Zambia Mining Township Service Project water and sanitation services

concluded

In 1999 an Asset Holding Company of the Mining and Municipal Services Limited (AHC-MMS) took the asset ownership and management responsibility over the water and sewerage services that were spanned off the Zambia Consolidated Copper Mines (ZCCM) during its unbundling and privatization reform. AHC-MMS was wholly owned by ZCCM, which was majority owned by the Government of Zambia. With few exceptions, the water and sewage service was conducted via individual household connections. It was expected that after a transition period, the ownership of the assets will be transferred from AHC-MMS to the municipalities. In 2001, the AHC-MMS contracted technical and commercial operations of the water supply and sanitation services and solid waste management to a private operator (PO) under a four-year performance based management agreement. The management contract with private operator was intended only for a transition period. The award of the management contract to the French operator Saur International was based on the lowest competitively fixed fee. The PO took over the management of the system in January 23, 2001. The contract was extended by eight months and was fully completed in August 23, 2005. The management contract operational areas were located within five districts on the Copperbelt, namely Kitwe, Chingola, Mufulira, Chililabombwe and Luanshya, with a City Council for Kitwe and Municipal Councils for the four other districts. Two intertwined but distinct utility systems existed in the Copperbelt, the mine operated systems (Mine Systems) and the Council Systems. The services included water treatment and distribution, as well as sewage collection and treatment. AHC-MMS agreed to pay the PO a management fee and capped incentive fees based on the degree of achievement of pre-defined annual performance targets. The PO was responsible for operating and maintaining AHC facilities, billing customers and collecting on behalf of AHC. The PO was provided with an “Operations, Maintenance and Repair Fund” as well as a “Rehabilitation Fund” in order to finance essential operation and maintenance costs for the mine townships. 92.7% of the committed US$38.0 million (actual US$ 40.16 million) went to support and finance the Management Contract, AHC-MMS, and Water and Sewerage Rehabilitation Works under the 4.5 years World Bank Zambia Mining Township Service Project (MTSP). The financing was provided by IDA (US$37.7 million specific investment loan/credit) and Zambian Government (US$ 0.3 million). Capacity 36,436 is number of households in the 5 townships None