Capital maintenance (CapManEx) is the punch on the jaw you didn’t see coming – the knock out blow that lands you on your back with little prospect of getting up in time to beat the count.
Published on: 24/11/2011
If you run a car it is probably not the price of petrol or the annual service that destroys your budget, but the sudden engine failure and the look on the face of the mechanic as he tells you it will be US$ 800 to repair. Such costs are at the same time unexpected and unavoidable. If you have a car, it will go wrong at some point, and if it goes wrong it will cost you. You didn’t know what was coming, but you could have known that something was going to fail.
What is true of cars is true of water systems. It is the unexpected costs you have not budgeted for that make the difference between being able to plan for the future and hoping for a miracle.
The case of Yaase
Yaase is a village in Bosomtwe District of the Ashanti Region of Ghana with a population of 897 (CWSA 2009) is a case in point. This is a cheerful, well run village with a good leadership and a functioning water supply. It is progressive and appears to be developing well.
Isaac Mensah, secretary to the WATSAN committee keeps the books neatly and the costs of water income from sales are available for all to see.
The WATSAN committee meets on the last Sunday of every month and they invite the village chairman (of the unit committee) to discuss any problems. They submit accounts to the district every quarter and invite them to send someone to audit their books. Every year they present their figures to a village meeting and answer questions.
So generally, things function well. There are four boreholes in the village – three in good working order. The cylinder on the fourth broke four or five years ago and has never been repaired. Area mechanic, Kune Banahene, hasn’t looked beneath the surface yet, but when the cylinder breakdown it usually means other parts need replacing as well and he expects it will probably cost GHS 260 cedis($163) to fix.
Of the three working pumps ,two are handpumps where the villagers pay 5 pesewa (about 3 US cents) for three 80 litre buckets of water. The other pump is mechanised. Water is electrically pumped to a 5,000 litre overhead Polytank which feeds the tap by gravity. One customer is Georgia Osei. She arrives with a large container on her head and stands upright and proud while it fills. Her 5 pesewas buy only two 80 litre buckets of water here, but she would rather pay the extra than do the pumping, and anyway this is conveniently near her home.
Pump attendant, Naomi Manu, works the taps, takes the money and oversees fair play, for which she is paid Gh¢ 40 ($26) a month. She keeps a written record of every litre she sells as well as daily and monthly accounts, and there are unannounced inspections. She is proud of her record keeping. “The WATSAN committee says I do a good job,” she says shyly.
This is the most productive pump in the village. In the dry season when demand is at its peak, Naomi may fill the tank twice a day and sell 10,000 litres of water – which earns the village Gh¢ 6.25 a day.
These modest costs are as much as villagers can afford – even in the dry season it takes 16 days to make 100 Gh¢. In the wet season, people are more likely to use others sources - almost every house has large drums to catch rainwater – and the handpumps are easier to operate because the water table is higher. When it is very wet, one tankful at the pump can last four days. Naomi may make less than Gh¢ 1 a day which does not even cover her salary. These figures vary a bit but Isaac says that in the dry months they take Gh¢ 150-200 and in a wet or wettest month Gh¢ 40-70.
If there are five dry months and seven months of varying degrees of wetness we can estimate that the annual income from this pump can be at best (5 x 200) + (7x 70) a total of Gh¢ 1,490.
From this money must be found to cover:
• The fee for the pump attendant, Naomi Manu (Gh¢ 12x40) = Gh¢ 480
• Disinfecting the Polytank (four times a year at Gh¢ 30 a time) = Gh¢ 120
• Replacement taps (one or two a year at approx. Gh¢ 35 a tap) = Gh¢ 35/70
• Electricity for pump – dry season Gh¢ 100 a month; wet Gh¢ 40-70
Approximate total for electricity Gh¢ 500 + 385 = Gh¢ 885
So the income is approx. Gh¢ 1,490 while expenditure is approx. Gh¢ 1,500, suggesting a small nominal loss. It is possible in a good year to break even or to make a small surplus. Indeed the WATSAN committee has Gh¢ 500 in the bank.
However, it is no surprise that there is no extramoney to mend the fourth pump. Indeed Isaac says that some months, once they have paid the attendant they have to “look for money” with which to pay the electricity bill.
About four years ago, (before Isaac Mensah’s time as secretary) there was a major fault which cost more than Gh¢ 450 to repair, a sum equal to more than two months’ income.
Now they face a dilemma. When the mechanised pump was installed in 2007, there was a bit of an accident with the Polytank which caused a small hole. They repaired this but now it has started to leak again.
The WATSAN committee would like to replace the tank and the platform on which it sits. However, the tank alone will cost about Gh¢ 1,500, almost exactly a year’s income. This is CapManEx – the unexpected sum you have to pay to keep the service at the current level.
They would also like to mechanise a second pump on the other side of the road – and this would cost about Gh¢ 5,000, more than three year’s income. This extends and improves the service, so we count this as new capital expenditure (CapEx).
So what can be done? If this was our analogy of a car we would now have to park it by the roadside and go to work by bus or walk. The CapManEx would be a knockout blow. But a village water supply cannot be abandoned.
There is one other source of money. Like many other villages in this part of the world. Yaase holds an annual harvest celebration and a collection in cash and kind which raises about Gh¢ 7,000. The WATSAN committee could seek help from this fund. But water has to compete with other urgent needs. Last year the harvest money paid for an information centre and electricity poles. This year, their priority is a community centre.
This is a progressive village, with a well-run WATSAN committee and dedicated team. The village chief himself is interested in water issues and promotes rainwater harvesting.
But the economics here do not add up to sustainability. There is just about enough money to keep the water system ticking over but not enough to deal with the unexpected.
The choices they appear to have are not very palatable.
What will Yaase village decide to do? When they decide on their next line of action, the Ghana WASHCost team will let you know.
Peter McIntyre and Bernice Donkor-Badu
November 21, 2011
