Organised by
Prepayment Water Meter as a
Revenue Enhancement Tool
Author & Presenter: Francois Olivier Pr Eng
Assisted by: Dr Eugene Fourie
(Development Engineer of Teqnovo Prepayment
Water Metering System
Presentation Content
1. Define the Problem
2. Quantify the Problem
3. The Prepayment Water System
4. Case Study
5. Project Feasibility
� In 2003 the country’s annual water demand for urban usewas estimated at approximately 2900 million cubic metres per annum
� This represents approximately 23% of the country’s total water requirement
� It is further estimated that the current water losses is approximately 29% of the above mentioned usage, which equates to approximately 840 million m³/annum
� Multiply by a unit rate of R2.50/kl gives an amount of approximately R2.1 billion/annum currently been wasted
� The yield from the Lesotho Highlands Water Project is approximately 940 million m³/annum
Current Water Losses in South Africa
Increase in Non-Revenue Water (NRW)
TREND IN BULK WATER PURCHASES / SALES
14,921,906
16,152,703
18,100,000
20,217,195
22,039,913
24,078,849
13,942,343
16,857,882
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
22,000,000
24,000,000
26,000,000
28,000,000
Year
Bu
lk W
ate
r P
urc
ha
se
s/S
ale
s
(k
l/a
nn
um
)
Total Purchases 18,100,000 20,217,195 22,039,913 24,078,849
Total Sales 13,942,343 14,921,906 16,152,703 16,857,882
2000/2001 2001/2002 2002/2003 2003/2004
30%
23%
7,220,967 kl
4,157,657 klR 9,457,173
R 19,734,263
Outstanding Municipal Debt
R 7.3R 9.3
R 11.8R 15.0
R 19.1
R 24.3
R 30.9
R 39.3
R 50.0y = 5.7445e0.2404x
R 0.0
R 10.0
R 20.0
R 30.0
R 40.0
R 50.0
R 60.0
Financial Year (Ending June)
Ac
cu
mu
late
d D
eb
t (R
bn
)
Municipal Dept R 7.3 R 9.3 R 11.8 R 15.0 R 19.1 R 24.3 R 30.9 R 39.3 R 50.0
Increase per annum 0 R 2.0 R 2.5 R 3.2 R 4.1 R 5.2 R 6.6 R 8.4 R 10.7
1997 1998 1999 2000 2001 2002 2003 2004 2005
IWA Standard Water Balance
Financial Year: June 2005 - July 2006
System Input Billed Authorised Recoverred
Volume Consumption Revenue(kl) 52.1%
12,634,007 R 80,292,609 R 80,292,609(kl) 52.1%
16,566,253
68.4% Unrecoverred
RevenueR 105,283,121 (kl) R 24,990,512
R 6.3553 3,932,24616.2%
(kl)
24,229,135 NRW Expected Losses100.0% (kl)
3,634,370 R 0R 67,098,114 15.0% 47.9%
R 2.7693 (kl) R 41,925,166
7,662,882 Apparent Losses31.6% (kl)
1,611,405 R 10,240,923R 16,934,654 6.7%
Real Losses(kl)
2,417,107 R 6,693,73210.0%
Prepayment System Objective
Pre-payment water system
Meter Master Station (MMS)
Hand Held Vending Unit
(HHVU)
Prepayment Meter
Dallas iButton
Transfer of Credit
Transfer of Information
Control CenterModem
BLOCK B
Collector Station
BLOCK A
Collector Station
RF CELL
RF CELL
Two way RF
Communication
between water
meter and
collector station
Two way
Communication
between collector
stations and MMS Meter Master
Station (MMS)ZONE 1 ZONE 2
Pre-payment water system
The project consisted of three components:
1. Water Distribution Management (WDM)
2. Customer Demand Management: (CDM)
a) Unmetered connections
b) Illegal connections
c) Faulty water meters
d) Internal plumbing leaks
3. Repair, Operations and Maintenance Programme (ROMP)
Installation of pre-payment
water meters
Leak repair on private properties
Pilot Project
Pilot Project Area
116
165
Non-payment position in Pilot Area
2005/2006 Financial Year:
SERVICE DEBITS
RAISED
PAYMENTS
RECEIVED
AMOUNT
OUTSTANDING
PERCENTAGE
PAYMENT
IN0001 2,826,758.64R 46,157.12R 2,780,601.52R 1.6%
WA 2,012,618.93R 203,675.41R 1,808,943.52R 10.1%
BR 1,667,285.54R 320,549.45R 1,346,736.09R 19.2%
EL 1,270,681.55R 217,246.58R 1,053,434.97R 17.1%
VA 973,493.16R 275,473.41R 698,019.75R 28.3%
SE 584,041.47R 144,000.24R 440,041.23R 24.7%
BE 471,910.36R 75,311.49R 396,598.87R 16.0%
SURECO 371,455.00R 25,584.50R 345,870.50R 6.9%
BS 192,659.19R 90,103.84R 102,555.35R 46.8%
SUPREP 11,823.74R 9,771.47R 2,052.27R 82.6%
Grand Total 10,384,795.58R 1,792,905.13R 8,591,890.45R 17.3%
Pre-Log of the Pilot Site
PILOT ZONE
("Before" Log : 14 January 2005 - 21 January 2005)
0
5
10
15
20
25
30
35
40
45
50
15/1
12:
00 A
M
16/1
12:
00 A
M
17/1
12:
00 A
M
19/1
12:
00 A
M
20/1
12:
00 A
M
21/1
12:
00 A
M
Date
Flo
w R
ate
(m
³/h
)
Max=1060
kl/day
Avg=665
kl/day
Min=401
kl/day
Demand = 264 kl/day
Excess MNF = 322 kl/day
Exp MNF = 78 kl/day
Pre-Payment Financial Model
Units BeforeExpected
MNFExcess MNF
Prepayment
Water Sales
kl/day 665 78 322 264
677
l/hh/day 982 116 476 390
kl/hh/month 29.9 3.5 14.5 11.9
kl/hh/month 0.0 6.0
kl/hh/month 14.5 5.9
R/kl R 2.7181 R 5.72
R/hh/month R 39.34 R 33.50
R/month R 26,632 R 22,682
R/annum R 319,581 R 272,187
TOTAL R 591,768
Average Payment (Saving) /
household / monthAverage Payment (Saving) /
monthAverage Payment (Saving) /
annum
Demand per household / month
Free Basic Water
Quantity water paid for
Unit Rate
PILOT ZONE
Average Demand
No of Households
Demand per household / day
Project Cost:
677 meters @
R1500 =
R1,015,500Payback periodPayback period
= 21 months= 21 months
PILOT ZONE
("After" Log : 25 October 2006 - 31 October 2006)
0
5
10
15
20
25
30
35
40
45
50
25/1
0 12:
00 A
M
26/1
0 12:
00 A
M
27/1
0 12
:00
AM
28/1
0 12
:00
AM
29/1
0 12
:00
AM
30/1
0 12:
00 A
M
31/1
0 12
:00
AM
Date
Flo
w R
ate
(m
³/h
)
Max=868
kl/day
Avg=349
kl/day
Min=112
kl/day
After-Log of the Pilot Site
Demand = 237 kl/day
Min = 112 kl/day
After Installation
Units Before Current "Savings" Water Sales
kl/day 665 349 316 250
677
l/hh/day 982 516 466 369
kl/hh/month 29.9 15.7 14.2 11.2
kl/hh/month 0.0 6.0
kl/hh/month 14.2 5.2
R/kl R 2.7181 R 5.70
R/hh/month R 38.54 R 33.96
R/month R 26,089 R 22,993
R/annum R 313,065 R 275,914
TOTAL R 588,979
Average Payment (Saving) / monthAverage Payment (Saving) / annum
Free Basic Water
Quantity water paid for
Unit Rate (Excl VAT)
Average Payment (Saving) / household / month
Average Demand
No of Households
Demand per household / day
Demand per household / month
PILOT ZONE
Pilot Project Area
1. The Municipality will repay the funds plus finance cost (prime interest plus 1% at starting date of each sub-project) supplied by Rand Water through a percentage of the value of savings effected by the project
� Year 1 80%
� Year 2 70%
� Year 3 60%
� Year 4 and beyond 50%
Agreement with Rand Water
2. Payment will be in terms of a levy by Rand Water on bulk water sales
3. The value of savings is to be determined by means of ring fencing the projects and comparing the effect of the project on water usage
4. Contribution of the Parties to the repayment of capital and financing costs is to be agreed on at the time of approval and be captured in an Annual Implementation Programme
Agreement with Rand Water
WATER SUPPLY SUB-
ZONE
SAVING ON
EXCESS MNF
PREPAYMENT
WATER
SALES
TOTAL
("Value of
Saving")
SUBZONE Z35/1 327,046R 201,595R 528,641R
SUBZONE Z35/2 335,527R 241,557R 577,084R
SUBZONE Z35/3 103,122R 577,084R 680,206R
SUBZONE Z35/4 313,065R 275,914R 588,979R
SUBTOTAL 1,078,760R 1,296,151R 2,374,911R
NON-PAYMENT 1,808,944R
GRANT TOTAL 4,183,855R
“Value of Saving”
“Payback Schedule”
2006/2007 2007/2008 2008/2009 TOTAL
4,183,855R 4,183,855R 4,183,855R 12,551,564R
80% 70% 60%
3,347,084R 2,928,698R 2,510,313R 8,786,095R
14.5% 423,866R 370,883R 317,900R 1,112,650R
2,923,217R 2,557,815R 2,192,413R 7,673,445R
LESS: Interest charges
Project funding available
PAYBACK SCHEDULE
Non-payment amount per
annum
Payback Percentages
"Value of Savings" to be
repaid
PROJECT COST
Number
of
Connections
Estimated
Project Cost
Repayment
Period
(months)
2666 3,999,000R 17
Key Success Factors for Prepayment Water Meters
� The process must be a Holistic Process
� Financial
� Technical
� Institutional
� Socio-Economic
� Communication/Community Liaison
� You cannot use a Technical Instrument to solve a Social Problem
� If the Management Component is lacking the process is doomed to fail