Public-Private Partnerships Conference June 5-8, 2012 DAKAR, SENEGAL 1
Small drinking water supply networks and original Public-Private Partnership in Burkina Faso :
The experience of a private operator after three years of management
Christophe LEGER
Technical and Development Manager
June 6th 2012
Public-Private Partnerships Conference June 5-8, 2012 DAKAR, SENEGAL 2
VERGNET GROUP
We are the specialists in finding energy solutions (wind and sun) and supplying water in remote areas.
For more than 30 years, VERGNET HYDRO has been known as a major stakeholder of rural water supply in Africa.
Since 1978: 100.000 hand-pumps and foot-pumps have been installed, serving 50 millions of users.
Since 2004: 200 water supply systems for small towns have been built.
Public-Private Partnerships Conference June 5-8, 2012 DAKAR, SENEGAL 3
VERGNET-HYDRO WORLDWIDE
Head office
Countries where VERGNET HYDRO - PHOTALIA has subsidiaries
Countries where VERGNET HYDRO - PHOTALIA has representatives
6 rue Lavoisier
45140 INGRE (France)
+ 33 2 38 22 75 10
+ 33 2 38 22 75 22
Public-Private Partnerships Conference June 5-8, 2012 DAKAR, SENEGAL 4
PRESENTATION OUTLINE
1. A dramatic situation in rural areas
2. Our experience in Burkina Faso as private operator
3. Key factors for success
4. Recommendations
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A DRAMATIC SITUATION
A very low operating rate (between 30 and 70 %) for manual pumps and small scale water supply networks in a majority of countries.
“Across rural Africa, some 50 000 water supply points have failed, representing a waste of US$215-360 million” – Jamie Skinner (International institute for Environment and development)
Public-Private Partnerships Conference June 5-8, 2012 DAKAR, SENEGAL
The leasing (affermage) zone
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o VERGNET BURKINA has signed leases with 7 districts of North-East Burkina Faso. As an introductory move, an inter-communal clause defines the relationships between the districts.
44 000 inhabitants 37 standpipes 14 000 m of pipes 32 hand-pumps with 25 in working order
Network operations started May 1st 2009.
Situation of the 7 water supply systems (150 km around Dori)
Waiting for the opening time at the standpipe in Gorgadji
500 FCFA = 0,93US$ (31/05/2012) OUR EXPERIENCE IN BURKINA FASO
Public-Private Partnerships Conference June 5-8, 2012 DAKAR, SENEGAL
Some figures after 3 years of operation
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TREND OF THE AVERAGE CONSUMPTION OF PAID WATER IN LITERS PER DAY AND PER INHABITANT OVER 3 YEARS AND OVER THE 7 NETWORKS
AVERAGE CONSUMPTION OF PAID WATER IN LITERS PER DAY AND PER INHABITANT: 3 YEARS OF OPERATION
AVERAGE VOLUME OF WATER SOLD PER NETWORK AND PER DAY: 3 YEARS OF OPERATION (m3)
The population has appropriated the network thanks to the quality of the service and the shorter periods without water (<3,5% in days), which has been confirmed by an increase in consumption.
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The operating accounts after 3 years of operation
2009* 2010 2011 2012** …2016
Consolidated turnover
20 799 085 44 971 200 52 122 845 13 984 250 85 000 000
Current expenses 17 987 082 38 158 751 37 213 273 11 847 115 61 000 000
Provision for future costs
5 528 687 12 205 573 9 345 269 327 712 10 300 000
Results (in FCFA) (2 716 684) (5 393 124) 5 564 303 1 809 423 13 700 000
*2009 : May to December **2012 : January to March
A fragile balance sheet but in increasing and promising progress…
….leading to sustainability of such an economic model
Total
486 700 000
365 400 000
68 400 000
52 900 000
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KEY FACTORS FOR SUCCESS
To an overall improvement of water supply in rural areas
Setting the foundations for an affordable, legal and institutional environment (water code, tax system, context of decentralization)
Developing incentives to encourage the local private sector to involve itself in the financial risky rural water supply market
Professionalizing the market and breaking with a policy of “ideological” community-based management
Public-Private Partnerships Conference June 5-8, 2012 DAKAR, SENEGAL
A DBO approach. The water scheme designer and operator is the contractor in charge of the construction of the network. Guarantees.
Optimize leasing perimeter size (population and water volume sold) in order to minimize financial risks.
The operation is mutualized. Several centres are grouped together to promote the water distribution service mixing structurally loss-making and profit-making operation centres.
Sign up the lease contract for a minimum of 7 years, 15 if co-investment.
PPP contract signed up, clearly sharing expenses an responsibilities between public authorities and private operator (investment cost repartition, short and long-term maintenance…)
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How to improve the situation? The example of Burkina Faso
ON THE FIELD
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CONCLUSION AND RECOMMENDATIONS
In Burkina Faso, technical, policy and institutional options chosen by the public authorities to ensure sustainable water distribution in rural areas is successful: the service of water distribution is carried out continuously.
The public authorities must continue their efforts to encourage operators to invest in the sector.
Sustainable development of water distribution will only be possible if there is a long-term commitment of all stakeholders.
The more private operators will have long-term visibility, the more they are inclined to invest a part of their capital equity in the water supply sector.
Niger Burkina Faso
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VERGNET HYDRO 6, rue Lavoisier 45140 INGRE – France Tel. +33 (0)2 38 22 75 10 Fax. +33 (0)2 38 22 75 22 E-mail : [email protected]
www.vergnet-hydro.com
