Now that you have completed this study session, you can assess how well you have achieved its Learning Outcomes by answering these questions.

Worku and Samson, two friends, visited their village over the Easter holiday and were in conversation with some of the elders there. The elders were discussing the new pipeline bringing drinking water to their houses, and asking why they had to pay for it when water was a basic need that the government should provide free. What do you think Worku and Samson told them?

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They would probably have said that for water to be safe, it has to be treated. The treatment process is quite complicated, with many steps, and requires equipment, energy and chemicals. Money is needed for this, and also for the pipelines and pumps to take the water to their village. The fairest way of recouping the money is to charge people for the amount of water they use.

  1. In setting water tariffs, the aim is to recover the cost of water supply. What are the different components that make up O&M costs and capital costs?
  2. How is it possible to recover the cost of water supply when the water tariff for domestic use is less than the actual cost of the water?

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  1. O&M costs include the salaries and benefits of the staff; administrative and office costs; and the costs associated with water production and distribution (such as the cost of chemicals, energy, repair and maintenance, and water analysis).

    Capital costs refer to the cost of new equipment; money needed for expansion of the existing system to cope with increased demand for water; and money required for external professional and technical support.

  2. The lower water tariff for domestic use is balanced by the higher water tariff charged to industrial and commercial establishments.

Think about different types of water meters and methods of billing, and fill in the following table.

Simple meter Smart meter


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Here are some points you may have thought of.

Simple meter Smart meter

Low cost



Gives employment for people as meter readers are needed

Does not require a meter reader to visit to take a reading

A water bill can be generated quickly and automatically

Can give a warning if there is a leak

The user can see the hourly rate of water consumption


Requires a person to physically collect data

Generating a water bill takes time

Will not warn of a leak

Does not inform user of hourly water usage


Relies on sophisticated technology that requires technical expertise

Needs to be handled carefully

Reduces the opportunities for employment

Beheilu is a construction worker who lives with his wife and six children in a poor neighbourhood. He spends about 20% of his income on water bought for his family at the water kiosk in his area. He would like to have a private water tap in his yard but is unable to pay the high price for the connection, and cannot approach a bank because he does not earn very much. Having studied the material in this study session, what advice would you give him?

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He should be advised to obtain a microloan if he can. This type of loan is designed for people in his situation, and charges a low interest rate.

Last modified: Monday, 3 October 2016, 7:45 AM