Diminishing state resources coupled with inadequate urban management capacity and insufficiency of conventional approaches have rendered it impossible to provide basic infrastructure in urban areas in developing countries such as in the city of Dar es Salaam. In that situation fringe neighbourhoods are mostly hit. However, a notable phenomenon has emerged in informal and formal settlements where the communities, through self-help and local governance in their own neighbourhood associations, have organised to fill the gaps in infrastructure services left by the centralised institutions. Among other things, community groups mobilise and organise fund-raising, mutual self-help and external technical assistance to provide water supply and sanitation, roads and drainage channels within the immediate area. This seems to be a trend in infrastructure improvement in poor neighbourhoods including fringe settlements. Actors observed to be participating in the process of providing the basic services and facilities in some of the fringe settlements include Dar es Salaam City Council (DCC), the civil societies including political party organisations and private individuals as well as youth and women groups, and the donor community. This paper discusses the potentials and constraints existing in the provision of basic infrastructure to fringe settlements taking water management as an example. Potable water was chosen to explain the case because these settlements are not connected to the Dar es Salaam Water and Sanitation Authority (DAWASA -- a centralised institution) water supply system and are remotely located. The purpose is to inform policy makers, researchers and practitioners including water providers and managers and water users on potentials and constraints existing in the provision and management of water supply in remote poor communities. Potable water as an essential need plays a major role in health development and if water is not easily accessible much time is wasted to search for it. One of the questions to be answered is how the residents, most of them being poor, are coping up with the deficiency of water supply in their fringe areas.