Publication:
The Challenge of Reducing Non-Revenue Water in Developing Countries--How the Private Sector Can Help : A Look at Performance-Based Service Contracting

Loading...
Thumbnail Image
Files in English
English PDF (671.08 KB)
2,339 downloads
English Text (154.55 KB)
175 downloads
Published
2006-12
ISSN
Date
2014-03-10
Editor(s)
Abstract
This study explains that one of the major issues affecting water utilities in the developing world is the considerable difference between the amount of water put into the distribution system and the amount of water billed to consumers (also called "non-revenue water" [NRW]). High levels of NRW reflect huge volumes of water being lost through leaks, not being invoiced to customers, or both. It seriously affects the financial viability of water utilities through lost revenues and increased operational costs. In this report, a number of case studies, taken from some of the largest and most recent performance-based NRW contracts, are studied and discussed in terms of their technical and financial performance. Lessons learned from the case studies are analyzed, showing the potential benefits of NRW performance-based service contracting with the private sector. This paper was prepared as part of a Public-Private Infrastructure Advisory Facility (PPIAF)-financed study to investigate opportunities for the use of the private sector to assist water utilities in developing countries in reducing non-revenue water. This study indicates that the private sector help ailing public sector utilities in developing countries reduce NRW even though the performance- based service contracting approach described should not be seen as a substitute for overall sector reform. The case studies, while limited in number, provide examples of both good ideas and those to be avoided-but hopefully enough to help a utility and its consultants devise better cost-effective contractual arrangements suited to their conditions.
Link to Data Set
Citation
Kingdom, Bill; Liemberger, Roland; Marin, Philippe. 2006. The Challenge of Reducing Non-Revenue Water in Developing Countries--How the Private Sector Can Help : A Look at Performance-Based Service Contracting. Water Supply and Sanitation Sector Board discussion paper series;no. 8. © http://hdl.handle.net/10986/17238 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Cost Recovery, Equity, and Efficiency in Water Tariffs : Evidence from African Utilities
    (2010-07-01) Ying, Yvonne; Banerjee, Sudeshna; Skilling, Heather; Foster, Vivien; Wodon, Quentin
    Water and sanitation utilities in Africa operate in a high-cost environment. They also have a mandate to at least partially recover their costs of operations and maintenance (O&M). As a result, water tariffs are higher than in other regions of the world. The increasing block tariff (IBT) is the most common tariff structure in Africa. Most African utilities are able to achieve O&M cost recovery at the highest block tariffs, but not at the first-block tariffs, which are designed to provide affordable water to low-volume consumers, who are often poor. At the same time, few utilities can recover even a small part of their capital costs, even in the highest tariff blocks. Unfortunately, the equity objectives of the IBT structure are not met in many countries. The subsidy to the lowest tariff-block does not benefit the poor exclusively, and the minimum consumption charge is often burdensome for the poorest customers. Many poor households cannot even afford a connection to the piped water network. This can be a significant barrier to expansion for utilities. Therefore, many countries have begun to subsidize household connections. For many households, standposts managed by utilities, donors, or private operators have emerged as an alternative to piped water. Those managed by utilities or that supply utility water are expected to use the formal utility tariffs, which are kept low to make water affordable for low-income households. The price for water that is resold through informal channels, however, is much more expensive than piped water.
  • Publication
    Reforming Urban Water Utilities in Western and Central Africa : Experiences with Public-Private Partnerships, Volume 2. Case Studies
    (World Bank, Washington, DC, 2009-06) Fall, Matar; Marin, Philippe; Locussol, Alain; Verspyck, Richard
    The Western and Central Africa has one of the longest experiences with public-private partnerships (PPPs) in the developing world, both for water supply and for combined power and water supply utilities. Cote d'Ivoire has a successful partnership dating from 1959, and over the last two decades as many as 15 countries (out of 23 in the region) have experimented with PPPs: eight for water supply operations alone and seven for combined power and water supply operations. This discussion paper documents the region's experience with PPPs for urban water supply in a comprehensive manner to help inform the current debate about the benefits brought by PPPs, in the context of helping Africa to achieve the Millennium Development Goals (MDG). Eleven PPPs have been studied, and detailed performance indicators are reported for six large cases - Cote d'Ivoire, Senegal, Niger, Mali, Burkina Faso, and Gabon, with at least four years of private operation. Through its successes and failures, the Western and Central African experience offers interesting lessons that other developing countries could reflect upon as they strive to improve the quality of urban water supply services, increase the efficiency of operations, and establish the financial credibility of the sector.
  • Publication
    Cost Recovery in Urban Water Services : Select Experiences in Indian Cities
    (World Bank, Washington, DC, 2011-03) Gupta, Anjali Sen
    The report draws on a Water and Sanitation Program (WSP) study from 2008 which made a comparative analysis of 23 Urban Local Bodies (ULBs)-looking at seven cities in detail and another 16 based on secondary data-to understand the factors affecting cost recovery in India and provide an indication of current performance. It also draws out examples and lessons to inform reform approaches and guidelines for reform. The first part of the paper discusses operational and tariff-related factors that impede cost recovery by urban water service providers in India, especially low service coverage; high water losses and nonrevenue water; inefficient metering, billing and collection; and high staffing levels. It also shows that distorted tariff structures and subsidies undermine cost recovery further, and often benefit middle and upper income levels, rather than the poor. The second part of the note discusses policy reform and practical initiatives and options to achieve improved cost recovery and, by implication, achieve service improvements, capital maintenance, and expansion of coverage.
  • Publication
    Reducing Water Loss in Developing Countries Using Performance-Based Service Contracting
    (World Bank, Washington, DC, 2008-06) Kingdom, William D.; Liemberger, Roland; Marin, Philippe
    A major challenge facing water utilities in the developing world is reducing water loss caused by leakage, theft, and improper billing. The difference between the amount of water put into the distribution system and that billed to consumers is known as Non-Revenue Water (NRW). The worldwide cost of NRW is conservatively estimated at $15 billion/year. More than a third of losses occur in the developing world, where some 45 million
  • Publication
    Water and Wastewater Services in the Danube Region
    (Washington, DC, 2015-05) World Bank
    This report analyzes the progress and challenges of 16 countries in the Danube watershed in delivering sustainable water and wastewater services to all, while meeting the European Union environmental acquis communautaire. After putting the services that are being delivered into context, the report analyzes the organization of services in the region and the level of access to services, that is, how well countries are doing in terms of providing access to water and wastewater services for the entire population. It then looks at the performance of the sector, including the quality of services provided and customer satisfaction with it. It also draws a picture of the efficiency of services, including whether they reflect accepted good practices. Finally, it analyzes the financing of services, looking at whether the financing of operation, maintenance, and investments is secured and affordable. The report draws largely from existing public data sources at the national and regional level, and consolidates them into a coherent, regional narrative, and analysis. The methods of analysis include horizontal comparisons among countries at a given point in time and trends within the countries or the region over a given period of time. Given shortcomings in the availability and comparability of data across 16 countries, the report seeks to encourage and inform a policy dialogue around sector challenges rather than provide a definitive set of policy recommendations.

Users also downloaded

Showing related downloaded files

  • Publication
    Lebanon Economic Monitor, Fall 2022
    (Washington, DC, 2022-11) World Bank
    The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.
  • Publication
    Classroom Assessment to Support Foundational Literacy
    (Washington, DC: World Bank, 2025-03-21) Luna-Bazaldua, Diego; Levin, Victoria; Liberman, Julia; Gala, Priyal Mukesh
    This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.
  • Publication
    Argentina Country Climate and Development Report
    (World Bank, Washington, DC, 2022-11) World Bank Group
    The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.
  • Publication
    Business Ready 2024
    (Washington, DC: World Bank, 2024-10-03) World Bank
    Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.
  • Publication
    World Development Report 2006
    (Washington, DC, 2005) World Bank
    This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.