Published on: 01/07/2011
During an interview at a sector meeting in Accra, Mr. Van Ess said that even though the project is now analyzing data gathered from its research works to draw conclusions, the final outcome will help in accurate computation of service delivery cost.
He said “the life cycle cost approach looks at the whole spectrum of cost in service delivery not only the initial investment cost but other related costs that go into service delivery. This will give a broader picture on the actual cost of service delivery in the sector. These costs include the investment, operations and maintenance, direct cost and indirect cost to ensure sustainability”.
The Life Cycle Cost Approach for service delivery refers to the cost of ensuring adequate water, sanitation and hygiene (WASH) services to a specific population in a determined geographical area within a particular time frame. It involves the cost needed for initial construction of facility referred to as Capital expenditure (CapEx) - hardware and software, Operational and minor maintenance expenditure (OpEx), Capital maintenance expenditure (CapManEx)– rehabilitation, replacement, Direct support costs and post construction activities made up of Indirect support cost – macro level planning and policy formulation, and Costs of capital – costs of loans.
Mr. Van Ess observed that even though the approach is a useful tool to ensuring sustainability in service delivery, the challenge to the approach is whether all those cost could be paid for by the financiers. He said “to ensure that the LCCA becomes a workable tool to the sector, it has to be factored into the budgeting process by the funding agencies, either government, district assemblies or donor agencies”.
Mr. Van Ess advised WASHCost to broaden its consultation process on the LCCA to enable the sector agree on the modalities and elements that go into each of the various cost components.
WASHCost Project Ghana