Malawi Appraisal of Blantyre Water Supply Project - World ...

Report No. 1328b-MAI FILE COPYMalawi Appraisal of BlantyreWater Supply ProjectApril 19, 1977

Eastern Africa Regional OfficeEnergy and Water Supply Division

FOR OFFICIAL USE ONLY

Document of the World Bank

Thts document has a restricted distribution and may be used by recipientsonly in the performance of their official dutes.. Its contens may nototherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

MALAWI

APPRAISAL OF BLANTYRE WATER SUPPLY PROJECT

CURRENCY EQUIVALENTS

1 US$ = Malawi Kwacha (MK) 0.90911 Malawi Kwacha = US$1.101 Pound Sterling = MK 1.501 Malawi Kwacha = 100 tambala

WEIGHTS, LENGTHS AND MEASURES

I Imperial gallon (Ig) = 1.2 US gallons (US gal)= 4.55 liters (L)

1 million Imperialgallons (Img) = 4,545 cubic meters

I Imperial gallon perminute (Igpm) = 0.00267 cubic feet per second (cfs)

= 0.0757 liters per second1 kilometer (km) = 0.62 miles (mi)1 meter (m) = 3.0828 feet (ft)

= 1000 millimeters (mm)

ABBREVIATIONS AND ACRONYMS

AfDF = African Development FundBWB = Blantyre Water BoardCDC - Commonwealth Development CorporationESCOM = Electricity Supply Commission of Malawifps = feet per secondGibb - Sir Alexander Gibb and Partnersgph = gallons per hourGermany Federal Republic of GermanyGTZ Deutsche Gesellschaft fur Technische Zusammenarbeit,

GmbH (German Agency for Technical Cooperation, Ltd.)hp - horsepowerImgd = million Imperial gallons per dayKfW - Kreditanstalt fur Wiederaufbau (German Credit

Institution for Reconstruction)L/sec = Liters per secondMANR = Ministry of Agriculture and Natural ResourcesMCDSW = Ministry of Community Development and Social WelfareMHC = Malawi Housing CorporationMLG = Ministry of Local GovernmentMOH = Ministry of HealthMTIT = Ministry of Trade, Industry and TourismMWS = Ministry of Works and SupplyODM Ministry of Overseas Development (U.K.)UK = United KingdomWF Walker's FerryWHO = World Health Organization

BWB's FISCAL YEAR

January 1 - December 31

FOR OFFICIAL USE ONLY

MALAWI


Table of Contents

Page No.

SUMMARY AND CONCLUSIONS ........................................... i i

I. INTRODUCTION ....................................... ....... .*.... ....

II. GENERAL ECONOMY AND THE WATER SUPPLY SECTOR ............ 2

The Country and the Economy ..... ................. 2Water Resources ............ . ....................... 2Organizatiou ........................................... .0 .... .... 3Legislation .................................... ................. 4Finance .................... *...*................................ 5Urban Water Supply . .............................. . 5Small Town and Rural Water Supply ................. 6Sewerage and Drainage . .................... ........ 6Comprehensive Urban Projects ...................... 7

III. THE PROJECT ............................................ 8

Project Description ............................... 8Cost Estimates .................. .................................. 9Financing of Project ... ......... . ................ . 10Disbursement ..* ................................. ....... o ......... 10Closing Date ...... ............. ................... 10Design and Construction Supervision .. * ............ 10Procurement ... .. ....................... ........... . 11Land Acquisition ....... ................................. 11Service to Low-Income, Unplanned Areas ............ 11Maintenance and Operation of Pumping Plant ........ 11Management Consultants .... .... * ..... ............. 12Engineering Studies ........ ................ ....... ..... 12Training ........... . ............... ...... . ...... . 12Project Supervision . ............................ .. 12Environmental Impact . ........................ ..... 12

IV. PROJECT JUSTIFICATION ... ............................... 13

Satisfaction of Demand ........................... 13Improved Water Service ............................ 13Least-Cost Alternative ..* ........... .............. 13Return on Investment ....... ...... ................ 14Non-Quantifiable Benefits ........ ........................ 14

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be discloed without World Bank authorization.

-2-

Table of Contents (Cont'd)

Page No.

V. BLANTYPE WATER BOARD ....... ........................... ... ...... 15

The Borrower ......................................... 15Institutional Framework ........ ................. 15Organization and Management ....................... 15Training .......................... .......... o............ 16Accounting and Auditing ......................... .. 16Billing and Collections ........................... 17

VI. FINANCE ........................................................... 17

Past Performance and PresentFinancial Position ........................... 17

Tariffs ........................... .......... &............ 1Proposed Financing Plan ........................... 18

VII. AGREEMENTS REACHED AND RECOMMENDATIONS ................. 20

LIST OF ANNEXES

ANNEX

1 Description of Existing Facilities2 Water Demand and Production Capacity3 Description of Main Elements of Project4 Project Cost Estimates5 Schedule of Disbursements from IDA Credit6 Implementation Schedule7 Incremental Costs and Return on Investment8 Organization Chart9 Cash Flow Projections10 Income Statement Projections11 Balance Sheet Projections12 Notes and Assumptions to Financial Projections13 Estimated Debt Statement, 1976 - 198314 Historical Income Statements15 Historical Balance Sheets16 Project Targets and Monitoring Guidelines17 Blantyre Waterworks Bylaws, 197518 Proposed Tariff Reforms and Revenue Implications

Map - IBRD 12376

MALAWI


SUMMARY AND CONCLUSIONS

1. This report appraises a water supply project for the Blantyre WaterBoard (BWB) in Blantyre, Malawi's largest city and main industrial and commer-cial center, for which an IDA Credit of US$7 million equivalent is proposed.

2. The estimated project cost is US$15.5 million equivalent, includingan estimated 70% foreign exchange cost of US$10.8 million equivalent. Aftertaking into account estimated interest during construction of US$1.1 millionequivalent, of which the foreign exchange component would be US$0.3 millionequivalent, the Project's total financing requirements would be US$16.6 mil-lion equivalent, including US$11.2 million equivalent in foreign exchange. Ofthe total financing requirements, about 80% would be provided by various lend-ing agencies with IDA providing US$7 million equivalent, the African Develop-ment Fund (AfDF) up to US$6 million and the Commonwealth Development Corpora-tion (CDC) about US$0.7 million. The remaining finance would be provided byBWB's internal cash generation.

3. The Project is needed to meet the growing water demand in Blantyre.It would increase BWB's water supply capacity by about 4 Imperial milliongallons per day (Imgd) and, when added to ongoing Phase IV improvements, isexpected to more than double the population having direct access to water byproviding water supply capacity for a further 220,000 people. Constructionwould commence in 1978 and be completed in 1980. The Project would be thefirst Bank Group water supply project in Malawi. Previous developments havebeen largely financed from CDC loans and British government grants.

4. BWB is a government-owned entity, responsible for public watersupplies in the Blantyre area. It has a long history of effective manage-ment. It would carry out the Project with the assistance of engineeringconsultants. The arrangements to be made for project design and construc-tion supervision are satisfactory and the Project is technically sound.

5. All supply and construction contracts financed by the proposed IDACredit would be awarded on the basis of international competitive biddingin accordance with IDA guidelines for procurement. Foreign suppliers andcontractors are expected to win all major contracts. Nevertheless, in accord-ance with Government's request, a preference of 15%, or the applicable customsduty, whichever is lower, would be applied to the evaluation of bids shouldlocal manufacaturers bid for supply contracts. Similarly, a preference of7-1/2% would be applied to the evaluation of bids submitted by domestic firmsfor construction contracts. Procurement procedures for goods financed throughAfDF would be in accordance with their procedures. CDC would accept IDA orAfDF procurement procedures for goods and services financed by them.

6. BWB's financial policy has been to set its tariffs at a level suf-ficient to meet annual cash outlays for operating expenses and debt service.

- ii -

Current tariff levels are well below economic cost and the structure iscomplicated and inequitable. By 1981, through phased increases, BWB plans toraise its tariff levels to close to long-run marginal cost and to reform itstariff structure. The revised tariffs will be set to achieve annual rates ofreturn on average revalued net fixed assets of not less than 8% in 1978 and1979, 10% in 1980 and 1981 after which BWB's financial objective will be tomaintain a rate of return of not less than 9% on average revalued net fixedassets.

7. If the Project benefits are measured on the basis of 1977 tarifflevels, the Project's internal rate of return would approximate 3%. If thebenefits instead are valued at levels to be attained by the time the Projectis completed, the rate of return would be about 7%. However, the tariffs donot fully reflect health and environmental benefits, which are difficult toquantify, but which would undoubtedly make the Project's rate of returnhigher.

8. An estimated 50,000 Blantyre residents in unplanned, low-incomeareas do not have ready access to public water supplies and the proposedProject will include provision for providing water supplies to such areas.

9. The Project is suitable for an IDA Credit of US$7 millionequivalent.

MALAWI


I. INTRODUCTION

1.01 The Government of Malawi has requested assistance from the Associa-tion to help finance a US$15.5 million project to expand the city of Blantyre'swater supply system to meet the growing needs of its population. The Projectwould be carried out by the Blantyre Water Board (BWB), a government-ownedentity.

1.02 A US$7 million equivalent IDA Credit is proposed to help meet theProject's costs. Additional external finance of up to US$6.7 million wouldbe provided by the Commonwealth Development Corporation (CDC) and the AfricanDevelopment Fund (AfDF), and the remaining finance from BWB's internal cashgeneration.

1.03 The Project would be Phase V of a long-term BWB program for abstrac-tion of water from the Shire River at Walker's Ferry (WF), treatment andsubsequent transport to Blantyre through the 23-mile long WF pipeline. Theproposed Project, in addition to increasing the capacity of the WF abstractionand treatment facilities, would uprate the pipeline to its economic capacityof 14 Imgd and would include water distribution facilities in Blantyre.The Project was prepared by Sir Alexander Gibb and Partners (Gibb), UnitedKingdom, and is part of a long-term development program recommended by Gibbfor augmentation of the Blantyre water supply during the period 1978-1990.The Gibb studies, which have taken into account Blantyre land-use planning ofGovernment's Regional Planning Office, indicate Walker's Ferry to be the mosteconomic of several alternative sources of supply.

1.04 This would be the first Bank Group water supply project in Malawi.Earlier projects, including the ongoing Phase IV project to increase thecapacity of the pipeline from 8 to 10 Imgd, have been largely financed by theCDC and by the United Kingdom (UK) Ministry of Overseas Development (ODM)assistance (see Annex 1).

1.05 Following a project preparation mission early in 1976, fieldappraisal was carried out in June 1976 by Messrs. Greenwood, LaBahn andCoyaud and Ms. D. Julius. This report is based on the findings of themission and on information supplied by BWB, by Government and by Gibb.

- 2 -

II. GENERAL ECONOMY AND THE WATER SUPPLY SECTOR

The Country and the Economy

2.01 Malawi is a land-locked country in southeast Africa, bordered byZambia, Tanzania and Mozambique. About one-quarter of the country is coveredby lakes, ihe largest being Lake Malawi with an area of some 11,100 sq. mi. 2(29,000 km ). Malawi's total land area 1/ is about 36,400 sq. mi. (93,000 km ),which consists largely of plateau and highlands in excess of 1,600 ft. (500 m)above sea level; the mountainous north rises to 8,200 ft (2,500 m) and theextreme south is less than 700 ft (210 m) above sea level. With a populationof about 5.1 million growing at about 2.6% per year, Malawi is one of the mostdensely populated countries in Africa. The population is more concentrated inthe Southern region, with 180 persons per sq. mile in 1975, compared with 114and 60 in the Central and Northern regions.

2.02 Since Independence in 1964, GNP at constant prices has grown ata comparatively high rate of almost 8% per year; the GNP (1975) per capitaof about US$150 2/ is, however, still one of the lowest in the world. Theeconomy is based primarily on agriculture in which over 90% of the popula-tion, largely at a subsistence level, is engaged. Total GNP in 1975 atcurrent market prices was estimated at US$755 million, of which agriculturaloutput accounted for approximately 45% and manufacturing 14%. Between 1970and 1975, high real growth of investments and domestic savings (11% and 15%per year, respectively) played an important role in the favorable developmentof Malawi's economy. On the basis of present potential, an economic growthof about 6.5% per year might be possible with manufacturing, the outputof large agricultural estates, and most services growing at a higher ratethan the economy as a whole.

2.03 Since 1968 the growth of wage employment in Malawi has been rapid,averaging 10%. Employment in the non-agricultural sector, which is mostlikely to increase the number of urban dwellers, grew at a rate of about 8.5%,only marginally lower than the above growth rate, and reached 147,000 by 1975.However, by mid-1975, the urban population was estimated to represent only 10%of the total population and it is Malawi's policy to avoid a marked increasein this ratio. Urban population is concentrated in Blantyre, where most ofthe manufacturing industry and service trades are located, and in Lilongwe,the rapidly-expanding new capital.

Water Resources

2.04 The water resources of Malawi are liberal due to precipitationranging from 25 inches (635 mm) to 114 inches (2,895 mm) annually but varyingmarkedly according to location and season. Good records of precipitationexist due to the maintenance of 475 monitoring stations widely distributedthroughout the country. Substantial information has been developed rela-tive to the country's surface water and ground water resources.

1/ Malawi Statistical Yearbook, 1975.

2/ World Bank Atlas, 1975.

-3-

2.05 Partly due to the influence of Lake Malawi and the Shire River,surface water is the more significant of the country's sources of supply.Surface water quantity, but not quality, is monitored by a network of 148stream gauging stations.

2.06 Ground water is widely available from shallow, dug wells and fromboreholes. However, individual yields from the latter characteristically arelow (averaging about 10 Igpm) while water quality varies from fair to poor*Ground water is classified according to location in three separate hydro-geological zones, i.e., Plateau-Highland, Escarpment and Rift Valley.Approximately one-half of the area of these zones have been studied in de-tail. Ground water management is not provided, partly due to the smallnumber of observation wells, incomplete information on lithology and waterquality (mainly limited to records of newly drilled wells), but mainly dueto lack of policy and staff. Over 2,000 boreholes have been drilled inthe past ten years with the majority of these located in rural areas andused for domestic supplies. Despite the recent increase in numbers of wells,Malawi's ground water resources are under-utilized due to financial con-straints and limited well production capacities.

Organization

2.07 Apart from BWB, operations within the sector are relatively ineffec-tive, partly due to the uncoordinated efforts of several ministries but alsodue to budget and staffing constraints. National efforts in water resourcedevelopment, in particular, need to be better coordinated. Although theformation of a single national water authority has been considered in thepast, no such change currently is being considered by Government. Althoughsome institutional changes are advisable, the extent of these changes isnot apparent due to incomplete knowledge of the sector. An IBRD/WHO coopera-tive sector study mission is scheduled to visit Malawi late in 1977.

2.08 Water resources fall under the province of the Ministry of Agri-culture and Natural Resources (MANR). The Ministry's Division of WaterResources is responsible for monitoring precipitation and surface water,while the Ministry's Geological Survey is responsible for the drilling ofboreholes, the collection of lithologic records, the preparation of geologicmaps, administration of records of boreholes, and a maintenance program formanually-operated well pumps. The Technical Services Department of theMinistry is responsible for developing comprehensive agricultural schemes,most of which also have domestic water supply components.

2.09 The Ministry of Local Government (MLG) has jurisdiction over muni-cipalities which are empowered to provide water and/or sewer service. However,only two municipalities, Blantyre and Lilongwe, currently provide either orboth of these services. The Blantyre Town Council is responsible for sewerageonly whereas the Lilongwe Town Council provides sewerage for a portion of thecommunity and potable water service (the latter of which is administered bythe Lilongwe Water Board). Neither of the two Town Councils currently has thecapability of planning or designing utility improvements. Partial assistancein planning and engineering is provided to Lilongwe by the Ministry of Worksand Supplies (MWS). Water service is provided in Blantyre by BWB and inremaining cities and small towns by MWS.

- 4 -

2.10 The Ministry of Trade, Industry and Tourism (MTIT) supervisesBWB, an autonomous water utility responsible for potable water service inthe Blantyre area (see para. 5.02). BWB is able to plan, design and constructminor works but must depend upon foreign consultants for the implementationof major works. Maintenance and operation procedures of BWB generally aresatisfactory except possibly in the area of electrical and mechanical equip-ment (see para. 3.13).

2.11 In addition to its assistance to Lilongwe, MWS is responsible fordesigning, constructing and operating water supply systems in two cities(Zomba and Mzuzu), 35 districts, and 20 small town water supply centers. In1973, the Ministry was estimated to provide water service to about 135,000persons. MWS is heavily dependent upon expatriate staff. Facilities appear tobe well engineered although overly sophisticated and highly dependent uponimported materials and equipment. Levels of maintenance and operation aregood. Due to the Ministry's special responsibilities in providing technicalassistance to the Capital Development Corporation, MWS also is responsible forplanning, designing and implementing water and sewer utility systems withinthe Lilongwe area. Upon completion, system improvements then are turned overto the local authorities, which include the Lilongwe Water Board and, in thecase of wastewater systems, the Town Council, the Malawi Army and variouslocal institutions.

2.12 The Ministry of Community Development and Social Welfare (MCDSW)plans, designs and supervises the construction and operation of a number ofsmall, "self-help" type schemes providing potable water supplies to approxi-mately 150,000 persons in rural areas from some 950 public standposts. Thisprogram, first started in 1968, has developed simple, low-cost potable watersupplies with a minimum dependence upon staff (two expatriate engineers sup-ported by several Malawi technical school diploma holders have been responsi-ble for planning, design and construction) and a maximum dependence upon localparticipation for construction and operation.

2.13 The Ministry of Health (MOH), which is responsible for environmentalhealth, is headquartered in Blantyre and has branch offices within the regionsand in principal municipalities. MOH records of mortality and morbidity arefew, poorly documented, and difficult to obtain. Improved communication isneeded between the Ministry and the country's water supply authorities.

Legislation

2.14 The principal legislation concerning the sector is the "WaterResources Act of 1969" which provides for "... the control, conservation,apportionment and use of the water resources of Malawi...." The Act furtherdecrees that ownership of all public water, which includes surface waterand ground water, is vested in the President whereas control resides with theMinister of Agriculture and Natural Resources. The latter, in turn, maydelegate such powers to a Water Resources Board (WRB). Abstractors arerequired to operate in accordance with conditions of a license issued by WRB.

- 5 -

Water rights based upon prescription are not recognized and existing rightscan be lost due to non-use. Rights also can be reduced or suspended at theoption of the Minister. Charges are levied on abstractions to finance theadministration of the Act.

2.15 In theory, the Water Resources Act provides Government with con-siderable power to control water development but the legislation is only partlyeffective. An example is water pollution, which is recognized in the Act asan offense but is not defined; nor is the extent of penalty to be leviedidentified. A 1975 draft of Water Pollution Control Regulations, which areproposed as a supplement to the Act, defines pollution but does not providethe machinery of enforcement.

Finance

2.16 Capital and recurring expenditures of water supply authorities,in general, are financed through Government's departmental budget appropria-tions. BWB and Lilongwe Water Board (LWB), which are autonomous, areexceptions to this. Records of sector expenditures are incomplete. Thecapital costs of improvements by BWB and LWB have been met mainly frombilateral assistance and from Government grants and loans. Other watersystems in urban areas and in small towns have been financed from Governmentfunding, from bilateral assistance and from grants by charitable organizationstotalling in excess of US$1 million (1975). Village water systems have beenconstructed on a self-help basis but have depended upon grants and, in someinstances, upon contributions from local District Councils for procurementof construction materials.

2.17 Water system operations of remaining urban areas and small townssupervised by MWS are not autonomous. Although water charges are levied,they are not necessarily in proportion to costs. No water charges are leviedin rural areas supplied by MCDSW. Recurring out-of-pocket costs of the lattersystems are met by the Ministry and by the District Councils.

Urban Water Supply

2.18 Approximately 70% (240,000 persons) of the 1975 urban population(330,000, representing the cities of Blantyre, Lilongwe, Mzuzu and Zomba)have access to piped water supplies. The level of service varies with abouttwo-thirds of the customers having individual connections and the balancebeing served from kiosks. All connections are metered.

2.19 Capital improvement programs either are underway or are plannedfor Blantyre and Lilongwe. Ongoing Phase IV improvements at Blantyre willincrease the Walker's Ferry supply from 8 to 10 Imgd and will provide BWBwith the capacity to serve approximately 220,000 persons (see Annex 1).The proposed IDA Project would further increase that supply to about 14Imgd and would satisfy demands through the mid-1980's (see Annexes 2 and 3).Government has identified a future project for LWB which would double (from 2to 4 Imgd) the water supply capacity of the existing system for a designpopulation of 150,000 projected for the year 1984. Financing for the LWBproject, which is estimated to cost MK 2.4 million (equivalent to US$2.6million), has been requested from the European Development Fund.

-6-

Small Town and Rural Water Supply

2.20 An estimated 1.2 million persons (approximately one quarter ofthe total rural population of about 4.7 million) had access to potable watersupplies in 1975. Thirty-eight small towns (with populations ranging from 500to 6,500) having a 1975 combined population of 60,000 persons have piped watersupplies from systems constructed by MWS since 1971. All connections aremetered and a tariff is levied. Government has proposed a follow-up RuralCenters Water Supply Project that would extend service to an additional 60,000persons in 34 towns by the year 1979. Financing for the Project, which isestimated to cost MK 1.7 million (US$1.9 million equivalent), is being providedby the AfDF.

2.21 Piped water supply systems by MCDSW provided service to 150,000persons in rural villages in 1975. This program, begun in 1968, has resultedin the construction of simple, untreated gravity water supplies using high-elevation, perennial streams as sources. No metering is provided and de-liveries are from public standposts. Maintenance and operation is the re-sponsibility of local District Councils. Follow-on projects designed toprovide similar service to an additional 430,000 persons either are underwayor proposed. Finance for the procurement of construction materials estimatedto cost in excess of MK 2.0 million (US$2.2 million equivalent) is beingsought.

2.22 Domestic water supply to remaining rural areas historically hasconsisted of "dambos" (swamps or marshes) or dug wells, both sources ofquestionable quality. Recent implementation of comprehensive agriculturalprojects 1/ by MANR has provided improved supplies, generally consistingof manually operated tube wells, to approximately 1.0 million persons residingin these project areas. Adjacent rural areas also have benefited from awell-drilling and maintenance program administered by the Geological Survey.The extent of additional population to be provided with improved potable watersupplies by new or follow-on comprehensive agricultural projects in ruralareas is unknown.

Sewerage and Drainage

2.23 Community wastewater systems exist only in Blantyre and Lilongweproviding service to about 40,000 persons out of a combined population of290,000 in these two cities. Both systems provide secondary treatment priorto disposal. Sanitary sewerage is separate from storm water drainage and,in most instances, the latter is confined to surface facilities. Elsewherein urban areas, sanitation service consists mainly of septic tanks or pitprivies with the latter generally restricted to traditional housing areas.

2.24 Piped wastewater systems in Blantyre, which provide service to about30,000 persons, are restricted to only three of the area's 13 catchments.

1/ Including the Bank Group's Karonga Rural Development projects, theLilongwe Land Development projects, and the Shire Valley AgriculturalDevelopment projects.

-7-

Approximately 110,000 persons are served by septic tanks and the balance bypit privies. The most recent expansion of the Blantyre sewer system wascompleted in 1971. Preparation of that project was financed by Governmentwhile the cost of detailed engineering and construction was financed by a DM5.2 million (US$2.3 million) soft loan provided by Kreditanstalt fur Wieder-aufbau (KfW) of the Federal Republic of Germany (Germany). The sewer systemis overloaded and the design of additions, limited mainly to the centralBlantyre catchment, currently is underway. Grant funds of DM 580,000(US$250,000) have been committed by the German Agency for Technical Coopera-tion, Ltd. (GTZ) for technical assistance including preparation and detaileddesign of this project. Construction, which is scheduled for the period1977-78, will include the expansion of two existing wastewater treatmentfacilities and the extension of sanitary sewers. KfW has agreed to provide aDM 6.0 million (US$2.6 million) loan on soft terms to finance the constructionof the project. Despite the present and previous programs, planning andimplementation of sewerage projects in Blantyre have not kept pace withgeneral development of the community.

2.25 Technical assistance in the form of training also is provided tothe city of Blantyre by Germany. Under the auspices of a sister-city programshared with Hannover, Germany, several operators from Blantyre are to receive12-months training at Hannover in the operation of wastewater treatmentfacilities. Additional on-the-job training of three to six months duration isto be provided to other selected operating personnel in Blantyre through grantfunds provided by GTZ.

2.26 Piped wastewater systems are of less significance in Lilongwe withonly 10,000 persons (out of 80,000) connected to sewers. Three small systemscurrently exist with two additional systems planned. Three of these systemswill be operated by the Town Council and the remaining two by the Army and aGovernment hospital. Operation and maintenance of all systems have been poormainly due to inexperienced operators and no provision for training.

Comprehensive Urban Projects

2.27 Other projects also having water supply and sewerage componentshave been implemented and others are underway. The most significant ofthese relative to the Blantyre Water Supply Project (Phase V) is the MalawiHousing Corporation (MHC) urban development scheme proposed for the SouthLunzu area in northeast Blantyre. The project, which would include landdevelopment, roads, water supply and sewerage, is expected to be constructedduring the period 1977-80. The project is being prepared by MHC while KfW hasindicated interest in financing the DM 7.0 million (US$3.0 million) costs ofthe project on soft terms.

III. THE PROJECT

Project Description

3.01 The Project is the fifth phase of BWB's water supply expansionprogram. It would increase the capacity of the WF supply from 10 to 14 Imgd,the maximum economic capacity attainable from the existing single pipeline,and would provide other major system improvements. It will include the fol-lowing principal elements:

(a) Improvements and extensions to existing facilitiesat WF including raw water pumping plant and watertreatment plant;

(b) Additions to the WF system consisting of about15,000 feet of treated water supply main generallyparallel to the existing WF pipeline; balancing tanksand pumping plant provided at WF, at Chileka and at a new,intermediate site; and a new terminus of the WF pipelinein the Blantyre area;

(c) Distribution system changes including the creationof seven new pressure zones, the modification orrelocation of two existing pump stations, and theconstruction of the following additional elements:nine service reservoirs, a pump station, and approxi-mately 35 miles (56 km) of transmission and distribu-tion mains ranging from 2 inches (50 mm) to 24 inches(600 mm) in size;

(d) Construction of general plant including staff housing,laboratory and workshop; procurement of vehicles,maintenance equipment, spare parts, accounting machines andmiscellaneous equipment for laboratory and workshop;

(e) Consulting services for: engineering design and supervisionof construction; management services to evaluate andimprove BWB's accounting practices; engineering servicesto determine the most economic mode of future operation ofthe WF supply system; and

(f) Training of BWB staff in engineering and accountancy.

A demand forecast and analysis of required future production capacity areprovided in Annex 2 and a detailed description of main elements of the Proj-ect is included in Annex 3. The locations of the proposed plant and areasto be served are shown in map IBRD 12376.

-9-

Cost Estimates

3.02 The estimated project costs are detailed in Annex 4 and summarizedbelow.

Summary of Project Cost Estimates(MK 1.0 = US$1.10)

MK (thousands) US$ (thousands) %Local Foreign Total Local Foreign Total Total

Civil works 2,461 4,320 6,781 2,707 4,752 7,459 48.0Equipment 268 2,330 2,598 295 2,563 2,858 18.4Land 15 15 17 17 .1Training - 140 140 154 154 1.0Consulting Services 364 635 999 400 699 1,099 7.1

Subtotal 3,108 7,425 10,533 3,419 8,168 11,587 74.6

Contingencies:Physical 397 890 1,287 437 979 1,416 9.1Price 762 1,542 2,304 838 1,696 2,534 16.3

TOTAL PROJECT COSTS 4,267 9,857 14,124 4,694 10,843 15,537 100.0Interest duringConstruction 679 317 996 747 349 1,096

TOTAL FINANCINGREQUIREMENT 4,946 10,174 15,120 5,441 11,192 16X633

3.03 Cost estimates, as originally prepared by the consultants, werebased upon preliminary project design and were expressed in terms of mid-1976price levels. These cost estimates were later revised to add components fortraining, special engineering studies, and for service to low-income, un-planned areas and, based upon information provided by BWB and the consultants,to reflect an apparent trend of increased civil works costs illustrated byPhase IV project tenders received in late 1976. Baseline cost estimates (seecost summary above) reflect March 1977 price levels. Consulting servicesinclude engineering and management advisory services and are described inparagraphs 3.09, 3.14 and 3.15. A provision of 10% on all items, excludingdistribution plant where a 15% provision was used, has been added to baselinecosts for physical contingencies and is considered adequate. Price contingencyallowances, which conform to current Bank Group guidelines and are shownbelow, have been applied to the baseline costs and to physical contingencies.

Period Civil Works Equipment

1977-79 9% 7.5%

1980-81 8% 7%

3.04 Government indicated that it would waive duties on all importedgoods and services required for the Project. The foreign exchange component,approximately 67% of the total financing requirement, includes both direct and

- 10 -

indirect foreign cost elements. It has been estimated on the assumptionthat equipment will be imported and construction contracts and pipe supplycontracts will be won by foreign firms. This has occurred in previous BWBwater supply projects.

Financing of ProJect

3.05 The proposed IDA Credit of US$7 million equivalent would be usedto help finance the costs of selected components of civil works, equipment,and consulting services and would cover about 42% of the total financingrequirement. The civil works, of which the Association would finance onlyforeign exchange costs, would consist of miscellaneous additions at the M4uditreatment works, Blantyre area distribution system additions of reservoirs,pumping plant and trunk mains, and general plant. The Association also wouldfinance the procurement of pumping equipment, vehicles, spare parts andmaintenance and workshop equipment and the foreign exchange costs of consult-ing services for engineering design and construction supervision.

3.06 Remaining Project financing requirements would be met by AfDF,CDC and from BWB's internal cash generation. An AfDF loan (of up to US$6million equivalent) would be used to finance the costs of civil works in-cluding supply and treatment works at Walker's Ferry and the foreign ex-change costs of staff housing and Blantyre area reticulation system. AfDFalso would finance the costs of treatment plant equipment and a trainingcomponent. CDC funds of US$0.7 million equivalent will be made availableto the Project without any restrictions attached to their use (see para.6.07). The remaining financing requirements would be available from BWB'sinternal cash generation. As a condition of effectiveness of the IDA Credit,all conditions of effectiveness of the AfDF finance and the CDC loan ofUS$3.3 million equivalent (of which US$0.7 million would be used in theProject) should have been fulfilled.

Disbursement

3.07 The IDA Credit would be disbursed to meet selected portions ofthe project costs as follows: (a) 65% of the total costs of civil works;(b) 100% of foreign expenditures or 90% of local expenditures for vehicles,equipment and spare parts; and (c) 100% of foreign expenditures for the ser-vices of consultants for engineering design and construction supervision.An estimated disbursement schedule is given in Annex 5.

Closing Date

3.08 The proposed closing date for the IDA Credit would be March 31,1982. This allows a margin of about 15 months after the estimated completionof the work for settlement of final contract payments and for slippage inconstruction.

Design and Construction Supervision

3.09 BWB will be responsible for project implementation but will retainengineering consultants for construction supervision and for detailed design,preparation of tender documents, and evaluation of tenders. For this purpose,

- II -

BWB has retained the firm of Sir Alexander Gibb and Partners, the same firminvolved in preinvestment studies and ongoing Phase IV work, with work ex-pected to begin by April 1977. This arrangement is satisfactory. BWB indi-cated that it would not seek retroactive financing of any consultant'sfees expended prior to the signing of the Credit Agreement. Engineeringrequired for planning, design and construction of staff housing, reticulationsystem, and facilities for low-income, unplanned areas will be performed byBWB staff. A Project implementation schedule is included as Annex 6.

Procurement

3.10 All construction and supply contracts financed by the proposed IDACredit would be awarded on the basis of international competitive bidding inaccordance with Bank Group Guidelines. Foreign contractors are expected towin all major construction contracts, and foreign manufacturers are expectedto furnish all pipe required in the Project. Major mechanical and electricalequipment required for pumping plant and treatment plant are not manufacturedlocally and will be procured from abroad. Nevertheless, should local manufac-turers bid for supply contracts, a preference of 15%, or the applicablecustoms duty, whichever is lower, would be applied to the evaluation of suchbids. A preference of 7-1/2% would also be applied to the evaluation of bidsby domestic firms for construction contracts. Detailed design work isscheduled to begin by April 1977, in which case all Project facilities shouldbe commissioned by December 1980.

Land Acquisition

3.11 The Project will require the acquisition of land for the intermediatepumping station site of the WF system and for reservoirs and booster stationswithin the distribution system. In the estimates it is assumed that land notowned by Government will be acquired at market value and Government land willbe transferred without cost. Government indicated all land necessary for theProject can be acquired without exceeding the estimated costs.

Service to Low-Income, Unplanned Areas

3.12 The Project includes provision for the extension of piped watersupplies to Blantyre's low-income, unplanned areas where currently an esti-mated 50,000 persons reside. Priority will be given to those areas contain-ing unserved populations of 500 persons or more for which no redevelopmentplan exists or, if such plan exists, where redevelopment is unlikely to becarried out within specified periods. BWB staff will: (i) determine thestatus of piped water service to these areas; (ii) develop a plan to serveareas of need according to criteria acceptable to the Association; and (iii)design and construct such facilities.

Maintenance and Operation of Pumping Plant

3.13 Numerous outages of BWB pumping plant have occurred in the pastdue to failures of electrical plant. In view of potential hazards posed byoutages and the difficulties and expense of replacing or repairing damagedunits, BWB has taken steps to determine the cause and reasonableness of these

- 12 -

outages. They will develop a plan of action to evaluate and upgrade BWBmaintenance and operation practices, exchange views with the Associationregarding the plan, and thereafter carry out such a plan.

Management Consultants

3.14 Management consulting services are also required to assist in theselection and introduction of data processing equipment. The equipment isrequired initially to improve BWB's capability to provide financial andstatistical information for project and tariff planning and, subsequently,to improve the efficiency of BWB's accounting by extension of the equipmentto a wider variety of uses. Consultants acceptable to the Association willbe employed to provide these services which are estimated to cost aboutUS$20,000 equivalent.

Engineering Studies

3.15 The Project includes provision for retention of engineering con-sultants acceptable to the Association to investigate alternative operationsof the WF system in order to determine a plan for water treatment and pumpoperation that reflects minimum overall economic cost. The studies, which areestimated to cost US$120,000 equivalent, would be deferred until 1980 in orderto accumulate a maximum amount of basic operational data and yet be completedin time to define principal elements of the next major (Phase VI) project.

Training

3.16 To further strengthen its staff, a training component for under-graduate engineers and accountants would be included in the Project. Thetraining component, which is estimated to cost US$150,000 equivalent, wouldsupplement existing BWB training efforts and would be financed by AfDF.

Project Supervision

3.17 Targets and monitoring guidelines will be used to improve managementplanning and to assist monitoring the progress of the Project (see Annex 16).

Environmental Impact

3.18 Although the Project, by itself, will not prevent or reduce pollu-tion within Blantyre area catchments, present regulations of BWB and BlantyreCity Council assist in controlling same. Most new water connections would bein high density residential areas being developed by MHC. Water service tothese areas generally will be by kiosk or by private standposts. In view ofthe limited water supply capacity of such facilities, rudimentary individualdisposal systems such as pit privies are considered adequate. Where directwater connections to buildings are proposed, sewer connections or septic tanksare prerequisites to water service. A continuation of this requirement, ineffect, will result in improved sanitation service to that portion of theBlantyre population not now receiving water service from BWB.

- 13 -

IV. PROJECT JUSTIFICATION

Satisfaction of Demand

4.01 The population of Blantyre, in 1975 about 210,000 persons, isgrowing at a rate of 6.5% annually or 2.5 times the national growth rateof 2.6%. Annual water demand of BWB, however, has grown at approximatelytwice the rate of population increase due to many factors. Principal amongthese have been industrial growth, the increase in domestic per capita waterusage, and the extension of water service to populations not previously served.Despite the latter, however, unserved squatter populations, which comprisemost of Blantyre's unsatisfied demand, continue to grow.

4.02 The Project provides increased water supply capacity to satisfyfuture growth in demand which is projected to average about 9% annuallythrough the period ending in 1985 (Annex 2). The population directly servedis expected to increase from 140,000 in 1975 to 360,000 by the mid-1980swhen both the ongoing Phase IV project and the IDA-financed Project (Phase V)will be complete and in service. The Project is a logical continuation of theestimated US$20 million (1975 prices) water supply program which BWB hasundertaken since 1963 with financial assistance from the Malawi Governmentand from UK (CDC and ODM).

Improved Water Service

4.03 Due to an inadequate distribution system, water customers in someareas of Blantyre currently are affected by interruptions in supply and/ordeliveries at inadequate pressure. The Project would improve this conditionthrough the creation of seven new pressure zones and the construction of addi-tional transmission and distribution mains.

Least-Cost Alternative

4.04 During project preparation, Gibb investigated numerous alternativemeasures, each reflective of a different source and conveyance system, toaugment the existing Blantyre water supply. The long-term economic cost ofthese alternatives was estimated based upon: (a) development of the existingWF supply to its maximum capacity of 10 Imgd; (b) consideration of incremen-tal capital and recurring costs specific to each alternative scheme over a50-year period; (c) discount rates of 8% and 12%; and (d) sensitivityanalyses reflecting possible increases of 20% in capital costs and electricalenergy charges. The studies indicated the Shire River to be Blantyre's mosteconomic future supply. Although several abstraction points on the ShireRiver also appeared promising, continued development at the existing WFsite was recommended due to less uncertainty of development costs comparedto those of alternative sites.

- 14 -

4.05 Of the alternatives considered, the Project is the least-costscheme for supplying treated water to Blantyre. However, to further improvethe economics of the WF conveyance system, modifications may be made to themode of operation in the mid-1980s. Engineering studies to investigate thispossibility will be undertaken as part of the Project (para. 3.15).

Return on Investment

4.06 The incremental capital and operating costs used to calculatethe internal rate of return are exclusive of all taxes and subsidies. Noshadow pricing of labor or foreign exchange was deemed necessary since bothmarkets function fairly efficiently in Malawi. The cost of power was basedon a recent marginal cost pricing study undertaken by ESCOM in connectionwith another IDA Credit. Using present tariffs as a minimal measure ofProject benefits results in an internal rate of return on the Project of about2.9%. The low rate of return is indicative of the underpricing of water, thelong-run marginal cost of which is estimated at MK 1.74 per thousand Ig(US$1.60 per thousand US gal) using an interest rate of 8% and at MK 2.06 perthousand Ig (US$1.90 per thousand US gal) using an interest rate of 10%.

4.07 However, with the tariff changes to be attained by 1981 to meet thefinancing objectives and to accomplish structural changes (reducing the useof fixed charges and increasing the progressivity of consumption charges)(see paras. 6.03 to 6.05), the average tariff rate would be MK 1.62 perthousand Ig (excluding increases projected to meet future inflation). Ifthe project benefits were valued at this average tariff, the rate of returnwould be 7%. Elasticity effects have been accounted for to some degree inthis calculation through the incorporation of the effect of expected priceincrease in the demand forecast (Annex 2) although it is impossible toaccurately predict consumer reaction given data limitations. Annex 7 des-cribes the method used in calculating average incremental costs and returnon investment and gives details of the calculation.

4.08 The following table summarizes the sensitivity of the rate of returnto different revenue and project cost assumptions.

Rate of return based uponaverage water charge, %

1977 1981(MK 1.12 per (MK 1.62 per

Assumptions thousand Ig) thousand Ig)

a) 10% increase in capital costs 2.3 6.5b) 10% decrease in revenues 1.6 6.0c) Both of the above 1.0 5.3

Non-Quantifiable Benefits

4.09 The Project will reduce health hazards and improve public healthstandards within the community through the extension of piped water serviceto populations now relying upon local streams and upon other water suppliesof doubtful quality.

- 15 -

4.10 Approximately 50,000, out of an estimated 70,000 persons currentlywithout piped water service in Blantyre, live in low-income, unplanned areas.BWB has withheld water service from such areas in accordance with Government'soverall policy of discouraging rural-urban migration. However, as in otherdeveloping countries, there is a lack of evidence in Blantyre that denial ofpiped water service has restricted such migration. In fact, unplanned areapopulations in Blantyre have continued to grow. For this reason and, inawareness of the potential adverse impact upon productivity, public health,and quality of life, the lack of reasonable access to safe water supplies inthese areas no longer can be disregarded. Accordingly, Government is toinstitute a program of improved water supply to residents of low-income,unplanned areas (para. 3.12).

V. BLANTYRE WATER BOARD

The Borrower

5.01 The borrower would be the Government of Malawi who would relend theproceeds of the IDA Credit to BWB (the beneficiary) on the terms stated inpara. 6.07.

Institutional Framework

5.02 BWB is a body corporate incorporated under the Blantyre Water WorksAct, Cap. 72-02. It is responsible for the supply of water to Blantyre andto designated areas adjacent to the City. The Board consists of a chairmanand ten members, all of whom are appointed by the Minister. At the presenttime, BWB reports to the Ministry of Trade, Industry and Tourism.

5.03 The present chairman of the Board is the General Manager of theMalawi Housing Corporation. The Board includes members from private indus-try, a bank, the academic world, the CDC representative in Blantyre and a CityCouncilor.

5.04 BWB's capital and revenue budgets and proposals for tariff changesare submitted to the Minister for approval. BWB is also required to obtainprior ministerial approval of all senior staff appointments and of all con-tracts entered into in excess of MK 10,000.

Organization and Management

5.05 The senior management position is Engineer/Manager who has reportingto him a Clerk/Treasurer and a Deputy Engineer. The position of Engineer/Manager has recently been filled (effective December 30, 1976) with an expatri-ate engineer newly hired by the Board after former service with the PublicUtilities Board of Singapore. The Deputy Engineer is a Malawian with pro-gressively responsible experience with the Board and, prior to that, overseas.

- 16 -

During 1976, he served as BWB's Acting Engineer/Manager and has performedwell. The Clerk/Treasurer is an expatriate with many years of experience withthe Board and his performance has been good. However, the accounting staffneeds to be strengthened at the managerial level to cope with the growing sizeof the Board's activities, to improve the accounting information system, andto help introduce tariff reforms. To help meet these needs, BWB has recentlyappointed a Chief Accountant.

5.06 With the recent appointments of an Engineer/Manager and a ChiefAccountant, BWB should, with engineering consulting assistance, be competentto carry out the Project and other capital works during the project implemen-tation period. To ensure the continuation of BWB's management capability,BWB will consult IDA regarding future appointment to the two most seniorposts, the Engineer/Manager and the Clerk/ Treasurer.

5.07 At the middle management level, and below, BWB is adequately staffed.Continued development of this staff, which is reasonably effective, would bemainly dependent upon on-the-job experience gained under the leadership ofsenior management. BWB's organization chart showing the principal staffpositions is included as Annex 8.

Training

5.08 BWB has been successful in attracting sufficient engineers. Ithas on its staff a number of Malawians holding university degrees in en-gineering and, by the end of 1976, is expected to have three additional Malawiansstudying overseas for such degrees. Technicians are trained at Malawi Poly-technic in Blantyre. Over the last two years, a number of staff have beensent to the National Water Council in the United Kingdom for further training.Financial and administrative staff are mainly recruited from Malawi Polytechnicand accountants are sent to Britain for studies leading to professional quali-fications. BWB has had difficulty in retaining the services of those who haveobtained professional qualifications, but this position may improve as thesupply of qualified accountants increases. It is a condition of the recentODM loan to BWB that the Board will maintain and, if necessary, expand thetraining of its Malawi staff both on the job and in Britain. A trainingcomponent covering further undergraduate studies is included in the portionof the proposed project being financed by AfDF (para. 3.16).

Accounting and Auditing

5.09 BWB's accounting system is adequate for recording transactions,preparing financial statements and annual budgets. There is a need, however,to improve the capability of the system to provide improved management infor-mation especially statistical information for project and tariff planning.

5.10 To assist BWB in this task, the Project includes accounting machines,consulting assistance in their selection, and the development of relatedaccounting procedures. BWB is to exchange views with the Association regard-ing the consultants' recommendations.

- 17 -

5.11 BWB's audit is conducted by the international firm, Deloitte andCompany, and the arrangement is satisfactory. BWB will have its annualaccounts audited by independent accountants acceptable to the Associationand the audited accounts will be submitted to the Association within sixmonths of the end of the fiscal year.

Billing and Collections

5.12 Meter readings are made monthly and bills normally sent out bymail within one week. Disconnections are made if payment is not made with-in 30 days of billing. Collection performance has been good and there are fewbad debts.

VI. FINANCE

Past Performance and Present Financial Position

6.01 BWB's financial policy has been to set tariffs at a level adequateto meet annual operating expenditures and debt service with only minor capitalexpenditures being financed from internal cash generation. BWB has met itsfinancial objectives, but has not accumulated liquid resources to help financecapital expenditures. To better determine its operating expenditures and in-come in its future financial statements, BWB will change its accountingpractices by introducing depreciation accounting.

6.02 BWB's revenues grew from MK 0.9 million in 1970 to MK 1.65 millionin 1975 and water sales from 1,157 Img in 1970 to 2,021 Img in 1975 represent-ing average annual growth rates of 16% in revenues and 15% in water salesduring the five-year period. The excess of revenues over operating expensesand debt service was small over the five years amounting to about 4% of reve-nues. As of December 31, 1975 about 65% of BWB's gross fixed assets had beenfinanced from loans, 26% from grants, and the remainder from surpluses. Afterdeducting estimated depreciation from revenues and from gross fixed assetsat historical cost, the rate of return on net fixed assets from 1970 to 1975was in a low range of 5% to 8%. BWB's 1976-1983 projected cash flow and in-come statements, balance sheets and debt statement, together with notes there-on, are presented in Annexes 9 to 13 and 1972-1975 historical income state-ments and balance sheets in Annexes 14 and 15.

Tariffs

6.03 The effect of BWB's financial policy mentioned in para. 6.01 isthat water generally is priced well below its economic cost. BWB's currenttariff (which became effective January 1, 1977 and is identical in structureto the 1975 tariff shown in Annex 17) includes a fixed monthly fee for allconsumer categories other than than kiosks and a monthly consumption charge.The fixed fee varies according to type of customer and the size and assessedvalue of property as does the "free allowance" of water delivered withoutadditional charge. Consumption in excess of this monthly entitlement is

- 18 -

charged at the rate of MK 0.80 per thousand Ig (US$0 73 per thousand US gal)for the first 5,000 Ig and MK 1.00 per thousand Ig (US$0.92 per thousand USgal) for the remainder. The tariff is unnecessarily complex and results inpricing inconsistencies, which are both uneconomic and inequitable, ascustomers pay widely differing amounts for water consumed without reasonablejustification. Although it would be desirable to abolish soon water chargesthat are based upon assessed valuation of property, the required adjustmentto BWB's billing system will be both difficult and time-consuming. Guide-lines for structural changes, which have been discussed with Government andBWB, are shown in Annex 18. BWB, in consultation with the Association, willintroduce changes in structure along these guidelines.

6.04 BWB plans to increase its tariff levels per thousand Ig sold toclose to estimated long-run marginal cost by 1981, through phased increasesbetween 1978 and 1981. To achieve this objective and meet its cash require-ments during the construction period and also finance a reasonable proportionof its expected large future capital requirements from internal cash genera-tion, BWB will adjust its tariff to provide an annual rate of return onaverage revalued net fixed assets of not less than 8% in 1978 and 1979, 10%in 1980 and 1981, and 9% thereafter. To achieve the minimum 8% rate of re-turn in 1978 and 1979, BWB will either make a 37% tariff increase in 1978 or23% and 11% tariff increases in 1978 and 1979, respectively. To achieve theabove rates of return from 1978 to 1981, it has been estimated that it wouldbe necessary to increase the average revenue per thousand Ig sold fromMK 1.12 per thousand Ig (US$1.03 per thousand U.S. gal) in 1977 to MK 2.20per thousand Ig (US$2.02 per thousand US gal) by 1981, after taking intoaccount 8% annual inflation. The average level attained by 1981 would beonly about 7% below long run marginal cost and would be such that largeusers would pay the full economic cost of their consumption. In constantprices the increase attained by 1981 would represent about 45%, raising the1977 average revenue of MK 1.12 per thousand Ig (US$1.03 per thousand US gal)to MK 1.62 per thousand Ig (US$1.48 per thousand US gal).

6.05 To measure BWB's annual rate of return on net fixed assets BWB,in consultation with Government, has (based on a modified application of theBritish General Index of Retail Prices) revalued these assets at December 31,1975 at a gross value of MK 17.11 million less accumulated depreciation ofMK 6.17 million. Although a better method of revaluation should beestablished in the future, the initial revaluation is acceptable in view ofthe large additions to fixed assets in future years. BWB is to revalueits fixed assets annually in accordance with methods satisfactory to theAssociation, and a proposed method will be submitted to the Associationbefore the end of 1977. In the financial projections, an 8-1/2% annualrevaluation increase of fixed assets has been assumed from 1976 to 1981, afterwhich prices are assumed to be constant.

Proposed Financing Plan

6.06 The total financing requirement, which is estimated to approximateMK 15.1 million (US$16.6 million) including interest during construction,would represent about 53% of BWB's estimated capital expenditures and

- 19 -

additions to working capital between 1977 and 1981. Under the proposedfinancing plan for this period, which is giv-n belot., BWB would provide 28% ofits estimated capital requirements from internal cash generation, 68% would beprovided from loans, and 4% from capital contributions.

Millions of Millions ofKwachas US$ %

RequirementsProject Expenditures (includinginterest during construction)

Development Program

Phase IV /1 8.0 8.8 28Phase V (Proposed Project) 15.1 16.6 53Phase VI /1 0.2 0.2 1

Other 1.5 1.6 5

Additions to Working Capital 4.0 4.4 1328.8 31.6 100

SourcesInternal Cash Generation 13.8 15.2 48

Less: Debt Service and SinkingFund Contributions /2 5.9 6.5 20

Net Internal Cash Generation 7.9 8.7 28

Capital Contributions 1.2 1.3 4

BorrowingsPhase V

(1DM 3.4 3.7 11CDC ,3 4.0 4.4 14

Phase V (Proposed Project)IDA 6.4 7.0 22AfDF (up t; US$6 m) 5.2 5.7 18CDC /3 0.6 0.7 2

Phase VI /1 0.1 0.1 119.7 21.6 68

28.8 31.6 100

/I The amounts shown opposite th se items are those portions of projec- ex-penditures and borrowings incSirred between 1977 and 1981 only.

/2 Excludes interest during cons ruc. ton./3 CDC ioans consist of US$1.8 m equiva ent approved 1976 and a proposed

US$3.3 m equivalent loan expected to be s-bmitted to the CDC Board inJune 1977.

- 20 -

6.07 External finance for the proposed Project would come from IDA, AfDFand CDC. Government will make the proceeds of the IDA Credit of US$7 millionavailable to BWB at an 8-1/2% interest rate. Principal repayments would com-mence in 1981 over 20 years and would be included in combined level principaland interest payments over that period. AfDF finance (up to US$6 million) isexpected to be made available to Government with a service charge of 3/4 of1% and repayment terms similar to the IDA Credit. Relending to BWB is likelyto be on similar terms but has been conservatively projected in this report atan interest rate of 3-1/2%. CDC project finance of US$0.7 million would bepart of a MK 3 million (US$3.3 million) loan to be made directly to BWB thebalance of which would, together with a previously approved CDC loan, be usedto help finance the previous phase of BWB's development program which, basedon recent civil works bids, is likely to cost significantly more than originallyanticipated.

6.08 The proposed Project would be followed by a Phase VI project to beconstructed between 1981 and 1985 at an estimated cost of MK 20 million(US$22 million) and, in the financial projections, it has been assumed thatthis would be 60% debt-financed. As it is impossible to predict the priceelasticity of water demand, water consumption may be less than forecast asa consequence of the proposed tariff changes (para. 6.04). In this case,the construction of the Phase VI project may be postponed.

6.09 With the change in tariff levels referred to in para 6.04, BWB willbe able to improve its financial performance as indicated by the followingprojected financial data:

1977 1979 1981 1983----- (millions of Kwacha)-----

Operating Revenues 2.6 4.3 7.5 9.4Operating Expenses 2.1 3.0 4.5 5.6Net Income before Interest 0.5 1.3 3.0 3.8Net Income Cash Generation 0.3 0.7 2.5 3.0Operating Ratio 81 69 60 59Debt Service Coverage 1.7 1.6 2.3 2.3

6.10 To help ensure a sound financial structure, BWB will not incurdebt without IDA approval, unless future debt service is covered at least1.5 times by internal cash generation.

VII. AGREEMENTS REACHED AND RECOMMENDATIONS

7.01 Agreement was reached with Government on the following points:

(a) BWB will provide piped water supplies to Blantyre'slow-income, unplanned areas (para. 3.12);

(b) BWB will consult with the Association before makingany appointments to the positions of Engineer/ Managerand Clerk/Treasurer (para. 5.06); and

- 21 -

(c) BWB will maintain its tariffs at a level whichwill yield at least 8% on its average revalued netfixed assets in 1978 and 1979, 10% in 1980 and 1981,and 9% thereafter (para. 6.04).

7.02 A condition of effectiveness of the proposed IDA Credit would bethat all conditions of effectiveness of the proposed CDC and AfDF financehave been fulfilled (para. 3.06).

7.03 The Project is suitable for a US$7 million equivalent IDA Credit.

April 19, 1977

ANNEX 1Page 1 of 4

MALAWI

BLANTYRE WATER SUPPLY PROJECT

Description of Existing Facilities

Background

1. The existing water system dates back to January 1929 when theBlantyre Water Board (BWB) was formed. Although the attractiveness of thearea due to high elevation and pleasant climate have been partly responsi-ble for Blantyre's rapid growth, its highland location also has made thesecuring of firm water supplies difficult. Local supplies, which are rela-tively insignificant during all seasons due to geographic location on thecatchments, taper off markedly during the dry season (July-December) whenpeak water demands normally occur. Urban growth has made local supplies lesssecure through encroachment upon their catchments. With the continuing growthof the community, BWB has had to reach out to more distant sources of supplyoutside the area of influence of urban development in order to meet increasingwater demands.

Sources of Supply

Mudi Catchment

2. The Hynde dam impondments, which are in the upper portion ofthe Mudi catchment, represent BWB's earliest source of supply. They wereconstructed in 1930 and are effected by four, small sarth-fill dams provid-ing a combined storage capacity of 25 Img (114,000 m ). A small treatmentplant, which processed water from this source for many years, was finallytaken out of service upon the completion of the Mudi works in 1953 due toobsolescence and the high cost of retaining it in service.

3. Steadily increasing water demands subsequently forced the construc-tion of the Mudi works whi5h include an earth-fill dam providing a total stor-age of 290 Img (1,320,000 m ), a raw water pumping station, a conventionalfiltration plant using gravity-flow, rapid-sand filters, and a high-servicepumping station. Due to insufficent raw water pumping capacity, the maximumdaily output of the Mudi works is limited to 3.0 Imgd. The annual sustain-able yield available from the Mudi catchment (including abstractions from theHynde dam reservoirs) varies from year to year but generally ranges from 0.5to 1.0 Imgd. The Mudi works are an important asset to the BWB system due totheir closeness to the center of demand and the extent of raw water storage

ANNEX 1Page 2 of 4

capacity available at the site. With BWB's increasing dependence uponthe Walker's Ferry source as its basic supply, the Mudi works have takenon a changed role and are now mainly used for peaking and for emergencies.This role is expected to continue in the future despite the continuedpressure of urban development on lands immediately adjacent to the catch-ment. It is important that Government be convinced of the need to protectthe catchment from further encroachment and actually takes steps to providesuch protection.

4. Ground water potential in the area is not significant. Numerousboreholes and testholes exist largely as a result of the droughts of 1949 and1950 which spurred the development of all potential sources. Unit capacitiesare low (the highest reported capacity approximates 50 Igpm) and water qualityis poor. Many of the boreholes were developed by individual industries andsome of these have now been abandoned. Only one of an original eight bore-holes and/or testholes constructed by BWB is still active. Due to poor waterquality, its production (less than 50 Igpm) is delivered to the lower Hyndedam reservoir for blending rather than sent directly to the distributionsystem.

Nankhunda Catchment

5. The Nankhunda works were constructed in 1919 and consist of Nankhundareservoir with storage capacity of 40 Img (180,000 m ), a gravity raw watersupply, a pressure rapid sand filter, and a high-service pump station pumpingdirectly to the distribution system. Nominal capacity of the works is about0.4 Imgd. Due to the construction of Government housing projects, the Nankhundacatchment increasingly is subjected to water pollution. For this reason, theNankhunda works normally are held in reserve for emergency or for use duringthe peak summer demand. Government's plans to further expand public housingwithin the catchment are likely to require the abandonment of the Nankhundaworks by the end of the current (Phase IV) capital improvement program.

Walker's Ferry Supply from Shire River

6. The Walker's Ferry (WF) supply, which constitutes BWB's principalsupply, was first developed in 1963 and consists of an intake and raw waterpumping station located at WF, raw water supply mains, water treatmentworks, and a treated water conveyance system extending from WF to the Blantyrearea. Additions and improvements subsequently were made to the WF supplyseveral times with the most recent (Phase III) additions completed by late1976.

7. Abstraction from the Shire River occurs at an intake pumping towerlocated approximately 4,000 ft (1,200 m) upstream of the intake of theElectricity Supply Commission of Malawi (ESCOM) Nkula Falls hydroelectricstation. The tower is of reinforced concrete construction and currentlyhouses seven electric-drive pump units totalling 895 horsepower (hp) and

ANNEX 1Page 3 of 4

having a combined pumping capacity in excess of 8 Imgd. The tower was con-structed to a level consistent with the modifications proposed as part of theongoing Nkula Falls II project recently approved for Bank Group financingwhere the forebay maximum operating level will be increased by about 20 feet(6 m). A raw water supply system consisting of two 12-inch diameter, 1,800-feet long pressure pipelines connect the raw water intake to the treatmentworks.

8. The treatment works have a nominal capacity of 6 Imgd although theycan be operated at a rate of 8 Imgd during periods of low raw water turbidity.Pretreatment facilities include a pre-sedimentation basin and a flash-mixchamber (currently inactive) with aluminum sulfate added as coagulant andDecapol used as a coagulant aid. The treatment works include upward-flow,sludge blanket-type clarifiers, conventional rapid sand gravity filters,post-chlorination and a chlorine-contact tank.

9. The treated water is pumped from a clear water tank at the WFsite a distance of over 23 miles through a 24-inch nominal diameter supplymain to the Ndirande terminal reservoir in Blantyre. The pumping is accom-plished in two separate pump lifts of 1,296 ft and 1,215 ft, respectively, bypumping stations located at WF and Chileka. Although the hydraulic capacityof the pipeline in its current configuration is 9.7 Imgd (based upon a 10 fpsvelocity), the actual capacity of the WF scheme is limited to 8 Imgd dueto limitations in installed pumping plant. The WF site includes a 1.0-Imgbalancing tank and a pumping plant with five electric-drive units with a totalinstalled capacity of 5,000 hp. The Chileka site includes a 1.0-Img balancingtank and a pumping plant of six electric drive units having a total installedcapacity of 4,575 hp.

Distribution System

10. The distribution system provides service to about one-half of the56-square mile net area currently planned for development within the Blantyrecity area. Additional small areas (Sanjeka, Chileka village and several ESCOMfield installations) external to the Blantyre municipal boundary also areserved. Service within the City is provided through six separate pressurezones ranging in elevation from 3,600 feet (1,097 m) to 4,309 feet (1,313 m)and formed by eight separate reservoirs having a combined storage capacity of7.0 Img (31,800 m ).

11. Treated water is introduced to the distribution system from theWF system via Ndirande reservoir and from the high-service pumping plantat Mudi treatment works. Pumping plant located at four booster stationslocated within the distribution system includes 14 separate pump units allof which are electrically driven, with a total installed capacity of 1,070 hpand delivering 9.2 Imgd.

12. The transmission and distribution systems consist of over 100 milesof pressure main ranging in size from one inch (25 mm) to 21 inches (530 mm)and constructed of asbestos cement, welded steel, cast iron and PVC. Therewere 9,754 metered connections providing service to an estimated 140,000persons out of an estimated total Blantyre population of 210,000 in 1975.

ANNEX IPage 4 of 4

Twenty-three of these connections were to kiosks (two of which were insquatter areas) and over 1,000 connections to private standposts in highdensity and traditional housing areas. There also are approximately 100fire hydrants attached to the system that were paid for by the municipal-ity but owned and maintained by BWB.

Ongoing Phase IV Project

13. The Phase IV project, which is scheduled to be completed by early1979, will increase BWB's basic water supply, improve the ability to meet peakand emergency water demands, and provide minor distribution system additions.The Project is being financed through external assistance provided by Common-wealth Development Corporation (CDC) and the Ministry of Overseas Development(ODM), both of the United Kingdom, and through internal assistance provided byGovernment.

14. The nominal capacity of the WF system will be increased from 8 to10 Imgd. Source of supply improvements will include modification of the rawwater intake and piping, construction of an access bund, and the addition ofa 24-inch raw water supply main. Additions at the treatment plant site willincrease treatment capacity to a nominal 10 Imgd, and will increase pumpingcapacity at the WF pump station through the enlargement of the pump build-ing and the addition of two 4.0 Imgd pump units. The project also willprovide for the enlargement of the Chileka pump building, the addition of two4.7 Imgd pump sets, the procurement of a spare 4.7-Imgd pump set, installationof additional surge equipment at the Walker's Ferry and Chileka sites, andincrease the capacity of the Walker's Ferry pipeline to a maximum of 10.3 Imgdthrough the removal of existing restrictions.

15. The nominal capacity of the Mudi works, which will provide increasedcapability to meet peak and emergency water demands, will be increased from 3to 10 lmgd. These improvements will include modification of the existing rawwater intake, construction of a new raw water pump station immediately down-stream of Mudi Dam and a new 27-inch raw water supply main to the treatmentworks. Treatment plant improvements will include modification of the existingclarifiers, provision for an additional reactioI tank and gravity, dual mediafilters, and construction of a 0.5 Img (2,300 m ) clear water reservoirand a new high-service pump station boosting to the Ndirande zone (elevation3,780 feet) reservoir.

16. Additions to the Blantyre area works, consisting mainly of a 0.6-Imgreservoir at South Lunzu (elevation 3,660 feet), three transmission mains, andminor reticulation works, also are scheduled for construction.

April 1977

ANNEX 2Page 1 of 11

MALAWI


Water Demand and Production Capacity

Introduction

1. The designers of the original Walker's Ferry (WF) pipeline plannedthat it would have an ultimate capacity of 10 Imgd and that constructionof a parallel pipeline would be necessary to transport flows in excess ofthat rate. Subsequent preinvestment studies by BWB's consultants have indi-cated that it is economically feasible to increase pipeline capacity to14 Imgd by making certain additions and changes in configuration not originallyconsidered. However, due to the remote location and the low elevation ofthe WF source of supply in relation to center of demand, any significantincrease in capacity is likely to be costly and have a marked effect upon BWBrecurring expense. For this reason, considerable efforts were made duringproject preparation to ascertain the extent and trend of future water demands.

Historical Water Demands

2. BWB maintains good records of water consumption (metered sales) butless satisfactory records of production (demand at source). Provision forimproving the metering of production is included in the ongoing Phase IVproject. This will permit a closer check on unaccounted-for water productionwhich probably has been underestimated in the past. Since completion of theWF pipeline, annual water demands have increased markedly, mainly due to rapidurban growth, but also because the water tariff tended to encourage consump-tion. Table 1 of this annex indicates that, for the period 1964-1975, annualincreases in system demand have averaged over 14% ranging from a minimum ofabout 8% to a maximum of approximately 20% for individual years.

Factors Affecting Future Demand

3. BWB's metered records have been helpful in identifying historicaltrends of water usage but provide little assistance in projecting future growth.Improved statistics on population and water customers are needed. This needhas resulted from a lack of census information (the most recent NationalCensus was in 1966), the use of some bulk rather than individual water metersto monitor consumption, and a BWB system of records that is cumbersome to usein future planning.

4. In 1975 only about 140,000 of an estimated 210,000 persons livingwithin Blantyre City were directly served by BWB. To assist in estimatingfuture water demands, Gibb assumed that future gross Blantyre populations

ANNEX 2Page 2 of 11

would increase from this base at an 8% (compounded) annual rate. The Gibbdemand forecasts, which reflect five separate components of water demand,were mainly tied to population growth. Only the Commercial/Industrial demandcomponent, which was assumed to match the growth of the national economy, wasan exception. Remaining components, i.e., Government/Institutional andresidential, were indirectly tied to population growth.

5. Modifications to the Gibb demand forecasts, which are describedlater in this annex (see para. 7), were made by the mission and reflect asomewhat diminished annual growth rate for residential water demands. Thereasons for the change were as follows. First, a lower (6.5% as against8.0%) population growth rate seemed appropriate based upon the results ofa recent sample census obtained by Government's Regional Planning Office.This lower rate had been adopted by Government for future Blantyre areaplanning, but it was obtained too late to be used in the Gibb studies.Second, constraints on housing starts effected by the Malawi Housing Corpora-tion (MHC) annual budget are likely to place an effective limit on thegrowth of numbers of house connections and thus water demands for the fore-seeable future. This is particularly true since MRC currently is responsiblefor over 90% of all Blantyre area housing starts. While the number of personsserved by BWB generally will increase in accordance with population, totalwater consumption is expected to increase at a slightly higher rate, despitethe emphasis on low-income housing and sites and services type developments,due to increased per capita demands (see para. 7). MHC developments generallyhave reflected low per capita consumption due to increased dependence uponkiosks and private standposts. A third consideration leading to reviseddemand estimates was the sensitivity of demand to future tariff increases.The latter, which have been recognized as necessary and are recommendedby the mission, are likely to reduce the rate of growth of water demands.

6. Currently, some unsatisfied demand exists in the Blantyre areaby population not served (70,000 persons estimated of a total population of210,000 in 1975). Most of this is represented by the approximately 50,000persons living in four widely scattered squatter areas (Bangwe, Kabula,Ndirande and Nkolokoti) adjacent to developed areas of Blantyre. The currentextent of unsatisfied demand partly is explained by BWB's stand of withhold-ing water service from squatter areas. This stand is an extension of Govern-ment policy established to discourage uncontrolled growth in urban areas.Service to these areas is likely to have little impact on water demand sinceper capita water use is expected to be low.

Future Water Demands

7. Projections of future water demands which were developed by themission for the period 1976-85, based upon considerations mentioned above,are shown at the back of this Annex. Table 2, the first of these, identifiesthe composition of future demands by principal class of consumer and in termsof average daily consumption. Residential consumption projected for anyfuture year is expected to increase from 1975 consumption based upon expected

ANNEX 2Page 3 of 11

future growth in numbers of residential connections and a continuationof the trend of annual increase (3.9%) in per capita water use noted forthe years 1972 and 1975. Projections of non-residential consumption arein accordance with the Gibb forecasts. Table 3 shows both consumptionand production. Unaccounted-for water, the difference between consumptionand production, has been assumed to remain at close to the historical rate,13% of production. Annual increases in required annual production wouldaverage about 9%, ranging from a minimum of 6.3% to a maximum of 10.1%during the period.

Variations in Demand

8. In planning and sizing elements of a water utility, evaluationof likely variations in demand is important. The Blantyre system is particu-larly sensitive in this respect due to the distant location of Walker'sFerry, which constitutes the principal source of supply. Table 4 shows thelikely monthly variation in demand based upon previous BWB experience duringthe period 1969-72. Table 5, which is based upon historical demand character-istics, shows projected flow rates for selected short-term periods that wereused in the planning and design of the Project.

Source Utilization

9. Studies by Gibb have indicated that, in order to avoid excessiveelectricial demand charges due to pumping and to minimize capital require-ments, it would be desirable to operate the WF supply at relatively uniformproduction rates. Local sources of supply and other local elements of sys-tem input, which are not penalized to the same degree by variations in flowrate, would be used to meet system variations in demand. Design of theProject has been based upon this rationale. The WF supply normally would beoperated at, or close to, the average annual demand rate. During below-average seasonal periods of demand, water surplus to immediate needs couldbe bled off from the WF pipeline for storage in Mudi reservoir, subsequentlytreated at the Mudi treatment works, and thereafter delivered to the distri-bution system. The facilities at the Mudi site, including raw water pumpingfacilities, treatment plant, and high-service pumping facilities, would bedesigned to meet maximum-day demands. Demands during shorter-term periods(of less than one-day duration) would be met by withdrawals from distributionsystem storage.

Production Capacity

10. Table 6 shows effective production capacity planned for the BWBsystem in order to meet future water demands. The total capacity shown forany given year equals the long-term sustainable capacity available from theWF works plus short-term yields available from local catchments. The capacityshown for the year 1984 is tentative due to uncertainty about future waterdemand. There also are uncertainties relative to optimum operation of futureadditions to the WF supply that could affect required production capacity(see para. 12 this annex).

ANNEX 2Page 4 of 11

11. Page 11 presents a graphical representation of water demandsand production capacity according to two separate categories relative to time,i.e., short-term and long-term. Short-term production capacity refers to thatcapacity that is sustainable by the end of the design period for a matter ofdays or, possibly, weeks. Long-term production capacity would be sustainableindefinitely, assuming no change in annual demand. The graph illustrates thattotal BWB production capacity must be chosen in consideration of both short-term and long-term needs. More specifically, it illustrates that the need forproduction capacity added by the proposed Bank Group (phase V) project isbased upon long-term rather than short-term considerations. If short-termcapacity is compared to maximum-day demand, there would be an apparentsurplus of about 5 Imgd by the year 1980 when the Bank Group project isscheduled for completion. This is due to the extent of supply capacityadded at the Mudi site for emergency protection by the ongoing Phase IVproject. Since supply capacity at Mudi is not sustainable for extendedperiods, no additions in treatment plant capacity at the Mudi site areproposed as part of the Bank Group project.

Future Operation of WT System

12. Prior to appraisal it became apparent to Bank Group staff thatcertain alternative operations of the WF system that could reflect lowereconomic costs were insufficiently considered. In particular, use of off-peakelectrical energy for pumping and the conveyance of raw water, rather thantreated water, to Blantyre appeared likely candidates for consideration. Themission investigated the attractiveness of such changes in future operationand the sensitivity of these changes, if desired, on future project timing.This investigation convinced the mission that, for Phase V, raw water pumpingwould be less economic than the more conventional current configuration.Since analysis by the mission relied upon cost information developed in theearlier Gibb studies, substantial updating of the analysis may be required.Additional studies to determine an optimum plan in operating the WF systemshould be completed prior to preparation of the next major (Phase VI) project.However, there is no need to conduct these studies, which are included in theProject, prior to 1980 since the current mode of operating the WF system, bynecessity, must be retained until a second WF to Blantyre supply main iscommissioned. This additional supply capacity is scheduled for Phase VI.Delaying the studies until 1980 should allow sufficient time to accumulate thesubstantial amount of basic operational data which will be required for thestudy.

April 1977

ANNEX 2Page 5 of 11

TABLE 1: PAST GROWTH IN WATER PRODUCTION

Calendar Average Annual IncreaseDay

Year Production I/ Amount %(Imgd) (Img)

1964 1.521965 1.82 .30 19.766 2.15 .33 18.167 2.54 .39 18.168 2.98 .44 17.369 3.23 .25 8.4

1970 3.70 .47 14.671 4.17 .47 12.772 4.60 .43 10.373 5.00 .40 8.774 5.49 .49 9.8

1975 6.40 .91 16.6

Note:

1/ Average daily production by high service pumps at treatment plants.

January 1977

ANNEX 2Page 6 of 11

TABLE 2: COMPOSITION OF FUTURE WATER CONSUMPTION 1/

Calendar Number of Residential Consump. Commercial/ Governmental/ TotalResidential Annual Industrial Institutional

Year Connections Increase, % Amount Consumption Consumption Consumption(Imgd) (Imgd) (Imgd) (Imgd)

1975 8,696 2.7876 9,386 11.3 3.09 1.73 1.09 5.9177 10,086 10.8 3.43 1.83 1.19 6.4478 10,796 10.5 3.79 1.94 1.30 7.0379 11,516 10.2 4.17 2.11 1.44 7.72

1980 12,246 9.9 4.59 2.30 1.59 8.4881 12,986 9.6 5.03 2.51 1.75 9.2982 13,736 9.4 5.50 2.74 1.94 10.1883 14,496 9.1 6.00 3.00 2.14 11.1484 15,266 9.0 6.54 3.26 2.37 12.17

1985 16,046 8.8 7.12 3.60 2.60 13.32

Note:

1/ Average daily consumption in terms of projected metered sales.

January 1977

ANNEX 2Page 7 of 11

TABLE 3: PROJECTED FUTURE WATER CONSUMPTION AND PRODUCTION

1/ Unaccounted- 3/ AnnualCalendar Consumption for Water 2/ Production IncreaseYear Imgd Img % I_mg Imgd %

1975 6.476 5.91 2,157 13 2,482 6.8 6.377 6.44 2,352 13 2,701 7.4 8.878 7.03 2,566 13 2,957 8.1 9.579 7.72 2,818 13 3,249 8.9 9.9

1980 8.48 3,095 13 3,577 9.8 10.181 9.29 3,391 13 3,906 10.7 9.282 10.18 3,716 13 4,271 11.7 9.383 11.14 4,066 13 4,672 12.8 9.484 12.17 4,442 13 5,110 14.0 9.4

1985 13.32 4,862 13 5,585 15.3 9.3

Water demand in terms of projected:

I/ Metered sales;

2/ In terms of water production;

3/ Production by high service pumps at treatment plants.

January 1977

ANNEX 2

Page 8 of 11

TABLE 4: SEASONAL VARIATIONS IN DEMAND 1/

Average Daily DemandDuring Indicated Month

Calendar As Against Average DailyMonth Demand for Year, %

January 86

February 88

March 89

April 90

May 97

June 97

July 100

August 106

September 116

October 123

November 111

December 97

Note:

1/ Based upon experience during period 1969-72.

January 1977

ANNEX 2Page 9 of 11

TABLE 5: PROJECTED SHORT-TERM VARIATIONS IN DEMAND 1/

(Imgd)

Average Daily Demand During:Maximum Maximum Maximum Peak

Calendar Demand Demand Demand HourYear Year Month 2/ Week 3/ Day 4/ Demand

1976 6.8 8.8 9.2 10.2 15.077 7.4 9.6 10.0 11.1 16.378 8.1 10.4 10.9 12.2 17.879 8.9 11.5 12.0 13.4 19.6

1980 9.8 12.6 13.2 14.7 21.681 10.7 13.8 14.4 16.1 23.582 11.7 15.1 15.8 17.6 25.783 12.8 16.5 17.3 19.2 28.284 14.0 18.1 18.9 21.0 30.8

1985 15.3 19.7 20.7 23.0 33.7

Note:

I/ In terms of production:Average demand during indicated period is projectedbased upon following relationship to average demand during year:

2/ Maximum month : 1.29:13/ Maximum week : 1.35:14/ Maximum day : 1.5:15/ Peak hour : 2.2:1

January 1977

ANNEX 2Page 10 of 11

TABLE 6: EFFECTIVE PRODUCTION CAPACITY

(Imgd)

IndicatedPhase of Source of Supply

Calendar Improvements TotalYear In Service WF 1/ Mudi 2/ Nankhunda 3/ Capacity 4/

1975 II 6.3 3.0 .4 9.7

1976 III 8.0 3.0 .4 11.4

1978 IV 10.0 10.0 20.0

1980 V 14.0 10.0 24.0

1984 VI 19.0 5/ 10.0 29.0

Notes:

1/ Walker's Ferry system forming BWB's basic, year-round supply;2/ Local source normally reserved for peaking and for emergency

usage; sustainable yield approximates 0.5 Imgd;3/ Normally reserved for meeting peak or emergency demands only;

scheduled to be phased out of service by 1978 due to urbandevelopment planned for catchment;

4/ Long-term production capacity plus short-term yield from localcatchments in excess of long-term sustainable yield;

5/ Estimated capacity required based upon continued utilizationof WF system for supplying treated water only.

January 1977


MALAWIBLANTYRE WATER SUPPLY PROJECT

BWB Water Demands and Production Capacity

z0

30<0

0

< 0 SHORT-TERM9L aaPRODUCTION CAPACITY

25 6<

>~~0 A-6a MAXIMUM-DAY

E I Ca DEMAND- /

z

a°- 15 ____

0 - - - - - - - 00-z 0

a 9- - - - ~~~~ -a - -0

10 190.~~~~~~~~~~~~~~~~0

000 000 AVERAGE DAY DEMAND1

LONG-TERM PRODUCTION CAPACITY5 ~~~~~~~(SUSTAINABLE YIELD)

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

CALENDAR YEAR

NOTE: 1/ Demand at source World Bank-16458

ANNEX 3Page 1 of 3

MALAWI


Description of Main Elements of Project

Introduction

1. The Project consists of the expansion and modification of the exist-ing water system of Blantyre Water Board (BWB). Construction is scheduledfor the period 1977-80. The Project represents Phase V of a multi-phasewater supply development program identified for the Blantyre area for the16-year planning period ending with the year 1990. The program was developedby the consulting firm of Sir Alexander Gibb and Partners with the assistanceof BWB staff. Principal BWB facilities, both existing and proposed, are shownon map IBRD 12376.

Project Objectives

2. BWB's objectives are to extend potable water service to a largerproportion of the City's total population. More specific project objectivesare to increase the capacity of the existing Walker's Ferry (WF) pipeline toits ultimate hydraulic capacity of 14 Imgd (735 L/sec) and expand the distri-bution system.

Walker's Ferry Supply

3. The capacity of the WF supply would be increased from 10 Imgd(after completion of Phase IV) to 14 Imgd. Raw water supply would be in-creased through modifications of the existing Shire River intake and theaddition of two 7.0-Imgd pump sets.

4. The capacity of the existing WF treatment plant would be expandedto a nominal capacity of 14 Imgd (740 L/sec) and a maximum throughput of 20Imgd (1050 L/sec) by the addition of sludge blanket, upflow-type clarifiers,dual-media filters, piping and miscellaneous equipment. Provision would bemade for bypassing the pre-treatment facilities in applying the raw water,after the addition of chemicals, directly to the filters.

5. Extensive changes and additions also would be made to existingtreated water pumping facilities. These improvements would be made at threeseparate locations: at the WF site, at a new intermediate site between WFand Chileka, and at the Chileka site. Improvements at the WF site would in-clude the addition of a 0.5 lmg balancing tank, the modification of existingpumps, the addition of a new 4.0 Imgd (210 L/sec) pumpset, surge protectionequipment, and miscellaneous piping and electrical equipment. Installationsat the intermediate pump station site will include a 1.25 Img balancing tank,

ANNEX 3Page 2 of 3

and a pump building to house four 5-Imgd (260 L/sec) units and two 2.5-Imgd(130'L/sec) units. Piping and miscellaneous electrical equipment also wouldbe added. Improvements scheduled for the Chileka site include the addition ofa 0.5 Img balancing tank, extension of the existing pump building, modifica-tion of existing pumps, addition of a new 4.7 Imgd (247 L/sec) pumpset, andthe addition of piping and miscellaneous electrical equipment.

6. Extensive changes also would be made to the WF pipeline in orderto increase its capacity and also to change the location of its terminus inthe Blantyre area. The increase in capacity would be effected through theconstruction of approximately 8,000 feet of 27-inch (700 mm) diameter mainparallel to the existing treated water pipeline at the WF end and approxi-mately 7,300 feet of 24-inch diameter pipeline terminating at the proposedNyambadwe reservoir site in Blantyre.

Distribution System

7. Substantial changes would take place in the distribution system.In order to maintain system pressures within reasonable limits, seven newpressure zones would be created (raising the total to 13) and nine new dis-tribution system reservoirs (of 5.25 Img capacity) would be constructed. Themost important of these would be the Nyambadwe reservoir which would provide adual function as a distribution system reservoir and also as a terminalreservoir receiving treated water from the WF pipeline. With the completionof the Nyambadwe reservoir and connecting link, the Ndirande reservoir wouldcease operation as a terminal reservoir but would continue to provide opera-tional and emergency storage for the Ndirande (elevation 3,780 feet) zone andalso would provide emergency storage for zones in the South Lunzu area. Theexisting Midima pump station would be abandoned and the Chichiri and ZombaRoad pump stations will be reconstructed. A new pump station, taking suctionfrom the adjacent Nyambadwe reservoir, also will be constructed to boost tothe Ndirande zone.

8. The Project also will provide approximately 90,000 feet (27,400 m)of transmission mains varying in size from ten inches (250 mm) to a maximumof 24 inches (600 mm) and an additional 93,000 feet of distribution mains (sixinches to ten inches in diameter). These mains will improve the distributionof treated water throughout BWB's service area and will permit connections tominor reticulation system to be provided by the Malawi Housing Corporation.The Project also will provide kiosks and minor (less than six inches in dia-meter) distribution mains to extend piped water service to low-income, un-planned areas.

General Plant

9. The Project also will include a laboratory (to be provided atthe Mudi treatment plant site), staff housing, and a workshop. Also to beprovided are accounting machines, vehicles, spare parts, maintenance equipmentand miscellaneous equipment to outfit the laboratory and workshop.

ANNEX 3Page 3 of 3

Engineering

10. Design and supervision of construction of principal project elementswill be accomplished by engineering consultants with the work effort estimatedat 275 man-months, and the total cost (including travel and subsistence) atUS$1.3 million equivalent. BWB intends to utilize its own staff to design andsupervise the construction of minor improvements such as staff housing, reti-culation system and facilities for service to low-income, unplanned areas.

Facilities Provided by Others

11. Substantial additions to the distribution system are anticipatedoutside the scope of the Project. These additions will consist mainly ofdistribution mains, service connections, customer meters and fire hydrants.The costs of these facilities would be borne either by the developer, by theindividual consumer, or by the city of Blantyre, as indicated below.

12. The cost of reticulation systems or main extensions required to pro-vide service within industrial estates, housing areas, or sites and servicesschemes, is to be borne by the developer which, in the majority of instances,will be the Malawi Government. In such cases, planning, design and construc-tion of the facilities would be carried out by BWB staff with BWB costs to bereimbursed by the developer. The cost of service connections and metersare borne by the individual customer. Fire hydrants and appurtenances areinstalled at the request and at the cost of the city of Blantyre.

April 1977

ANNEX 4

MALAWI


Project Cost Estimates

Local Costs Foreign CostsSub- Sub- Total

Year Ending December 31 1977 1978 1979 1980 1981 total 1977 1978 1979 1980 1981 total Costs

Civil Works

Source of SupplyIntake and pumping plant 173 125 17 315 321 233 29 583 898WF pipeline, furnish and lay 262 190 24 476 486 354 44 884 1,360

Treatment WorksWF site 40 30 4 74 73 57 9 139 213Mudi site 7 3 10 12 4 16 26

Blantyre Area WorksReservoirs and pumping plant 309 224 29 562 574 417 52 1,043 1,605Trunk mains, furnish and lay 282 206 25 513 524 382 47 953 1,466Reticulation system, furnish and lay 174 131 305 154 301 455 760Service to unplanned areas 20 40 20 20 100 60 30 30 120 220

General PlantStaff Housing 81 81 80 80 161Laboratory and Workshop 11 11 3 25 21 22 4 47 72

Equipment

Pumping PlantSource of supply 18 134 9 161 202 928 248 72 1,450 1,611Blantyre area facilities 4 37 2 43 54 244 63 19 380 423

Treatment Plant 4 28 2 34 43 197 52 16 308 342Vehicles and Maintenance Equipment 5 2 2 9 15 22 12 2 51 60Miscellaneous Equipment

Accounting Aachines 64 64 64Spare parts & workshop equipment 2 8 5 1 16 17 3 19 5 44 60Laboratory & WT equipment 5 5 13 20 33 38

Land 15 15 15

Training 4 26 36 36 38 140 140Subtotals 20 62 1,395 1,151 116 2,744 4 635 3,865 1,949 337 6,790 9,534

Consulting ServicesAdvisory Services 5 5 12 12 17Special Studies 82 82 82Engineering Design 95 307 70 69 541 541Supervision of Construction 41 159 159 359 359

ContingenciesPhysical 3 14 199 167 14 397 12 113 475 253 37 890 1,287Price 1 8 308 396 49 762 4 76 728 615 119 1,542 2,304

TOTAL PROJECT COSTS 24 130 2_061 1,873 179 4,267 115 1,143 5,138 2,968 493 9,857 14,124

April 1977

ANNEX 5

MALAWI


Estimated Schedule of Disbursements from IDA Credit

IDA Cumulative DisbursementFiscal Year at End of Quarterand Quarter US$000s Percentage

1977-78

December 31, 1977 70 1March 31, 1978 140 2June 30, 1978 210 3

1978-79

September 30, 1978 420 6December 31, 1978 770 11March 31, 1979 1,610 23June 30, 1979 2,100 30

1979-80

September 30, 1979 2,940 42December 31, 1979 3,850 55March 31, 1980 4,550 65June 30, 1980 5,250 75

1980-81

September 30, 1980 5,740 82December 31, 1980 6,300 90March 31, 1981 6,650 95June 30, 1981 6,650 95

1981-82

September 30, 1981 6,650 95December 31, 1981 6,650 95March 31, 1982 7,000 100

April 1977


Implamentation SchIedule

_ d ~~~~ ~ ~~~~ ~~~1000 ro7e 10,0 000 1e91 lff2

SOURCE OF SUPPLY PLANT

Irr-ke. . Shire River

Civil Works 4A

Me.berivel & Electri- I 5

Welker,s Ferry Pvmp Sessin

Civil Works 4A

Riecheflival 6 biseqrivel S

In.earediste Pump Sesri-

Civil Works 4A

M.chnirsl ff Eleorricl S

Chileka Pv--- 8rerio-

Civil Works 4A -Mfchvnivel & ElecIricl 5

W.1lkerSP',, F Pi-Peirr 4A

WATER TREATMENT PLANT

W.rkers Ferry Sile

Clvii Works 4A

Mavh-niql & El-vrrivI S_

Mudi Sire

Civil Wvrks 4B

Mrv-anl Eleveriver 5

TRANSMISSION & DISTRIBUTION PLANT

Pump Sa-ivns

Civil Wvrks 4m

Meorranivl & Eleo-rival 5

Rerrivo-- WCWI 40

Tr-nk Mmins (CWI 40

Miror Diesr,bulor Maine (CW)

Service rv U,rplar-d Ares ICW)

GENERAL PLANT

rSh H-msing (CWI 7

VeWirves & Risirrence Eqt,ivnrv 4B

LEor0rvr- & Wvrkrrhop ICW) 40 -Mi-v11-e-eus E- -imenr

Mev-arrivl & Evrcica1 E-prrrenr S_

Waler T-esrrrrr Eqv,prrenr 6 _

SUMMARY BY MAJOR ELEMENT P T oT A CIC EMCo.rrrct No. 4A. Cvl Wors, WF Scheme 5.......... .... l4 C - EM

Cvrrr- Nv. 4B: Civil Wvrks. 1lan-ryr A-ea P A C C f E. C EM

C-nrracr Nv. 5 P-mi,g Pivn. .... a....... .. _._P T____SE__ C EMCo-rIrt No. 6 W.r, Tr-atvrrr Planr ..... I...... A I C E

CP OT A Err

C-1-1ev No 7: Civl Works Salff Housirrg Is......... ...... 1 ... I

OirerZ Labor: Civil Works. Miror P T A SC CM,inlJUn-l-rned Ares Servce I . 555555 e. C

LEGEND NOTES

P OsOrin cianrivo arid dessrOflCflifleriflO5555 ..-.- I Planng. d-sigo, prsrer.i-o ot r-nder dg-omrrrs and -jlysi- of bids T B Pid Word B.k-17348Cvnrr-or work OT Oprn -deiers_ - _ ~ Mainre-ance period A Award co_lirav

BC BeOrcnsrvrirSE Sorr ersov-i-

EM Errd gf -,,ineo.ns period

ANNEX 7Page 1 of 3

MALAWI


Incremental Costs and Return on Investment

General

1. Revenues and costs attributable to the Blantyre Phase V watersupply project are shown in Table 1 of this annex. From these data wereestimated average incremental costs (AIC) and return on investment (ROI).

Average Incremental Costs

2. The same input information used in the rate of return calculationcan be used to calculate the average incremental cost (AIC) of the water sold.The AIC is the cost per thousand gallons of the incremental water sold, aver-aged over the Project's life and discounted back to the present using theopportunity cost of capital. Thus, if the price of water is set equal toits AIC, the return on investment will just equal the opportunity cost ofcapital. Based upon the data (Annual Incremental Costs and IncrementalConsumption, respectively) shown in Table 1 and an opportunity cost of capitalranging from 8% to 12%, AIC would range from MK 1.74 to MK 2.43 per thousandIg sold. Similarly, based upon an opportunity cost of capital of 10%, AIC isMK 2.06 per thousand Ig.

Return on Investment

3. ROI of the Project is defined as the discount rate at which thepresent worth of estimated annual incremental costs equals the present worthof revenues attributable to the Project over its projected service life.If the price of water is set equal to its AIC, ROI will equal the opportunitycost of capital. ROI has been calculated to be about 2.9% based upon netcash flows shown in Table 1 (page 3 of this annex) and measuring incrementalbenefits according to the willingness to pay the BWB tariff effective inJanuary 1977 (which provides an average revenue of about MK 1.12 per thousandIg sold).

4. The low rate of return shown above is the natural consequence ofthe method of benefit valuation used, the high costs of BWB production,and the fact that water currently is priced well below AIC. BWB's tariffstructure is to be reformed in line with the Association's recommendations andtariff levels will be increased during the Project construction period to alevel more closely approximating marginal production costs. After implementa-tion of these changes, average 1981 revenues will rise to MK 1.62 per thousandIg (in terms of 1977 prices) and ROI over the life of the Project would be7.2%.

ANNEX 7Page 2 of 3

5. The sensitivity of ROI to changes in project costs and in revenuesalso was investigated. Using benefits of MK 1.62 per thousand Ig mentionedin para. 4, ROI would decline to 6.5% should a 10% increase in project costsoccur and, alternatively, to 6.0% with a 10% decrease in annual revenues.With both of these changes in effect concurrently, ROI would decline to5.3%.

Assumptions

6. The following assumptions were made in developing these data:

a) Constant prices (as of 1977) were used throughout;

b) The effective service life of the Project was esti-mated at 35 years beginning with the year 1982;

c) Annual costs include capital and recurring costsexclusive of taxes and duties;

d) Capital costs consist of Phase V project costs plusother capital costs required for minor reticulationelements such as local mains, customer services andmeters excluded from the Project but which are neededto fully utilize the project facilities;

e) Annual maintenance expense has been estimated to equal1% of cumulative capital costs of the Phase V projectand other additions;

f) Annual operational expense consists of the costs ofpumping, purchase of chemicals, and other operatingcosts per thousand Ig produced as shown below:

Pumping cost MK 0.35Cost of chemicals MK 0.04Other operating costs MK 0.03

April 1977

TABLE 1

Calculation of Rate of Return on InvestmentUsing Two Alternative Revenue As umptions

(Phase V Improvements)

--------------------------------------------------------------------- E Thoussand ---------------------------.--------------------- _-____----_

Incremental Maintenance and Operation Expense

C ital Cs ts Operational Expense Incremental RevenueIncremental Annual Annual Incremental

Calendar Phase V Other Maintenance Production Annual M and 0 Incremental Consumption Annual Revenue N Net Cash FlowYear Project Additions , Total Expense Img 3/ Expense / Expense Cost / Im / "A" "B" Revenue "A" Revenue "B"

1977 134 134 134 ( 134) ( 134)78 1,189 1,189 1,189 (1,189) (1,189)79 6,163 6 163 6,163 (6,163) (6,163)

1980 3,830 200 4,030 4,030 (4;030) (4,030)81 504 200 704 119 0 0 119 823 0 0 0 ( 823) ( 823)82 200 200 121 146 61 182 382 127 142 206 ( 240) ( 176)83 200 200 123 547 230 353 553 476 533 771 ( 20) 21884 200 200 125 985 414 539 739 857 960 1,388 221 649

1985 o/ 125 1,460 613 738 738 1,270 1,422 2,057 684 1,3191986-2016-9/ 125 1,460 613 738 738 1,270 1,422 2,057 684 1,319

/ Minor reticulation works;

2 Incremental annual maintenance expense estimated ts be equivalent to 1% of combined cumulative capital cost of phase V and other additions;

3/ Projected annual treated water production less 4,125 Img (effective capacity of BWB plant after completion of ongoing phase IV project);

Product of annual production and unit operating expense; latter includes following components:Pumping cost = MK 350/ImgCost of chemicals = 40/ImgOperating cost 30/Img Total Operational Expense = MX 420/Img of productiou

/ Annual total, capital plus recurring costs;

Portion of annual consumption attributed to phase V project;

7 Incremental gross revenue based upon following average tariff levels:Alternative revenue "A" = MK 1,120/ImgAlterm tive revenue "B" = MK 1,620/Img

Annual revenue less annual cost;

2/ Indicated figures are for each year.

April 1977


ORGANIZATION CHART OF BLANTYRE WATER BOARD

Ministry of Trade, Industry and Tourism

Blantyre Water Board

re

Engineering Department Finance |Admiistrtion

Deputy Engineer Clerk/Tr-asurer

Chief Acco.ntant

Electrical Administratve Accountant &Mecha nCal Auditor Officer Revenue ExpenditureEngineer

Wle'Ferry Plant Eantyre Area Plant Distribution CDnsrcion &Sapply Laoatory

Section Engineer Section Engineer Section Engineer Section Engineer=Rgnsnre Chemist

| Walker's Ferry j X Mechanical Services Design

Assistant Engineer Assistant Engineer Assistant Enginr Superlntenden

l Chileka l | Electrical Maine Construction

Assistant Engineer | H Assistant Engineer Assistant Engineer Superintendent

World Bank-16353 co

MAL A W I

BLANTYRE WATER BOARD

Cash Flow Projections

(thousands of Kwachas)

-Summary

1976 1977 1978 1979 1980 1.981 1977 - 1982 1983

INTERNAL SOURCES 1981.

Net Income Before Interest 227 547 1046 1408 2216 3055 8272 3415 3915

Depreciation 631 695 763 977 1211 1591 5237 1922 1935

Sinking Fund Liquidation 0 0 0 0 0 336 336 0 0

Total Internal Sources 858 1242 1809 2385 3427 4982 13845 5337 5850

OPERATIONAL REQUIREMENTS

Working Capital -13 153 182 152 276 306 1069 221 162

Debt Service 563 731 1063 1477 1822 2160 7253 2313 2589

Sinking Fund Deposits 32 34 37 40 40 46 197 0 0

Total Operational Requirements 582 918 1282 1669 2138 2512 8519 2534 2751

Net Available from Operations 276 324 527 716 1289 2470 5326 2803 3099

CONSTRUCTION REQUIREMENTS

Phase III 150 0 0 0 0 0 0 0 0

Phase IV 91 3396 3486 469 45 0 7396 0 0

Phase V 0 139 1273 7199 4841 672 14124 0 0

Phase VI 0 0 0 0 0 200 200 1800 10200

Other 223 239 256 297 324 354 1470 368 381

Total Construction Requirements 464 3774 5015 7965 5210 1226 23190 2168 10581

Balance to Finance 188 3450 4488 7249 3921 -1244 17864 -635 7482 o

Summary1976 1977 1978 1979 1980 1981 1977 - 1982 1983

1981

FINANCED BY:

ODM, Phase. III Project 99 0 0 0 0 0 0 0 0CDC, Loan 1 0 1437 133 0 0 0 1570 0 0ODM, Phase IV Project 91 1960 1200 230 0 0 3390 0 0IDA, proposed Project (Phase V) 0 111 717 3192 2019 325 6364 0 0AfDF, proposed Project (Phase V) 0 4 267 2911 1762 257 5201 0 0CDC, Loan 2 0 0 2153 802 45 0 3000 0 0Unarranged, Phase VI Project 0 0 0 0 0 120 120 1080 6120Grants & Contributions 121 226 336 425 124 125 1236 125 125TOTAL 311 3738 4806 7560 3950 827 20881 1205 6245

Additions (Deductions) toCash other than OperationalRequirements 123 288 318 311 29 2071 3017 1840 -1237

Debt Service Coverage 1.5 1.7 1.7 1.6 1.9 2.3 1.9 2.3 2.3

April 1977

0

}d h

MALAWI


Income Statement Projections

Year to December 31 1976 1977 1978 1979 1980 1981 1982 1983

Water Produced, Img 2480 2703 2950 3240 3559 3899 4273 4676Water Sold, Tmg 2157 2351 2566 2818 3095 3391 3716 4066Average Revenue per thousand Ig, MK 0.878 1.120 1.383 1.539 1.877 2.207 2.310 2.310

…thousands of Kwachas----------------

OPERATING REVENUES

Water Sales 1893 2633 3550 4337 5810 7485 8583 9392

OPERATING EXPENSES

Wages & Employee Benefits 255 374 433 502 582 675 729 787Chemicals 100 110 127 147 170 197 213 230Electricity 487 710 950 1032 1314 1596 1906 2098Maintenance 108 123 142 164 190 220 237 255Administration & Other 127 124 144 167 193 223 240 259Depreciation 631 695 763 977 1211 1591 1922 1935

Total Operating Expenses 1708 2136 2559 2989 3660 4502 5247 5564

Operating Income 185 497 991 1348 2150 2983 3336 3828Miscellaneous Income 42 50 55 60 66 72 79 87

Net Income Before Interest 227 547 1046 1408 2216 3055 3415 3915 OQInterest Charged Operations 301 296 274 892 803 1592 1523 1467

o I1Net Income -74 251 772 516 1413 1463 1892 2448t'J

1976 1977 1978 1979 1980 1981 1982 1983

Rate of Return on Average Revalued

Net Fixed Assets in Service, % 1.6 4.2 8.0 8.0 10.0 10.0 9.0 10.8

Average Revalued Net Fixed Assets

in Service 11,268 11,869 12,396 16,854 21,502 29,835 36,940 35,386

Operating Ratio,%(after depreciation) 90 81 72 69 63 60 61 59

Operating Ratio,%

(before depreciation) 57 55 51 46 42 39 39 39

April 1977

NJ:

o oFrt'

MALAWI


Balance Sheet Projections(thousands of Kwaches)

At December 31 1976 1977 1978 1979 1980 1981 1982 1983

ASSETSPlant in Operation 18931 20779 22801 33033 36165 54727 55095 55476

Less: Depreciation 7327 8645 10143 11982 14211 17010 18932 20867

Net Plant in Operation 11604 12134 12658 21051 21954 37717 36163 34609

Work in Progress 95 3789 9042 8982 14553 296 2152 12714CURRENT ASSETSCashOperational Requirements 200 220 240 260 280 300 320 340Temporary Surplus 123 411 729 1040 1069 3140 4980 3743

Accounts Receivable 360 500 674 824 1104 1422 1631 1784

Inventories 375 400 425 450 475 500 525 550

Other 20 20 20 20 20 20 20 20Total Current Assets 1078 1551 2088 2594 2948 5382 7476 6437

Sinking Fund Investment 139 173 210 250 290 0 0 0TOTAL ASSETS 12916 17647 23998 32r77 397EZ5 43395 45791 5371

EQUITY & LIABIL.ITIESRetained Earnings 10 261 1033 1549 2962 4425 6317 8765

Capital Contrihutions 2683 2909 3245 3670 3794 3919 4044 4169

Revaluation Surplus 6043 7029 8060 9136 10926 12792 12792 12792

TOTAL EQUITY 8736 10199 12338 14355 17682 21136 23153 25726

Long Term Debt 3980 7216 11391 18210 21702 21841 22187 27547

CURRENT LIABILITIESAccounts Payable 200 232 269 312 361 418 451 487

Total Current Liabilities 200 232 269 312 361 418 451 487

TOTAL EQUITY & LIABILITIES 12916 17647 23998 32877 39745 43395 45791 53760

Debt as % of Long Term

Capitalization 31 41 48 56 55 51 49 52

April, 1977

ANNEX 12Page I of 4

MALAWI



Notes and Assumptions to Financial Projections

1. The financial projections from 1976 to 1983 are based on informa-tion supplied by BWB and were updated and reviewed with BWB during nego-tiations.

Income Statements

Revenues

2. Annex 2 gives a detailed breakdown of the projected quantity ofwater sales. To achieve the projected rates of return of 8% in 1978 and1979, 10% in 1980 and 1981 and 9% thereafter, the following minimum tariffincreases, allowing for inflation, are estimated to be required: 1978 23%;1979 11%; 1980 22%; 1981 17%; and 1982 5%.

Expenses

3. 1976 expenses are based on expected actuals and 1977 expenses onBWB's budgets. It has been assumed that (1) salaries, wages and employeebenefits, (2) maintenance, and (3) administrative expenses will increase by 8%per annum. To this has been added a further 8% per annum to cover estimatedinflation from 1978 until the end of the construction disbursement period in1981.

Electricity

4. This is based on the consultant's estimates of the use of pumpingequipment and relevant maximum demands and estimated unit consumption. Tarifflevels are based on ESCOM's latest tariff. Further increases of 30% areassumed on January 1, 1978 and 10% on January 1, 1981.

Chemicals

5. It is estimated that chemicals cost MK 0.03838 per thousand Igof water sales to which has been added 8% per annum for estimated inflationas mentioned in para. 3 above.

ANNEX 12Page 2 of 4

6. BWB's fixed assets were revalued at December 31, 1975 at a grossvalue of MK 17.11 million less accumulated depreciation of MK 6.17 million.Estimated annual asset revaluations have been made thereafter at 8-1/2% perannum until 1981. Depreciation is at a rate of 3.5% on average gross fixedassets in operation.

Balance Sheets

Debtors

7. It has been assumed that about 68 days annual sales will be out-standing at the end of each year.

Inventories

8. Inventories consist principally of pipe and fittings, water metersand chemicals. They are high because of the impossibility of predictingdelivery dates under present conditions. They have been assumed to increaseby R 25,000 per annum.

Grants and Contributions

9. This represents an estimate of reticulation costs for housing,commercial and industrial developments financed by Malawi Housing Corporation,Government and others and an expected Government contribution towards interestduring construction on the ongoing Phase IV project.

Payables

10. Payables are assumed to increase by 16% per annum until the endof the construction disbursement period in 1981 in line with most operatingexpenses and, thereafter, to increase by 8% per annum.

Sinking Fund Investments

11. Under an agreement with the Commonwealth Development Corporation(CDC) dated April 6, 1975, capital repayments cannot be made on any moneyborrowed after that date from the Malawi Government without the writtenconsent of CDC. CDC loans outstanding at December 31, 1975 will be fullyrepaid in 1981. BWB makes provision for capital repayments through annualsinking fund investments.

Capital Expenditures

12. During the period covered by the financial projections, in additionto Phase V of the Blantyre Water Board's capital development program, othermajor capital expenditures are as follows:

ANNEX 12Page 3 of 4

Phase III - This is expected to increase the reliable capacity ofthe Walker's Ferry pipeline from 6 to 8 Imgd and becompleted by late 1976.

Phase IV - This is expected to increase the reliable capacity ofthe Walker's Ferry pipeline from 8 to 10 Imgd at anestimated cost of MK 7.4 million (excluding IDC). TheProject should be completed by late 1978 or early 1979.

Phase VI - This is expected to increase the reliable capacity ofthe Walker's Ferry system from 14 to 19 Imgd at anestimated cost of MK 20 million to be disbursed be-tween 1980 and 1984.

Other Capital Expenditures

13. These consist of motor vehicles, minor main extensions, reticula-tion connections, etc.

Source and Application of Funds

14. The terms of project loans from 1976 to 1983, the period covered bythe financial projections, are assumed to be as follows:

ANNEX 12Page 4 of 4

No. ofAmount Principal Years of Basis of

Source (millions Repayments Principal Principal InterestProject of Loan of Kwachas) Commence Repayments Repayments %

Phase IV ODM 3.48 1982 20 Annuity 8-1/2

CDC/1 4.00 1981/82 see note /1 Graduated 8-1/2

Total ProjectCost without

IDC 7.48

Phase V CDC/l 0.60 1981/82 - do - Graduated 8-1/2

IDA(US$7 m) 6.40 1981 20 Annuity 8-1/2

AfDF 5.20 1981 20 Annuity 3-1/2

Phase VI Un-identified/2 7.30 After Not Not known 8-1/2

1983 known

/1 CDC loans for Phase IV (repayable over 15 years commencing 1981) andPhase V (repayable over 16 years commencing 1982), which would be madedirectly to BWB, are as follows:

Approved 1976 MK 1.60Expected to be approved June 1977 3.00

MK 4.60

The MK 3 million loan will be MK 3 million in sterling equivalent witha maximum of E 2. 2 million.

/2 In the financial projections, it has been assumed that 60% of projectcosts would be debt financed.

April 1977

MALAWI


Estimated Debt Statement1976 - 1983

(thousands of Kwachas)

.1.976 :1977 :1.978 J .979 1980 1981 1982 :1983

1...) R:: L Wl (i:. S 437 I33 0* WO -: l(.fl lZIC)ON 0 0 79 79 79B () I (-'i N C., 0 1437 1.570 :1. 1.570 [49:1. :1.4:1.2 :,.333*-:1:NT1.:1k1::T,7 0) d>61 128 :1.33 :1.33 :1.30 :1.23 :1.:1.7

l,;' 4.l, - .s 1... 36 llRt R(:i (1W :,; N t3. 9:1. :1 96() 1 200 230() 0 0 0

*AMOk ZA(i V': ... C N 00 0 0 0 2 79*HA,e':II A N4tt:.E: i9:1. 205:1. 3251. 3481 3481. 348:1. 3409 3330)

:1: iN .i 1**: i: .E i4 9:1 225 286 296 2:?6 29 286

1 li C 1 : W:IN i . :1. :1. :1. 7:1.7 3192 20() 1.9 325 0 0*:1: . f - 1 iN 0 0 0 0 :1.3:1. :1.43 i.i55

L. A IN C, F. 0 1 :1. 28 4020 6039 6233 6090 5935:1 1 1::: 1 i 5 40 206 42 524 A 2 :1.

F:'I IASE ' s**4i (:3, , R 1:1 W :1: N C:i .. 4 267 291 LI :1.762 25: 0 0

Avj iL :1:0 -:Z :1:(3 N 000 1. O4 :19.1 :1: r1-.i A Ir-) N l:, E.: m)4A. .; .{3 A4R44'iH( |'i( |7}f3{ 1 :4 2I1 71. :2 4944 5201. 50:1.7 4826:, N T::l.: R I:0 5 60 :.42 :1. 78 .17 9 .72

*f C.) R11 (:1 W:1 N 0 3:1.53 802 45 Ci 0 0M (':.: 1. AT: 1 lON O :1.0 57 I.7

I:4f-4i ,ANC'i:' 2) () ^ :.:1.'53 S X-.>t,2955 30((O I3 ( 2843 2686:1: 1.: . . 9 1.7 2 , J ':35 24 234 :3

:1. 9' 6 9., 9 : E.1 .1 979 J. 9 L 19 813.1. 1 9 823 2 :1. 9 3 83

- TN 0 ) O) R R W '? : O 2 ( 12 1 6120X:.sf:i A1L.; 0 0 0 01) 1 2 :L 2 O 1200 7;320

-- I:Nli:i: N .EREST 0 0 00 K) 5 5 6 362

I..:.'a: S IN [T I ... 0I A N ,o -i~ ~O W I NU 90 I RT .. .1N 25: 276 295 9316 3L 6 334 353 9 9 9 9I.. .N CE1:: ;3 8 9 9 36 :L 3 30)02 6 6 8 2 3 1 1.5 2 :216 2: 117

Si 1 N V FR: .F 0.1 2 9 E2 7..?9 258 236 2:1. : .56 :146

C1ER iW NR S N f . 19 35 1. 2 447) 71;3 5 3 8.2 26 702 J. K 0 t : L20....I I::F F; Y A Ei .N TS . ': 276 29' :9 .'31 6 334 563 734 760*-t N:L f 7 I39 72:16 :.1.1.391 1. 8 1) 2 1 21702 2:81 . 2 2:1. 8 7 2754 7I N 1R ; 1 45 768 :. 1.4 I :14597 .1579 1.829

April 1977

fD

OQ wo_ Lia

Ht

ANNEX 14

MALAWI


Historical Income Statements(Thousands of Kwachas)

YEAR ENDED December 31 1972 1973 1974 1975

Water Sales, Img 1,477 1,586 1,740 2,021

REVENUES

Water Charges 1,103 1,167 1,256 1,658

EXPENDITURE

Pumping, filtration &distribution 431 456 544 761

Administration and general 135 134 161 179

Loan servicing charges 494 518 534 560

Exceptional expenditures - - 5 -

Total Expenditure 1,060 1,108 1,244 1,500

Miscellaneous Income 36 40 41 38

SURPLUS FOR YEAR 79 99 53 196

September 1976

ANNEX 15

MALAWI


Historical Balance Sheets(Thousands of Kwachas)

At December 31 1972 1973 1974 1975

FUNDS EMPLOYED

Long-Term Liabilities, Loans 4,204 4,185 4,055 4,047Sinking fund 44 61 83 111Grants and Contributions for

Capital Works 2,404 2,504 2,529 2,562

Loans Redeemed 1,364 1,572 1,797 2,036Revenue Contributions to Capital 446 580 658 763Exchange Reserve 5 137Accumulated Revenue Fund 99 88 95 224

8,561 8,990 9,222 9,880

EMPLOYMENT OF FUNDS

Fixed Assets 8,435 8,778 8,958 9,531Deferred Charges 14 12 16 14Sinking Fund Investments 50 60 82 107

CURRENT ASSETS

Stocks and Stores 94 188 239 323Debtors 159 169 196 295Short call deposits 282 243 143 126Bank Balances and Cash 40 26 58 13

575 626 636 757

CURRENT LIABILITIES

Creditors 167 132 116 155Loan Interest and Capital Repayments 346 354 354 374

513 486 470 529

Net Current Assets 62 140 166 2288,561 8,990 9,222 9,880

September 1976

ANNEX 16Page 1 of 6

MALAWI


Project Targets and Monitoring Guidelines

General

1. The following targets and guidelines are proposed to facilitateplanning and to evaluate achievement of technical, financial, administrativeand training goals. Certain of these would be included in periodic reports tobe submitted to the Association. An effort would be made, through discussionswith BWB management during project implementation, to expand the list oftargets through quantification of certain indices described in the monitoringguidelines.

Targets

2. Targets are projected in Table 1 of this annex on an annual basisfor the 8-year period ending with the year 1983. Although certain of the in-dices quantified below are currently maintained in BWB records, others arenot. Categories in which current record-keeping will require upgrading are:population, service connections (numbers of each type of connection should beidentified where major categories of residential connections, i.e., kiosks,private standposts and direct connections to structures, are distinguishedfrom Commercial/Industrial and Governmental/Institutional service connections),and water production (current records are unreliable due to inoperative flowmeters). Monitoring of MHC developments is intended as a planning tool forBWB.

Monitoring Guidelines

3. An attempt also would be made by BWB to develop and maintain recordsfor the following:

a. Operating Data

1) Water Production - average daily metered production(demand at source excluding treated water produc-tion diverted to Mudi raw water reservoir) for eachmonth.

2) Water Consumption - average daily consumption for eachmonth.

ANNEX 16Page 2 of 6

3) Unaccounted-for-Water - volume and percentage (interms of production) for each month.

4) Number of connections by month listed by size and categoryincluding residential connections of the following types:

a) House connections;

b) Private standposts; and

c) Kiosks. 1/

5) Population served by BWB at end of year by principal categoriesof service including, but not limited to, each of the indicatedresidential types of connections:

a) House connections;

b) Private standposts; and

c) Kiosks. 1/

6) Customer Water Meters

a) Number of meters by size in stock at end ofquarter;

b) Number of meters repaired or replaced duringquarter.

7) Leaks

a) Number of leaks investigated by month;

b) Number of leaks repaired by month.

8) Distribution System Pressure - pressure at selected pointsin distribution system.

b. Status of Unplanned, Low-Income Areas (information required quarterly)

1) Description by name and location of individual areas havingpopulations of 500 or more persons;

2) Dwelling units by area, number;

1/ Includes public standposts in unplanned, low-income areas.

ANNEX 16Page 3 of 6

3) Resident populations by area:

a) Total population;

b) Population served. 1/

4) Connections to piped water system by area, number:

a) Individual service connections;

b) Public standposts.

5) Identification of redevelopment planning by area:

a) Areas for which Government-approved redevelopment plan exists;

b) Areas for which land clearance in accordance with Government-approved redevelopment plan is programmed to begin byDecember 31, 1978.

6) Completed sites and services schemes by area, number of plots:

a) Total number of plots developed;

b) Number of plots assigned or committed;

c) Number of plots actually occupied.

c. Water Quality

1) Physical - Water turbidity values by month in terms of maximum,minimum and mean values as determined for:

a) Raw water produced from each principal source;

b) Settled water at each active water treatment facility;

c) Filtered water at each active water treatment facility.

1/ Includes populations served from individual service connections and popu-lations resident within 100 m distance of public standposts.

ANNEX 16Page 4 of 6

2) Chemical

a) Representative complete chemical analysis by month forfinished water for each active water treatmentfacility;

b) Chlorine residual of delivered water at selected points indistribution system, monthly:

i. Number of samples;

ii. Test results indicating type of residual (combined orfree), range of monthly values for each sampling point interms of maximum, minimum and mean value.

c) Corrosion index (Langelier, or suitable alternative)by month for water sampled at selected points in supplyand distribution systems.

3) Bacteriological

a) Number of samples obtained from distribution system by monthfor which determinations of bacterial counts (MPN) werecarried out;

b) Number of samples by month for which positive analyseswere obtained.

d. Public Health Statistics - Public health statistics will be reportedquarterly. The statistics will record incidence of illness in terms ofmorbidity and mortality for the Blantyre area for the following diseases:

cholera intestinal diseasestyphoid diarrheamalaria

e. Staffing and Training

1) Staffing

a) Number of permanent employees;

b) Number of permanent employees:

i. per 1,000 connections;

ii. per m /day supplied.

ANNEX 16Page 5 of 6

2) Training

a) Number of employees being trained by category:

i. Professional

ii. Subprofessional

b) Estimates of future annual training requirements by year inman-months and proposals for meeting them.

3) Project Implementation - Quarterly forecast of expendituresare to be prepared for each contract within three months ofsignature of contract. Quarterly reports are to indicatepercentage completion of original forecast and revised forecastof expenditures for remainder of contract.

f. Financial Indicators (required annually)

1) Contribution to capital expenditure from internal cash generationduring the project construction period (1977-81) as measured byhistoric performance and BWB's five-year forecast;

2) Annual rate of return on revalued average net fixed assets inoperation;

3) Operating ratio;

4) Number of days water sales uncollected;

5) Average operating revenue per unit of water billed (total andby consumer category);

6) Debt service coverage.

g. Miscellaneous Population Statistics - number of water system customersprovided with indicated sanitation service at end of year:

1) Sewers2) Septic tanks3) Pit privies4) Other

April 1977

ANNEX 16Page 6 of 6

TABLE 1: TARGETS FOR OPERATION AND PLANNINGL'

Historical Projected Future1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

Operating Data

Population of Blantyre, 000's 198 210 223 236 251 266 282 300 318 337

Level of ServicePopulation Served, End of Year

Persons served by service level, 000'sby house connectionby private standpostby kiosk

Total persons servedNumber, 000's 132 140 152 163 178 197 217 243 270 300

% of total population 67 67 68 69 71 74 77 81 85 89

No. of Connections, End of YearResidential

House connectionsPrivate standpoatsKiosks

Commercial/IndustrialGovernment/Institutional

Total No. of Connections 9,754 10,530 11,310 12,110 12,920 13,740 14,570 15,410 16,260

Production and ConsumptionNet Production, 2/ 1mg 2,005 2,348 2,482 2,701 2,957 3,249 3,577 3,906 4,271 4,672

Consumption, ImgResidential

House connectionsPrivate standpostsKiosks

Commercial/IndustrialGovernment/ Institutional

Total Consumption 1,740 2,021 2,157 2,352 2,566 2,818 3,095 3,391 3,716 4,066

Unaccounted-for-WaterAmount 265 327 325 349 391 431 482 515 555 606

% of production 13 14 13 13 13 13 13 13 13 13

Non-Scheduled Outages 3/Cause-related frequency, Nos.

Due to electric faults 58 75 78 70 60 55 50 45 40 40

Due to other causes 5 5 16 12 10 8 6 4 3 3

Duration-related frequency, Nos.Duration> 1 hr. 10 20 24 20 18 16 14 12 10 10

Duration, 8 hrs. 2 5 6 5 3 3 2 2 2 2

Duration 24 hrs. 2 4 3 3 2 2 1 1 0 0

Financial DataReturn on average revalued net fixed

assets in operation, X 1.6 4.2 8.0 8.0 10.0 10.0 9.0 10.8

Operating ratio 57 55 51 46 42 39 39 39

Uncollected water sales, days 70 68 68 66 64 62 60 58 56 54

Unit operating revenue, MK/OOO Ig 0.72 0.83 0.88 1.12 1.38 1.54 1.87 2.20 2.31 2.31

Debt service ratio 1.5 1.7 1.7 1.6 1.9 2.3 2.3 2.3

Other Statistics

Annual Development by MHCNo. of traditional housing plots 1,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000

No. of family housing units 200 400 400 400 400 400 400 400

1/ Incomplete records currently prevent the establishment of targets for certain categories descriptive of service.Targets for these categories would be developed later as better information is developed by BWB;

2/ Excluding Increment of treated water production diverted to Mudi raw water reservoir;

3/ Outages of BWB pumping equipment.

April 1977


MALAWI


Blantyre Waterworks Act

(CAP. 72:02)

BLANTYRE WATERWORKS (AMENDMENT) BY-LAWS, 1975

IN EXERCISE of the powers conferred by Section 48 of the BlantyreWaterworks Act, the Blantyre Water Board, subject to the approval ofthe Minister, hereby makes the following By-laws

Citation and 1. These By-laws may be cited as the BlantyreCommencement Waterworks (Amendment) By-laws, 1975 and

shall be deemed to have come into operationon the 1st October, 1975.

2. By-law 79 of the Blantyre Waterworks By-laws (hereinafter Amendmentreferred to as the principal By-laws) is amended by the deletion of By-law 79of sub-paragraph (1) thereof and substituting the following new Local Govern-paragraph :- ment Supple-

ment"(1) Any quantity of water ascertained by meter Cap. 72:02as having been used in a month over and above sub. leg.any free monthly allowance specified in the p.F20Blantyre Waterworks Rate Rules shall be chargedfor as follows :-

(1) where the quantity of water ismeasured by meter in Imperialgallons, at the rate of KO.60per thousand gallons for thefirst 5,000 gallons and there-after at the rate of KO.80 perthousand gallons;

(ii) where the quantity of water ismeasured by meter in cubic metersat the rate of KO.132 per cubicmeter for the first 23 cubicmeters and thereafter at therate of KO.176 per cubic meter."


3. By-law 79 of the principal By-laws is further amended by Amendment ofthe deletion of sub-paragraph (3) thereof and substituting the By-law 79 offollowing new paragraph the principal

By-laws"(3) Notwithstanding the date upon which thisBy-law came into operation, all metered watercharges determined by meter readings taken inOctober, 1975 and shall be calculated at therates set out in sub-paragraph (2) hereof."

Made by the Blantyre Water Board on the 22nd July, 1975

Chairman

Approved by the Minister on the

Minister for Trade,Industry & Tourism


BLANTYRE WATERWORKS ACT

(CAP. 72:02)

BLANTYRE WATERWORKS (AMENDMENT) BY-LAWS, 1975

IN EXERCISE of the powers conferred by Section 48 of the BlantyreWaterworks Act, the Blantyre Water Board, subject to the approval ofthe Minister, hereby makes the following By-laws

Citation and 1. These By-laws may be cited as the BlantyreCommencement Waterworks (Amendment) By-laws, 1975 and

shall be deemed to have come into operationon the 1st January, 1975.

2. By-law 79 of the Blantyre Waterworks By-laws (hereinafter Amendment ofreferred to as the principal By-laws) is amended by the deletion By-law 79of sub-paragraph (1) thereof and substituting the following new Cap. 72:02paragraph :- sub. leg.

p.F20"(1) Any quantity of water ascertained by meteras having been used in a month over and aboveany free monthly allowance specified in theBlantyre Waterworks Rate Rules shall be chargedfor as follows :-

(i) where the quantity of water is measuredby meter in Imperial gallons, at therate of KO.60 per thousand gallons;

(ii) where the quantity of water ismeasured by meter in cubic metersat the rate of K0.132 per cubic meter."

3. By-law 79 of the principal By-laws is further amended by Amendment ofthe deletion of sub-paragraph (3) thereof and substituting the By-law 79following new paragraph :- Cap. 72:02

sub. leg.p.F20

"(3) notwithstanding the date upon which thisBy-law came into operation, all metered watercharges determined by meter readings taken inJanuary, 1975 and shall be calculated at therate of 60 tambala per thousand gallons wherethe quantity of water is measured by meter inImperial gallons, or at the rate of KO.132 percubic meter where the quantity of water ismeasured by meter in cubic meters."


4. By-law 80 of the principal By-laws is amended by the Amendment ofdeletion of sub-paragraph (1) thereof and substituting the By-law 80following new paragraph :- Cap. 72:02

sub. leg."(1) When application is made under By-law p.F2062 for a supply of water for domestic purposesto premises within the distance specified inSection 20(2) of the Act a fee in accordancewith the following scale shall be payable:

Size of Meter Fee

A 1/2 inch connection to adwelling house erected on aplot of land less than 0.2of an acre K60

All other 1/2 inch connections KIOO

Connections exceeding 1/2 inch A fee is to be prescribedby the Board having regardto the costs which wouldbe incurred in making sucha supply of water available."

5. By-law 81 of the principal By-laws is amended by the Amendment ofdeletion of sub-paragraph (1) thereof and substituting the By-law 81following new sub-paragraph:- Cap. 72:02

sub. leg."(1) Meter rents shall be payable according p.F20to the following scale:-

Size of Meter Annual RentK

1/2 inch Nil1 inch 10.001 1/2 inches 20.002 inches 30.003 inches 50.004 inches 75.006 inches 100.00 "

Made by the Blantyre Water Board on the

Chairman

Approved by the Minister on the

Minister for Trade,Industry & Tourism


THE BLANTYRE WATERWORKS ACT, 1962

(Act No. 13 of 1962)

THE BLANTYRE WATERWORKS RATE RULES

(Amended and Converted to Decimal CurrencyGN 252 of 1966, 260 of 1967, 75 of 1971.)

IN EXERCISE of the powers conferred upon me in Section 25 and 56of the Blantyre Waterworks Act, 1962, IMinister of Trade and Industry, make the following Rules:

PART I - PRELIMINARY

1. These rules may be cited as the Blantyre Waterworks Short titleRate Rules 1971 and shall come into operation on the 15th andday of February, 1971 Commencement

2. In these rules unless the context otherwise requires - Interpretationitagricultural premises" includes premi.ses used forgrowing or keeping for sale or trade or for the prep-aration for sale or trade other than by manufacture ofany fruit, vegetable, seed, flower, bush, tree, animalor fowl or the produce or issue thereof, land used asgrazing land, meadow land, market garden, nursery gar-den and any dwelling occupied by persons engaged inagriculture within such premises;

"business premises" means premises other than agri-cultural premises used primarily either for any tradeor business, or for any commercial or industrial activ-ity or for the practice of any professi.on for gain orprofit;

"domestic employees quarters" means any buildinghaving its own supply pipe constructed or adapted tobe used exclusively or principally for habitation bydomestic employees of the owner or occupier of any houseor flat;

"flats" means a building within which accommodationis divided into separate and self-contained units usedor intended to be used as dwellings let for rent or othervaluable consideration;

"house" means any building or part of a building,constructed or adapted to be used wholly or principally


for human habitation together with any land, gardens,outbuildings or appurtenances thereto or usually enjoyedtherewith but does not include flats, or domestic em-ployees' quarters;

"housing estate" means two or more houses on anyland held as a distinct or separate holding or tenancyeither unconnected to a water main or with not more thanone supply pipe serving all the houses thereon;

"institutional premises" includes any premises otherthan undeveloped premises occupied either by a localauthority constituted under any law in force in Malawior by any association, club or society of a social,recreational or religious character not operating pri-marily for gain;

"month" means the time between consecutive readingsof a meter which shall be as near to 30 days as is con-veni.ent to the Board, provided that no interval between

consecutive readings shall be less than 28 days;

"'supply main" means a water main or part of such amain constructed or managed by the Board which is used orintended to be used for the purpose of providing supplypipes and water services to individual consumers and in-cludes any apparatus used in connection with such a pipeother than supply pipes and services;

''undeveloped premises" means any premises valued atmore than K500.00 on which either no improvements existor whi.ch is not defined under any other classification;

''unused property" means business premises which arenot used for a period of one month or more.

PART II - CATEGORIES OF PREMISES AND RATES

"Rates 3. (1) Subject to the provisions of paragraph (2) of thisand rule, the rates specified in these Rules shall beexemption payable to the Board by the respective occupiertherefrom of the various premises hereinafter described in

these Rules when, and only when, a supply main lieswithin 100 yards of the boundary of such premises.

(2) The premises described in the Fifth Schedule arehereby exempted from rates levied under theseRules".


Monthly 4. (i) A monthly rate of K1.25 shall be payable by occupiers of -Rates

(a) domestic employees' quarters;

(b) houses and unused property having a separatesupply pipe and valued at not more than K500;

(c) Flats, housing estates, agricultural premises,business premises or institutional premises having a separatesupply pipe and valued at not more than K500.

An occupier of any premi.ses rated in accordance with this ruleshall be entitled to a free supply of 1,500 gallons of water per month.

(ii) Occupiers of houses and unused premises other than asdefined in paragraph (i) shall pay a monthly rate in accordance withthe First Schedule. Where any premises rated in accordance with thisrule are provided with a supply pipe an occupier shall be entitled toa monthly free supply of water shown in the First Schedule.

(iii) Occupiers of flats, housing estates, agricultural prem-ises, institutional premises and business premises having a valueof more than K500 but not more than K8,000 and undeveloped land shallpay a monthly rate in accordance with the Second Schedule provi.dedthat in cases where the registered value of a plot of undevelopedland exceeds K8,000 the monthly rate payable shall be K7.50. Whereany premises rated in accordance with this rule are provided with asupply pipe an occupier shall be entitled to the monthly free supplyof water shown in the Second Schedule.

(iv) Occupiers of flats, housing estates, agriculturalpremises, institutional premises and business premises other thanas defined in either paragrpah (i) or paragraph (iii) shall pay amonthly rate in accordance wi.th the Third Schedule and where any suchpremises are provided with a supply pipe an occupier shall be en-titled to the monthly free supply of water shown in the ThirdSchedule subject to the provisi.ons in rule 5 in the cases of agri-cultural premises and institutional premises and rule 6 in the caseof certain housing estates.

5. - (i) A rebate of two thirds of the rate shall be Rebatesallowed to occupiers of institutional premises. In such casesthe appropriate entitlement to a free supply of water shall bereduced to the same extent.

(ii) A rebate equivalent to the rate payable on acreagein excess of one acre shall be allowed to occupiers of agriculturalpremi.ses rated in accordance with the provisions of paragraph (iv)of Rule 4.


6. - (i) For the purpose of computing the monthly rate Housingpayable on a housing estate according to the Third Schedule estatesvalues in excess of K20,000 shall be disregarded and anoccupier of such premises shall be entitled to a monthly freesupply of water of 6,000 gallons.

(ii) Where on any housing estate the value of build-ings is less than K2,000 per acre computed by dividing theacreage of the land into the value of the buildings, anoccupier of such premises shall pay a monthly rate of eitherK7.50 or the amount of the rate payable on a house valued atmore than K500 on an area of less than 0.200 of an acre ratedin accordance with paragraph (ii) of rule 4 multiplied by thenumber of houses valued at more than K500 comprising thehousing estate whichever is the greater. An occupier of suchpremises shall be entitled to a monthly free supply of waterof 6,000 gallons.

7. - (a) The entitlement of a free supply of water shall Monthlynot be accumulative from month to month. Free

Supplies(b) Where in accordance with these Rules the Board of

is required to provide a free supply of water and where the Watermeter is calibrated to register in metric quantities the freesupply of water shall be calculated by taking 4.6 cubic metersas being equal to 1,000 gallons.

8. - Where an occupier vacates or occupies any premises Pro-Rataon a date other than the last day or the first day of a month Monthlyrespectively the rate payable and the entitlement to a free Ratesupply of water for such a period of time shall be that pro-portion of both the monthly rate and the entitlement to a freesupply of water as the period of occupation bears to 30 days.

9. - The rates prescribed in this part shall not apply Specialto any person who has, in accordance with Section 18 of the ContractsAct, entered into a contract with the Board. Section 18.

PART III - REGISTER

10. - (1) The register shall be kept in the form set outin the Fourth Schedule and shall include - Register

(a) The name and address of the owner of anypremises registered therein;

(b) The name and address of the occupier ofany premises registered therein;


(c) Where any land is public land or customaryland, a description of the location of the land sufficientto enable such land to be distinguished or identified;

(d) Where any land is neither public land norcustomary land, then either -

(i) the area of the sub-division of land forplanning purposes recorded by the City of Bantyre TownPlanning Committee; or

(ii) the area of premises served by one supplypipe and meter; and

(iii) where appropriate, the plot -umber of num-bers assigned to the area in any local authority valuationroll adopted and in force within the water area;

(e) the acreage of the land;

(f) the nature of any buildings on the land andtheir use;

(g) the value of the land;

(h) the value of any buildings on the land.

(2) The entries in the register relating to the nature,use acreage and value of land and buildings shall determine theappropriate monthly rate chargeable in accordance with these Rulesand for the purposes of these Rules the value of any premises shallbe the value of the land together with the value of any buildingserected thereon.

11. - No change in the classification of business premises tounused property shall be made unless the owner or person entitledto lawful possession of the premises applies in writing to theBoard for such a change. Upon receipt of such application theBoard shall cause the classification of the premises to be changedwith effect from the date of the next monthly meter reading, andsuch classification shall remain in effect for each full monththat the premises remain unused.

PART IV - MISCELLANEOUS

12. - For the purpose of these Rules, the occupier of Domesticany house or flat, shall be deemed to be the occupier of the Employees'domestic employees' quarters relating thereto. Quarters


13. - (1) The premises served by a single supply pipe Single

and meter shall be regarded as one entity for the purposes Supplyboth of its classification under Part II, and its registra- Pipe andtion under Part III. meter

(2) Where in order to make available a sufficientsupply of water the Board has agreed to provide more thanone meter for any premises, then notwithstanding the provisionsof paragraph (1), the register shall record such premises asone entry.

(3) In the event of any premises being used formore than one purpose, such premises shall be classified andregistered according to the purpose which attracts the highestwater level.

14. - Nothing in these Rules shall require the Board to Meterprovide more than one meter to any premises.

15. - The Blantyre Waterworks Rate Rules are hereby Revocationrevoked. of GN.252

of 1966.

FIRST SCHEDULE

Limits of Value Limits to Acreage Monthly freesupply of water

To lessMore But not From than monthly (cubicthan more than (acres) (acres) rate (gallons) meters)

K 500 unlimited - 0.200 K1.25 1,500 6.9K 500 K2,000 0.200 unlimited K1.88 1,500 6.9K2000 unlimited 0.200 0.400 K3.12 3,000 13.8K2000 unlimited 0.400 5.000 K5.00 6,000 27.6K2000 unlimited 5.000 10.000 K6.25 6,000 27.6K2000 unlimited 10.000 unlimited K7.50 6,000 27.6

Limits of Value Monthly free_______________________ supply of water

More But not monthly (cubicthan more than rate (gallons) meters)

K 500 K2000 K1.88 1,500 6.9K2000 K4000 K5.00 6,000 27.6K4000 K6000 K6.25 6,000 27.6K6000 K8000 K7.50 6,000 27.6


THIRD SCHEDULE

Limits cf acreage Linmits of Value

including less thani more than moro than more than more than IHand over (acres) K8n0o -but K20,000 but g 000 but KIOO 000 but an(acres) n6morle riov more, Rot miore not more K200,000

than K20000 than K50000 than K1001000 than K200,000

_ 0.500 1 K 10.00 K 12.50 K 15.00 K 17.50 K 20.000.500 0.625 12.50 15.62 18.75 21.88 25.000.625 0.750 15.00 18.75 22.50 26.25 30.O00.750 0.875 17.50 21.88 26.25 30.62 35.000.875 1.000 20.00 25.00 30.00 35.00 40.001.000 1.125 22.50 28.12 33.75 39-38 45,001.125 1.250 25.00 31.25 37.50 43.75 50.001.250 1.375 27.50 34.38 41.25 48.12 55.001.375 1.500 30.00 37.50 45.00 52.50 60.001.500 1.625 32.50'- 40.62 48.75 56.88 65.001.625 1.?50 35.00 43.75 52.50 61.25 70.001.750 1.875 37.50 46.88 56.25 65.62 75.001.875 2.000 40.00 50.00 60.oo 70.00 80,002.000 2.250 42.50 53.12 63.75 74.38 85.002.250 2.500 45.00 56.25 67.50 78.75 90.002.500 2.750 47.50 59.38 71.25 83.12 95.002.750 3.000 50.00 62.50 75.00 87.50 100.003.000 3.250' 52.50 65.62 78.75 91.88 105.003.2Z50 3.500 55.00 68.75 82.50 96.25 110.003.500 3.750 57.50 71.88 86.25 100.62 115.003.750 4.ooo 60.00 75.00 90.00 105.00 120.004.000 4.250 62.50 78.12 93.75 169.38 125.004.250 4.500 65.00 81.25 97.50 113.75 130.004,500 4.750 67.50 84.38 101.25 118.12 135.004.750 5.000 70.00 87.50 105.00 122.50 140.005.000 5.500 72.50 90.62 108,75 126.88 145.005.500 6.ooo 75.00 93.75 112.50 131.25 150.006.ooo 6.500 77.50 96.88 116.25 135.62 155.006.500 7.000 80.00 100.00 120.00 140eOO 160.007.000 7.500 82.50 103.12 123.75 144.38 165.007.500 8.000 85.oo 106.25 127.50 148.75 170.008.000 8.500 87.50 109.38 131.25 153.12 175.008.500 9.000 90.00 112.50 135.00 157.50 180.009.000 9.500 92.50 115.62 138.75 161.88 185.009.500 10.000 95.00 118.75 142.50 166.25 190.0010.000 11.000 97.50 121.88 146.25 170.62 195.0011.000 12.000 100.00 125.00 150.00 175.00 200.0012,000 13.000 102.50 128.12 153.75 179.38 205.0013,000 14.000 105.00 131.25 157.50 183.75 210.0014.000 mnlimited 107.50 134.38 161.25 188.s2 215.00

Monthly freesupply o{f water

(gallonls) 6,000 9,000 12,000 15,000 1g,000(CubJi raetres) 27..6 41.4 55.2 69.00 82.8.

ANNEX 18Page 1 of 7

MALAWI


Proposed Tariff Reforms and Revenue Projections

Introduction

1. A good tariff structure is one which reconciles economic efficiencyobjectives with financial, administrative and equity constraints. In par-ticular, the problem facing the Blantyre Water Board (BWB) is how to shiftfrom a tariff structure that was designed to encourage consumption during theBoard's early years of excess capacity and grant-financed expansion to astructure which better reflects the present situation of capacity constraintsand increased capital and operating costs.

2. The financial objectives of BWB have been to meet all expenses anddebt service obligations out of tariff revenues on an annual basis. Theyhave been remarkably successful at this in the past, but rising electricityrates and increased interest charges make future performance conditional upontariff revisions. In addition, there is a growing concern that new capacityincrements should not be entirely debt-financed, so that BWB's financialtargets (and tariff levels) may have to be adjusted to permit some internalcontribution to the capital cost of future projects.

3. Equity considerations also point to the need for changes in thetariff structure. Present rates are based in part on property size and valuewhich often leads to significant differences in the amount that two consumersof equal income but different lot sizes pay for the same quantity of water.The highest average rate (MK 1.25/000 Ig) of all is borne by those withoutconnections who must use the public kiosks.

4. For the economist or development planner who is concerned withpromoting efficient resource allocation, these financial and fairness con-siderations are supplemented by a concern that the price of water be set asnear as possible to its marginal cost. If water is priced above marginalcost, use will be artificially restricted. Conversely, if it is priced belowmarginal cost, the consumption of water (as opposed to other goods) will beunduly encouraged, and expensive capacity expansions, which could otherwisebe postponed, will be required to keep up with the stimulated demand. Asdescribed in Annex 7, the estimated long-run marginal cost of supplyingwater to Blantyre based upon an opportunity cost of capital of 10% isMK 2.06/000 Ig (in 1977 prices), while the average revenue expected during1977 is MK 1.12/000 Ig.

5. Thus, the grounds for a change in the tariff structure are clear.In addition, one of the biggest obstacles hampering improvement in the utili-ties of many developing countries has been overcome by BWB: all water suppliesare metered and the administrative functions are well organized and run.

ANNEX 18Page 2 of 7

Present Tariff Structure

6. BWB's current tariff, which became effective on January 1, 1977, includesa fixed monthly fee for all consumer categories other than kiosks and a monthlyconsumption charge. The fixed fee varies according to type of customer andthe size and assessed value of property as does the "free allowance" of waterdelivered without additional charge (see Annex 17 of the prior 1975 BlantyreWaterworks Bylaws for specific levels). Consumption in excess of this monthlyentitlement is charged at the rate of MK 0.80/000 Ig for the first 5,000gallons and MK 1.00/000 Ig for the remainder. There is also an initial connec-tion fee which covers the connection and meter expense and ranges upwards fromMK 60 for a 1/2-inch connection on a small plot.

7. Since the initial water consumed under the "free allowance" is actuallyquite costly (averaging about MK 1.25/000 Ig for residential customers andtwo to three times that for commercial customers), 1/ the tariff structurehas first a decreasing and then an increasing block. This sort of pattern isdifficult to justify on either economic or equity grounds. There is, however,a very strong feeling in BWB that some sort of fixed fee must be preserved forfinancial planning purposes although such charges now account for underone-third of the total revenue and marginal costs are clearly higher thanaverage total costs. However, it is also felt that the residential usersregard the allowance as "free" and would resent paying consumption charges onit even if the fixed fee were lowered.

Proposed Tariff Charges

8. Based on the project costs and operating expenditures detailed inAnnexes 4 and 7, the IDA mission estimated that the long-run marginal costof supplying water to Blantyre is approximately MK 2.50/000 Ig during thepeak months of September through November and MK 1.95/000 Ig during the restof the year (in 1977 prices). While economic concerns alone might suggestthat rates be immediately raised to these levels, the impact of a strictimplementation of marginal cost pricing would range from a near tripling ofthe average water bill for customers in areas of highest density to a 150%increase for those in lowest density areas.

9. Due to the extent of this impact, the movement to a full economictariff should probably be done in stages and with some subsidy incorporatedfor the lower consuming classes. The benefits provided to the community byensuring that the amount of water necessary for adequate sanitation standardsis available to all at an affordable price are likely to justify some subsidyfrom an economic standpoint as well as promoting social objectives.

1/ For many businesses, the initial increment of consumption costs evenmore than what is implied by dividing the fixed fee by the "freeallowance" since they do not use as much water as the allowance wouldprovide.

ANNEX 18Page 3 of 7

10. It has been estimated that the minimum amount of water requiredfor the control of water-borne disease is about three gallons per capita perday (Igcd), while 5-10 Igcd is recommended for minimum satisfactory sanita-tion. The monthly water consumption of an average Blantyre household of fivepersons 1/ using 10 Igcd would be 1,500 gallons. This coincides with the"free allowance" currently provided to the two highest density housing classes(HO/O and HO/1) for MK 1.25 per month by BWB. Thus, it is suggested that BWBcontinue subsidizing the first 1,500 gallons sold monthly to those two groupsat MK 1.25 (or MK 0.83/000 Ig) per connection while charging the full cost forany additional water consumed.

11. During appraisal, although it was apparent that administrativeadjustments necessary to alter the tariff structure would be difficult andtime-consuming, an early increase in revenue also was recognized as essential.Subsequently, in January 1977, BWB followed the mission's recommendations andeffected the Stage I tariff change (see Table 1, this Annex) which increasesconsumption charges from MK 0.60 to MK 0.80 and from MK 0.80 to MK 1.00 perthousand I gallons, respectively, for the two consumption blocks. This adjust-ment is an improvement over the former structure since it reduces differencesin unit costs effected by successive blocks of consumption. Based on 1975consumption levels, this tariff increase will yield about a 22% increase inrevenue (see Table 2). Its effect on individual residential classes, which isshown in Table 3, is an increase ranging from 15 to 22%.

12. Meanwhile, preparations should begin now for Stage II incorporat-ing more pervasive structural tariff changes which could be introduced 12months later (in January 1978). This second stage would replace the currentrate structure with a straight consumption charge for all categories exceptthe two lowest residential classes (those with property valued at less thanMK 500 or comprising less than 0.2 acres). It is suggested that the Stage IIconsumption charge be set to yield an average revenue of MK 1.38/000 Ig andthen be adjusted upwards as financial considerations warrant. If it isfelt necessary for financial and/or political reasons to retain a fixed feeand free allowance, then consumers (excluding the two lowest classes) couldbe provided with the first 1,500 gallons per month at a flat rate of MK 2.05.

1/ Five persons per household is the figure developed from the 1966 censusfor Blantyre City and used by the Regional Planning Office in all pop-ulation and housing density plans.

ANNEX 18Page 4 of 7

(which averages MK 1.38 per thousand I gallons). For the two lowest cate-gories of residential consumers 1/, the initial 1,500 gallons could be sup-plied at the subsidized rate of MK 1.25. Kiosk sales also would remainat their present rate. For consumption in excess of the allowance, anincreasing block tariff would be applied. Abstracting from elasticity effects,the revenues generated by the Stage II tariff would be 33% larger than thos-of Stage I (based on 1975 consumption) and over 60% larger than the 1975revenue (see Table 2). The effect on individual residential classes is anincrease ranging from 33 to 60% over Stage I levels (see Table 3). Havingaccomplished these structural changes, subsequent tariff increases (para.6.04) can be accomplished simply through an upward adjustment in consumptioncharges.

1/ If this subsidy system is implemented, it would be desirable to refinesoon the criteria for obtaining the reduced rate since any household withless than 0.2 acres of land currently is eligible, regardless of thevalue of that property. While, ideally, eligibility should be based on abroad wealth measure which includes income levels, the easiest revisionwould be to replace the acreage ceiling with a straight property valua-tion ceiling of, say, MK 2,000. This rule also could include the smallbusinesses and institutions which are valued at below that level sincethey are often store-front residences whose water usage is related moreto domestic than business needs.

April 1977

ANNEX 18Page 5 of 7

- Table 1: PRESENT TARIFF STRUCTURE

Stage I Tariff /1

UnitMonthly Monthly Consump-

Consumer Fixed Entitle- tionCategory Charge ment Charge /2

--- MK--- -- Ig/mo-- ---MK----

HO/O, HO/i 1.25 1,500 .80 /3, 1.00

Other Residential (See pp. 10 and 11 ofAnnex 17) .80 /3, 1.00

Kiosk Users - - 1.25

Business,Institutions,and Others (See pp. 10 and 11 of

Annex 17) .80 /3, 1.00

/1 Effective January 1, 1977;

/2 Unit charge per thousand Ig;

/3 MK 0.80/000 Ig would apply to first 5,000 gallons consumed in excess ofmonthly entitlement. Remaining consumption is billed at MK 1.00/000 Ig;

April 1977

ANNEX 18

Page 6 of 7

Table 2: TOTAL REVENUE IMPLICATIONS OFPROPOSED CHANGES IN TARIFF

Total Annual Revenue (MK)Consumer 1975 1975Category Water Sales Tariff /1 Stage I /2 Stage II

(000 Ig)

Residential /3 (792,879) (567,329) (627,044) (1,027,827)

HO/O 22,985 16,089 17,558 26,299HO/1 332,262 222,616 251,677 401,972HO/2 19,709 14,979 17,137 27,001HO/3 65,275 50,915 56,971 89,427HO/4 337,124 249,472 269,247 461,860HO/5 7,975 6,539 7,200 10,926HO/6 7,549 6,719 7,254 10,342

Kiosks 30,044 18,026 18,026 18,026

Business,Institutions,and Others 1,198,033 1,072,938 1,377,738 1,641,305

TOTALS 2,0202956 1,658,293 2,022,808 2,687,158

Increase fromprevious tariff - 21.9% 32.8%level

]1 As amended in July 1975;

/2 Effective January 1, 1977;

/3 The HO water customer categories are described in the Blantyre WaterworksBylaws, 1975 (see Annex 17), and range in ascending order from thecustomer resident in the area of the highest (HO/0) to the lowest (HO/6)population density.

April 1977

ANNEX 18Page 7 of 7

Table 3: REVENUE IMPLICATIONS OF TARIFF CHANGESFOR RESIDENTIAL USERS

Percent Increasein Average Bill

Average Monthly Bill from PreviousAverage Monthly (MK) LevelConsumption per 1975 Stage Stage Stage Stage

Category Connection Tariff I /1 II I /1 II… Ig--------

HO/O 3,360 2.37 2.74 3.80 16 39

HO/I 4,730 3.19 3.83 5.68 20 48

HO/2 8,490 6.47 7.89 11.63 22 47

HO/3 12,260 9.53 11.44 16.80 19 47

HO/4 13,680 10.14 11.68 18.74 15 60

HO/5 21,440 17.60 20.69 29.37 18 42

HO/6 18,390 16.41 18.89 25.19 15 33

11 Effective January 1, 1977.

January 1977

< f _ tr.~~~~~~~chilek T.x |T. Ln , lorns rZ..bo

~~~~~~~~~~~~~~~~~Fom Wlker<ts .Z /v

aHIWH,H Err ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~Fer ~oChl

CHL * : 0

/ '-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4

P'o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I

K~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

0 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~!r f rf0te.:/;; \ A N T

I~~~~~~~~~~~~~~~~~~~~~~~I

/ \ T .V lfirB¢uNam / . if t: ?, W > - ^r % SURN T.M~I.r

T. Ch,k... / S ; :- :;

-95. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -

MALAWI Vi.a9

BLANTYRE WATER SUPPLY PROJECT z i Dii

E.istmg P,.ject Fulwre K r try e re

End PH- IV)l977-19 84111985-19901

,

_ Supply moins TP M;.k5r-d

13 Wt., fri-t-et pirt .P r di

Frincip. mg plows I r

Wt -c--/ boudory R HppIy Hav

RicersLan,d reserve areas Hv.

Squatter areasCity b0o,vd-r' Lirmit oF plaveed 4 oo

-rban development KILOMETER, r S - I

;npI, ,rdH,.ynyr~~~~~~~~~~rp,~~~~ MILES11,. a .J ,cS o / e. h I.r .{] *e ° \ ] Z -* *> e>:. CHI

Malawi Appraisal of Blantyre Water Supply Project - World ...

Documents

Transcript of Malawi Appraisal of Blantyre Water Supply Project - World ...