Managerial Incentive Plans for Water Utility Management: Practical Applications in Sub-Saharan African Water Companies

A number of studies exist in relation to monitoring/regulation of complex forms of water operations management contracts, particularly leases and concessions. The latter are implemented, more rationally, in operating environments where perceived market entry risks have been adequately mitigated prior to actual implementation of reforms. In these cases, it is possible to implement incentive activities, characterised by mutually and objectively negotiated tariff/rate regimes. Incentive plans involving tariffs/rate regimes, are however, not easily applicable in simple forms of incentive contracts like management, service or performance contracts. We know that in developing countries where perceived market entry risks are high, the latter forms of contracts form the bulk of the initial preparatory activity. And yet incentive applications in these contracts/performance improvement programmes have not received sufficient research and debate. This paper outlines practical application of incentives in public-public settings and presents empirical evidence in respect to a case of National Water and Sewerage Corporation (NWSC), Uganda where managerial incentive intensities positively impact on technical efficiency and total factor productivity.