KEBERKESANAN KEY PERFORMANCE INDICATORS PENGURUSAN AIR

1. SimposiumPengurusan & Pengauditan Industri Air 2009 KEBERKESANAN KEY PERFORMANCE INDICATORS PENGURUSAN AIR 2 – 3 November 2009 Shah Alam Convention Centre

2. Why Performance Indicators? • Indicators were derived to assess : • The availability of water and sewerage services to the public; • The technical and financial condition of water and sewerage facilities / assets; • The economic and environmental aspects of water services and use • These indicators provide comparable information on utility operations necessary for understanding and controlling deviations in the sector's performance.

3. Why Performance Indicators? • The KPIs will assist the Licensee to: • Deliver quantifiable outcomes • Ensure rigorous assessment of Licensee Business Plans & Annual Reports and monitor regulatory compliance. • Deliver a framework for analysing and reporting on its effectiveness

4. SPAN’s KPI’s for Licensees : An Update Working Group met on 12 March 2009 to arrive at consensus Latest changes/updates presented at water operators meeting on 14 April 2009 Business Plans received from SAJH, SAINS, SAMP, PBA Penang, PAIP, AKSB, IWK License issued to SAINS, SAJH, SAMP, AKSB and IWK (in process) KPIs are imposed on all operators as part of licensing condition Introduction of consumer standard and code

5. KPIs : Customer Service Standards Framework

6. SPAN’s Approach to Establishing Good Performance Measures • Meet policy objectives • Set KPI framework based on what to measure • Take into account different starting line • Focus on a result: The result of the PM should provide you with information • Must measure attainment of one or more of the utility goals • Must be practical and data must be obtainable • Accuracy must be tested over time • Resistant to misrepresentation (cheating!)

7. IMPLEMENTATION: The First 3 Years 12 main KPIs had been identified Span will negotiate with operators to determine baseline figures for KPIs Target levels will be based on improvement to current levels of achievement KPIs of each licensee can be viewed in public domain Operators to request for funding to address the requirement to achieve KPIs through PAAB in 3 year Business Plan Penalty in relation of non compliance (license condition) – first 3 years – could be in form of undertaking by operators to rectify or take remedial action to make up shortfall. Draft Explanatory Notes on KPI being prepared to ensure standard definition and measurement by all operators TOR for appointment of Reporters (independent auditors) on cost and performance being prepared .

8. NATIONAL KPIs FOR WATER SUPPLY SERVICES

9. National KPIs for Water Supply Services WATER SERVICES Treated Water Quality Section 41 Water Pressure Section 40 Security of Supply Section 34 Supply Coverage Section 31, 32 CUSTOMER SERVICE Section 33, 37, 52 Billing Complaints Response to Complaints Customer Contact OPERATIONAL & ECONOMIC PERFORMANCE Section 30 Water Loss Management Operating Cost Collection Efficiency Operating Ratio ENVIRONMENTAL PERFORMANCE Section 30 Sludge Treatment

10. KPIs Outcomes and Impact on Water Service Providers 1.We will see a shifting of focus from Technical Input to Performance Outcomes • Old Paradigm : We invest in creating assets, but don’t address the OUTCOMES of investments adequately New Paradigm: A project is “completed” when service delivery levels improve – not when assets are created

11. KPIs Outcomes and Impact on Water Service Providers • Old Paradigm : See water provision as a job, an obligation rather than a service • Limited emphasis and focus on satisfying customers’ needs • Poor accountability • New Paradigm : Welcome consumer inputs and feedback to shape performance improvements and priorities for improved accountability • Internally, across the organisation • To consumers • To other stakeholders (shareholders, regulator, etc)

12. KPIs Outcomes and Impact on Water Service Providers • WSP will begin to track performance, and • implement performance improvement planning • Optimise the use of their assets and resources • Measure service levels to reflect operating performance • Identify opportunities for revenue improvement • Prioritise and track improvements • Position and compare own performance relative to others

13. KPIs Outcomes and Impact on Water Service Providers 3. Develop a culture of continual performance improvement to stay in business in challenging times • Improve financial performance • Improve customer satisfaction • Increase competitive advantage • Improve transparency to stakeholders

14. KPIs Outcomes and Impact on Water Service Providers 4. Benchmark performance among peer operator : • Reveal performance • How well are you doing? • Promote comparison • How well are you doing, compared to others? • Promote networking and sharing between peers • Horizontal learning, mentors and ‘mentees’ • Promote performance improvement • Link government/PAAB funding to performance improvements

15. Next Steps by Operators Data baseline housekeeping on current submissions (MWIG) for proper documentation towards coming KPI target level Identify Capex and Opex funding requirements in preparing Business Plans especially relating to addressing KPIs as part of licensing condition. Work out your proposed KPI target levels based on SPAN KPI framework and prepare to negotiate/discuss with SPAN and PAAB Leverage on ICT and establish dedicated team on performance measurement and monitoring as one of core business viz a viz licensing condition.

16. SPAN’s Regulatory Role • Holding water service lisencees accountable for performance • Monitoring their performance • Analysing their perfomance to identify support needs • Providing technical and financial “support” via Business Plan submission • Auditing their results – especially if tied to incentives!

17. SPAN’s Regulatory Role Monitoring and reporting WSL submit quarterly report to SPAN Publish KPIs on SPAN website and Water Forum (to be agreed) Auditing by SPAN on regular basis Regular consultation sessions to refine methodology, target levels, implementation strategies, etc Discussions on non compliances and remedial actions

18. Conclusion • One of the key tool in water sector reform • Strengthens internal performance assessment • Helps WSL prioritise interventions with their limited resources for efficiency gains and obligations • Is an important tool for SPAN to track service delivery performance, set targets, monitor performance and prioritise regulatory interventions • Improves accountability Key Performance Indicators

19. TERIMA KASIH