Kiosk Systems: Main Principles

Kiosk Systems: Main Principles

June 2007

This is a Summary of how to design and operate Water Kiosks in order to offer sustainable access to safe water in the settlements of the poor according to the relevant MDG declaration (MDG fast tracking). These principles are a summary of lessons learned in several countries in Africa where implementation has ensured that Kiosk respond to the basic requirements lined out in poverty and human rights based approaches such as sustainability, affordability, etc.

1  Urban Areas Suitable for Kiosks

·  The following types of urban areas in Kenya should be considered as areas where water kiosks can improve, in a sustainable way, accessibility to treated water:

o  Informal settlements (illegal slums).

o  Planned areas with low-income housing (where most landlords are poor and unable to invest in a yard tap).

o  Planned areas/estates which are owned by the Municipality.

o  Sub-centres of cities and towns with urban characteristics (for example, the sub-centres (Katua, Top Station) along the road between Kitale and Eldoret).

2  Main Objectives of a Kiosk System

The main objectives a Water Service Provider (WSP) should be able to achieve with a kiosk system which can supply the poorest urban socio-economic strata, can be summed as follows:

·  Social objectives (making water more accessible).

·  Public health objectives (contributing to a reduction of the incidence of water and sanitation related diseases).

·  Commercial and financial objectives (the system is sustainable, i.e. the kiosk system is able to recover its costs).

·  Technical objectives (the system is user friendly and easy to maintain and repair).

·  Environmental objectives (the system does not contribute to environmental degradation and the resource – water – is not wasted).

All objectives directly or indirectly relate to the sustainability of the water supply schemes. For example, a kiosk system is only viable in the long run if it is able to meet the financial and commercial targets of the service provider. The social objective can be translated into “accessibility”, a concept which can be dissected into the following elements:

·  Distance between the dwellings and the nearest kiosk.

·  Maximum waiting time at the kiosk during peak demand hours.

·  The price (affordability) of water.

·  The design of the kiosk (user-friendliness and ergonomic design).

·  Business hours of the kiosks.

·  The quality of the service provided by the Water Vendor.

Considering sustainability and the financial/commercial objectives in particular also implies that the long and short term interests of the following 5 main stakeholders are taken into account:

·  The population of the urban areas concerned.

·  The Water Service Provider.

·  The Water Services Board.

·  The Water Vendor who operates the kiosk.

·  The Municipal Council.

It is often assumed that the various objectives of a kiosk system and the interests of the various stakeholders are incompatible. The social objective of a kiosk system is often assumed to be incompatible with the financial and commercial objectives of service providers. If treated water is affordable for the urban poor residing in informal settlements, then collections cannot cover the operation, maintenance and replacement costs of these supply schemes. If water is affordable, and if the service provider is able to cover its costs, then the commission (a percentage of the tariff) given to the Vendors will not allow them to earn a decent living.

Kiosk systems, however, can achieve all their objectives and satisfy the needs and interests of all stakeholders, provided they are well planned and provided certain conditions are met such as a minimal population density and the willingness and ability to pay a certain tariff. Proper planning of kiosk schemes involves the active participation of the community and its representatives.

3  Main Principles of the Proposed Kiosk System

The main principles, upon which a successful and sustainable kiosk system is based, can be summed up as follows:

·  Kiosks should be operated by Water Service Providers (WSPs) and not by a community-based organisation.

·  Each water kiosk is managed by a Water Vendor.

·  Kiosk Water Vendors should not become company employees but sign a (kind of franchise) contract with the WSP.

·  The Vendor signs a contract with the company which stipulates in detail the rights and responsibilities of both parties as well as the rights and responsibilities of the customers and other stakeholders (community-based organisations, etc.).

·  The Vendor is not an employee of the company, he or she operates the kiosks as his or her own business.

·  Water Vendors, in principle, are treated like any other customer of the company: They have to be charged according to metered consumption. This implies that customers have to pay for the quantities they fetch. In other words, the kiosk customer has to pay for each container fetched. This excludes the introduction of flat monthly charges.

·  The retail price customers have to pay at the kiosk is fixed by the company and approved by the Regulator. In other words, Vendors are not allowed to determine the retail price of kiosk water.

·  The Vendor is allowed to sell other goods at the kiosk. The contract specifies the types of goods which are not allowed to be sold at the kiosk.

·  The Vendor has to be present during the business hours he or she has agreed upon with his or her customers.

·  The local community or its representatives are not involved in the day-to-day management of the water kiosks. In principle, the kiosk system can function without community participation.

·  The Vendor and the kiosk are monitored and inspected by the WSP.

·  As far as the financial responsibilities of the Water Vendor are concerned, the Vendor is monitored and controlled by the WSP.

·  The Vendor receives training before or after signing the contract with the WSP.

4  Kiosk Systems, Community Participation and Customer Rights

Community participation is a key element of the successful introduction of sustainable kiosk system in urban contexts. It is important, however, to clearly separate the roles and responsibilities of the various stakeholders:

The community should be involved in:

·  Finding appropriate sites for the kiosks (implementation phase).

·  The identification, recruitment and training of Water Vendors (implementation phase).

·  The mobilisation and sensitisation of the population (implementation phase).

·  The prevention of vandalism (operation phase).

·  The communication of customer complaints (operation phase).

The WSP should be responsible for:

·  Financial management and control (including cash collection).

·  Tariff setting (tariffs have to be approved by the Regulator).

·  Water quality.

·  Supervision of Vendors.

·  Assuring adequate service levels.

5  Planning a Kiosk System: Assessing the Market for Kiosks

Many kiosk systems do not perform well because during the planning phase only attention was given to the social and public health objective, whereas other objectives were hardly considered.

The neglect of the commercial/financial and management aspect during the planning phase often becomes apparent when the kiosks (due to their small clientele and low tariffs) are unable to generate enough revenues to keep Water Vendors motivated. Indeed Vendor incomes are often forgotten when designing a kiosk system. Instead of calculating the number of kiosks required on the basis of population data and expected demand for treated water, the social objective is translated in a number of norms and assumptions, Norms regarding distances between kiosks and dwellings (for example a maximum distance of 200 metres) and assumptions and norms concerning per capita consumption levels (for example, peri-urban residents consume or are expected to consume 20 litres per person per day).

The outcome of this emphasis and neglect is that the number of kiosks which is constructed in an area is too high. This results in low Vendor incomes and subsequently in low collection efficiencies.

Why is the long-term sustainability of kiosk system often neglected? The answer is simple: A study of the potential market for treated water is not carried out because it is often assumed that residents will consume the quantities specified in existing norms and recommendations.

The calculation of the number of kiosks which are required to satisfy demand in a given area has to be based upon a detailed area focused assessment of the need for kiosks (number of households which is expected to make use of kiosks) and for kiosk water (expected daily per capita kiosk water consumption).

This assessment has to consider and/or collect data on:

·  Legal status of the area.

·  Current population and population growth indicators (through area extension o or densification).

·  The social and economic make-up of the area (are residents owning or renting their homes, etc.).

·  Access (distance, price, water pressure, lack of restrictions, etc.) to alternative sources of safe and unsafe water (yard taps, springs, protected wells, etc.).

·  Technical constraints (related to network extensions, water supply, etc.).

·  Land ownership and land rights.

The assessment has to be:

·  Rooted in a realistic definition of adequate water supply and as result a realist coverage definition.[1]

·  Based on a kiosk retail tariff which allows the WSP to cover its costs, which allows the Vendor to earn a decent income and which is based upon the willingness of residents to pay for treated kiosk water.[2]

6  Planning a Kiosk System: Calculating the Required Number of Kiosks

The calculation of the required number of kiosks should be based upon a detailed market assessment and upon a coverage definition. Such a definition should incorporate the following parameters[3]:

·  Price of water; (for example) should not exceed the price of minimum consumption at the individual connection (social tariff plus lump sum for connection maintenance).

·  Functionality; (for example) installation regarded as functioning must operate at least 12 hours a day and 80% of time = 300 days a year except for intermittent supply programs and other arrangements within the service level agreements signed between the providers and the Regulator.

·  Walking distance; (for example) expressed in an average walking distance from the home of the users to an installation according to the density of population – 200 metres for high density and 300 metres for lower density.

·  Waiting time; should not exceed 15 minutes on average.

·  Water pressure; (for example) at the outlet the requirement for the water pressure is the same as for the individual connections (7 litres per minute as minimum requirement)

·  Sustainability, (for example) income must cover the unit production cost for the entire system and at the same time provide sufficient incentives for Vendors to guaranty continuous operation. The capital costs of the system should be covered through cross-subsidies.

·  Design of installation, (for example) should allow for hygienic conditions, be ergonomic friendly, provide customer safety (i.e. secure location) and be vandalism proofed.

In order to consider a resident to be covered, all these parameters have to be fulfilled.

7  Need for Mixed Systems and Kiosks Phase out Concept

Residents in areas which will be supplied through kiosks should have the option to upgrade their water supply, for example, by applying for a yard tap or a house connection. Offering a mixed water supply system consisting of water kiosks, house connections and even institutional (local clinics, etc.) and commercial connections, is preferable as it does not put a freeze upon the social and economic developments taking place in the low-income areas. Moreover, as households with house connections tend to consume more water, a mixed system can make a significant contribution to the revenue base of a service provider.

Water kiosks should be regarded as temporary solutions. If the demand for domestic (yard) connection increased there will be need to reduce the number of kiosks. During the planning phase the project may anticipate the gradual phasing out of kiosk by ensuring that open kiosk can be transformed into yard taps.

8  Use of Water Kiosks for HIV/AIDS sensitisation and prevention

Water Kiosks are installations which are frequented almost daily by the households in contrast to infrastructure such as dispensaries or hospitals where people only go when their need medical help or visit patients. Therefore, health structures should use Kiosks for sensitisation and encourage also NGOs to support this approach. This option should also be taken into consideration by the water company when Kiosk operators and company staff are trained in Kiosk management.

______

1

[1] Such a national coverage definition is currently being developed by the Ministry of Water and Irrigation.

[2] Studies carried out in Zambia show that the willingness and ability of the residents of illegal slums to pay for treated kiosk water are high. Sometimes the willingness to pay (amount/m3) is higher that the willingness of residents in medium and high-cost residential areas. The low tariffs are, however, often the result of a pro-poor political discourse which is not rooted in the willingness and ability of residents to pay not upon the financial requirements of the Service Provider.

[3] These parameters were developed in Zambia by the Regulator, NWASCO.