Appropriate incentives include performance linked wages as well as access to

Appropriate incentives include performance linked

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Appropriate incentives include performance-linked wages as well as access to government grants or donor concessionary
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243 URBAN GOVERNANCE, MANAGEMENT AND FINANCE One of the physical casualties of the 1975-93 war in Cambodia was the almost total collapse of the water supply system in the capital, Phnom Penh. By 1993, barely 20 per cent of the city’s population had access to water and low-income residents suffered from shortages. The system was able to deliver only 10 hours per day. Non-revenue water (i.e., leakage, illicit connections and other losses) represented as much as 72 per cent of production. The system’s earnings barely covered 50 per cent of operating costs. In 1994, the Cambodian government changed the management structure of the Phnom Penh Water Supply Authority (PPWSA). The utility was provided with external assistance amounting to US $130 million from the Asian Development Bank, the World Bank, the United Nations Development Programme and the Governments of Japan and France. The Water Authority management immediately launched a programme that increased water production; reduced the proportion of non- revenue water; maximized water bill collection; and revised charge schemes to reflect the true cost of water delivered. To reduce non-revenue water, the utility replaced old pipes with new ones, installed accurate water meters, set up an emergency leak repair team on duty 24/7; divided the distribution network into zones and identified problem areas, and cancelled contracts with water wholesalers. The bill collection system was computerized, meter readers were trained, incentives were given to customers who paid regularly and on time and penalties were imposed on those who did not. Water rates were rationalized, with customers using less water charged less than those using more. The staffing of the authority was streamlined, with the number of personnel reduced from 20 per 1,000 water connections to only four. Most importantly, the Water Authority deployed an efficient customer service programme, made bill payment more convenient, and acted quickly to deal with customer complaints. By 2009, the Authority was listed by the Asian Development Bank and the World Bank among the most efficient water utilities in Asia. About 90 per cent of Phnom Penh’s 1.5 million residents now have access to safe water, including those living in slum and squatter areas. ‘Non-revenue’ water has been reduced to 6.1 per cent in 2009. Finally, the proportion of customers who pay bills on a regular basis has more than doubled from 45 per cent in 1994 to 99 per cent in 2009. BOX 6.11: EFFECTIVE WATER MANAGEMENT: PHNOM PENH Source: Chan (2009) Phnom Penh. 13.8 million residents now have access to safe water, including those living in slum and squatter areas ©Komar/Shutterstock loans. To make such performance-linked incentives effective, information systems back stringent reporting requirements. Most well-performing utilities have clear operational goals and performance-linked improvement plans. These are monitored throughout implementation.
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