3 Operation and maintenance costs of rural water supply schemes in South Africa

Author: Jim Gibson

This paper presents the findings from ananalysis of financial data collected from a nine-year support programme in theChris Hani and Alfred Nzo District Municipalities in the Eastern Cape Provinceof South Africa. The projects served a total of 67,437 rural households. Thedata illustrates that the costs of providing technical support to ruralsettlements may vary significantly from scheme to scheme. In the South Africancontext, this has particular implications for the subsidy provided to eachmunicipality by national government to support the provision of basic waterservices. 

The impact of geographic location, as well asthe scale / technology choice, on the actual cost is explored. It is also notedthat careful consideration must be given to balancing ‘economies of scale’ withthe ‘cost of complexity’ as very large, technologically advanced systems becomedifficult and expensive to operate.

The paper identifies the actual costsassociated with a comprehensive approach to operation and maintenance (O&M)that included local CBO’s carrying out appropriate tasks at scheme level, togetherwith skilled and competent technical and institutional support. These actualcosts are compared with other methods of determining the financial resourcesrequired to support the O&M of rural water services infrastructure such as:

1.  Engineering estimates (‘costed norms’)

2.  Activity based costing, and

3.  Equitable Share allocations of the South African National Treasury.

A significant finding of this research is thatthe technical support costs of rural water schemes are large in quantum, aswell as in proportion to other items. The costs for technical support andtravel represent 52% and 65% of the total operational cost for the two project are as respectively.