Uganda water sector clogged by corruption

A water supply point in Fort Portal. Picture: Morgan Mbabazi 

By MALINGHA DOYA  (email the author)

The policy debate on establishing an independent

water regulator has re-emerged after the sector

woke up to a survey finding last week that

between $5 million and $10 million meant

to improve access to safe water for drinking

in Uganda is lost to corruption annually.

A World Bank sponsored baseline survey

on integrity in Uganda's water supply

and sanitation sector found that between

10 and 20 per cent of money given

to contractors is spent on kickbacks,

which significantly reduces the extent to which

the contract can deliver on improving

access to safe water and sanitation.

Some 54 per cent of private water operators

said they paid 10 per cent of the value of

the contract to win it, while 46 per cent

of urban consumers confessed

to paying extra charges to be

connected to the water supply network.

Going by the fact that national budgetary

allocation to the water sector is an average

of about Ush130 billion ($65 million) over

the past five years, the country could

have lost about Ush65 billion ($32.5 million)

to corruption in that time.

The national effort to improve water supply

and sanitation facilities equitably is

also distorted by interference

with budget allocations to favour areas

where politicians hope to gain

political mileage — another form

of corruption an independent regulator

could check.

To address outright corruption as well

as influence peddling by politicians,

some stakeholders are advocating

an independent regulator, and introduction

of integrity pacts between the government

and contractors, to be monitored

by civil society.

The idea of establishing such a body first

emerged in 2003 after a series

of corruption cases — notably the valley dams

project, which former vice president

Specioza Kazibwe was accused of

mismanaging leading to the loss

of Ush4 billion ($2 million) to the taxpayer.

Corruption at the time was so pronounced

in the sector that some donors

like the Swedish government withheld funds.

The Ministry of Water and Environment

believes in the concept and indeed

sent officials on a study tour

to Germany to learn from the experience there.

However, the National Water and Sewerage

Corporation (NW&SC) argues that

a regulatory body would only

increase water tariffs in the likely

event that players under regulation

fund the watchdog's budget.

Besides, there is no competition in

that segment of the sector meaning

that the regulator's eye will be

fixed on NW&SC only.

"We have set up a unit within the ministry

already to try out the regulatory idea

we learnt from Germany because they have

one of the best water regulation

systems in the world," said State Minister

for Water Jennifer Namuyangu.

An independent regulator would ensure

adherence to procedures in

procurement — where most corruption

cases were reported; operations and


It could also set performance targets

and approve tariffs for the water utility,

which is used to doing these things

on its own.

Currently, regulation is done by performance

contracts only, drafted with anti-corruption

components, although these are understood

to be ineffective because the unit

that awards a contract to, for instance

construct boreholes in the countryside,

is the same party that supervises

the work, and is responsible

for the assets.

With pressure to perform from the top,

there is a tendency for supervisors

to appraise positively even when

work is shoddy.

The management of NW&SC is instead

advocating a regulatory framework with

guidelines to be implemented by a select

committee and supported by the existing

accountability institutions such as

the ombudsman and the procurement regulator.

"It is very costly to put up a regulatory body,

and it is the consumer who will meet

this cost," said Dr William Muhairwe

managing director at NW&SC.

However, the national water utility, although

making a surplus, dedicates most of its

internal income on recurrent expenditure

while money for development spending

is usually provided by capital injections

from the government and donors.

In 2007 a process was begun for the could

to convert a debt of about $90 million

the company owed it into equity,

so that the money can be invested in water

infrastructure rather than paid

to the exchequer.

The move will also clean the water utility's books

of old debts, and enable it to access

funds on a commercial basis by issuing

a bond on the stock exchange,

or making outright application for

long-term loans from financial houses.

Therefore, requiring it to forgo some

income by contributing money to fund

a regulator's budget is not a welcome idea.

Observers also point out that existing

regulatory authorities have not exactly

reduced the amount of corruption

or improved efficiency

in their respective sectors.

The World Bank survey was commissioned

following the Inspectorate

of Government's National Integrity

Survey in 2008, which recommended

that sector studies on corruption be done.

These studies will bring out a representative

picture of how much is lost

to corruption across all sectors.

Unlike some sectors, water does not have

a regulatory authority, leaving regulation

to be done by contracts only, and some

bureaucrats and development partners

think that its establishment will reduce

corruption and improve efficiency.

"It is important for us to have integrity

in the sector because we do not want

to have a situation like we had in 2004

when Sweden withheld funds due

to corruption in the sector,"

said Helen Holm, first secretary in charge

of Water and Sanitation

at the Swedish Embassy in Uganda.

At a meeting where results from the survey

were presented, a notable recommendation

from the consultant was to establish

an independent regulatory authority

with urgency.

The meeting, which The EastAfrican received

exclusive media access to, did not discuss

the matter at length, officials said,

because policies are not made at workshops,

but from the golf club, through

presidential round tables

and on to the Cabinet.

Link here

             J-L K.
Procurement Consultant
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