Module-c community Based Financial Management

Session Guide
 
Step-1: 
Definition of 
Water Tariff 
A water tariff is the rate at which users are charged for water. If cost recovery 
aims to satisfy an increasing demand for water then the tariff should reflect the 
cost of the operation and maintenance for rural schemes as stipulated in Water 
Resources Management Policy. However, many water supply tariffs do not 

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Ministry of Water, Irrigation and Electricity 
 Operation and Maintenance Management Manual 
Training Module - D 
Community Based Financial 
Management 
 
DEMEWOZ CONSULTANCY 
25
achieve coverage of the current costs of O&M. 
Step -2: What 
are revenues 
used for? 
 
Review the discussion from Session C2: Preparation of an Annual Budget in terms 
of the vision of the project and the expenses that the project needs to cover. 
Discuss and document on a flip chart the costs that need to be covered for the 
WASHCO to operate, prove the quality of service discussed in the visioning 
exercise. 
Discuss the differences between technologies (e.g. diesel generator-powered 
systems) that require fuel and staff to operate versus simpler technologies (e.g. 
handpumps) that require periodic servicing and repairs and finally renewable 
energy based systems (e.g. solar powered systems) that require specialized 
repairs if they breakdown. 
Discuss how the technology influences the attitude of the consumers in terms
of 
paying for the water service. Many consumers and WASHCO
members do not 
place enough emphasis on the need to raise money on a routine basis to cover 
periodic costs.
Step 
– 3: Basis