2. The lack of water connections throughout the water service area, inadequate water supply to those with water connections, and willingness to institutionalize provision of water among squatter households by MWSS have induced the development of private water vending activities. Ironically, over 80% of that privately vended water is MWSS water that is part of the non-revenue water, but paid for by household consumers at a much higher price than MWSS rates. Assuming that average water consumption of households using vended MWSS water (24% of households) is only 40% that of those with MWSS connections, and only about 10% of water produced is lost through illegal connections and tampered meters, MWSS may easily increase its revenues by at least 30% through management or institutional reforms with little investment capital. Casual observation indicates that private water vending of MWSS, as well as illegal connections and tampering of meters, are relatively obvious and thus cost of enforcement of rational water distribution policies should be minimal. For example, MWSS should be able to legally sell water directly or indirectly to squatter households. Doing so only increases non-revenue water, raises cost of water for poor consumers, and corrupts the MWSS bureaucracy. Under the present management or institutional arrangement, there appears very little incentive to address the very high NRW through improved management.
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