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AsDB Cambodia Vietnam – Twinning of Water Utilities

Organization(s):

Binh Duong Water Supply Sewerage Environment Company Limited (BIWASE) and Phnom Penh Water Supply Authority (PPWSA)

Country (ies):

PPWSA (Cambodia): Provider BIWASE (Vietnam): Recipient

Overview:

ADB has adopted and improved on twinning as a development strategy for its Water Operators' Partnership (WOPs) Program. The WOPs program promotes knowledge sharing and builds the capacity of water operators and utilities in the Asia and the Pacific region. Among its key initiatives is the twinning of 20 water utilities and operators in Asia-Pacific region.

Where most twinning arrangements pair off entities with similar characteristics on the assumption that they will share similar problems and solutions, ADB's approach is to match a stronger water and sanitation utility (expert) with a developing utility (recipient). The aim is to enable the latter to improve service coverage and delivery, financial sustainability, and other aspects of its performance.

The specific purpose of the twinning was to strengthen BIWASE in the following fields (in which PPWSA has valuable expertise):

. NRW reduction,

. customer service improvement,

. management improvement,

. development of a training center, and

. tariffs/financial management.

1. PPWSA visit to BIWASE to assess needs and identify twinning activities.

2. BIWASE visit PPWSA to exchange experience on billing, procurement, finance management, and non-revenue water reduction (NRW).

3. BIWASE visit PPWSA to exchange experience on customer service, NRW reduction, and training management.

4. Evaluation and final report by PPWSA.

Background:

Globally, about 71% of people without access to improved sanitation and 56% of those who lack safe water live in Asia. People who do not have these basic services face incredible health risks, are often forced to sacrifice their education or livelihood, and suffer indignity and inconvenience everyday.

Asian water utilities are at the forefront of efforts to counter this common scenario. Theirs is the critical responsibility of providing water supply and sanitation services to Asia's 4 billion people. But their task is hampered by numerous challenges—artificially low tariffs, staff incapacity, insufficient budgets for infrastructure development, and more.

To deliver sustained and world class service, utilities need considerable help from various partners. One key partner is their peers.

BIWASE suffered from a high level of NRW . In addition, poor billing collection combined with scarce attention to customer service and inefficient financial management were key factors in BIWASE's poor financial viability. BIWASE got to know PPWSA through report of its success in NRW reduction program. PPWSA is keen to share its experience and is willing to assist BIWASE.

Both recognize that a twinning arrangement which will facilitate the exchange of knowledge, ideas and experience will be a valuable learning tool that will lead to positive results for both agencies.

Despite their different geographical, cultural, and governance circumstances, utilities share many concerns and challenges. They worry about having access to sufficient and sustainable water supply, or whether their distribution network can reach all those in need of water. They all look for robust and efficient methods of metering, billing, and collection. They pursue tariffs high enough to recoup their operating costs and allow them to finance renewal and expansion. They also grapple with issues of autonomy, especially as it allows them to make speedy decisions, and recruit and reward skilled personnel. Recipient twins welcome the opportunity to access the experiences and insights of the expert twins on these issues.

It is easy to understand why recipient twins would enter the twinning arrangement. But can the same be said for the expert twins? What do they get out of this arrangement? After all, they are investing some skilled resources in another utility that should have been devoted to their own service needs.

Surprisingly enough, expert utilities have given various reasons for wanting to twin: proud of its achievements and wants to demonstrate its knowledge outside the country, sees it as a way to provide greater job scope and satisfaction for its senior engineers, consider twinning a desirable social duty to help others, or they just want to share their skills, to understand the practices of less developed utilities so they can both work toward possible improvements in their own operations.

What was/is the broad design of this SSC project / program?
The twinning was initiated by ADB and with the support of the South East Asian Water Utilities Network (SEAWUN). The twinning was part of a larger Technical Assistance (financed by the Japan Special Fund, through ADB), which foresees the development of 10 twinning pairs in the region.The TA was designed to:

1. Develop twinning arrangements between operators that have already modernized their services and set high performance standards and those seeking support to improve their performance.

2. Enable utilities to develop alternative organizational models that most appropriately reflect their missions. The emphasis will be on autonomy and accountability, with minimal government involvement. Commercially sound operating principles will be introduced, and utilities will be supported to run as water businesses.

3. Support training programs and workshops that will allow members to adopt (a) enhanced financial management systems that focus on cost reduction, better asset management, proper tariff structures, and improved metering, billing and collection; and (b) improved technical management systems that focus on operation and maintenance, reducing NRW, increasing coverage and hours of service, and improving water quality.

ADB developed a process which involves: identifying expert water utilities, matching the appropriate twins, and conducting onsite diagnostic study (expert and ADB facilitators).

As agreed in the Memorandum of Agreement (MOA), BIWASE and PPWASA conducted performance audit of BIWASE operations to identify and prioritize the areas for improvement and to structure the required assistance.

Based on the outcome of the performance audit a work plan was developed, resource requirements identified and agreement was reached. Both parties agreed to continue the exchange beyond the scope of the twinning to update information and discuss further water related issues.

Implementation:

With the support of SEAWUN and ADB the twinning program signed on 31 July 2007 was carried out through a number of visits, meetings, discussions between both parties to draw lessons from their experiences in NRW works, customer service, financial management, billing, metering, and procurement.

PPSWA is one of the strongest water utilities in the region, being financially sound and independent. Compared to similar water utilities in the region PPSWA's NRW level is very low.

The activities were carried out as follow:

1. During the first visit, PPWSA collected data and information about BIWASE to assess the needs and design the relevant and appropriate training tools and activities. (October 2007)

2. BIWASE visit PPWSA to exchange experience on billing, procurement, finance management, and non-revenue water reduction (NRW). PPWSA shared their procedures, data, process, field visits were also carried out to the 3 water supply plants owned by PPSWA. Billing and collection, financial management, and NRW were also thoroughly discussed. (February-March 2008)

3. BIWASE visit PPWSA to exchange experience on customer service, NRW reduction, and training management. Particular importance was given to the management method and the customer service. A different HR approach, including the need for learning opportunities and development, was discussed to increase efficiency and motivation. (November 2008)

4. Evaluation and final report. (October 2009)

Please describe the roles, responsibilities, interests and interrelations of the involved stakeholders.

BIWASE and PPWASA
1. Conducted onsite diagnostic study

2. Cooperated to achieve the set outcome

3. Conducted performance audit

4. Developed and agreed on work plan and resource requirements

5. Committed to contribute human and/or in kind resources (i.e. training facilities

6. Bore the costs incurred by personnel involved in the twinning arrangement

7. Recognized that a twinning arrangement which will facilitate the exchange of knowledge, ideas and experience will be a valuable learning tool that will lead to positive results for both water utilities

Asian Development Bank
1. Provided the financial and technical support

2. Facilitated the matching between the recipient twin and expert twin

3. Twinning arrangement is implemented under ADB's Water Operators' Partnership (WOPs) Program

Outcomes:

Initially, BIWASE and PPWASA intended to cooperate with each other (per MOA signed 31 July 2007, Bangkok) to achieve the following outcomes:

1. to identify priority areas for improvement in the BIWASE operations,

2. to train BIWASE personnel in priority areas,

3. to develop institutionalized system of benchmarking and monitoring process, and

4. to achieve measurable improvement in two or more areas of operations at the end of twinning period.

December 2009 Final Report reveals that the experience gains of BIWASE are the following:

1. knowledge on how to effectively and efficiently reduce NRW level, e.g. through financial and human resources investments, proper selection of pipe materials, proper installation, regular maintenance, use of accurate meters, replacement of malfunctioning meters, modification of existing network, proper network design and staffing, etc. Knowledge on the importance of data collection which is fundamental to understand the losses, both real and apparent.

2. knowledge on how to provide good customer service, including customer-friendly applications, is needed throughout the whole process, from application forms to metering and billing.

3. knowledge on good management and development of personnel – including clear regulations, motivation, and discipline of all staff, and developing manuals is also a very effective tool.

4. knowledge on the importance of building training center to support the human resources development.

5. knowledge on the importance and implementation of accountable tariffs system, effective financial management, and proper metering for a water utility to operate at full cost recovery, without government subsidies.

6. Continuous dialogue and visits beyond the scope of the training to discuss sectoral developments, issues and problematics.

Improvements achieved by BIWASE:
1. restructuring of BIWASE organization to include new departments: Customer Service Department (to update customer data for proper billing and good connection, and to strengthen customer service team), Human Resources and Training Department (to improve HR management and development), and NRW department (to deal with busted pipes and leak detection, to replace and repair network, inspection of newly installed pipes, etc.),

2. manuals are now operational, like: civil work procedure for household connection, water meter reading and recording procedure, and water bill collection procedure,

3. new water tariff scheme implemented, and

4. PPWASA noted in one of its visits: BIWASE has improved in data recording and monitoring, physical improvement of the offices.

The twinning is implemented by and through all levels of the organization, focusing on a limited number of operational issues for which achievable and measurable targets are set. This approach ensures that improvements are supported by all levels of the organization leading to sustainability.

The twinning stimulates day-to-day communication and consultation which is expected to continue following the closing of the twinning. It is expected that BIWASE will be able to assist other Vietnamese utilities by passing on their gained knowledge and experiences.

The twinning entities have established a good rapport and correspond directly with one another on operational and management issues.

Aid Effectiveness:

Sharing experiences between utilities in the same region is bound to increase the relevance of the experience itself, as issues are likely to be similar. Countries at similar stages of development are also likely to rely on similar technologies, which are likely to be more appropriate to them than technologies adopted in more industrialized countries.

Also, common cultural 'traits' may also facilitate the exchange of managerial and HR experiences which are likely to be more culturally appropriate than the practices found in the industrialized countries.

This twinning program was effective because sustainable, even beyond ADB's support, as stressed by both parties. It supported a weaker institution in becoming financially viable and independent from the public subsidies (which ultimately drain resources which could be utilized by the government to implement development programs). It also stressed the importance of the end consumers and the staff for the 'well-being' of the utility. Finally, it helped reduce water losses which ultimately have negative financial and environmental impacts.

Was national leadership supported? To which extent was the experience aligned to national priorities and systems?

Based on the Country Strategy and Program (CSP) some of Viet Nam's Government development goals are:
1. 95% of the urban and 75% of the rural populations to have access to safe water

2. increase average life expectancy to 72 years

3. reduce child mortality for under 5 years old to 25 per 1000 by 2010

4. reduce maternal mortality to 6/10,000

5. achieve universal secondary education and ensure that 40% of the workforce has received vocational training

The Twinning with PPWSA aims to increase performance of BIWASE in the following areas: reduction of NRW, water quality, distribution system design and maintenance, management practices (including human resources), energy saving and metering – which will lead to the achievement, directly and indirectly, of the development goals mentioned above. In particular, the program will assist BIWASE carry our its mandate to provide water supply and sanitation services to Binh Duong province.

The recipient partner is supported by ADB's loan program, through which infrastructural investment requirements may be financed.

MfDR ensures there are measurable targets and this program has also sought to have measurable targets.

Capacity Development:

The restructuring program of BIWASE includes:
1. Creation of NRW department – is now handling better detection of leaks, repair, inspection and maintenance of pipes and piping network, etc; which is targeting US$120,000 savings per year equivalent to 1% NRW reduction

2. Creation of Customer Service Department – which has started to update customer data for proper metering, billing and collecting system process, to improve its customer service,

3. Strengthening of Human Resources and Training Department – improving the management and development human resources (e.g. creation of a Training Center), and

4. Implementation of a new tariff scheme.

The goal is for BIWASE to become financially sound and independent from public subsidies.

As the twinning is expected to continue, beyond ADB's support, BIWASE is likely have the opportunity to further develop its capacity in the future, through sharing its experience with more sound and efficient utilities.

Main lesson is that water supply utilities can be effectively supported by other water utilities since they speak the same "language", the so-called "utility-speak". Reliance on Northern consultants firms should be reduced and involvement of Northern water supply companies should be stimulated.

Duration:

July 2007 - October 2009

Budget (Optional):

ADB Advance Payment Facility budget for the BIWASE and PPWSA Twinning : US$31,000

Name of Primary Contact Person:

Paulus van Klaveren; Nguyen Van Thien; Dr. Ing (Ph.D) Chea Visoth

Title of Primary Contact Person:

Water Supply and Sanitation SpecialistEnergy and Water DivisionSouth East Asia Department; Director Binh Doung Water Supply - Sewerage Environment Co. Ltd; Assistant General DirectorProcurement and Training CenterPhnom Penh Water Supply Authority "PPWSA"

City:

Manila, Philippines