Water Champion

Country water actions are stories that showcase water reforms undertaken by individuals, communities, organizations, and governments in Asia-Pacific countries and elsewhere.

Ek Sonn Chan: Pulling the Plug on Nonrevenue Water
October 2006

By Maria Christina Dueñas Knowledge Management Officer How big a problem was nonrevenue water (NRW) when you took over the utility? In 1993, Phnom Penh Water Supply Authority’s (PPWSA) NRW rate was incredibly high at 72%. Our water was very expensive due to the high electricity tariff, so this 72% was a very significant loss. At the same time, our water tariff rate was very low so our total income did not even cover half of our operating expenses. I knew back then that NRW reduction was, for PPWSA, a matter of do or die. What is your NRW’s breakdown between physical and commercial losses? Unfortunately, we don’t have an official figure for that. But, we estimate that 1993’s NRW rate could be equally attributed to both losses. For our current NRW, which is at 6%, we estimate that 2-3% is due to authorized consumption and commercial losses, and the rest is due to physical losses. What were the major causes of NRW for PPWSA? We can attribute a small part of our NRW to authorized, unbilled consumption. For instance, we test the water pressure after pipe construction. We clean the reservoirs. We do not charge for water used by fire fighters or by the PPWSA office. We also donate water to poor communities. A certain portion also comes from commercial losses. In 1993, only 2,400 out of 26,881 connections, or 9%, were metered. Now, all our 147,000 connections are metered. However, we still have cases of defective water meters so we have to estimate actual consumption for those. Also, we face the challenge of dismantling around 30 illegal connections each year. The bulk of our NRW is due to physical losses, mainly from leakages caused by the construction of roads, drainage, cable, etc. In 2004, road construction caused 75% of our leaks. The year after, the figure rose to 81%, and then again to 83% by 2006. What strategies did you use to address commercial losses? First, we started metering all our connections. Then, we upgraded to more accurate water meters. We now use volumetric water meter class C, which has a replacement cycle of 4-8 years. About the Champion Mr. Ek Sonn Chan is the General Director of Cambodia’s Phnom Penh Water Supply Authority (PPWSA). As an electrical engineer, he started his career in government as a simple worker in a Phnom Penh abattoir. Gradually, he was promoted as Director of Municipal Commerce and, for a short period, as Director of Electricité du Cambodge. In 1993, he was appointed as Director of PPWSA. Mr. Chan’s appointment as PPWSA’s head began the utility’s transformation from a decrepit and war-torn water supply system with missing water and customers into a model public sector water utility that provides 24-hour, safe drinking water to Phnom Penh. This transformation was nothing short of radical. From a collection ratio of 48% in 1993, PPWSA now collects 99.9% of its water bills. Where it once covered only 25% of the population, it now covers 90%. Its total connections increased by 450% in the years between 1993 and 2006. And its nonrevenue water dropped from 72% to just 6%. More importantly, where PPWSA staff used to cause problems, they are now a major part of the solution. The PPWSA experience has been heralded as exemplary in Asia and the Pacific. Both utility and its leader have received numerous awards and citations. In 2004, ADB awarded its Water Prize to PPWSA for dramatically overhauling Phnom Penh's water supply system and demonstrating leadership and innovation in project financing and governance. In 2006, Mr. Chan received the Ramon Magsaysay Award for Government Service for the same feat. As Mr. Chan himself would say, the stint with PPWSA has been the hardest but most rewarding of his experiences.

Related Links Water for All Champions Phnom Penh Water Supply Authority: An Exemplary Water Utility in Asia

Stopping the illegal connections was a bigger challenge for us. Back in 1993, only 20% of the city was connected to the 70-yearold water system. Considering the $1,000 connection fee, that wasn’t surprising. You could have had a water pipe running in front of your house and still not have a connection. When I first took over PPWSA, I discovered that most of the illegal connections were even installed by the utility employees themselves. To solve this problem, we ran a public awareness campaign encouraging people to stop this illegal activity. We gave incentives to anyone who could provide information on illegal connections. We slapped heavy penalties on those connected illegally. And we paid special attention to the staff of PPWSA. Any staff associated with illegal connections was removed or punished immediately. To this day, we remain vigilant about staff involvement in illegal connections. Finally, the customer file is the basic data for billing so we carefully and painstakingly update it daily. What strategies did you adopt against physical losses? Our first step was to renew old pipes. We did that by using state of the art materials. What’s more, our own team laid the pipes themselves, which helped us control the repairs and save money. We also slowly eliminated the underground tanks. In 1993, there were 1,945 underground tanks along the PPWSA distribution network. Now, we have 1,500 km of new distribution network. One of our effective strategies was establishing Leak Repair Teams. All of PPWSA’s staff are duty-bound to report leaks, and we set up hotlines to encourage residents to do the same thing. Our Leak Repair Teams, composed of very highly motivated and disciplined staff, then respond to the reports within 2 hours. To control the water flow, we divided our distribution network into 41 zones. Each zone is equipped with pressure and flow rate data transmitter that provides online data for analyzing big leaks in the system. In 2003, we also established the NRW Control Teams. These teams control the distribution zone on-site—they investigate and repair leaks, discover and disconnect illegal connections, and more. We provide incentives for the team that could reduce the NRW in their zone, and fine those whose zones reflect increased NRW. How did you manage the human aspects of NRW, e.g., people reselling water to their neighbors or refusing to pay bills, PPWSA staff installing illegal connections, etc? It is sad but true that most of the illegal connections in the past were linked to PPWSA employees. With help from the public, who reported these links to us, and a discipline committee that investigated and decided on cases involving PPWSA staff, we were able to weed out the guilty ones. As for the water resellers, they are definitely on our radar. Our records show that 90% of them stole water to make profits. We implemented a program to control them, involving a specific connection, special seal, and a team to check up on them regularly. One of our critical targets for NRW reduction is the complete elimination of the water resellers. That’s why we keep on extending our distribution network to supply customers directly. As for people refusing to pay their bills, you have to understand the situation in Cambodia. Immediately after the Khmer Rouge regime in 1993, the government provided water free of charge to all of Phnom Penh. This is why PPWSA had such a tough time collecting charges when I took over. Influential or military people even refused to let us install a water meter on their connection. So we started a campaign to educate our customers, to make them understand that PPWSA could not continue supplying water if they don’t pay their bill. I’d say we were largely successful in this campaign. PPWSA’s collection ratio is now 99.9% of private bills. The fact that the Prime Minister supported our efforts was also a big plus. How much did PPWSA spend to reduce NRW from 72% to 6%? I don’t really know how much we actually spent over the years to curb the NRW. To me, money is necessary but is not the key issue. I know that for every single percent of NRW each year, we lose roughly US$150,000.00. In 2005, we spent about US$75,000.00 just to repair the leaks and control all 41 zones. This represents around 0.4% of our total revenue. What insights would you highlight from your fight against NRW? First, remember that its staff is a utility’s best resource. But, we must invest in developing their capacity, and give them the right incentive or punishment as necessary. When I first came in, PPWSA’s staff were underpaid, underutilized, unmotivated, and undisciplined. With the right investment, they became PPWSA’s champions. Second, you must get the public behind your efforts; get them to be active partners instead of passive recipients of water services. I know we wouldn’t have caught as many of the commercial or physical losses in our water system if the public hadn’t been actively informing us. Finally, controlling the distribution zone, and attaching the right incentive system to the control, guarantees significant results. Our program with the NRW Control Teams has been the most successful among our strategies to reduce NRW.
_______________________________ *This article was first published online at ADB's Water for All website in October 2006: http://www.adb.org/Water/Champions/chan.asp.

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