Overview
Rapid population growth and urbanization in Tanzania exerts enormous pressure on the delivery of water supply and sanitation services. Since Tanzania is not in a position to meet the costs of maintaining and improving water supply and sanitation services from public revenues, this has led to the introduction of a commercial approach to the provision of these services on which they must be paid for, rather than a free right. Regulation of water supply and sanitation services is particularly important since water entities which provide water supply and sanitation services do not face competitive pressures that would otherwise ensure the quality of service provision to consumers is adequate.

The Energy and Water Utilities Regulatory Authority (EWURA) is mandated to regulate water supply and sanitation services other than those provided by a community water organisation, autonomous Water Supply and Sanitation Authorities which provide services in regional and district headquarters, small towns and National Projects. Under both the existing licences and the Energy and Water Utilities Regulatory Act, the Authority is obliged to monitor the performance of licencees and to take measures necessary to improve that performance. Performance agreement constitutes a logical extension of that obligation.