Debt management and service delivery in utility companies in Uganda: case study national water & sewerage corporation

Abstract

In a bid to improve collections of billed revenues, most utility companies are experimenting with innovative forms of debt management practices to improve service delivery to their customers. This study examines debt management by National Water and Sewerage Corporation, a fully government owned parastatal charged with provision of water and sewerage services in the large urban centers of Uganda. Service delivery by the Corporation is also looked into and the relationship between debt management and service delivery is established. The theory of the firm was used to examine the existence and relationship between National Water and Sewerage Corporation and the market. In particular, Stakeholder theory was used to explore the roles of the Corporation’s stakeholders in relation to debt management and service delivery. A quantitative approach was applied in seven towns where the Corporation operates and responses were sought from 184 customers and staff of the Corporation. A response rate of 68% was realized and analysis done using frequency tabulations and the statistical package SPSS. The study reveals that the Corporation applies good debt management practices through timely & accurate billing, easy means of payment, quick resolutions of customer complaints and good database management. It also revealed that the quality of services provided by the Corporation is high through provision of a quality product, reliability of water supply, quick connection of new applicants, favorable service coverage and excellent customer care. However, it has been noted that due to growth in the Corporation’s business, inappropriately applied debt management procedures and Government defaults, the debt position of the Corporation is growing. It has been noted that there is need to establish better customer relationship management and profiling so that debt management strategies are more focused rather than the general application currently in place. The implementation of the pre-paid metering has been recommended not only for better management of debt but also for consumers to budget and control their usage of the Corporation’s services.