Mali - Operation Contract for Water Supply to Peri-Urban and Rural Areas
Mali - Operation Contract for Water Supply to Peri-Urban and Rural Areas
This is a document (the general conditions and the special conditions) that is simple and well-drafted. It has a number of features that could be used elsewhere, even in common law countries, and it would be beneficial to translate the general conditions into English and Spanish so that a greater audience can benefit from them. There is for instance a useful provision requiring that the contract with end users contain a substitution provision in favor of the Community (so that it is not necessary to novate the user contracts in the event that the operation contract is terminated). The provider is also required to provider performance security equal to 20% of the estimated annual revenue. The contract could benefit from some more specific performance requirements.
| Title | Delegation de Gestion des Adductions d’Eau Potable dans les Centres Semi-Urbains et Ruraux (2004 version) |
| Parties | The local authority and the provider |
| Date | Not specified |
| Duration | N/A, but renewable (article 5) |
| Service being provided | Exclusive service of production, transportation and distribution of water to the public within the specified service area (article 1 and 2) Clear delineation of where responsibility starts and stops |
| Investment obligations | Provider is responsible for the cost of maintenance and repairs (art 17) and extensions and strengthening are new works are the responsibility of the local authority (article 21). Provider is responsible for operating the meters. |
| Funding source | Revenue. The tariff consists of the operator charge, a renewal fund and a community charge (art 23 to 26) |
| Maintenance and rehabilitation requirements | Article 18 and Annex A1. The water tariff is to cover renewal of equipment (on the basis of 20 year amortization, other than the periods listed in art 18). |
| Service levels specified | Article 8 requires that service specifications are to be part of the agreement and are to be agreed between the parties. Water quality is to meet the applicable regulations (art 14) and quantity to meet the requirements of the users. There is a minimum level of pressure specified (art 14). |
| Performance targets | N/A |
| New connections | Article 19. The cost of a new connection is for the user. |
| Bonus/penalty system | The provider should establish a guarantee to the local authority before the commencement of its activities. The deposit should be made to the account of funds of rehabilitation/extension of the local authority. (article 17) |
| Tariff setting - who is responsible | Change of tariff can be demanded by the provider or by the local authority. All changes of tariff and license fee should be approved by a decision of Community Council. (article 27) |
| Tariff collection | The provider collects the revenue as a whole and then transfers the levy/license fees to the local authority. (article 27) |
| Payment - does provider keep revenues/get paid fee | The operator keeps revenues (other than payments to be made from revenues). (article 27) |
| Accounts and reporting | (Art 39 to 41) – semi-annual, annual reports and accounts and also monthly reporting |
| Capex and renewal | |
| Asset ownership | Community – but a detailed asset register is to be annexed (including age, projected life, state of repair). It is clear what is to be returned to the Community at the end of the contract. |
| Is any sum put aside for rehabilitation? | The local authority opens a bank account on its own name to provide funds of rehabilitation/extension. The provider is obliged to make payments of license fee of rehabilitation/extension directly to this account. (article 25) |
| Regulator/monitoring body? | Community (art 43) and the Direction Nationale de l’Hydraulique (44) |
| Dispute resolution | Reconciliation; litigation through administrative tribunal. (art 34) |
| Customer complaints mechanism | The local authority serves to resolve matters between the users and the provider such as breach of the rules of use by users. (article 47) |
| Other | Performance security to be provided by provider (20% annual revenue) |
