THE INTERNATIONAL FEDERATION OF RIVATE ATER · PDF filePRIVATE WATER OPERATORS Private...

THE INTERNATIONAL FEDERATION OFPRIVATE WATER OPERATORS

Private operators delivering performance

for water-users and public authorities

Examples from across the world2nd edition

ACTU_BROCH_AquaFed Pays 2015_p1_15_5 03/04/2015 14:32 PageI

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Publications of AquaFed, The International Federation of Private Water Operators, can be obtained from AquaFed at:e-mail: [email protected], rond point Schuman box 5, 1040 Brussels – Belgium – Telephone: +32 2 234 78 07 – Fax: +32 2 234 79 11or 16, avenue Hoche 75008 Paris – France – Telephone: +33 1 53 89 08 10 – Fax: +33 1 45 63 04 72

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AquaFed, The International Federation of Private Water OperatorsAssociation legalised on April 9, 200516, avenue Hoche 75008 Paris – France

ACTU_BROCH_AquaFed Pays 2015_p1_15_5 03/04/2015 14:32 PageII

Private operators delivering performance

for water-users and public authorities

Examples from across the world2nd edition

March 2015

ACTU_BROCH_AquaFed Pays 2015_p1_15_5 03/04/2015 14:32 Page1

2 AquaFed Private operators delivering performance

1. Preface to the second edition 3

2. Introduction 4

2.1. Objectives of this brochure 4

2.2. Introducing Private Water Operators and AquaFed 4

2.3. Private operation, a management option for delivering good performance 4

2.3.1. An option to be considered 4

2.3.2. Private operators are change agents 5

2.3.3. Legal arrangements that control public water services 5

2.3.4. Organising the road to performance 5

2.3.5. Common misconceptions about private water operators – “The lamp post syndrome” 6

2.4. Needs for high performance water services 7

2.5. Diversity of performance dimensions 7

2.5.1. Implementing the human right to safe drinking water 7

2.5.2. Improving wastewater management 10

2.5.3. Improving relationship with water-users 10

2.5.4. Improving efficiency of water utilities 11

2.5.5. Raising and maintaining staff capacity 12

2.5.6. Responding to natural disasters 12

Map of cases presented in this brochure 14

Field cases 16

Country cases 65

Developing countries 79

Bibliography 82

Contents


AquaFed Private operators delivering performance 3

By Mamadou Dia, President

The first edition of this brochure was produced at the Sixth World WaterForum in 2012. It has proved to be very popular and useful to thosepeople interested in water services development. Since its originalpublication, it has been translated into French and Spanish anddistributed widely. It has been made available on the AquaFed websiteand frequently downloaded from there. The case studies have also been linked to an interactivemap on the website making each one accessible individually.

Given this success and the clear need for many people to have better information about whatprivate water operators do, we have taken the opportunity to update the document for theSeventh Forum. This second edition brings the case studies up-to-date with the latest dataavailable. It also extends the number of case studies that are included. It shows a sample of theachievements of private operators in supporting the public authorities that engage them.

Since 2012, the need for, and interest in, the private sector option has continued to grow. Thismeans that the original purpose of the brochure: to explain what private water operators cando and give evidence of their performance is as important as ever.

In many parts of both the developed and the developing the world, the backlog of underservedpeople, irregular or poorly performing services and the decline in existing public infrastructurecontinues to place a burden on the public authorities that have the responsibility to organiseand control water and sanitation provision. At the same time the expectations that water usersand the general public place on private water operators has also increased. The partnershipcontracts between public authorities and their private operators have to evolve to adopt to thesechanges. This requires both parties to work together to find appropriate outcomes. In the vastmajority of cases they are able to do this successfully. Almost all the examples show that thishas been achieved, even though a few have had to face difficulties. In most of these, carefulnegotiations between the parties have overcome the differences and the difficulties have beenresolved. In the few exceptions where this is not possible, all parties have lost out and the servicehas suffered1.

The richness of the case studies, their wide range of scope and of contract types shows clearlythe diverse ways that private water operators contribute to meeting the objectives of responsiblepublic authorities. It demonstrates the usefulness of the private sector option and the diversityof solutions it offers.

Preface to the second edition

1 For various reasons it has not been possible to publish updated versions of the cases of Jakarta, Latur and Uganda for this edition



Objectives of this brochureMost water-users need drinking water and sanitation services to be organised for them by publicauthorities. These services must be of good quality, reliable and cost-optimised to suit bothconsumers’ and authorities’ needs. Hiring a private company to deliver all or part of them isamong the options that these authorities can choose. This brochure illustrates the manyachievements that can be obtained by using the capacity of private professionals in the deliveryof public water and sanitation services.

Public services that perform well are those that are able to deliver good results simultaneouslyfor many different dimensions. For example, improving access to drinking water and improvingthe level of service to the population are equally as important as managing the utility in anefficient way.

This brochure collates a wide sample of field cases of private management of water or sanitationservices. These illustrate the good results that are obtained, by public authorities who haveengaged private operators, for all the most significant dimensions. Each case describesoutstanding results achieved on several of these essential dimensions. The cases come from allaround the world and illustrate the wide diversity of sizes of private companies.

This sample of cases does not present an exhaustive view of the performance of all private wateroperators that are members of AquaFed. Nor are all private operators are able to perform as wellas those examined here. However, these cases clearly illustrate that in appropriate conditionspublic authorities and water-users are able to obtain very high service performance from privateoperators. There are many other examples with similar results.

Introducing Private Water Operators and AquaFedAquaFed, the International Federation of Private Water Operators, represents private companiesthat deliver water supply or sanitation services under the direction of public authorities.

Members of the Federation are water services providers of all sizes, operating in around 40countries, as both locally or internationally owned businesses. The members of the Federationserve the majority of those people who get water from private companies that are mandated andregulated by governments. Some supply water and sanitation daily to a few thousand people,others to hundreds of thousands and others to millions or even tens of millions of people2.AquaFed’s members’ business is to be the operators of public services entrusted to them bygovernments (central government, local government, water authority) through public-privatepartnership contracts or licenses to supply drinking water and to provide sanitation services totheir populations. They do it as instructed by public authorities and under their control.

In this way these private operators are used by public authorities as tools to implement theirwater policies.

Private operation: a management option for delivering good performance

An option to be considered

Public authorities that have the responsibility to ensure the delivery of water supply or sanitationservices to the population and other water-users have several options they can choose fororganising the operational management of these services. They either manage the servicethemselves with their own operator (internal management), they entrust an external operator

Introduction

2 See ref. 15

2.3.

2.3.1.

2.1.

2.2.



or they organise a joint-venture with an external operator. External operators can be publicbodies or private companies. All these options can deliver excellent results depending on thecircumstances. In the case of external operators, public or private, success factors are mainly thecapacity of the operator, the quality of public policy, sustained political support and above all,the good organisation of the relationship between the authority and its operator(s).

Private operators are change agents

To achieve their water policy outcomes, public authorities need to identify their goals, mobiliseappropriate means and charge their operator(s) with appropriate operational targets. In the caseof private operators these targets are imposed through a public-partnership contract (PPP) or anoperating license and the corresponding regulations. These targets are usually measurable andtime-bound. They will almost certainly evolve over time. When initial targets are achieved orobjectives change, new targets can be fixed by the authority.

Regulated private operators are change agents that are used to create improvements in thequality and the efficiency of the service delivered. They cannot be held responsible for thesituation of the service at the beginning of their contract or license. They are not a substitute forthe public authority. Their responsibility is to achieve progress between the situation at the startof their engagement and the current status of quality and efficiency of the service.

This is where the performance of operators lies. It is in their ability to manage change effectivelyand improve the performance of the service delivered. The cases presented in this brochuredescribe improvements achieved over a specific period of time and not situations at a given date.

Legal arrangements that control public water services

All private sector involvement in public water services is controlled by one or more public bodiesthrough formal legal arrangements. In the majority of cases the principal agreement is a timebound performance contract. These contracts set out the relationship, requirements andresponsibilities between the contract principal (the public authority) and the contractor. Keyelements of these contracts are the scope of the work to be carried out, key performanceindicators, penalties for non-performance and the contractor’s remuneration. The duration ofthe contract is specified and so are the grounds for extending or terminating it. The length ofcontract can be as short as 3 years and they rarely extend beyond 15 years. It is therefore perfectlynormal for contracts to come to an end. A completed contract can be followed by a new onewith different objectives if the public authority decides to do this. Creating a new contract givesthe authority the opportunity to introduce competition and test that it is getting value for money.

Organising the road to performance

Performance in the delivery of water or sanitation services requires skills and the appropriatemeans, including legal, financial and operational capacities. It also requires mutual understandingbetween the public authority and the operator. The latter cannot invent the goals that will satisfythe authority. These goals have to be formalised in the contract or license. Usually, performanceagainst these goals is monitored through performance indicators that are used to measureprogress and contractual compliance.

Performance indicators can be very diverse. Some relate to the internal functioning and efficiencyof the water utility or its cost-effectiveness. Others concern the service delivered to users, itsimpact on the environment or its relationship with stakeholders. The indicators are controlled bythe public authority and show its priorities. They can vary over time since progress achieved inone direction can permit subsequent progress in other directions.

2.3.4.

2.3.2.

2.3.3.



Common misconceptions about private water operators – “The Lamp Post Syndrome”

Many misconceptions circulate about the work of Private Water Operators. Private wateroperators mandated, regulated and controlled by public authorities through licenses or public-private partnership contracts (PPP) are far less numerous than public utilities. Private operationprovides water services to less than 10% of the global population today compared to about 50%that is served by public operators and 40% who have no formal service whatever. In spite of thissmall participation, private operations are more visible than other options because of theconcentration of commentary on them. AquaFed refers to this as “The lamp post syndrome”.

Because the work of regulated private operators is formalised, and made transparent bymonitoring and reporting, knowledge of their action is far more developed in academic or officialreports than knowledge of the action of informal operators, NGOs or even public operators.Contracts and licenses provide for strict monitoring, detailed regular reporting, public informationand formally debated political decisions. This is not usually the case for the other types ofoperators. In addition public scrutiny is higher on private operators than on public ones andexpectations are higher. As a consequence, the level of knowledge of the work of private wateroperators is far more extensive than knowledge of any other type of water provider. Thisincreased basic knowledge creates a cumulative effect. The number of research papers on privateoperators is greatly out of proportion to their position in the water and sanitation services sector.

The most important issues are not necessarily where there is the most light. The risk of the “lamp-post syndrome” is the risk of looking at the problems of only the minority of cases where they aremost visible or most documented and to miss the majority of cases where the magnitude ofthese problems might be much higher3.

Figure 1 – The Lamp Post Syndrome

3 See ref. 5

2.3.5.



The many research reports on individual public-private partnerships (PPPs) cases show a broaddiversity of results and illustrate the challenges of ensuring that public-private partnerships aresuccessful. However, they are not sufficient to give a fair and true vision of the beneficial impactof private management of public water services (Private Sector Participation or PSP). Somecommentators have tried to present a global vision of water PSP, however these are marredby methodological limitations since systematically they omit or play down the good resultsachieved4. Others set out from an ideological starting point and seek to show private operationsin relation to the interests of that ideology. Many such studies spread serious misconceptionsabout the private sector option. These are often detrimental to the interests of those whom thesestudies purport to protect. One such misconception is the relationship between private operationand the right to access to safe drinking water and sanitation. The human right is clearly andspecifically neutral on the nature of the operator and clearly recognises the legitimacy of theoption of engaging non-state actors including the private sector5.

To AquaFed’s knowledge, the only serious global assessment of the impact of privatemanagement of public water services that has statistical value has been made by the WorldBank. Its 2009 research6 provides evidence about the average performance of public-privatepartnerships contracts (PPPs) in developing countries, a part of the world where these kinds ofcontract have developed regularly since the eighties and made a significant impact in improvingthe services where they have been used.

Needs for high performance water servicesWater-users need drinking water. They also need their wastewater to be collected safely and theyneed to be protected from polluted waters. The majority of them have no other choice than toexpect these services from public authorities. The performance of such public services shouldmatch the expectations of users at an optimised cost.

The cost of these services is ultimately borne by users, either as consumers through waterbills or as taxpayers through public budgets. Public water or sanitation services can only beconsidered to be performing well if users’ expectations are satisfied, improvements decided bypublic authorities are realised and the overall cost is optimised to ensure economic sustainabilityover the long-term.

The “raison d’être” of private water operators is to contribute to all these expectations asinstructed, regulated and controlled by public authorities. This brochure provides examples ofperformance in a variety of directions identified below as the “dimensions” of performance.

Diversity of performance dimensionsThe performance cases presented in this brochure illustrate outstanding achievements in avariety of dimensions. They are sorted according to the following categories.

Implementing the human right to safe drinking water

Individual water-users need clean water daily. Their basic needs are now the subject of the humanright that was recognised at the UN level in 20107 as part of the right to an adequate standardof living. In practice, this means precise requirements. It does not only mean that everybodygets a minimum quantity of clean water. It means that this water should be safe, accessible,acceptable, affordable and can be obtained without discrimination. These dimensions are

4 See ref. 5 5 See ref. Z [CDA’s report] 6 See ref. 26, 28 7 See ref. X & Y [UN Resolutions]

2.4.

2.5.

2.5.1.



independent one from another. For example, progress on safety and regress on affordability canoccur simultaneously. In terms of performance, the improvements made can be measured on a“radar” diagram8 (see below) where progress on these different dimensions can be measuredindependently. The starting points differ from one city to another; they can also be very diverseaccording to different users in the same city.

Figure 2 – Showing progress towards the criteria of the right to safe drinking water

The field cases presented in this brochure illustrate all these dimensions of the human right todrinking water. They describe the extension of coverage of water networks (physical access),realisation of domestic connections and increase of regularity of water supply (accessibility),compliance with potability standards (safety), suppression of bad taste or odour (acceptability),subsidy mechanisms (affordability) and pro-poor programmes (equity).

Access. The cases included in this brochure provide many examples of the extension of watersupply to previously un-served people. In many cases the increase in the domestic “coverage” ofwater networks is very impressive (see figure below). These achievements are all the more remarkablewhen one notes that on average the coverage of piped water supply in all cities of the developingworld has only progressed by less than 1 percent in the last two decades9.

At the global level, an extensive World Bank study10 has made a detailed examination of the 36 largestPPP contracts in developing countries. Initially these contracts supplied drinking water to 48 millionpeople. After less than 10 years, the population served had been increased to 72 million people. Thisrepresents an increase of 50% in the number of people benefiting from a good public service onthose contracts11.

8 See ref. 21 9 See ref. 3, 18, 19 10 See ref. 28 11 See ref. 6



Figure 3 – Water supply: linear representation of progress of coverage in selected cities

Accessibility. Operators have created millions of new individual connections thereby facilitatingaccess to water. Urban Senegal is an interesting example. In 1998, 20% of the population wascompletely un-served, without access to tapwater or to a public standpipe, and 22% were suppliedthrough public standpipes. By the end of 2013 only 1.5% remain un-served and only 8.6% are stillusing standpipes. All the others benefit from tapwater at home. Switching people from standpipes totapwater creates a dramatic improvement in their daily lives.

Furthermore, in all cases where water is not running continuously the operator is requested toimprove the regularity of water supply which improves availability of water. The examples of, Limeira,Mbombela, Cartagena, and Algiers are described in this brochure. At the global level, a statistical surveymade by the World Bank12 found that on average in developing countries private management hasbrought a 41% increase of the number of hours a day that water is running at the taps.

Safety. Potability of water supplied is the primary target of all private operators. Their job isto provide healthy water to people13. In Apalit, over 82% of the population could have its waterdisinfected. In Petropolis, water is now safe everywhere when only 2% was treated in 1998. In cities wherewater coverage reaches 100%, safety of water becomes the utmost priority. Examples of England orAlgiers are good demonstrations of this situation. In Paris a change in the safety regulation imposedthe replacement of 70% of all connections because they were in lead. This was achieved in only 10 years.

Acceptability. Users dislike water that is coloured. In Limeira the cloudiness and the unacceptablecolour that were present before 1995 have been removed so that the water is now correct aesthetically.

Affordability. The cases presented illustrate the many mechanisms that are used to keep accessto water affordable for all users. For consumption, cross-subsidies between users are described inApalit, Limeira, Petropolis. For new connections, subsidy mechanisms are described in the cases ofUrban Senegal. In Tangiers, one third of the population pays for the volume of water supplied at homeat a price that is cheaper than the price paid by the water supply company to purchase it from the bulksupplier. It could be added that the Government of Chile has put in place a pro-poor subsidymechanism funded at the central level that aims to mitigating the impact of the cost of the huge

12 See ref. 26 13 See example of impact in ref. 10



investment program. As the subsidies are tailored to the income of each customer, this mechanismreaches the poorest people effectively.

Equity. Private operators are usually requested by public authorities to ensure, at leastprogressively, a universal service in the area where they are mandated to supply drinking water.This means that they have to face all individual situations including supplying water to all poorwater-users. This is normal and usual. There are cases in this brochure that illustrate their pro-poor activities. In Cartagena, 86% of domestic customers newly connected to water networks arefrom lower income classes. In 1999, in Mbombela, 79% of informal houses did not receive water at alland the remainder only received water irregularly. In 2014 in spite of the growth in number of informalhouses, the proportion of informal houses with no access to water supply was reduced significantlyfrom 79% to only 9% and 81% of informal houses were receiving water every day.

Improving wastewater management

Wastewater management is a key sanitation service. It is essential for human health, economicdevelopment and protection of ecosystems. For individuals, it starts by collecting domesticwastewater from households and transferring it away from dwelling areas. Then pollution needsto be removed from the wastewater before its discharge or reuse. If not, water bodies and aquifersbecome more and more polluted by human activities and both humans and ecosystems suffer.

The field cases presented in this brochure illustrate significant improvements in wastewatercollection and treatment. In Limeira, in spite of a 31% population growth, the proportion of peopleconnected to the wastewater collection system was raised from 78% to 100% in less than ten years.Simultaneously wastewater treatment, that was almost non-existent at the beginning, has beenextended to all the urban wastewater. In the surrounding suburbs of Rostock, the proportion of thepopulations that is connected to the wastewater collection system has been increased from 28% to93% In Chile where only 17% of urban wastewater was treated in 1998, the proportion of urbanwastewater that is treated has been increased to 100% by 2013.

These improvements in wastewater management are beneficial to people where they live. Theyalso help to sustain and protect both the built and natural environment. In the field casespresented in this brochure there are several examples of complete recovery of the quality ofbeaches. Beaches near Gdansk had been closed since 1978. They have been reopened and this hasstimulated a tourist boom in the whole coastal area. In Rostock, the quality of the bathing water inthe Baltic Sea at this seaside resort region has also been improved. The Bay of Tangiers is now freefrom wastewater discharge on the beaches allowing the city to upgrade its tourist resort status. InAlgiers, all of the 72 beaches of Algiers have been permitted and reopened to the public for swimmingduring the summer 2014 against only 39 in 2006.

Improving relationship with water-users

Supplying good quality water to people is not sufficient. The operator has to take care of water-users,their expectations and their interaction with the water utility.

The field cases presented in this brochure illustrate significant improvements in customer carewith many examples of ways through which the life of water-users has been made easier: morereliable billing, customer centres closer to water-users, increased public information, call centresallowing quick responses, etc. These cases also describe outstanding results in increasingcustomer satisfaction ratings. In Cartagena the proportion of satisfied users has increased from 71%to 87%. In Bucharest, it has rocketed from 46% to 86%.

2.5.2.

2.5.3.



Improving efficiency of water utilities

The search for efficiency is rooted in the genes of private professional water operators. Privatecompanies are used to improve efficiency of services, which is one of the main reasons why theyare hired by public authorities. In particular, the authorities expect cost-savings that will enablethem to limit the increase of water rates that they charge to their water-users.

In this brochure there are many examples of where significant improvements in reducing leakageand water losses in water networks are saving huge amounts of freshwater. The table below givesa flavour of these achievements.

Figure 4 – Reducing leakage in water networks14

Energy consumption is another domain where optimisation is key. In Bucharest the annual electricityconsumption has been reduced by 60% between 2010 and 2013 (excluding the consumption of theWWTP that entered into operation in July 2011, the reduction would be about 78%).

Water utilities can only deliver a good service if they are able to collect the monies due to themfrom users. Field cases in Mbombela, South Africa, provide examples of significant improvements inbilling and cash collection.

Professional water operators care about the sustainability of the services that they deliver. Inthis respect, they work to improve the management of the existing assets and in particular tomaintain the networks in good condition. In the case of the distribution of water in Central Paris(intra-muros) more than 50% of the distribution networks were renewed by the private wateroperators. At the end of the contracts the average “functional” age of the distribution networks was21 years younger than it was at the beginning of the PPP contracts 25 years earlier.

Efficiency is necessary to be able to deliver a good quality service in all conditions. However,costs must remain reasonable and affordable. When an ambitious new water policy aims atimproving the service significantly, it is also necessary for the government to limit the priceincreases that would inevitably result from the new investments required. This is one reason forhiring a private operator. In any case, budget constraints mean that cost-optimisation is alwaysrequired from private operators. In addition, competition and regulation drives cost-effectiveness:

14 Indicators may not be calculated with the same method in all cities

2.5.4.



a public authority would not hire a private operator if a cheaper option that could deliver thesame results was available. The field cases presented in this brochure illustrate significantinvestments that private water operators have been able to undertake despite strict budgetaryconstraints. Out of the 44 main Romanian operators, even though all the other operators receivesubsidies to help them implement their investment programmes. In England and Wales, annualinvestments for water and wastewater infrastructure have more than doubled since the 1989privatisation. However, huge efficiency savings have avoided nearly 70% of the cost of newinvestments from being reflected in water bills paid by water-users.

Raising and maintaining staff capacity

The water services can only be efficient and well-perceived by users if the staff of the watersupplier has appropriate skills. This is why training the personnel to upgrade its capacity isan essential tool for delivering additional performance. Private water operators are used toorganising regular training of their staff. In some cases they have even invested in dedicatedprivate training centres. This is the case of Amendis, in Tangiers, that has built a large training centre.The quality of the training programmes is so good that the centre is entitled to deliver diplomasthrough an agreement with universities. In Cartagena, the initial training programme has beenmassive: 125 hours per employee in 2000. In Algiers, 115,000 training days have been undertakenfrom 2006 to 2014, through trained trainers.

Responding to natural disasters

Operators of public water services must do more than just operating public systems in normalconditions. They must be prepared to anticipate and react to exceptional events such as heavystorms, floods, droughts or accidental pollution or disruption of infrastructure. This is becauseusers need water every day and experienced professionals know that exceptional events have ahigh probability of occurring over several decades. The case of earthquakes is particularly difficultsince it happens very rarely and is particularly disruptive. A big earthquake can destroy waterplants and break the main water pipes. In such case, water supply may be completely stoppedfor days or even weeks since repairing large underground pipes may be particularly difficult. Thecase of the February 2010 earthquake in Chile is remarkable. There, an earthquake more powerfulthan the one that destroyed Port-au-Prince in Haiti has damaged water networks in a whole regionof Chile. The local private water operators reacted immediately. Only 72 hours after the disaster, 87.5%of the water supply was restored and operating in the areas affected. Five days after the earthquake,90% of the water services had been restored and regions such as Valparaíso, Metropolitana, deO’Higgins and La Araucanía had 100% of its services restored. This was a costly operation, yet, thanksto the insurance contracts secured by the private operators in charge of the affected areas, thedamage suffered by the water industry has not had any cost transferred to the government and hasnot had or will not have any impact on the tariff that the population in the affected areas.

2.5.5.

2.5.6.



Implementing the human right to safe drinking water

Extending access to water to un-served people Apalit, Cartagena, Mbombela, Petropolis, Tangiers,Urban Senegal, Saltillo

Improving accessibility of water Petropolis, Urban Senegal, Bucharest, Cartagena,Santa Ana, Saint Marc, Guayaquil, Benin, Niger

Improving availability of water Algiers, Cartagena, Limeira, Mbombela, Santa Ana,Armenia, Benin

Securing water safety Algiers, Apalit, England & Wales, Gdansk, Paris,Petropolis, Urban Senegal, Pennsylvania, Santa Ana, Saltillo, Shanghai Pudong, Niger

Improving acceptability of water Pennsylvania, Rostock, Urban Senegal, Gdansk

Contributing to affordability of water services Apalit, Urban Senegal, Limeira, Petropolis,Tangiers, Guayaquil

Ensuring more equitable water supply Cartagena, Mbombela, Tangiers


Extending wastewater collection Limeira, Cartagena, Chile, Petropolis, Rostock,Mogi Mirim, Campo Grande, Guayaquil

Protecting the environment from wastewater pollution

Chile, England & Wales, Gdansk, Limeira, Rostock,Tangiers, Algiers, Petropolis, Fillmore, Mogi Mirim,Bristol

Improving relationship with water-users

Satisfying users’ expectations Algiers, Bucharest, Limeira, Cartagena, Senegal,Bristol

Making life of users easier England & Wales, Rostock, Tangiers, Cartagena,Guayaquil

Improving efficiency of water utilities

Reducing leakage and water losses England & Wales, Paris, Shenyang, Urban Senegal,Limeira, Pennsylvania, Tangiers, Campo Grande,Bristol, Shanghai Pudong

Improving energy efficiency Bucharest, Pennsylvania, Shenyang, Fillmore,Mogi Mirim, Saltillo, Campo Grande, Bristol,Adelaide, Armenia, Niger

Securing revenue streams Mbombela, Shenyang, Saint Marc, Armenia, Benin

Managing infrastructure assets sustainably Paris, Algiers, Pennsylvania

Optimising economics of public services Bucharest, England & Wales, Paris, Chile,Petropolis, Urban Senegal, Fillmore

Raising and maintaining staff capacity Algiers, Apalit, Cartagena, Tangiers, Saint Marc

Responding to natural disasters Chile

Exemples of achievements illustrating the many dimensions for which performance is needed



The cases presented in this brochure illustratemany types of performance resulting from pri-vate management of public services (PSP). Ineach field case only a few types of perform-ance achieved are described even if other use-ful results have been obtained. These caseshave been selected to show the wide diversityof countries, types and sizes of partnershipsand operators. There are many other success-ful cases in the world.

Note: on this map, the darker the colour, the higher the HumanDevelopment Index (HDI) in the country

Source: UNDP – 2011 Human Development Report

Cases presented in this brochure

Field casesN° Country Area Operator Population

in the areaPage

1 United States Fillmore Amercian Water, Shenyang SEDA 15,000 162 The Philippines Santa Ana Balibago 54,000 183 Brazil Mogi Mirim SESAMM S/A 66,500 204 The Philippines Apalit Balibago 103,000 225 Haiti Saint Marc SESAM 130,000 246 China Shenyang SEDA Shenyang Sembcorp 127,000 267 Brazil City of Limeira Odebrecht Ambiental 280,000 288 Brazil City of Petropolis Aguas do Brasil 290,000 309 Germany Rostock Eurawasser 310,000 3210 South Africa Mbombela Sembcorp Silulumnzi 440,000 3411 Poland City of Gdansk Saur Neptun Gdansk 500,000 3612 China Macao Macao Water 607,500 3813 Mexico Saltillo Aguas de Saltillo 823,000 4014 Brazil Campo Grande Aguas de Guariroba 843,000 4215 Morocco Tangiers Amendis 985,000 4416 Colombia City of Cartagena Acuacar 1,000,000 4617 United Kingdom Bristol Bristol Water 1,200,000 4818 Australia Adelaide Allwater 1,200,000 5019 United States Part of Pennsylvania Aqua America 1,400,000 5220 Romania Bucharest Apa Nova Bucharesti 2,000,000 5421 France City of Paris (Central Paris) Veolia + Suez-Environnement 2,200,000 5622 Ecuado Guayaquil Interagua 2,466,000 5823 Algeria Algiers (City and wilaya) SEAAL 3,200,000 6024 China Shanghai Pudong Pudong Veolia 3,700,000 62

1

13

22

5

314

87

16

29

19



Global levelN° Country Area Operator Population

in the areaPage

31 DevelopingCountries

Locations supplied by private operators

Many private operators 160,000,000 80

HDI

> 0.793

0.698 - 0.793

0.522 - 0.698

< 0.522

Country levelN° Country Area Operator Population

in the areaPage

25 Armenia The whole country excluding Yerevan SAUR Sevan Services 1,230,000 6626 Benin Ruras areas Members of AFEB 2,100,000 6827 Niger 54 uban centers SEEN 2,921,000 7028 Senegal Urban Senegal Sénégalaise des Eaux 5,500,000 7229 Chile Urban Chile Members of ANDESS 15,000,000 7430 United Kingdom England and Wales Members of Water UK 55,000,000 76

30

26

27

25

24

2

18

4

6

9 11

10

15

17

2021

23

28

12



Organising authority: City of Fillmore.

Water operator: American Water’s ContractServices Group (American Water).

Location: Fillmore, California.

Description of contract

American Water was chosen by the city ofFillmore to design, build and operate (DBO)the new wastewater recycling facility under apublic-private partnership. The new facilityhas replaced Fillmore’s existing 50-year-oldfacility and serves approximately 15,000 resi-dents and businesses. American Water willoperate the facility until 2029. The constructioncommenced in 2007 and operation started in2009.

PPP context and objectives

As per the new regulations, the city was requi-red to improve the quality of treated waste-water discharges to the Santa Clara River. Thisthreatened the continued operation of thecity’s old WWTP in its current state. The FillmoreWRP was undertaken in response to the stric-ter discharge regulations brought down by theLos Angeles Regional Water Quality ControlBoard. The Fillmore wastewater treatmentplant needed significant upgrades in order tocomply with stricter environmental standards.

The objective of the PPP was to design, buildand operate a facility to produce high-qualitydisinfected water to meet the stringent stan-dards required for surface and sub-surfaceirrigation of public and private utilities.

Improving energy efficiency

The plant features state-of-the-art technologythat maximizes energy efficiency helping tokeep costs down. A flow-equalization system

minimizes water flow during the day, whencost and energy use is highest. The facilitiesalso include a recycled water tank that has astorage capacity of 1 million gallons (3,785 m3).Wastewater is cycled back into the plant whereit is treated during off peak hours – when powerdemand and cost is lower. The current confi-guration is intended to operate at 1.8 milliongallons (6,813 m3) of water daily. The plant’speak pumping capacity is 4,146 gallons (16 m3)of effluent per minute.

Fillmore water recycling plant


The new plant is yielding water 10 times clea-ner than other types of modern activated sludgeplants, and this water is being used to irrigatemultiple properties, which is a true luxury inCalifornia, where water supply is always indemand. The plant currently produces up to1 million gallons of water daily that meets thestandards for unrestricted reuse irrigation pur-poses. About 800,000 gallons (3,028 m3) perday is discharged to percolation ponds and anunderground Effluent Disposal System thatprovides rainy weather disposal. A membranebioreactor system and an ultraviolet disinfec-tion system yield cleaner recycled water sui-table for irrigation.

Fillmore, California, U.S.A.Population: 15,000

100% of the treated water is recycled.



n Improving energy efficiencyn Protecting the environment from wastewater pollutionn Optimising economics of public services

Optimising economics of public services

The current irrigation system provides 200,000gallons per day to two public schools, thenew Two Rivers Park and a new greenbeltalong a historic railroad. Plans for the irrigationwater also include areas in new home deve-lopments, commercial building developments,the site of the old wastewater treatment plant

The plant won eight awards,including twoProject-of-the-Year(POY) prizes, withinseven months of its operation.

(being converted into a park), the groundsat City Hall and other public areas. The PPPapproach and DBO model helped the Cityachieve a $4 million savings. Savings and waterquality have both turned out to be far superiorto initial projections. Costs are lower, life spanof the membranes is longer, and use of recy-cled water is reducing demand upon thepotable water system as well as providingadditional revenue.

“This is a highly successful partnership. We avoided cost escalation, treatment risks, and obtainedexcellent operator expertise by engaging in a public private partnership with American Water.” BertRapp, Former Public Works Director of Fillmore, California



Organising authority: Municipality of SantaAna, Pampanga Province, Central Luzon Region,Philippines.

Water operator: Santa Ana Waterworks a sub-sidiary of Balibago Waterworks System, Inc.

Location: Municipality of Santa Ana.

PPP description

Santa Ana Waterworks is the 25th franchise ofBalibago Waterworks System, Inc. (or BWSI forshort), a private water utility that operates smallto medium scale water supply and distribu-tion systems in the provinces of the Philippines.The terms of the agreement included that BWSIwould finance the construction and operationof the complete water supply system and reco-ver its investment through the water tariffscharged to the customers. In return, the muni-cipality granted BWSI a 35-year franchise tooperate the Santa Ana water system.

Context and PPP objectives

In early 2007, local government officials led bySanta Ana’s municipal mayor approached BWSIto provide a water system for the municipa-lity. The municipality was having difficulty pro-viding water to its population especially duringthe summer, when its shallow wells with cheaphand pumps would dry up. The mayor wan-ted to establish an institutionalized water sup-ply and distribution system for the municipality.

After a process of consultations with the exe-cutive and legislative branches of the localgovernment and public hearings with theconstituents of Santa Ana, an agreement wassigned by the municipal mayor and BWSI tosupply and serve all 14 barangays of the muni-cipality with a total of 9,856 households or apopulation of 54,129.

Key performances:

Improving accessibility of water

Immediately after the beginning of the PPP,the construction of the first deepwell pum-ping station commenced together with theimplementation of pipe laying for the first five(5) barangays namely San Pedro, San Juan, Sta.

Maria, San Jose, and Sta. Lucia. Operations offi-cially started on January 2008 with 335 billedcustomers. By the end of the same year thebranch had 1,118 customers. Because of thepositive feedback about the sustainable,24 hours a day 7 days a week water service andthe clean and potable water quality, the localofficials and residents from other barangaysrequested speedy expansion in their areas.

The pipe network was expanded to the remai-ning 9 barangays in batches of 3 barangaysper year over the succeeding 3 years. As of end2014, the pipe network has been extendedfrom 0 kilometers in 2007 to 70.4 kilometers.The number of billed customers increasedfrom 335 in 2007 to 7,154 in 2014. Santa AnaWaterworks grew on average by 1,022 billedaccounts per year in its seven year life span.

Increasing availability of water

As the pipe distribution network expands, sodoes the number of customers connected tothe water system. Santa Ana Waterworks ensu-red that supply would keep up with demandby increasing significantly water productionfrom 165,612 to 1,625,825 liters a year anderecting additional pumping stations. SantaAna is located in the Central Luzon region ofthe Philippines which is a flat plain land. Onebenefit of this landscape, is that there are goodunderground aquifers with excellent volumesof water. As demand increased, Santa Ana ensu-red sufficient supply by drilling new wells anderecting pumping stations. To further augmentthe water supply and pressure, Santa AnaWaterworks is also purchasing bulk water fromneighboring water systems: Arayat Waterworks(also owned and operated by BWSI) andSinukuan Waterworks (the water system of theMunicipality of Mexico, Pampanga).

Santa Ana, Pampanga, PhilippinesPopulation: 54,000

In 7 years, the number ofcustomers hasincreased from 335 to 7,154.



n Improving accessibility of watern Increasing availability of watern Securing water safety

Securing water safety

Prior to the entry of BWSI in the municipality ofSanta Ana, residents in the area sourced waterby digging shallow wells and installating handpumps or electric-powered or jetmatic pumps.The quality and potability of such water isalways questionable. Because BWSI sourceswater from deepwells (ranging from 90 to150 m in depth), the pumping stations are ableto tap clear and potable water that has beenfiltered naturally by the layers of the earth. Toensure that the water is truly potable, BWSIinstalls online chlorinators with static mixersto ensure that any bacteria present in thewater is eradicated. Further, as required bythe Department of Health, the water from thevarious deepwells of Santa Ana must be tes-ted by accredited laboratories. Bacteriologicaltests are conducted monthly while Physical-Chemical tests are conducted semi-annually.Other regular practices that Santa Ana under-takes to ensure water quality is the drainingof the mainlines to remove sand particles andother debris that may have entered the pipe-lines and the immediate repair of broken pipe-lines to prevent water from being contaminatedby exposure to bacteria.

Other significant improvements:raising and maintaining staff capacity

Employees are a key factor in the success of anybusiness. BWSI wholeheartedly believes that phi-losophy and invests much in its people, both inthe form of training and development and byimproving their quality of life through provisionof benefits that employees highly appreciate.

The success of Santa Ana can be attributed toproper administration and implemention of a“lean and mean” mode of management. The

The rate of non-revenue wateris less than 10%.

rank and file are taught how to become “multi-taskers”. This is the key to the efficiency of SantaAna Waterworks and why it is able to achievea high customer to employee ratio. The fieldstaff are trained on three roles: Plumber, MeterReader and Pump Operator. Through properdelegation of work by the Branch Manager,the minimal number of branch staff are actuallyable to accomplish all the work necessary forthe proper and efficient operations of the watersystem. Some key performance indicators ofthe branch include an impressive employee tocustomer ratio at 1 employee for every 385 cus-tomers; an enviable past due rate of only 3%and an admirable non-revenue water of lessthan 10% month on month.

BWSI staff

For the supervisors and managers, key trainingprograms include a series of modules that focu-sed on having the proper attitude: PersonalEmpowerment or Emotional Quotient Training,Change Management, Work Attitude andValues Enhancement and last but not the leastCustomer Service Excellence. Developing theright attitude amongst its employees is ano-ther key to the success of BWSI’s management.

“Santa Ana Waterworks’ customer service is excellent and the water rate is very affordable. Thewater is clean and with good taste, unlike the water coming from hand pumps in their area. Allemployees from the manager down to the plumbers are very respectful, responsible and know howto deal with their customers. They immediately respond to customer needs.” Hon. Ernesto F. Lazatin,Barangay Chairman of Barangay San Jose



Organising authority: Mogi Mirim City Hall.

Name of Concessionaire: SESAMM - Serviçosde Saneamento de Mogi Mirim SESAMM S/A isa consortium in which the following compa-nies are shareholders: GS INIMA, SABESP andECS, being formed by private companies andone mixed capital (private and public).

Location: Mogi Mirim, state of São Paulo.

Description of concession

The Mogi Mirim City Hall, with interventionby SAAE – Serviço Autônomo de Água e Esgotode Mogi Mirim, signed a Partial ConcessionContract for wastewater treatment withSESAMM – Serviços de Saneamento de MogiMirim S/A.

The contract started in 2008 and has a 30 year term.Its objective is the provision of services to sup-plement implementation of the wastewaterremoval system and implementation and opera-tion of the Mogi Mirim Municipal WastewaterTreatment system. An investment of BRL 77.54 mil-lion(US $ 2,45 million) is stipulated in the contract.


The SAAE of Mogi Mirim has an over 40 yearlong history. Having achieved universal cove-rage of the water supply in 1998, the companyturned its attention towards wastewater col-lection and treatment. To speed up the process,a private sector concession was established forthis service in 2008.

Main goals of the concession are:

• Universal coverage of wastewater serviceby 2033

• Reinforce the wastewater system, involvingthe construction of trunk lines, lift stations,discharge lines, outfall and wastewater treat-ment station, including their operation

• Clean the Mogi Mirim and Mogi Guaçu rivers

• Stimulate the local economy, creating250 direct and indirect jobs

• Transfert of technology

Extending wastewater management

In 2008, the SAAE of Mogi Mirim decided toimprove significantly wastewater collection

and treatment by entering a concession contractwith SESAMM. This kicked off the execution ofan expansion of wastewater infrastructure andmanagement. The rate of wastewater collec-tion increased from 84% in 2008 to 99% todaywith the construction of 9.4 km of reinforcedconcrete trunk lines and 10.9 km of reinforcedcollection networks and outfalls.

This has been achieved through a project splitinto four main phases, all with well-definedscopes, terms and investments. By the end of2014, around BRL 77.54 million (US$ 2,5 mil-lion) had already been invested.


The partnership established between the pri-vate sector and SAAE of Mogi Mirim was funda-mental to quickly reaching the goals as well as toachieving environmental improvements in theregion. Controls performed by the environmentalagency, CETESB – Companhia de Tecnologiade Saneamento Ambiental, connected to theSão Paulo State Secretariat of Environment, forthe period before and after the concession havepermitted the monitoring of real indicators ofeffluent quality that are currently a source ofpride for the people of Mogi Mirim.

The quality of the effluent is controlled by theUrban Municipal Population WastewaterCollection and Treatability Index – ICTEM,its acronym in Portuguese, monitored by theSão Paulo state environmental control agency(CETESB) at the receiving body of water, theMogi Mirim River. The ICTEM is an indicatorformed by five key weighted elements: I) Collec -tion, II) Existence and efficiency of the waste-water treatment system, III) Effective removalof the organic load in relation to potential load,IV) Appropriate disposal of sludge and wastegenerated in treatment, and V) Quality com-

Mogi Mirim, São Paulo, BrazilPopulation: 66,500

In 6 years, the rate of wastewatercollection increasedfrom 84% to 99%.



n Extending wastewater managementn Protecting the environment from wastewater pollutionn Improving energy efficiency

pliance of the receiving water body (into whichtreated and untreated wastewater is discharged).

Comparison of performance monitored by theICTEM: the table below shows the averageresults for a period 2007-2011prior to the startof contract and the improvements achievedafterwards in 2013.

SESAMM’s commitment to preserving water resources

In addition to contractual obligations to improvethe quality of wastewater treated, the efficiencyof the service provided and SESAMM’s com-mitment have led the operation to developactions resulting in optimized use of this treatedwastewater.

Urban Municipal Population WastewaterCollection and Treatability Index – ICTEM

Water re-use

The good quality of the effluent allows it to beused for non-potable purposes. Use of recy-cled water for operational purposes and otherpurposes contributes to improving a balancebetween the supply and demand of water inthe region which is under stress.

Since the recycledwater system wasimplemented (2013),an average of 75% of the total waterneeded to carry outthe operationalactivities executedby SESAMM hasbeen recycled water.

In November 2013, after various technical, eco-nomic, environmental and social studies, espe-cially in relation to employee health, SESAMMimplemented the recycled water system, pro-ducing an average of 1,335 cubic meters permonth. Recycled water has made it possibleto maintain planting of 2,550 native trees andhas supported various operational infrastruc-ture and equipment cleaning activities at theWTS-Mogi Mirim.

Since this system was implemented, an averageof 75% of the total water needed to carry outthe operational activities executed by SESAMMhas been recycled water. This system has alsoallowed SESAMM to save approximately 92%on the cost of purchasing water from the publicsystem. In addition to lowering operational costs,the reuse system will contribute to improvingthe region’s water sustainability in the long run.

Environmental protection

With the construction of trunk lines, collectorsand outfalls that now collect and transport thewastewater generated to the treatment system,it has become possible to prevent uncontrolledrelease of these effluents directly into the muni-cipalities bodies of water, keeping them frombecoming polluted.

Water Waste Treatment Plan – SESAMM, Mogi Mirim

Other improvement: improvingenergy efficiency

Besides all the benefits of the recycled water,the project has improved energy efficiency,due to the aeration system, orbal-type aerators,which consist of disks that work at various speedsand spin in the two directions of the reactor’sflow, an innovative feature that allows for signi-ficantly less energy consumption and a highdegree of elimination of the contaminant load.

Year ICTEM Note

2011 1,5 Year preceding the start of the WTS-Mogi Mirim operation

2013 6,92 Year after the start of the WTS-Mogi Mirim operation

The higher the value the better the result

Average 2013 Average 07-11

Conductivity (μS)122.0 189.0

Turbidity (UNT)41.0 50.0

Nitrate (mg/L)0.23 0.13

Ammoniacal Nitrogen 0.78 4.0

Dissolved Oxygen (mg/L)5.0 1.3

BOD5.20 (mg/L)5.0 28.0

Phosphorous (mg/L)0.19 0.86



Organising authority: Municipality of Apalit,Pampanga Province, Central Luzon Region,Philippines.

Water operator: Apalit Waterworks, a subsi-diary of Balibago Waterworks System Inc.

Location: Municipality of Apalit.

PPP description

Starting from a Memorandum of Agreementin 2003 to take over a pump and borehole pro-vided by an NGO, Apalit Waterworks was ableto develop the water system rapidly throughcoordination with barangays1 in Apalit andneighbouring Macabebe. The aim was todevelop additional boreholes, networks andcustomer management systems. Investmentand operation are carried out by the company,which finances the works and operations mainlyfrom revenue from customer charges. It nowserves 103,000 people.


The Municipality of Apalit is situated in the eas-tern portion of the province of Pampanga inthe Central Luzon Region of the Philippines. Ithas a total land area of approximately 6,147hectares and it is composed of 12 barangays.

As with many towns in the region, urbangrowth has been very rapid. Between 2000and 2014 the population has grown by 78%and the number of households by 82%.

Prior to the involvement of Apalit Waterworks,the municipality was having difficulty provi-ding water to its fast growing population,especially in outlying districts. The initial objec-tive was to overcome this with a pilot project

to show how a private company could improvethe operation of the borehole and create apiped water network.

Subsequently, the services have been exten-ded to the other barangays in Apalit and partsof the adjacent municipality of Macabebe.

Extending provision of water supply

Having been given the initial well and pumpby the barangay of Tabuyoc (the farthest fromthe town centre), Apalit Waterworks started toinstall a network of PVC pipes and connectcustomers with meters. Since then the com-pany has progressively extended its water ser-vices to other areas, installing new boreholes,pumps, backup generators, 3 elevated storagereservoirs and distribution networks to extendthe service to parts of all 12 barangays in themunicipality and 2 barangays in Macabebe.

The number of customers supplied in Apalithas increased from 150 at the end of 2003 to12,919 in 2014. In Macabebe, the numbersserved have risen from 258 in 2008 to 550 atpresent. This means that the overall coverageratio has increased from 0.89% to 82% of ApalitMunicipality and the 2 barangays served inMacabebe.

The number of pumps and boreholes hasincreased from 1 in 2003 to 11 in 2014 (includesthe additional well in Barangay Sucad com-pleted in November 2014), with more plannedin 2015.

To ensure reliability, pumps have backup die-sel generators, all procured and installed byApalit Waterworks. In this way the water sup-ply is assured on a 24/7 basis for all connec-ted users.

The length of the networks has been exten-ded from 0 in 2003 to 91 kilometers in 2014.

Apalit, PhilippinesPopulation: 130,000

Continuous watersupply has beeninstalled for 12,919 in 11 years,increasing thecoverage ratio hasfrom 0.89% to 82%.

1 Barangay is the smallest administrate unit in the Philippines

Apalit

ManilaGoogle Maps - ©2012 Google



n Extending water supply to un-served peoplen Ensuring water safetyn Contributing to affordability of water services

The volume of water produced in 2013 reached3,488,482 m3. Average consumption inDecember 2013 was 23 m3. per customer. Themajority of customers are domestic households,but commercial customers are also supplied.

Water users that are not connected to the waternetworks mostly use shallow wells with cheaphand-pumps or small electrical pumps thatare expensive to operate. In both cases, sup-plies are of dubious quality and are time consu-ming or costly to use.

Ensuring water safety

All the pumping stations are equipped withelectronic chlorinators to ensure water safety.The water quality is tested and controlled forbacteriological and physical-chemical com-pliance with the Philippine National Standardsfor Drinking Water (PNSDW 1999). Copies ofthese tests are submitted to the NationalWater Resources Board (NWRB) and resultsshow consistent compliance with PNSDWparameters.

When combined with the extension of thewater network, the safety of the water supplyfor over 82% of the population of Apalit hasbeen assured within 11 years.

Subsidies to domestic users

Customers are offered the opportunity to connectto the Apalit Waterworks network on a volun-tary basis as the pipes become available. Theconnection charge is currently (2014) 2,760 Pesosfor ½ inch (12 mm) domestic connection and3,060 Pesos for a ½ inch (12 mm) commercialconnection.

The tariffs are agreed between the LocalGovernment Unit and Apalit Waterworks andthen approved by the NWRB. The currentwater charges are set out in the table below.This shows that there is a cross-subsidy in placethat enables commercial users to give somesupport to domestic customers.

The safety of the water supply for over 82% of the population of Apalit has beenassured withinalmost 11 years.

Apalit Waterworks Tariffs 2014

Note: the average conversion rate Php – Euro for 2014 was 0.0170

Other significant improvements

It is notable that Apalit Waterworks has crea-ted 40 jobs directly (including 1 accountantand 1 assistant accountant). Its continuing pipe-laying, construction, repair and other activitieslikewise promote local employment. Also, asthe company has developed, it has implemen-ted appropriate modern technology such asdata loggers, hydraulic modelling, geographicinformation systems and variable frequencydrives. This has required it to expand the skillsand competencies of its staff accordingly.

Moreover, aside from the increased producti-vity and improved sanitation it brings with itspiped water, Apalit Waterworks has made aconsiderable contribution to the local eco-nomy through providing water to commercialand industrial activities and permitting theconstruction of new housing subdivisions.

“Apalit Waterworks has been the Municipality of Apalit’s partner in our pursuit to improve thequality of life in our town. lt has been providing potable water to the Apalitenos. Challenges thoughare present and many areas for improvement are abundant but with the local government unitand Apalit Waterworks’ solid cooperation, the obstacles for continued success will be handled allfor the common benefit of our townsfolk.” Mayor Oscar Tetangco Jr.

Residential

Min: 1-10 m3 P 205.00

11-20 m3 P 21.30 /m3

21-30 m3 P 22.10 /m3

31-40 m3 P 23.00 /m3

Above 41 m3 P 24.20 /m3

Commercial

Min: 1-10 m3 P 409.00

11-25 m3 P 40.90 /m3

Above 26 m3 P 44.20 /m3



Organising authority: National Directoratefor Water Supply and Sanitation (DINEPA).

Water operator: Saint-Marc Water Utility(SESAM), LYSA’s subsidiary.

Location: Saint-Marc city, department ofArtibonite, Haiti.

PPP description

The public service delegation of Saint-Marcworking in association with the new EnablingLegislation (2009) on the reorganisation of thewater and sanitation sector aims gradually totransfer the management and operation of waterand sanitation to local authorities. The opera-tion was assigned to SESAM following an inter-national bidding process won by LYSA in 2009.


This is the first public-private partnership fordrinking water in Haiti. Once the infrastructurehad been renovated with funding from theIDB, the challenge was to achieve an efficientservice that is provided by a local workforceand that is financially balanced through watercharges, whilst ensuring the maintenance ofthe network through the payment of a secto-ral tax and a tax on turnover.

Specific objectives have been added to thesegeneral objectives, such as acceptance by theusers of volume-based invoicing, respect forpublic infrastructure and removal of small scaletap connections, resolving usage conflicts thatwere not anticipated when creating new sup-ply infrastructure, as well as adapting to theimpact of the disastrous events that hit thecountry and its population and delayed andcomplicated action plans.

By the beginning of the 6th year of the contract,the links between the organizing Authority andthe operators have developed to a level whereunforeseen problems and difficulties can beovercome and a dialogue built around the per-formance of the service and its financial stability.


The number of connections has been increasingsteadily, rising from nearly 2,200 in 2009 to8,100 in 2015. This has been coupled with the

improvement of the quality of the water deli-vered and the continuity of the service thathas gone from a few hours a week to almost16 hours per day on average. The commercialcoverage of the city reached 71% in early2015. The increased accessibility of the serviceimproved through responsiveness to customerrequests, the establishment of traceability ofactions and effective monitoring of complaints.A works renewal project with design and super-vision carried out by LYSA-SESAM was imple-mented. This allowed the setting up of waterconnections to be adjusted to tally with actualcustomer demand, alongside verification thata subscription agreement had indeed beenput into place before the connection was made.

Putting an effective billing systeminto place

LYSA and its subsidiary SESAM took over thedelegation contract after the water supply hadbeen set up and the meters had been installedbut not before the volume-based billing hadbeen introduced. The first priority was to reversethe trend that had left the public believingthat flat rate billing would continue in the sameold way; the payment rate was of the order of3%. The change in charges for a householdbetween the previous flat rate and the newvolumetric rate was of a ratio of 3. Under thesecircumstances it was important that volume-based billing be set up with regularity to allowusers to get used to monitoring their consump-tion to fit their means. It was also necessaryfor SESAM to chase up customers in arrears.Billing had to be carried out rigorously in orderto leave the system free from criticism in acontext where billing by volume was beingtried for the first time in Haiti. For these reasonsthe personnel were trained to meet all scena-rios effectively and fairly.

Saint-Marc, HaitiPopulation served: 130.000 inhabitants

Unprecedented in Haiti: theintroduction ofvolumetric metersfor subscribers.



n Improving access to servicesn Improving accessibility of watern Securing revenue streamsn Raising and maintaining staff capacity

In four years the recovery rate reached 75% andwas then maintained at this level despite manyuncertainties: the earthquake that the capitalsuffered and which paralysed the country, thecholera epidemic which fortunately was contai-ned outside the city, severe cyclonic episodes, thedrought which led to conflicts regarding usageof the supply, the economic crisis which resul-ted in temporary and organised attempts tocreate illegal connections and the political crisisthat led to protest in the form of sabotage.

While the regular payment for water by volumeis a heavy burden for people who do not havehealth insurance, are old or unemployed, orare experiencing inflation and very significantlevels of unemployment, the satisfaction surveyconducted by DINEPA in February 2014 sho-wed that 60% of respondents expressed satis-faction with the service.

Customer survey

At Saint Marc,improved quality of service in urbanareas in Haiti: from16 to 24h of waterservice per day.

To transformational Management

SESAM has had an independent managementteam since May 2014, in other words after itsfifth year. The personnel of the previous publicinstitution was retained and staff had to assi-milate a new corporate culture. They also hadto be trained in the use of modern manage-ment tools and the systematic organisation ofwork. This process had to be put into placewhile incorporating new recruits and ensuringthat several aspects of business that werenew to Haiti were introduced. They includedvolume-based water consumption billing withthe required consumer education and the esta-blishment of an effective and rigorous mana-gement of metering. This first public-privatepartnership in the water sector required theconstruction of responsible relationships withthe delegator and the National Directorate ofdrinking water as well as the mayor and repre-sentatives of civil society. Finally, a manage-ment culture in which improved performancewas combined with the achievement of ope-rational balance has to be established. Thetechnical assistance provided by LYSA inclu-ded permanent expatriate staff during thefirst five years, with regular support missionsfocusing on technical or specific forms of orga-nisation. An engineer recruited three years agoand trained internally became CEO in May 2014.The autonomy of local staff is supported by arigorous management framework, with a dash-board and remote meetings as well as ad hoctechnical assistance missions.

“I am aware that SESAM has made great efforts to improve the conditions of the water supply.Using polyethylene to renovate the network is a good thing, giving us a modern network. I hopethat through this, the whole city will benefit from the water round the clock. I ask all customers tocontinue to consume tap water.” Dr. Raoul Vincent, coordinator of the Union of Municipal Health(Union Communale de Santé) radio interview 1 December 2013

“The job SESAM has done deserves congratulations and thanks. This is a positive achievement thatis useful to the community. I personally hope that the service continues to improve every day.”Chapelet Makfret Ak, rapper, 12 March, 2014



Organising authority: Shenyang Economic& Technological Development Area (SEDA).

Water operator: Shenyang Sembcorp WaterCo. Ltd.

Location: Shenyang is the capital of Liaoningprovince and a major economic, political, indus-trial centre in North East China. The servicearea of the concession has a population of200,000 over 88.5 km2.

PPP description

In 2008, Shenyang Sembcorp Water Co. Ltd. inan 80/20 partnership with SEDA acquired3 water works facilities and correspondingwater supply networks. The company was gran-ted exclusive concession rights for 30 yearsto supply water to customers in the area plusfuture areas to be developed. The companycurrently supplies over 899 industrial and over38,168 domestic customers (a population ofaround 98,300 people).


Shenyang Project is the first tap water supplyproject of Sembcorp in China. The total des-ign capacity of the company is 160,000 m³/day,and the total network length is 212 km. Theproject objective is to supply high quality waterto customers inside SEDA and provide the bestservices to customers. Its aim is to develop anoptimum mode of operation to set a standardfor other water supply projects in China.

Location of SEDA

Reduction of non-revenue water

The company made a comprehensive plan toreduce the Non-Revenue Water (NRW), which

was more than 30% before takeover. Losseswere mainly from pipeline leakage causedby the corrosion of underground pipelines,uneven ground settlement, or extreme wea-ther. However, some special factors, whichcause the high NRW in China, were also found.

1/ Disorderly construction

Before takeover, construction of water pipe-lines was managed by various parties, andwas haphazard and unorganised, leading toincomplete and inaccurate data on under-ground pipes. Unauthorized connections weredifficult to identify. The company made a bigeffort to investigate pipelines, valves and firehydrants. The company also strengthened theinspection team and set up Standard OperationProcedures (SOPs).

Losses caused by disorderly construction

2/ Improper meter management

A meter management system has been set up.It was common that meters were not calibratedand were not replaced for many years beyondtheir lifespan. The inaccuracy of some oldmeters was between 12% and 14%, which cau-sed a lot of the water used by customers to gounregistered. An ongoing meter managementplan was implemented.

3/ High NRW in residential estates

There are about 20 old residential estates, andmost showed very high NRW of 70% to 80%.Thus only 20% to 30% of water supplied tosuch estates was registered. This was mainlydue to the poor quality of the estates’ internalpipelines. A detailed work plan has been imple-

Shenyang SEDA, ChinaPopulation: 200,000

Non-revenue waterhas been reducedfrom 30% to 10%within the initial 3 year period, andbeen kept around10% until now.

City of Shenyang



n Reducing water losses n Improving energy efficiency

mented. Measures include monitoring of thestatic water level of storage tanks, checking allvalve pits and fire hydrants and the pipelinesof the cogeneration company, checking forunauthorized connections and unmeteredwater connections. For one estate the NRWhas been reduced 70% to below 5%.

Inspection of Residential Estates

With these measures, NRW has been reducedfrom over 30% to around 10% to 12% withina 3 year period, and been kept around 10%until now.

Energy efficiency

Reducing NRW also leads to higher energyefficiency. The optimization of the energyconsumption of the whole operation has beencompleted. The major areas of improvementafter takeover are supply pump station ope-ration, use of storage tanks, backwash mana-gement and supply pressure control.

A saving in energyconsumption perunit of production of 6% has beenachieved.

Currently, a combination of variable speedpumps and constant speed pumps is used forall the supply pump stations, and there are8 variable frequency drives installed at 4 sup-ply pump stations to ensure that the pumpsare operating at high efficiency levels. The maxi-mization of the use of the off-peak electricitytariff, which is only 1/3 of the peak tariff, hasbeen reviewed for every pump in the com-pany. The water level of storage tanks is kept ata low level in the daytime by shutting downsome of source well pumps.

The filter backwash has also been changed tooccur late at night. The filtration tank back-wash cycle has been optimized from 24 hrs to120 hrs, and the backwash duration shorte-ned from 8 minutes to 5 minutes. The pipelinenetwork for the 3 water plants, which were notinter-connected before takeover, was even-tually interconnected in January 2011. Thisenables supply pressure optimization using ahydraulic model. As a result, the unit powerconsumption is reduced significantly. A savingin energy consumption per unit of productionof 6% has been achieved.


Note: Main transmission pipeline connected to WTP#3 was bro-ken in Feb 2013; it made higher distribution pressure of WTP#1and led to an increase of energy consumption.

After takeover, a localised billing and collectionsystem was established and implemented forall customers in 2011, and it created a secureand reliable platform for billing and collection.

“Shenyang Sembcorp Water is a typical successful JV case in Shenyang, and Sembcorp used theirvast experience and technology of water business resolving the problems and brought excellentservice to SEDA.” Director of SEDA



Organising authority: The city of Limeira.

Water operator: Odebrecht Ambiental 100%subsidiary of Foz do Brasil.

Location: Limeira is a city located in the stateof Sao Paulo, 150 km from the city of Sao Paulo.

PPP description

Odebrecht Ambiental manages the munici-pal water and sanitation services of Limeirathrough a concession contract. Foz de Limeirawas selected by a process of international com-petitive bidding among 18 other proposals.The operations started in 1995 and the durationof the contract is 30 years. Limeira is the first cityin Brazil to enter into a concession for its muni-cipal water and sanitation services.


The city of Limeira had a significant popula-tion growth since 1960, the population increa-sed from 61,000 to 280,000. This city growth,in number of inhabitants and thus in surfacearea, created some serious problems for thesafe water system and sewerage. Through apublic and international bidding process, thecity of Limeira called on the private sector forcooperation and created a Public-PrivatePartnership, aiming at the following goals:

• Universal coverage of water and sanitation• Water supply 24 hours a day and 7 days a week• Water quality improvement• Water losses reduction• No pollution of local river basin PCJ (Piracicaba,

Capivari and Jundiaí)• Universal treatment of wastewater• Affordable tariffs for the whole population

Extending wastewater collection

At the beginning of the concession there were164,000 people connected to the wastewatersystem, they represented 78% of the wholepopulation. Thanks to the investment that hasbeen made since 1995, the whole populationwas connected to the sewerage system by2004; thus, the company achieved one of itsmain goals – collection of 100% of wastewaterfrom the population – in less than 10 years.

The following graphic shows this evolution.The number of people connected to seweragesystem has been increased by 68%.

The city is included in the regional sanitationplan named “Piracicaba, Capivai and Jundai”.At the end of 2010, the average of wastewa-ter collection of the 62 municipalities fromthe valley was 85%, Limeira being one of themost advanced cities collecting 100% of itswastewater.

Increasing wastewater treatment

At the beginning of the operations, only 2%of population had its wastewater treated.Industrial wastewater did not receive any kindof treatment, which means that wastewaterfrom all industries, charged with industrialcontamination such as heavy metals, grease,detergent, etc. was dumped into the river. Sinceonly a tiny percentage of urban wastewaterwas treated, water poured in Piracicaba Riverproduced serious pollution. At this time thecity of Limeira was responsible for 40% of theriver’s pollution.

Thanks to the investment that has been madeby the operator, the percentage of treatedwastewater has increased every year, as shownin the graph, attaining a 100% of wastewatertreated since 2011.

City of Limeira, BrazilPopulation: 280,000

In spite of the 31%population growth,the proportion of people connectedto the wastewatercollection systemwas raised from 78% to 100% in lessthan ten years.

Wastewatertreatment wasalmost non-existent.Today all urbanwastewater is treated.



n Extending wastewater collectionn Increasing wastewater treatmentn Satisfying users’ expectations

Wastewater treatment plant

Satisfying users’ expectations

The company has proved high performancein numerous matters such as the universality ofwater supply and sanitation, the treatment ofthe total flow of wastewater, the water qualityimprovement – which, before 1995, sufferedfrom cloudiness and a certain colour – thedecrease of water losses from the drinkingwater network – which has been reduced from40 to 15% – and the consequent improvementto a 24 hours a day water supply for all connec-ted households. All these improvements havehad a positive impact on customers and publicauthority’s satisfaction.

Customersatisfaction surveysshow that more than91% of the waterusers are satisfied.

The social tariffprogram allows5,000 families to havea 50% reduction on their bills for their consumption below 15 m3.

This is proved by the satisfaction poll conduc-ted by the company with its customers.According to the results of the 2011 survey,91.5% of those polled considered the servicesatisfactory, and only 0.4% of them are notsatisfied with the service.


The company and the municipality have laun-ched a social tariff program through internalsubsidies. Subsidies are funded and deliveredby the operator to 5,000 families selected by themunicipality on the basis of their low revenues.The graph shows the money paid by a familywith a social tariff (in red) and the money paidby a family with the regular tariff (in blue) accor-ding to their consumption. The differencebetween both curves represents the savingsrealized by a family with social tariff. A familywith consumption of 15 m3 or less will have adiscount of 50% on their bill.

Finally, Odebrecht Ambiental obtained the ISO9002 certification for its quality policy in 1998,the ISO 9001:2000 in 2002 and the ISO IEC17025 for its laboratories in 2008.

In 2011, Odebrecht Ambiental received the title of “Company of the Year in the area of Socialand Environmental Responsibility”. Awarded by the City of Limeira

See ref. 28



Organising authority: Petrópolis City Hall.

Operator of water and sanitation service:Águas do Imperador, Águas do Brasil group.

Location: Petropolis, a City located in the stateof Rio, 65 km from Rio de Janeiro.

Description of PPP

Águas do Imperador manages municipal waterservice in Petropolis. Aguas do Imperador wasselected by an international competitive bid-ding. The 30 year contract began in January1998.


Before 1998, the city of Petrópolis had seriouswater supply problems such as the coverage(44% of population had no access to waterprior the beginning of the contract), continuityof water supply (some households had watersupply once a week or even a month), and only2% of the population with access to waterreceived disinfected water (only by chlorina-tion). In addition, the water losses in the networkwere about 50%. Only 45% of the populationwas connected to the sewerage system andonly 4% of wastewater was collected.

Through a process of international competitivebidding, The city of Petrópolis called the pri-vate sector for cooperation and created aPublic-Private Partnership aiming at the follo-wing goals:

• Regularization and increase of water pro-duction in order to supply water 24 hours aday and 7 days a week

• Universal coverage of water and sanitation

• Replacement of obsolete pipes in order toreduce leakage and water losses

• Purification treatment of 100% of watersupplied

• Installation of water meters and implemen-tation of a reading and billing system

• Increase the amount of wastewater collectedand treated

• Enhancent of customer service

Improving accessibility and availability of water

In spite of the 15% population growth since1997, the proportion of population connec-ted to public networks has risen from 56% in1997 to 91.3% in 2014 while most people livein neighborhoods outside the city center inareas that are difficult to access due to the rug-ged landscape of the region.

In order to supply water for this growing popu-lation, the company increased the number ofconnections from 24,000 in 1998 to 68,500 in2014. This means 150% more connections madein the last 15 years. Today, there are seven watertreatment stations that, together, produce61.8 million liters of water daily – complyingwith standards established by the World HealthOrganization. The concessionaire is able toserve 95% of the population.

In 2014, the concessionaire finished work oninterconnecting the six main municipal sup-ply systems. With the installation of 11 km ofpipelines, interconnection made it possible totransport water produced in any systems towherever there is an immediate demand. Withthis, water can be moved from the city centerto the outer districts, for instance, covering adistance of nearly 30 km.


Notable progress has also been made in rela-tion to wastewater. The number of connec-tions to the wastewater system increased by87%. Prior to the concession, wastewater treat-ment was almost inexistent (only 4% of was-tewater was collected). Now, 80% of thepopulation has its wastewater treated, a totalof 52.5 million liters of wastewater per day.

Petrópolis, Rio de Janeiro, BrazilPopulation: 298,000

In spite of 15%growth, theproportion ofpeople connected to public waternetworks has risenfrom 56% to 95%.



n Improving accessibility and availability of water n Improving wastewater managementn Protecting the environment from wastewater pollution

The proportion oftreated wastewaterhas risen from 4% in1997 to 80% in 2014.

possible, local manpower is used to build them.The filters are made of thousands of tires andPET bottles, allowing polluting materials to beused in a better way. There is no treatment feecharged and the biogas generated is used bydaycares and residents in the community.

In addition, the biodigesters consume no elec-tricity, they treat waste at the location where itis generated and, at the end of the process,the treated effluent is returned to the riverswith up to 85% purity in relation to the initialorganic load.

Águas do Imperador currently has eight bio-digesters and one biosystem, with a total of10,400 people benefitting from treatment of731,000 liters of wastewater per day. The pro-jects are always sustainable and have alreadyguaranteed reuse of around 280,000 PET bot-tles and approximately 3,000 tires.

In 2014, Águas do Imperador was among thetop three of over 100 projects in the NationalWater Agency (Agencia Nacional de Águas –ANA) Award, in the Corporate category, withits ’Sustainable Sanitation – Use of Biosystemsand Environmental Education in Low-IncomeCommunity’ project, which included therenowned work that the company does withthese treatment units. The awards are aimed atrecognizing and publicizing good practicesthat contribute to management and sustai-nable use of water resources in Brazil.

The wastewater system in Petrópolis currentlyhas 25 treatment units (3 large WTSs, 5 compactWTS, 8 small WTS, 8 biodigesters and 1 bio-system). According to Instituto Trata Brasil,Petrópolis is 27th among the 100 largest cities(more than 300.000 inhabitants) with the bestsanitation in Brazil.

Protecting the environment from wastewater pollution, an innovative approach

The pioneering work that Águas do Imperadoris doing with biodigesters is a national andinternational reference. Implemented in regionswith uneven topography and disorderly occu-pation, these units represent an unique solutionin the treatment of wastewater for these loca-tions and they fit within the best models ofsustainability.

Biosystem, Carangola

They therefore play an important social role.Work in environmental education was done inthe region to implement them and, whenever

See ref. 27



Responsible authority: Warnow Wasser andAbwasserverband Water Board (WWAV) as wellas Water and Watewater Association Güstrow-Bützow-Sternberg (WAZ).

Water and sewerage operator: EURAWASSERNord GmbH (EWN), a private company, esta-blished in 1993 in the state of Mecklenburg-Vorpommern, Germany and now a subsidiaryof Remondis Aqua.

Location: City of Rostock and neighbouringtowns and rural regions in Mecklenburg-Vorpommern.

PPP description

A cooperation between EURAWASSER and theWarnow Wasser and Abwasserverband WaterBoard (WWAV) through a PPP contract for25 years. Signed in December 1992 after acompetitive tender, the contract was initiallyfor drinking water supply and wastewatermanagement in the City of Rostock and thesurroundings. In 2003 it was merged withanother contract to serve now approximately310,000 people in Rostock and neighbouringtowns and rural regions in Mecklenburg-Vorpommern today.

The figure below shows the drinking watersupply and wastewater management area ofEWN with the division into regional responsi-bility areas.

Water supply and sanitation area of EWN

Wastewater collection and treatmentto protect the environment

EURAWASSER Nord GmbH has extended andoperates wastewater systems in the serviceareas, and has realised the following systemupgrades and network rehabilitation:

• 56 wastewater treatment plants with theRostock central wastewater treatment plant asone of the most modern in Europe.

• 2,073 km of sewers and stormwater lines.

• 7,562 small sewage treatment plants and sep-tic tanks for areas that are not yet developed.

Since the beginning of the contract, EURA-WASSER Nord has spent a total of 454 million €for the restoration and investments in waterand wastewater infrastructure. The table belowshows these top Investments.

The extension of the wastewater network inthe suburbs surrounding Rostock has resultedin an increase from 28% to 93% of the numberof people that have their wastewater collected.

City of Rostock and adjacent districts, GermanyPopulation: 310,000

Extension from 28% to 93% of thenumber of people in the surroundingsuburbs that areconnected to thewastewater network. Project Investment

(million €)

Development of the Rostock water plant 16.7

Modernization of the Rostock WasteWater Treatment Plant

90.7

Extension of the drinking water system 105.5

Increase of access to the wastewaternetwork for the people in thesurrounding suburbs (from 28% to 93%)

241.5



n Removing pollution to protect the environmentn Improving the acceptability of watern Making life of users easier

An environmental commitment

EURAWASSER Nord has always been stronglycommitted to environmental protection inorder to attain the objectives of the HelsinkiConvention to protect the Baltic sea.

In obtaining a modern wastewater treatmentplant, Rostock succeeded in complying withthe new environmental requirements in forcein the countries of the Baltic region.

The quality of the bathing water in the BalticSea at this seaside resort region has also beenimproved as a result of this investment.

Optimising water treatment to improvequality and acceptability of water

In Rostock, EURAWASSER Nord took up thechallenge of quality water.

The construction of ozonation units in the drin-king water production plant improved tastequality and reduced the quantity of chlorineused for disinfection by 80%.

In addition to its better taste, the water distri-buted in the city and its surroundings is strictlymonitored today.

Today, the quality of drinking water meetsthe strict standards of the German DIN 2000

55,000 customercontacts a year. 78% of water-usersfind the water of excellent quality.

regulations on drinking water. External inde-pendent monitoring by the German PublicHealth Department attests the good qualityof the drinking water.

Each month, 120 samples are subject to micro-biological tests and 460 samples are analysedfor chemical compliance.

The storage of drinking water in Biestow, witha capacity of 10,000 m³, and in Niederhagen,with a capacity of 5,600 m³, guarantees a highdegree of safety of supply for the city of Rostockand 19 municipalities in the administrativedistrict of Rostock.

Services designed for customer satisfaction

A series of customer satisfaction surveys havebeen carried out. These examine issues suchas the setting up of a single call number and acall centre (handling 55,000 customer contactsa year). In the last survey, a total of 1,000 cus-tomers were asked about EURAWASSER Nord.78% of the sample thought that the companyprovides an excellent water quality, 96%are satisfied with supply guarantee and 84%rate the provision with wastewater services asvery good.

Management of drinking waterquality is certifiedISO 22000.Water qualitycomplies with theGerman DIN 2000standards.


Basic water supplyhas been expandedfrom 56% of thepopulation to 95%.


Organising authority: Mbombela LocalMunicipality. In 2000 Greater NelspruitTransitional Local Council (created in 1994)merged with White River and Hazyview tobecome Mbombela Local Municipality.

Water and sewerage operator: SembcorpSilulumanzi.

Location: Greater Nelspruit area. Nelspruit isthe capital of the province of Mpumalanga,South Africa. The concession covers the cityof Nelspruit, and the main Nsikazi townshipsof Kanyamazane, Tekwane, Msogwaba andMatsulu. It also extends to other peri-urbanareas such as Zwelisha, Mpakeni and Luphisi.

Total population in concession area is 440,000of which currently 380,000 are receiving theservices (2013).

PPP description

Sembcorp Silulumanzi (formerly known asGreater Nelspruit Utility Company) is the waterutility in charge of the Greater Nelspruit area.It is a subsidiary of Sembcorp Industries ofSingapore.

On the advice of the Development Bank ofSouthern Africa, a request for proposal wasissued in 1996. The Transitional Local Councilselected Sembcorp Silulumanzi by a processof competitive bidding among 5 other com-panies and in 1999 the contract was signed.The concession agreement was approved bythe Department of Constitutional Affairs andthe Department of Water Affairs and Forestry.Operations started in November 1999 and theduration of the contract is 30 years.

Sembcorp Silulumanzi operates, maintains,replaces and upgrades the assets leased fromthe council. The assets will be transferred backto the council at no cost and in the same orbetter condition at the end of the concession.The PPP is regulated by a Concession Moni -toring Office within the municipality.


Nelspruit Town population was 25,000 in 1990and the majority of households were mid toupper class. In 1994, when Greater NelspruitTransitional Local Council was created, the areaincreased by over 8 times and the populationto 250,000. The total income of the area, howe-ver, was only 38% greater. This was due to thefact that the new areas included were lesswealthy and had a significant proportion ofinformal households, particularly the peri-urbanareas which had 100% informal households.Consequently, when the operations started in1999, 56% out of the 43,000 households wereinformal. Thus, the access to water service waslimited, 44% of all households and almost 80%of informal households did not have access towater supply.

Some of the main performance targets assi-gned to the operator to be achieved by 2009were:

• 24 hour water supply to all formal householdsby 2009

• to use best efforts to improve the number ofhouseholds in informal areas with a 24-hourwater supply

• to comply with national water quality stan-dards

• to improve revenue collection

• annual customer satisfaction survey andfollow-up actions to address issues identified

• community-oriented training and develop-ment programmes

Extending access to water to un-served people

The company achieved the first target: areaswith a 100% of formal houses, such as Nelspruitand Tekwane, had full coverage of basic watersupply, 24 hours a day and 7 days a week, by

Mbombela, South AfricaPopulation: 440,000



n Extending access to water to un-served peoplen Ensuring more equitable water supplyn Securing revenue streams

2009. Over and above the 24-hours services,the operator was successful in connecting allcustomers in these two areas to sewer network.Overall performance figures are also remarkable,especially considering the demographic expan-sion. The population has grown by 65% bet-ween 1999 and 2009, with most of this growthconcentrated in informal areas, an increase of20,000 informal houses. In spite of the high levelof growth of the population, the concessionaireimproved the coverage of basic water supplyfrom 56% to 95% of all households in only thefirst five years of the concession.

Equity & non-discrimination

It is important to note the efforts made by thecompany to supply water in areas where mostof the houses are informal. In 1999, none ofthe informal houses received water 24 hours aday, and 79% of informal houses did not receivewater at all. In 2013, fourteen years later, inspite of the growth in number of informalhouses, the proportion of informal houses withno access to water supply was reduced signifi-cantly from 79% to only 9% and 81% of infor-mal houses were receiving water every day.

The same improvement can be seen in the sta-tistics in rural areas. In 1999, only 21% of the ruralpopulation of Mbombela Concession was ser-ved at or above the basic level of service. Thisfigure is far lower than the average national sta-tistics, where 48% of rural population had accessto water. After the first ten years of the concession,the percentage of rural population with at leasta basic level of service increased to 96%, whichis above the national average of 90% in 2013.

SembcorpSilulumanzi is accredited with the InternationalStandards for ISO 9001 QualityManagement, 14001EnvironmentalManagement and OHSAS 18001Health and SafetyManagementSystems.

The proportion ofrevenue collectionout of the total billsincreased from 73% to 83%.

In this chart, only areas already established in 1999 are included

Securing Revenue Streams

For political reasons, the percentage of revenuecollection was low in Mbombela. This wasbecause refusal to pay for any municipal orgovernment provided services was used as aform of protest against the apartheid govern-ment. Without the payments it was very diffi-cult to support the development and operationof the water and sanitation systems. One ofthe main goals of the concession was to convertthis strong culture of non-payment for waterservices. Among the contractual requirementsto be achieved by 2009 there were targets forrevenue collection for each area.

The efforts of the concessionaire to addressthis problem have allowed an increase in thetotal revenue collection from 73% of the totalbills in 2000-2001 to 83% in 2013-2014. Thebest improvements have been in Matsulu andKanyamazane and Tekwane as shown in thefollowing graph.


Sembcorp Silulumanzi on behalf of MbombelaLocal Municipality is an active participant in thenational Department’s Blue Drop (drinking watersystems) and Green Drop (wastewater systems)incentive based compliance systems.

SembcorpSilulumanzi is one of the few watersystems to obtainthe Blue and GreenDrop awards.

See ref. 29



Organising authority: City of Gdańsk, Poland.

Water and sewerage operator: Saur NeptunGdańsk (SNG).

Location: Gdańsk and Sopot, Eastern Pomerania,Poland.

Gdańsk is a major Polish port on the Baltic Sea,the City of the late revolutionary union leaderand president Lech Walesa. Gdańsk is also amajor summer resort with the beaches andamenities of the Sopot beach resort attractingover 1 million visitors per year.

Public-Private Partnership

A lease/affermage contract was signed in 1992for a duration of 30 years between the city ofGdańsk and Saur Neptun Gdańsk (SNG). SNGis a Joint Stock Company held for 51% by SaurInternational, a private group from France and49% by the City of Gdańsk. This “mixed” com-pany operates the water and wastewater ser-vices in Gdańsk and Sopot. It is responsiblefor operation and maintenance of the system,maintaining quality of service standards,and billing and collection. Today, it serves500.000 people.

The city of Gdańsk remains the owner ofthe infrastructure through an asset-holdingcompany GIWK – Gdańska InfrastrukturaWodociągowo-Kanalizacyjna. This company isresponsible for funding and realising the newinvestments. The city remains also responsi-ble for regulation and setting of tariffs (yearlytariff-setting by the Municipality).

The Gdańsk PPP contract is often characterisedas the 1st major water PPP contract in CentralEurope. It is a two-way public-private partner-ship: through a PPP contract between the localgovernment and an operator and through aco-ownership of this operator.


Prior to the beginning of the PPP contract, themain problems in Gdansk were related to thequality of the water supplied which was com-pletely unsatisfactory for the population served.

In addition, major network failures led to hugewater losses (25% Non-Revenue Water in 1992)and problems with continuity of service.

As a result of under-investment, untreated was-tewater seriously polluted the Baltic Sea andcaused the closure of the bathing beaches ofGdansk and Sopot.

Removing pollution to protect the environment

Sopot, seaside resort near Gdańsk, has world-class beaches and spa facilities, including thelongest wooden pier in Europe. However, dueto pollution caused by lacking wastewatertreatment and the resulting toxic sewerageeffluents, these beaches had been closedsince 1978.

By 1994, only two years into the contract, by1994, SNG had overcome the failure of waste-water treatment and this led to the festive reo-pening of the bathing beaches in Gdańsk andSopot. Marine environments were restored,leading to a renewed flourishing of this sparesort and a tourist boom for the whole coas-tal area.


SNG focused on the improvement in the watertreatment stations dealing with surface water.The implementation of new technology andtreatment systems led SNG to rapidly achievecompliance with EU drinking water standards.In 1992, 8% of water circulating in the Gdańskwater supply network met European standards,compared to 100% in 2013.

Gdańsk, PolandPopulation: 500,000

Beaches reopenedafter being closedfor 16 years becauseof wastewaterpollution.



n Removing pollution to protect the environmentn Securing water safetyn Improving acceptability of water

Improving compliance to EU quality standardsfor drinking water

In 2010, ISO 22000: 2005 certification dealingwith Hazard Analysis and Critical Control Point(HACCP) was obtained by SNG, qualifyingGdańsk tapwater for food safety certification.

To monitor continuously the quality of waterSNG has deployed the wisdom of nature:a biomonitoring system based on the beha-viour of rainbow trouts living in the reservoirof the row water and Unio tumidus musselsconnected to specially calibrated computerprogramme.

Bio-monitoring at SNG

In 2014, 100% of water suppliedmet Europeanquality standards,compared to 8% in 1992.

Improving water acceptability

Prior to the PPP there were huge expectationson Drinking Water Quality improvements:“People said they would even welcome thedevil if the water quality only went up!” (asreported by the WaterTime research project in2005).

Improvements performed by SNG have rever-sed the perception of users.

In 2010, a Poland-wide test by Brita, a leadingwater filtration products brand, of tapwaterprovided by the largest 10 utilities, revealedsome remarkable results in terms of “accepta-bility” of the water supplied. Gdansk tapwatercame out first in terms of odour (best smell)and taste (least detectable).

In recent customer satisfaction enquiries (2013),88% of the customers declare their drinkingwater to be of good to excellent quality (sourceSNG).

Compared to the 1992 situation, the accepta-bility has dramatically improved in objectiveand subjective terms.

Other improvements: reduction of water losses

• Network breakdown rate decreased by 50%.

• Water losses in the Gdańsk water networkwent down from 25% to 12% (in 2014).

• A leakage monitoring system for the entirewater supply network was introduced.

• All these efforts have led to significant watersavings (334,500 m3 in 2014).

In 1992 the waterwas perceived aspretty bad by users.Today, 88% of water-users declare theirdrinking water of good or excellentquality.

Water losses in the Gdańsk waternetworks wentdown from 25% to 12%.

“Saur Neptun Gdańsk has done a great work to guarantee high standards of services, among themthe superb quality of water.” Pawel Adamowicz, Mayor of Gdańsk, Global Water Summit, Berlin 2011



Organising authority: Marine and WaterBureau of Macao.

Water operator: The Macao Water SupplyCo. Ltd.

Location: Macao is one of the two SARs (SpecialAdministrative Region) of China enjoying a fastgrowing GDP of USD 87K per capita in 2013due to the rapid development of the gamingindustry since the opening up of the mono-polistic market in year 2000. The service areaof the concession has a population of 607,500over 31.3 km2.

PPP description

In 1985, Sino French Holding (Hong Kong) Ltd.,a joint venture of then Lyonnaise des Eaux(Suez Environnement today) from France andChow Tai Fook (New World Services Holdingtoday) from Hong Kong acquired 85% shareof the then Macao Water Supply Co. Ltd. Thecompany was granted exclusive concessionright for 25 years to supply water to customersin the whole Macao and subsequently had thecontract renewed in 2009 for another 20 yearstill 2030. At the end of 2013, the company sup-plies over 227,400 customers, of these 11.6% arecommercial and industrial customers accoun-ting for 46.3% of the total water demand and87.6% are domestic customers representing42.6% of the total water consumption.


Macao Water is the very first contract of SuezEnvironnement operating outside the Europeancontinent in the 80’s.

In the early 80’s, there was no medium or longterm investment plan to improve the overallinfrastructure including treatment facilities,distribution network and automation equip-ment. The consequences werea lack of pres-sure in the distribution network due to agedpipeline and high physical leaks. The waterquality was considered non-potable with highturbidity. Poor customer service led to dissa-tisfaction by customers and the government.The project objective was to supply high qua-lity water and provide excellent services to cus-tomers. Its aim is to develop an optimum modeof operation to set a standard for other water

supply projects in the region.

Reducing leakage and water losses

The company made a comprehensive plan toreduce the Non-Revenue Water (NRW), whichwas more than 20% before takeover. Losseswere mainly from physical leakage caused bythe corrosion of underground pipelines, une-ven ground settlement in the reclaimed areas,and commercial losses from under-metering.The NRW today has been reduced to 10,2%which is close to the optimum level.

Various measures were taken to reduce NRW.More than 95% of the distribution network hasbeen renewed with premium piping materials,for example, ductile iron or steel pipe. Flexiblecorrugated stainless steel pipes have also beenintroduced in reclaimed areas in dealing withthe adverse impact of ground sedimentation.A massive meter replacement (MRP) programhas been implemented since 1995 to startreplacing meters of different sizes based ontheir years of service and consumption profile.A meter resizing program has also been adop-ted to identify any undersized or oversizedmeters for all major customers and rectify theproblem by replacing them with a correct metersize based on their consumption profile.

Equipment inspection

Macao, ChinaPopulation: 607,500

80% of therespondents supportMacao Watercontinuing to provide waterservice to the City of Macao.



n Reducing leakage and water lossesn Improving water qualityn Satisfying users’ expectationsn Improving energy efficiency


With the Contract signed in 1985, Macao Waterhas been implementing close monitoring ofwater quality by performing parallel samplingwith the government laboratory on a dailybasis to ensure the water quality is in com-pliance to the EU Drinking Directives and thewater quality standard set by the local govern-ment. The Laboratory and Research Centre ofMacao Water has been accredited with ISO17025 Laboratory Accreditation Certificate in2007 meeting the General Requirements forCompetence of Testing and CalibrationLaboratories.

In 2012, Macao Water successfully completedthe certification audit of ISO 22000 Food SafetyManagement System and obtained the certi-ficate for better protection of water supplysafety, demonstrating a real commitment todeliver safe and quality water to the City ofMacao. Since 2004, the compliance water rateis above the IMS objective target of 99% andis continuously 100% since 2011.


In terms of energy saving, the company mana-ged to reduce the energy consumption of waterpumps by 6.61% -using 2009 as the baseline-through a series of measures including an over-haul of the water pumps, downsizing impel-lers and installation of frequency inverters tocontrol water pumps.

Improving users’ satisfaction

From autumn 2005 to spring 2006, Macaoencountered a major salinity crisis caused by theingress of sea water in winter in the Xijiang

River, the main source of drinking water inMacao. Macao Water had worked very closelywith the SAR Government in mitigating theimpact of salinity to customers. Macao Waterdeveloped a communication scheme there-fore providing transparent and updated sali-nity information to customers during winterand dry season every year.

Regular customer satisfaction surveys havebeen conducted annually since 2000 to mea-sure the customer support index toward theCompany. The customer support index in 2014is 78,2% whereas 90% of respondents ratedthe pricing and tariff is very reasonable andaffordable and 80% of the respondents sup-port Macao Water continuing to provide waterservice to the City of Macao.

Respondents also rated Macao Water as thepreferred utility in Macao compared with thelocal electricity and telecom companies in areasof overall performance, value for money, cor-porate citizenship, customer care and listeningto customer feedback. Macao Water is the onlylocal utility company that provides the grea-test range of payment collection services toits customers, including 24 hours 7 days col-lection service at all major convenience storesand online payment by all major credit cards,plus other user friendly services such as e-bill,e-application, SMS reminder etc.


Since 2010, Macao Water has published itsannual independent Sustainability Report sho-wing transparency enhancement and impro-vements of its corporate social responsabilities(CSR) as well as Macao Water’s strategies in sus-tainable development. The 2013 SustainabilityReport shows the performances of the com-pany in various major areas: environmentalprotection, energy conservation, customer ser-vice, employees and the community. In addi-tion, the Report has met the Global ReportingInitiative (GRI) Sustainability Reporting B+ level,and it passed an independent limited assu-rance performed by PricewaterhouseCoopers.

Since 2004, thecompliance waterrate is above the IMS objectivetarget of 99% and is continuously100% since 2011.

See ref. 28



Organising authority: Local governmentof the city of Saltillo.

Water operator: Aguas de Saltillo SA de CVsubsidiary of Aguas de Barcelona.

Location: Saltillo, capital of the State ofCoahuila, located in north-east México.

Description of the PPP

In 2001, following a public tender lauched bythe the city of Saltillo to operate the watersupply system in the city of Saltillo, Aguasde Barcelona was selected as the company tomanage the water system.

Aguas de Saltillo has been the first joint under-taking in Mexico, with the participation ofthe city of Saltillo, as public partner (with 55%of the shares of the company) and Aguas deBarcelona as private partner, which holds the45% remaining. The Partnership Contract is fora period of 25 years.

Context and objectives of the PPP

For decades, the city of Saltillo had a majorproblem of water shortages which negativelyaffected the socio-economic, demographicand industrial development of the city. Thiswas mainly due to the conditions of the oldsystem operator which was deficient in manyways, in addition to factors such as low rain-fall and population growth.

Only 10% of users had water every day, therewas a high level of physical leakage: more thanhalf the volume of water injected to the net-work was wasted. The revenue collection wasinsufficient, there was a lack of financialresources to improve service in addition to thediscontinuity in the management due to thechange of municipal administration every threeyears. The water shortage in the city worsenedand the problem became a permanent demandfor the State and the municipal government.

In this context, Aguas de Saltillo identified thefollowing objectives as main actions to take inorder to rapidly improve water supply service:

• Modernizing procedures and facilities

• Forming a sustainable water system

• Being an example of management in thewater sector in Mexico


Aguas de Saltillo performs rigorous analisiscertifying the quality and safety of drinkingwater supply, thus ensuring the good quality ofwater. In 2014, 2,740 samples of bacteriologi-cal analisis were performed together withauthorities such as the Ministry of Health. Allsamples are in conformity with the standards.Thus water quality in Saltillo is measured, moni-tored and improved to ensure optimal physicaland chemical parameters in the distributionnetwork. Aguas de Saltillo also has a programof cleaning and disinfection for 100% of thestorage tanks and pumping stations.

Extending access to water to un-served people

Aguas de Saltillo provides social tariffs to allowaccess to a water service of quality to low-income and disadvantaged people of the city.For example, aged people are benefitting fromspecial tariffs. Families living in irregular areas,lacking basic services and in precarious condi-tions are benefitting from access to drinkingwater through a community connection. Thefamilies concerned also benefit from subsidizedcost for the connection and the monthly waterconsumption is divided between the benefi-ciary families.

With this program, Aguas de Saltillo ensuresaccess to drinking water for vulnerable familieswho avoid paying high costs for obtainingwater from tankers or bottled water, as well asimproving health and preventing diseases byusing safe sources of drinking water insteadof contaminated ones.

City of Saltillo, Coahuila MéxicoPopulation: 823,000

From 2001 to 2014,water losses havebeen reduced by27% and commercialefficiency increasedby 33%, remainingat a level of 98%.

Aguas de Saltillotransformed thewater service andresolved the waterissues of the city. The water serviceused to be the mostpoorly rated by the population and is now the bestqualified.



n Securing water safetyn Extending access to water to un-served peoplen Managing infrastructure assets sutainability


Aguas de Saltillo manages water resources ina sustainable way by improving efficiency.Aguas de Saltillo improves every year theenergy efficiency rate, resulting in a significantdecrease of consumed energy and a betterefficiency of electrical equipment. Aguas deSaltillo also reduces water losses and leakagein the networks. To reduce them, projects ofcontrol and optimization of the network havebeen implemented, notably through hydraulicand pressure control, sectorization, renewalof pipes and connections. Leak detection equip-ment has also been modernized.

Improvements in the network managementhave allowed Aguas de Saltillo to face theimportant increase (almost 63%) of the numberof customers from 2001 to 2014 with a limitedwater production growth.

Aquas de Saltillocreated a dedicatedservice qualitydepartment that after 2 years has enabled thecompany to berecognized by the“Fundation GonzaloRio Arronte” for its “best practices in value for moneyin water services”.

While a small increase in water productionhas been achieved, water supply has beenprovided to nearly 90,000 additional house-holds.

With tariffs below the national average, thecompany has invested 545 million pesos(US$ 37,3 million) and spent more than1,040 million pesos (US$ 71 million) in main-tenance works on the installations since 2001.

Other significant improvement

Also, through agreements with civil societyorganizations, Aguas de Saltillo promotes theparticipation of the community in the conser-vation of the Sierra de Zapalinamé. More than40,000 households make voluntary financialcontributions through their water bills to theassociation “Profauna”, which carries out pro-tection and conservation of the mountain.Sierra Zapalinamé is the main source of waterfor the city of Saltillo. The reforestation activi-ties, planting endemic trees within the protec-ted area of the forest is designed to restore it.

Reforestation Sierra de Zapalinamé

Aquas de Saltillo has received the distinction of “Inclusive andsocially responsiblecompany” and “safe company”accreditation fromthe Secretariat of labour and social welfare.

See ref. 28



Organising authority: Municipality of CampoGrande.

Operator of water and sanitation service:Águas de Guariroba, AEGEA Saneamento group.

Location: Campo Grande, Capital of the stateof Mato Grosso do Sul, Center-West region ofBrazil.

Description of concession

Águas Guariroba is the concessionaire in chargeof public water and wastewater services inCampo Grande, the capital of Mato Grosso doSul, located in the Center-West of Brazil. Thecompany began its activities in 2000, afterwinning a competitive tender and through aconcession contract with the municipality a30 year term, extendable for 30 more years(until 2060). Águas Guariroba is currently partof the Aegea Saneamento company, whichserves 36 municipalities in six states in Brazil.

Context and goals of concession

Prior to the concession, the water and waste-water services in Campo Grande were managedby a municipal company and (for less than 2years) a state company. At that time, the watersupply reached 96% of the population butthe wastewater service only reached 23% ofinhabitants. The rate of water losses was abovethe national average, at around 56%.

The main objectives of the contract were:

• Universal coverage of water and wastewatersystems, through modernization and expan-sion of the services

• 100% wastewater collection and treatmentcoverage for the city by 2025

During its operations, Águas Guariroba hasalready invested BRL 680 million (US$ 217 mil-lion) in modernizing and expanding the city’sbasic sanitation services. The rate of watersupply, which reached 96% of the populationin 2000, now reaches 99.7%.

Extending wastewater collection

Águas Guariroba’s main goal is to achieve uni-versal coverage of the wastewater collectionand treatment service. The plan is for the entire

city to have 100% of its wastewater collected andtreated by 2025. To do this, the concessionaireis investing BRL 636 million (US$ 208 million) inprojects that are part of Sanear Morena, thelargest program of investments in basic sani-tation ever executed in Campo Grande. In thefirst two phases (2006 to 2013), Águas Guarirobainvested BRL 255 million (US$ 81 million) inimplementation of 839 km of wastewatercollection networks, 67,000 home connectionsand two new treatment stations, the LosAngeles WTS and Imbirussu WTS.

The Sanear Morena 3 Program, begun in 2014,should benefit around 240,000 people. Todo this, 2,000 km of collection networks and12,600 new home connections will be imple-mented, in addition to construction of a newtreatment station and expansion of the twoexisting stations. The entire population ofCampo Grande will therefore be served by thebasic sanitation service, which will positivelyaffect health and sustainable development. Inthe first phase of the Sanear Morena Programalone, according to data from the Ministry ofHealth’s Data – SUS (Unified Healthcare System)Department of Information Technology, therehas been 34% reduction in cases of illnessesconnected with a lack of basic sanitation atthe city’s health units.


Through its Reduced Losses Program (Programade Redução de Perdas – PRP), Águas Guarirobareduced the rate of losses in Campo Grande’swater supply system, going from 56% (2006) to19% (2014) one of the best averages amongBrazilian cities. The initiative has benefits forthe system as a whole: it lowers operating costs,provides energy efficiency, improves qualityof services provided to customers, and contri-butes to water conservation.

Campo Grande, Mato Grosso do Sul, BrazilPopulation: 843,000

The rate of losses in Campo Grandedecreased from 56% in 2006 to 19% in 2014.



n Extending wastewater collectionn Reducing leakage and water lossesn Improving energy efficiency

Among many other initiatives, the concessio-naire uses a hydraulic simulation which allowshydraulic behavior to be predicted and iden-tifies any operational anomalies, such as a dif-ference in simulated pressure and flow anddata measured in the field. This enablies grea-ter precision in fighting water and energy lossesand identifying these problems.

At the Operational Control Center, equippedwith a real-time data monitoring software,24 hour monitoring of the entire system isundertaken. This enables preventive and cor-rective actions to be taken immediately afterany anomaly is detected (leaks, pressure ano-malies, current trends, inaccurate measure-ments, data errors and others). It also allowsfor prioritization of services and managementof all events in the system through mathema-tical and statistical modeling, in addition toproviding automatic monitoring until the eventis resolved.

Operational control center, Águas deGuariroba

While waterproductionincreased by 12.11%from 2008 to 2014,there was an 18.5%energy reduction in Kwh/m³.

The PRP is work in progress, involving invest-ments in technology, operational improve-ments and employee training, creating a cultureof combating waste throughout the entireteam. Actions are focused on preventing leaks,reducing fraud, improving meter readings andguaranteeing precise control of standardizedwater by the company, to be consumed bycustomers.


The project began in 2007 with actions likedaily monitoring of electric consumption andfrequent monitoring of pressure in the distri-bution network taken to optimize the watercollection and distribution system in CampoGrande. Águas de Guariroba is also developingnew projects which aim at distributed gene-ration with alternative sources of energy (rene-wable resources: solar, natural gas, biomassand hydropower).

The results were significant: from 2008 to2014, water production increased by 12.11%and there was an 18.5% energy reduction inKwh/m³. For reference purposes, the energysaved could supply 138,777 Brazilian homes.

When participating in an event to kick off the wastewater project, the Mayor of Campo Grande, GilmarOlarte, said: “Everyone needs to be aware that wastewater is not an expense; it is a preventiveinvestment in health. Campo Grande is prominent nationally as one of the nation’s capitals withthe best water supply and sewer rates.”

See ref. 28



Organising authority: The City of Tangiers.

Water and sewerage operator: Amendis, alocal privately-controlled company (a subsi-diary of Veolia Environnement).

Location: The region of Tangiers – Asilah onthe Northern Coast of Morocco. Approximately985,000 inhabitants.

PPP description

The Public-Private Partnership (PPP) is a conces-sion-type contract for the supply of drinkingwater, management of the sewerage systemand the distribution of electricity in the cityof Tangiers. The operator purchases drinkingwater and power in bulk from state-ownedproducers.

The PPP contract started in 2002 for a dura-tion of 25 years.


Some of the key objectives of the PPP contractwere to:

• Finance and implement an ambitious invest-ment program comprising the protection ofthe bay of Tangiers against the wastewaterpollution that gave rise to bad odours for theneighbouring population, recurrent seweragefloods and direct disposal of the wastewater inthe vicinity of tourist areas.

• Complete the access to basic services to thewhole population of the contract area.

• Improve drainage to reduce flooding.

• Improve the quality and the efficiency of thecustomer service.

Protecting the Bay of Tangiersthrough removing pollution from wastewater

It was paramount to rehabilitate and completethe sewerage system of the city in order toremedy the bad hygiene conditions of thepopulation and the long standing problem ofodours from the rivers in the city and alongthe coastline, and also to improve the qualityof bathing water on the beaches of the city inorder to maintain its status as a tourist resort.

From the start of the contract in 2002 up toyear 2014, the overall investment programamounted to 3,372 million Dirhams (€306 mil-lion) of which 54% was dedicated to the sewageservice alone.

The new wastewater treatment plant

The sewage system that has been built andimplemented by the operator comprises:

• 50 kilometres of main sewers to collect thewastewater that was previously disposed ofin the small rivers (“oueds”) and indirectly intothe bay,

• 39 pumping stations across the city,

• a waste water treatment plant (primary treat-ment),

• a 2.2 km long sea outfall.

Nearly 60 kilometres of rivers (“oueds”), formerlyused as open sewers, have been completelycleaned, as well as 500 km of sewer lines.

Miscellaneous waste in a sewage collectorbefore cleaning

Making life easier for users

The customer service has been the focus ofspecial attention from the operator.

The improvements implemented since the startof the contract comprise:

Tangiers, MoroccoPopulation: 985,000

In 2002, wastewaterwas dischargeduntreated in manylocations on the seashore. 12 years later, 95% of wastewater is collected andtransferred to a treatment plantthen discharged faroffshore allowingthe city of Tangiersto upgrade itstourist resort status.



n Protecting the environment from wastewater pollutionn Making life of users easiern Raising and maintaining staff capacity

• the creation of a customer care centre (“callcentre”) named “Amendis Direct”,

• the increase in the number of branches from7 in 2002 to 15 since 2010 for customers toresolve any issues/requests,

• the introduction of 3 mobile branches to serveremote areas through fully equipped buses,

• the introduction of a new billing system aswell as the redesign of the bill,

• provision of better information to customers,

• the facility for customers to pay their bill atlocal groceries,

• meter reading through handheld devicesimproving the efficiency of the reading/bil-ling cycle.

Mobile branch to serve remote areas

Raising and maintaining staffcapacity through intense training

A massive training effort for the staff has beenundertaken: 195,000 hours of training between2002 and 2014, i.e. an average of 17 hours oftraining per staff per year, with an overallbudget of 43 million Dirhams (US$ 3,412) forthe period 2002 to 2014.

A new training center has been built with12 specific training rooms (in a 1,300m2 buil-ding) and a 4 hectare field, equipped to pro-

The number ofcustomer centreshas been doubled to simplify the life of water-users. Remote areas are served by 3 mobile centres.

vide training in water, sewerage and electri-city. Through an agrement with 3 universitiesthe new training centre is entitled to deliverofficial diplomas.

Staff on the field


The water network has been extended by 70%since 2003 and the connection rate has impro-ved by 22% from 73% in 2003 to 95 % in 2014.The number of customers has been increasedfrom 111,000 to 247,000 at the end of 2014(i.e. +119%).

Cross-subsidies allow the 32% of customerswho consume less than 6 m3 per month (lowestbilling block) to pay a metric charge that islower than the price paid by Amendis, the dis-tribution operator, to the bulk water provider.

37,000 “social” connections have been realisedbetween 2002 and 2014 targeting poor hou-seholds (partly funded through a World Banksupported Output Based Aid scheme).

The efficiency of the water distribution net-work has been improved from 63.3% in 2002to 79.5% in 2014, saving the equivalent ofthe water consumed by a Moroccan city of200,000 inhabitants.

The improvements to the sewerage and drai-nage networks have also contributed to sol-ving the issue of recurrent floods during wetweather in some of the low points of the city(nearly 79 flooding hotspots have been elimi-nated), thus contributing to better hygiene ofthe population concerned.

The System of Quality Management is certi-fied ISO 9001-2008. The wastewater treatmentplant is certified ISO 14001.

Cross-subsidiesallow the operatorto charge 32% of customers a priceper cubic metre that is cheaper than it purchases it from the bulk water provider.

See ref. 28


Organising authority: Municipality ofCartagena de Indias.

Water and sewerage operator: Aguas deCartagena SA E.S.P. (Acuacar).

Location: Cartagena de Indias is a city loca-ted in the state of Bolivar, Colombia.

PPP description

Aguas de Cartagena manages the municipalwater service of the city of Cartagena de Indias.It is a “mixed” company owned by the city (witha share of 50%), by a private operator (AGBARgroup - with a share of 45.9%) and some localprivate shareholders (with 4.1%). PPP opera-tions started in 1995 and the duration of thecontract is 26 years.


The city of Cartagena de Indias had significantpopulation growth during the years before1995. This city growth, in number of inhabi-tants and thus in surface area, created seriousproblems for the water and sewerage systems.Through a public and international biddingprocess, the city set up a Public-Private Partner -ship, aiming at the following goals:

• universal coverage of water and sanitation• water supply 24 hours a day and 7 days a week• water quality improvement• water loss reduction• universal treatment of wastewater• affordable tariffs for the whole population

Improving regularity of water supply

In 1995, at the beginning of the concession,there were areas where households receivedwater supply less than 8 hours a day, other sec-tors where households received water supplybetween 8 and 16 hours a day and in some areashouseholds received water supply between 16and 24 hours a day. Water supply of 24 hoursa day was practically non-existent. On averagewater was running at the tap for only 14 hoursa day. The map illustrates these different sec-tors according to water supply regularity.

Thanks to efforts of rehabilitation and repla-cement of the existing network, the situationhas been reversed and now water supply iscontinuous in almost all the city (99.3% of thetime in average), as shown on the second map.

Ensuring more equitable supply

Cartagena has seen its population increase from510,000, in 1995, to more than 1 million in2014. This demographic growth has resultedin the increase of the number of connectionsfrom 94,639 in 1995 to 243,107 in December2014.

86% of new domestic users are from lowerincome groups. In Cartagena water users areclassified in six different bands according totheir socioeconomic status, where bands 1, 2and 3 receive subsidies and bands 5 and 6 payan additional percentage above the regularprice, which is paid only by band 4.

City of Cartagena, Colombia Population: 1,000,000

In 1995, there wasrunning water at the tap only 14 hours a day on average.Since 2002, it isrunning more than99% of the time.

86% of domesticcustomers newlyconnected to waternetworks are fromlower income classesand receive tariffsubsidies.

Caribbean Sea

Caribbean Sea



n Improving availability of water supplyn Ensuring more equitable supplyn Raising and maintaining staff capacity

Raising and maintaining staff capacity

One of the more important investments reali-zed by Acuacar has been, and continues to be,its staff training. All workers, including theGeneral director, have received training thathas allowed them to develop their talents andabilities. This has been developed through aseries of Training and Management Develop -ment approaches, based on organizationalstrategy, key processes and continuous impro-vement programmes.

During the ten first years, the company put allits efforts into training and into the develop-ment of basic competencies for all its workers.In 2000, the number of training hours peremployee per year was 125 hours. It was par-ticularly important to achieve the professio-nalisation of a significant part of the operativestaff and qualify them as “Technician in drinkingwater and basic sanitation”. To do this the com-pany increased the number of “man-hours” oftraining significantly.

During the later years, the company has workedon strengthening competencies, mainly for

The company hasrealised significantefforts in capacitybuilding and workerstraining, which havehad very positiveimpacts.

managers. This explains the reduction in thenumber of man-hours of training. However,the effectiveness of the training is maintainedbecause it has a multiplier effect and createshigh levels of productivity.

In recent years, the company has worked onstrengthening human and organizational skills,especially in the formation of the leaders of theorganization, with has been highly efficient andprovided great results in productivity.

In 2014 a further step was completed in higherstaff training, Aguas de Cartagena facilitieswere certified as a training centre for the pro-gramme “Water and sanitation technology” ledby the Ministry of National education. Currently30 employees are being trained in basic waterand sanitation services.


Despite the doubling of the population, theefforts made by the company have permittedan increase in the percentage of the populationconnected to the drinking water supply net-work from 72% in 1995 to 99.9% since 2008.

The coverage of sewerage connections increa-sed from 60% to 93,58% between 1995 and2014.

The company implemented mobile officeswhere customers can easily go to regularizetheir services with payment plans accordingto their budgets and capacity to pay. This ini-tiative strenghtens the relationship betweenthe company and its customers.

The investments have allowed an increase in thepopulation that benefits from a continuouswater supply, improving the water quality andprotecting the environment of the bay andthe lake as part of the “Master Plan of WaterNetwork, Sewer Network and EnvironmentalSanitation“. All these elements contributed tosatisfy water users expectations. According tosurveys, customers’ satisfaction has been increa-sing steadily since 2005, reaching more than85% since 2007.

“It is so satisfying to see the commitment to excellence in management that companies such as Aguas de Cartagena have. Congratulations for this achievement that contributes to the progressof our beloved Colombia.” Quote from President of Colombia Juan Manuel Santos, in a letter sent to Acuacar in October 2011, on the occasion of the Health and Safety certification

Despite populationdoubling watercoverage has beenincreased from 72% to 99.9%.

Customersatisfaction hasimproved from 71%of users in 2007 to more than 85%since 2007.


See ref. 2,13,14, 28, 30



Organising authority: OFWAT, a UK Govern -ment body.

Water operator: Bristol Water PLC.

Location: Bristol, south west of England.

PPP description

Bristol Water has supplied drinking water forover 167 years and today serves a populationof 1.2 million people.

Bristol Water plc is currently owned by CapstoneInfrastructure Corporation (50%), Suez Environ -nement (30%) and Itochu Corporation of Japan(20%).

Privatisation of the water industry in Englandand Wales occurred in 1989, although BristolWater was one of 28 water only companiesthat have always been privately owned. BristolWater currently operates as a licensed mono-poly company, although in April 2017 businesscustomers will be able to choose their retailoras regulatory changes to drive competition andimproved customer service come into force.


Bristol Water faces a series of challenges overthe coming years including population growth,the impacts of climate change, and furtherchanges both in customer expectations and theregulatory environment in which it operates.

A number of government organisations regu-late the UK private water industry. OFWAT isthe economic water industry regulator res-ponsible for ensuring Bristol Water meets theconditions of its license. It regulates by settingthe price, investment and service package thatcustomers receive and sets targets for KPIs suchas leakage. This is reviewed every five years.


The company measures satisfaction throughan annual survey, monthly consumer surveysand the OFWAT SIM measuring the consumerexperience. Bristol Water has consistently beenhighly ranked by customers. In February 2014annual survey 93% of respondents ranked theservice as excellent or good, this was the samefigure as the 2013 survey.

It also revealed that 70% of consumers ratedservices as providing good value for money.

Tackling water poverty

The company assessed that 2.1% of customerswere experiencing water poverty; they spendmore than 2% of their income after tax onpaying their water charges.

Advice is given to customers requiring assis-tance and support can be offered in the formof ’social tariffs’. These are currently assistingmore than 6,000 customers, moving forwardthere will be a focus on promotion of socialtariffs and working in partnership with charities,debt advice services, housing associations andlocal councils.

Reducing unwanted calls

Through understanding customer demands,changes have been made to the manner inwhich billing information is displayed. Therehas been a decline in customer queries in rela-tion to billing from almost 7,000 in 2010 to lessthan 3,000 in 2014.

Further changes were seen within 2014/15 asan e-Billing service was introduced. There hasalso been investment in a new website follo-wing detailed research with consumers, andan upgrade to the CRM database, introducedto help with the management of consumercontacts more efficiently.

Staff on the field


In excess of 98% of properties in Bristol Water aremonitored permanently through 378 DistrictMeter Areas (DMAs). The remainder of the pro-perties are covered through a programme ofregular sounding. Flow and pressure data fromdistrict meters are obtained on a daily basis

Bristol, United KingdomPopulation: 1.2 million

£88.5m of capitalinvestment in2013/2014 – highestannual investmentin company’s history.

In 2013/2014 93% of respondents rated the service as excellent or good.

In 2013/201499.97% of watersamples compliedwith DWI standards.



n Satisfying users’ expectationsn Reducing leakage and water lossesn Improving energy efficiency

through various modes of telemetry and mobiletechnology.

In 1997 OFWAT introduced mandatory leakagetargets on an annual basis for water compa-nies in England and Wales. To achieve thesemandatory targets a programme of Pro-activeleakage management was initiated withinBristol Water as part of the Leakage ReductionPlan. A focussed active leakage control andpressure management plan was implementedalongside this strategy. As a result of this pro-gramme a significant reduction of total leakagelevels has been achieved.

Due to the latest determination by OFWAT,Bristol Water will be looking to reduce TotalLeakage, from 91 to 81 Leakage Litres/day(48 to 43 Megalitres/day) over the next fiveyear period.

Pressure management has been successful incontributing towards meeting the corporateleakage target, but reducing system pressure hasalso significantly reduced the number of breakson pipes and services. A study of pressure mana-gement schemes implemented in Bristol Watershowed that on average a 25% reduction ofmains breaks and 45% reduction of servicepipes breaks occurred after pressure manage-ment with an average reduction of maximumpressures of 39%. This data was a major contri-butor to the first IWA (International WaterAssociation) (WLTF) Water Loss Task Force inter-national data set on pressure – burst research.


Energy use is high because the amount of watertransported throughout the water supply net-work is so large (Bristol Water utilises approxi-mately 100 million tonnes per year). Most ofthis energy is used for pumping (64%) and

Special paymentschemes benefit6,226 households(for 2013/14).

Bristol Water uses approximately 80,000,000kWh of electrical energy each year. The termsNHH (Non Half Hourly) HH (Half Hourly) moni-tored sites are referred to within the energyuse graphic.

There are two main opportunities to reduceenergy costs. The first is to reduce the energyrequired to deliver customers’ needs, by selec-ting water sources that require lower energyfor pumping and treatment. This “conjunctiveuse” approach allows the company to choosethe best source options – matching resourcemanagement needs, treatment costs andenergy consumption.

The second is to ensure that energy is consu-med efficiently: this requires the largest andmost energy-intensive equipment to be mana-ged through constant monitoring systems andto have an energy management team in placeto extend and develop this approach to includesystem modelling forthe whole network.

Finally, the source of the energy is a major fac-tor in its environmental impact. The companyhave installed one of the UK’s largest solarphotovoltaic systems at its Purton TreatmentWorks which produced 268,925 kWh of elec-tricity during2013/14, all of which was usedon this site.

Photo-voltaic panel

In excess of 98% ofproperties in BristolWater are monitoredpermanentlythrough 378 DistrictMeter Areas.


Organising authority: South Australian WaterCorporation (SA Water).

Water operator: Allwater Joint Venture (Allwater)is a joint-venture between Suez-Environnement,Degremont and Transfield Services.

Location: Adelaide, the fifth largest Austra liancity.

PPP description

In 2011, Allwater was chosen by SA Water, ownedby the Government of South Australia, to ope-rate and maintain metropolitan Adelaide’swater, wastewater and recycled water systemsfor ten years. This performance-based PPPcontract is an Alliance partnership that allowsSA Water and Allwater to work collaborativelytogether in the delivery of water services toSA Water’s metropolitan customers.

An Alliance Partnership is a form of perfor-mance-based contract where the risk andrewards are shared between the partners whowork cooperatively together to achieve com-mon goals. Features include integrated mana-gement, unanimous decision making and openbook accounting. Funding is provided solelyby the business owner with the non-ownerpartner providing the services either solely orjointly. The Adelaide contract is an outsourcedalliance, whereby the majority of the work-force is provided by the non-owner partner.


After an Australia-wide examination of manyservice delivery models, SA Water chose theoutsourced alliance option on the basis it wouldprovide:

• Best value customer service through a one-stop-shop for all general, billing and servicequeries and a priority based field service res-ponse to faults

• Flexibility to manage future business direc-tions and priorities, such as economic regu-lation and other water industry reforms

Adelaide, AustraliaPopulation: 1,200,000

Accreditation in AS4801 (Safety),ISO9001 (Quality),14001(Environmental)and 50 001(Energy).


• Improved asset management through theseparation of maintenance and capital worksdelivery, to encourage optimal life cyclingcosting

• Joint management of operations to ensurealignment of commercial and performancegoals and utilisation of strengths from eachpartner organisation

Bolivar Wasterwater Treatment Plant

Protecting the environment form wastewater pollution

Allwater/SA has a long term strategic goal toreduce nitrogen discharge to the sea forenvironmental protection. A number of inno-vative and operational improvements havebeen implemented. At the Bolivar wastewatertreatment plant, the total nitrogen concentra-tion was reduced from 19.1 mg/l in 2012-13to 14.8 mg/l in 2013-14. Since 2011, this hasresulted in 200 tonnes less Nitrogen being dis-charged to Gulf St Vincent, a sensitive marineenvironment. These results were achieved usingonly existing infrastructure without incurringany capital or additional energy costs.



Overall customersatisfaction has risenfrom 75% to 84%.

n Improving wastewater managementn Improving network efficiencyn Improving energy efficiency

Improving network efficiency

Allwater Networks are responsible for repairwork to both the water and wastewater distri-bution networks in metropolitan Adelaide,including meters and customer connections. In2013-14, Allwater’s responsiveness to networkfaults has greatly improved through the intro-duction of an outstanding task optimisationtool enabling the clustering of jobs by suburb.

A GPS-based In Vehicle Monitoring System wasinstalled in 117 vehicles, allowing dispatchersto see the location of technicians in real timeand identify the nearest resource.

This has led to:

• 9% improvement in overall customer satis-faction from 75% to 84%

• 8% less kilometers travelled

• 4% more jobs completed with 11% less totalhours worked, including overtime.


Allwater has a strong focus on energy efficiencyand is the first Australian water utility to beISO 50 001 certified.

One of the main achievements was the reduc-tion in the unit power usage at the two mainwastewater treatment plants, despite treatingan increased volume of influent:

• 7% energy efficiency improvement at BolivarWWTP

• 11% energy efficiency improvement at GlenelgWWTP.

In 2013/14, Allwater introduced waste fromfood industries to boost the production ofbiogas at Glenelg WWTP. This full-scale co-digestion project has increased the genera-tion of power from biogas by 25 per cent whilereducing costs, with the plant now being 85%self-sufficient in energy.

“The Adelaide Services Alliance is a major component of SA Water’s operations and as such theservices it delivers must be both efficient and high quality. Allwater has proved to be an excellentalliance partner to assist SA Water improve its business through innovation and collaboration.”Mark Gobbie, General Manager, Operations & Maintenance, SA Water



Responsible Authority: Commonwealth ofPennsylvania.

Regulatory Agencies: Pennsylvania PublicUtility Commission and Pennsylvania Depart -ment of Environmental Protection.

Water Utility: Aqua Pennsylvania (Aqua).

Location: Pennsylvania in the Northeast regionof the United States is home to more than12.7 million residents. Aqua serves 1.4 millionpeople in 30 counties across Pennsylvania.

About Aqua Pennsylvania

Aqua was founded as the Springfield WaterCompany in 1886 to supply water to a townshipin suburban Philadelphia. After more than acentury of development and change, theSpringfield Water Company grew to becomea national investor-owned utility called AquaAmerica.

The Pennsylvania subsidiary is the company’slargest and operates under the regulation of theCommonwealth of Pennsylvania.

Improving water quality and acceptability

The Neshaminy Surface Water Treatment Plantcompleted a multi-year, two-phase series ofmajor upgrades totaling $20 million. Phase Iincluded the installation of an ultravioletlight/hydrogen peroxide treatment system,which removes up to 90 percent of taste andodor causing compounds without generatingadditional waste sludge. The system can beturned on and off to treat issues as they occur.The initial work in Phase II was completed in2012 and included the construction of newequipment to help aid coagulation and reducedisinfection byproducts. Upgrades to thesedimentation tanks improve water qualityand filter performance.

The final work completed in 2013 includes anewly constructed solids handling facility thatmechanically removes excess water weight,which not only provides a more cost effectiveand sustainable way of disposing solids, butalso extends the useful life of the onsite landfill.

Increasing Energy Efficiency

Aqua is engaged in the enhancement of energyefficiency in order to reduce environmentalimpacts and energy costs.

The continued incorporation of cleaner energysources from Aqua Pennsylvania’s energyprovider’s energy mix, allowed the utility’snet emissions to decrease. In 2013, AquaPennsylvania’s operation created the CO2 equi-valent of 72,844 metric tons. Of that amount,more than 88 percent was electricity used forpumping and treating water and wastewater.

The electric demand of Aqua Pennsylvania’ssoutheastern operations saw a reduction ofmore than 11,500 metric tons of emissions, or4.4 million kWh compared to 2012. This wasdue in part to continued pump efficiencymeasures, power management programs, andan unseasonably wet winter.

The company continues to lower electricityconsumption through a number of innovativemethods including the installation of new andlarger mains, which reduce the energy requiredto move water through transmission mains byreducing pipe resistance.

Booster maintenance programs are switchingout old fixed-speed pumps with new, smarterVariable Speed Drives, or VFDs, that adjustsendout to the current system demand. SeveralAqua America states have treatment plantsparticipating in market-driven electricitydemand reduction programs that help to sta-bilize the electric grid during peak periods ofextreme temperatures.

Pennsylvania, U.S.A.Population: 1.4 million people served by Aqua Pennsylvania

Aqua Pennsylvaniahas reduced its electricityconsumption by almost 3.9 millionkilowatt hours andits fuel consumptionby roughly 28,000 gallons forms 2009 to 2010.

Algae contaminantsthat produce bad taste and odourare effectivelyeliminated thanks to a UV-oxidationsystem.



n Improving water quality and acceptabilityn Increasing energy efficiencyn Optimising asset management

Optimising Asset Management

Aqua is convinced of the importance of goodasset management to ensure continuedserviceability and to prolong the life of infra-structure. With this in mind, the company adop-ted a new asset management software atthree division production facilities in 2009.The software has a detailed database of allassets (8,000 assets were included in 2011) andcaptures and records all preventive, predictiveand corrective maintenance jobs.

With more than 5,700 miles of pipe inPennsylvania, the ability to prioritize whichpipes need improvement and when is a chal-lenge. For nearly 10 years, Aqua Pennsylvaniahas used two cutting-edge technological assetmanagement software programs to meet thechallenge: the Asset Information ManagementSystem (AIMS), allowing users to electroni-cally retrieve detailed information on pipes,hydrants, main breaks, customer taps, and plansfrom the past 100 years, also providing a link tomore than 60,000 scanned images of as-builtconstruction plans, providing one-stop shop-ping for distribution system information andGeographic Information System (GIS), thatallows users to retrieve and display visual infor-mation about the distribution system networkwith a web-based map application.

Both initiatives were designed to meet AquaPennsylvania’s need for a formal and efficient

The company wonthe managementInnovation nationalaward for its Asset InformationManagementSystem andGeographicInformation Systemprogrammes.

means to prioritize infrastructure projects whileoptimizing the use of capital to replace orupgrade the company’s distribution systeminfrastructure.

Other Significant Improvements

With the production of almost 40 billion gallons(151 million m3) annually, any kind of waterloss on that scale represents a significant costto utilities and the environment. Every gallonof water produced has an associated cost ofchemicals for treatment, electricity for pum-ping, and manpower for operations and emer-gency repairs. Even small reductions in waterloss can result in savings to a water utility.

In 2013, Aqua Pennsylvania enlisted a contrac-tor to review its Southeastern operations tobetter understand the real environmental andfinancial cost of water loss and strategies forreducing it.

The goal of the project was to investigate trendsfor the past 10 years and validate or adjust cal-culations to account for any reporting errors;evaluate real, apparent, and authorized sourcesof water loss; and develop prioritized solutions.The study found three areas to focus efforts:

The number of main breaks has been decli-ning for several years due to Aqua’s proactivemain replacement program. However, serviceline leaks have represented a real challengeas in most cases they fall under the responsi-bility of the customer. The study estimatedthat service line leaks could represent as muchas 35 percent of the total water loss in AquaPennsylvania’s southeastern territory. Aqua isconsidering the suggestions from the review,and working to further reduce water loss bothin Pennsylvania and its operating states.

Aqua Southeast Pennsylvania Non-RevenueWater Amount (mgd) 10-Year Trend



Organising authority: The city of Bucharest.

Water and sewerage operator: Apa NovaBucuresti (ANB), a subsidiary of Veolia Water -73.7% of the shares, with 16.3% owned bythe Municipality of Bucharest and 10% by theemployees of the company.

Location: The city of Bucharest, covering apopulation of about 2 million.

PPP description

In March 2000, the Municipality of Bucharestentered into a public-private partnership contract(PPP) for the management of its water and sewe-rage systems. The 25-year innovative conces-sion contract was awarded to ANB following aninternational competitive tendering process.

The PPP contract is output-based. Services obli-gations (levels of service targets) are clearlyspecified and have to be met by the operatorin a fixed timeframe. Targets are related to waterservice, sewerage service and commercialrelationship with end-users.

The type and amount of capital expenditurerequired to reach each service target are notimposed by the contract and are planned at thediscretion of the concessionaire. However, thecontract mentioned one obligatory invest-ment requirement: to finance, complete andcommission a 3 m3/s water treatment plant(obligation fulfilled in 2006).

Compliance with the levels of service targetsis assessed annually by the local TechnicalRegulator, while the national EconomicRegulator supervises the correct applicationof tariff adjustment rules.


In the 1990s, more than half of the populationof Bucharest was not satisfied with the falte-ring water and sewerage utility. The water ser-vice was intermittent and unreliable, and wasin a dire financial situation. The municipal objec-tives to be achieved through the concessioncontract were the following:

• Complying with EU standards for potablewater and sewerage services at the lowestpossible tariffs;

• Running services that are financially inde-pendent from Municipal and Governmentalfunding;

• Improving efficiency and operational perfor-mance;

• Avoiding monopolistic behavior and obtai-ning sustainable contractual arrangements;

• Increasing environmental protection andpollution control.

Resulting from the common will of the Muni -cipality and ANB, between 2009 and 20135 Addendums to the contract have beenconcluded in order to face the new challengesof the global economic crisis and developmentneeds of the city.

Below are some of the achievements 13 yearssince the start of the concession.

Improving Energy Efficiency

ANB has significantly improved operationalefficiencies, including in particular increasingenergy efficiency with a reduction of about60% of annual electricity consumption bet-ween 2000 and 2013 (excluding the consump-tion of the WWTP that entered into operationin July 2011, the reduction would be about 78%).

This is the result of the reduction of water lea-kages, the decrease of water abstraction aswell as extensive modernization of the pum-ping stations and optimization of pressuremanagement.

City of Bucharest, RomaniaPopulation: 2,000,000

Excluding the newtreatment works,annual electricityconsumption has been reduced by more than 75%between 2000 and 2013 on a likefor like basis.



n Improving energy efficiencyn Satisfying users’ expectationsn Optimising economics of services


Client services have improved, with the mete-ring of all the customers, new customer recep-tion areas and a new Call Centre to deal withcustomers requests 24 hours a day.

With improved services (correction of all lowwater pressure problems, improved water qua-lity etc.) and customer care, customer satis-faction went up substantially from 46% in 2002to 86% in 2013 (and written customer com-plaints dropped from 11,462 in 2001 to 1,191in 2013, a decrease of 90%).

Service efficiency and cost savingsgenerating financial resources for increased investments

In the first 13 years of the concession, ANB hasinvested more than 360 million €, equivalent toabout 24% of its total incomes since the begin-ning of the concession.

Unlike the other Romanian utilities, ANB finan-ced all its operations and investment withoutpublic subsidies and the tariff has remainedaffordable.

In 2013, tariffs in Bucharest were in the mid-range in Romania, on the 18th place in des-cending order out of the 33 main Romanianoperators. This is in spite of the cost of the newobligations that have been assumed by ANBbut were not foreseen in the initial contract,as for example taking over of the City’s maincollector, followed by huge cleansing opera-tions that have to be carried out under verydifficult conditions.


Bucharest’s water quality considerably impro-ved. Since 2005, the deadline for achieving thislevel of service, the technical Regulator has

Customer satisfactionwent up substantially,from 46% in 2002 to 86% in 2013.

Apa Nova Bucharest can be considered an efficient water supply and sewerage service operatorfrom an economic, social and environmental perspective, further demonstrating the viabilityand sustainability of the concession of these services in Bucharest, primarily by achieving theobjectiverelated to service quality increase and consumer satisfaction.” Effects of the Public PrivatePartnership in the public water supply and sewerage services of Bucharest (2009-2012). Authors: Prof.Ioan Radu, PhD and Cleopatra Şendroiu, PhD, Editura Universitara, 2014

reported annually that ANB met the standardsfor all water quality parameters included inthe concession contract.

Even if water and sewerage coverage wasalready high when the concession started,water and sewerage network coverage inBucharest increased from 91 to 97% in 2013.The current network extension program star-ted in 2011 will continue until 2016. This levelis higher than the coverage in other Romaniancities, which averages below 90% for waterand 80% for sewerage.

Water resources have been preserved by a reduc-tion by three-quarters in the water losses in thedistribution networks as a result of both decreasesin consumption and reduction of leakages.

About 60% of the wastewater (including stormwater) generated in the service area is treatedin the existing WWTP entered into operationin 2011, which will be extended further.

See ref. 7, 24



Organising authority: The City of Paris.

Water distribution operators: Two privatewater operators:

• Compagnie des Eaux de Paris, a subsidiary ofVeolia Water, for the Northern Bank of theSeine River),

• Société Parisienne des Eaux, a subsidiary ofLyonnaise des Eaux, for the Southern Bank ofthe Seine River.

Location: Central Paris (inside the first ringroad) corresponding to a resident populationof 2.2 million inhabitants.

PPP description (1985-2009)

Between 1985 and 2009, the water service inParis was split into two parts:

• The production of drinking water was underthe responsibility of a publicly-controlledcompany, named SAGEP, that sold the drinkingwater it produced in bulk to the two privateoperators in charge of the distribution of drin-king water to the city.

• The distribution of the water, bought in bulkfrom SAGEP, to end-users was undertaken bythe 2 private operators. This “supply” part of theservice represented only 15% of the waterand wastewater rates charged to end-users.

The two PPP contracts came to their naturalend at end of 2009. From January 2010 onwardsthe service was restructured into a single publicentity “Eau de Paris” to comply with the politi-cal will of the new mayor of Paris, who haddecided to take the whole management of thewater service back in-house.

Reviewing the period 1985-2009, the outcomeof the PPP contracts for water supply can bedeemed to be excellent.


The scope of the two contracts included, mana-gement of the distribution network, mainte-nance of the fittings, maintenance and cleaningof the water towers and reservoirs, monitoringwater quality, 24/7 supply of water to premisesthrough the 2,000 km long distribution net-work, billing and customer relationship mana-gement.


In 1998 the European Directive 98/83/EC ondrinking water imposed more stringent stan-dards on the presence of lead in the watersupplied.

To ensure the potability and the safety of thewater for the water consumers in compliancewith this directive, it was found necessary toremove all lead communication pipes beforethe 2013 mandatory deadline. These repre-sented 70% of the total stock of connectingpipes in the network, about 66,000 in all.

Between 1999 and 2009 the operators wereable to replace all the remaining lead com-munication pipes still in the Parisian distribu-tion network. The cost of this important andunexpected investment has been fully repaidby water rates by the end of the PPP contracts.This permitted the City of Paris to make ratereductions or additional investment after 2010.

Managing infrastructure assetssustainably

In parallel with the very intensive and com-prehensive leak detection work, the operatorshave carried out a massive investment pro-gram on the network comprising both struc-tural rehabilitation and renewal of distributionpipes. Overall 1,100 kilometres of distributionpipes have been dealt with (either renewedor rehabilitated), representing more than halfthe overall length of the network. The cost ofthis important investment was funded by theoperators.

Between 1985 and 2009, the “functional” age ofthe network, despite a natural age increase ofthe 25 years of the contracts, has been reducedby 21 years.

City of Paris, FrancePopulation: 2,200,000 – Water Distribution

100% of the leadcommunicationpipes have beenreplaced to complywith tightenedsafety standards.

More than 50% of the distributionnetworks have been renewed. The average age of the distributionnetworks is now21 years youngerthan it was at the beginning of the PPP contracts25 years before.



n Securing water safety n Reducing leakage and water lossesn Managing infrastructure assets sustainably


At the start of the PPP contracts 22% of thewater purchased in bulk from the productionoperator was lost in the distribution network.

Improvement of the network performance wasachieved by zoning it into District MeteringAreas, equipping it with GSM sensors to help todetect leaks in sensitive sectors, permanentleak detection campaigns on a rolling basis,and routine operational monitoring.

This extensive approach undertaken by theoperators has enabled an increase in the effi-ciency of the network to a level as high as 96%,when it was lagging at a mere 78% in 1985.The leakage from the network has thereforedecreased from 22% to only 4%, which meansa reduction by a factor of 5 in the volume ofwater lost through leakage.

The leakage effort as well as the renewal invest-ment has allowed the city of Paris to save theequivalent of three years of annual drinkingwater consumption (617 million m3).


The operators also equiped all the customersand connections with an innovative system ofremote Automatic Meter Reading. This schemeprovides gains in the accuracy of the meteringas well as in the quality of service through online(internet) monitoring of the clients’ waterconsumption.

As an ultimate recognition of the good workundertaken by the operators, regular customersurveys have shown that 80% of customerswere satisfied or very satisfied by the qualityof the water service provided in Paris.

Water losses in the distributionnetworks have beenreduced from 22% to4%, i.e. a factor of 5.

The Suburbs of Paris and the City of Paris not to be confused

The Greater Paris Region’s population exceeds10 million inhabitants. The population servedby the City of Paris is therefore less than ¼ ofthe Greater Paris population. In the suburbs,the water supply is organised by differentpublic authorities. They mostly use privateoperators through PPP contracts.

The largest responsible authority is theSyndicat des Eaux d’Île de France (SEDIF)that federates 142 municipalities. The SEDIFhas chosen private operation to manage thewater service for its population of more than4 million.

In 2010, the SEDIF has renewed its trust inprivate management and decided to enterinto a new public-private partnership contractfor 12 years. The new contract started on01/01/2011. The private operator is incenti-vised to further improve the performance ofthe service through a set of 190 performanceindicators. Meeting the target values directlyaffects the operator’s remuneration.

The stiff competition for the contract and theefficiency gains brought in by the previouscontract have led to a significant 18% price cutin the average price of the water service forthe 4 million people served by SEDIF.

See ref. 9


90% of the solutionsprovided by the“Client Ombudsman”are qualified as excellent by the users.


Organising authority: City of Guayaquil.

Private operator: Veolia through Interagua.

Location: Guayaquil is the most populous andbiggest city of the Republic of Ecuador.

PPP description

In 2008, Interagua signed a 30 year concessioncontract to manage water services in the can-ton of Guayaquil. Emapag-EP the municipalbody for regulation and control ensures thatthe concessionaire complies with the obliga-tions of efficient drinking water and sanitationservices.


Since the beginning of the concession, therehave been great challenges to be overcometo improve the service coverage. The conti-nuity of services has faced major difficulties:major sectors of the city suffered from a irre-gular and discontinuous water supply. Interaguaaims at achieving the following objectives:

• Supplying 24/7 water

• Complying with high quality standards

• Complying with required pressure standards

• Fighting the culture of non-payment

• Promoting relationships with the communityand interest groups

Improving the accessibility of water and wastewater

In 2008, only 65% of the population ofGuayaquil had access to drinking water.Interagua took up the challenge of impro-ving the drinking water service. In 2014, therate of population with access to drinkingwater has risen to 90%. Several times the cityof Guayaquil was close to total water supplycoverage, this has not been achieved onlybecause of to the continuous increase of theurban perimeter within the scope of the landmanagement plan enacted by the Nationaland Municipal Governments. This has led tothe permanent needs for the City to under-take extensive new work plans.

The sanitation coverage has also been impro-ved significantly. The population connectedto the wastewater network has increased from35% in 2008 to 69% in 2014. The water andsanitation expansion plan is focused on less-favored sectors of the City. In 2014, an inter-ins-titutional agreement was signed with theregulator body (Emapag-EP) to subsidizedomestic connections to the public sanitationnetwork during municipal works. This allowsthe population’s life quality to be maintainedand prevents contamination of rivers andestuaries.

Making life of users’ easier

The private operator made the choice to inno-vate by developing and implementing morethan an information system but a whole newway of working in the commercial processes. Itallows saving in time and resources and it isenvironmentally-friendly.

The billing system allows reading, calculationof consumption, payment and bill printing andreceipt on the website. The company has chan-ged the image of the service by investing ininstallations to receive customers in agenciesand allow them to use services by phone. Thesystem detects exceptional increases inconsumption and localizes water consump-tion that is more than 100% of normal use. Itcharges the regular consumption for a month,or until a technical verification is conductedfor the consumer, in order to establish whatled to the increase in consumption.

Guayaquil, EcuadorPopulation: 2,470,000 inhabitants

The population rateconnected to thewastewater networkhas risen from 35%to 69% between2008 and 2014.



n Improving the accessibility of watern Making life of users easiern Contributing to affordability of water services

Guayaquil on-line billing centre

Interagua was also keen to strengthen rela-tionships with stakeholders. The “Social mana-gement and local development” programmecontributes to capacity building for commu-nity leaders, public and private social mana-gers. Between October 2011 and January2014, 1.200 community leaders have been trai-ned. In 2009, the company created by its owninitiative a “Customer Ombudmsan” who helpsto resolve conflicts that may arise with custo-mers who are not completely satisfied withthe service provided. This mediation processhas proved to be very effective and hasdemonstrated great results. This is confirmed bythe good payment behavior of the customers.90% of solutions provided are seen as excel-lent by them.

Interagua is the first company in Ecuador whichhas been fully certified ISO 1001, ISO 9001,OSHAS 18001 and complied with the Ecuadorianstandard NTEINEN-ISO/IEC 17 025. Interaguais currently working to comply with ISO 50 001.

Contributing to affordability of water services

Tariffs operated by Interagua are set by EMA-PAG. These include some mechanisms that aimat facilitating access to water service. Interaguaapplies a cross-subsidy-based tariff systemwhere large consumers subsidize the smallones. More than 370,000 users benefit from asubsidized price. In May 2010, a social tariffhas been created, it benefits almost 6,500 lowincome inhabitants.


With the Veolia Foundation, Interagua partici-pates in the humanitarian aid programme WaterForce. Volunteers have been trained to inter-vene in case of emergency. They can also inter-vene in other countries of the Andean zone.Moreover programmes named Sembrar Aguaand Somos Agua are developed in collabora-tion with the Municipality. Their goal is toraise awareness about natural resource pro-tection and especially water resources.

For the 3rd consecutive year, Interagua has been awarded “Company with best process of customerscare” of the country by the Ecuadorian Corporation of Citizen Participation.

1,200 inhabitants are trained ascommunity leadersand social managers.

Interagua is the firstcompany in Ecuadorwhich has been fully certified ISO 14001 ISO 9001, OSHAS 18001,NTEINEN-ISO/IEC17025.

See ref. 28



Organising authority: water and wastewa-ter bodies of the Ministry of Water.

Water and sewerage operator: SEEAL withthe support of a private company through aPPP contract.

Location: Wilaya of Algiers, Algeria, a city andits surroundings.

PPP description

The Société des Eaux et de l’Assainissementd’Alger (SEAAL) is the water utility in chargeof the Algiers region. It is a company 100%publicly-owned by ADE (Algérienne des Eaux)and ONA (Office National de l’Assainissement)and co-managed with Suez-Environnementthat provides high level staff through a PPPcontract. The initial duration of the contractwas 5.5 years starting in March 2006. Thecontract was renewed and extended geogra-phically to include Tipasa in September 2011 fora further 5 years.


This management contract was a pioneeringapproach and a test case in Algeria as part ofthe wider national policy undertaken by theAlgerian public authorities targeting the moder-nisation of water services in the main cities.

When the new management team at SEAAL tookover in March 2006 only 8% of the population hadwater on a 24/7 basis. The motivation of thepublic employees of the company was very lowand the customer service was particularly poor.

The main performance targets assigned to theoperator through the contract were to:

• improve the living conditions of the localpopulation through achieving continuous

Algiers, AlgeriaPopulation: 3,800,000

In Algiers Wilaya,continuous 24/7water supply hasbeen expandedfrom 8% of thepopulation to 100%in 4 years.

Non-compliance of water suppliedwith bacteriologicalrequirements (3% of samples in 2006)has been eliminated.

24/7 water supply within 3,5 years, ensuring100% potability of water supplied

• improving the performance and coverage ofsanitation services

• improve customer satisfaction

• organise and deliver the transfer of know-how to the 4,500 employees of the companyand its 1,000 managers.

Ensuring continuity of water supply

In March 2006, the majority of the populationonly had water at their taps in an irregular man-ner, ranging from a few days in a week to a fewhours per day.

This resulted from obsolete infrastructure andserious water losses in the water network obli-ging the operator to supply water sector bysector on a rationing basis.

Huge efforts have been engaged in all sectorsto bring the infrastructure up to standard andreduce leakage so as to supply water on amore continuous basis. SEEAL and its privatepartner have fixed 220,000 leaks on the waterdistribution network. 380 km of network mainsand 50,000 communication pipes have beenrenewed. 540,000 meters have been installed.

Since April 2010, SEEAL has been able to sup-ply drinking water 24 hours a day and 7 days aweek in all sectors, thus achieving one of itsmain objectives.


In 2006, numerous pollution events occurredresulting from polluted water infiltrating fromthe ground to water pipes when the waterpressure was low.

In 2013, SEAAL became the “service public” most popular of the Algerians



n Improving availability of watern Securing water safetyn Satisfying users’ expectations

These resulted in non-compliance with pota-bility requirements of 3% of samples of water.

Thanks to the efforts made to reduce leakingpipes and to maintain internal pressure on acontinuous 24/7 basis, these events have disap-peared and the bacteriological compliance ofwater supplied has reached 100% in May 2008.

Satisfying water-users’ expectations

Customers’ satisfaction was not measuredbefore the PPP. When the PPP contract startedthe monitoring of water-users satisfaction wasorganised through regular surveys made by anindependent external survey organisation. Ithas risen from 70% in 2007 to 85% in 2014.

These surveys include several questions towater-users selected on a random basis. A “cus-tomer’s satisfaction index” is built from the ans-wers. This has allowed measurement of thedramatic increase of customer satisfaction thathas resulted from the significant improvementof the water services implemented in Algiers.

This slight shift of the curve is explained bythe fact that the year 2010 is that of achieving

In 2013, SEAALbecame the mostpopular “servicepublic” for Algerians.

“In Algeria, we do not have any a priori nor dogma concerning Public-Private Partnerships.”“In Algiers, results are entirely correct.” Quotes from Minister Abdelmalek Sellal

24/7 in Algiers. The level of expectation of theAlgiers population is now very high and thesatisfaction rate still is excellent. In 2013, SEAALbecame the most popular “public service” forAlgerians, when SEEAL launched a new bil-ling system, supported by users.


The asset management skills have been rein-forced as part of the wider know-how transferprogram which has been a catalyst for successenabling the management of a massive invest-ment program ($ 800 millions) committed bythe public authorities in support of the actionsundertaken by the operator.

115,000 training days have been undertakenfrom 2006 to 2014, (53% of them are realizedby internal trainers).

The sanitation system has been dramaticallyimproved. 60% of the wastewater of Algiers isnow treated before discharge to the environ-ment against 6% in 2006, with the objective toreach 100% in 2020. Due to technical and landacquisition difficulties hindering the main Algierscollectors/wastewater infrastructure, the objec-tive to reach 70% in 2012 has not been reached,this delay should be caught in 2015 with a was-tewater treatment rate of 85% being reached.

6 km of sewerage pipes have been cleaned.72 out of the 72 beaches of Algiers have beenpermitted and reopened to the public for swim-ming during the summer 2014 against only39 in 2006.

This success has been made possible by clo-sely coordinated and complementary actionsby the different parties involved, based on awell-structured PPP contract that defines pre-cisely and clearly the respective roles. The Statehas undertaken significant investment; theWater department of the Wilaya has comple-ted major new infrastructure works. Suez haseffected a significant transfer of operationaland managerial know-how to SEAAL and finallythe local teams of SEAAL have engaged stron-gly in the project.


Organising authority: Shanghai Munici -pality.

Water operator: Shanghai Pudong WaterCorporation Limited (Pudong Veolia), a 50-50joint venture established in 2002 by Veoliaand Shanghai Water Assets Operation andDevelopment Co., Ltd.

Location: Pudong, Shanghai’s fast-growingbusiness district.

PPP description

Operational since 2002, the Company is thefirst sino-foreign joint venture providing inte-grated water services including production,distribution and customers services in China.Revenues of the joint venture are based onwater sales to customers and investments(OPEX and CAPEX) are held 50% by Veolia and50% by its Chinese local partner.


In early 2000, there was an unsustainable quan-titative and qualitative pressure on waterresources due to the fast growing needs andchanging environment. The City of Shanghaihad a strong will to improve and increase thesupply of water to match rapid economic andpopulation growth (+60% from 2000 to 2010)of the district of Pudong. In order to face themain challenges, Pudong Veolia has develo-ped and implemented a dedicated informa-tion system to manage its network, with anadvanced GIS centric integrated platform, col-lecting reliable real-time data from the field,called the Octopus.

This has helped to meet the main challengeswhich were:

• High level of water losses (>35%)

• Low water tariff limiting investments

• Limited health & safety awareness

• Fast growing and changing urban environment

• Inherent resistance to technical and mana-gement changes

• Paper based work flow and activity records

View of Pudong in 2014


In early 2000 water losses were up to 35%. Theinformation system is able to track the stateof the network and interventions. The leakdetection, in particular, can be allocated moreprecisely to the critical and most failing parts ofthe network. It is the same for pipe renewals.Thus Octopus contributes directly to the reduc-tion of losses in the network. The good waterinfrastructures in Pudong have already reducedwater losses by 10% despite the continuousintegration of large additional areas with net-works that perform poorly.

Shanghai Pudong, ChinaPopulation: 3,7 million

In 12 years, networkefficiency hasimproved from 65 to 76%.




n Reducing leakage and water lossesn Improving energy efficiencyn Improving water quality

At the beginning of the joint-venture, the sur-face covered by the contract was 320 km2 andis now more than double at 670 km2. Thisexplains why the reduction of water losses hasnot been regular: large rural areas have beenintegrated, degrading significantly the overallperformance of the network.


The information system ensures the collectionand the availability of all the data related toworks, hydraulic simulations and operatio-nal data. This data is used by an optimizationtool that reduces the energy consumption ofthe contract.

Modeling enables optimized energy expendi-ture by indicating where to pump taking intoaccount all the parameters in order to opti-mize pressure.

Operator on site with Octopus mobile consultation equipment and information capture

Improving water quality

Heritage information, environmental and ope-rational data in the information system ensurethe maintenance and network renewal in amost rational way. Water quality is one ofthe determinant criteria used in the models.106 drinking water quality parameters arenow compliant with local and internationalstandards. Octopus integrates all water qualityinformation allowing an enhanced decisionprocess. Water quality information is combined

106 drinking waterquality parametersare now compliantwith local and internationalstandards.

from various sources:

• Pudong’s first-class central laboratory

• Self-control plan dedicated to water qualitysurveys

• Aquadiag mobile diagnosis truck

Aquadiag mobile diagnostic truck

Some examples of improvements :

• Average turbidity at plant outlets has beenreduced from 0.20 NTU (2002) to 0.06 NTU (2013)

• Average turbidity in the network has beenreduced from 0.41 NTU (2002) to 0.15 NTU (2013)

• Manganese compliance has improved from61% (2002) to 10% (2013)

Other significant improvements:satisfying water users’ expectations

This is the first time that a private operatorthrough a joint venture is in a direct relations-hip with the Chinese consumers and issuesbills directly addressed to them. Thus it wasvery important to create a great customer rela-tionship: new customer services (managementsystem, call center, meter GPS localization andbarcodes) have been implemented.

A strong policy related to training has beenimplemented, and the percentage of trainedemployees has raised from 62% (2004) to 99.6%(2013). In 2013, 25,345 hours of training havebeen provided both locally and through VeoliaAsia trainers and facilities.


ACTU_BROCH_AquaFed Pays 2015_p64-84_6 02/04/2015 18:13 Page64

Country cases25 - Armenia

26 - Niger27 - Rural Benin

28 - Urban Senegal29 - Urban Chile

30 - England & Wales, UK


Organising authority: The State Committeeof Water Economy (SCWE).

Public service company (société de servicepublic): Armenian Water and SewerageCompany (AWSC).

Water and sewerage operator: Saur SevanServices, a local, privately-controlled company(a subsidiary of SAUR) established in 2005.

Location: More than 330 collectivities throu-ghout Armenia.

PPP description

After an international consultation, a mana-gement contract has been implemented bythe World Bank in 2004 with two priorityobjectives:

• Restructure the state company AWSC, on themodel of a private company.

• Coordinate and manage the realization ofinvestments (100 million US dollars) relatedto the rehabilitation of the drinking waterproduction and distribution infrastructure.

Among many performance criteria (24 KPI),4 include a bonus/malus:

• The daily availability of drinking water• The amount of annual receipts• The quality of water supply • The reduction of water losses.

Between 2005 and 2011, a first programme of114 million US$ has been invested to restorewater and wastewater infrastructure. It was co-financed by the World Bank, the European Bankfor Reconstruction and Development and theAsian Development Bank. Since 2012, newinternational donors (KFW – Kreditanstalt fürWiederaufbau – and the European InvestmentBank) have financed another 100 million US$programme.


In 2005, water supply was provided for only6 hours a day on average. Many cities hadwater supply only twice a week. Infrastructure –network and treatment plants – were not main-

tained. Water pipes – more than 80 years old –were repaired using wooden wedges. The drin-king water network was full of illegal connec-tions, breakages happened every day. Withouta metering and billing procedure, only 20% ofhouseholds paid for water. In terms of safety,only 61% of the water provided was subjectto a disinfection treatment. Finally, the syste-matic use of pumps, without any gravity alter-native, generated disproportionate energyexpense (72% of gross sales).

The objectives of the PPP were to:

• Improve daily water supply availability andwater quality

• Rehabilitate and modernize the infrastructure

• Reduce water losses

• Restore water bill collection

Malishka tank

Improving availability of water

Thanks to the rehabilitation of networks, theaverage water supply availability has risenfrom 6 hours to 15 hours a day between 2004and 2013.

ArmeniaPopulation served: 1,230,000

• 40 towns with over5.000 inhabitants

• 282 villages• 1.230.000

inhabitants served• 10.000 km

of drinking waternetworks

• 2.155 km of wastewaternetworks

• 1.550 staff members




At the end of the contract in 2016, the objec-tive is to provide water 18 hours a day, on ave-rage: 24/24 in towns and 15/24 in isolatedrural zones.


It was a priority to reduce energy expensesthat were presenting a heavy burden to theoperator. Technical studies have been carriedout and existing mechanical installations havebeen replaced by new gravity water distribu-tion networks. Pumping plants have beenmodernized, and equipped with more energyefficient pumps. In 10 years, the energyconsumption has decreased by more than 40%.


With the establishment of laboratories andmultiplication of disinfection points, the qua-lity of the supplied water meets the Europeanstandards and 100% of the supplied water hasbeen submitted to a disinfection treatment.

Securing revenue streams

In 2004, of the 170.000 documented water-users, only 35.000 paid their bill and only 40%of the individual connections had a water meter.In 2014, 90% of the 180.600 active connectionswere metered and 100% of customers receivea water bill.

In 2014, 100% ofsupplied watermeets the Europeanstandards.

Several actions, including the creation of acentral call center in 2011, allowed an efficientservice relationship with customers and localcollectivities.

Between 2004 and 2014, the annual volumeof receipts increased by 100%, excluding theimpact of rate increases.

Other significant improvements:management

Saur Sevan Services has paid particular atten-tion to the human side. Concern for the welfareand staff training accompanied the organiza-tional changes. Renovation of the headquartersand buildings welcoming staff members, trai-ning, sports tournaments, summer camps forchildren of employees: all actions that havestrengthened the pride, motivation and senseof belonging to a modern Armenian company.

Call center TeamPraised by the internationalDonors, AWSCreceived in 2012 the “Global WaterIntelligence” awardin the category “Best performanceof the year.”

“Saur has met our expectations. Tangible improvements are visible, whether the distribution ofwater or level of treatment.” Hovic Abrahamyan, Premier Ministre, mai 2014



Organising authority: Municipalities in ruralareas of Benin.

Private operators: 150 water operators knownas “farmers”, 80 of which are members or sup-porters of the Association fédérative des ges-tionnaires privés des réseaux d’eau du Bénin(AFEB – Federation of private of Benin’s waternetworks managers).

Location: Rural areas in Benin.

PPP general model description

In the framework of the public service dele-gation, private water operators and munici-palities of rural areas can enter into affermage(lease) contracts. Farmers operate and maintainthe water network, collect revenue from watersales and pay charges to the municipality.


Under the community management whichoperated until 2003 water services sufferedfrom many deficiencies: lack of suitable mana-gement tools, insufficient management stafftraining and water waste at the standpipes.Revenues were very low due low revenue col-lection rates from water sales and theft. Thiswas also because of financial mismanagement.This led to a poor water service and seriousdifficulties to repair breakdowns that incon-venience the population.

In 2003, the administrative decentralizationin the country led to the creation of Munici -palities, the new key players in the drinkingwater supply’s governance. According to thelegislation, the Municipality is in charge of theproject management of the drinking watersupply within its territory. A new national villagedrinking water supply strategy (2005-2015)was conceived to take account of this secto-ral approach. In accordance with this strategy,drinking water services must be addressed inconsideration of the promotion of the privatesector in water supply in rural areas. Emphasisis also given to the support of the professio-nalization of staff and the Millenium Develop -ment goals. Municipalities must delegate watersupply management to water users‘associa-

tion or POP. The affermage process started in2007 in pilot areas and was generalized to everydepartment and all municipalities in 2008.

Water “Farmers” at a training session

In order to improve the benefits of the publicservice delegation of village water supply toprivate operators, the Government of Beninasked for the support of the World Bank’s Waterand Sanitation program and the InternationalFinancial Society to implementing a corporationpilot project. This project, implemented in 2014in 10 pilot areas, aimed at introducing a moreformal structure (concession) for the villagewater supply networks between municipali-ties and private operators with a longer contrac-tual term than in the affermage contracts.

Special examples of the PPP model

The public service delegation aims at improvingwater services for the consumers in the form ofvillage water supply by private operators inthe village of Koundokpoe (around 9,500 inha-bitants, in the Municipality of Zè) and in thevillage of Gonougou (around 11,400 inhabi-tants, in the Municipality of Gogounou) show.

The village water supply in Koundokpoe ismanaged by Canal-Eau SARL. A 3 year affer-mage contract was signed in 2010 betweenthe private operator and the Municipality ofZè. It has been renewed in 2013.

In Gonougou, COGEFI signed a 5 year tripar-tite affermage contract in 2007 with theWater users association and the municipalityof Gogounou to supply water services. This hasbeen renewed in 2014. Gogounou is one of thepilot villages of the government project: thecontract is now an 8 year concession contract.

Rural BeninPopulation: 2,100,000 inhabitants

In the village of Koundokpoe, the collection ratehas risen from 85%to 96,87% at thehouseholdconnections.



n Improving accessibility of water n Improving availability of watern Securing revenue streams

Main objectives are:

• Improving accessibility of water• Improving availability of water • Securing revenue streams


In Koundokpoe, 23 household connectionsand 21 standpipes are now connected to thevillage water supply, this means 12 householdconnections and 2 standpipes more than beforethe beginning of the contract in 2010. The drin-king water supply to the population has risenfrom 42.12% in 2010 to 59.78% in 2014. Canal-Eau SARL brought drinking water to 3,000 addi-tional people and supplies 9,500 in 2014.

Villagers collect water at a safe standpipe

In Gogounou, only 1 household was connectedto the network, the population had to go tostandpipes where the waiting time was long.COGEFI connected 62 households of which9 community connections, which group seve-ral households around a single connection.This shows the great interest for householdconnections from the population.

Moreover household connections have beeninstalled by the two private operators in unser-ved or under-equipped areas. For example,Canal-Eau SARL installed connections inWédjamè, Dokota, Médébaho, Aklouzountikon,Waga, Aklouzountikon, Waga, Togbonou,Avossa, Tangnigbadji and household connec-tions have been installed by COGEFI in unser-

ved localities: 2 household connections in anarea far from the village centre and 9 in Kirikou,a less-favored area.

Improving availability of water

In Gogounou and Konoukpoe, drinking wateris always available at the household connec-tions and at the standpipes during the hoursdetermined by mutual agreement with themunicipality: 24/7 for the household connec-tions and 11 hours a day at the standpipes.Network outages have decreased and arbitraryshutdowns at the standpipes disappeared.Moreover, the shut downs of the drinking watersupply at the household connection by theprivate operators due to the non-payment ofbills on the due-date have declined signifi-cantly. The availability of water as scheduledin the contracts has reduced water-relateddrudgery especially for women who do notneed to walk long distance anymore.

Securing revenue streams

The low collection rate under the communitymanagement was one of the main factorsof water supply’s deficiencies. Since theaffermage, the collection rate has improvedsignificantly. For the village water system ofKoundokpoe, Canal-Eau SARL increased thecollection rate from 85% to 96.87% at the hou-sehold connections and from 70% to 87.90%at the standpipes. Through a better manage-ment and money available to face expenses,a reduction in the number of interruptions andtheir duration have been made possible.

Other significant improvement:securing water safety

In order to improve water quality and safety,water is treated once a month by chlorinationand the private operators conduct regularlythe cleaning of the water towers. Moreoverthe farmers carry out a follow-up on water qua-lity. For instance, in Gogounou water samplesare collected and sent to the laboratory IRGIBAFRICA to be analyzed.



Organising authority: Société de Patrimoinedes des Eaux du Niger (SPEN).

Water and sewerage operator: : Sociétéd’Exploitation des Eaux du Niger (SEEN), asubsidiary of Veolia.

Location: Niger, 17, 8 million inhabitants.

PPP description

The tender for the lease contract of the Nigerwater service was initiated in June 2000. Thecontract was awarded to Veolia in January 2001.The Société de Patrimoine des Eaux du Niger(SPEN) is a state-owned asset holding com-pany which outsourced the operations of waterproduction and distribution in 54 urban centersacross the country for 10 years to the Sociétéd’Exploitation des eaux du Niger (SEEN) througha performance-based lease contract associa-ted with key performance indicators (KPI).The contract was renewed for 10 years in 2011.


Located in sub-Saharan Africa, Niger is regu-larly hit by drought and has long suffered froma very unreliable drinking water supply. In theearly 2000s, the government decided to imple-ment a reform in the urban and semi-urbanwater sector to ensure drinking water of qua-lity in sufficient quantity, at a reasonable costfor all populations of urban centers through aPPP contract.

To accompany the Reform, the governmentapplied for funding from several internatio-nal donors and drew up an investment planthat defined the rehabilitation and extensionworks needed to achieve the production anddistribution facilities (wells, water abstraction,networks, water treatment…) The total of$ 80 million was mainly covered by the WorldBank (60%) the BOAD (13%), the AFD (9%) andthe state of Niger (13%), all of which renewedtheir contribution in 2011.

Like other Western African countries, Nigerpledged to meet the Millennium DevelopmentGoals and adopted a National Strategy onPoverty Reduction in January 2002, aiming atreducing poverty from 63% to less than 50% by

2015. In terms of the access to water, the goalwas to increase the water supply coverage fromless than 31% in 2001 to 59% in 2013.


In almost 15 years, SEEN has extended thewater supply coverage, including access to thepoorest, through the upgrading of water pro-duction and distribution infrastructure:

• The total length of the network has beenextended by over 77% since 2001

• 57 886 social connections and 448,662 ordi-nary connections have been installed

• 805 standpipes were provided

• The total number of customers increased byover 170% since 2001

• The population served by connections increa-sed by 55%

Much progress has been accomplished throughthe years: from less than 60 000 residentialclients in 2001, there are almost 160 000 twelveyears later, and much still remains to be doneto meet the challenge of supplying access todrinking water for all. Fully aware of the wateraccess-related issues, tariffs set by the organi-zing authority and charged by the SEEN areparticularly low in comparison with prices inthe region. The first social block (10 m3/month)is billed 127 FCFA (US$0, 21) in Niger.

Improving network efficiency

Upon signing the lease contract, and with thesupport of its mother company Veolia, the SEENdeveloped its professional expertise and know-how to improve rapidly and sustainably the

Niger, 54 urban centersPopulation: 2,922,000

The rate of drinkingwater supplyincreased from 65%to 87% in 12 years.



n Improving accessibility of watern Improving network efficiencyn Improving water quality

technical management of the water supplyproduction and distribution infrastructure.

The network efficiency which was evaluatedon a very loose basis, has been significantlyimproved through better organization of fieldteams and changes in working techniques.Thus, the number of leaks detected and repai-red that were only 7,770 in 1999, has almostdoubled, reaching 18,595 procedures in 2013.

Thus the overall performance of the networkthat was only 78% in 2001 increased by 9.6 per-centage points to 87,6% (2013) for all unitsmanaged by SEEN.


Increasing the frequency, expanding the scopeand improving the quality of controls werethe priorities of the SEEN. Bacteriological, phy-sical and chemical analisis which were veryirregular in provincial centers have been sys-tematized.

In addition to the upgraded central laboratory,the two new regional laboratories establishedin Maradi and Zinder in 2005, have improvedthe monitoring of remote centers. A measure-ment campaign on all installation is also perfor-med each year. Episodic water quality problemsare resolved or about to be, even in centerslike Loga Keita which present high levels ofiron. Today, 98% of the water supplied com-plies with microbiological standards.

The importance attached by the SEEN to therespect of water quality is reflected in the rigor,

Since 2001, anadditional 1.5 millionNigerians haveaccess to water.

frequency and quantity of analysis performed,and in the increase in the size of the QualityMonitoring Department, which has doubledsince the beginning of the contract from 5 to12 agents.

Other improvement: raising andmaintaining staff capacity throughtraining

Veolia has also worked to improve the socialconditions of employees, particularly throughthe development of their skills and better accessto health.

Veolia Health & Safety Direction and the SEENdecided to train all 550 employees in part-nership with Veolia Campus in 2007-2009, toenhance the awareness about Water, Sanitation& Hygiene, also to ensure the employees wouldbecome Hygiene ambassadors towards localpopulations: neighbors, clients and externalworkers.

Staff of SEEN

This training policy is based on a skills deve-lopment plan tailored to business needs asconceived by managers. The amounts paid bySEEN for the training of its employees havegrown from 8.5 million FCFA (US$14,535) in2003 to 173 million FCFA (US$295,830) in 2013,currently representing 5.57% of payroll. Staffproductivity increased from 8.6 to 3.6 staff perconnection.



Organising authorities: The State of Senegaland the Société Nationale de l’Eau du Sénégal(SONES), its assets-owning company.

Water operator: Sénégalaise des Eaux (SDE).

Location: Urban centres of Senegal, i.e. themain 56 urban cities across the whole coun-try as well as 400 villages close to the maindistribution network, covering an overall popu-lation of 5.5 million.

PPP description

After an international competitive biddingprocess a tripartite Public-Private-Partnershipcontract was signed in 1996 for ten years. Itwas renegotiated in 2006 and 2013 and exten-ded until the end of 2018.

The scope of the private operator is to produceand supply water on a daily basis using theinfrastructure that is owned by SONES. It is an“affermage” since major investments are fundedby SONES.

The main shareholder of SDE is Eranov with57% of the shares. The population currentlysupplied by the contract is close to 5.5 millioninhabitants.


The contract is a performance-based contract.The outputs targeted are monitored by a verycomprehensive “performance contract” signedwith SONES. The numerous performance indi-cators cover all operational processes inclu-ding, the quality of water supplied, the qualityof services (speed of reaction to customer com-plaints and requests and to service interrup-tions), technical aspects as well as financialperformance.

SDE with its partner SONES has managed todeliver significant improvements to the watersupply service.

Improving accessibility to water

The main improvement is the coverage of thepopulation. At the start of the contract, in 1996,the connection rate was less than 80%. Thiscomprised 58% of the population suppliedthrough private household connections andthe remaining 22% supplied through standpipes. The total number of customers was241,671. The overall connection rate is now98%. 89.4% of the population is suppliedthrough private household connections and8.6% through stand pipes. The total numberof customers that benefit from this improvedaccess is now 638,629 customers (2014).

This 98% connection rate is the highest inSub-Saharan Africa for urban dwellers accor-ding to the World Bank. The reduced use ofstandpipes is a significant improvement in theaccessibility of water.

Urban SenegalPopulation: 5,500,000

While only 80% of urban dwellershad access to publicwater networksthrough private tapsor public standpipesin 1996, the overallconnection rate reaches 98%.

The proportion of population usingpublic standpipeshas been reducedfrom 22% to 8,6%only thanks to morethan 220,000 new householdconnections.



n Improving accessibility of watern Contributing to affordability of water servicesn Reducing leakage and water losses

Contributing to affordability of water services

The majority of newly-connected householdshave benefited from subsidised “social connec-tions” funded by SONES and installed by SDE.Over 18 years 187,478 of such social connec-tions have been installed free of charge for thebenefiting customers reaching a populationof about 1,925,000. At the same time morethan 600 stand pipes have also been installed.The population targeted has been mainly inthe poorest parts of the cities, in particular theslums of Dakar. This newly connected popula-tion represents 13.33% of the population thatis supplied today.

This social connection program has been fun-ded through the support of many internationaldonors and by revenues raised from custo-mers.

The domestic tariff scheme has been designedas an Increasing Block Tariff comprising a first“social” block for a monthly consumption ofless than 10 m3. This targets the most vulne-rable customers with a significantly discountedrate as illustrated by the following table :

This household tariff has been kept unchan-ged for more than 10 years since 2003.


SDE has also demonstrated an excellent recordin leakage reduction limiting the increase inproduction required to supply the newlyconnected population.

Since the beginning of the contract, the pro-duction of water has increased by 71.15%while at the same time the water supplied tothe connected population has increased by

1.9 million people,mostly poor, havegained access totapwater throughfully subsidisedconnections.

117.58%. This has been possible thanks to asignificant reduction in leakage.

This improvement in network efficiency (from68.2% at the start of the contract to an ave-rage 80,34% in 2014) has allowed to saveannually 17 millions m3 of water available to theconnected population, equivalent to the dailyconsumption of a population of 900,000 people.

This outcome has been achieved in spite of thefact that the number of leaks on communica-tion pipes and on the network has remainedconstant since 1996 (respectively 30,000 and6,000 per year on average ). This is mainlydue to the investment needed to renew thenetwork, which is the responsibility of SONES,being behind schedule. SDE has become veryefficient at monitoring and fixing new leaksvery quickly to avoid water being lost.

Women at a standpipe in a slum in Dakar


Quality of water supplied: the microbiologi-cal compliance of the water supplied nowreaches now a level of 98.54% against acontractual target of 96%.

The customer satisfaction rate regarding thequality of the water supplied now stands at83% against 45% in 2005.

The presence of a professionnal and efficientprivate water operator as well as the gover-nance framework have been instrumental inreinforcing the trust of international donorsand catalytic to attract their financial support.

DomesticIncreasing Block Tariff

Monthly consumption

Price per m3

FCFA US$

Social block From 0 to 10 m3 191 0,33

Normal block From 10 to 20 m3 630 1,08

Deterrent block Above 20 m3 789 1,35The domestic tariffshave been keptunchanged in thepast 12 years.

See ref. 1, 2, 28



Organising authority: Government of Chile.

Regulator: Superintendencia de ServiciosSanitarios (SISS).

Water operators: 57 Chilean companies pro-viding water and sanitation services to theurban population (87% of total population).

Two types of private operators

In the 90’s, the Chilean government sold themajority of the shares of 4 main water andsewerage companies to the private sector, kee-ping a minority stake in the capital. In 2011,the Government sold most of its shares in thesecompanies keeping only 5% in order to be ableto appoint one director in every company, thushaving the right to veto any possible transfer ofwater rights. A few other companies were pri-vatised in the following years.

In 1998, the central government put out ontender concession contracts for nearly all theother water companies for a period of 30 years.

Today there are 57 companies supplying waterand operating sewerage networks in the urbanareas. Most of them are privately-controlled(except a mid-size municipal company inMaipú).

Some operate publicly-owned infrastructureunder PPP contracts, others own the waterinfrastructure and operate under a license. Allare regulated by SISS, the national regulator.

Context and objectives

In 1989, less than 10% of households connectedto sewers had their wastewater treated, whichmeant a population inferior to one million. Thecountry had no experience of wastewater treat-ment plants. A significant amount of wastewa-ter was dumped into rivers, lakes and the ocean.Numerous beaches and the coastline sufferedfrom pollution. The same occurred with waterused for agriculture in many regions. There waseven a cholera outbreak due to crop irrigationwith wastewater at the beginning of the 90s.

Ecosystems received thousands tons of garbage.Not only did this pollution affect water quality,but also the sea bottom. This pollution alteredfauna and flora, affecting biodiversity and some-times causing migration or extinction of species.

2 A mostly via stabilisation ponds

In 1998, the central government decided toimprove wastewater management and adop-ted a huge investment programme based oninfrastructure to be built in all cities with moresophisticated technologies than the very basicones used previously. Secondary treatmentwas decided for inland cities (80% of waste-water) and primary treatment + sea outfallswere planned for coastal cities (20% of waste-water). The target was to “treat” all urban was-tewater flows in these ways.

Access to private capital and private manage-ment through partnerships with the govern-ment provided the necessary funding andallowed the new infrastructure to be built. Thisrepresented a major change in the way ofmanaging water companies with a lot of inno-vations. A social policy was designed to pro-tect the poorest against the increases of water& wastewater bills needed as a result of themassive investment programme. These initia-tives have had positive impacts in the qualityof life of people.

Removing pollution from wastewater

The percentage of the population that has itswastewater treated before discharge or reusereached 100% by the end 2012.

This growth means that the sewage of morethan 17 million Chileans has been incorporatedinto the wastewater treatment systems.

Urban Chile Population: 17,000,000

The proportion of urban populationthat has itswastewater treatedbefore discharge has been increasedfrom less than 10%in 1998 to 100% in 2012.

Urban Chile 1998

Drinking water coverage 99.2% of population

Wastewater collection 91.6% of population

Wastewater “treatment” 2 16.7% of population



n Removing pollution from wastewatern Optimising economics of water servicesn Responding to natural disasters

The increase of wastewater treatment cove-rage represents around 1,000 million m3 peryear of sewage that is being treated through280 treatment systems in the whole country.

3 Mostly secondary wastewater treatment plants

A very important investmentprogramme

The annual amount of investment had to beincreased significantly in comparison with theprevious decades to allow for this importantenhancement of wastewater treatment, theimprovement of water and sewerage coverageas well as the operational modernization.

Investments have risen to an average of US$340 million per year. This amount representsalmost double that of the previous decade andmeans that during the period 2000-2014 thetotal invested was more than US$ 4,700 mil-lion, fully financed by the operators withoutany subsidy.

38% of this amount has been used for waste-water treatment plants and wastewater out-falls while 52% has been used for upgradingand maintaining drinking water and sewerageinfrastructure.

The huge 2010earthquakedisrupted a lot of networks. Theywere repaired very fast at no costto water-users.

In the last decadethe annual amountof investments inwater and sanitationinfrastructurehas been nearly 5 times higher than before the 1989 privatisation.

Urban Chile 2014

Drinking water coverage 99.9% of population

Wastewater collection 97% of population

Wastewater “treatment” 3 100% of population

“The restructuring of the water service sector has been quite successful and can be regarded as amodel case.” OECD/UN-ECLAC, Environmental performance Review, Chile, 2005

The largest new wastewater treatment plant

Responding to natural disaster

For the last five years, Chile has suffered severdrought (particularly between Coquimbo andLa Araucanía. This is having serious economic,social and environmental consequences impac-ting many towns and small farmers.

Water operators have been taking initiativesto overcome the difficulties. In the summer of2014-2015 they instituted a plan of US$ 62 mil-lion to ensure continuous supplies of goodquality water. The cumulative investment indraught measured for 2011-2014 is close toUS$ 210 million.

Private water operators already proved theirprofessionalism during the critical task of res-toring water supply after the devastating earth-quake (level 8,8) on February 27, 2010.). Only 72hours after the disaster, 87.5% of the watersupply was restored and operating in the areasaffected, between Valparaíso and La Araucanía.The restoration of infrastructure of great impor-tance such as aqueducts, sewage ponds andwastewater treatment plants was not an easytask. However, the engagement of the industryand the cooperation with authorities made itpossible to restore the high quality standardsthat existed before the tragedy without occu-ring any cost for governement nor tariff increasefor the population in the affected areas.Damages suffered by the industry are estima-ted up to US$ 120 million.

See ref. 12, 16, 27



Organising authority: UK Government.

Regulators: Water Services Regulation Authority,Drinking Water Inspectorate, EnvironmentAgency.

Water operators: 24 private companies ope-rating according to licenses awarded by thecentral government.

Location: England & Wales, urban and ruralpopulation.

Privatisation

Up to 1989 water and sewerage services weredelivered in England and Wales by 10 largepublic bodies, the Regional Water and Sewer -age Authorities (RWAs) and 28 private com-panies supplying drinking water in part of theterritory.

End 1989 the 10 RWAs were privatised andreplaced by 10 companies listed on the LondonStock Exchange. These private companies ownand operate the water infrastructure accordingto licenses awarded by the government. Theyare regulated by several regulators. Theirtariffs are regulated by an economic regula-tor, the Water Services Regulation Authority(OFWAT).

One major aim of this privatisation was toimplement a huge programme of investmentpartly financed through significant savings ofoperational costs.

The success story of the waterindustry revitalisation

The regulated water industry post-privatisa-tion has been successful in service and opera-tional terms. It has been possible to financeand complete the investments in capital worksanticipated. Efficiency in operation has beenincreased. The levels of the services deliveredto water-users and to ecosystems have beensignificantly improved. Substantial cost-savingshave limited the growth of water bills thatwould have resulted from the numerous invest-

ments required to enable the U.K. to becomecompliant with European Union regulations.

Some factual achievements are summarizedbelow. They are average results at the countrylevel which may not reflect the diversity oflocal situations.

Improving water safety

In 1990 only 99% of water quality tests metthe required standards. Since then water qua-lity has increased regularly.

In 2008, overall compliance with the drinkingwater standards in England and Wales was veryhigh at 99.96%.

Realising the huge investments needed

Between 1990 (the date of the industry priva-tisation) and 2010, the industry has investedaround £80 billion in improving drinking waterquality, the water environment and customerservice.

That is almost £3,500 for every household inEngland and Wales. Investment is now runningat some £3 to £4 billion each year, well overthe £1.6 – £2bn before privatisation, delive-ring real improvements at no additional cost totaxpayers.

England & Wales, UKPopulation: 55,000,000

Overall compliancewith the drinkingwater standards in England andWales has increasedup to 99.96%.

Annual investmentsfor water andwastewaterinfrastructure havemore than doubledin England andWales since the 1989 privatisation.



Protecting the environment

In 2007, 72% of English rivers were rated eithergood or excellent compared with 55% in 1990;87% in Wales compared with 79% in 1990.Successes include the River Mersey, wherebreeding salmon have returned after a morethan 80 year absence in what was once knownas Western Europe’s most polluted river.

The number of beaches in England and Walesrecommended for excellent water quality bythe Marine Conservation Society’s (MCS) GoodBeach Guide has increased by almost 90%between 1998 and 2008. 380 beaches wererecommended by the MCS in 2008.

1 1990 2 1988 3 1994-1995

Reducing water losses

Between 2005 and 2010 water and seweragecompanies in England and Wales have laid,renewed or relinied approximately 20,000 kmof water mains – more than enough pipes tostretch from London to Auckland.

�Since its peak in 1994-95 leakage has beenreduced by about one-third, enough to supplythe daily needs of more than ten million people.

After the 1989privatisation thepercentage of Englishrivers where waterhas either good or excellent qualityhas increased from55% to 72%.

Making users’ lives easier

Customer service has also been improved withservice levels now at their highest level since1990.

Improvements lie both in the way water ser-vices are delivered physically and in the contactwith customers.

For example, fewer than 1 in 1,000 propertiesis now likely to experience low water pressurecompared with 18 in 1,000 in 1991.

The proportion of properties at highest risk ofsewer flooding has been reduced by more than75% in the last 10 years.

Optimising water economics

This huge investment programme has beeninitially financed by the private companies.Through water bills, the water-users will onlypay for it progressively over several decades.

Water bills have gone up, but nearly 70% ofthe additional cost resulting from new invest-ments has been covered by the water compa-nies’ efficiency savings. This means that if thegovernment had funded the same programmeitself and had implemented it with its owninternal means, water bills would be higherthan they are today.

“Really the success is down to the companies – and their technical staff rising to the challengeand of course all those enterprises including consultants that support them.” William Emery, OFWAT Director, 2003

n Improving water safetyn Realising huge investmentsn Protecting the environment

n Making users’ lives easiern Reducing water lossesn Optimising economics

Huge efficiencysavings haveavoided nearly 70%of the cost of newinvestments frombeing reflected in water bills paid by water-users.

Leakage has fallenby about one-third,enough to supplythe daily needs of more than tenmillion people.

Protecting the environment 1990-1995 2006

Good river water chemical quality 47%1 70%

Good river water biological quality 62%1 72%

Coastal bathing water compliance 66%2 99.4%

Sewage treatment works compliance 90% 99%

Unsatisfactory combinedsewer overflows 31%3 8.8%

See ref. 17, 31



Developingcountries

All locations with private operators



Private water operators mandated and regu-lated by public authorities through licenses orpublic-private partnership contracts (PPP) arefar less numerous than public utilities. Howeverthey are more visible (the “lamppost syndrome”,see paragraph 1.3.4.) than other options becauseof the concentration of commentary on them.The many research reports on individual PPPcases show a broad diversity of results andillustrate the challenges of ensuring that public-private partnerships are successful. However,they are not sufficient to give a fair and truevision of the impact of private managementof public water services (PSP). Some com-mentators have tried to present a global visionof water PSP, however with methodologicallimitations since they systematically omit thegood results.

To our knowledge, the only serious globalassessment of the impact of private manage-ment of public water services that has a sta-tistical value has been made by the World Bank.Its 2009 research (ref. 26 & 28) provides evi-dence on the average performance of PPPcontracts in developing countries, a part of theworld where these kinds of contract have deve-loped regularly since the eighties to reach 3%to 4% of the population (160 million peopleserved in 2007 according to these reports).

The World Bank’s global assessment

In 2009, the World Bank released two comple-mentary reports entitled Does Private SectorParticipation Improve Performance in Electricityand Water Distribution? and Public-PrivatePartnerships for Urban Water Utilities, A Reviewof Experiences in Developing Countries. The firstprovides statistical evidence from data on athousand water utilities. The second under-takes a thorough review of some performanceindicators in all the PPP contracts that theWorld Bank was able to identify in developingcountries.

These reports show that overall local and inter-national private companies deliver much morebenefit to the populations and governments ofdeveloping countries than is generally reco-gnised.

Extending access to drinking water

Improvement in the access to safe drinkingwater is particularly impressive. The extensiveWorld Bank study makes a detailed examinationof the 36 largest PPP contracts in Africa, LatinAmerica and Asia.

Initially these contracts supplied drinking waterto 48 million people. After less than 10 yearsthe population served had been increased to72 million people. This represents an increaseof 50% in the number of people benefitingfrom a good public water service.

The statistical study found an average 12%increase in domestic connections to water net-works between the pre-PSP period and thepost-PSP period.

Ensuring more equitable water supply

World Bank report (ref. 28) page 134: “There iscircumstantial evidence that poor householdssignificantly benefited from the increased accessand reduced water rationing that was achievedby a significant number of PPP projects. This wasnotably the case in cities with high poverty rates,and where access was improved significantly byexpanding the water network to poor neighbo-rhoods that were previously unserved, as in Côted’Ivoire; Senegal; Cartagena, Barranquilla, andMonteria (Colombia); Guayaquil (Ecuador);Manila (the Philippines); and even La Paz–El Altoand Buenos Aires (Argentina).”

Improving regularity of water supply

The continuity of service has been significantlyimproved. The World Bank statistical survey(ref. 26) found an average increase of 41% ofthe number of hours a day that water is avai-lable at the taps between the pre-PSP periodand the post-PSP period.

Developing countriesPopulation: 5.5 billion – Evidence on 160 million served by regulated private operators

In a decade increaseof 50% of populationconnected to publicwater networks in the territories of the 36 largest PPP contracts.

Private managementhas brought a 41%increase of thenumber of hours a day that water is running at the taps.



n Extending access to drinking watern Ensuring more equitable supplyn Improving regularity of water supply

n Reducing water lossesn Securing revenuesn Optimising cost

Reducing water losses

In many cases private operators are called tomake water savings as well as cost-savings. TheWorld Bank survey presents detailed results.It identified significant progress in reducingNon Revenue Water in the vast majority of PPPcontracts (more than 80% of cases studied).

Securing the revenues necessary to finance the public water services

Private operators are often requested to makethe revenue stream from users more reliable.The World Bank research found evidence ofmany cases where the rate of billing collectionhas been increased. These are the vast majorityof cases in comparison with the few caseswhere no change was observed “The most spec-tacular improvement was achieved in Yerevan,with the collection rate going up from less than20 percent to 80 percent in five years. This wasachieved through close collaboration between

Significant reductionof water losses.

the operator and the government, and in paral-lel with sizable improvements in service quality.”

Optimising cost

Anti-private activists habitually presentincreases of water rates as supposed proofsof alleged excessive costs brought by privateoperators. However, substantial rates increasesalways result from investment in new infra-structure or from changes in public policy. Ifa private operator is mandated by the publicauthority it is to limit the necessary rateincreases. A Public authority would not enterinto a Public-Private Partnership contract forthe implementation of its water policy if it wasa more costly option than public management.The global survey made by the World Bankprovides evidence of this economic behaviour.Despite broad statistical research it was notable to identify any statistically relevant diffe-rence between the costs of private and publicoperators.

Private managementdoes not cause pricerises that are higherthan for publicmanagement underthe equivalentconditions.

“The analysis of the four dimensions of performance (access, quality of service, operationalefficiency, and tariff levels) suggests that the overall performance of water PPP projects has beengenerally quite satisfactory.” Excerpt from World Bank report on PPPs in developing countries (Ref. 28)

Source: figure 3.6 of World Bank report, ref. 28



1. AFD, A. Blanc and C. Ghesquières, ‘Working Paper n°24 – Water sector in Senegal - a balancedpartnership between public and private actors to serve the poorest?’, June 2006

2. AFD, collective work, under the direction of A. Blanc et S. Botton ‘Recherches n°2 | Servicesd’eau et secteur privé dans les pays en développement – Perceptions croisées et dynamique desréflexions’, March 2011

3. AquaFed, Access to Drinking Water is deteriorating in the urban half of the world where rapidurbanisation is outpacing public services, press release www.aquafed.org, 7 September 2010

4. AquaFed, Private Water Operators celebrate the recognition of the Human Right to water andsanitation by the United Nations General Assembly. This resolution must be used to turn the Rightinto a Reality for the billions of people who do not enjoy proper water services, press release,www.aquafed.org, 29 July 2010

5. AquaFed, Private Water Operators contribute to making the Right to Water & Sanitation real,Submission by AquaFed to the UN Independent Expert on the issue of human rightsobligations related to safe drinking water and sanitation, www.aquafed.org, 26 March 2010

6. AquaFed, ’Professional private companies have provided over 25 million people, including manypoor, access to a reliable water connection’, press release, www.aquafed.org, 30 September 2009

7. Bucharest Academy of Economic Studies, I. Radu, V. Lefter, C. Şendroiu, M. Ursăcescu andM. Cioc, ‘Effects of Public-Private Partnership in Water Supply and Sewerage Public Services’, 2009

8. Business Standard, ‘Clean water to the doorsteps of parched throats‘ Article on the first 24x7water supply in India (in demonstration zones in Karnataka), July 24, 2009

9. FP2E, ‘Aquae de Novembre 2009 : le bilan des entreprises de l'eau après 25 ans passés au servicedes parisiens’, Aquae N°46, November 2009

10. Galiani S., P. Gertler, E. Schargrodsky, ‘Water for Life: The Impact of the Privatization of WaterServices on Child Mortality’, Found of Political Economy 113:83-120

11. GPOBA, I. Menzies and I. M. Setiono, ‘Output-Based Aid in Indonesia: Improved Access toWater Services for Poor Households in Western Jakarta’, OBA Approaches Note Number 38,November 2010

12. Humphreys – Clasificadora de Riesgo, C. Ebensperger H., ‘Empresas Sanitarias en Chile: unsector con potencial de crecimiento y atractivo para el inversor’, January 2012

13. Inter-American Development Bank. La experiencia de las empresas mixtas-Cartagena,Colombia, 2010

14. International Finance Corporation, L.A. Andrés, D. Sislen and P. Marin, ‘Water Concessions inColombia’, handshake Issue N°4 ‘CITIES ppps’, January 2012

15. OECD, J. Winpenny, Opportunities and challenges arising from the increasing role of new privatewater operators in developing and emerging economies, Background Issues Paper for OECDGlobal Forum on Sustainable Development “Public-Private Partnerships in Water Supply andSanitation – Recent Trends and New Opportunities”, Nov 21, 2006

Bibliography



16. OECD / UN Economic Commission for Latin America and the Caribbean – UN ECLAC, ‘OECDEnvironmental Performance Reviews: Chile 2005’, May 2005

17. Ofwat, ‘International comparison of water and sewerage service 2008 report’, August 2008

18. OMS-UNICEF Joint Monitoring Programme, ‘Access to Drinking-Water with a focus on Equity,safety and Sustainability, WHO / UNICEF Joint Monitoring Programme for Water supply andSanitation Thematic report on drinking-water: a preview’, document issued in Stockholm on24 August 2010

19. OMS-UNICEF Joint Monitoring Programme, ‘Progress on sanitation and drinking-water, 2010update’, www.wssinfo.org, 2010

20. Payen, G., Worldwide needs for safe drinking water are underestimated: billions of people areimpacted, part of The implementation of the right to safe drinking water and sanitation in Europe,Editions Johanet, Paris, 2012, p.57 à 85

21. Pinsent Masons LLP, ‘Pinsent Masons Water Yearbook 2011-2012’, 2011

22. Rudolph, K.U. and M. Harbach, ‘Private Sector Participation In Water And Sanitation For DevelopingCountries’, CESifo DICE Report 3/2007, Ifo Institute for Economic Research, Munich 2007

23. The World Bank, A. Estache, J. L. Guasch and L. Trujillo, ‘Price Caps, Efficiency Pay-offs, andInfrastructure Contract Renegotiation in Latin America’, 2003

24. The World Bank, D. Earhardt, M. Rekas and M. Tonizzo ‘Public Policy for the Private Sector – NoteNumber 326: Water In Bucharest’, Viewpoint 326, The World Bank – IFC, February 2011

25. The World Bank / PPIAF, ‘Impact Stories: PPIAF Supports Small-Scale Water Providers in Uganda’,February 2011

26. The World Bank / PPIAF, K. Gassner, A. Popov, N. Pushak, ‘Does Private Sector ParticipationImprove Performance in Electricity and Water Distribution?’, Trends and policy options 6, 2009

27. The World Bank / PIAFF, K. Ringskog, M. Hammond and A. Locussol, ‘The Impact fromManagement and Lease / Affermage Contracts’, Draft Report, June 2006

28. The World Bank / PPIAF, P. Marin, ‘Public-Private Partnerships for Urban Water Utilities, A Reviewof Experiences in Developing Countries’, Trends and policy options 8, 2009

29. The World Bank / PPIAF / South African PPP Unit – National Treasury, P. Bender and S. Gibson,‘Case Study for the 10 years of the Mbombela (Nelspruit) Water and Sanitation Concession SouthAfrica’, January 2010

30. Universidad Tecnológica de Bolívar, F. Rueda de Vivero and A. Espinosa, ‘¿Los pobres de hoyserán los pobres del mañana? Determinantes de la pobreza y magnitud de la vulnerabilidad deCartagena de Indias’, 2008

31. Water UK, ‘A national success story’, April 2009

32. WSP-AF / UN-Habitat, ‘Water Operators Partnerships Africa Utility Performance Assessment’,September 2009


Photo Credit P3 : Romain Laurendeau – Jeune Afrique, p16 : American Water, p19 : Balibago Waterworks System, Inc, p21: SESAMM, p24: SESAM, p26-27:Shenyang Sembcorp Water, p29: Odebrecht Ambiental, p31: Aguas do Imperador, p36,37: Saur Neptun Gdansk, p38:Macao Water, p40-41:Aguasde Saltillo, p 43 : Águas de Guariroba, p44-45 : Amendis, p48-49, Bristol Water, p 50-51 : Allwater, p53 : Aqua Pennsylvania, p55 : Apa Nova Bucuresti,p56 : Fédération professionnelle des entreprises de l’eau, p61 : SEEAL, p62-63 : Pudong Veolia, p65 : Aguas Andinas, Veolia Water UK, p66-67 : SaurSevan Services, p69,SEEN, p72-73 : SDE, p75 : Aguas Andinas, p55 : C.Guillais, AquaFed.


ACTU_BROCH_AquaFed Pays 2015_p64-84_6 02/04/2015 18:14 PageIII

Most water-users need drinking water and sanitation services to be organised for them by public authorities.These services must be of good quality, reliable and cost-optimised to suit both consumers’ and authorities’needs. Hiring a private company to deliver them is among the options that these authorities can choose.This brochure illustrates the many achievements that can be obtained by using the capacity of privateprofessionals in the delivery of public water and sanitation services.

Public services that perform well are those that are able to deliver good results simultaneously for manydimensions. For example, improving access to drinking water and improving the level of service to thepopulation are equally as important as managing the utility in an efficient way.

This brochure collates a wide sample of field cases of private management of water or sanitation servicesthat illustrate the outstanding results achieved by public authorities who have engaged private operators.The cases come from all around the world and illustrate the wide diversity of sizes of private companies.

www.aquafed.org

ACTU_BROCH_AquaFed Pays 2015_p64-84_6 02/04/2015 18:14 PageIV

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