Recurrent Expenditure of Urban Water Supply Systems – Case Study of ATMA and Kumasi Water Supply Systems

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Over the past decade, the urban population of Ghana has been increasing and provision of potable water to urban dwellers has become a huge burden on the urban water utility provider because water demand exceeds the supply. In order to bridge the gap, there is the need to invest within the sector to sustain service delivery and expand service coverage. Meanwhile, it is not clear how much is needed to ensure continuous service delivery. This research established the recurrent costs of large water systems using the two largest urban water systems in Ghana; the Kumasi Water Supply System (WSS) and Accra-Tema Metropolitan Area (ATMA) WSS. The recurrent expenditure used for study included expenditure on operation and minor maintenance (OpEx), capital maintenance (CapManEx) and capital enhancement (CapEx Enhancement).The study was based on a 5 year analysis period (2007-2011) using cost data from reports and documents of Ghana Water Company Limited (GWCL). Key personnel of GWCL such as Managers and Technical Operators of the water supply systems were interviewed to establish the maintenance practices and financing mechanisms within the urban water sector. The total annual recurrent cost obtained for ATMA WSS was GH¢77,261,008 (i.e. GH¢0.55 per m3) and GH¢28,412,007 for Kumasi WSS (i.e. GH¢1.03 per m3). OpEx ranged from 43%-57% (GH¢0.31-0.45 per m3), CapEx Enhancement ranged from 38%-50% (GH¢0.21-GH¢0.51 per m3) and CapManEx ranged from 5%-7% (GH¢0.03- GH¢0.07 per m3) of the total recurrent cost for the systems. The highest contribution to the recurrent costs along the supply chain was from production and the least contribution was expenditure on transmission. The development of asset management within the urban water utility will help GWCL manage its assets and enable better planning for recurrent expenditure.
A Thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfilment of the requirements for the degree of Master of Science in Water Supply and Environmental Sanitation, September-2013