Water treatment facilities in Tanzania have been implemented to improve access to clean water, but their cost-effectiveness varies significantly due to differing local conditions and infrastructure. A quasi-experimental approach was employed to analyse data from 50 randomly selected villages across Tanzania. The analysis included econometric models to estimate the cost-effectiveness of water treatment systems in terms of both financial benefits and environmental impact. The econometric model revealed that village-specific factors significantly influence the cost-effectiveness of water treatment facilities, with a coefficient indicating that for every $10 increase in initial investment, villages with higher economic development saw an average reduction in waterborne disease incidence by 5%. This study provides empirical evidence on how to optimise water treatment facility investments based on local conditions, contributing to the sustainable management of water resources in Tanzania. Policy makers should prioritise investment in water treatment facilities that are tailored to local economic and environmental contexts to maximise cost-effectiveness and health outcomes. The maintenance outcome was modelled as $Y_{it}=\beta_0+\beta_1X_{it}+u_i+\varepsilon_{it}$, with robustness checked using heteroskedasticity-consistent errors.