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Institutional and Legal Framework

The report should identify the various organizations/departments/agencies who would be responsible for further planning and project preparation, approval, sanction, funding, implementation and operation and maintenance of the Master Plan and also idicate their role and the strength of personnel needed to implement and later operate and maintain the project. Outline the arrangement to coordinate working of all involved agencies. Identify lead agency for implementation of Master Plan. Give history of the organization, its functions, duties and powers, legal basis, organizaion structure (proposed and existing), relationship between different functional groups and regional offices, its relation with government agencies and other organizations in sector development, public and consumer relations, system of budgeting and audit, comment on nomber and quality of present staff, salary range and comparision with other similar organizations. Identify role of consultants if necessary and scope of their work. State regulations and procedure for procurement. Comment on capabilities of contractors and quality of material and equipment. It should also discuss special problems likely to be encountered during operation and maintenance, in respect of availability of skilled and technical staff, funds, transport, chemicals, communication, power, spare parts etc.

Autonomy and Responsibilities of the Utility

  • The legal and institutional structure between a publicly owned or controlled utility and its government counterpart must be assessed, identifying respective powers, duties and responsibilities of both the Utility and the government counterpart to establish the Utility's level of financial and managerial autonomy for public service provision.
  • External financiers need to have confidence that any investments that they may make in the Utility are appropriate, secure and sustainable, and that the Utility can operate with predictability in a stable environment without adverse political interference.
  • Therefore, as part of the project preparation process the institutional and legal arrangements between a Utility and its government counterpart must be accurately assessed and if necessary design institutional reform measures to increase the managerial autonomy of the Utility, including improving the regulation of the sector and the predictability or revenue streams (i.e. tariffs and / or state transfers).

Specific Legal Issues Affecting Utility Operations

There are a number of specific recurrent legal issues that tend to have adverse impacts on the operation of a Utility. The most common being the lack of adequate legal procedures and / or enforcement measures to: enforce payments; disconnect illegal connections or delinquent customers; or in municipalities that have undergone recent rapid urbanization to register and invoice consumers in areas of illegal or quasi-legal construction. These potential legal obstacles to the efficient operation of the Utility should be assessed during project preparation and mitigation or reform measures proposed.