Urban Water Utility Governance:Sustainable Management And Adequate Operation

Efficiency assessment improves a firm's performance;urban water utility(UWU)regulators employ a diverse management strategy to monitor the operational activities so as to improve UWU performance in the assessment period.Regulators monitor UWUs operational activities using key performance indicators(KPIs)and evaluate the performance attained using empirical methods.However,empirical methods do not generate UWU efficiency and management specific features.Regulators assign KPIs with weights and acceptable service levels to rank a utility and at the same time use acceptable service levels to forecast UWU performance targets.The performance analysis involves benchmarking a UWU under a yardstick competition(YC)regime and deliver ranking results in public under sunshine regulation.However,the majority of the UWUs underperforms,thus delivering unsustainable water services.Based on country's management priorities,regulators have assigned high weight score in a few KPIs which when UWU management will concentrate,the level of other KPIs will improve.For example,the majority of the regulators assign non-revenue water(NRW)with high weight compared to proportion of population served with the focus that the decrease in NRW will increase the system water volume and apparently increase the number of populations served.However,the level of NRW is higher than the recommended maximum percentage(15%and 20%in developed and developing countries respectively)among the regulated UWUs.This study investigated UWU underperforming problem referring to the regulator's UWU management strategies and UWU internal operation management strategies with data collection from Tanzania.Firstly,the study identified weaknesses in methodologies employed by regulators to benchmark UWU performance and propose the use of data envelopment analysis(DEA)for ratio data to assess UWU efficiency-and management-features.Secondly,the study identified weaknesses in managing NRW into components,the process which allows UWU management to apply specific water loss management strategy that reduce the level of non-revenue water(NRW).The reduction of NRW improves the level of other KPIs which apparently improves UWU efficiency in the dimensions of economic,environmental and social trust in water services delivery.Although regulators use various empirical methods to benchmark UWU performance,the existing empirical methodology does not have the ability to identify a UWU with the best management strategies and water loss management is not explicit.Thus,emphasise for an alternative methodology that benchmark a UWU efficiency-and management-specific features,and at the same time monitoring the level of UWU operation activities using customer consumption records.This study proposed an extension of DEA into water industry to assess a UWU efficiency-and management-specific aspects and at the same time allow UWUs sharing management strategies globally,the quality efficiency assessment method never used by water regulators.DEA never used due to many weaknesses like clustering UWUs efficiency in a single ranking position and not allowing variables with zero included in the efficiency assessment.This study developed network DEA models for ratio data and an approach to asses and control apparent water loss(AL)using customers water consumption records to overcome UWU efficiency benchmarking problem and at the same time improving the level of NRW and other KPIs.The efficiency assessment of this study shows that the majority of the UWUs outperformed their previous year NRW has a substantial improvement in other KPIs and were ranked in top positions.AL assessment shows that water meter inaccuracy is the main component contributing to high AL and the main AL causes are age and tampering activities.Thus,effective NRW reduction and control depends on monitoring water meter inaccuracy.This study presents DEA efficiency assessment technique that produces an efficiency value for a UWU in a competitive scenario with other UWUs like empirical methods.In contrast to empirical methods,the technique allows decision-makers to sort out UWUs with the best and worst management environments without favouritism and set clear performance improvement guidelines.The innovation allows for cross UWU and national border sharing of management strategies.Using the proposed assessment approaches,the regulator will benchmark a UWU while monitoring a UWU efficiency-and management-specific features and at the same time improving a UWU performance.On the other hand,it is well known that AL occurs when water has been delivered to a customer and consumed without paying for.However,each UWU has an alternative strategy to reduce AL which might be different from other UWU but leakage management strategies are the same.Therefore,this study proposed AL assessment based on customer records with the focus that UWUs will share some AL reduction strategies and help each other improve efficiency through NRW reduction.