Hydraulic ram pumps and Sling Pumps

Key Factors for Sustainable Cost Recovery1. Planning for cost recovery1.1 Demand - driven approach1.1.1 The importance of demandExpressed demand by communities and consumer groups for an improved water supply service canhave a direct influence on cost recovery, in two ways. The first is related to the consumer's habits andexpectations, and the second to the water committee that will be managing a water supply system.At consumer levelProjects which take into consideration consumer demand, analyse in a participatory way the habits andexpectations of consumers, in terms of water use and volume of consumption. The presence ofalternative sources of water and the desired service level will be assessed and projects designedcorrespondingly. These projects are better adjusted to real life situations and can be based on realisticestimates of water consumption with predictable revenues from the sale of water.However, projects are still not adequately assessing community demand. Projects are developed whereit becomes clear that demand for the service, measured by volume of consumption, is too low toachieve cost recovery. A great number of field reports mention that with current prices and lowconsumption levels, operators are unable to collect enough revenue to cover costs. This is particularlya problem in areas where there are alternative sources of cheap water. Competition from alternativesources is not a problem in areas where the primary alternative is water sold at a high-cost by watervendors 9."When demand is not sufficient to achieve cost recovery, system operators are stuck with theproblem of having to increase demand in order to achieve cost recovery. Some projects are tryingto use education campaigns to increase water demand. Others have considered lowering prices.However, lowering water prices is a dangerous way to improve cost recovery, unless the priceelasticity of demand is known. Price decreases could actually reduce revenue collection if thequantity of water sold does not increase enough to compensate for the lower price" 10 .In addition, projects which match the desired service levels of communities while at the same timecreating a full awareness of the financial implications, are likely to influence willingness to pay bycommunities and therefore contribute positively to cost recovery.At water committee levelParticipatory assessments of water demand imply that communities make a committed contributiontowards designing an improved water supply system. This commitment can generate a feeling ofownership of and responsibility for the system, expressed through the community or user groupmanaging it (for example, a Water Committee). The Committee will strive to run the system in aneffective and efficient way.910BPD ReportBPD Report5