Do SWEs rip off the urban poor?
Recent studies show that SWEs do not overexploit their customers. Indeed, SWEs have been found to conform far more closely to the free market ideal than do private utility operators. SWEs typically operate in highly competitive markets, and this competition keeps profits to a minimum, even in the absence of government regulation (McGranahan, et al, 2005). For instance, vendors in Khartoum (Sudan) reported finding it difficult to pass on a recent 15% increase in the utilitys water-yard charges to their customers. Although SWEs in Khartoum charge their customers up to four times the utilitys water-yard fee, most of this margin is easily accounted for by the high overhead costs of hiring carts and feeding donkeys and their drivers. Figure 1 shows the typical breakdown of costs for water cart vendors in peri-urban settlements around Khartoum. Figure 1. Cost breakdown of water sold by vendors in peri-urban areas of Khartoum (Njiru and Albu, 2004) The potential for utility-SWEs partnerships
