(Ref:02MR) Implementation of Sustainable Business Models for Rural Water Supplies

Oxfam in Nepal

Oxfam has been working in Nepal since the early 1980s undertaking various development initiatives addressing the poverty and injustice faced by women and other socially and economically excluded groups. The level of Oxfam's engagement increased substantially after restoration of democracy in 1990 as it became easier for civil society to work in the new political environment. Over the years, Oxfam has worked in partnership with local civil society organisations and the government to promote rural livelihoods, and vulnerable communities' resilience to climatic shocks and disasters. It has also significantly contributed to empowering community people, especially women, to; negotiate with people in power, influence decision making processes, claim rights and essential services to which they are entitled, demand accountability on the part of duty bearers and engage larger masses in advocacy efforts. Oxfam also worked closely with UNHCR in providing assistance to Bhutanese refugees during the 1990s. Oxfam and its long term programme partners believe that the underlying structural causes and drivers of poverty must be addressed if improvements in peoples's lives are to be broad and lasting. Poverty is not one-dimensional; nor is it purely local in its causes and solutions. Therefore, Oxfam's work addresses not only material and technical change, but also the related economic, social, institutional and policy changes which are necessary to end poverty and achieve development and wellbeing. The Oxfam Nepal Vision is: The people of Nepal are empowered and work together to attain a life of dignity with justice and equal rights for all. The Overall Nepal Programme Goal is: to improve the well being of vulnerable people through strengthening their participation in development and governance processes and reducing poverty and suffering.

Details / requirements:

Consultant Assignment for  Implementation of Sustainable Business Models for Rural Water Supplies

Proposal Submission Deadline: 29 March, 2018   

Send Proposal to: consultancy_nepal@oxfam.org.uk 

Terms of Reference (ToR)

Implementation of Sustainable Business Models for Rural Water Supplies 

Background

Nepal has made a significant progress in last five years in accelerating water and sanitation coverage. DWSS reports say that around 98.21% people have now access to toilets, and 90.96% population has access to basic water supply facility (DWSS, 2016). However, the report also indicated that only 25% of the existing water supply schemes are functioning well and 36% need minor repair. More than 39% of the schemes have been identified needing major repair, rehabilitation or complete reconstruction. Thus, it is realized that though there is the dramatic increase in the coverage following community led demand-driven approach, the qualities of services provided by Water User Committees (WUCs) are largely in question (ibid). These include a failure to generate sufficient tariff, a failure in accountability & transparency, and a lack of capacity for preventative and curative maintenance.  

In order to address above problem, Oxfam in Nepal is trying to develop sustainable operation and maintenance management model for rural water supply systems to be incorporated into its program over the coming 3 years (2017 – 2020).   In this context, Oxfam is planning to make a study to better understand the barriers to sustainability in rural water supplies, as well as the feasibility of developing sustainable and financially-viable business models for the provision of professionalized O&M services.  

 

Oxfam has recently started to work on two overhead tank (hybrid (solar and electrical) pumping) in Pidari Gaupalika of Sarlahi and Fatuha Maheshpur of Rautahat of Terai for 3 years. Prior to intervention, Oxfam intends to do formative research on opportunities for management model in these areas that ensures the functionality of the water supply scheme in community of Terai. Following to the research, Oxfam will then test, evaluated and gradually adapted to make it a working model by the end of three years.  

Initial study in Hills, have identified some key elements which can be used as a reference in this research. However, the research should not limit to these elements, but only should test the feasibility of similar approach in Terai.  The key elements of the model proposed in study are the following:

  • Transition to a block tariff structure and individual household connections with meters – this would be planned into existing designs for water infrastructure development by Oxfam within Post Earth Quake Response water supply program, with higher tariff levels linked to higher levels of service delivery.  Initial analysis in the study showed that collection rates in the realm of 200 Rs/HH/month are necessary to create a viable system for O&M (this rate falls within affordability criteria of <5% of HH income).
  • Use of local financial cooperatives for tariff collection and management of the Operation & Maintenance (O&M) Fund in an income-generating account (most provide a 10% return);
  • ‘Bundling’ or ‘grouping’ of water systems/WUCs within geographic areas - to develop economies of scale through service agreements with private sector which cover multiple water systems (hence sharing costs amongst several WUCs/Cooperatives) - to provide full service preventative maintenance and urgent repairs to water systems, paid from Cooperative’s O&M Fund.  Will need to clearly define what portion of each village’s O&M Fund is earmarked for this ‘cluster’ service agreement.  Payment of these service agreements should be performance-based.
  • Attempt to feed Guanpalika’s (local government) available budget for O&M into Cooperative-held O&M funds or to pay a portion of cluster-level service agreements (possibly making contributions results-based, based upon functionality rates).
  • Private sector enterprise to act as ‘owner’ of the service agreements, managing the deployment and activities of the technicians/plumbers, as well as using this as an entry point for the marketing of their water treatment options and services by mobilizing alternative funding sources.
  • The proposed model includes combinations of Oxfam’s water infrastructure work,  water treatment options to be financed by users/local government; the O&M fund would finance an annual service agreement by private sector and regular O&M on these filters; and on top of this Private sector would also use this service agreement to hire skilled technicians/plumbers for O&M of the water system and filtration units.  

Objectives of the Assignment

Overarching aim of the TOR encompasses aim to do formative research on opportunities for management model that ensures the functionality of the water supply scheme in community of Sarlahi and Rautahat in Terai which will be gradually developed, tested, evaluated and adapted  in period of three years 

Oxfam also aims to link its infrastructure development work and community mobilization/outreach to private sector actors in Nepal who can provide sustainable operation and maintenance (O&M) services as a financially-viable business model.  Emphasis shall be placed upon the development of market based operating models and approaches that can best maximize revenue and minimize operating expenses, while also exploring options to ensure affordability for the poorest households and stimulate investment from the government at the Guanpalika and District levels.  

Target Areas

The programme shall develop the business model(s) for O&M of rural water system across Sarlahi and Rautahat. The research shall propose, but not limited to, the best business model for O&M of pumping system in Terai Communities of following districts: Sarlahi and Rautahat  

Scope of Work

Research Questions

Overarching research question: What is the most cost-effective and sustainable way to manage hybrid pumping water supply schemes in Terai ensuring affordability (<5% of the income) of local community? 

Primary research question: How can water management models be established to provide sustainable operation and maintenance of infrastructure while collecting sufficient revenue to maintain financial viability? 

The following questions should be considered but not limited to:

1)Functionality of water supply schemes and management model for full cost recovery:

Demand Side

What is “Improved water system” for Terai communities? What are the opportunities and challenges to shift water use from hand pumps to HH tap system?  What is the definition of “Adequate” and “Reliable” system for community? 

  • What models currently exist for management and maintenance of water supply schemes in Terai? 
  • What are barriers to, and enablers of, sustained functionality of water schemes? What have been the primary reasons for the ineffectiveness/effectiveness of WUCs to sustainably manage water systems?
  • What is the tariff that HHs willing to pay for safe and reliable drinking water systems?  Is there a preference for a block tariff structure (rather than the existing flat rate tariff system)? 
  • What are the motivators and drivers for HHs to invest in improved water system operation and management?  (Example: If tariff is associated with the amount of water they use, are the community willing to pay high amount for more water or are community willing to just get drinking water in tap from pumping and use hand pumps for other use? 
  • What are the factors to be considered to ensure poor and marginalised group also get the service?  Are sustainable subsidies available for areas where cost recovery may not be possible?  Are there options to cross-subsidize the price of water for the poorest?
  • How to community perceive the role of cooperative in tariff management?   

Supply side

  • How are water supply tariff structured in terai water supply and are current tariff structures sufficient to support sustainable operation and maintenance of water systems?
  • Which aspects of O&M should be considered for business development or external intervention in the water schemes? 
  • What would be the potential scale or size of water supply schemes to engage private sector for full cost recovery?  Is there scope for ‘clustering or ‘bundling’ of O&M and management services for multiple schemes, to make more attractive PPP contracts?
  • What are the barriers and motivations for private sector to engage in O&M of water systems? 
  • Opportunities for existing enterprises and/or civil organizations to engage in service provision of water schemes? 
  • Identification of financing requirements (and alternative financing models) to support sustainable operation and management of water systems.  
  • How is Small Town Projects in Terai recovering the invested fund in water supply scheme? 
  • Required capacity building and/or mentorship to support alternative operation and management models
  • What options exist for monetizing services related to water supply management, in order to reduce sole dependence upon user tariffs?  
  • How can the O&M budget of the Guanpalika be best utilized to contribute to proposed models?
  • How can existing service providers best be ‘professionalized’? 

Expected Deliverables

Part A: Technical support to Market Research Design

a)Explanation of approach, methodology and questions to be used in the household research to determine the ability and willingness to pay.  

Part B: Analysis of Market Research and Development of Models

b) A brief report detailing an estimation of household’s willingness and ability to pay for sustainable water service delivery, including the methodology used. 

c) A brief report detailing the findings of the market research, test feasibility of business model proposed by Oxfam and their implications on the financial viability of potential operational models, with a particular focus on barriers/chokepoints, incentives/opportunities, and most significant cost drivers. 

d) A brief report documenting at least two different possible models for delivering and financing water services including the expected revenue and costs. This should include consideration for whether it is possible to subsidise the poorest households. Perform SWOT analysis of both models. 

e) Identification of potential partners for (government, private sector, financial institutions, etc.) for establishing proposed operational models, as well as the structure of the partnerships.

f) Development of block tariff structure and proper marketing strategy for transitioning to household water connections with meters, including recommended payment structure and marketing strategy.

g) Development of performance metrics for the model(s) 

Reporting Line Manager

This work is to be delivered to the WASH Team Leader, Oxfam in Nepal and overseen by the National WASH Technical Lead, Oxfam.

Duration: Start date and completion date

The estimated input of the consultant is 55 days (7 days per week). The assignment is expected to start on 1 April 2018, 2018 and be finalised by no later than May 28, 2018.

Detail Budget breakdown

S.N.

Expenses Head

Unit

Nos

Rate

Total

Remarks

1.      

Consultancy Fee

 

 

 

 

 

1.1

Team leader

Days

20

 

 

 

1.2

WASH technical Expert

Days

30

 

 

 

1.3

Data Analyst

 

10

 

 

 

1.4

Business Expert

 

20

 

 

 

1.5

Market Expert

 

20

 

 

 

 

Enumerators

 

40

 

 

 

2

Accommodation

 

60

 

 

 

3

Vehicle and transportation

days

20

 

 

 

4

Meeting expenses and FDGs

 

15

 

 

 

5

Survey and Digitization cost

 

2

 

 

 

6

Per diem

 

60

 

 

 

7

Report /Printing/ Photocopy

 

1

 

 

 

 

Grand Total

 

 

 

 

 

Terms of Payment

  • 30% on presentation of data gathering tools
  • 20% on first one page analysis of Terai
  • 40% on first draft report 
  • 20% after submission of final report

Documents for submission

  1. Technical and Financial proposal with the udated Cvs of the lead consultants
  2. VAT registration certificate 
  3. Tax clearance certificate of FY 2073/74 or extension letter
  4. Company registration certificate (if applying through company/Firm)

All the documents should be in PDF format with consultant signature and company stamp

Qualification

The consultant / consulting firm is expected to have the following expertise and experience:

  • Experience working in market research and the development of sustainable business/partnership models in the developing world.  
  • Experience in the analysis and evaluation of markets based approaches in development contexts
  • An understanding of the complexities in achieving sustainable results in the WASH sector and some previous experience of WASH programming 
  • Strong analytical, writing and presentation skills
  • Experience in WaSH sector. 

Preference shall be given for those with Proven track records of carrying out business model development or similar assignments in Nepal; 

Confidentiality / Non disclosure

All material issued in connection with this ToR shall remain the property of Oxfam and shall be used only for the purpose of this procurement exercise. All information provided shall be either returned to Oxfam or securely destroyed by unsuccessful applicants at the conclusion of the procurement exercise.

During the performance of the assignment or at any time after expiry or termination of the Agreement, the Consultant shall not disclose to any person or otherwise make use of any confidential information which s/he has obtained or may in the course of this agreement relating to partner organization/Oxfam, the respondents or otherwise.

The consultant will be required to sign a non disclosure / confidentiality agreement as part of their undertaking of this work. 

Intellectual property, Copyright, and Ownership of all prepared information

The Consultant shall retain all rights to pre-existing (background) intellectual property or materials used by the Consultant in the delivery of this study. All arising intellectual property, ideas, materials, processes or processes formed in contemplation, course of, or as result of this study shall be passed to Oxfam without restriction.

The Consult shall warrant that all arising Intellectual Property, materials and/or products produced in pursuit of this study shall be original, and shall not infringe on any third party’s claim. All technical or business information, in whatever medium or format, originated, collated or prepared by or for the Consultant in contemplation, course of, or as result of this assignment shall be transferred to Oxfam without restriction on completion and shall not be used by the Consultant for any other purpose without express written permission of Oxfam’s Head of Programme Funding.

Copyright of all arising documents, data, information or reports produced by the Consultant under this agreement shall belong to Oxfam and will be passed to Oxfam without restriction. Such documents, data, information and reports shall not be used by the Consultant for any other purpose other than in conjunction with this assignment, without the express written permission of Oxfam’s Head of Programme Funding.

Overview

Category Consulting & Professional Services
Openings 1
Experience Please check details below.
Education Please check details below.
Posted Date 22 Mar, 2018
Apply Before 29 Mar, 2018
City Lalitpur