Franchising water services

Some parts of Africa suffer from poor/unacceptable quality of public water delivery. The reason for this is usually inadequate arrangements and incentives for operation and maintenance – including sometimes inadequate design and/or construction, skills shortfalls, budget shortfalls, weak institutional arrangements, and unwillingness or inability to change.
/~South Africa’s Water Research Commission (WRC) and the Council for Scientific and Industrial Research (CSIR) have been investigating the application of franchising partnership principles to this operation and maintenance.
Generically, franchising:
*    Transfers appropriate skills to local personnel.
*    Provides ongoing performance measurement and support, and mentoring and quality control.
*    Provides back-up at-a-distance skills together with the incentive, on the part of the local (franchisee) personnel, to call for the franchisor to make those skills available because there is a contract between them and a shared reputation.
The WRC and the CSIR have concluded that franchising partnerships could address many challenges in the management of water and sanitation services.
But these partnerships would involve three parties: the franchisor, the franchisee, and the owner of the water services infrastructure.
The main incentive to the franchisor and franchisee to perform is that their livelihood depends on it.
The incentive to many owners of water services infrastructure (most of them municipalities) to reform their current often-inadequate provision for quality service delivery is the need to provide their communities with an adequate service.
Also in some countries, they may be prosecuted. For instance, the South African National Department of Water Affairs and Forestry (DWAF) is threatening to prosecute local authorities not complying with the legislated requirements for safe drinking water and adequate sanitation.
Help from the franchisor would be of particular value away from the major urban centres. Few rural municipalities in African countries can afford to employ competent, qualified staff, which directly results in periodic unreliability of supply and non-compliance with national standards relating to, for example, wastewater treatment works’ effluent quality. Significant improvements would soon be seen if the generally under-qualified and under-resourced water and sanitation services staff could have this ongoing support, mentoring and quality control – or if the municipality could partner with micro-enterprises which would, through franchising, enjoy the necessary ongoing support, mentoring and quality control from the franchisor.
Franchise service providers, dependent for their livelihood on the success of their businesses, would have a strong incentive to perform to the benefit of the public.
The cost of the higher skills levels, which are needed only intermittently, is spread across many sites. Thus the cost per franchisee, or per municipality, is low.
How could entrepreneurs get involved?
In franchising, it is those who would like to be franchisors that design the franchise arrangements. Usually a business wants to grow bigger without expanding its direct employee numbers, and feels that franchisees would have more incentive to run the outlets more effectively. So the decision is made to franchise the business.
Many opportunities lie in the franchising of suitable parts of the water and sanitation services value chain – of activities inter alia "suitable" for microenterprises in that they can be readily systematised.
Activities evidently suitable for franchising include meter management, plumbing, sewer maintenance, and operation of small treatment plants.
Franchising also appears well suited to operation and maintenance of rural schools’ sanitation facilities, which are often in poor condition.
However, business modelling should only be done by franchisors competent in the technical area of the service being offered, and familiar with their customer base.
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