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Monday, 19 September 2011

Break the monopoly of Ghana Water Company

Stakeholders of the just ended Ghana Water Forum have overwhelmingly called on government to break the monopoly of the Ghana Water Company Limited for the sake of efficiency.

Participants from different sessions during the conference made separate calls, which were all read during the closing ceremony on 7th September 2011, thereby forcing the call into the main conference communiqué.

From the Ministerial and Development Partners Roundtable, one of the side events with very high level participation, comprising Ministers and/or high profile officials from the Ministry of Water Resources, Works and Housing, Ministry of Local Government and Rural Development, the Ministry of Finance and Economic Planning, as well as top officials from Ghana’s Development partners including the World Bank, UNICEF, the European Union, CIDA, DANIDA, IRC, Embassies and several international NGOs and Civil Society Representatives, a statement was issued as follows;

“Given the fast pace of urbanization, and the need to meet the growing demand for water for consumption, industry and commerce, the meeting called for more drastic reforms in urban water delivery currently under the jurisdiction of GWCL. Reform options for consideration may include efforts to break the monopoly of GWCL such as “Regionalization,” separating the roles of Water Production and Distribution or complete decentralization up to municipal levels. A more concrete role for communities in the management and delivery of urban water within the GWCL supply areas can substantially improve governance and increase access to Water and Sanitation Services, especially to poor and peri-urban areas.”

The Business Roundtable, whose participation include private businesses led by the Association of Ghana Industries (AGI) and officials from the key water sector ministries also called for similar reforms through defining the role of private sector in urban water management such as revenue mobilization and building efficiency in their end of session statement.

The session on Governance, where the Ag Managing Director of the GWCL, the former Director of Water at the Ministry of Water Resources, Works and Housing, and other top officials from the Ghana Water Company made presentations on urban water supply management options, also came up with a similar recommendation – de-monopolize the Ghana Water Company - and it was captured in their end of session statement as follows, “break the GWCL monopoly and introduce service or supply area based concepts.”

Following these separate calls coming from different sessions of the forum, the call was finally and inevitably captured by the conference communiqué, “As a way forward for urban water services, management of urban water supply services should be decentralized to enhance efficiency. The separation of the key functions of production, transmission and distribution to be handled by different entities could also be considered.”

Urban water supply in Ghana has already gone through several reforms dating back to the pre-independence era. The first public water supply system in Ghana, then Gold Coast, was established in Accra just before World War I.  Extensions were made exclusively to other urban areas among them the colonial capital of Cape Coast, Winneba and Kumasi in the1920s.

During this period, the water supply systems were managed by the Hydraulic Division of Public Works Department. With time the responsibilities of the Hydraulic Division were widened to include planning and development of water supply systems in other parts of the country.

In 1948, the Department of Rural Water Development was established to engage in the development and management of rural water supply through the drilling of boreholes and construction of wells for rural communities.

The Ghana Water and Sewerage Corporation (GWSC), was established in 1965 under an Act of Parliament (Act 310) as a legal public utility entity.  GWSC was responsible for water supply and sanitation in rural as well as urban areas and the conduct of research on water and sewerage as well as the making of engineering surveys and plans. The Corporation was also responsible for the construction and operation of water and sewerage works, and the setting of standards and tariffs and collection of revenues.

Documentation by the GWCL indicates that by the late 1980s and early 1990s, 33% of the water supply systems had deteriorated greatly or completely broken down due to inadequate funding to carry out maintenance and rehabilitation. A World Bank report in 1998 states that: “The water supply systems in Ghana deteriorated rapidly during the economic crises of the 1970s and early 1980s when Government’s ability to adequately operate and maintain essential services was severely constrained.”

Though some gains were made in interventions by the World Bank and other External Support Agencies from 1971 to 1988, their general impact on service delivery was very disappointing.  Due to this several efforts were made to improve efficiency within the water supply sector in Ghana especially during the era of the Economic Recovery Programme from 1983 to 1993. During this period, loans and grants were sought from donors, user fees were increased,  for the initiation of rehabilitation and expansion programmes, to train personnel and to buy transport and maintenance equipment etc.

In 1987, a “Five-Year Rehabilitation and Development Plan” for the sector was prepared which resulted in the launching of the Water Sector Restructuring Project (WSRP).  The reforms were aimed at reducing unaccounted for water, introducing rationalization through reduction of the workforce, hiring of professionals and training of the remaining staff. A strong focus in the WSRP was also to improve management and increase efficiency through organizational change in the water sector.

Accordingly, a number of organizational reforms within the Ghanaian water sector were initiated in the early 1990s. As a first step, responsibilities for sanitation and small towns water supply were decentralized from Ghana Water and Sewerage Corporation to the District Assemblies in 1993.

The Water Resources Commission (WRC) was founded in 1996 to be in charge of overall regulation and management of water resources utilization.  In 1997, the Public Utilities Regulatory Commission (PURC) came into being with the purpose of setting tariffs and quality standards for the operation of public utilities.

With the passage of Act 564 of 1998, the Community Water and Sanitation Agency (CWSA) was established to be responsible for management of rural water supply systems, hygiene education and provision of sanitary facilities.  After the establishment of CWSA, 120 water supply systems serving small towns and rural communities were transferred from the GWSC to the District Assemblies and Communities to manage under the community-ownership and management scheme.

Finally, in July 1999, GWSC was converted into a 100% state owned limited liability, Ghana Water Company Limited, with the responsibility for urban water supply only.

After heated public debates especially from 2002 on management options for urban water supply, a five-year Management Contract Agreement was finally signed with Aqua Vitens Rand Limited in 2006. However, at the expiry of the contract in June 2011, an assessment indicated a massive failure of the management contract option forcing the government not to renew it. This has thrown the nation into a search for a better management option for urban water supply again.

Rapid urban population growth has been cited as one of the major factors contributing to the perennial failure of the urban water supply utility to satisfy Ghanaians. In 1990 for instance, Ghana’s urban population was estimated at 36% representing just about 5.6m people in absolute terms. Preliminary report from the 2010 census indicates about 51% of the population, more than 12m people in absolute terms, live in urban areas.

This trend of growth has created several other challenges such as development of several slum and unplanned communities, emergence of peri-urban communities hitherto classified under rural communities, increasing demand of water for industrial and commercial use among several other challenges. Investment in the urban water supply sector has not been adequate enough to match all these challenges associated with urban water supply.

At the 3rd Ghana Water Forum, therefore, an opportunity was created for stakeholders to engage water sector policy-makers, through presentations and plenary discussions and the overwhelming outcome was these calls to break up the GWCL and identify options such as creating companies along production limes, transmission lines and supply lines. Others also suggested creating regional or even municipal level companies or supply area based companies whichever is more adequate to help meet the urban water supply challenge.

By Emmanuel Addai (Water and Sanitation Monitoring Platform)

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