to undertake the assignment and proposed reporting format.
  2. Comprehensive CVA report by counties, this will include financial, infrastructural investment gap analysis, socio-economic and political economy.
  3. List of potential private enterprises by counties

The consultant’s team will be expected to submit weekly time sheets to SNV detailing number of days delivered for internal administrative purposes. All the deliverables will be submitted in soft and hard formats.

Final payment for the assignment will only be made upon successful implementation of the activities and submission of satisfactory reports as outlined above.

PERFORMANCE INDICATOR

Quality/completeness and timely delivery of the assignment as per agreed schedule will be essential.

REPORTING

The Consultant will report directly to respective county governments and EDE-CPIRA Team Leader at SNV Kenya and will work closely with SNV Advisors responsible for the project. SNV will provide advisory support throughout the delivery process, including linkage of the Consultant to County Governments, selected community water systems, stakeholders and partners involved.

BUDGET

Interested Consultants are encouraged to submit a technical and financial proposal that will be required to undertake this assignment in the most efficient manner to produce a high quality product.

The budget should cover all eligible costs required to undertake the assignment (excluding travel costs and per diems which will be provided/reimbursed based on actual/SNV rates. These exclusions should however be estimated on a separate schedule in the proposal). Proposals will be evaluated based on both their technical merit and their price competitiveness.

Qualifications

Eligible Consulting Firms (“Consultants”) are invited to indicate their interest in providing the Services. Consultants may associate with other firms in the form of a joint venture or a sub-consultancy to enhance their qualifications. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services. The short-listing criteria are:

  • Previous experience in similar assignments.
  • Team lead with very strong and advanced financial background.
  • Advanced degree(s) in Sociology/Economic/Business
  • Experience in Kenyan water sector context including Arid and Semi-Arid Lands.
  • Understanding of private sector promotion and business environment in Kenya including Arid and Semi-Arid Lands.
  • Conversant with political economy in Kenya including Arid and Semi-Arid Lands.
  • Availability of appropriate skills among staff.
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