Country Water Actions

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

Viet Nam: NRW Projects: Hide and Seek Game Can Quickly Turn Around Revenues
October 2006

By Hubert Jenny Senior Urban Development Specialist It is one of those hard-to-believe stories in the water sector. In less than 1 year, Ho Chi Minh City has proven, through a pilot project in two of its districts, that massive amounts of leaking water and missing revenues can inexpensively and quickly be captured. Through study, readjusting pressure, and getting to know its customers better, the city could reduce its water losses by one third and save $1.4 million as indicated by the pilot project -far exceeding its initial plan to reduce losses by just 6% annually. PILOTING CHANGE Ho Chi Minh City has 5.3 million residents. The Ho Chi Minh public water company services 67% of the city, with 412,000 customers. Of these customers, 90% have meters. The city has restructured its water operations under a corporatized water company, SAWACO, responsible for the production of water supply and distribution through six water distribution subsidiaries. A privatized consortium led by Hyundai took over the Thu Duc BOT from the French-led consortium, Suez, and supplies 300,000 cubic meters per day of bulk water to SAWACO. Ho Chi Minh City city was particularly interested in knowing the degree of nonrevenue water (NRW)-water that is distributed but either never arrives at the tap because of leaks or is never billed for because it is either stolen or not metered properly. To gain an idea of the overall condition of the city's piped distribution network, the Government of France financed a diagnostic study of just two districts—An Dien and An Phu. The districts were a logical site because they have only one supply point and a manageable customer base, about 20,000 residents. The districts house about 40 kilometers of pipes. The project used the "Global and Integrated Method (GIM)," which is one of two solutions typically used in projects that aim to reduce NRW. GIM focuses on identifying and quantifying all the different types of losses in a system and identifies how to mitigate those losses in ways that directly result in increased revenues. KNOWING WHERE TO CUT YOUR LOSSES A commercial geographic information system was then used to map the network. It found that the pilot site actually had 10 kilometers more pipe than what the utility had estimated. Further study, through systematic leak detection and hydraulic modeling of the system, uncovered 126 leaks—an average of 3 leaks per kilometer. In response, the utility constructed additional interconnections and pressure regulators. In high leakage areas, pressure was reduced to cut losses, leading to a 27% reduction in losses during the minimum night flows. UNCOVERING THE CUSTOMER CULPRITS With the physical, invisible losses detected in the pilot areas system, the next kind of loss to detect was from the commercial side— the users. The study used a global positioning system to conduct a georeference of 97% of the users in the pilot area. The study identified 82 large water users. These large users account for only 3% of the pilot project's total user population, but more than 20% of the total billed water. As the major revenue makers for the utility, it was only logical to start here with detecting any discrepancies. Sure enough, further study found that 60% of their meters were not properly sized—32% were oversized and 28% were undersized, resulting in commercial losses over 10%.

More commercial losses were detected when the utility's customer databases were updated: 479 families without meters or supplied by neighbors 2,528 anomalies on meters, due to installation (inclined, buried, flooded), absence of seal or protection boxes 200 tariffication incidents 1 illegal connection and 7 clients not invoiced 24 direct pumping (forbidden by law) Furthermore, most of the users' meters were underrecording consumption by an average 3.4%, according to a representative sample of 115 meters and a drafting of 50 water consumption profiles. KEEPING CLOSER TABS Armed with data from the studies on the commercial losses, the utility set up a plan of action: a new users database with new codification reorganized the meter reading cycle draft a policy of meter renewal replacement and certification, including calibration a new code for meters installation and a year-long training program.

A LITTLE STUDY GOES A LONG WAY As a result of acting on that plan of action, the city has posted impressive results in the pilot project area in just one year. The operator has reduced NRW by one third, from 42% to 31%. And, operating service pressure increased by one bar during peak period. In the end, a project that cost about $800,000 (excluding repairs) is estimated to save eventually the utility $1.4 million annually after implementing the project on a full scale. Another NRW project is implemented separately by the International Development Association, together with two of the distribution companies using the District Metered Area (DMA) Method. Following the pilot project with the districts An Dien and An Phu, the French Government is discussing further NRW projects with one distribution company. The Asian Development Bank has expressed interested to the Ministry of Planning and Investment, the State Bank of Viet Nam, and Ho Chi Minh City People's Committee to finance NRW projects for the remaining distribution companies, also applying the GIM approach.

_______________________________ *This article was first published online at ADB's Water for All website in September 2006: The Country Water Action series was developed to showcase reforms and good practices in the water sector undertaken by ADB’s member countries. It offers a mix of experience and insights from projects funded by ADB and those undertaken directly by civil society, local governments, the private sector, media, and the academe. The Country Water Actions are regularly featured in ADB’s Water for All News, which covers water sector developments in the Asia and Pacific region.

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