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REPUBLIC OF ZAMBIA

LUSAKA SANITATION PROJECT

IMPLEMENTATION SUPPORT MISSION

February 9- 17, 2017

Aide Memoire

I. INTRODUCTION AND ACKNOWLEDGEMENTS

1. A World Bank team1 visited Zambia during the period February 9-17, 2017 to review progress on the

Lusaka Sanitation Project. The overall objective of the mission was to review implementation progress and

to support Lusaka Water and Sewerage Company (LWSC) in accelerating key project activities. This aide

memoire summarizes the main mission findings and recommendations, and reflects the comments made at a

wrap-up meeting held on February 16, 2017 at the Ministry of Water, Sanitation and Environmental

Protection (MWSEP) and chaired by Dr Edward Chomba, Permanent Secretary MWSEP. The mission

wishes to thank the Government of Republic Zambia (GRZ), and officials from MWSEP, LWSC, Lusaka

City Council (LCC), Zambia Environmental Management Agency (ZEMA), and National Water Supply and

Sanitation Council (NWASCO) for the for the excellent collaboration and the courtesies extended. The full

list of key persons met is attached in Annex 1. As agreed with LWSC, this aide-memoire will be classified

as a public document under the World Bank’s Access to Information policy.

II. KEY PROJECT DATA

2. Key Project Data (as of February 15, 2017) Project Data Project Performance Ratings

Board Approval: May 22, 2015

Effectiveness Date: June 17, 2016

Current Closing Date: December 31, 2020

Summary Ratings: Last Now Trend

Achievement of PDO S MS ▼

Implementation Progress MS MS ◄►

Credit Amount: US$63.9 million2

Amount Disbursed: US$12.4 million

% Disbursed: 19 percent

Ratings: HS=Highly Satisfactory; S=Satisfactory; MS=Moderately Satisfactory; MU=Moderately Unsatisfactory;

U=Unsatisfactory; HU=Highly Unsatisfactory; ▲ Improving; ▼ Deteriorating; ◄► Stable

III. SUMMARY OF MISSION FINDINGS

3. Project implementation is gaining momentum. Works contracts for priority sewerage works have

been signed. This package of works includes three subprojects– i.e. expansion of sewer network in

Emmarsdale (CSE-08), expansion of sewer network along Kafue Road (CSE-23), and upgrading of

Ngwerere Western Interceptor (CSU-05). The works were procured in two lots. Lot 1 included CSE-23 and

Lot 2 included CSE-08 and CSU-05 subprojects. The total contract amount for the two lots is US$7.5 million

– which is about 30 percent lower than the original engineer’s cost estimate (US$10.9 million). The

1The mission comprised: Josses Mugabi (Task Team Leader); Odete Muximpua (Water and Sanitation Specialist and Co-Team

Leader); Zvikomborero Hoko (Sanitary Engineer); Wedex Ilunga (Senior Procurement Specialist); Richard Everett (Social

Development Specialist); Mwansa Lukwesa (Environmental Specialist); Tambulani Chunga (Sanitation Marketing Consultant); Peter

Hawkins (Senior Water and Sanitation Specialist); and Charles Odonga (Institutional Development/Utility Management Specialist) 2 Credit amount when expressed in USD is lower than at the time of approval due to SDR-Dollar exchange rate fluctuations. The

original credit amount was USD 65million, implying an exchange loss of USD 1.1 million.

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contractors are expected to mobilize no later than March 30, 2017. Construction period is estimated at 12

months. Procurement of consultancy services for construction supervision of priority sewerage works is also

in advanced stages. Contract negotiations have been completed and LWSC expects to sign the consultancy

contract by March 15, 2017.

4. However, approval of safeguards instruments for priority sewerage works is delayed and this

may impact on the construction schedule. The Environmental and Social Impact Assessment (ESIA)

Report and Resettlement Action Plan (RAP) for year 1 sub-projects have been prepared, and extensively

reviewed by the Bank team. Both documents have received a provisional approval by the Zambian

Environmental Authority (ZEMA), and a final public meeting – the last step to receiving final ZEMA

approval and authorization to proceed – has been held on January 25, 2017. At the same time, the documents

will need to be cleared by the Bank, publicly disclosed and any compensation payments made before

construction can start. Both the ZEMA and Bank clearances of the safeguards documents are expected by

March 15, 2017. However, LWSC is yet to secure Government funds for compensation of Project Affected

Persons (PAPs) as per the RAP. Both the Ministry of Finance and MWSEP have committed to expedite the

process of securing compensation funds (about $0.49m) and transferring the funds to LWSC no later than

March 31, 2017. The mission also discussed and agreed on safeguards instruments for the rest of the

planned works under the project and a schedule of their preparation. TORs for Year 2-5 Safeguard

instruments have been prepared by LWSC and cleared by the Bank. Environmental and social impacts,

including possible resettlement, of the proposed Year 2-5 sewerage works and Faecal sludge treatment

facilities will assessed through standard ESIA and RAP processes. Environmental and social impacts related

to the collection and transportation services will be addressed through Environmental and Social

Management Plan(s), to be developed as part of the FSM business development study. The ESMP(s) will be

supplemented by health and safety guidelines and operational procedures and employee Codes of Conduct.

The potential environmental and social impacts of the onsite services (OSS) subproject will be addressed

through ESMPs, EHS guidelines and Employee Codes of Conduct developed as part of the OSS Design and

Construction Supervision study and consultancy. In addition, it is understood that ZEMA will require a

separate Strategic Environmental and Social Assessment (SESA) to assess the collective impacts of the

household units, for which LWSC will develop a TOR.

5. Preparation of additional sewerage subprojects is significantly delayed, and their

implementation is now likely to start in Year 3 of the project. Feasibility studies were completed in

August 20163 for sewer network sub-projects (worth about US$130 million) that were originally

programmed to start implementation in the second year of the program, with financing from WB, EIB and

AfDB. However, LWSC has not yet been able to progress to detailed design for the WB sub-projects, due to

a number reasons. First, LWSC decided to procure a separate consultancy for detailed design rather than

expand the scope of the feasibility study consultancy –a decision that led to further delays in completing

preparatory activities. Second, there was uncertainty on the scope of detailed design consultancy, including

(i) whether or not to include subprojects proposed for financing by EIB, and (ii) whether or not to include

additional subprojects without a full feasibility study. As a result, LWSC took much longer to finalize the

ToRs for detailed design consultancy. The final scope of the consultancy includes detailed design, tender

documentation and construction supervision of five sewerage sub-projects estimated at US$30 million, as

well as full feasibility study and detailed design for an additional five subprojects (see Annex 2 for details).

The Bank provided no objection to the ToR on December 16, 2016, and LWSC proceeded to publish a

Request for Expressions of Interest (REoI) on December 27, 2016. The shortlist and RFP were cleared by

the Bank on February 3, 2017. LWSC issued the RFP to shortlisted consultants on February 7, 2017, with a

proposal submission deadline of March 17, 2017. LWSC will fast-track the rest of the procurement steps to

ensure that the consultancy contract is signed no later than June 30, 2017. The consultant will then be

expected to produce detailed designs and tender documents for the first five subprojects within 6-9 months.

This means that the next set of sewerage works under the project (after the priority works above) will only be

ready for tender in the first quarter of 2018.

3 Three months behind schedule

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6. Progress on the onsite sanitation (OSS) component has been slow, but is expected to pick up

pace over the coming months. Feasibility studies for OSS interventions were completed in August 2016,

but LWSC has not yet progressed to detailed design. A significant amount of time has been spent on firming

up a strategy and principles to guide implementation of OSS interventions under the project and beyond – an

important step that was completely overlooked at feasibility stage. Consultations have been carried out on

LWSC’s evolving strategy for OSS, including on sustainable business models for delivering both the

infrastructure and fecal sludge management (FSM) services at scale. The Bank’s September 2016 mission

helped in firming-up various aspects of the strategy, and how project resources could be better utilized to

support operationalization of the strategy (for details see September 2016 mission aide memoire). A set of

actions was agreed to accelerate progress, including fast-tracking the procurement of additional technical

assistance (TA) services that are critical to getting this component ready for implementation. The mission

reviewed and enhanced the draft Terms of Reference (ToRs) for design and supervision of OSS facilities

(improved toilets and septic tanks), and FSM business development. It was agreed that LWSC will finalize

the ToRs taking into account Bank comments and advertise all the REOIs no later than March 20, 2017.

Thereafter, LWSC will fast-track the rest of the procurement steps and ensure that all three consultancy

contracts are signed no later than July 30, 2017. The consultants will then be expected to produce detailed

designs and tender documents within 6-9 months. This implies that OSS works and goods packages will only

be ready for tender in the first quarter of 2018.

7. LWSC has made good progress in defining the nature and scope of institutional strengthening

activities to be supported under the project. An institutional assessment of LWSC was completed in

January 2016, which resulted in LWSC developing an outline Institutional Development Action Plan

(IDAP). During the mission, progress was made in firming up the plan and identifying a set of actions to

help kick-start LWSC’s change process. Further, the mission supported LWSC in undertaking a rapid,

qualitative assessment of LWSC’s organizational structure, behaviour, capability, tools, and ability to

influence the external policy environment. For each of the areas, the assessment examined the situation

encountered in LWSC and compared it against what would be expected in a well-run utility in order to

identify gaps and issues to be addressed. This assessment helped to inform further development of the IDAP,

and will provide a basis for tracking progress (see details in Annex 3). The IDAP is designed to contribute to

overall performance of the utility by, among others, promoting a positive organizational culture and

productive work environment; addressing long standing structural issues; enhancing staff capabilities;

improving operational processes and systems, as well as strengthening LWSC’s ability to influence the

external policy and regulatory environment. LWSC management will finalize internal consultations on the

IDAP in the coming weeks, and ensure buy-in from across the organization. A Special Task Force (Change

Management Team) will be appointed by the Managing Director to spearhead the process and to ensure that

the action plan is finalized and approved by the Board no later than April 15, 2017. The mission also

encouraged LWSC management to conceptualize and implement regular short-term, high-impact

performance improvement programs within the context of the IDAP.

8. There are however a number of unresolved policy and regulatory issues that are critical to

achieving project objectives related to sustainability of sanitation services. These include: developing

new economic regulation tools and instruments for urban sanitation services; approving a sustainable tariff

structure for urban sanitation services; strengthening enforcement of sanitation-related bylaws, building

codes and regulations; establishing a predictable public financing stream for the public good aspects of urban

sanitation; security of tenure arrangements for peri-urban areas; and improving accountability arrangements

between different sanitation players in the urban space. The mission strongly recommends that LWSC

management pays close attention to these issues and take deliberate actions to influence policy and

regulatory changes. With respect to sewerage tariffs, NWASCO confirmed that (i) as a regulator, they are

not bound by the targeted tariff increases included in the project’s result framework; and (ii) their approach

to sewerage tariff setting will change from one that is based on a percentage of water tariffs to one based on

actual costs of providing sewerage services. To facilitate this change, NWASCO is in the process of

developing guidelines for separation of costs for water and sewerage services. The guidelines are expected

to be ready for use by utilities before the next pricing review in September 2017. At the same time,

NWASCO has initiated stakeholder consultations on improving policy and regulatory framework for OSS

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services. These consultations are expected to result in specific policy proposals or changes in existing legal

frameworks (e.g. WSS Act) aimed at further strengthening the enabling environment for ‘integrated’

sanitation service solutions (i.e. mixed use of off-site and on-site solution).

9. The mission noted several key policy issues that are reflected in LWSC’s evolving strategy for OSS

and the principles the utility has formulated to guide planning and design of OSS interventions. For instance,

LWSC is pushing for sustainable public financing mechanisms for sanitation services (including the public

good aspects) beyond the project, through an increased sanitation surcharge and a review of restrictions

imposed by the regulator regarding what can be financed by the surcharge. However, discussions with

NWASCO revealed that the regulator had (on request from LWSC management) temporarily suspended the

sanitation surcharge due to LWSC’s inability to meet its obligations in terms of completing peri-urban

sanitation projects approved by NWASCO as eligible for financing through the surcharge4, and LWSC’s

continued use of the accumulated resources for other purposes (e.g. to meet short-term cash flow

requirements). The mission flagged this issue with the new LWSC management who agreed to review (in

consultation with NWASCO) the decision and issues that led to the suspension, with a view to reinstating the

surcharge. The mission emphasized the importance of the sanitation surcharge as one of the public financing

mechanisms for sanitation investments in Lusaka, and that the scale up and sustainability of OSS services

beyond the project is partly dependent on maintaining the surcharge mechanism as a source of financing.

10. With respect to enforcement of sanitation-related bylaws and regulations, LCC is empowered by the

Public Health Act to regulate and enforce rules for the construction and use of sanitation facilities, but it

lacks capacity (funds and human resources) to implement this enforcement. Given this constraint, LWSC

plans to use financial incentives (i.e. partial financing of containment structures) to encourage

households/landlords to improve sanitation facilities. Those customers who do not respond to the incentive

will be specifically targeted through an enhanced enforcement program implemented in collaboration with

LCC public health teams. The exact nature and scope of the proposed enforcement program is currently

unknown. It is expected that program will be designed and implemented as part GIZ’s technical assistance

package to LWSC and LCC – which was initiated recently. Specifically, GIZ will support LCC in improving

systems for environmental health monitoring and enforcement related to sanitation (including wastewater,

on-site sanitation, faecal sludge and solid waste management). Further, the mission was pleased to learn that

LCC is accelerating efforts to grant security of tenure to households in various peri-urban areas in Lusaka.

This move is good for sanitation services as it is expected that a secure tenure status would provide

additional incentives for households to invest in improving sanitation.

11. Communication and advocacy has improved. The mission noted significant improvements in

communication and advocacy activities under the project, in line with the recommendations of the June 2016

Bank mission. Efforts have been made in creating awareness on the Lusaka Sanitation Program in general.

A workshop for the media has been conducted and public awareness campaigns have been done through

radio programs. Further, a joint LWSC-LCC branding initiative is gradually taking shape with the new city

Mayor as the champion. Initial advocacy activities will target a cross section of key stakeholders, including

members of parliament, councilors and community leaders. These advocacy efforts will be further enhanced

by the sanitation marketing consultancy–which is currently in advanced stages of procurement – and whose

scope includes both advocacy and marketing communication. LWSC has issued a Request for Proposals

(RfP) to the shortlisted firms with a proposal submission deadline of March 21, 2017. Evaluation will be

fast-tracked and a technical evaluation report sent for Bank review and no-objection by April 15, 2017.

LWSC will fast-track the rest of the procurement steps and ensure that a contract is signed no later than May

30, 2017.

12. The project still face substantial coordination risks, but these are now proactively being

managed by LWSC. Information sharing between partners has improved. The Program Steering

Committee–which is charged with the responsibility to oversee and coordinate program implementation– is

now fully constituted and held its first meeting in January 2017. A program management support consulting

4 At the time of the suspension, LWSC had collected about US$1 million through the sanitation surcharge, and

NWASCO had approved 3 projects for implementation. However, to date none of the projects have been completed.

5

firm (EIB-financed5) was recruited and is providing much-needed technical and program management

support to LWSC. A draft Program Implementation Manual (PIM) has been prepared and circulated to

development partners for comments. Finally, LWSC is taking a more proactive role in developing a

coordinated approach to program implementation–including facilitating the sharing of information,

developing a joint implementation schedule at the program level, identifying critical interface risks and

mitigation measures (see Annex 4 for a summary of the joint program implementation schedule). The

mission recommends that LWSC organizes (in consultation with program funding partners6) one joint

mission within the next six months to discuss, among other things, the program coordination arrangements

and how they could be further enhanced.

13. Disbursements and commitments have increased significantly. This is mainly due to the recent

signing of works contracts for priority sewerage works. The original disbursement schedule assumed that

about US$15 million (23 percent) would be disbursed by the end of FY17. As of Febraury 2017,

disbursements stood at US$12.4million (19 percent), which close to the original projection. However, the

rate of disbursements is expected to slow down significantly over the next 12 months as the rest of the major

infrastructure investments will not be ready for tender until the first quarter of 2018. Nevertheless, the Bank

and LWSC will continue to closely monitor the project procurement plan to identify opportunities for

accelerating disbursements, where possible.

14. Overall implementation progress rating is maintained at moderately satisfactory. Although

there has been some progress since the last formal mission in June 2016 (especially the signing of the first

works contracts under the sewerage component), the mission concluded that the progress registered since

then does not justify an increase in the rating, given the persistent delays on both the OSS and institutional

strengthening components. The PDO rating on the other hand is downgraded to moderately satisfactory due

to: (i) delays in preparation of sewerage subprojects, which has created some uncertainty on whether all

planned subprojects can be fully implemented within the remaining project period; and (ii) unresolved tariff

regulation issues which have put into question the likelihood of achieving PDO indicators related to cost

recovery. The mission also reviewed the Results Framework and updated the baseline indicators for project

monitoring and evaluation (see annex 5).

IV. AGREED ACTIONS

1. Summary of agreed actions. The majority of actions over the next 3-6 months will be

procurement-related. The main focus are the priority consultancy services that required to help defined the

subsequent works packages under the project. Attention must also be paid to completion and implementation

of safeguard instruments for the priority sewerage works. Summary of agreed actions is presented in Table 2

below.

Table 2 – Summary of Agreed Actions

# What When Who Status

Procurement-related

1 Sign consultancy contract for construction

supervision of priority (year 1) sewer network

rehabilitation and expansion

March 15, 2017 LWSC completed

2 Complete procurement process and sign

consultancy contract for detailed engineering

design and supervision of Year 2-5 sewerage

sub-projects

June 30, 2017 LWSC In progress

–

evaluation

of technical

proposals

5 The main financing agreement for EIB lending to the program is expected to be signed in June 2017. In the meantime,

EIB provided a technical assistance grant which has been used to finance the program management support consultancy

6 Current funding partners for the Lusaka Sanitation Program include: World Bank, EIB, KfW, AfDB, GIZ and MCC

6

3 Complete procurement process and sign

consultancy contract for sanitation marketing

May 30, 2017 LWSC In progress

–

evaluation

of technical

proposals

4 Complete procurement process and sign

consultancy contract for design of household

OSS systems

July 30, 2017 LWSC In progress

5 Complete procurement process and sign

consultancy contract for FSM business

development

August 30, 2017 LWSC In progress

– EOI

evaluation

6 Complete procurement process and sign

consultancy services for design of a call

center solution for OSS service delivery

August 30, 2017 LWSC In progress

7 Complete procurement process and sign

consultancy contract for LWSC

organizational restructuring study (Funded by

WB trust fund)

March 31, 2017 WB In progress

Other Actions

8 OSS strategy approved by LWSC Board June 30, 2017 LWSC In progress

9 Bank clearance of RAP and ESIA for priority

sewerage works

March 15, 2017 WB Completed

10 Government funds for compensation

payments transferred to LWSC

March 30, 2017 MoF and

MWSEP

In progress

11 LWSC completes compensation payments May 30, 2017 LWSC In progress

12 Board approval of IDAP April 15, 2017 LWSC In progress

13 Share approved IDAP with the Bank and

other development partners

April 30, 2017 LWSC In progress

14 Organize corporate governance and utility

management training for LWSC Board

members and senior management

April 30, 2017 LWSC and WB On

schedule

15 Review decision to suspend sanitation

surcharge and the issues that led to the

suspension. Share findings and recommended

way forward with the Bank

June 30, 2017 LWSC and

NWASCO

In progress

15. Proposed timing of next mission. The next Bank mission is tentatively scheduled for

September 2017. In the interim, the Bank will continue its close monitoring and technical discussions with

LWSC to help ensure that the agreed action plan targets detailed in this Aide Memoire are met. The team is

currently conducting regular technical discussions /missions to advance progress in various activities of the

project. This approach will be continued over the course of the project.

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ANNEX 1 – LIST OF KEY PEOPLE MET

NAME INSTITUTION

Mrs. Ireen Habasimbi Min of Finance

Mr. Mulusepa Min of Finance

Mrs. Mwila Zulu Min of Finance

Mr. Joseph Chanda Min of Development Planning

Mr. Eward Chomba Min of Water Development, Sanitation and

Environmental Protection (MWDSEP)

Mr Oswell Katooka MWDSEP

Mr. Musole R. Kambita MWDSEP

Mr. Charles Kalapa MWDSEP

Dr. Sylvester Mashamba LWSC

Mr. Jilly Chiyombwe LWSC

Ms. Matilda Mwansa LWSC

Mr. Malambo Dennis LWSC

Mr. Christopher Walimuntu LSWC

Mr. Wycliff Kunda LWSC

Mr. Hamalambo Kanini LWSC

Ms. Yvone M. Siyeni LWSC

Mr. Evaristo Simusokwe LWSC

Ms. Mwiche Sekeleti Musabaila LWSC

Mr. Nyonge Phiri LWSC

Mr. Kennedy Mayumbelo LWSC - LSP

Ms. Barbara Banguna LWSC - LSP

Mr. Obert Musongo LWSC - LSP

Mr. Hector Zulu LWSC - LSP

Mr. James Mwale LWSC - LSP

Mr. Francis Chipalo LWSC – LSP

Mr. Godmans Numwa LWSC - LSP

Mr. Charles Kapembwa LWSC - LSP

Mr. Avitol Kweendenda LWSC - LSP

Ms. Mwansa Mukuka LWSC - LSP

Mr. Stephen Dollery Project Implementation Consultant - LSP

Mr. Abhinav Goel Project Implementation Consultant - LSP

Mr. Patric Katuramu Project Implementation Consultant - LSP

Mr. John Banda Project Implementation Consultant - LSP

Ms. Nosiku S. Muyunda Project Implementation Consultant - LSP

Mr. Trevor Surridge GIZ

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ANNEX 2 – SEWERAGE SUB-PROJECTS (YEAR 2-5)

1. The Year 2-5 subprojects are divided into two parts (Part 1 and Part 2). Part 1 subprojects have a full

feasibility and preliminary design study done while Part 2 have no feasibility study. Part 2 subprojects were

identified through a preliminary assessment done in-house by Lusaka Water and Sewerage Company.

Part 1 sub-projects

2. Table 1 shows Part 1 sub-project areas and their estimated network lengths, indicative number of

pump stations and indicative pipe diameters required. Figure 1 shows the location of these subprojects. A

feasibility study and preliminary design has been done for these areas under World Bank funding. The next

step is detailed design of the selected sub-projects followed by construction which will require construction

supervision.

Table 1: Part 1 Subproject details

Part 2 sub projects

3. Part 2 sub-projects incorporate five sub-projects (i) Mass Media (ii) Chalala (iii) Vonna/Ndeke (iv)

Roma/ Munali, and (v) Kwamwena. Summary details of the subprojects under Part 2 are given in Table 2.

Sub Project Estimated

Network

length (km)

Estimated No.

of Pump

stations

Indicative range

of pipe diameters

(mm)

Estimated

cost (US$

million)

CSE 5 Chipata 40 1No., estimated

total daily flow

of 0.5ML/d &

Proposed power

of 0.7KW

160-400 4,805,279

CSE 10 Garden 17 160-400 1,530,326

CSE 20

Kanyama,

CSE-14

Industries

phase

60

2No. with

estimated total

daily flow of 6

and 10ML/d

respectively

100-600 7,519,340

CSE 25

Chawama

Kuomboka

60 1No. with

estimated total

daily flow of

3.3ML/d

100-400 6,650,246

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Table 2: Part 2 Subproject details

A brief description of each sub-project is given below.

Mass Media

5. Mass media is well-planned area located about 5km East of Lusaka’s Central Business District

(CBD). The area is mainly a high cost residential though commercial properties have come up in recent

years. The project area is estimated at 250 Ha and covers part of a low cost area (Kalingalinga compound), as

shown in Figure 2. A detailed design of the condominial sewerage system for Kalingalinga was done in 2012

with phase one being implemented. However, the project area under this scope has no existing sewerage

system though Mass Media pump station is within a kilometre. At present, residents rely on onsite sanitation

solutions. The use of septic tanks and soakaways has threatened the groundwater quality of the area. Further,

LWSC has boreholes within the same area hence the need to sewer the area. On the eastern side of the

project area, a main sewer trunk line crosses the project area through to Kaunda Square ponds. Mass media is

under the Manchinchi sewer shed whereas Kalingalinga flows to the Kaunda Square sewer shed.

Sub Project Area

coverage

(Ha)

Estimated

Network

length (km)

Estimated

No. of

Pump

stations

Indicative

range of

pipe

diameters

(mm)

Estimated

number of

new

connections

Estimated

cost (US$

million)

Mass Media 250 47 1 160-400 2050 9,725,804

Chalala 1815 344 2 160-600 14200 71,184,608

Vonna/Ndeke 700 133 Nill 160-300 5740 27,521,956

Roma/

Munali,

1370 260 2 160-900 10,000 53,802,320

Kwamwena 600 114 Nill 160-400 7100 23,590,248

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Figure 2. Mass media area

Chalala

6. Chalala is one of the newly developed areas on the south-eastern part of Lusaka. The area is

predominantly high cost residential and is well planned. It is about 3km from the Lusaka CBD and covers

about 1815 ha as shown in Figure 3. It covers the water works area, Hilview, Rockfield and Rockview areas.

The area is under the Manchinchi sewer shed. Chalala has no existing sewerage infrastructure. At present,

residents rely on onsite sanitation solutions. The use of septic tanks and soakaways has threatened the ground

water quality of the area. Further, the area is so rocky that it is a challenge for households to build quality

onsite sanitation facilities. LWSC has some boreholes within the same area which risks contamination if the

situation is not corrected. The nearest existing sewer line to Chalala is an interceptor along Chilimbulu Road.

This interceptor will require assessments to confirm if additional flows can be accommodated. The project

area has a generally flat terrain. Due to the relative flat terrain of the area, pumping stations or DEWATs

will have to be considered so as to lift or localise the treatment of wastewater from the area.

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Figure 3 Chalala area

Vonna/Ndeke

7. Vonna/Ndeke is one of the newly developed areas on the eastern part of Lusaka. It is about 25 km

from the Lusaka CBD and is mainly medium cost residential (Figure 4). It covers about 700 ha of land

underlain by unconsolidated or semi consolidated gravel, sand, silt and clay sedimentary rock. Vonna/Ndeke

has no existing sewerage infrastructure. Being a new development area, residents have started building

alternative onsite sanitation systems. With plot sizes as small as 25mx25m, it is unthinkable to have both the

borehole and onsite sanitation facilities on the same plot. Hence the need to sewer the area cannot be

overemphasized. The area is located about 9km downstream of the proposed New Ngwerere Wastewater

Treatment Plant. The area has no nearby sewer network to connect to, except a bio filtration plant installed

within the vicinity to service Sitatunga City Properties. This plant was recently handed over to LWSC. An

assessment should be carried out to establish whether the additional flows can be accommodated by this

facility or whether there is need for a completely new DEWAT system to service the areas. Ndeke Village

has 4678 plots while Vonna valley has 1062 plots.

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Figure 4: Ndeke/Vonna valley

Roma/ Munali

8. Roma/Munali is a well-planned high cost residential housing area within the Manchinchi and

Ngwerere Sewer shed. It is one of the old townships of Lusaka covering about 1370 ha of land with over

10,000 medium cost housing (Figure 5). The area has no existing sewerage network. At present, residents

rely on onsite sanitation solutions. In some areas like Olympia, communal septic tanks are common. These

are subject to annual flooding posing health risks to the public. The use of septic tanks and soakaways has

threatened the groundwater quality of the area. Roma/Munali drain northwards allowing Roma to connect to

CSU 05 (Ngwerere) which is earmarked for upgrade in the priority investments under the World Bank while

Munali area can also be connected to either Kaunda Square ponds or down to the New Ngwerere Wastewater

Treatment plant to be constructed under the European Investment Bank funding.

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Figure 5. Roma/Munali

Kwamwena

9. Kwamwena is one of the new development areas on the northern part of Lusaka. It is a medium cost

housing area and about 15km from the Lusaka CBD. The area is predominantly high cost residential and is

well planned. It covers about 600 ha of land. The area has about 7100 plots most of which have had the

buildings completed. The area has no existing sewerage network (Figure 6). At present, residents rely on

onsite sanitation solutions. The area is also subject to flooding making construction of onsite sanitation

facilities a challenge. Hence, providing sewerage infrastructure will alleviate the major challenges

experienced.

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Figure 6: Kwamwena

10. While interested consultants are expected to bid for all the above subprojects, Part 2 subprojects

should have a detailed breakdown of cost for each key step/task for the defined scope of work for each sub-

project. This will allow for easier negotiations should some of the scope of work fall off as a result of the

outcome of the feasibility study.

15

ANNEX 3 - INSTITUTIONAL CAPACITY DEVELOPMENT - SUMMARY OF MATURITY

ASSESSMENT AND INSTITUTIONAL ACTION PLAN

Assessment of LWSC Maturity Level

1. The Bank carried out technical missions to assess the maturity level of LWSC during the periods

12th- 17

th December 2016 and 31

st- 13

th February 2017. The assessment used the Water Utility Maturity

Model (WUM) as its conceptual framework. The model defines five levels of maturity (namely, level 1 -

initial; level 2 - basic; level 3 - proactive; level 4 - flexible; and level 5 - progressive) against five broad

attributes or dimensions of; behavior, structure, capability, tools and the ability to influence the external

operating environment positively and strategically. These attributes are broken down into sub- components

(table 1) and were assessed using a score card of management practices and organizational characteristics

that one would expect to see for each of the five increasing levels of maturity. The summary of the

assessment is given in figures 1 and 2 below.

Table 1: Attributes and their sub-dimensions

Attribute Sub Components

1 Behavior Strategic Orientation, Strategic Leadership, Organizational Culture, Customer

Orientation, and Commercial Orientation

2 Structure Organizational structure, Empowerment structure and Internal Accountability

3 Capability Human Resources, Technical Operations, Infrastructure Management, Financial

Management and Performance.

4 Tools Monitoring and Evaluation, Information and Knowledge Management, Internal

and External Communication and Continuous Improvement.

5 Influence Policy, Legal and Regulatory Environment; Managerial Autonomy; External

Accountability; Partnerships and Networks; and Corporate Image.

0

1

2

3

4

5Behaviour

Structure

CapabilityTools

Influence

where LWSC is now

where LWSC wants to be

Figure 1: LWSC Aggregated Current and Desired

Maturity level

16

2. The results of the assessment shows that the current overall LWSC maturity level is graded at 2.6 i.e.

the Company’s maturity level lies between level 2 (basic) and level 3 (proactive). This finding is significant

as it reveals that LWSC currently exhibits characteristics of both a level 2 and level 3 Utility under different

attributes. The company has established basic foundations for progress as a Utility but is at different stages of

acquiring vital behavioral orientations, structure, capabilities and tools that a level 3 (proactive) or higher

level Utility should have.

Key Challenges facing LWSC.

3. The assessment of the LWSC maturity level has identified gaps or challenges that the company

needs to address if it is to build its capability and grow into a higher level of maturity. Some of the key

challenges include:

Poor Organizational Culture. The current LWSC organizational culture does not promote staff

productivity and the achievement of organizational goals. Staff have poor values, attitudes and

behaviors at work. There are disengaged managers and generally management has over some time

practiced the laissez faire management style. This is by far the single most critical challenge the

company is facing.

Inadequate Organizational Structure. The current organizational structure has gaps and issues that

need to be addressed if the company is to be effectively aligned to the changes in its operating

0

1

2

3

4

5

SOSL

OC

CuO

CO

OS

ES

IA

HR

TO

IMFM

Perf

M&E

IKM

IEC

CoI

PLRE

MA

EA

PN

CI

Figure 2: LWSC Disaggregated Current and Desired Maturity Level

Where LWSC is now

Where LWSC wants to be

Key: SO- Strategic Orientation SL - Strategic Leadership OC - Organizational Culture CuO - Customer Orientation CO- Commercial Orientation OS - Organisational Structure ES -Empowerment Structure IA - Internal Accountability HR - Human Resources TO - Technical Operations IM - Infrastructure Management FM - Financial Management Perf - Performance M&E - Monitoring & Evaluation IKM - Information & Knowldege Management IEC - Internal & External Communication CoI - Continuous Improvement PLRE - Policy, Legal & Regulatory Environment MA - Managerial Autonomy EA - External Accountabilty PN - Partnerships and Networks CI - Corporate Image

17

environment. As an example, company is overstaffed with staff costs amounting to about 60% of

overall operating costs.

Poor Performance. The LWSC quantitative performance is poor as evidenced by the following Key

Performance Indicators i.e. Water produced is only about 270 MLD against an estimated demand of

370 MLD; NRW has been above 42% over the last five years; debt age is at 8 months (2015);

creditor payment period of 9 months; and WWTP effluent quality at only 56.1% (2015) compliance

instead of 95% as required.

Inadequate organizational tools. The structure, systems and current activities for monitoring and

evaluation of performance are inadequate as the current M&E framework has been established to

only oversee the performance contracts between the Branches and the Head Office. Additionally, the

performance contracting system itself has weaknesses in both design and implementation rendering

it ineffective in galvanizing performance improvements. On the other hand, the MIS system together

with other operational systems and processes need enhancement.

Liquidity Problems. The company currently faces serious liquidity problems. This has affected the

implementation of planned activities. The impact of this is best exemplified by the very meager

provision of funds for plant, equipment and network maintenance and repair. In 2015, the company

only disbursed 16% of the approved budget for plant, equipment and network maintenance. On the

other hand, the company takes over nine months to pay its suppliers. This definitely presents

business relationship issues with suppliers.

Institutional Development Action Plan (IDAP)

4. LWSC has, with support from the mission, reviewed and developed a detailed draft five-year

Institutional Development Action Plan. The plan aims at addressing issues and gaps identified through the

institutional assessment of LWSC maturity level and to develop the Utility’s capacity to grow to higher

levels of maturity. The IDAP has five objectives, namely; (i) Improve behavior, (ii) Improve Structure, (iii)

Improve Capability, (iv) Improve tools and (v) Improve Influence. A detailed set of targets (with

corresponding set of activities for their achievement) have been developed for the achievement these

objectives. A Special Task Force (Change Management Team) is to be appointed by the Managing Director

to not only finalize the plan and have it approved by the Board, but to oversee its implementation. The plan is

to be approved not later than April 15, 2017. The IDAP will contribute to overall performance of the utility

by, among others, promoting a positive organizational culture and productive work environment; addressing

long standing structural issues; enhancing staff capabilities; improving operational processes and systems, as

well as strengthening LWSC’s ability to influence the external policy environment. Funding for the IDAP

will mainly be through LWSC internally generated resources and the development partners; with the bank

playing a lead role. The approved Bank support to LWSC under the Institutional Development component

amounts to a total of USD 9 million.

18

ANNEX 4 – LUSAKA SANITATION MASTER PROGRAM

19

Lusaka Sanitation Program - Abridged Implementation Schedule for Major Works Packages

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Procurememt of consultancy services

Conceptual Design, ESIA and RAP

Tendering stage (Design- Build)

Design and Construction stage

Procurememt of consultancy services - completed

Design, ESIA and RAP -completed

Tendering stage (works)- completed

Construction stage

Procurememt of consultancy services

Design , ESIA and RAP

Tendering stage (works)

Construction stage

Procurememt of consultancy services

Design , ESIA and RAP

Tendering stage (works)

Construction stage

Procurememt of consultancy services

Design , ESIA and RAP

Tendering stage (works)

Construction stage

Procurememt of consultancy services

Design , ESIA and RAP

Tendering stage (works and FSM services)

Construction/FSM service delivery

Procurememt of consultancy services

Design , ESIA and RAP

Tendering stage (works)

Construction stage

World Bank -financed packages

EIB+KfW- financed packages

AfDB-financed packages

On-site sanitation investment package (WB)

On-site sanitation investment package (AfDB)

2023 20242017 2018 2019 2020 2021 2022

Sewerage investment package A (EIB/KfW) - New Ngwerere and new Chunga WWTPs

Sewerage investment package B1 (WB) - Priority (Year 1) sewerage works in Ngwerere and Machinchi sewer sheds

Sewerage investment package B1 (WB) - Year 2 -5 sewerage works in Ngwerere and Machinchi sewersheds

Sewerage investment package B2 (AfDB) - sewerage works in Chunga and Matero sewersheds

Sewerage investment package B3 (EIB) - sewerage works in Manchinchi sewershed

20

ANNEX 5 – PROJECT RESULTS FRAMEWORK

Project Development Objective (PDO): To increase access to sanitation services in selected areas in Lusaka and strengthen LWSC’s capacity to manage sanitation services

PDO Level Results Indicators*

Co

re Unit of

Measure

Bas

elin

e Cumulative Target Values

Frequency Data Source/

Methodology

Responsibility

for Data

Collection

Description (indicator

definition etc.) YR 1 YR2 YR 3 YR 4 YR 5

Indicator 1: People provided with access to improved sanitation facilities under the project (cumulative) (through sewerage) [through on-site facilities]

X

People

(thousand)

0

(0)

[0]

0

(0)

[0]

20

(2)

[18]

60

(6)

[54]

150

(24)

[126]

213

(33)

[180]

Annual

Progress

reports from

LWSC

LWSC

Based on 50% sewer

connection rate; assuming 8

people per sewer connection

and 18 people per on

-site facility 7

Indicator 2: People with access to adequate fecal sludge management systems (cumulative)

People

(thousand)

0

0

36

108

252

360

Annual

Progress

reports from

LWSC

LWSC

“Adequate” will need to be

defined. Assuming 20,000

on-site facilities are serviced,

serving 18 people each. 8

Indicator 3: Tons of BOD5 removed by the treatment plant supported under the project

x

Tons/year

77

230

230

470

709

949

Reports from

LWSC

Recorded at Ngwerere

Sewerage Ponds 9. (Baseline

data calculated from LWSC

measurements in Dec 2016)

7 Based on 50% of ultimately planned sewer connections; assuming 8 people per connection as per NWASCO guidelines; and assuming 18 people per on-site facility as per figures from Kanyama pilot project. 8 8 people per sewer connection based on NWASCO guidelines. 18 people per on-site facility based on data of Kanyama FSM pilot project. Assumed overall average frequency of emptying is once in five years.

9 Based on Ngwerere SP baseline load as per data of LWSC for 2013/2014 being 7000 m³/d with BOD5 inflow 110 mg/l and outflow 20 mg/l. For 2020, assumed flow is 20,000 m³/d (80% of design capacity being

24,900 m³/d) with an inflow BOD5 of 170 mg/l and outflow BOD of 40 mg/l.

21

Indicator 4: Tons of BOD5 removed by fecal sludge management systems

Tons/year

0

0

21

63

147

210

Reports from

LWSC

Calculated on basis of sludge

volume taken over, multiplied

by 35 g BOD5/liter. 10

Indicator 5: Domestic sewerage tariff increased (cumulative) to recovery O&M and debt servicing costs for domestic and other customers

% of water

tariff

30%

45%

30%

45%

35%

50%

39%

54%

43%

58%

50%

65%

This indicator is contingent on

tariff proposals being

approved by NWASCO.11

Indicator 6: Performance contract signed between LWSC management and branches

Yes/no

yes

yes

yes

yes

Yes

yes

Annual

Progress

reports from

LWSC

LWSC

Indicator 7: Integrated MIS established and used

Established/

Used

No

No

Estab

lishe

d

Used

Used

Used

Report from

LWSC

Indicator 8: Percentage of sewerage blockage complaints addressed satisfactorily

%

98

98

99

100

100

100

EDAMS NWASCO definition to be

used. Will be monitored

across the whole service area.

(Using LWSC report to

NWASCO)

Indicator 9: Direct project beneficiaries of which 50% female (on-site + off-site)

x

%

0

0

38

(36+

2)

114

(108

+6)

276

(252

+24)

393

(360

+33)

Annual

Progress

reports from

LWSC

LWSC

Assuming sewerage (at 50%

connections) plus FSM

10 Based on assumption of 35,000 mg/liter BOD5 for received fecal sludge; 1200-liter sludge per standard size single latrine; with 10,000 standard size latrines emptied by end of project. Double size latrines or bigger to be counted in standard size equivalents. 11 In the corresponding increase in ZMK/m³ plus inflation compensation to be applied in case NWASCO changes the sewerage tariff from “% of water tariff” to a true “real sewerage tariff in ZMK/m³”.

22

INTERMEDIATE RESULTS

Results Indicators

Co

re Unit of

Measure

Bas

elin

e Cumulative Target Values

Frequency Data Source/

Methodology

Responsibility

for Data

Collection

Description (indicator

definition etc.) YR 1 YR2 YR 3 YR 4 YR 5

Intermediate Result (Component One): Sewerage improvements (sewers, collectors, pump stations, treatment facilities constructed)

New household sewer connections constructed under the Project (cumulative)

x

No

0

0

300

850

2600

4100

Semi-

annual

Progress

reports

LWSC

Assumes 50% of households

connect

Length of sewer rehabilitated and newly constructed(cumulative)

km

0

0

5

20

50

82

Semi-

annual

Including main collectors and

network

Wastewater treated per year (cumulative)

m³/day (thousand)

4 7 7 10 15 20 Annual Progress

reports

LWSC Influent to Ngwerere ponds.

(Baseline data from LWSC

measurements in Dec 2016)

Intermediate Result (Component Two): Access to on-site sanitation services and fecal sludge management systems

Improved on-site facilities constructed

under the Project (cumulative) x

No. (thousand)

0

0

1

3

7

10

Semi-

annual

Progress

reports

LWSC

2 Fecal sludge management facilities

constructed & used

Constructed/

Used

2

Cons

truct

ed.

Used

Used

Used

Semi-

annual

Progress

reports

LWSC

Operation Manual for FSM developed

and in use

yes

Progress

reports

LWSC

People trained to improve hygiene

behavior or sanitation practices under

the project (cumulative) X

People

(thousand)

0

0

36

108

252

360

Annual

Progress

reports from

LWSC

LWSC

Assuming that marketing

campaign targets those with

access to FSM services

23

Observed presence of hand washing

facilities

%

0%

0%

20%

40%

60%

80%

Progress

reports from

LWSC

Report from program

monitoring system (using

data gathered by EHTs). In %

of households in the project

target area.

Intermediate Result (Component Three): Institutional strengthening

Minimum collection rate

%

79

85

85

85

85

85

Annual

Progress

reports

LWSC

Using LWSC report to

NWASCO

Number of sewer blockages addressed

(cumulative)

#/km

5.7

5.0

4.5

4.5

4.8

5.2

Annual

Progress

reports

LWSC

Feasibility studies completed

(cumulative)

Number

1

2

Annual

Progress

reports

LWSC

Drinking water samples tested

(bacteriological and residual Chlorine)

Number

167

55

16800

17000

17200

17500

17800

Annual Progress

reports

LWSC Using LWSC report to

NWASCO