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r - part - usaid

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At the "Lime of writing, WDA is estimated to have twenty<br />

drilling rigs in operating conditioz, and perhaps a further<br />

twenty which are not operational but axe considered repairable.<br />

Though many of these are old, and, in accounting terms, fully<br />

depreciat-d, thesa forty rigs represent an eventual capital<br />

replacaxtent cc's+ of at least ten million dollars. Assuming the<br />

drilling rates experienced by the project in the Central Range,<br />

with a euccese rate of only 50%, these rigs coula potentially<br />

construct 120 productfon wells each year, The direct costs<br />

involved would be approxi~tely VSS5.000.000 for the production<br />

wells, and an additional US$1.250,000 for the exploratory wells.<br />

The success rate would hopefully be much higher than 50%.<br />

This level of production would achieve the targets shown in<br />

Table 2.4.18 by WDA alone, not counting the additional wells<br />

constructed by the private sector. This level of production<br />

could be achieved, but given the present level of management<br />

expertise within WDA, and the complete lack of incentives<br />

provided to staff, it is unlikely to occur. In considering<br />

whether Somalia can afford such an extensive program of<br />

drilling, consideration should also be given to whether Somalia<br />

can afford not to have the water which it would praduce.<br />

4.4.2. Operation and Maintenance, and Well Revenues<br />

From the cost figures shown in section 4.3.4, the current<br />

government price for water appears to be adequate to recover all<br />

operation and maintenance costs. Xn order to recover the direct<br />

costs of corstruction, the price would need to be at least<br />

doubled. The revenues actually collected by WDA, however, fall<br />

a long way short of those predicted in this report. Many<br />

instances were found ohere village communities regularly<br />

purchased fuel on the "black marketH: for all practical<br />

pcrposes, these wells have been abandwnned by WDA. In many<br />

other areas, the practice seems to have been established that<br />

fuel delivered by WDA is wpurchased" by the local community, and<br />

this purchase price substitutes for the correct revenues due for<br />

e previous operating period, Given these widespread<br />

practices, the uperatian and maintenance costing analyses<br />

presented in this re<strong>part</strong> will not be especially useful,<br />

If, in fact, WDA is unable to enforce the correct pricing<br />

procedure for the sale of water, and cannot therefore recover<br />

anything like the total revenues due, then a case exists for an<br />

alternative approach to the administration of wells. This might<br />

involve some degree of privatization. Ownership could be<br />

transferred to the comnunity, w ith laws governing the obligation<br />

to provide access to water rsd maximum prices charged, Tne<br />

wells could be sold, Peasea, ox rented to the community.<br />

operation and maintenance suld then be the responsibility of<br />

the comunity, to contract .-ith the private sector, ox with WDA.

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