By Helen Nyambura-Mwaura

DAR ES SALAAM, March 17 (Reuters) - The Tanzanian soldiers burst into the water utility in Dar es Salaam last month and demanded to be shown the main distribution taps. When the plumbers refused, they abducted five people and beat them up.

The soldiers were furious because the water distributor, Dawasco, had shut off supplies to army camps over an unpaid bill of 200 million shillings ($172,000). The army described them as errant soldiers and said police were investigating.

Dawasco, the Dar es Salaam Water and Sewerage Corporation, has been getting tough with customers who fail to pay their bills in this sweltering port city on the Indian Ocean.

But getting the money is just one of Dawasco's problems. A clunky administration and run-down infrastructure combine to make ending chronic shortages of water in Tanzania's coastal commercial capital a real struggle.

"We have tried all manner of things to get people to pay; discounts, reminders, phone calls, but they don't respond," Badra Masoud, Dawasco's public relations manager, told Reuters.

Even government ministers have defaulted, she said.

"Our last option is disconnection for the most stubborn."

Dawasco took over the water network from City Water, a joint venture put together in 2003 by Britain's Biwater, German firm Gauff and a local investor, following World Bank pressure to privatise the system and address the shortages affecting Dar es Salaam's 4.5 million people.

But after two years, the government terminated the contract, saying the company had failed to improve the situation. City Water said key information had been left out of its contract.

"Utilities should not be privatised because most people in Africa are poor and cannot afford the services," Masoud said. "If you privatise water, the businessmen will look for profits and only those that can afford it will get it."

WATER WORKS

In 2000, the United Nations set a goal of halving the proportion of people without access to safe drinking water by 2015. Some 300 million people lack access to safe drinking water in Africa, and polluted water is one of the top killers in developing nations like Tanzania.

Residents of Dar es Salaam say they have seen a slight improvement since Dawasco was created. Around three-quarters of the city's people now have some access to piped water, compared with 42 percent before. But only 10 percent have running tap water around the clock, Dawasco says.

People living in the badly planned slums and shantytowns can now collect water from more than 40 new distribution points. Hawkers pushing carts loaded with 20-litre yellow containers for sale are a common sight.

But Dawasco's efforts to address shortages have been hampered by the complicated way the city's water system is run.

Dawasco's mandate is to distribute water and collect payments, while the infrastructure network is owned by the Dar es Salaam Water and Sewerage Authority, or Dawasa.

Both are government bodies, but Dawasco has to pay Dawasa 35 percent of its revenues and a monthly rent of 400 million shillings for office space and the pipe network.

Dawasco collects only about 1.6 billion shillings a month, while its operations cost 2.2 billion, and this has forced the government to pick up the tab more than once.

Dawasco is also answerable to three regulators: the ministry in charge of water, Dawasa and the another body that oversees the water and energy sectors.

"Why should there be so many regulators eating into taxpayers' money?" asked Daudi, a young man from the affluent Masaki suburb, where residents hire trucks to ferry in water every week.

"Shouldn't it go into laying more pipes so more people have water?"

Dawasa has improved the network by placing new pipes and replacing decaying old ones. The company still loses nearly half the 270 million litres that it pumps every day due to leaks, but this is still an improvement on the 70 percent it used to lose.

Dawasa is also looking for more water in a city where reserves have not increased since the 1970s when they were tapped to serve just 500,000 people.

City Water had received a $164 million World Bank loan to invest in the sector and since it took over, Dawasa has been using what was left of that to upgrade the system.

It says it has found substantial underground reserves in three suburbs and is looking for financing to develop them.

"It's about time," said the young resident Daudi.

(Editing by Daniel Wallis and Clar Ni Chonghaile)

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