1 / 17

WOP: How to make them even better

WOP: How to make them even better Experiences on partner modalities to tackle NRW reduction of water operators Philippe Marin Sr. Water Specialist, World Bank 30 May 2013. Let’s start with non-WOP modalities…. Concession: the “strongest” modality of PPP

betty_james
Download Presentation

WOP: How to make them even better

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. WOP: How to make them even better • Experiences on partner modalities to tackle NRW reduction of water operators • Philippe Marin • Sr. Water Specialist, World Bank • 30 May 2013

  2. Let’s start with non-WOP modalities… Concession: the “strongest” modality of PPP • A private operator comes from outside and takes over for long duration • Full control including financing and investment • Case of Morocco: quality data, set of concessions and public utilities to compare

  3. Experience with concessions: case of Morocco

  4. Another non-WOP modality… Management contract: closer to a WOP • Private management but the utility remains public, under same institutional framework • Usually short duration • Sharing of functions and responsibilities between the parties

  5. Experience with 14 management contracts • Track record is mixed (only 5 projects out of 14 were clear success) • Seem more efficient for dealing with commercial losses (rapid gains), than with physical losses

  6. Another non-WOP modality… Improvement under public management, without any scheme involving an external operator: • Case of Phnom Penh • Case of Morocco

  7. Moroccan concessions since 2005(NRW in liters / connection.day) NRW reached a plateau for the 4 concessions in 2007

  8. 6 largest municipal public utilitiesin Morocco (NRW in liters / con.day) Improvement took longer, but they have now reached levels comparable with the concessionaires – under pressure from government and benchmarking regulation

  9. WhataboutWOPs? the Taiz case in Yemen (VEI) • From a baseline NRW at 45% • Wells:productionoverestimatedby5% • Physicallosses: reservoir overflows, installingcontrol valvesreducedlossesby 4% • Commercial losses– fraudwith meters reading/ billing  firingof financial accountant  commercial losses down by5% • Overall NRW went easily down to ~ 30% - but thenhitted a wall: lack of interest fromutility management to make furtherprogress!

  10. WOP in Taiz / Yemen • Improvement in NRW still better than most MCs • The few MCs which showed NRW improvement usually went the same route (finding low lying fruits) but charged more  • “Low lying fruits” are good, but not enough in a country where there are huge needs for saving water: WOP as it was designed failed to address the core NRW issues (leakages, metering)

  11. What makes for successful NRW reduction? • Not just technical, not just about skills • Need to deal with the whole organizational and incentive structure • This usually means addressing difficult issues: • Corruption and frauds, but also… • Special interest groups (material standards, focus on increasing production capacity vs. leakage reduction) • Inherent conflict between technical and commercial departments (pointing fingers at each other)

  12. With MC: external partner typically does not have enough control nor time to push for true NRW improvements • With WOP: external partner has no control to push for improvement: frustrating!

  13. NRW reduction requires an integrated approach at the utility level • Arguably, this is may be best dealt with if there is a clear line of command: “only one in charge” • Concession: a private operator with clear financial incentives • Successful public utility: a champion able to push for the internal and institutional reforms • Having two actors may create more opportunities for confusion or conflicts, which can be used by those opposing the changes at utility level (MCs)

  14. NRW sustainability and short-term schemes • Improvement under concessions and successful public utilities tend to be sustainable: long term view (contract duration, institutional reform) • MC or WOP tend to be short term • Short term contracts may be include features to improve sustainability, but no magical formula • Second generation MC tend towards longer contracts, with knowledge transfers (Algiers MC)

  15. A new modality: Performance Based Service Contracts (PBC) • Utility remains under public management, external operator brought to carry out NRW reduction activities, paid on results i.e. meeting objective targets (m3 of water saved) • Advantages: • Sharper set of financial incentives • Focus on specific activities that can be ring-fenced from utility management • New IWA taskforce on PBC

  16. Can the PBC approach be adapted to WOP? • Taking more risks and responsibility for results would move WOP to giving more control to the external partner, under specific ring-fenced activities • The “P word”: profit does not equate profiteering, especially if fair remuneration for efforts and results achieved while taking risks: what PBC is about! • Would sharing financial benefits from effective NRW reduction be against the spirit of WOP? • Making profit in some cases would allow to take on more risks elsewhere, on more projects…

  17. Purpose of 5th Symposium Thankyouforyour attention Philippe Marin Sr. Water & Sanitation Specialist, The World Bank pmarin@worldbank.org

More Related