Region: Sub-Saharan Africa
Country: Benin
Sectors: Water and Sanitation
Keywords: Contractual Provisions, Affermage
Document(s):
Benin - Modele 2 - contrat d'affermage - contrat tripartitie commune/ UAE/ fermier bytes
Document Summary:
This is a simple tripartite affermage contract that sets out simple service obligations between the Community, the water user association (AUE) and the provider.
Document Details:
Unlike the simple bipartite affermage (model 1), the monitoring of the contract is by the AUE (and by the Commune for technical and financial aspects). The AUE is also responsible for making sure that the users pay for the water used. The tariff is revised with the approval of the Community Council. The various fees for rehabilitation and budget are paid into a joint account of the Commune and the AUE. There are very few service requirements set in the contract but there is a curious requirement to ensure the operation of the facility "to the satisfaction of the users" (this seems rather open ended and vague) as well as to meet "normes techniques" (technical norms). It might be appropriate in replicating this arrangement to have some of the technical norms specified in a schedule to the contract. There is no need to have any specific obligations in this contract regarding increases in connections as the provider takes the net revenues and so is incentivized naturally to increase connections. The provider is responsible for repair and maintenance but not major renewal and replacement and extension (which will be funded out of the rehabilitation fund that comes out of the licence fee). The provider implements/ oversees any major renewal or extension, as per the annual capital investment plan. While this contract is developed in a civil law context using the affermage model, it could be adapted to a common law context where it was possible to assume full cost recovery and where the water user association could perform the sort of role anticipated in this contract.
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Parties |
The Community, the Water User Association (UAE) and the Service Provider |
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Date |
N/A |
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Duration |
3/4/5 years, renewable for a similar period. (article 3.2) |
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Service being provided |
Operation, management and maintenance of the Village Water Supply (AEV) (article 1) in accordance with technical norms (article 5) and to the satisfaction of the users. |
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Investment obligations |
There are minimal investment obligations regarding operations and maintenance of the facilities. The facilities are existing and there is no major renewal or extension unless agreed and funded from the renewal fund. The provider is responsible for replacement and repair of damaged parts (article 5). |
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Funding source |
Revenue from tariffs (complete cost recovery). (article 13) |
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Maintenance and rehabilitation requirements |
The provider is to maintain the works and equipment to the satisfaction of the users. (article 5) |
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Service levels specified |
Articles 5 and 9 (in particular, service of [ ] hours per day, 7 days a week) |
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Performance targets |
None |
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New connections |
Article 10. The user is to pay the cost of the connection but the cost of the meter is to be covered by the provider. Approval for a new connection must be given by the AUE and the provider. |
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Bonus/penalty system |
In case of interruption of water supply without justification from the superior service 24 hours in advance, the community and AUE has the right to penalize the provider of an amount up to 50% of the estimated revenue of water services for the period of interruption. (article 18) |
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Tariff setting - who performs |
The tariffs are specified in the contract (article 11) as well as the charge for a new connection. Tariffs can be reviewed annually. The provider or the community may also request an increase or decrease respectively (in the case of the community, at the request of the AUE). The amount by which the license fee can also be revised annually must in agreement with the Technical Service of the community to take into account renewals etc. The AUE fee is also able to be revised. The change of tariff should be approved by a decision of the Community Council (article 12) |
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Tariff collection - service provider on own or on authority behalf? |
The provider collects the revenue and then transfers each month the license fee (which is fixed in the contract) for rehabilitation, extension and auditing costs, as well as fee for community budget, to the designated bank account in the joint names of the community and the AUE + the AUE fee (which is to cover the AUE's costs and expenses) to the AUE (this fee is fixed in the contract). There is also a payment to be made to cover the annual budget. (article 13) |
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Payment - does provider keep revenues/get paid fee |
The operator keeps revenues (other than those paid to community under the licence fee and to the AUE under the AUE fee). (article 13) The water user association is to ensure that the users respect the rules, in particular payment of the water tariff. |
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Is any sum put aside for rehabilitation? |
Yes, a license fee for the rehabilitation, extension and auditing is established and is paid by the provider every month. (article 13) |
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Accounts and reporting |
The provider is to have accounts drawn up by accountants approved by the community.(article 5). It is to make monthly reports and annual accounts to the community and to the water users association. |
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Proposals for capital expenditure and renewal |
The provider is to propose to the community (with a copy to the water users association) a program of investments each year, to be financed from the rehabilitation fund (article 5) |
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Asset ownership |
The assets and any new assets are held by the community (article 7) |
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Regulator/monitoring body |
The water user association plays the role of monitor and supervisor of performance of the provider (article 6 and 15). The commune can also oversee the technical and financial performance. |
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Right to cut off supply |
Provider has a right to suspend the service for non-payment (article 9) |
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Dispute resolution |
Reconciliation; litigation. (article 23) |
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Customer complaints mechanism |
There is no provision specified - but the agreement is with the community and so it is likely that complaints would be addressed to the community. |
Updated: October 25, 2021