To achieve full cost recovery of tariffs for urban water supply and wastewater services, the Government of Mozambique introduced a management framework for running services and a Water Supply Regulatory Council (CRA) to regulate services, safeguard consumers? interests, approve changes in tariffs, and adjust the framework as necessary in 1998. Through the Water Supply Investment Fund it then introduced private participation and a revised regulatory framework in five service areas; and the National Directorate of Water privatized the operation of services in a few small towns. Services in some cities and towns, however, have not improved much.

Working with the CRA, Nathan Associates evaluated whether methods of service tariff application and collection were effective in achieving goals for cost recovery and coverage. We reviewed tariff structures and how tariffs had been set; assessed how tariff-setting reflected the services that people are willing and able to sustain and matters associated with the social tariff and subsidies; evaluated how well tariff-setting supported the operations and populations of smaller towns under delegated management; and conducted workshops to share study findings and to develop a training program for staff of the CRA and other institutions. We considered the applicability of the current and proposed tariff framework to small and medium-sized cities and towns.