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
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
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.
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