Guest post from Joe Dalton – joe [dot] e [dot] dalton [at] gmail [dot] com

May 2019

Reducing water losses sounds sensible and simple in theory. “Just fix the leaks” is a regular refrain to be heard in my home country of Ireland from critics of the public utility Irish Water, which struggled to gain public acceptance since its formation in 2013, when it inherited high leakage levels from the 34 local authorities that preceded it.

Yet conceiving, designing and executing a mechanism to successfully and sustainably reduce water losses, or Non-Revenue Water, is easier said than done. My paper “Performance-based contract for non-revenue water reduction – case study Bahrain” tells one such story and has just been published in the International Water Association Publishing journal, Water Supply, Volume 19 Issue 4. It describes the real life experience of reducing water losses in the Muharraq Governorate, one of four Governorates of the small island Kingdom of Bahrain in the arid Gulf region of the Middle East.

A 2018 study estimated that expensively treated water lost from distribution pipes around the World amounts to over 126 billion cubic metres annually, valued at US$ 39 billion per year, akin to two thirds of West Africa’s Niger River or half of India’s Ganges River disappearing . Reducing these losses by a third would provide enough water to supply 800 million people. This would be a much more environmentally and cost effective way to meet the United Nations Sustainable Development Goal of universal access to water and sanitation by 2030, than by expanding water abstraction and production facilities.

Yet a distinct and often shameful lack of vision and commitment has meant that many utilities around the World still struggle with this problem. Part of the challenge is in accurately quantifying what the losses actually are. If suitable measurement systems are not in place, this can be akin to plucking numbers out of thin air. There can be a reluctance by utility managers to admit the scale of the problem when it might lead to hostile media attention or public criticism. The temptation exists to peddle in emotionally satisfying delusions.

Any utility which seeks to genuinely address this issue in a systematic way should be commended. The recently published book Performance-Based Contracts (PBC) for Improving Utilities Efficiency highlighted how suitably designed projects can enable utility water losses to be successfully reduced through the setting of incentivised reduction targets. The World Bank, Inter-American Development Bank, IWA and PPIAF have a current program to create good practices for Non-Revenue Water Performance Based Contracts, creating a series of tools that are being used on a number of projects.

In Bahrain, I led the project for the private sector service provider from the initial tender stage in 2012 to project completion in 2016. The project scope included a utility audit, water balance calculation, establishment of District Metered Areas, installation of automated water loss monitoring and the targeted reduction of Non-Revenue Water. There was a mixture of fixed and performance based payment terms.

The project went through an extended period (through 2014 and 2015) when failure looked likely. This was down to the initial project timescales being completely unrealistic for the anticipated achievements and what I argue was an inequitable contract design that placed too much risk upon the Contractor. Discussions between the Utility and Contractor became quite heated during this period but, through perseverance and the commitment of individuals from both parties, success was eventually achieved to all parties’ satisfaction. After completing the project, I metaphorically jumped the fence and joined the public utility, where I continue to assist efforts to minimise water losses across the country.

Projects rarely go seamlessly from start to finish. Every project has challenges and the risk of failure. It is always good to share experiences (especially the challenges) so that others may learn and adapt.

Putting the measurement systems in place (in the form of bulk metering and water loss management software) takes time and has high up-front costs during which water losses are not actually being reduced. However, they provide the basis for eventual achievement of water loss reductions, as was eventually shown in Bahrain. This is something that should be understood by utility managers.

Ireland is currently implementing the same water loss data management system and is still early in its journey in reducing water losses following decades of underinvestment. Much of the media in Ireland criticised what were referred to as the “exorbitant consultancy fees” in the early stages of the establishment of Irish Water. While some of these criticisms were justified (it is the duty of a public utility to justify its expenditure to the taxpayer), it should be understood that there is everything to gain from a properly structured Contract to leverage expertise from the private sector to reduce water losses. With the right Contract design and incentives, such consultancy fees can provide value for money to the taxpayer. 

A good place to start is learning from what others have done.

 

Joe Dalton's full study – "Performance-based contract for non-revenue water reduction – case study Bahrain" – is available from the journal Water Supply.

Download it here: https://doi.org/10.2166/ws.2018.159

 

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