Rapid urbanization in Ethiopia is resulting in the need for alternative sustainable service models for urban water supply. Contractual arrangements to improve the functionality of urban water services in Ethiopia have included build, operate and transfer (BOT), design, build and operate (DBO), performance-based contracts (PBC) and utility development. UNICEF undertook a review of these modalities and concluded that a modified version of the BOT modality was required to both incentivize private sector engagement in urban water supply and to enhance public sector utilities. This paper describes the contractual modality developed to achieve this aim, namely an Ethiopian build, capacity build and transfer (B-CB-T) modality. This paper tests the applicability of the B-CB-T model using fuzzy logic statistical analysis and concludes that of the four tested variables (internal accountability, external accountability, operation and maintenance and financial management), the most statistically significant was the clear mandate to address complaints and maintain a positive relationship with the clients (users). This paper concludes that the B-CB-T is an effective contracting modality that should be accompanied by appropriate behavior change and social mobilization outreach to maximize tariff, billing, extension and performance of the infrastructure that is administered within the B-CB-T arrangement.
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