Linking tariff structure changes to improved utility performance: the case of NWSC

The design and implementation of an efficient, equitable, and sustainable tariff system remains a high priority and a great challenge for public and privately operated water utilities in developing countries. This paper attempts to show the different tariff structure changes that were adopted by the National Water and Sewerage Corporation ( NWSC) since 1998. In summary, the tariff reforms included; the reduction of the connection and reconnection fees, the indexation of the tariff, the re-balancing of the tariff and the introduction of a new connection policy. The implementation of the above tariff changes have shown that cost reductions have implicit efficiency gains which can lead to the improved financial health of a company. With the implementation of the above tariff changes, the NWSC now operates on an improved financial basis. There are therefore lessons other utilities can learn on how the tariff changes were adopted, implemented, and their resultant effects.