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Guidelines for Preparation of Pre-Feasibility Reports (Urban Schemes and Small Towns)

Guideline No. : NWSDB / RWS / GUI / 07

NATIONAL WATER SUPPLY AND DRAINAGE BOARD

Prepared by Third ADB Assisted Water Supply Sanitation Sector Project

December 2008

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Table of Contents 1 Executive Summary 5 1.2 Introduction and Objective of Study 7

1.3 Project Need and Justification 7

1.4 Comparison of Feasible Options 8

1.5 Recommendations 10

2 Background and Objectives 11 2.1 Background 11

2.2 Objectives and Scope 11

2.3 Study Assumptions and/or Limitations 12

3 Project Area Characteristics 13

3.1 Administrative Boundaries 13

3.2 Demography and Land Use 13

3.3 Geophysical Features 13

3.4 Meteorology, Hydrology and Environment 13

3.5 Hydrogeology 14

4 Existing Situation 15 4.1 Water Supply 15

4.2 Preliminary Assessment of Performance 18

4.3 Socio-Economic Conditions and Potential Development Trends 23

4.4 Sanitation, Health & Hygiene 25

5 Anticipated Demand for Improved Water Supply 28 5.1 Sub-Project Cycle 28

5.2 Anticipated Water Demand 29

5.3 Anticipated Demand for Health, Hygiene and Sanitation Services 32

5.4 Project Justification 32

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6 Options Considered 33 6.1 Small Towns – Basis for Participatory Approach 33

6.2 Summary of Options 33

6.3 Option 1 38

6.4 Assessment of Option 1 38

7 Conclusions and Recommendations 43 7.1 Conclusions 43

7.2 Recommendations 43

List of Appendices: Annex 1: Document review form

Annex 2: Water Quality Testing Parameters (Raw Water)

Annex 3: Sample Form for Preliminary Institutional Assessment

Annex 4: Format for baseline data collection for pre-feasibility

Annex 5: Sample Format - Household Self Assessment Survey.

Annex 6: Sample Format – Data Tabulation, Self Assessment

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List of abbreviations (this is a standard page).

ADB : Asian Development Bank AGM : Assistant General Manager (of NWSDB) BOQ : Bill of Quantities CBO : Community Based Organisation CF : Community Facilitator (of PO) CDA : Community Development Assistant CDO : Community Development Officer CPPP : Community Participatory Planning Process DGM : Dy. General Manager (of NWSDB) DIU : Divisional Implementation Unit DLCC : Divisional Level Co-ordinating Committee DM : District Manager (of NWSDB/PIU) DTO : District Training Officer DS : Divisional Secretary EA : Engineering Assistant GND : Grama Niladhari Division(s) GOSL : Government Of Sri Lanka HH : Household(s) m

3 : Cubic metres (1,000 litres)

MoU : Memorandum of Understanding MGD : Million Gallons per day NGO : Non-Government Organisation NORAD : Norwegian Agency for Development (Assistance) NWSDB : National Water Supply & Drainage Board O & M : Operation and Maintenance PEC : Project Evaluation Committee (of NWSDB) PCC : Provincial Co-ordinating Committee PIU : Project Implementation Unit PMU : Project Management Unit PO : Partner Organisation PS : Pradeshiya Sabahs Rs. : Sri Lanka Rupees RWS : Rural Water Supply Section of the NWSDB RWSS : Rural Water Supply and Sanitation TA : Technical Assistant (of the PO) USD : United States Dollars (1 USD ~ 70 Rs.) WSS : Water Supply and Sanitation List of Persons met during Study: Mention names and designations of all persons contributing to the re-port with data or information, date of interviews etc.

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1 Executive Summary Introduction to the Guidelines

This issue is no. 2 of the final Guidelines. The Guidelines are produced by the Consultant after

receiving ADBs comments to issue no. 2 of the Guidelines and after submission of the draft

version 3 and the final report, version 1, to PEC of the NWSDB for comments. Previous versions

have been circulated within the project organisation and comments received have been

incorporated. This ver-sion is final. However, updates may be issued by PMU from time to time.

The documents forwarded to the PIUs is accompanied by a diskette with the tem-plate for the

pre-feasibility report.

These guidelines are produced under the Third Water Supply and Sanitation (Sector) Project in

order to streamline the structuring of pre-feasibility studies. The guidelines will also be of

considerable help when the pre-feasibility reports are prepared. In this context the guidelines

indicate what should be included, but they also remind the author to limit the contents of such

reports to essential parts only.

At the same time the author should try to view the water supply and water re-sources issues from

a broad perspective and keep an open mind for alternative solutions involving other technologies

than the ‘normal’ concept of piped water supply. Other technologies such as rainwater harvesting,

desalination, intro-duction of water saving fittings can be considered as part of the selected op-

tions.

Also, due attention should be given to environmental aspects of source protec-tion, i.e. the pre-

feasibility report should address how the water quality of the sources can be maintained.

Under the project, a number of urban schemes and a large number of small towns schemes will be

selected for rehabilitation and/or augmentation or in some cases construction of new facilities. A

common factor for these schemes is that they all will have to undergo feasibility assessment,

including pre-feasibility assessment. Thus, these guidelines try to establish continuity be-tween

the pre-feasibility and feasibility assessment.

These guidelines only apply to pre-feasibility report for urban and small towns project/sub-

projects. Guidelines for production of feasibility reports will also be issued by PMU as well as

guidelines for rapid appraisal of village schemes.

All pre-feasibility reports prepared by PIUs (Senior Engineers) shall follow and use this format,

unless special circumstances justify deviation. In terms of Quality Assurance all draft reports

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shall be internally checked by PIU staff and sent for quality assurance of PMU before being

finalization. Document review forms must be filled when first draft is completed.

Sample document review form is provided in Annex 1. The draft reports shall be issued as a

COWI document and the final reports shall be issued as ‘PIU – Name of District’ report, i.e. the

label in the lower right hand corner of each page must be changed accordingly. PMU will forward

report covers to be used.

In the following chapters guidelines for the respective contents are given. Attention is drawn to

the fact that a pre-feasibility report is a brief report. The volume of these guidelines may seem

substantial but the individual chapters and sections can and should be kept as brief as possible.

Contents of Executive Summary

The executive summary chapter shall include essential background only, the general scope of the

study and the major findings, conclusions and recommendations of the study. The Executive

summary should not exceed two to three pages.

The following sub-headings shall be used, numbering starts with 1.1 through 1.4: Often, it may be

possible to copy most sections from the main report.

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1.2 Introduction and Objective of Study

1.3 Project Need and Justification 1.3.1 Existing Sources – Key Points

1.3.2 Existing Supply Situation – Key Points

1.3.3 Social Key Issues and Expressed Needs

1.3.4 Area Development and Projected Demand

1.3.5 Justification for Assistance

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1.4 Comparison of Feasible Options In this section the tables comparing the identified options shall be presented in order to provide

the reader with the most important features and figures:

Table 1.1: Comparison between option 1 and option 2, key figures

Parameter Option 1 Option 2

Service level (% HC, YT and SPs)

Total no. of households to be served (HH)

Total no. of people served (nos.)

O & M responsible (CBO/PS/NWSDB)

Estimated number of permanent staff re-quired in the O & M organisation

Est. Per Capita Cost (Rs/cap) of scheme

Est. Total Capital costs (Rs.)

Est. O & M Costs (Rs/year)

Est. total Government contribution (Rs.)

Est. total Community contribution (cash and labour, value in Rs.)

Est. total contribution1 per household (Rs.)

Est. total Community cash contribution (Rs)

Est. average per HH cash contribution (Rs.)

Alternative technologies considered/used

Average selling price of water2 (Rs./ cbm)

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Includes staff salaries, operation and maintenance costs as well as overhead costs 5 Includes salaries, pension, gratuity, leave encashment, travel costs and other cash benefits

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Table 1.4: Comparison of staffing levels for option 1 and 2

No. Staffing Levels Units Option 1 Option 2

1 Total no. proposed staff/Total length of pro-posed

distribution system

Staff/km

2 Total no. admin. staff x 100/total no. of staff %

3 No. of proposed staff x 1,000/number of thousands

connections

Staff/ 1,000

con.

4 No. of proposed O & M full time staff/ total no. of

proposed connections

Staff/con

4

Includes

Table 1.5: Comparison of Financial Indicators for Option 1 and 2

No. Financial Performance Indicators Unit

1 Production Costs:

Total yearly O & M estimate4/Total est. yearly production

Rs/cbm

2 Revenue:

Total yearly estimated revenue

Rs.

3 O & M costs:

Total est. yearly O & M costs in year 1

Total est. yearly O & M costs in year 20

Rs.

4 Total personnel costs:

Total est. yearly personnel costs5 X 100/Total yearly O & M

estimate

%

5 O & M recovery:

(Total expected revenue – total O & M esti-mate) X 100/

Total O & M estimate, year 1

(Total expected revenue – total O & M esti-mate) X 100/

Total O & M estimate, year 20

%

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1.5 Recommendations Based on the presented tables the recommendation must appear logical.

If there are specific recommendations on investigations to run parallel to the coming feasibility

study they should be summarized here.

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2 Background and Objectives 2.1 Background It is important for the reader to be able to place the current report, project pro-posal etc. into the

correct context. Therefore, a brief sector description could be included, the sub-project in sector

context, along with a description of how the project was selected for pre-feasibility study. In the

case of a pre-feasibility report prepared under the Third Water Supply and Sanitation (Sector)

Project the report should briefly outline the project and the reasons why the current study has

been carried out.

This chapter will outline the history of the study, i.e. when and why the study was initiated, by

whom, dates etc. This chapter should also describe briefly the justification of the study.

The most important of project policies and strategies such as definitions of communities, per

capita consumption, community involvement and contributions, conceptual features in demand

driven approach etc., could be mentioned here.

2.2 Objectives and Scope While section 2.1 has provided the reader with background relevant back-ground information

(why the study was conducted, the need for the project in national, sector or local context etc.)

this section should provide the reader with a clear understanding of the immediate objectives of

the study.

It is always worth spending some time when preparing the study to define the objectives clearly.

Secondly, as the overall project strategy is to implement the project in a people centered manner

it could be relevant to describe how suitable the schemes is for application of the participatory

approach. Obviously, certain urban schemes may be far from suited to this approach whereas

small towns communities may take a keen interest in formulation of options, selection of options

and discus-sions on the financial commitments to be made.

Pre-feasibility reports normally have the objective of determining the feasibility of a proposed

project (preliminary feasibility assessment). The pre-feasibility and feasibility assessments are

both based on technical, social, institutional and financial performance and data as well as on a

detailed desk analysis of these.

The intention of such studies is always to provide background for decisions to abandon the

proposed project or to proceed to the feasibility study. The pre-feasibility assessment will often

be possible to conduct without extensive data collection and fieldwork. However, socio-economic

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data need to be collected in order to establish the focus on the actual needs and preferences of the

people. The important issue in this context is to condense the study into a concentrated, to-the-

point study and subsequent report. Although differences of opinion exist on then level of detail to

incorporate in the pre-feasibility report the basic fact remains that the report is a preliminary

feasibility assessment and as such should only outline the essentials.

It should also be noted that the pre-feasibility study and report could outline alternative solutions

other than the more traditional supply solutions, e.g. introduction of rainwater harvesting

technologies where resources are inadequate. The selection of options should look at such

solutions in a broad perspective.

In order to clarify exactly what the study should encompass the scope of the project can be

detailed here.

2.3 Study Assumptions and/or Limitations If there are limitations and/or assumptions built into the study these should be mentioned, i.e. “the

study does not consider …” and the reasons why. It may also be pertinent to give specific

information on major, serious problems to consider in the course of the study.

Attention has to be given on following aspects but not only limited to those.

- Time constraints of the study and their implications on findings as presented in this report.

- Limitations on availability of base line details and their impact on evaluations as presented

in this report.

- Limitations of resources to conduct the pre-feasibility study or barriers for collection of

information.

- Assumptions made on field measurements or surveys/ desk studies and their validity on

analysis as presented in the pre-feasibility report.

- Assumption or hypothesis made on demand/population/development etc. forecasting or

anticipating future characteristics.

In order to save time during the feasibility and design stages it may be considered to make a

quick indicative survey along the main lines/roads and other high and low points which may be

relevant. Such survey can be made with altimeter.

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3 Project Area Characteristics The description of the project area should contain a precise geographical location, supported by a

map of the area. The map should be presented in this chapter. Population figures, geology,

hydrology and other relevant information should also be presented in summary here.

3.1 Administrative Boundaries Demarcation of the project boundaries in par with the well define administrative boundaries (DS

divisions, GN divisions, Hamlets etc.,) should be indicated here. If possible, attempt should be

made to superimpose the project boundaries on top of the GN division map as a lay out diagram.

3.2 Demography and Land Use Brief outline of demographic and land use features based on available information collected from

relevant sector planning authorities.

Attention has to be given to this section in order to arrive at realistic figures on population

densities and demand centres. Figures can be obtained from the Divisional Secretariat and

Department of Statistics and Census. At any rate the source of given population, population

densities etc. shall be provided in the report, preferably as a footnote.

3.3 Geophysical Features 1:50,000 & 1: 10,000 (if available) survey maps could be made use of to obtain basic features. If

there is close variance on geo-morphology of the area spot levelling could be a following activity

to describe the basic features, or a recommendation to do this in the course of the feasibility

study.

3.4 Meteorology, Hydrology and Environment Include climate description and rainfall figures, main rivers and streams, avail-able figures on

water balance, environmental considerations (sensitive sources, sanctuaries in the vicinity,

forested areas etc.)

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3.5 Hydrogeology Issues to incorporate include:

i) assessment of current water source quality

ii) assessment of existing wells

iii) identification of regional fractures, configuration of fractures through various methods

iv) identification of quartenary aquifers and preliminary assessment of their sustainable

productivity in terms of quantity and quality of water

v) preliminary estimates of aquifer recharge and or balance

The above assessments should be made mainly on basis of desk studies and desk analysis but data

can also be collected through a baseline data collection, ref. Annex 4.

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4 Existing Situation This chapter should describe in detail the current situation as pertaining to water supply and

sanitation, if sanitation is a relevant aspect of the proposal. In this chapter, substantial attention is

given to collection of data that provide an objective picture of the status of an existing situation.

The description should be kept brief and precise.

The assessments in this chapter, along with the contents of the next chapter should lead towards a

logical justification for the project and a subsequent identification of options.

For the purpose of providing a more objective picture of the current conditions, a set of indicators

has been identified. It should be noted that the application of the indicators to the existing

schemes will establish current standard of performance of the scheme when compared to other

schemes.

All data can be collected from relevant authorities and through a site visit, combined with

interviews with resource persons.

This chapter should also describe the actual supply situation as seen by the con-

sumers/community in various parts of the area. This is necessary in order to establish whether the

current service is acceptable to the consumers or if they have/feel a real need for improvement.

However, the need should be expressed by the consumers, not by the planning authorities or the

PIU.

4.1 Water Supply In the context of the Third Water Supply and Sanitation (Sector) Project it may be assumed that

urban projects and small towns sub-projects include construction of new facilities and distribution

network, rehabilitation and/or augmentation of existing schemes.

However, there may be cases where the community/consumers are perfectly happy with existing

dug/tube wells. In such cases there may be no felt or ex-pressed need for piped water supply and

the massive investments required for such an urban scheme may be uncalled for/unwanted by the

beneficiaries.

Of course, the opposite could also be true, i.e. that the beneficiaries suffer many hardships due to

insufficient supply which provides a straight justification for the project.

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These elements have to be taken into account when describing the existing water supply situation

and the need for assistance.

It is important to present the existing scheme in a proper, understandable manner to the reader.

Thus, it is advisable to include drawings and plans as required of the scheme facilities and

installations, including lay-out, location of sources, treatment facilities, mains and distribution

system along with diagrams of the principles of the scheme. These may be included as Annexes.

In view of the possible areas without piped supply but with other means of water supply the

drawings must also indicate these areas.

The following sections shall be used for description of the current situation:

4.1.1 Previous Design Water Demand against Current Demand (Piped)

• time of construction (may be phased),

• previous design population and corresponding capacity : Domestic and non-domestic demands,

peak factors if available (fyear

, fday

, fhour

)

• current population served and capacity requirements (domestic and non-domestic demands are

available in NWSDB operated schemes; in PS operated schemes include what is available),

coverage in terms of water meters (% of all connections, tariffs etc.)

• description of the problems (capacity, quality etc. or unbalance between design demand and

current demand and why)

Please note that only facts should be presented, not interpreted or speculated upon.

4.1.2 Description of Current O & M Set-up

Describe mechanisms of revenue collection and financial management, in terms of collection

raisers and profits. If the scheme is jointly operated by the parties, the divided responsibilities

should have to be clearly specified. External support or services which are received from others

agencies or from the private sector should be stated.

Describe the staff allocation (and availability) for overall operation and maintenance of the

scheme with respect to their basic duties and responsibilities. If possible, rapid assessment on

staff performances can be carried out, but generally such exercises should be referred to the

feasibility stage. If there is any mechanism to obtain external services, it should be described. he

existing O & M set-up can be described conveniently through the methodology given in Table

4.2, Parameters for Preliminary Institutional Assessment of Existing O & M Organizations

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4.1.3 Existing Sources

This section is important since source failure in terms of quantity and/or quality often is a

problem in Sri Lanka. The reasons for failure could be many, including depleting ground water

resources, change of ground water quality, reduced flows in streams and rivers etc. There is

reason to remind the technical staff who perform the source assessment (both existing and

proposed) that a source is supposed to be sustainable and that all sources should be considered

and assessed in that light.

Preliminary assessment of existing source(s), location, age, capacity, quality etc., water quality

analysis may be annexed along with data on yield, flows etc. Further studies are to be performed

as separate source investigation programmes and the results can be incorporated in the feasibility

report. Testing parameters are provided in Annex 2.

The section on existing sources should also describe other sources which are utilized by the

people within the current supply area, e.g. dug wells, tube wells etc.

4.1.4 Existing Water Treatment

Description of current treatment facilities, time of construction, condition, performance (analysis

may be annexed) and staffing.

4.1.5 Existing Transmission Mains, Storage Facilities and Pumping Stations

Description of:

• raw water and clear water transmission mains: age, materials, method of jointing, flow

measurements (if available) and calculation of velocities

• water sumps and tower: capacities, age and physical condition

• pumping stations incl. capacity, age and efficiency of pumps, hours of daily operation, time of

pumping station construction, physical condition, breakdowns and other

operation/maintenance problems.

• treatment plant(s): age, physical condition, principles of treatment, loading of clarifiers and

filters and assessment of operation and maintenance

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4.1.6 Existing Distribution System

Description of distribution system, time of construction, condition, operational and maintenance

problems. Especially an overall assessment of the UFW should be made and possible reasons for

high losses described.

Here a brief assessment of the utility’s ability to provide services to the consumers may be

presented. The assessment should be based on interviews with consumers in various parts of the

area and it could contain a summary of the hours of supply in various zones. Also the consumers’

happiness/unhappiness with the service and their ideas for improvements.

4.2 Preliminary Assessment of Performance 4.2.1 Technical Performance of existing scheme

The assessment of the actual need for the project is directly related to technical, institutional and

financial performance. Thus, a number of indicators have been established. These will be applied

to all proposed sub-projects. The range of indicators may be extended during the feasibility study.

In table 4.1 a number of performance indicators are given. The technical performance assessment

basically should provide all these figures. The indicators/data should then be able to point to the

current status of the scheme performance. Some of the indicators such as e.g. UFW, treatment

capacity etc. have been described earlier in this chapter.

Brief comments may be added after the assessment.

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Table 4.1: Technical Performance Indicators/Technical Data

No. Technical Performance Indicator/Data Units

1 Water Production in m3 per capita per day (domes-tic category only) m

3/(d x cap)

2 Total water production m3/d

3 Treatment capacity m3/d

4 Hours of Supply Hours per day

5 No. of consumers

a) Domestic

b) Non-domestic

Nos.

6 Years since last major rehabilitation Years

7 Service level (ratio HC/YT/SP) ratio

8 Functioning private wells, in % of total no of HH %

9 Unaccounted for Water (UFW) % of production

10 Water Quality , % of samples outside SLS %

11 km of transmission lines km

12 km of trunk mains km

13 km of distribution system km

14 Water rights problems yes/no

15 Water meters installed yes/no

If the information is available it would be appropriate to give rough assessment on catchments

areas and their drainage basins.

4.2.2 Institutional Performance of existing scheme In order to be able to determine all aspects of a problem that has led to the need for the proposed

project/sub-project, other issues and aspects than technical need to be considered.

Often, a problem related to water supply is not clearly technical but has a number of other

contributing factors. Institutional performance, if assessed correctly and objectively, may at the

time of the pre-feasibility study, give an indication of the problem complex to consider when

outlining options. The out-lined options should also comprise suggestions on which O & M

organisation would be most appropriate.

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To that end a comparison between various possible organisations is made in chapter 6, e.g.

comparison between an existing CBO and the PS.

In order to provide an objective, preliminary assessment of institutional performance a few

indicators can be applied. An example of such preliminary assessment is provided below.

Brief comments may be added after the assessment including statistics on consumer

complaints/satisfaction collected from the operator of the scheme, checked against real consumer

satisfaction (field check). 6

Separate sheet can be attached for specification of facilities

Table 4.2: Parameters for preliminary institutional assessment of exist O & M organisations

Institutional Parameter Exist. O & M

Organisation.

Staffing:

No of staff (converted into full time staff). Categories

of technical and admin staff:

1

2

3

4

5

6

Physical Establishment:

Administrative Office

Existence of technical workshop and repair facilities6

Billing and complaints office

System for complaints and repairs/maintenance

Laboratory/Quality Monitoring Mechanism

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Other Schemes:

No. of other WS schemes under O & M by same org.

Names of other schemes: 1

2

Production cost of each scheme (Rs./cbm)

1

2

Scheme financial performance (Very good/good/bad/no

information)

Scheme technical performance (Very good/good/bad/no

information)

Audited accounts available two years back ? (Yes/no)

Sector Links established ?

If yes, for what functions ?

Institutional Parameter

Plant and machinery:

Mechanical workshop available ?

Safe storage for PVC pipes and fittings ?

Maintaining sufficient stocks of spares ?

No. of vehicles ?

No. of motorbikes ?

No. of bicycles ?

Organization charts etc. could be helpful in visualization of the existing set-up.

A number of recognized institutional indicators may be useful to assess the effectiveness of the

existing or proposed establishments Comparison with the existing situation and other schemes

will provide an idea of the relative staffing level. Such figures will be assembled by PMU for

later distribution.

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Table 4.3: Existing Staffing Levels as Indicators

No. Institutional Performance Indicators, Staff-ing Level,

Existing Situation

Units

1 Total no proposed staff/Total length of proposed distribution system No. staff/km)

2 No. of proposed staff x 1,000/number of thousands connections No. staff/ 1,000

connections

3 No. of proposed O & M full time staff/ total no. of pro-posed connections No. staff/connection

4.2.3 Financial Performance of existing scheme In line with the Government’s policy of focusing on financial viability and sustainability the pre-

feasibility study should take into account factors which in-crease or reduce these prospects in

connection with the project/sub-project.

The overall intention is to provide assistance to the schemes which have a realistic possibility of

becoming financially viable after implementation of the project/sub-project, or to design the

project in such a way that this becomes possible.

The current financial performance is often depicting some of the difficulties faced by the

managing organization in operation and possibly maintenance. Current high production costs give

reason to be careful when outlining options

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unless the productions costs and O & M expenditure can be recovered through tariffs.

The assessment of collection ratio often provides information on the efficiency of the managing

organization as well as indication of which institutional issues should be addressed to increase the

prospects of financial viability.

The bottom line of any water supply scheme is the level O & M recovery the scheme attains. If

the level is low reasons must be given and recommendations given for which aspects to pay

particular attention to in the course of a possible feasibility study.

Table 4.4 indicates the essential indicators which must be included in the study.

Brief, clarifying comments may be added after the assessment.

Table 4.4: Financial Performance Indicators for Current Scheme

N

o.

Financial Performance Indicators Unit

1 Production Costs: Total yearly O & M estimate7/Total yearly production

Rs/cbm

2 Revenue: Total yearly revenue collected

Rs.

3 O & M costs: Total yearly O & M costs

Rs.

2 Total personnel costs: Total est. yearly personnel costs8 X 100/Total est. yearly O & M expenditure

%

3 O & M Recovery: (Total revenue – total O & M costs) X 100/ Total O & M estimate

7

Includes staff salaries, operation and maintenance costs as well as overhead costs 8 Includes salaries, pension, gratuity, leave encashment, travel costs and other cash benefits

4.3 Socio-Economic Conditions and Potential Development Trends In this section socio-economic data and information of relevance for the project/sub-project

should be presented and analyzed.

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As community involvement is expected at every stage of the WSS from formulation of proposal,

implementation and operation and maintenance of schemes, it is important to focus the attention

on the socio-economic status of user communities. This kind of approach will ensure that true

user needs, requirements and expectations are sufficiently included when creation of scheme.

Focus should also be on the potential development trends of the area as provision of pipe borne

water has a great influence as changing the state of development in small towns, semi-urban and

rural set-ups etc. To facilitate such data collection a baseline data collection can be organized. A

sample format for this is provided in Annex 4.

Immediate findings on following areas need to be incorporated in the pre-feasibility reports.

- Water user patterns and level of consumption.

- Poverty level and unemployment status of the potential users.

- Willingness to contribute and ability to pay (existing studies

- Affordability and accountability of users

- Specific gender aspects and issues, if any

- Disadvantaged groups, aspects and issues

- Order of priorities for development of the community (water and sanitation

may not be the highest priority for the community)

- Community opinion of existing water supply situation and assessment of the

community’s willingness/wish to invest in improved water supply. This

need to be established through at least one public meeting where such

community wish is clearly expressed.

- Community expressed needs/areas/technologies/modes/ for improved water

supply and sanitation (give details on which improvements are considered

important by the community and if possible state technologies preferred).

- Conflicting situations in obtaining water resources from different agencies

and communities. (e.g. land issues, water rights, sharing of users

regarding catchments as a common property)

- Finding and application of locally available knowledge or expertise

- Engagement in water related activities by the communities for their living.

(e.g. sand mining etc)

For the purpose of collecting specific household related information a household self assessment

survey can be carried out. A sample format for a house-hold self assessment survey is provided in

Annex 5. A sample format for the data tabulation of a data is provided in Annex 6.

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4.4 Sanitation, Health & Hygiene This section is also relevant if there are no or few sanitary aspects of the pro-ject/sub-projects in

the sense that surface drainage problems should be ad-dressed.

4.4.1 Sanitation

For projects/sub-projects with sanitation components this section should contain statistical

information on the existing sanitary situation. Attention should be given to the following data

collection:

• Approximate percentage distribution of housing units by source of drinking water

• Approximate percentage distribution of housing units by type of toilet

Discuss the problem of water scarcity as well as the lack of sanitary facilities with the community

to obtain an understanding of the priorities of the communities as well as the real needs and

problems to address.

Attention should be drawn to the following sanitary aspects:

1. drainage from pour flush latrines to surface drains,

2. surface drainage (pools of stagnant water, location, reasons)

3. location, condition and slope of surface drains

4. potential problems during periods of high rainfall or high water tables (flooding, pollution of

surface water sources/wells/tube wells)

5. assessment of need for improved sanitation based on data and interviews

In connection with sanitation, also current level and mode of environmental sanitation should be

considered (collection and disposal). In this context, an assessment of the current solid waste

disposal and collection practices could be made. Especially the occurrence of large quantities of

waste in the streets and in public areas could be a contributing cause of high incidences of certain

dis-eases.

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Sources of data:

Annual health bulletin 1997, Ministry of Health

Public health Inspector of the area (all details about the sanitation / en-vironmental

sanitation)

Medical officer of health of the area.

F. H. W. (Family health worker) to obtain further information

Hospitals, dispensaries of health dept.

4.4.2 Health

In the overall sector and project context health is a major factor. The overall justification for

provision of safe, adequate drinking water is improvement of health of the population served.

Thus, it is important to identify health problems, which can be attributed to shortage or absence

of water, low water quality, inadequate number of latrines etc.

A commonly prescribed method to assess the relationship between water sup-ply and health is to

assemble data on water borne diseases in the project area or in a part of the project area (inform

geographical proportion). However, for small towns sub-projects data should be relatively easy to

compile. The data may be available from Dept. of Health or local hospitals. Department of Health

may also have national average prevalence of these diseases which can be compared to the

frequency in the project area. Diseases include:

• Cholera

• Typhoid

• Worm Diseases

• Viral Hepatitis

• Abdominal Pain

• Diarrhoea

27

A possible relationship between health and hygiene practices/standards should be considered and

commented on, if relevant.

In addition, the following aspects should be considered:

What are the community expressed health needs in the area ?

What do people think as their health priorities ?

What do they consider health problems ?

What do they think about the current water supply facilities and sanitary facilities ?

4.4.3 Hygiene

Only data and information of relevance for the project should be included. This could comprise

e.g. information on hygiene practices that have relation to water supply, hygienic aspects that

contribute to an increase in occurrence of water borne diseases etc.

If information is available on hygiene education campaigns this should be included in this

section.

28

5 Anticipated Demand for Improved Water Supply This section should describe in concise, but brief terms the anticipated future demand, the

possible implications of increased demand for the various facilities/installations, i.e. the ability of

the existing system to deliver the projected demand. The text should not at this time speculate in

options, rather present facts. Options will be considered in the next chapter.

To a large extent this chapter is assuming that some existing water supply facilities are present. If

the report is for a new scheme and there is currently no piped water supply facilities only the

relevant sections of this chapter should be incorporated in the report.

In order to establish a more detailed and substantiated picture of the anticipated future demand it

is deemed necessary to conduct at least one (public) meeting. In this meeting the current water

supply should be discussed and the consumers/communities should express their views on the

existing and future supply situation and need for improved water supply and sanitation. It has to

be established unequivocally that the community wants improved water supply and sanitation,

and if the direction of the pre-feasibility study goes towards piped water supply then the

community has to express such wish. The report must clearly and directly point out reservations

voiced by the community about improvements etc. The pre-feasibility study is not committing the

community.

5.1 Sub-Project Cycle The sub-project cycle of small towns is much similar to that of village schemes, except that it is

likely to take longer time for the community to arrive at the relevant decisions than at the village

level. The approach to small towns schemes is participatory and demand driven, i.e. the

communities decide from a given range of options what they want in terms of i) technology, ii)

service level and iii) costs.

The project cycle comprises the following phases:

1. Pre-Feasibility Study (Identification of Options)

2. Community Mobilization

3. Participatory Planning and Design

4. Construction

5. Consolidation

POs will be responsible for all community related activities.

29

For the urban schemes the approach is not participatory as community mobilization would require

enormous resources to be successful.

5.2 Anticipated Water Demand Assuming that the community initially is in favour of improved supply this section should

calculate and describe the future total water demand based on a 20 year design horizon. First,

describe the assumptions for your calculations. Include in these :

- Growth rates and related zonal variances (if any).

- Water served population (%).

- Service level and there incremental variations with time.

- Allocations for non-domestic consumption (as a % of the domestic

consumption).

- Assumptions on overall UFW (%) and reduction of the value with time.

The water demand should be allocated to the various supply (hydraulic) zones, if possible.

Particular attention should be given to the estimation of population growth. The well known

problem of schemes which provide much less water than required to serve a population arises

most often because of three major problems:

population growth rate underestimated

water resources are inadequate (investigations insufficient)

capacity of the O & M organisation to operate and maintain the scheme in a sustainable

manner

The national average population growth should be used with considerable caution, as the growth

rate is likely to be substantially higher in development centres, such as urban towns and certain

small towns. Attention should also be given to the possibility of a period of extreme growth rate

in some areas, which previously had no water supply and where water is/has been a limiting

factor for development. Past population growth rates of similar small towns may be possible to

30

obtain as a guideline. It is advised to contact PMU or PIU for latest information on figures to use,

especially for small towns schemes.

5.2.1 Source Considerations

Having established the future water demand it is of overriding importance to assess the

abstraction limitations and potential of the current source(s) and to assess, on a preliminary basis,

to which extent supplementary source(s) will be required. In case supplementary sources are

needed the report should describe which supplementary or alternative sources are thought (or

likely) to be avail-able to cater for the future demand. In case of obvious shortcomings of the

source to provide the required volume of water this should be highlighted.

Separate guidelines for source identification and flow measurements outline the methodology to

identify and gauge probable new sources9. As such the pre-feasibility report should focus on

source identification to a limited extent only but at the same time also ensure that the fundamental

issues surrounding preliminary source assessment are covered sufficiently. Also, the report could

out-line possibilities for lessening the load on the existing aquifers through, e.g. recharge of the

aquifer. Further, the report must also outline the need for source protection measures to be

initiated to maintain the quality of water.

The preliminary assessment of the future sources should only outline the investigations that

should be conducted in order to establish location and sustainable yield of alternative

sources/supplementary sources. The investigations recommended in this report should be

incorporated in the separate source investigation programme to be done by PIUs. The results can

be included as an annex to the later feasibility report. The individual district managers of

NWSDB will be responsible for the district implementation of the programme.

5.2.2 Water Treatment

This section should describe the scenario set off by the projected demand. Questions to clarify

include:

• Capacity of current treatment plant, if any, against projected demand. This is a simple

comparison of current capacity against projected future demand.

• Likely method of treatment in the future setting

31

This could be a generalized statement mentioning that the type of treatment will be decided upon

as and when raw water analysis are available. However, if the past records of water quality are

available, basic assessment is to be made for the need for improvement of the treatment process.

f new sources are thought incorporated in the scheme, at least one sample analysis should be

organized for water quality and based on defined quality parameters. Parameters to be tested for

are indicated in Annex 2. In general both a chemical and a bacteriological sample has to be

analyzed and included in the report to illustrate water quality.

A preliminary treatment arrangement should be proposed (probably conventional treatment

process).

5.2.3 Transmission Mains, Storage Facilities and Pumping Stations

It may be expected that either one part of or all of the existing transmission mains (raw water as

well as clear water mains), storage facilities and pumping stations will be inadequate to cater for

the projected demand. It is therefore important to provide a preliminary assessment of the

capacity of the existing mains, the existing storage and the pumping stations and any other

component against the determined future demand.

5.2.4 Distribution System

In a number of older schemes the distribution system may be in a poor condition as well as

unable to supply the projected quantities. In order to provide some information to that end a

preliminary assessment shall be made as fol-lows:

• Capacity of system to cater for future demand, brief assessment e.g. sufficient or insufficient

supported by figures.

• Argument which may warrant studies into replacement of the system (or part thereof) such as O

& M problems, end of design period, poor service level etc. Arguments point by point, not

elaborate discussions.

• Anticipated expansion with new demand centres. Short description.

• Ideas on a few preventive measures needed to control UFW (e.g. improvements to service

connections) and observations on UFW. This is to be very brief.

32

• Preliminary assessment of dual systems (dry zones with small resources)

• Other water conserving measures

5.3 Anticipated Demand for Health, Hygiene and Sanitation Services In this section it could be mentioned if there are initiatives in health/hygiene planning including

government targets for improved health in the area.

Planned new hospitals, health clinics etc. should be included. Also, future solid waste

collection and disposal aspects could be incorporated in brief.

10

(Source – Demographic Survey 1994)

According to a recent estimate, about 26% of the households need an improved latrine in three

districts of Puttalam, Anuradhapura and Moneragala, whereas around 9 % require improvements

in the other three project districts, namely Kegalle, Hambantota and Kalutara Districts 10

Also, it is evident that incidence of diseases occurring due to sanitation and contaminated water is

high.

Therefore in this section should discuss about the expected future sanitation service demand.

• Community needs

• Individual need for sanitation services

• How the community is willing/able to help project sanitation service activities

• How they are willing to gain assistance from the project

• What are their collective effort of the sanitation programme.

5.4 Project Justification Having prepared chapter 4 and 5 the writer should in this section be able to de-duce the

justification for the project. The existing situation has been described and the anticipated needs

have been explained, along with the possible consequences and implications. This should lead to

an outline of the gap between the current and desired future situation. This section does not need

to be elaborate, but strongly argued.

33

6 Options Considered This chapter will describe the likely options as result of the data analysis per-formed and

presented in chapter 4 and 5. The assumptions for the considered options must be thought

carefully out and presented for each possible option. More than two options for urban schemes is

likely to confuse the reader. This chapter is by virtue of the technical, financial and institutional

analyses made a fairly long and exhaustive chapter. Nevertheless, it is advisable not to take

shortcuts in the analyses. The reasons for not considering other options must be clearly

stated..The options should consider the total, broad solutions to the supply and resources problem

by describing design concepts of sound practices and alternative technologies where feasible. The

option identification is not to be considered a one-eyed exercise of designing a water supply

scheme. The exercise should be focused on design of a process that leads towards a sustain-able

situation in terms of source, supply, finances, O & M etc. The options identified should contain

all the necessary elements to achieve such a situation.

6.1 Small Towns – Basis for Participatory Approach However, in case of small towns water supply improvements the number of options may be

increased as circumstances direct. At this time it is expected that the participatory planning

activities may be focused, kept on track and per-haps be faster than originally estimated because

the most appropriate options have been identified through this report. Should the community later

in the process wish to alter the options or investigate aspects of other options this should be

accommodated to the extent practical. As such the pre-feasibility report for small towns provide

only the basis for further community deliberations. However, the project is likely to impose

deadlines for the community identification of i) final option along with ii) deadlines for payment

of commu-nity cash contribution. As such community drop-out criteria can be expected to apply.

Hence, the process cannot continue for long before the project will have to consider other

communities.

6.2 Summary of Options In this section only a very brief presentation of some of the most important aspects of option 1

and 2 should be given. The presentation should include the salient features of each option and the

total cost estimate for each. The options will be analysed more in the following sections. If more

than two options have been selected under small towns component similar exercise shall be

extended to all options.

To enable the reader to compare the options it is suggested to present a summary of key figures of

the identified options alongside one another on the same page for easy comparison. Table 6.1 is

34

an example of such a comparative table for two options. At this time it should again be noted that

the pre-feasibility report contains by no means an exhaustive analysis of the identified options.

The report has the objective of identifying the most feasible options. The de-tailed analysis will

be provided in the course of the feasibility study, once the final option has been decided by the

community (for small towns) or Project Evaluation Committee (PEC) for Urban Schemes. It is

important to present costs as a range rather than a determined amount. The cost estimates should

be calculated on a conservative basis. In the table the estimates shall be presented as the best

current estimate incl. community contribution, 10 % contingencies with a margin of 25 %. In

table 6.1 is given an example of such comparison.

Table 6.1: Comparison between option 1 and option 2, key figures

Parameter Option 1 Option 2

Service level (% HC, YT and SPs) 50/25/25 70/20/10

Total no. of households to be served (HH) 950 950

Total no. of people served (nos.) 4850 4850

O & M responsible (CBO/PS/NWSDB) CBO CBO + PS

Major Operating Points requiring staff 3 4

Staff requirement for major oper. points 3 5

Est. Per Capita Cost (Rs/cap) of scheme 2758 - 4368 2783 – 4639

Est. Total Capital costs (Rs.) 12 – 19 mill 13.5 – 22.5 mill

Est. O & M Costs (Rs/year) 200,000 – 500,000 300,000 – 700,000

Est. total Government contribution (Rs.) 9.6 – 15.2 mill 10.8 – 18.0 mill

Est. total Community contribution (cash and labour,

value in Rs.)

2.4 – 4.2 mill 2.7 – 4.5 mill

Est. total contribution11 per household (Rs.) 2696 - 4719 2842 – 4736

Alternative technologies considered/used Yes (RW) No

Aver. selling price of water (Rs./m3) 4.5 5.3

In addition to the key figures given above in table 6.1 it is considered relevant to provide

comparison between option 1 and 2 for financial and institutional issues. For further comparison

between options please refer to comparison of indicators in table 6.2 and 6.3.

35

Table 6.2: Technical Performance Indicators/Data, Comparison between Op-tion 1 and 2

No. Technical Performance Indicator/Data Units Option 1 Option

2

1 Probable water extraction (based on source(s) capacity)

c) Average flows

d) Dry period flows

m3/d

2 Est. water production in m3 per capita per day (domestic category only) m

3/(d x cap)

3 Total est. water production m3/d

4 Proposed treatment capacity m3/d

5 Anticipated hours of supply Hours per day

6 Est. no. of consumers 2020 Nos.

7 Service level (ratio HC/YT/SP) ratio

8 Unaccounted for Water (UFW) % of production

9 No. of major operating points with

full automation:

semi-automation:

km of transmission lines (> 200 mm) km

11 km of distribution mains (>110 mm, < 200 mm) km

12 km of distribution system (>63 mm, < 110mm) km

In addition to the key figures given above in table 6.1 it is considered relevant to provide

comparison between option 1 and 2 for financial and institutional issues. For further comparison

between options please refer to comparison of indicators in table 6.2 and 6.3.

36

Table 6.2: Technical Performance Indicators/Data, Comparison between Option 1 and 2

No. Technical Performance Indicator/Data Units Option 1 Option 2

1 Probable water extraction (based on source(s) capacity)

c) Average flows

d) Dry period flows

m3/d

2 Est. water production in m3 per capita per day (domestic

category only)

m3/(d x cap)

3 Total est. water production m3/d

4 Proposed treatment capacity m3/d

5 Anticipated hours of supply Hours per day

6 Est. no. of consumers 2020 Nos.

7 Service level (ratio HC/YT/SP) ratio

8 Unaccounted for Water (UFW) % of production

9 No. of major operating points with

full automation:

semi-automation:

10 km of transmission lines (> 200 mm) km

11 km of distribution mains (>110 mm, < 200 mm) km

12 km of distribution system (>63 mm, < 110mm) km

12

Separate sheet can be attached for specification of facilities

37

Table 6.4: Comparison of staffing levels for option 1 and 2

No. Staffing Levels Units Option 1 Option 2

1 Total no. proposed staff/Total length of pro-posed

distribution system

Staff/km

2 Total no. admin. staff x 100/total no. of staff %

3 No. of proposed staff x 1,000/number of thousands

connections

Staff/ 1,000 con.

4 No. of proposed O & M full time staff/ total no. of

proposed connections

Staff/con

13

Includes staff salaries, operation and maintenance costs as well as overhead costs 14

Includes salaries, pension, gratuity, leave encashment, travel costs and other cash benefits Table 6.5: Comparison of Financial Indicators for Option 1 and 2

No. Financial Performance Indicators Unit Option 1 Option 2

1 Production Costs:

Total yearly O & M estimate13/Total est. yearly

production

Rs/cbm

2 Revenue:

Total yearly estimated revenue

Rs.

3 O & M costs:

Total est. yearly O & M costs in year 1

Total est. yearly O & M costs in year 20

Rs.

4 Total personnel costs:

Total est. yearly personnel costs14 X 100/Total yearly O

& M estimate

%

5 O & M recovery:

(Total expected revenue – total O & M esti-mate) X

100/ Total O & M estimate, year 1

(Total expected revenue – total O & M esti-mate) X

100/ Total O & M estimate, year 20

%

For the analysis on balance requirements, please refer to Annex 3, i.e. the dif-ference between the

current requirements and the future requirements as given in option 1 and 2.

38

6.3 Option 1 The following presentation of the option is deemed adequate at this time

6.3.1 Description of Option 1 Description of the option, salient features, main points only.

A brief presentation of this likely option with the benefits, advantages and disadvantages it may

set off. The option may be supported by layouts and diagrams as necessary, to be annexed. If at

all possible a plan of the proposed distribution system with trunk mains should be produced and

annexed.

Data and details should be annexed as supporting documents to prove the workings of the various

indicators tabulated in table 6.1 – 6.4

6.3.2 Cost Estimate, Option 1 Presentation of assumptions for cost estimates and a table summarizing the estimates. Details and

data may be annexed.

Probable anticipated variances on basic costs, overheads and price escalations up to the year of

contract award could be briefly discussed here. In addition, it may need to be investigated which

possible ways there are of reducing capital costs (cost sharing models, low cost alternatives, bulk

procurements and attrac-tive discounts etc.)

6.4 Assessment of Option 1 Assessment of the option may address three basic aspects of the option, namely: technical,

financial and institutional aspects. To support this assessment, the institutional, socio-economic

and environmental issues need to be discussed in a broad sense. Based on the technical and

financial viability, arguments need to be made to analyze the. the governing factors for project

sustainability.

6.4.1 Technical Assessment, Option 1

In this section attention is to be given to discuss and justify the choice of option and in brief also

the reliability of the major project components which may have been selected for consideration.

Included in the assessment should also be the various alternative technologies which could be

applied, e.g. desalination, rainwater harvesting..

Risks involved and their implications to overall project sustainability should be assessed on a

preliminary basis. If further field studies are needed to confirm

39

the selections, it should be clearly stated. In addition, appropriateness of the selection of elements

(e.g. treatment units) should be briefly discussed.

While analyzing the technical viability of the option due consideration shall be given to address

the issues pertaining to the selected water sources. Anticipated variations of water levels and

water quality with time to be discussed. Probable expectation of the water usage of multiple end

users to be assessed.

Appropriateness of the treatment elements and their applications with the variations of the raw

water quality should be discussed briefly. If further studies (including pilot plants etc) are needed

to finalize the selection, the requirements are to be listed and included as recommendations for

the feasibility study

If there is likely to be a proposal for 'zonal operation' with multiple hydraulic zones as in an

integrated scheme, strong arguments are to be made with it’s appropriateness and effectiveness.

6.4.2 Socio-Economic and Gender Assessment, Option 1

Under this assessment, it is expected to draw attention on probable impacts in socio-economic

features due to enhancement of the facility and service level. Preliminary analysis (based on

random sample surveys) on following areas may be essential.

- Usage of water and probable per captia consumption.

- Anticipated development of the area due to enhanced facility.

- Ceilings on affordability or probable user contribution.

- Active involvement of women in O&M of the scheme.

6.4.3 Environmental Assessment (only urban schemes), Option 1

It should be noted that Initial Environmental Examinations or Environmental Impact Assessments

are required in sub-projects of total costs above 1 mill. USD. The IEE or EIA should be prepared

as separate reports by a specialist.

For small towns sub-projects the obvious environmental aspects of various options should be

included here. Not least should it be considered whether special efforts will be required in order

to maintain the water quality of the source(s) and to prevent pollution and degradation of the

source(s).

40

6.4.4 Institutional Assessment, Option 1

A preliminary assessment of the anticipated/suggested future O & M set-up and the

appropriateness for the proposed option should be made here. The existing O & M set-up has

already been analysed in section 4.2.2

The purpose of this section is to provide information for considerations on the future operating

and maintaining organisation. Should the existing CBO or the Pradeshiya Sabah be considered

for this function ? Are there other possibilities ? The NWSDB should only be considered for O &

M if the scheme is a large integrated scheme or if there are special problems which require more

qualified staff.

The proposed O & M organisation must then undergo same assessment as the existing

organisation has done, ref. section 4.2.2, to the extent this is possible. As a minimum the three

institutional indicators must be given in this section.

Organisation charts etc. could be helpful in visualisation of the existing set-ups.

Other possible options for scheme operation and maintenance may be discussed here, e.g. joint

ventures, participatory models, links with line agencies etc. While evaluating the possible O & M

models due consideration should be given to institutional issues such as institutional capacity and

capability including back-up supports if needed for the support of the enhancement of the

delivery mechanism.

Also, it is important that the pre-feasibility report briefly considers the avail-ability of plumbers

and pipe fitters and to what extent additional training would be required in order to improve the

level of workmanship

The comparison made between option 1 and 2 can be referred to, ref. 6.2., but should not be given

more than one place in the main report.

6.4.5 Financial Assessment, Option 1

The preliminary financial viability assessment will in nature have to be limited at this stage and

should focus on the available basic elements with allowance for a brief analysis on cost recovery:

O & M costs for the proposed option.

Overall O & M Assessment, Option 1

Anticipated O & M costs per year need to be established in this section, separating genuine O &

M costs from the staff salary component and overheads. If possible, the author could propose

arrangements or alternatives for cost recovery along with the appropriate O & M set-up, including

staffing. Please re-member the need for brief assessments and to-the-point statements. In the fol-

lowing more guidance is given to completion of the individual headings.

41

Basic O & M Costs

The basic cost parameters on O & M of the proposed option is to be calculated along with an

assessment of their probable variation with the design life. It should, however, be limited to very

basic parameters such as:

1. Energy costs and cost of consumables

2. Repair costs (spares and other procurements)

3. Utility costs (including overheads)

4. Maintenance of plant and equipment (i.e. preventive maintenance costs in-cluding cost for

support services)

5. Staff salaries (total costs)

Cost Recovery

Cost recovery models should be discussed briefly here. Cost recovery has two basic aspects:

• Capital cost recovery

• O & M cost recovery

Directives on Capital cost recovery will be issued by PMU later in the course of the project.

It should be assessed whether an existing cost recovery mechanism (e.g. tariff) is sufficient to

cover basic O & M costs. If that is not the case alternative measures can be discussed briefly. In

case of augmentation of existing urban schemes the analysis may be based on existing tariffs

against anticipated O & M costs over time. In case of small towns, existing facilities may not be

pre-sent and the analysis could focus on determination of the probable range of the tariff.

At present it is being debated whether the National tariff, a regional tariff or a scheme specific

tariff should be introduced for the new schemes under the cur-rent project. While cross subsidies

may serve many purposes the principle to apply at this stage should be to secure scheme viability

and sustainability.

This means basically that the production costs of water should be reasonable and that the scheme

should basically turn out a profit, however marginal such profit may be. It should be noted

whether the existing and projected O & M costs are very high and which steps could be taken to

reduce the costs.

In cases where staffing is very high compared to other schemes (ref. section 4.2.2) it may be

considered to try to rationalize the operation through e.g. automation, contracting services,

maintenance contracts with the private sector etc. If possible, automation should be kept as low

42

cost and simple as possible, e.g. automatic pump start based on floats and relays. Private sector

development potential should/interest in such technologies should be given attention, if relevant.

It is of importance to establish the basic cost recovery aspects. This can e.g. be carried out based

on the total O & M costs against expected revenue collection year by year, please refer to the

section in financial indicators.

Financial Indicators

In order to get basic information on the expected performance of the new/augmented scheme the

following financial indicators will be useful.

Production costs (Rs./m3): The indicator will provide an indication of the production costs of

water. If the production costs are very high compared to other schemes the concept may need to

be changed. Figures will be issued by PMU on regular basis based on actual reports from the

field. data collected indicate that in existing schemes the production costs vary between 2 Rs./ m3

to 30 Rs./m3,

with the majority around 5 – 10 Rs/m3.

No statistical analysis has been performed as

yet.

Total personnel costs: This indicator will provide information on the financial burden of the

staffing. Obviously, if this indicator is high only little will be available for actual operation and

maintenance. No figures are currently avail-able with PMU and should be obtained by PIUs.

O & M recovery: This indicator visualizes the extent of the recovery of O & M costs. If the

proposed scheme is sound in concept it should be able to recover O & M costs fully.

Consequently, the indicator should be min. 100 %. Any figure lower than 100 indicates

questionable financial viability.

The preliminary assessment should identify points of critical importance for financial viability

and recommend those to be included in the feasibility study.

6.4.6 Sustainability Assessment, Option 1 This assessment is of particular importance. It will be based on all the previous sections in this

chapter and will outline uncertainties and risks which may affect sustainability, technically and

financially. If further investigations are necessary to determine sustainability prospects these

should be stated here for inclusion in the feasibility study.

Technical Sustainability Assessment

The technical sustainability assessment comprises an assessment of the main components as

outlined in the text and their capacity to sustain during the de-sign period. There may be specific

requirements to maintenance, specific needs

43

7 Conclusions and Recommendations 7.1 Conclusions In this chapter the conclusions arrived at from the analysis of the existing situation and the

expected demands should be incorporated. The conclusions may be accompanied by a brief

rationale as to how the various conclusions have been arrived at.

The conclusions should be structured systematically, e.g.:

• conclusions, existing situation

• conclusions, anticipated demand

• conclusions, options considered

7.2 Recommendations Based on the conclusions above the author is required to provide his/her recommendations. There

must be a clear line of logic between observations/analysis, conclusions and recommendations.

The recommendations should be kept brief and in clear language without details and data.

1.0 Basic Data of scheme

a) Daily Water production / Population served (m3/d/capita)

b) Annual Water Production in m3

c) No. of connections requested (waiting list) / No. of present connections ( % )

d) Hrs of supply per day (hrs/day) e) Age of scheme since last rehabilitation (years)

f) Service level (House connections HC / Standposts SP )

g) Major breakdowns per month (no.) (breakdowns that effect supply)

h) Overall system UFW ( % of production ) i) Water Quality – WHO permissible

Yearly Ave. results lying outside limits (% of total no. of analysis)

44

2.0 Financial performance indicators a) Production costs per Rs/m3

Total yearly O & M expenditure Total yearly production

c) Collection ratio (1/X) Yearly collected revenue Yearly billed

d) Profit for water supply services (Rs.) (Revenue-O & M Expenditure)x100 Expenditure

3.0 Institutional performance indicators 3.1 Staffing levels

a) Total staff / Total length of distribution system (No/km)

b) No. of staff x 1000/ 1000 connections (No./1000 connections)

c) Staff for meter reading & maintenance / Total no. of meters installed (No./ 1000

3.2 Maintenance

a) Workshop facilities for maintenance (good/adequate/poor/none)

b) Water quality monitoring facilities (yes/no)

3.3 Accountability

a) Maintenance of accounting records (good, adequate, minimum, poor)

b) Availability of the most recent audited accounts (1-2yrs/2-3yrs/3-4 yrs/>4yrs)

45

Institutional Analysis Annex 3 Balance Requirements, Option 1 and 2 Institutional Parameter O & M Option 1 O & M Option 2

Available Required Available Required

Staffing: No of staff (converted into full time staff) required for the new scheme

Categories of technical and admin staff: 1 2 3 4 5 6 Physical Establishment: Administrative Office

Existence of technical workshop and repair facilities Billing and complaints office

System for complaints and repairs/maintenance Other Schemes:

No. of other WS schemes under O & M Names of other schemes: 1 2

Production cost of each scheme (Rs./cbm) 1 2 Plant and machinery: Mechanical workshop available ?

Safe storage for PVC pipes and fittings ? Maintain sufficient stock of spares ? No. of vehicles ? No. of motorbikes ? No. of bicycles ?

Proper tools for repairs and maintenance ?