A Cost-benefit Analysis of Interventions to Improve Water Service Reliability in Blantyre Malawi - Technical Report

Despite the recent completion of the Likhubula water supply project, Blantyre is plagued by water shortages. The new infrastructure increased the Blantyre Water Board’s capacity to 122 million L of water daily. However, this is still less than estimated average demand of 140 million L per day (private correspondence, Blantyre Water Board). Additionally, large physical water losses mean that 40% of water supply is lost before it reaches the consumer, exacerbating the shortfall. Unreliable water imposes costs on water users. Mpakati-Gama and Mkandire (2015) show that due to the unreliable nature of supply, consumers store water in their homes or are forced to travel to other water sources to meet their needs. The latest integrated household survey notes that across Malawi around 16% of urban dwellers get their water from boreholes which are typically outside of the main water board’s supply system, a phenomenon confirmed by the Blantyre Water Board. All of these coping strategies require extra costs, extra time or both. The largest burden of insufficient supply falls upon Blantyre residents living in informal settlements, who are serviced from the city’s water kiosks. Despite the fact residents in informal settlements make up around 60% of inhabitants in Blantyre, kiosks only provide 4% of supplied water. This forces these residents to seek alternative sources. This compares to consumers from permanent housing areas and industrial, businesses and institutional customers who receive a higher share of the water they demand. This study conducts cost-benefit analyses on two interventions that can address the challenges of insufficient water supply, particularly for those living in informal settlements. The first intervention is to substantially increase the supply of water by 230 million L daily with a new facility from the Shire River. This is one of the future projects identified by the Blantyre Water Board and is currently only 47% financed with a loan from India’s Exim Bank. The second intervention is the installation of E-Madzi kiosks across Blantyre, similar to the ones that have recently been rolled out in Lilongwe. These E-Madzi kiosks are automated water dispensers that replace in-person kiosks while ensuring increased access to water and lowering water costs by 65%.