Case Project: Safe Water Network Mastering the Model at Dzemeni Flashcards
Dzemeni pronunciation
JEM-uh-nee
2 questions he and Hew Crooks considered
1) How can we optimally expand the system to increase profitability at the Dzemeni site?
2) And, should we move ahead with plans to expand the Dzemeni site into a regional “micro-utility” to
provide safe water to the people living in nearby Tongor?
Who founded Safe Water Network
Founded by American actor and philanthropist Paul Newman and a group of business and
civic leaders
What does Safe Water sought to do?
Safe Water Network sought to “develop innovative solutions that provide safe,
affordable water to those in need
Safe waters core values
Located in Figure 1
Access: Making water available and affordable for all
Empowerment: Providing communities the confidence and competency for self-sufficiency
Impact: Realizing lasting health, social, and economic benefits
Measurement: Documenting success and failure
Lessons Learned: Adopting best practice
Environment: Safeguarding water resources
Risk Taking: Investing in new approaches
Open Source: Sharing our findings with the water sector at large
Safe Water Network’s partner list
The organization counts the Conrad N. Hilton Foundation, Kosmos Energy, the Merck Company
Foundation, Newman’s Own Foundation, PepsiCo Foundation, Navajbai Ratan Tata Trust, and
Starr International Foundation among its funders, and it has partnered with the International
Finance Corporation (IFC), IBM, and the Johns Hopkins Bloomberg School of Public Health
(JHBSPH)
Safe Water Network currently
operates in two countries: ____ and _____
India and Ghana
When did Safe Water Network start?
The organization began in 2008 with the launch of
a rainwater harvesting program in Rajasthan, India
WHG
WaterHealth Ghana
Economic conditions for Ghana
Per capita income averages $1,230 annually for the country as a whole, 39 percent of rural Ghanaians earn less than $456 per year, or $1.25 per day,
the global standard for extreme poverty
What percentage of Ghanaians do not have access to clean drinking water
Between 40 and 45 percent of rural
Ghanaians, roughly 4.6 million people, lack consistent access to clean water
What happens when you drink back water?
Water-borne diseases such as diarrhea,
Buruli ulcer, and intestinal worms run rampant among the population, with 70 percent of diseases
in the country traceable to the lack of safe water.
The Dzemeni safe water site made sense to Safe Water Network for several reasons
First, Dzemeni had no municipal water source and no other commercial water vendors existed; the
convenience of Lake Volta effectively eliminated competition
-Since it first appeared, residents
have drawn water out of the lake, in spite of its contaminated state
Second, Safe Water Network research indicated that more than 50 percent of residents, while poor, could reasonably afford to purchase clean water.
Third, Safe Water Network was able to identify community leaders who would create excitement about safe water stations and encourage educational efforts that stressed the importance of clean water.
Finally, nearby Tongor, which was also a combination
of a number of villages, provided another potential market if the safe water station could profitably
scale its operation
Delays and problems to the Dzemeni project
1) Locating, screening, and
selecting sites took longer than expected
2) Negotiations with community leaders at selected
sites took time, and the sites required different water purification systems to address specific
challenges.
3) The Dzemeni center opened 18 months behind schedule, and capital costs for construction of the site exceeded its budget by 80 percent
4) Operating performance fell short of expectations; sales volumes indicated penetration rates (the percent of the population using the safe water station) around 20 percent instead of the 75 percent target, and the facilities failed to even cover operating costs
The Water Users—Customers
Although the need for water is universal to humans, the demand for safe water is dependent on
a variety of factors, including:
1) price sensitivity,
2) convenience,
3) seasonal variation in demand,
4) consumer knowledge about the benefits of clean water
1) Price Sensitivity
Before the management transition to Safe Water Network began, in order to stem operating
losses, WHG had doubled the price of water from 0.05 Ghana cedis (GHS) or 5 pesewas (p)—
about $0.035—to 0.10 GHS or $0.07 for 20 liters (20 L).
Overall demand dropped 30 percent immediately after the price increase, and the reduction in demand from the poorest Ghanaians, those Safe Water Network most wanted to reach, likely exceeded that figure
Incomes for the 40 percent living below the $1.25 per day poverty line averaged $1.08 per day, or $5.40 for a family of five.12 These families would have to spend about 2 percent of their income on commercial water, and studies from the Johns Hopkins group indicated that “cost did not seem to be a barrier to use.”
2) The Convenience Factor
20 L container weighs nearly 45 pounds, and not only did the spending of hard-earned cash for the water dampen demand but so did the physical energy required to transport water from the station to the home
Safe Water Network mapped water purchasers
and found usage to be highly dependent on distance.
Dzemeni exhibited a similar pattern, with use dropping substantially for customers who lived further than 300m from the site
Safe Water Network decided to pipe water to remote kiosks (sales stations) some 400m away from the main station to increase demand and consumption. The remote kiosks almost doubled sales at Dzemeni
The increased water sales, combined with the low incremental operating costs of the remote kiosks, significantly improved the economics of the safe water
stations in these sites.
Total system cost per liter declined by 33 percent in Dzemeni after the remote kiosks were installed.
3) Seasonality
As with rural populations around the world, Ghanaians have relied on rainwater harvesting to provide fresh, potable water during the rainy seasons, which in southern Ghana extend from April to July and from September to November.
The annual rainfall average in Ghana is more than 80 inches per year, a foot more rain than in Mobile, Alabama, the rainiest location in the continental United States.
The demand for commercial water could potentially vary 50 to 65 percent between the dry and rainy seasons, depending on the intensity of the rainy season.
3) Seasonality
As with rural populations around the world, Ghanaians have relied on rainwater harvesting to provide fresh, potable water during the rainy seasons, which in southern Ghana extend from April to July and from September to November.
The annual rainfall average in Ghana is more than 80 inches per year, a foot more rain than in Mobile, Alabama, the rainiest location in the continental United States.
The demand for commercial water could potentially vary 50 to 65 percent between the dry and rainy seasons, depending on the intensity of the rainy season.
Safe Water Network chose to install enough capacity to cover the dry seasons, and believed it could
stimulate enough demand for commercial water during the rainy season
4) Education and Recontamination
Many people in developing countries do not understand the need for consistent clean water to
combat water-borne diseases, and this lack of understanding leads to mishandling and recontamination of clean water by consumers.
Safe Water Network did not rely solely on the chiefs, and the organization recruited other influential volunteers, including local women, teachers, and even primary school children (peer educators) to teach residents about the need for, and benefits of, clean water.
The open or multiple-use water containers that people used, and lack of hygienic practices, often resulted in recontamination of the treated water.
Consumers dipped their hands into their clean water and introduced contaminants to the water in the container, and those contaminants remained in the container to pollute the next batch of clean water purchased.
To solve this problem, Safe Water Network introduced narrow-mouthed containers because the
smaller opening kept hands out
Two thousand narrow-mouthed containers were sold to Dzemeni residents along with a coupon that provided users with vouchers good for 30 containers of free water if they purchased a container for GHS 3 ($2.10)
The result of their efforts was a 151 percent increase in
overall demand from late 2010 to late 2011.
The Safe Water Network Business Model
Safe Water Network envisioned solving the challenge of potable water by creating financially sustainable
and community-welcoming safe water facilities.
The organization believed that if it could accomplish these goals, a third goal could be reached: finding local owners to buy and run the safe water stations
Taken together, these three overarching goals constituted the Safe Water Network objective.
Financial Sustainability
Rain water is pure; the evaporation process removes inorganic pollutants—chemicals, sediments,
residues—as well as bacteria or other organic contaminants
The cost of equipment identified as suitable for community-sized systems in Ghana ranges from $23,000 (32,600 GHS) to $100,000 (142,000 GHS), not including land, building, and permitting costs
Consumables such as sand, gravel, chemicals, membranes, operator and staff salaries, and maintenance expenses constitute operating costs.
Carbon filter with ultraviolet light treatment (CUV).
These systems employ sand, carbon, and 10- and 1-micron polypropylene wound cartridge filters in addition to ultraviolet (UV) treatment systems
Water passes through a carbon filter and a series of other filters to remove chlorine, sediment, and other inorganic compounds. Exposure to UV light alters organic DNA and kills bacteria, viruses, yeast, mold
spores, fungi, algae, and fecal coliform
CUV systems cost $50,000–$90,000 to purchase and
install
Limited mechanization systems (LMS)
LMS involves installing a submersible pump in a
newly drilled or existing borehole (well), pumping water to an elevated water storage tank, and
distributing the water via gravity to standpipes
This system does not provide water filtration;
it only provides more water from existing boreholes
Safe Water Network’s budgeted LMS costs
are $23,000 for 1,000 people, $32,500 for 2,000 people, or $48,000 for 5,000 people. The use
of solar power would reduce operating costs but increase capital outlay by $5,000–$6,000
