Financial sustainability of rural water supply: An analysis of cost recovery, revenue collection, and efficiency

Abstract

AbstractMaintaining a financial sustainable pipe water supply (PWS) is one of the serious challenges in sustainable provision of water supply in rural areas. Poor revenue collection and willingness to pay for the service is adding severity to the problem. This study analyses the factors affecting revenue collection in rural water utilities and measures its efficiency in maximizing revenue and average hour of water supply per day. The findings convey that cost recovery is a failure in rural water supply even they are not able to generate revenue. Inactive community participation, the notion of free water supply, unaccountable payment is main reason for poor revenue collection. Therefore, active community participations, educating the household on water supply, adoption of accountable payment mode will be a step towards revenue generation. To attain efficiency, the utilities can expand their output revenue and hours of water supply by 22% without altering their input. This study is an empirical contribution in the field of sustainable provision of water supplies, which address the problem of poor revenue generation in rural water supply and find out the reason for it.