INVESTMENT PLAN REPORT - World Bankdocuments.worldbank.org/curated/en/... · Greater Harare Water and Sanitation Investment Plan Investment Plan Report Executive Summary ES1 INTRODUCTION

REPUBLIC OF ZIMBABWE

GREATER HARARE WATER AND SANITATIONSTRATEGIC PLAN

GREATER HARARE WATER AND SANITATION

INVESTMENT PLAN

INVESTMENT PLAN REPORT (FINAL)

EXECUTIVE SUMMARY

June 2014

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Acknowledgements The preparation and writing of this report could not have been possible without the invaluable support of theWorld Bank, the Zimbabwe Multi-donor Trust Fund, City of Harare (Harare Water), Chitungwiza Municipality, Norton Town Council, Ruwa Town Council, Epworth Local Board, GIZ, Dorsch International Consultants GmbH, Lahmeyer GKW Consult GmbH, BCHOD and ZimSTAT. We are grateful for the level of cooperation and assistance provided by the dedicated professionals from these institutions.

June 2014

Stefan Dörner Rocky Kasanga

H.P. Gauff Ingenieure H.P. Gauff Ingenieure

Project Manager Deputy Project Manager

Preface This report is the outcome of a combined financing and supervisory effort by the Zimbabwe Multi-Donor Trust Fund (Zim-Fund) and the Multi-Donor Analytical Trust Fund (MDTF) under the World Bank as well the operational contributions of the beneficiary local authorities. The Zim-Fund financed the study that generated the Harare and Chitungwiza input data, while the MDTF financed the additional investigations in Ruwa, Epworth and Norton and the development of the integrated water and sanitation investment plan for Greater Harare.

The Consultant signed two separate contracts with the two financiers with different contractual obligations regarding submission of reports. Under the Zim-Fund project, the Consultant is obliged to issue individual reports for Harare, Chitungwiza, Kwekwe, Chegutu, Masvingo and Mutare. Under the World Bank project (which includes Harare and Chitungwiza), the consultant is required to issue a single report covering all the project towns.

Considering the inter-linkages and dependencies of the technical and institutional aspects of water and sanitation service provision in the Harare area, the financiers resolved that it would be in the best interest of the Clients to receive a single combined report for the Zim-Fund and the World Bank projects instead of issuing two separate reports for Harare and Chitungwiza as per the Zim-Fund contract. This arrangement will allow the Consultant to provide the necessary information on the integrated Greater Harare water and sanitation systems in one consolidated document.

Greater Harare Water and Sanitation Investment Plan Investment Plan Report Executive Summary

GREATER HARARE WATER AND SANITATION INVESTMENT PLAN REPORT

EXECUTIVE SUMMARY

Table of Contents

ES1 INTRODUCTION AND BACKGROUND ............................................................................................... 1

ES1.1 ZIMBABWE MULTI-DONOR TRUST FUND (ZIM-FUND)........................................................................... 1 ES1.2 MULTI-DONOR ANALYTICAL TRUST FUND (MDTF) ............................................................................. 1 ES1.3 SYNERGIES BETWEEN THE ZIM-FUND AND MDTF .............................................................................. 1 ES1.4 PURPOSE ........................................................................................................................................ 2 ES1.5 SCOPE OF SERVICES ........................................................................................................................ 2 ES1.6 THE PROJECT AREA ......................................................................................................................... 3

ES2 DEMOGRAPHIC PROFILE AND URBAN PLANNING ........................................................................ 4

ES2.1 OVERVIEW ....................................................................................................................................... 4 ES2.2 POPULATION PROJECTIONS .............................................................................................................. 5 ES2.3 URBAN PLANNING ............................................................................................................................ 6

ES3 WATER DEMAND AND WASTEWATER FLOW PROJECTIONS ...................................................... 6

ES3.1 KEY PLANNING AND DESIGN CRITERIA .............................................................................................. 7 ES3.2 WATER DEMAND PROJECTION RESULTS AND KEY ISSUES .................................................................. 8 ES3.3 WASTEWATER FLOW PROJECTION RESULTS AND KEY ISSUES ............................................................ 9

ES4 ASSESSMENT OF EXISTING WATER AND SEWERAGE INFRASTRUCTURE ............................ 11

ES4.1 HARARE ........................................................................................................................................ 11 ES4.2 CHITUNGWIZA ................................................................................................................................ 12 ES4.3 EPWORTH ...................................................................................................................................... 13 ES4.4 NORTON ........................................................................................................................................ 13 ES4.5 RUWA ............................................................................................................................................ 14

ES5 PROPOSED INVESTMENT MEASURES ........................................................................................... 15

ES6 INVESTMENT COST ESTIMATES ..................................................................................................... 20

ES6.1 PRIORITIZATION PRINCIPLES AND SEQUENCING OF INVESTMENTS ..................................................... 20 ES6.2 HARARE ........................................................................................................................................ 20 ES6.3 CHITUNGWIZA ................................................................................................................................ 21 ES6.4 EPWORTH ...................................................................................................................................... 22 ES6.5 NORTON ........................................................................................................................................ 23 ES6.6 RUWA ............................................................................................................................................ 24 ES6.7 GREATER HARARE ......................................................................................................................... 24 ES6.8 FINANCING OPTIONS ...................................................................................................................... 25

ES7 FINANCIAL ANALYSIS AND SUSTAINABILITY .............................................................................. 26

ES7.1 OBJECTIVE .................................................................................................................................... 26

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ES7.2 FINANCIAL MODEL CONFIGURATION ................................................................................................ 26 ES7.3 KEY PARAMETERS AND ASSUMPTIONS ............................................................................................ 27 ES7.4 FINANCIAL ANALYSIS RESULTS ....................................................................................................... 28 ES7.5 CONCLUSION ................................................................................................................................. 32

Index of Tables

Table ES - 1: Projected Future Annual Growth Rates ................................................................................. 5 Table ES - 2: Projected Future Populations for Greater Harare .................................................................. 6 Table ES - 3: Projected Future Populations by Housing Types for Greater Harare .................................... 6 Table ES - 4: Per Capita Water Consumption Figures ................................................................................ 7 Table ES - 5: Key Planning Criteria ............................................................................................................. 7 Table ES - 6: Aggregated Water Demand - Greater Harare ....................................................................... 8 Table ES - 7: Water Demand by Town ........................................................................................................ 8 Table ES - 8: Wastewater Flow Projections Summary .............................................................................. 10 Table ES - 9: Existing Wastewater Design Treatment Capacity ............................................................... 10 Table ES - 10: Infrastructure Assessment Findings - Harare ...................................................................... 11 Table ES - 11: Infrastructure Assessment Findings - Chitungwiza ............................................................. 12 Table ES - 12: Infrastructure Assessment Findings - Norton ...................................................................... 14 Table ES - 13: Infrastructure Assessment Findings - Ruwa ........................................................................ 14 Table ES - 14: Summary of Investment Measures ...................................................................................... 16 Table ES - 15: Summary of Investments in Harare by Priority .................................................................... 21 Table ES - 16: Summary of Investments in Chitungwiza by Priority ........................................................... 22 Table ES - 17: Summary of Investments in Epworth by Priority .................................................................. 22 Table ES - 18: Summary of Investments in Norton by Priority .................................................................... 23 Table ES - 19: Summary of Investments in Ruwa by Priority ...................................................................... 24 Table ES - 20: Summary of Aggregate Investments in Greater Harare by Priority ..................................... 25 Table ES - 21: Financing Sources ............................................................................................................... 26 Table ES - 22: Income Statement ................................................................................................................ 29 Table ES - 23: Cash Flow Statement .......................................................................................................... 30 Table ES - 24: Annual Balance Sheet ......................................................................................................... 31

Index of Figures Figure ES - 1: Synergies between the Zim-Fund and the MDTF .................................................................. 2 Figure ES - 2: Project Activities..................................................................................................................... 3 Figure ES - 3: Project Area ........................................................................................................................... 4 Figure ES - 4: Water Demand versus Water Availability .............................................................................. 9 Figure ES - 5: Prioritization Principles ........................................................................................................ 20 Figure ES - 6: Financing Options ................................................................................................................ 25 Figure ES - 7: Outline Approach Schematic Layout of the Financial Model ............................................... 26

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ES1 INTRODUCTION AND BACKGROUND

ES1.1 Zimbabwe Multi-donor Trust Fund (Zim-Fund)

The economic and humanitarian crisis in 2008 that included widespread cholera outbreaks prompted the Zimbabwean Government and the donors to begin dialogue on the modalities of financing relief and remedial efforts. The African Development Bank was asked by a group of donors, with the consent of the Zimbabwean Government, to establish and administer a ‘basket’ fund - the Zimbabwe Multi-Donor Trust Fund (the “Zim-Fund”). The main purpose for the Zim-Fund is to mobilise and administer donor resources needed for economic recovery and development efforts in Zimbabwe. Part of the resources mobilised by the Zim-Fund have been applied towards the Urgent Water Supply and Sanitation Rehabilitation Project (UWSSRP), the main scope of which is the urgent rehabilitation of water supply and sanitation systems in six urban centres, namely Harare, Chitungwiza, Mutare, Masvingo, Kwekwe and Chegutu.

Under the UWSSRP, the Zim-Fund is also financing consultancy services for the development of Medium to Long Term Water Supply and Sewerage Investment Plans in the same towns and cities. The contract for these services was awarded to HP Gauff Ingenieure GmbH after an international competitive procurement process. The contract was signed on 22nd April 2013 and the project officially commenced on 20th May 2013.

ES1.2 Multi-Donor Analytical Trust Fund (MDTF)

The City of Harare requested the World Bank to support the development of a water supply and sanitation strategic plan for Greater Harare - the metropolitan area that includes Harare and the satellite towns of Chitungwiza, Epworth, Ruwa and Norton. The purpose of the strategic plan is to assess the infrastructure requirements for the Greater Harare area as a single water and wastewater infrastructure system that can be managed as one entity. The long term vision is to have a well-structured and sustainable single utility able to raise its own capital on the financial markets.

The World Bank engaged HP Gauff Ingenieure GmbH to develop the Greater Harare Water and Sanitation Investment Plan – a key input to the strategic plan - in parallel to the on-going study financed by the Zim-Fund.

The Investment Plan outlines the medium (until 2020) to long term (until 2030) water supply and sanitation infrastructure requirements. It is intended to be a ‘blue-print’ that will guide future infrastructure and institutional development necessary for sustainable water and sanitation services for the Greater Harare area.

ES1.3 Synergies between the Zim-Fund and MDTF

The Zim-Fund financed the study that generated the Harare and Chitungwiza input data, while the MDTF financed the additional investigations in Ruwa, Epworth and Norton and the development of the integrated water and sanitation investment plan for Greater Harare. The synergies between the two funds are illustrated in Figure ES – 1 below.

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Figure ES - 1: Synergies between the Zim-Fund and the MDTF

ES1.4 Purpose

The purpose of the investment plan is to assess the infrastructure requirements for the Greater Harare area as a single water and wastewater infrastructure system that can be managed as one entity.

ES1.5 Scope of Services

The scope of services carried out in preparation of the Greater Harare investment plan is illustrated in the workflow chart below (Figure ES – 2).

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Assessment of existing facilities

Population & water demand, wastewater

flow calculations

Development of options for improving/extending

water supply and sewerage service

Analysis, preliminary design & Costing of

options

Evaluation of options

Development of Investment Plans on

Selected Options

Financial analysis and scheduling of investment

plans

Environmental Framework description

Bankable Investment Plan For Greater Harare

Figure ES - 2: Project Activities

ES1.6 The Project Area

The project covers Harare and the surrounding satellite towns of Chitungwiza, Epworth, Norton and Ruwa, collectively known as Greater Harare (Figure ES – 3). Greater Harare is situated on the Zimbabwean Highveld between latitudes 17° 40’ S and 18° 06’ S, and between longitudes 30° 37’ E and 31° 16’ E. It is an urban sprawl with a total current population of around 2.35 million according to the 2012 national census.

The four centres of Harare, Chitungwiza, Epworth and Ruwa form a single contiguous urban area whilst Norton is located some 45 km to the west of Harare. Norton and Ruwa are both situated alongside primary access roads and railway lines, to the west and east respectively, and both were developed specifically to provide opportunity for industrial expansion outside of Harare. Chitungwiza has a limited industrial area and, together with Epworth, primarily serve as satellite residential areas for Harare.

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http://en.wikipedia.org/wiki/Highveld


Figure ES - 3: Project Area

ES2 DEMOGRAPHIC PROFILE AND URBAN PLANNING

ES2.1 Overview

Each of the five urban centres that constitute Greater Harare is managed by an independent urban local authority: the Harare City Council, the Chitungwiza Municipality, the Epworth Local Board, the Norton Town Council and the Ruwa Local Board. Each centre has its own unique history and pattern of development and, to date, there has been little in the way of coordinated planning between the individual towns. However, these centres function as part of single urban sprawl and economic system. In particular they are linked together on the basis of sharing a common water supply system and, also, all their wastewater treatment systems discharge upstream of the water supply dams on the Manyame River and consequently affect their common water supply.

As the capital of Zimbabwe, Harare strongly dominates Greater Harare in terms of area, population and development of commerce and industry. Harare has a well-defined Central Business District (CBD) but this is lacking for the other centres of Chitungwiza, Epworth, Norton and Ruwa. In each case plans exist for development of a town centre but these have yet to be developed. As the capital city, Harare also supports the bulk of the institutional development, in particular hosting a large number of national organizations. For the other centres, institutional development is limited, the most numerous organizations being educational facilities, particularly schools, and churches.

In order to estimate future water demand and wastewater flow projections it is necessary to project future populations, the spatial distribution of future populations and the breakdown of populations by different housing categories and associated service levels.

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Greater Harare Water and Sanitation Investment Plan Investment Plan Report Executive Summary ES2.2 Population projections

The results of the 2012 national census were used as the baseline for population projections. Future populations to 2030 were derived through consideration of historical rates of growth (derived from national census results from 1969, 1982, 1992, 2002 and 2012) and through developing reasonable scenarios about future growth rates. Comparisons were made to regional data in the form of recent documented growth rates from 87 urban centres from seven comparable Southern and East African countries. Detailed discussions were also held with the individual urban authorities to identify specific factors likely to promote or constrain future growth within each of the five centres, and a number of workshops were carried out in order to present and discuss the scenarios and to develop and reach consensus among stakeholders on this key aspect.

Over the last 20 years the rate of annual population growth in Greater Harare has declined markedly from a peak value of 6.05% for the 1982-1992 census interval, to 2.62% for 1992-2002 and to 1.84% for 2002-2012. This compares to a mean rate of annual growth of 3.23% for the 87 regional centres, as recorded over their most recent census intervals. Likely causes of this muted growth for Greater Harare include high mortality rates due to the ongoing HIV pandemic and the massive economic decline from the late 1990s to the present, which has resulted in high levels of out-migration. Given the continuing economic problems these conditions seem unlikely to change markedly at least in the short term.

Individual growth rates were established for each of the five constituent centres, in accordance with specific local factors (Tables ES – 1). Combining these results, the overall projection for Greater Harare is to continue with a relatively low rate of annual growth of 2% to 2020, but thereafter to escalate markedly to 3.59% to 2025 and 4.68% to 2030.

Table ES - 1: Projected Future Annual Growth Rates

Annual Growth Rate (%)

PERIOD 2002-2012 2012-2020 2020-2025 2025-2030

Harare 1.59% 1.75% 4.00% 5.00%

Chitungwiza 0.99% 0.99% 2.00% 4.00%

Epworth 3.91% 2.50% 2.00% 2.00%

Norton 4.29% 4.29% 4.00% 5.00%

Ruwa 9.05% 9.05% 4.00% 5.00%

Total Greater Harare 1.84% 2.00% 3.59% 4.68%

The resulting population figures are shown in Table ES – 2. Harare strongly dominates the overall population of Greater Harare, in 2012 accounting for 72.5% of the overall population of 2,356,764 people. Corresponding figures for the other centres were 15.1% for Chitungwiza, 7.1% for Epworth, 2.9% for Norton and 2.4% for Ruwa.

The overall population of Greater Harare is projected to grow from 2.35 million in 2012 to 2.8 million in 2020 and to 4.1 million in 2030. Over this same period Harare’s population is estimated to increase from 1.7 million in 2012 to 2.0 million in 2020 and 3.0 million in 2030. By 2030 Chitungwiza is anticipated to increase to over half a million people, Epworth to reach nearly 250,000 people, and Norton and Ruwa to both expand to well over 100,000 people each, to roughly the current size of Epworth.

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Table ES - 2: Projected Future Populations for Greater Harare

YEAR 2012 2020 2025 2030

Harare 1,708,538 1,962,908 2,388,178 3,047,987

Chitungwiza 356,840 386,199 426,395 518,774

Epworth 167,462 204,036 225,272 248,719

Norton 67,591 94,606 115,102 146,903

Ruwa 56,333 112,682 137,094 174,971

Total Greater Harare 2,356,764 2,760,430 3,292,042 4,137,355

ES2.3 Urban Planning

Detailed discussions were held with town planning officials from each of the urban centres to determine the current distribution of population by housing categories, and to identify existing plans and potential for future growth in existing wards and neighbouring areas. Four levels of housing were considered: low density (LD) housing, medium density (MD), high density (HD) and informal settlements (without in-house water and sanitation services). The breakdown of the overall 2012 population for Greater Harare by service levels was 61% HD, 22% LD, 12% informal and 5% MD residents, although the proportions varied markedly between the different centres (Table ES – 3). During the course of the project the combined proportion of LD and MD is projected to gradually decline from the present value of 27 % to 23%; the level of HD is expected to remain relatively constant; and informal settlements are expected to increase from 12% to 17%.

By comparison of expected growth by housing types against identified opportunities for growth, it was possible to estimate future annual ward populations by housing types. This data comprised a key input to subsequent calculations of future water demand and waste water flows.

Table ES - 3: Projected Future Populations by Housing Types for Greater Harare

Housing Category Population Distribution

Population

2012 2020 2030

LD 525,175 22% 572,605 21% 767,999 19%

MD 114,044 5% 132,150 5% 157,637 4%

HD 1,438,903 61% 1,641,892 59% 2,489,085 60%

Informal 278,642 12% 413,784 15% 722,632 17%

Total 2,356,764 100% 2,760,431 100% 4,137,353 100%

ES3 WATER DEMAND AND WASTEWATER FLOW PROJECTIONS

The level of investment required to provide water supply and sewerage services to an urban settlement is driven by the water demand and the resultant wastewater flows. Water demand comprises domestic, institutional, commercial and industrial water use (consumption), and the inevitable water losses resulting from physical leakages and

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inefficiencies in the commercial operations of the service provider (Non-Revenue Water or NRW). The water consumption varies over time, both seasonally and daily, so the water supply and sanitation infrastructure is sized and designed with capacity to provide services during the highest possible demand (peak period).

ES3.1 Key Planning and Design Criteria

The high per capita water consumption figures prescribed in current water usage manuals in Zimbabwe are projected to gradually reduce due to improved public awareness on the need to conserve water, state driven policies that promote principles of financial sustainability in the provision of water and sanitation services, and implementation of a progressive block tariff system which penalises high water usage. Table ES – 4 below shows the consumption figures that were used. It is important to note that the figures are comparable with actual measured consumption figures from the region (Lusaka, Zambia).

Table ES - 4: Per Capita Water Consumption Figures

Urban areas At present 2020 2030

l/cap/day l/cap/day l/cap/day Low Density (LD) areas 300 250 200 Medium Density (MD) areas 200 175 150 High density (HD) areas 85 80 80 Informal areas 40 40 40

Water consumption for institutions such as schools, hotels, hospitals, prisons, service camps and administrative offices was calculated as a percentage of domestic consumption (15%).

Industrial and commercial water demand was calculated on the basis of area. A unit consumption figure of 15 m3/ha/day was assumed for commercial properties while 22.5 m3/ha/day was assumed for industries. The current industrial land area was calculated using a combination of information gathered during field investigations and recent satellite images.

Other key planning and design criteria are presented in the Table ES – 5 below.

Table ES - 5: Key Planning Criteria

Parameter Assumption

Physical losses Assumed to reduce from the current high levels (40%) to 25% in 2020 and down to 20% in 2030

Peak factors Peak season factor = 1.25, peak hour factor = 1.5 Wastewater return rates Low density (where connected to sewer) – 50%,

medium density – 70%, high density – 85%, non-domestic (on average) – 80%

Service coverage Factors considered were coverage of network,

service availability and prevalence of boreholes

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Greater Harare Water and Sanitation Investment Plan Investment Plan Report Executive Summary ES3.2 Water Demand Projection Results and Key Issues

The total peak season demand for Greater Harare is currently around 712,000 m3/d (Table ES – 6 and Figure ES – 4). It reduces to around 662,000 m3/d in the medium term and then grows to just over 820,000 m3/d in the long term. The reduction in the medium term is due to the assumed reduction in the physical losses over the next seven years and the gradual reduction in per capita water consumption over time. Table ES – 7 shows the breakdown of the aggregate water demand by the component towns.

Table ES - 6: Aggregated Water Demand - Greater Harare

Parameter Unit 2013 2020 2030 Total water consumption m3/d 340,973 397,306 525,543 Water Loss Rate % 40% 25% 20% Water Loss m3/d 229,238 132,435 131,386

Average demand m3/d 570,212 529,742 656,929 Peak Season factor 1.25 1.25 1.25 Peak season demand m3/d 712,765 662,177 821,161

Table ES - 7: Water Demand by Town

City/Town Average Demand (m3/day) Peak Season Demand (m3/day)

2013 2020 2030 2013 2020 2030

Harare 465,166 396,681 494,013 581,457 495,852 617,516

Chitungwiza 54,469 54,499 68,471 68,086 68,123 85,589

Epworth 14,371 28,829 30,436 17,963 36,037 38,045

Norton 20,031 22,666 29,008 25,039 28,333 36,260

Ruwa 16,175 27,066 35,000 20,219 33,832 43,750

Greater Harare Total

570,212 529,742 656,929 712,765 662,177 821,161

The Greater Harare area is currently utilizing water from the Upper Manyame catchment, except for Ruwa which uses sources in the Mazowe catchment. The 4% risk yield of the four dams (Seke, Harava, Chivero, Manyame) that provide storage for the water supply in Greater Harare is around 478,000 m3/d (allowing for upstream commitments only). Clearly, the current demand already exceeds the available water at 4% risk. The available water could increase if the risk factor was to be relaxed to 10% as is being advocated in some quarters. However, the evident climate change effects on the environment, particularly rainfall patterns, coupled with catchment degradation and the sensitive nature of the large urban concentration that Greater Harare is, counter the argument for relaxing the risk level.

In terms of water production facilities (raw water abstraction and treatment), the installed capacity currently stands at a total of just over 704,000 m3/d, even though the actual production is around 540,000 m3/d. The plant rehabilitation efforts currently being implemented under various financing sources are expected to restore the water works to design capacity. Analyses indicate that the existing production facilities will be sufficient

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until around 2022. Hence short and medium term investments should be directed towards arresting the physical losses in the distribution network.

Given the low yield and general environmental degradation of the Upper Manyame catchment, additional production facilities located in other catchments will be needed soon. The Kunzvi Dam and water treatment plant in the Mazowe catchment will have to be built as soon as possible.

We propose that the Kunzvi scheme should be constructed first instead of the Muda Dam scheme because it can provide all the required capacity at one site. If Muda were to be developed first, Kunzvi would still have to be developed within a short period because Muda Dam WTW (with a capacity of 50,000 m3/day) would not provide enough water to satisfy the projected demand within the planning horizon. However, the Muda Dam and the Shabanove schemes should also be considered in the long term beyond the planning horizon of this study

Kunzvi will be developed in two phases – Phase I with a capacity of 100,000 m3/day should be available by 2022. A second module with a capacity of 50,000 m3/day should be operational by 2029.

Figure ES - 4: Water Demand versus Water Availability

ES3.3 Wastewater Flow Projection Results and Key Issues

A summary of the wastewater flow estimated for Greater Harare is presented in Table ES-8, while existing water treatment capacities are presented in Table ES-9

-

100

200

300

400

500

600

700

800

900

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Wat

er P

rodu

ctio

n [m

3/d]

Thou

sand

s

Morton Jaffray WTW Prince Edward WTW

Ruwa WTW Kunzvi WTW

Average Demand Peak Season Demand

4% Risk Yield - Manyame 10% Risk Yield - Manyame

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Table ES - 8: Wastewater Flow Projections Summary

City/Town Wastewater flow (dry weather) [m3/d] Present 2020 2030 Harare 182,354 191,270 242,468 Chitungwiza 37,872 40,985 55,328 Epworth - - 7,934 Norton 3,805 8,743 13,266 Ruwa 9,221 18,416 25,801 Total 233,251 266,712 344,798

Table ES - 9: Existing Wastewater Design Treatment Capacity

WWTP Type Design Capacity

Harare [m3/day] Firle Conventional + BNR 144,000 Crowborough Conventional + BNR 54,000 Marlborough Stabilisation ponds 2,000 Hatcliffe BNR 5,000 Donnybrook Stabilisation ponds 2,300 Total Harare 207,300

Chitungwiza Conventional + BNR 55,000 Epworth None Norton Conventional 8,000 Ruwa Stabilisation ponds 4,000

The key issues regarding wastewater collection and treatment are as follows:

• Even though the existing aggregate design treatment capacity in Harare appears to be adequate, there is a deficit in some catchments, especially Crowborough which will be expanded;

• The rapid development of Harare South and the lack of treatment facilities in Ruwa and Epworth will necessitate construction of a southern trunk sewer and a new single treatment facility in Harare South – the Harare South Waste Water Treatment Works (Harare South WWTW);

• When both the modified conventional wastewater treatment plant and the BNR are rehabilitated, Chitungwiza will have sufficient wastewater treatment capacity. However, if the wastewater from the planned new Nyatsime development were to be treated at the existing Zengeza WWTW, pumping would be required. Hence it is proposed to connect Nyatsime and the St Mary’s area to the new Harare South WWTW in the long term;

• Parts of Epworth have a sewer reticulation network that was never commissioned because the treatment facility that was supposed to receive and treat the wastewater was never built. Once the Harare South trunk sewer and the associated treatment facility are built, those parts of Epworth will be reticulated and connected to the trunk sewer;

• The existing Adelaide ponds that Ruwa is currently using are insufficient. Moreover, they are located on land that belongs to the Epworth Local Board and has been allocated to a private developer. Hence Ruwa is in immediate need of an alternative wastewater treatment facility. For the short and medium term it is proposed that a

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new set of ponds and an irrigation system should be constructed just south of Ward 7. In the long term Ruwa will be connected to the Harare South trunk sewer;

• For Norton the capacity of the existing wastewater treatment works and the new plant under construction, will barely meet the requirements for the medium term. Hence we propose construction of a new pond and irrigation system.

ES4 ASSESSMENT OF EXISTING WATER AND SEWERAGE INFRASTRUCTURE

ES4.1 Harare

The Harare water supply scheme consists of two water treatment works (WTW) - Morton Jaffray WTW with a nominal design capacity of 614,000 m3/day and Prince Edward WTW with a nominal design capacity of 90,000 m3/day. Actual water production, however, is around 75% of nominal capacity. The water supply scheme also has 16 treated water pumping stations, 27 reservoir sites, 5,400 km of transmission and distribution pipelines and over 200,000 service connections. Water service coverage is around 82%, even though the supply hours are very low, or even absent, in many places.

The City of Harare operates a number of wastewater treatment facilities with total installed capacity of around 220,000 m3/day. These include Firle WWTW, Crowborough WWTW, Donnybrook Stabilisation Ponds, Hatcliffe WWTW and Marlborough Stabilisation Ponds. The sewerage system has over 5,000 km of sewer collection and transmission pipes. Present sewerage service coverage is around 75%.

The key findings of the infrastructure assessment in Harare are presented in the Table ES - 10 below.

Table ES - 10: Infrastructure Assessment Findings - Harare

Water Supply Infrastructure Sewerage Infrastructure • Various components of water treatment facilities

are in poor condition; • Booster pump stations are in poor state; • Reservoirs are generally in good structural

condition; • Deterioration of old steel pipes a major source of

leakage; • Bursts on steel pipes occur because pressure

reducing valves are not working; • Most valves and other appurtenant fittings are

dilapidated; • Service connections are corroded and incrusted.

Substantial leakages occur here.

• Wastewater treatment facilities are in poor condition;

• Sewage pump stations are in poor state; • Sections of transmission mains

(stream/crossings) are in poor condition, hence spillage of raw sewage into natural water courses;

• AC sewer reticulation pipes are in fairly good condition, except in old parts of the city such as Mbare, CBD, Kuwadzana, Rugare, Westlea etc.

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ES4.2 Chitungwiza

The Municipality of Chitungwiza utilizes bulk water from the City of Harare’s water treatment facilities. The transmission system is designed in such a way that water can be drawn from both Prince Edward WTW and Morton Jaffray WTW. Overall, the city provides services to a population of 356,840 (2012 National Statistics). At present, the system has 55,669 connections. Water service coverage is around 94% even though supply is very intermittent.

The wastewater infrastructure in Chitungwiza consists of both on-site and off-site sanitation systems. Building and housing guidelines, by-laws and standards stipulate that Low Density properties depending on soil conditions, are not connected to the sewerage system. They are provided with on-site septic tanks and soak-away pits. High and Medium density properties, on the other hand, are all connected to the sewerage system. The sewerage system in Chitungwiza consists of laterals, collector mains, pump stations and trunk mains that collectively convey wastewater to the Zengeza WWTW.

The key findings of the infrastructure assessment in Chitungwiza are presented in Table ES – 11 below.

Table ES - 11: Infrastructure Assessment Findings - Chitungwiza

Water Supply Infrastructure Sewerage Infrastructure • Reservoirs are generally in good structural

condition; • Deterioration of the old steel pipes is a

major source of leakages; • Most valves and other appurtenant fittings

are dilapidated; • Service connections are corroded and

incrusted. Substantial leakages occur here.

• Zengeza WWTW are in poor condition; the BNR plant is not operational:

• Sewage pump stations are in a poor state; • AC sewer reticulation pipes are in fairly

good condition; • Old concrete pipes are collapsing in some

areas.

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ES4.3 Epworth

Epworth relies on water from the City of Harare via the Ventersberg storage tanks. Supply is intermittent (very little is supplied infrequently). With the considerable water shortages that Epworth has been experiencing the Local Board has an ongoing programme to supply water through strategically located boreholes. Coverage is estimated to be around 38%.

A small area of Epworth, within Wards 1, 2, 5 and 7 currently has a sewerage network. Ponds were constructed to collect and treat the sewage from the area but were quickly overbuilt and were never commissioned. Therefore the sewerage network was never commissioned either. Hence people use on-site sanction means such as pit latrines and septic tanks.

ES4.4 Norton

Norton currently obtains all of its water from the Morton Jaffray WTW. A DN300 steel treated water supply line 3.8 km long feeds the town’s reservoirs on a hill to the east of the town. The water system currently supports around 12,500 service connections.

Norton Town Council operates two sewage treatment plants at the same location known as the ‘Old Works’ and the ‘New Works’. The Old Works has a nominal capacity of 3,200 m3/day, while the new works have a nominal capacity of 4,000 m3/day. There are also holding ponds with an allowable loading rate of around 300 kg BOD per day, equivalent to a flow of 2,400 m3/day from treated sewage from the works. Service coverage is around 41% mainly because people in low density areas are on septic tanks and the high density population in the northern wards do not receive water.

The key findings of the infrastructure assessment in Norton are presented in Table ES – 12 below.

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Table ES - 12: Infrastructure Assessment Findings - Norton

Water Supply Infrastructure Sewerage Infrastructure • The reservoirs are in fairly good condition; • The transmission line from the reservoirs has

no servitude and in some sections is built over:

• Newly developed western areas receive little or no water;

• Reticulation network in some older parts of town is in poor condition and some transmission lines are known to burst frequently:

• Over 50% of consumer meters are faulty or inoperable;

• Lack of valves makes demand management difficult.

• Maridale sewage pump station is not equipped with pumps;

• Wards 12 and 13 have a sewerage system which was never commissioned;

• Sewage pump stations need rehabilitation; • No standby power at any of the SPSs; • New WWTW not complete; • WWTW effluent disposal by irrigation is not

functioning.

ES4.5 Ruwa

Ruwa currently utilises water from Nora Dam via a DN450 uPVC/ DN515 AC supply line which feeds into Green Sykes Dam and on to the Ruwa water treatment works. The bulk water supply has a capacity of 21,000 m3/day whilst the WTW has capacity 7,500 m3/day. Additional water is obtained from the City of Harare (treated water supply) via a DN525 supply line from Donnybrook tanks to the ZIMRE Estate and onwards into the supply network for Ruwa, and a DN350/ DN200 supply line from the Ventersberg tanks which feeds the Mutare Road Ground Tanks via a booster station on the western outskirts of Ruwa. The system supports 12,500 service connections.

Ruwa has a single sewage catchment served by three sewage pump stations and the Adelaide Ponds. The Adelaide stabilization ponds are in an area under the jurisdiction of Epworth Local Board, which has zoned the ponds area for development and has requested the Ruwa Town Council to make alternative arrangements to dispose of their sewage. Hence the sewage from Ruwa is currently discharged to the natural water courses untreated. The key findings of the infrastructure assessment in Ruwa are presented in Table ES – 13 below.

Table ES - 13: Infrastructure Assessment Findings - Ruwa

Water Supply Infrastructure Sewerage Infrastructure • The WTW is generally in good condition

except for corrosion of the steel reactor and the chemical dosing system (non functional);

• No bulk and block metering; • Distribution networks are relatively new; • There has been a significant water supply

deficit for many years which makes it almost impossible to assess the level of leakage in the tertiary distribution system;

• Over 50% of consumer meters are faulty or inoperable.

• Ruwa is a relatively new town, so the sewerage network is in good condition;

• Runyaro and Chiremba SPSs are prone to overflows as a result of power failures but are mechanically reliable. There are no standby generators;

• The Ruwa Main SPS is currently inoperable with one pump failed, two motors failed and one panel failed;

• With no pumps running, all of Ruwa’s sewage discharges untreated into the Manyame catchment;

• Ruwa's wastewater stabilisation ponds (Adelaide ponds) are located in land controlled by Epworth and slated for redevelopment. They are currently inaccessible to Ruwa and are not in use.

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ES5 PROPOSED INVESTMENT MEASURES

Assessment of the existing water supply and sewerage schemes in the project city/towns has confirmed that there is need for major rehabilitation investment to bring the existing facilities back to good working order. Further analysis of the water and sewerage service requirements indicates that, the water and sewerage schemes need to be extended in the medium and long term horizons.

The proposed investment measures are grouped according to the following six categories:

A - Water Demand Management/NRW Reduction Programme (Investment measures aimed at rehabilitating the distribution network and reducing NRW);

B – Water Supply Service Improvements (Investment measures aimed at improving water production, transmission and distribution);

C - Extension of Water Supply Services (Investment measures aimed at increasing water production and extending services to new areas resulting from population increase);

D - Sewerage Service Improvements (Investment measures aimed at improving sewerage services by rehabilitating existing sewage collection and treatment infrastructure);

E - Extension of Sewerage Services (Investment measures aimed at increasing capacity for wastewater treatment and service coverage to the new development areas);

F – Accompanying Measures (Investment measures aimed at improving capacity to carry out technical and commercial operations. Professional services accompanying implementation of investments, uncertainties in estimating physical quantities).

Table ES - 14 overleaf summarises the identified investment measures in each town.

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Table ES - 14: Summary of Investment Measures

Harare Chitungwiza Epworth Norton Ruwa

A - Water Demand Management/ NRW Reduction Programme

• Replacement of 54 km of transmission pipelines, including associated appurtenant fittings and structures,

• Replacement of 83 km of distribution pipelines, including associated appurtenant fittings and structures,

• Replacement of 87 bulk meters,

• Replacement of 260,000 service connections and water meters,

• Network mapping, network investigations and repair/replacement programme (ALL TOWNS),

• Customer database cleanup and awareness campaigns (ALL TOWNS).

• Replacement of 12.4 km of transmission and distribution pipelines, including associated appurtenant fittings and structures,


• Replacement of 56,000 service connections and water meters.


• Installation of 64 bulk meters,


• Installation of 13,600 flow limiters (done with service connection replacement).




• Installation of flow limiters (done with service connection replacement).



• Replacement of 2,100 service connections and 12,500 water meters.

B - Water Supply Service Improvements

• Rehabilitation of Morton Jaffray WTW including source works,

• Rehabilitation of Prince Edward WTW including source works,

• Rehabilitation of Warren Control Station,

• Rehabilitation of storage reservoirs.

• Construction of 21 water kiosks, complete with meters.

• Rehabilitation of existing water tanks,

• Construction of a new water supply line DN500 from Morton Jaffray to Norton Hillside tanks.

• Rehabilitation of existing WTW.

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Harare Chitungwiza Epworth Norton Ruwa • Rehabilitation of

Alexander Park Booster Station,

• Rehabilitation of Letombo Booster Station,

• Rehabilitation of storage reservoirs including lift stations.

C - Extension of Water Supply Services

• Construction of proposed Kunzvi Dam, WTP (150,000 m3/day), and transmission infrastructure,

• Construction of new storage reservoirs to increase capacity by 230,000 m3,

• Extension of distribution system in expansion areas (881 km of pipes and 81,000 service connections in the medium term; 2,565 km and 238,000 service connections in the long term).

• Installation of 36 km of new transmission and primary network pipes,

• Construction of additional reservoir storage at Makoni and construction of a new reservoir in the Nyatsime new development area,

• Extension of distribution system in expansion areas (53 km of pipes and 5,800 service connections in the medium term; 239 km, and 26,000 service connections in the long term).

• Construction of Ventersberg - Epworth Booster Pump Station,

• Construction of 845 m of secondary pipes,

• Extension of distribution system in expansion areas (21 km of pipes and 1,800 service connections in the medium term; 153 km and 13,200 service connections in the long term).

• Expansion of primary and secondary distribution (39 km),

• Expansion of Norton Hillside Storage,


• 12.5 ML Expansion of FC Reactor WTW

• Construction of Ruwa WTW Booster Pump Station and Mutare Road Water Booster Pump Station,

• Expansion of primary and secondary distribution (24.5 km),

• Replacement of Mutare Road Elevated Tank

• Ruwa WTW clear water tanks expansion


D - Sewerage Service Improvement

• Rehabilitation of Firle WWTW,

• Rehabilitation of Crowborough WWTW,

• Rehabilitation of Zengeza WWTW- modified conventional works,

• Sewer reticulation pipes - replacement (3.2 km),

• Sewer reticulation

• Rehabilitation of Norton WWTW,

• Establishment of new slow rate irrigation

• Decommissioning of existing Adelaide sewage treatment works,

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Harare Chitungwiza Epworth Norton Ruwa s • Rehabilitation of

Hatcliffe WWTW, • Rehabilitation of all

sewage pump stations, • Replacement/upgradin

g of 104 km of existing sewer reticulation and transmission network.

• Rehabilitation of Zengeza WWTW- BNR System,

• Rehabilitation of Tilco sewage pump station,

• Replacement/upgrading of 2.1 km of existing sewer reticulation and transmission network.

pipes grit removal (12.4 km).

disposal system, • New pumps and force

main to new irrigation site,

• Rehabilitate existing sewage pump stations,

• Replacement/upgrading of 1.4 km of existing sewer reticulation and transmission network.

• Decommissioning of sewage pump stations (retain screening facilities),

• Replacement/upgrading of 8 km of existing sewer reticulation and transmission network.

E - Extension of Sewerage Services

• Decommissioning of Donnybrook ponds,

• Rehabilitation/ commissioning of existing Lyndhurst Farm sewer (1.5 Km),

• Trunk sewer extensions in Southern suburbs (Ward 1),

• Construction of the Harare South trunk sewer

• Construction of the Harare South sewage pump station and force main,

• Construction of the Harare South WWTW

• Expansion of Crowborough WWTW,

• Extension of sewer reticulation system in new development areas (401 km of sewers and 47,000 service connections in the medium term;

• Installation of 22 km of new sewer trunk mains,

• Extension of sewer reticulation system in new development areas (49 km of sewers and 5,800 service connections in the medium term; 222 km of sewers and 26,000 service connections in the long term).

• Epworth outfall sewer to Lyndhyrst Farm line (4.7 km),

• Network expansion into Wards 3 and 4,

• Extension of sewer reticulation system in new development areas (6.8 km of sewers and 11,200 service connections in the medium term; 114 km of sewers and 13,200 service connections in the long term).

• Construction of new Norton WWTW (anaerobic/ facultative ponds)

• New secondary sewerage lines in Wards 12 and 13,

• New secondary sewerage lines in Chegutu expansion area,

• Extension of sewer reticulation system in new development areas (35 km of sewers and 4,200 service connections in the medium term; 67.7 km of sewers and 8,000 service connections in the long term).

• Ruwa Northern expansion of sewer network,

• Ruwa Southern and Ward 4 expansion of sewer network,

• Ruwa Eastern expansion of sewer network,

• Short and medium term, construction of a new 18 MLD pond system to replace Adelaide ponds,

• Long term Ruwa outfall sewer to Lyndhurst Farm / Harare South trunk sewer,

• Extension of sewer reticulation system in new development areas (86 km of sewers and 10,100 service connections in the medium term; 92 km of sewers and 10,900 service

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Harare Chitungwiza Epworth Norton Ruwa 1,300 km of sewers and 163,000 service connections in the long term).

connections in the long term).

• F – Accompanying Measures

• Establishment of meter control, testing and repair workshop; procurement of tools and equipment for operations and maintenance; provision of vehicles for operation and maintenance teams; supply and installation of information communication technology infrastructure; review/ improvement of billing and commercial operations; socio-economic surveys and customer awareness campaigns; management, commercial and technical software applications; professional services for institutional support, engineering services

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ES6 INVESTMENT COST ESTIMATES

ES6.1 Prioritization Principles and Sequencing of Investments

Given the current political and economic situation in Zimbabwe, there may not be enough funds to finance all the identified investment measures in one project. Hence prioritization and evaluation to identify measures with the highest economic and social returns is an important element of this investment plan. We have grouped the investment measures into three broad priority categories (Figure ES – 5).

The highest priority will be given to investment measures aimed at ensuring that the utility meets its basic public health and service obligations by getting the most out of the existing facilities. The second priority will be given to measures that are essential for safeguarding the health of the population and the environment (wastewater treatment and disposal), while the last priority will include measures that will respond to the increasing demand for services due to population and economic growth.

Figure ES - 5: Prioritization Principles

Short and medium term investment measures will focus mainly on rehabilitation of existing infrastructure, while longer term investments will focus on expansion. The first wave of investments should aim at increasing the amount of water available to the customers, mainly by reducing physical losses in the network and increasing production at existing water treatment facilities. Financing from the Zim-Fund and EXIM bank of China has already been applied especially for rehabilitation of the water treatment plants. The second wave of investments should focus on managing the increased wastewater flow by rehabilitating existing wastewater treatment facilities and increasing treatment capacity. Once the services have been stabilised, additional investments can be made in increasing water production and extending services to new development areas, capturing more customers.

ES6.2 Harare

The total required investment in Harare between now and 2030 is US$ 1,723 million. This comprises US$ 628 million in short term investment measures focused mainly on

Priority 1

• Investments for the restoration of existing facilities

Priority 2

• Investments to safegurad the health of the population and the environment

Priority 3

• Investments to meet increasing needs of the city

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rehabilitation of existing infrastructure, and US$1,095 million in longer term investments. Of the total investment 37% is for extension of water and sewerage reticulation into expansion areas, which could be financed by private developers.

Table ES – 15 shows a summary of the investment costs in Harare by priority. The investment measures in each priority are presented in the accompanying graphic.

Short term investment measures will include network restructuring and rehabilitation to reduce physical losses as well as other commercial operational investments to reduce overall NRW. They will also include further rehabilitation and optimisation of the two water treatment facilities to increase availability of water. Medium term measures will be dominated by the construction of the first phase of the Kunzvi scheme and the associated restructuring of the primary and secondary distribution network. Expansion and further rehabilitation of Crowborough WWTW and other wastewater infrastructure will also be done in the medium term. The long term measures will be dominated by the Harare South Trunk Sewer and associate wastewater treatment works.

Table ES - 15: Summary of Investments in Harare by Priority

Description Total Investment

US$ (million)

Investment to 2020

US$ (million)

Investment 2021-2030

US$ (million) Priority 1 Investments 430 232 197 Priority 2 Investments 274 142 132 Priority 3 Investments 1,020 254 766 Total 1,723 628 1,095 Reticulation to new development areas 634 152 482 % of total investment 37% 24% 44%

ES6.3 Chitungwiza

Table ES – 16 shows a summary of the investment costs in Chitungwiza by priority. The investment measures in each priority are presented in the accompanying graphic. The total required investment in Chitungwiza is US$ 162 million, of which 45% is required in the short/medium term and 55% in the long term.

Short term investment measures will focus on reducing NRW and increasing supply to the Makoni reservoirs by rehabilitating/restricting the network and upgrading the transmission line from Prince Edward WTW. Medium term investment measures are dominated by the rehabilitation of the Zengeza BNR plant and the sewage pumping stations to better manage

Priority 1

•NRW reduction programme (network rehabilitation and improvement of commercial operations)

•Rehabilitation of Morton Jaffray and Prince Edward WTW

•Replacement/upgrading of existing sewer network

•Accompanying measures and institutional support

Priority 2

•Construction of Kunzvi phase I

•Rehabilitation of water pump stations and reservoirs

•Rehabilitation of WWTW and sewage pump stations

•Expansion of Crowborough WWTW

Priority 3

•Harare South trunk sewer and treatment works

•Construction of Kunzvi phase II

•Expansion of reticulation to new development areas

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the increased wastewater resulting from the short term measures. Long term measures will be dominated by expansion of the primary and secondary network into Nyatsime as well as increasing storage capacity.

Table ES - 16: Summary of Investments in Chitungwiza by Priority


US$ (million)

Investment to 2020

US$ (million)


US$ (million) Priority 1 Investments 41 25 17 Priority 2 Investments 18 10 8 Priority 3 Investments 103 37 65 Total 162 72 90 Reticulation to new development areas 69 13 57 % of total investment 43% 17% 63%

ES6.4 Epworth

Table ES – 17 shows a summary of the investment costs in Epworth by priority. The investment measures in each priority are presented in the accompanying graphic. The total required investment in Epworth is US$ 64 million, of which 26% is required in the short/medium term and 74% in the long term. Short term investment measures are dominated by the NRW reduction programme, while long term investments will focus on increasing service coverage in the wake of increased water supply to Epworth and availability of a wastewater treatment plant to receive sewage from Epworth.

Table ES - 17: Summary of Investments in Epworth by Priority


US$ (million)

Investment to 2020

US$ (million)


US$ (million) Priority 1 Investments 21 15 6 Priority 2 Investments 43 2 41 Priority 3 Investments Total 64 16 47 Reticulation to new development areas 36 2 34 % of total investment 56% 11% 71%

Priority 1


•Replacement/ rehabilitationn of existing transmission and primary distribution mains

•Rehabilitation of storage tanks and pump stations


Priority 2

•Rehabilitation of Zengeza WWTW

•Rehabilitation of sewage pump stations

•Rehabilitation/ replacement of existing sewer network

Priority 3

•Connection to the Harare South WWTW

•Construction of additional reservoirs

•Expansion of services to new development areas

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ES6.5 Norton

Table ES - 18 shows a summary of the investment costs in Norton by priority. The investment measures in each priority are presented in the accompanying graphic. The total required investment in Norton is US$ 100 million.

Short term investment measures will include upgrading of the transmission main from Morton Jaffray WTW to the Hillside reservoirs to increase the quantity of bulk water, and network rehabilitation to reduce physical losses as well other commercial operational investments to reduce overall NRW. Expansion of the secondary distribution network to Wards 12 and 13 will also be done in the short term. Medium term measures will include construction of a council owned irrigation system for disposal of effluent from the existing water treatment facility and general rehabilitation of sewerage infrastructure. Long term measures will be dominated by the construction of a new pond system to treat sewage from Wards 12 and 13 and the new development area in the south-west.

Table ES - 18: Summary of Investments in Norton by Priority


US$ (million)

Investment to 2020

US$ (million)



Priority 1



Priority 2

•Primary and secondary distribution network expansion

•Expansion of services to new development areas

•Epworth outfall sewer to Lindhurst Farm line

•Sewer expansion to Wards 3 and 4

Priority 3

•Not applicable

Priority 1



Priority 2

•Rehabilitation of Norton WWTW

•New slow rate irrigation disposal system

•Rehabilitate existing sewage pump stations


Priority 3

•New Norton WWTW (anaerobic/ facultative ponds)

•New secondary sewerage in Wards 12 and 13 and in Chegutu Expansion Area

•Extension of water and sewer reticulation system in new development areas

•Expansion of Hillside Storage

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Greater Harare Water and Sanitation Investment Plan Investment Plan Report Executive Summary ES6.6 Ruwa

Table ES – 19 shows a summary of the investment costs in Ruwa by priority. The investment measures in each priority are presented in the accompanying graphic. The total required investment in Ruwa is US$ 141 million, of which 48% is required in the short/medium term and 52% in the long term. Ruwa’s investment costs are significantly higher in the short/medium term as compared to the other towns because of the immediate need for a wastewater treatment facility and the expansion of the water treatment works following the completion of the raw water transmission line from Nora Dam to Green Sykes Dam.

Hence the short term investments are dominated by the pond system and the NRW reduction programme. The water treatment plant will be upgraded in the medium term along with the completion of the storage tank at the treatment plant. In the long term, the pond system may be decommissioned after connection to the Harare South Trunk Sewer. Long term investment measures will also include construction of more reservoirs in the system to increase storage capacity.

Table ES - 19: Summary of Investments in Ruwa by Priority


US$ (million)

Investment to 2020

US$ (million)



ES6.7 Greater Harare

For Greater Harare as a whole, the total required investment between now and 2030 is US$ 2,189 million (Table ES – 20). This comprises US$ 827 million for short and medium term investment measures focused mainly on rehabilitation of existing infrastructure and

Priority 1


•Construction of a new pond system


Priority 2

•Proposed RUWA WTW expansion

•Construction of new storage reservoirs

Priority 3

•Decommissioning of wastewater stabilisation ponds and sewage pump stations

•Extension of water and sewer reticulation system in new development areas


•Expansion of sewer network

•Connection to the Harare South sewer transmission

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managing the resulting increase in wastewater flows, and US$ 1,363 million in longer term investments in expansion.

Table ES - 20: Summary of Aggregate Investments in Greater Harare by Priority


US$ (million)

Investment to 2020

US$ (million)


US$ (million) Priority 1 Investments 580 312 268 Priority 2 Investments 327 141 186 Priority 3 Investments 1,282 373 909 Total 2,189 827 1,363 Reticulation to new development areas 828 205 623 % of total investment 38% 25% 46%

ES6.8 Financing Options

This investment plan assumes that extension of the water and sewer reticulation network in new development areas will largely be financed by private developers. This accounts for 38% of the total investment costs. A further assumption has been made that the service providers (councils and eventually the water utility) will meet the cost of periodic service meters replacements (8%) of the total. The remaining 54% of the total investments will be financed through grants and loans. Figure ES - 6 below illustrates this split in financing assumptions over the study horizon.

Figure ES - 6: Financing Options

Some financial resources have been made available in the short term. The Zim-Fund is financing the implementation of the Urgent Water Supply and Sanitation Rehabilitation Project (UWSSRP) in two phases: US$ 14 Million under Phase I and US$ 19 million under Phase II (Table ES – 21). The City of Harare has secured a US$ 144 Million loan from the EXIM bank of China to be invested in rehabilitation works over the next three years. This leaves a financing gap of nearly US$ 1.2 billion. Efforts must start now to bridge this financing gap.

-

50

100

150

200

250

300

350

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Mill

ions

Loan/Grant Financing

Meter Replacements (Own financing)

Investment in New Development Areas (Private Developers)

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Table ES - 21: Financing Sources

Source Amount Zim-Fund - Phase I 14,000,000 Zim-Fund - Phase II 19,000,000 CMEC (EXIM Bank loan) 144,000,000 Unknown 1,182,471,471 Total 1,359,471,471

ES7 FINANCIAL ANALYSIS AND SUSTAINABILITY

ES7.1 Objective

The main objective of the financial analysis was to ascertain a utility based assessment of the financial viability over the project evaluation period (2013 to 2030) using income statements, cash flows and balance sheets to determine the individual level of sustainability of all entities; Harare, Chitungwiza, Epwoth, Norton, Ruwa and finally all these combined as a clustered entity.

ES7.2 Financial Model Configuration

To achieve this objective a readily available spreadsheet application was used to develop a financial model capable of measuring the aforementioned financial statements. The general approach is outlined in the following schematic flowchart.

Figure ES - 7: Outline Approach Schematic Layout of the Financial Model

As a first step, the information was entered into the model for the base year (2013) and calibrated to reflect the current commercial and financial position as per recent reports and

Investment assetsIn

Variable costs • Abstraction/bulk • Power • Chemicals

Demand & production

VOLUMES COSTS REVENUE

Tariff (consolidated)

Billing (sales)

Collections

Depreciation (exist & invest)

Maintenance (exist & invest)

Invest. costs

Existing assetsIn

ASSETS

ANALYSIS

Income Statement

Cash Flow Statement

Balance Sheet

Fixed costs • Employment • Transport • Admin

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financial statements availed by the councils and local boards. Discrepancies between ideal and advisable cost and efficiency levels were gradually adjusted. This includes the key parameters.

ES7.3 Key Parameters and Assumptions

The key parameters and associated assumptions to the financial model are listed below:

• Proportion of bulk water demand supplied: With currently inadequate volumes of water available to fully satisfy the demand for water by Harare and satellite towns, only a proportion of the demand is realistically supplied. For the base year it is assumed that only 50 % of the demand for bulk water will be supplied by Harare. This gradually increases to 100 % as NRW reduces as well as the production capacities increase, which all contributes to more water available to satisfy demand.

• NRW is currently high, estimated at an average for all areas at 55 %. This is assumed to improve, reducing to 30 % by 2020 and further to 20 % by 2030 (including commercial and technical losses);

• The bulk water tariff provides a financial interface between Harare (supplier) and the satellite areas. The current average bulk water tariff charged by Harare of USD 0.40 was adopted and kept constant throughout the project horizon. This compares slightly higher than recalculated bulk water costs ranging between USD 0.25 and USD 0.31 over the evaluation period, Taking losses into consideration, the currently charged bulk tariff was considered to be realistic:

• The Retail tariff calculated by the model for water was well below the average tariff actually charged at present of 1.45/m3. This is a combined tariff including sewerage and other fixed charges. For purposes of financial modelling this combined charge was applied initially and gradually reduced to USD 0.90, also as a combined charge;

• Collection efficiencies vary amongst the various entities, the lowest for 2013 being Harare at around 40 %. While individual collection efficiencies obtained for each area were used as a starting point, they converged to the same miletone of 95 % by 2020, which was assumed to be maintained at this level until the end of the evaluation period;

• Depreciation costs for existing assets were not included in the model as the financial position various entities would not allow for such a provision to be maintained; However, the depreciation of the planned capital investments were included in the cost calculations. Where applicable, depreciation is calculated on a linear basis;

• Maintenance costs calculated for both existing and investment assets were limited to 10 % thereof since the current financial performance of the entities is inadequate to afford higher levels. However with time, the proportion of ideal maintenance cost levels is increased to a maximum of 50 %.

• The financial model is carried out with real costs and therefore excludes inflationary cost escalations;

• Loan interest is calculated on a reducing balance, whereby two distinct loans have been identified; a) an existing loan from Exim Bank with a repayment period of 5 years at an interest of 3.5 % and an anticipated loan for the implementation of the

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planned investment assets, set at a repayment period of 20 years at an interest of 5 %, whereby 50 % of the funding would be a grant and hence the effective interest rate is 2.5 %.

ES7.4 Financial Analysis Results

The results of the financial analysis are summarised in the following tables (all values in 000 USD).

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Table ES - 22: Income Statement

ENTITY/ITEM 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030HARAREIncome 94,722 94,845 116,044 117,839 123,586 128,820 131,799 135,989 134,810 116,721 120,308 124,508 128,773 133,102 137,495 141,952 146,472 151,057 Expenditure 49,875 56,349 61,848 66,532 71,958 80,784 84,436 90,766 97,973 98,700 100,423 102,362 104,359 107,050 112,376 115,537 115,614 115,515 Surplus/(Deficit) 44,847 38,496 54,196 51,307 51,628 48,036 47,364 45,223 36,838 18,021 19,884 22,146 24,414 26,052 25,119 26,415 30,858 35,542 Provision for Bad Debt 27,916 47,423 46,418 35,352 24,717 19,323 13,180 6,799 6,741 5,836 6,015 6,225 6,439 6,655 6,875 7,098 7,324 7,553 Depreciation 0 169 388 438 998 1,541 1,939 3,507 5,372 6,933 8,641 9,355 9,609 11,148 12,694 13,281 13,525 13,899 Adj. Surplus/(Deficit) 16,931 (9,095) 7,390 15,517 25,913 27,172 32,244 34,916 24,726 5,252 5,228 6,566 8,367 8,250 5,550 6,037 10,009 14,090 CHITUNGWIZAIncome 3,027 3,704 4,176 4,940 5,969 7,090 12,077 16,013 15,934 13,551 14,074 14,607 15,148 15,699 16,259 16,828 17,407 17,994 Expenditure 3,968 4,370 5,766 6,625 8,029 10,094 12,603 14,320 14,873 15,046 15,218 15,525 15,698 16,119 16,530 16,089 16,247 16,405 Surplus/(Deficit) (941) (666) (1,590) (1,686) (2,059) (3,004) (526) 1,693 1,061 (1,495) (1,144) (918) (549) (420) (271) 739 1,159 1,589 Provision for Bad Debt 378 926 1,044 1,235 1,194 1,064 1,208 801 797 678 704 730 757 785 813 841 870 900 Depreciation 0 4 14 18 130 236 240 366 517 677 841 1,214 1,065 1,003 1,111 1,164 1,201 1,238 Adj. Surplus/(Deficit) (1,319) (1,596) (2,648) (2,939) (3,383) (4,304) (1,974) 526 (253) (2,850) (2,689) (2,863) (2,371) (2,208) (2,195) (1,266) (912) (548)EPWORTHIncome 819 1,138 1,436 1,881 2,494 3,225 5,941 8,471 8,264 6,895 7,029 7,164 7,301 7,438 7,577 7,716 7,857 7,998 Expenditure 932 1,141 1,657 1,997 2,526 3,050 4,370 5,436 5,502 5,533 5,563 5,632 5,663 5,819 5,970 5,996 6,019 6,043 Surplus/(Deficit) (113) (3) (221) (116) (32) 175 1,571 3,035 2,762 1,362 1,466 1,532 1,638 1,619 1,607 1,720 1,837 1,956 Provision for Bad Debt 164 626 718 753 748 645 594 424 413 345 351 358 365 372 379 386 393 400 Depreciation 0 0 2 3 32 54 55 84 127 177 233 350 302 297 342 372 393 414 Adj. Surplus/(Deficit) (277) (629) (941) (871) (811) (525) 922 2,528 2,222 841 881 824 971 951 886 963 1,052 1,142 NORTONIncome 1,113 1,388 1,593 1,919 2,359 2,851 4,940 6,660 6,642 5,661 5,892 6,127 6,366 6,609 6,856 7,108 7,364 7,623 Expenditure 2,173 2,350 3,112 3,557 4,246 5,202 6,217 6,936 7,098 7,168 7,237 7,333 7,403 7,897 8,372 8,372 8,406 8,437 Surplus/(Deficit) (1,060) (963) (1,519) (1,639) (1,886) (2,351) (1,277) (277) (456) (1,507) (1,345) (1,206) (1,037) (1,288) (1,516) (1,264) (1,042) (814)Provision for Bad Debt 184 416 478 480 472 428 494 333 332 283 295 306 318 330 343 355 368 381 Depreciation 0 2 7 11 57 94 98 152 215 281 352 432 384 431 517 538 552 566 Adj. Surplus/(Deficit) (1,244) (1,381) (2,004) (2,129) (2,415) (2,872) (1,869) (761) (1,003) (2,071) (1,992) (1,945) (1,740) (2,050) (2,376) (2,158) (1,962) (1,761)RUWAIncome 1,232 2,396 2,546 2,910 3,458 4,093 6,623 7,953 7,942 6,777 7,061 7,351 7,646 7,946 8,251 8,561 8,877 9,198 Expenditure 1,563 1,862 2,381 2,753 3,577 4,793 5,278 5,797 5,988 6,256 6,385 6,543 6,671 7,301 7,867 7,913 7,945 7,992 Surplus/(Deficit) (330) 534 165 157 (119) (700) 1,346 2,155 1,953 521 677 808 974 645 384 648 932 1,206 Provision for Bad Debt 363 1,198 1,018 873 692 614 662 398 397 339 353 368 382 397 413 428 444 460 Depreciation 0 4 17 25 84 135 143 227 322 418 521 611 556 602 698 724 742 760 Adj. Surplus/(Deficit) (693) (668) (870) (741) (894) (1,449) 540 1,530 1,234 (236) (197) (171) 36 (354) (726) (504) (254) (14)GREATER HARAREIncome 106,220 106,744 127,587 129,294 136,143 142,819 149,322 155,651 154,637 131,311 136,185 141,142 146,183 151,307 156,516 161,807 167,182 172,641 Expenditure 53,140 57,936 70,451 73,960 83,792 93,729 98,172 104,908 112,865 113,726 115,582 117,882 120,011 124,133 130,845 133,472 133,656 133,677 Surplus/(Deficit) 53,080 48,808 57,137 55,334 52,351 49,090 51,150 50,743 41,772 17,585 20,603 23,261 26,172 27,174 25,670 28,336 33,526 38,964 Provision for Bad Debt 29,211 53,372 51,035 38,788 27,229 21,423 14,932 7,783 7,732 6,566 6,809 7,057 7,309 7,565 7,826 8,090 8,359 8,632 Depreciation 0 177 212 245 648 1,029 2,473 2,888 3,273 3,391 3,526 3,984 3,968 4,490 5,117 5,356 5,468 5,622 Adj. Surplus/(Deficit) 23,870 (4,742) 5,890 16,300 24,474 26,638 33,745 40,073 30,767 7,628 10,268 12,219 14,895 15,119 12,727 14,889 19,700 24,710

Gauff Ingenieure 29


Table ES - 23: Cash Flow Statement

ENTITY/ITEM 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030HARARENet cash flow (10,985) (6,611) 10,233 18,547 2 (973) 1,610 2,984 (7,846) (145) 1,220 3,269 5,278 2,724 (2,404) (3,955) 273 4,739 Accumulated cash flow (10,985) (17,596) (7,363) 11,183 11,185 10,212 11,822 14,806 6,961 6,815 8,035 11,304 16,582 19,305 16,901 12,946 13,219 17,957 CHITUNGWIZANet cash flow (1,697) 723 (117) (2,921) (3,985) (5,512) (3,168) (544) (1,179) (3,609) (3,304) (3,106) (2,770) (2,874) (2,960) (1,977) (1,584) (1,182)Accumulated cash flow (1,697) (975) (1,092) (4,013) (7,998) (13,509) (16,678) (17,222) (18,402) (22,010) (25,315) (28,420) (31,190) (34,064) (37,024) (39,000) (40,584) (41,767)EPWORTHNet cash flow (440) 1,674 1,601 (867) (961) (797) 652 2,286 2,018 684 773 832 928 801 680 784 895 1,007 Accumulated cash flow (440) 1,234 2,835 1,968 1,007 210 862 3,149 5,167 5,851 6,624 7,457 8,384 9,185 9,865 10,649 11,544 12,551 NORTONNet cash flow (1,428) 924 544 (2,115) (2,766) (3,569) (2,561) (1,400) (1,581) (2,579) (2,438) (2,310) (2,155) (2,804) (3,429) (3,190) (2,980) (2,764)Accumulated cash flow (1,428) (504) 40 (2,075) (4,841) (8,409) (10,970) (12,371) (13,951) (16,530) (18,968) (21,278) (23,433) (26,237) (29,666) (32,856) (35,835) (38,599)RUWANet cash flow (1,057) 1,639 1,687 (695) (1,281) (2,287) (297) 768 563 (809) (681) (564) (415) (1,214) (1,944) (1,695) (1,427) (1,168)Accumulated cash flow (1,057) 582 2,269 1,575 294 (1,993) (2,290) (1,522) (960) (1,769) (2,449) (3,014) (3,429) (4,642) (6,587) (8,282) (9,708) (10,876)GREATER HARARENet cash flow (5,341) (2,278) 8,510 18,749 (2,376) (3,529) 2,542 6,840 (4,158) (1,583) 833 3,241 5,842 2,491 (3,369) (3,065) 1,870 7,047 Accumulated cash flow (5,341) (7,619) 891 19,641 17,264 13,735 16,277 23,117 18,958 17,375 18,208 21,449 27,291 29,782 26,413 23,347 25,217 32,264

Gauff Ingenieure 30


Table ES - 24: Annual Balance Sheet

ENTITY/ITEEM 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030HARAREFixed Assets 772,845 763,334 757,323 750,811 861,114 963,846 1,046,872 1,126,578 1,212,959 1,206,813 1,201,904 1,209,811 1,216,873 1,378,216 1,542,722 1,641,515 1,631,803 1,623,141 Current Assets 8,216 1,586 15,997 34,713 35,773 35,466 37,399 40,543 31,333 26,285 28,006 31,893 37,796 41,710 40,039 36,935 38,129 43,834 Total Assets 781,062 764,921 773,320 785,524 896,887 999,312 1,084,271 1,167,121 1,244,292 1,233,097 1,229,910 1,241,705 1,254,670 1,419,926 1,582,761 1,678,450 1,669,932 1,666,974 Equity 781,062 635,321 641,820 652,224 729,660 809,554 882,175 955,021 1,026,422 1,028,217 1,038,019 1,062,802 1,088,757 1,191,282 1,295,370 1,361,958 1,377,034 1,397,671 Long term liability 0 129,600 131,500 133,300 167,227 189,758 202,096 212,100 217,870 204,881 191,891 178,902 165,913 228,644 287,390 316,492 292,898 269,303 Total Liability 781,062 764,921 773,320 785,524 896,887 999,312 1,084,271 1,167,121 1,244,292 1,233,097 1,229,910 1,241,705 1,254,670 1,419,926 1,582,761 1,678,450 1,669,932 1,666,974 Debt/Equity ratio 0% 20% 20% 20% 23% 23% 23% 22% 21% 20% 18% 17% 15% 19% 22% 23% 21% 19%CHITUNGWIZAFixed Assets 76,813 74,934 74,512 72,922 99,813 124,779 120,967 117,116 117,181 117,121 116,967 128,560 127,661 135,282 142,543 141,921 142,374 142,705 Current Assets (1,370) (545) (656) (3,486) (7,325) (12,690) (15,042) (14,901) (16,205) (20,451) (23,665) (26,701) (29,377) (32,161) (35,029) (36,806) (38,288) (39,365)Total Assets 75,443 74,389 73,856 69,436 92,489 112,089 105,925 102,215 100,976 96,671 93,302 101,859 98,284 103,120 107,514 105,115 104,087 103,339 Equity 75,443 74,389 73,131 68,749 77,779 84,507 79,840 77,626 77,884 75,075 73,203 83,257 81,179 83,563 85,711 85,225 86,109 87,274 Long term liability 0 0 725 687 14,709 27,582 26,085 24,589 23,092 21,595 20,099 18,602 17,105 19,558 21,802 19,890 17,978 16,065 Total Liability 75,443 74,389 73,856 69,436 92,489 112,089 105,925 102,215 100,976 96,671 93,302 101,859 98,284 103,120 107,514 105,115 104,087 103,339 Debt/Equity ratio 0% 0% 1% 1% 19% 33% 33% 32% 30% 29% 27% 22% 21% 23% 25% 23% 21% 18%EPWORTHFixed Assets 6,333 6,885 7,069 7,124 14,772 20,334 19,865 19,388 22,003 24,546 27,020 32,801 35,043 41,376 47,560 49,955 52,200 54,374 Current Assets (342) 1,379 3,008 2,206 1,343 670 1,778 4,517 6,469 6,803 7,601 8,453 9,407 10,230 10,932 11,743 12,664 13,698 Total Assets 5,990 8,264 10,077 9,330 16,115 21,004 21,644 23,905 28,472 31,350 34,621 41,254 44,450 51,606 58,492 61,697 64,864 68,072 Equity 5,990 8,036 9,804 9,072 12,128 14,369 15,371 17,995 22,925 26,165 29,799 36,794 40,353 45,937 51,353 55,087 58,822 62,598 Long term liability 0 228 273 258 3,986 6,635 6,272 5,910 5,547 5,185 4,822 4,459 4,097 5,669 7,138 6,610 6,042 5,474 Total Liability 5,990 8,264 10,077 9,330 16,115 21,004 21,644 23,905 28,472 31,350 34,621 41,254 44,450 51,606 58,492 61,697 64,864 68,072 Debt/Equity ratio 0% 3% 3% 3% 33% 46% 41% 33% 24% 20% 16% 12% 10% 12% 14% 12% 10% 9%NORTONFixed Assets 10,974 12,591 13,812 14,877 32,018 47,685 47,882 48,043 48,873 49,653 50,385 53,381 54,005 69,906 85,521 85,874 86,247 86,573 Current Assets (1,317) (352) 196 (1,878) (4,580) (8,081) (10,296) (11,392) (13,011) (15,854) (18,252) (20,527) (22,640) (25,408) (28,800) (31,940) (34,875) (37,592)Total Assets 9,658 12,240 14,008 12,999 27,438 39,604 37,587 36,651 35,861 33,799 32,133 32,854 31,365 44,498 56,721 53,934 51,373 48,981 Equity 9,658 12,012 13,735 12,741 19,342 24,606 23,402 23,281 23,305 22,057 21,205 22,740 22,065 28,682 34,774 33,573 32,598 31,792 Long term liability 0 228 273 258 8,096 14,999 14,184 13,370 12,556 11,742 10,928 10,114 9,300 15,816 21,947 20,361 18,775 17,189 Total Liability 9,658 12,240 14,008 12,999 27,438 39,604 37,587 36,651 35,861 33,799 32,133 32,854 31,365 44,498 56,721 53,934 51,373 48,981 Debt/Equity ratio 0% 2% 2% 2% 42% 61% 61% 57% 54% 53% 52% 44% 42% 55% 63% 61% 58% 54%RUWAFixed Assets 24,549 28,035 31,080 33,922 56,785 78,284 79,939 81,513 82,447 83,319 84,127 87,394 88,091 106,842 125,271 125,700 126,073 126,453 Current Assets (891) 991 2,678 2,033 838 (1,358) (1,112) (107) 412 (741) (1,381) (1,907) (2,279) (3,455) (5,354) (6,995) (8,364) (9,476)Total Assets 23,658 29,027 33,758 35,955 57,623 76,925 78,827 81,406 82,859 82,578 82,746 85,487 85,813 103,387 119,918 118,705 117,709 116,977 Equity 23,658 28,799 33,485 35,697 47,589 58,035 60,961 64,564 67,042 67,785 68,978 72,743 74,093 84,047 93,412 94,134 95,072 96,275 Long term liability 0 228 273 258 10,034 18,890 17,866 16,842 15,817 14,793 13,769 12,744 11,720 19,340 26,505 24,571 22,637 20,702 Total Liability 23,658 29,027 33,758 35,955 57,623 76,925 78,827 81,406 82,859 82,578 82,746 85,487 85,813 103,387 119,918 118,705 117,709 116,977 Debt/Equity ratio 0% 1% 1% 1% 21% 33% 29% 26% 24% 22% 20% 18% 16% 23% 28% 26% 24% 22%GREATER HARAREFixed Assets 891,515 885,781 883,796 879,656 1,064,500 1,234,927 1,315,526 1,392,638 1,483,462 1,481,452 1,480,403 1,511,947 1,521,674 1,731,621 1,943,615 2,044,964 2,038,695 2,033,244 Current Assets 16,757 14,571 26,978 45,888 44,724 42,179 45,778 53,235 47,621 39,801 41,432 45,417 52,053 55,883 53,408 51,487 54,473 62,684 Total Assets 908,272 900,352 910,774 925,544 1,109,224 1,277,106 1,361,304 1,445,873 1,531,083 1,521,253 1,521,835 1,557,365 1,573,727 1,787,505 1,997,023 2,096,451 2,093,167 2,095,928 Equity 908,272 770,061 777,686 790,682 904,010 1,016,123 1,089,257 1,164,629 1,244,430 1,247,949 1,261,881 1,310,760 1,340,472 1,468,993 1,597,364 1,667,732 1,688,124 1,714,561 Long term liability 0 130,291 133,088 134,862 205,214 260,983 272,047 281,244 286,653 273,304 259,954 246,605 233,255 318,511 399,659 428,719 405,043 381,367 Total Liability 908,272 900,352 910,774 925,544 1,109,224 1,277,106 1,361,304 1,445,873 1,531,083 1,521,253 1,521,835 1,557,365 1,573,727 1,787,505 1,997,023 2,096,451 2,093,167 2,095,928 Debt/Equity ratio 0% 17% 17% 17% 23% 26% 25% 24% 23% 22% 21% 19% 17% 22% 25% 26% 24% 22%

Gauff Ingenieure 31


In general, the financial statements from the financial model indicate that Harare alone is financially viable to implement the measures detailed under the investment plan for scenario 1 (priority 1, 2 and 3). The results for the satellite towns is however not as favourable; none are deemed to be viable. The outcome of the financial model for a clustered situation -in which Harare and all satellite towns are combined into a single organisation-, is financially sustainable for all investment scenarios.

ES7.5 Conclusion

Summarising the various findings presented above it can be stated that the base model for Harare using current and reducing tariff levels is positive with regard to the income statement, sustainable in terms of the cash flow and shown to have an affordable rate of investment according to the balance sheet.

However, this cannot be stated for the satellite towns that return a substantially inferior financial position taking into consideration all three financial statements forecast for these areas. It can further be stated (in general terms) that the satellite areas neither have the liquidity at present nor are they likely to have this in future to cover costs and as such, not be able to honour the obligations of a loan required to implement the much needed investments.

Clustering Harare Water together with the satellite areas does, however, present an opportunity of achieving a financially sustainable result and at the same time be in a position to refund the loan required to implement the much needed capital investments in all areas.

While the existing loan from Exim Bank has provided for the funding of capital investments in Harare worth USD 130 million, the terms and conditions of a 5-year repayment period at an interest rate of 3.5 % p.a. poses a heavy burden on the entity. Nonetheless, the financial model shows that by and large it is possible to still afford an additional loan or loans required to implement the medium to long-term investment plan as proposed herein and service the existing loan obligations, however with the result that there are occasional periods during which the forecast financial performance may require assistance from the shareholders of the entity.

The two alternative investment plan scenarios offered in this investment plan do provide scope for reducing the financial burden on the entity. However, these do not offer the same degree of satisfactory long-term technical solutions. Since the first option can be afforded, it would be advisable to consider re-negotiating the existing loan towards more favourable conditions in order to comfortably take on the full investments recommended and detailed under the investment scenario 1.

As indicated above, the full investment for all areas, i.e. including all satellite towns, is best achieved under a single entity that clusters all areas into one more capable organisation.

In view of the above, it is therefore recommended to cluster the areas and prioritise the investment plan as detailed under scenario 1.

Gauff Ingenieure 32

Documents

INVESTMENT PLAN REPORT - World Bankdocuments.worldbank.org/curated/en/... · Greater Harare Water and Sanitation Investment Plan Investment Plan Report Executive Summary ES1 INTRODUCTION