Output-Based Aid (OBA) is a performance-based payment to service providers that subsidizes the cost of providing basic services to users. The aim of OBA in the case of Rukingiri is to improve the access to safe water, since users' tariffs do not cover the full cost of providing you water. However this subsidy is only paid to the provider after it delivers the agreed outputs: yard tap connections and water service delivered for a specified time. OBA has been desiggned as an incentive mechanisms to improve water provider's performance and effectiveness.
In Rukungiri, if the water provider, whose name is Water Supply Services Limited, does not deliver specific outputs, it won’t get paid. This new type of contract is known as OBA
What changes is OBA trying to implement in Rukungiri?
Explicit subsidies: Subsidy support to users is clearly defined: who gets the support for exactly what service.
Payment on output delivery: The service provider is held accountable to deliver on concrete outputs.
Monitoring based on results: Specific results should be the indicators for monitoring.
Sustainability: Subsidies should be set to help demand for water meet supply.
But OBA is just a part of the puzzle. The private operator has a 5-year contract which requires certain performance standards, and these are monitored by the Local Authority and the Ministry of Water and Emvironment -- and of course, the user!
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