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n Ghanaian Journal of Economics - The cost of urban water service delivery in Ghana : the case of the Kumasi and Accra-Tema water systems

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Abstract

Rapid increase in water demand has necessitated water utilities in developing countries to maintain existing infrastructure to deliver services while extending services to the unserved population. Close attention to the two needs - keeping assets and reaching the unserved population, can be a difficult task. This study focuses on the cost of urban water supply of two biggest urban water systems in Ghana by examining the magnitude and relative magnitude of recurrent expenditure and the cost of extending services. The study is based on five-year historical cost data of the two water systems, Accra-Tema (AWSS) and Kumasi (KWSS). All costs were adjusted to 2012 US$ using the GDP deflators of the World Bank. The costs were determined in terms of cost per connection, cost per person served, and cost per cubic meter of water supplied. The dominant recurrent cost component is the operational expenditure (OpEx). Capital maintenance expenditure (CapManEx) levels represent 8% of fixed assets that key informants indicate was low due to backlogs of neglected maintenance, which was supported by relatively high levels of non-revenue water. The actual annual capital investments (CapEx-enh) are inadequate compared to expenditure levels required to achieve universal service coverage. The implication for the low current CapEx-enh levels is higher future capital investments to increase coverage especially to the unserved population. Unit cost in ATWSS was slightly lower than KWSS due to economy of scale. The costs details are discussed in relation to meeting universal coverage and maintaining assets for reliable service.

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/content/ghajecon/2/1/EJC169143
2014-12-01
2016-12-08
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