57483 A Review in Bangladesh, India, and Pakistan Benchmarking for Performance Improvement in Urban Utilities The Water and Sanitation Program (www.wsp.org) February 2010 is a multi-donor partnership administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services Report DISCLAIMER: Water and Sanitation Program (WSP) reports are published to communicate the results of WSP's work to the development community. Some sources cited may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed herein are entirely those of the author and should not be attributed to the World Bank or its affiliated organizations, or to members of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to wsp@worldbank.org. WSP encourages the dissemination of its work and will normally grant permission promptly. For more information, please visit www.wsp.org. A Review in Bangladesh, India, and Pakistan Benchmarking for Performance Improvement in Urban Utilities Contents Abbreviations 4 Executive Summary 5 Introduction 7 Benchmarking in the Global Perspective 9 Introducing Benchmarking in South Asia 11 Phase 1: Initiation Phase 2: Institutionalization and Consolidation Phase 3: Strengthening Performance Assessment and Improvement Benchmarking Findings 19 The Reliability of Benchmarking Data The State of Service Provision in the Region Findings against Specific Indicators Assessment A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Performance Improvement Planning 31 Using Process Benchmarking to Drive Improvements Strengthening Benchmarking to Drive Sector Reforms 37 Institutionalizing Benchmarking in Government Moving beyond Utility Benchmarking Data Key Lessons from Regional Benchmarking Experience 41 Next Steps 43 Conclusions 45 References 46 Appendix 47 South Asian Utilities Participating in Performance Benchmarking, 2005­07 Abbreviations CIB Continuous Improvement and Benchmarking DFID Department for International Development (UK) GTZ Deutsche Gesellschaft für Technische Zusammenarbeit (German Agency for Technical Cooperation) HUD&PHED Housing, Urban Development, and Public Health Engineering Department (Punjab) IBNET International Benchmarking Network for Water and Sanitation Utilities JICA Japanese International Cooperation Agency JNNURM Jawaharlal Nehru National Urban Renewal Mission JUSCO Jamshedpur Utilities and Services Company Lpcd Liters per capita per day MDGs Millennium Development Goals MLGRD&C Ministry of Local Government, Rural Development, and Cooperatives (Bangladesh) MoUD Ministry of Urban Development (India) NRW Nonrevenue water PIP Performance improvement planning PROOF Public Record of Operations and Finance RMC Rajkot Municipal Corporation SAWUN South Asian Water Utility Network SOP Standard Operating Procedures SEAWUN South East Asian Water Utility Network ULB Urban local body (India) WASA Water and Sanitation Agency (Punjab, Pakistan) WASA Water and Sewerage Authority (Bangladesh) WSP Water and Sanitation Program WSP-SA Water and Sanitation Program­South Asia WSS Water supply and sanitation 4 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Executive Summary Performance benchmarking is a · No water utility in Bangladesh, India · Operating expenditure far exceeds powerful tool to make service providers or Pakistan provides its customers income in many utilities, and tariffs more accountable, and to measure with continuous water; the average bear no relation to costs. Most progress while improving performance. is five hours a day. utilities rely on subsidies and ad hoc This review examines the introduction of grants from government. performance benchmarking in over 30 · Water utilities do not serve at least a urban water utilities across Bangladesh, third of urban residents. With some exceptions, the quality of India, and Pakistan since 2003, with the the performance data reported by the · High nonrevenue water--frequently utilities does not yet support robust support of their respective governments estimated above 40 percent-- analysis beyond indications of broad and the Water and Sanitation Program­ means a large volume of water is trends. Consequently, comparative South Asia. It focuses on the process of being lost through leaks, instead of assessment of the utilities' performance building systems for performance being available to improve and indicators is not the main focus of measurement, monitoring and analysis, extend supply; billions are lost each this review. and institutionalizing benchmarking as year through unbilled consumption an integral part of operational practice The data reveal the wide scope that and revenue mismanagement. in utilities and government, to support exists to implement internal system Citizens are carrying these costs, broader sector reforms. improvements. It is spurring the and receiving very poor services The findings reveal that most utilities are in return. performing poorly, and just how dire the state of service provision really is across the towns and cities of South Asia: 5 participating utilities to respond to (pourashavas) to mega cities (Water sewerage; storm water; and solid performance gaps revealed by the and Sewerage Authorities) have waste management. data. Many of the performance institutionalized the concept of In Pakistan the initiative which started in improvement plans being developed performance benchmarking. The data five large utilities of Punjab has been and implemented focus on reducing have been used to develop scaled in two other provinces. Out of nonrevenue water and improving their performance improvement planning the total nine classified urban utilities of billing systems, to mitigate chronic (PIP), and there is systematic the country, eight are in various stages under-funding of their operations. improvement in access and collection of implementation of the performance efficiency areas in utilities. Significant capital investment will be benchmarking initiative. In Punjab the needed to extend coverage, upgrade In India, the Ministry of Urban utilities have moved from data decaying networks, and develop Development (MoUD), of the central generation to PIP development and wastewater treatment capacity on a government, is driving implementation implementation. Three utilities of large scale. But many performance of service level benchmarking in 26 Pakistan have been linked through the weaknesses will not be remedied cities through the Jawaharlal Nehru regional utilities network to performing through flagship capital projects alone. National Urban Renewal Mission. The utilities of East Asia. In Karachi the utility Greater attention is also to be given has institutionalized the initiative by MoUD, recognizing the importance of to maintenance and revenue establishing a dedicated cell. performance benchmarking, has management systems, and aligning linked access of funds to states/cities Comprehensive change will take service outcomes with the needs of with their commitment to reveal their time, but benchmarking is already citizens. This requires effective performance, plan and implement contributing decisively to a new era in accountability mechanisms and improvement, and become more service delivery across South Asia, governance systems. accountable through disclosure of based on performance measurement In Bangladesh, the initiative has made their performance against annual and monitoring. This is laying the basis headway at utility level. Sixteen utilities targets in four service delivery for improved sector governance, serving from medium size towns domains, that is, water; sanitation and regulation, and reform. 6 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Introduction Water and sanitation utilities are the decision making, and contributing sophisticated. For example, in India, essential vehicles for delivering the powerfully to sector reform initiatives the grading of data adds an important services needed to enable and sustain which emphasize institutional dimension to make benchmarking economic growth, and, in turn, meet realignment, transparency, and increasingly reliable. Benchmarking is the Millennium Development Goals and accountability. Such reform initiatives highlighting where improvement is support South Asia's fast-growing would become more effective and needed--not just in big infrastructure towns. But there is widespread reliable if the data become increasingly development programs, but in lower evidence of poor performance. Until recently, the evidence was largely anecdotal. New data from regional performance benchmarking initiatives are now providing quantitative informa- tion on the state of water services, across a range of parameters. It reveals the performance of a cross section of utilities, and is enabling comparison with others of similar size and structure. No water utility in the region provides its customers with continuous water. The supply is intermittent and generally of poor quality, contributing to illnesses. High nonrevenue water--frequently above 40 percent--means a large volume of water is going to waste, instead of being available to improve and extend supply; billions of Rupees and Taka,1 vital for improving and sustaining the quality of service delivery, are lost each year through unbilled consumption and poor revenue management. Citizens are carrying these costs, and receiving poor services in return. The analysis of this data is shaping performance improvement planning and 1 US$1 = Bangladeshi Taka 69; US$1 = Indian Rs. 46; and US$1 = Pakistani Rs. 85 (approximately, as of February 2010). Conversion rates are from www.coinmill.com; all conversions in the text are approximations. 7 profile interventions which drive Benchmarking is also revealing governments and the Water and decisive service improvements. opportunities for quick wins. Better Sanitation Program­South Asia. It This includes household surveys to management of billing and collection, focuses on the process of building upgrade utilities' customer databases for example, generates more income systems for performance and improve their knowledge of who to do a better job of service delivery. measurement, monitoring and they are serving, and how effectively; This review examines the introduction analysis, and institutionalizing systems to track response times and of performance benchmarking in over benchmarking as an integral part of loss reduction; comprehensive 30 water utilities across Bangladesh, operational practice in utilities and metering to pinpoint losses and India, and Pakistan since 2003, with government, to support broader strengthen sustainability; and so on. the support of their respective sector reforms. Box 1: Utility benchmarking: A tool for performance improvement and decision making Benchmarking involves assessment of performance, and comparison with others to identify key areas for improvement. There are two main types of benchmarking; they complement each other. Both are being used by South Asian water utilities. Metric Benchmarking: Establishing Different Levels of Performance A range of methods is used to quantify the performance of a utility, and compare its performance to others. The approaches described in this review rely on simple analysis of the ratio of inputs to outputs--cost per cubic meter, number of staff per 1,000 water connections, and so on. As the quality and reliability of the qualitative data improves, more sophisticated techniques can be used, such as regression analysis. This type of analysis takes account of external variables that are outside the control of management, and allows for better comparison across different operating environments. For example, the cost per cubic meter is determined by a range of variables--including the nature of the water source, the total volume supplied, the cost of electricity, and so on; regression analysis enables these factors to be taken into account when assessing performance across very different operating environments (Kingdom, 1996). Metric benchmarking provides information for utilities to identify performance gaps, but does not usually reveal the reasons for them. The key is to understand the reasons behind the performance gaps. Process Benchmarking: Assessing How to Improve Performance Having established a need for performance improvement in a particular function, process benchmarking highlights how to change the way things are done. Processes associated with the targeted function are analyzed closely, step by step, and compared against those in `best in class' organizations. Rigorous assessment of internal processes, enhanced through comparative assessment, can achieve significant improvements through more effective, streamlined, and efficient approaches. To date, most benchmarking activity in the South Asian water sector has focused on quantifying performance. A growing number of utilities are adopting process benchmarking approaches to fine-tune performance improvements. 8 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Benchmarking in the Global Perspective How does the performance of different In the Philippines, benchmarking is G To drive service improvements utilities compare? Why do some do being used to compare the through linking funding support better than others, and what is it that performance of the two water to performance monitoring and they are doing differently? Globally, concessionaires serving different improvement planning: organizations are using benchmarking parts of the city of Manila. Funders--within government and to seek answers to these questions beyond--increasingly want G To support sector assessment and drive improvements. evidence that capital investments and programming: China, Vietnam, are yielding better service `Benchmarking' can be used in and a growing number of other performance outcomes. different ways for different purposes: Asian countries have used one-off Benchmarking can show how benchmarking assessments of utility effectively public funds are being G For competitive advantage: performance to determine utilized, and where new investments Benchmarking emerged in the performance across the should be prioritized. There is a private sector in the early 1980s water services sector and refine growing move in India and Pakistan when the U.S. company, Xerox, national level planning and for government to link capital sought to strengthen its competitive advantage by assessing its policy development. funding to performance performance in relation to its rivals, improvement plans which address G To identify and share best learning from the best achievers, deficiencies revealed through practice: Regional networks such and adapting best practices to benchmarking. In India the as the South East Asian Water Utility enhance its own performance Jawaharlal Nehru National Urban Network (SEAWUN), the South Asian (Cabrera, 2008). The approach is Renewal Mission (JNNURM), a Water Utility Network (SAWUN), and now used widely by many of the Rs. 16,500 crore program of the Water Operators Partnerships world's most successful companies national governments, is in the offing program for Africa (WOP­Africa) under which the fiscal transfers to and organizations. promote benchmarking to drive the utilities linked to performance. In G To promote efficiency in a comparative assessment and Pakistan the provincial government context of monopoly supply by continuous improvement in service of Punjab is exploring the option to water utilities: In the United provision and utility performance. link the flow of funds, over and Kingdom, the national economic These networks promote the above the regular transfers under a regulator for water utilities, OFWAT, collection, analysis, and comparison finance commission formula, to uses mandatory benchmarking--or of key performance data between performance. Utilities in Africa, `yardstick competition'--by water water utilities in a country, a region, particularly in Ethiopia and South utilities to generate information on and worldwide, and then support Africa, are eligible to receive the appropriate water pricing and knowledge sharing, twinning funds from higher tiers of performance norms (Dassler, Park, partnerships, and training government on the production of and Saal, 2006). Colombia's workshops to promote adoption credible data showing improvement regulator uses a similar approach. of good practice. in service delivery. 9 Benchmarking of water supply utilities representatives of the Alliance of Philippines. The objective is to is now common practice worldwide, Government Workers in the Water strengthen decision making for across developed and developing Sector, working with the Public improved water services by drawing economies from Europe to Latin Services International Research Unit on the knowledge and information America and Africa. (PSIRU) and other agencies, believe of operational-level employees that management-labor cooperation (Corral, 2008). Involving Staff to Make can be mobilized to support the shared the Most of Benchmarking goal of safe, affordable, reliable, and A valuable source of information on sufficient water for all. In October 2008, global utility performance benchmarks The value of benchmarking as a a six-month capacity-building program from over 2,000 utilities in 85 countries practical management and decision- on performance benchmarking and can be found at the website of the making tool is being recognized beyond database management was launched, International Benchmarking Network government and utility managers. targeting worker representatives from for Water and Sanitation Utilities In the Philippines, for example, public water utilities across the (IBNET), at www.ib-net.org. 10 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Introducing Benchmarking in South Asia The introduction of benchmarking in The next section describes the process infrastructure in most areas, and city South Asia under a well designed of introducing benchmarking in the corporations and local municipalities regional program was pioneered in different contexts of Bangladesh, India, charged with operating and maintaining India, beginning in 2003. Bangladesh and Pakistan, before moving onto an the infrastructure and providing and Pakistan followed soon after, from assessment of key findings. services. Semi-autonomous Water and 2005, and were able to draw on the Sewerage Authorities (WASAs) provide lessons of India's experience. From the Phase 1: services in the two largest cities, Dhaka start, these benchmarking initiatives and Chittagong. Overall planning is have looked beyond comparative Initiation fragmented, utilities are inappropriately assessment, to using benchmarking to staffed, and revenue falls far short of focus performance improvement Bangladesh what good service provision requires. planning (PIP) and monitor its impacts. In Bangladesh, the local government The sector faces enormous challenges, In each country, the Water and division of the Ministry of Local in part arising from rapid urbanization Sanitation Program­South Asia Government, Rural Development, and and increasingly dense settlements. (WSP-SA) has played a pivotal role in Cooperatives (MLGRD&C) introduced The population of Dhaka, for example, initiating and supporting benchmarking, benchmarking in 11 cities and towns in is expected to surge from 12 million using tools developed by the 2005, with the support of the WSP-SA. now to over 21 million by 2025. International Benchmarking Network for Water and Sanitation Utilities (IBNET). A This followed the development of a Nationally, there is limited monitoring, common approach has been pursued, 2005 Water Sector Development Plan, resulting in widespread bacteriological which is adapted to align with country- which aimed to guide comprehensive contamination of groundwater at specific needs and dynamics. It has reforms, with an emphasis on shallow depth, the country's primary three main phases: promoting greater autonomy and water source. Compounding this is professionalism for water utilities. This arsenic contamination in a quarter of G Phase 1: Initiation; heralded a major shift from the status the country's tubewells and increasing quo, where institutions are fragmented salinity in the coastal belts. The water G Phase 2: Institutionalization and and investment decisions occur at a table is falling steadily because of high Consolidation; and different level from operations and abstraction rates. Very low river flows, G Phase 3: Strengthening maintenance. The national Department seasonal shortages, and frequent Performance Assessment of Public Health Engineering is power cuts add to water supply and Improvement. responsible for planning and developing problems. The potential for using Phase 1: Activities 11 surface water is constrained by of a wide range of public sector entities declining flows in the rivers from India, India were approached to provide insights and the cost of treatment to The way Phase 1 was structured and into the different organizational overcome severe contamination. implemented in India illustrates the capacities and their implications for Climate change will impact approach used across the region. collecting data. Between them, the 13 particularly harshly on Bangladesh's The catalyst for benchmarking in utilities covered 23 cities and towns people, accelerating urbanization and India was the Ministry of Urban across India, ranging in size from less worsening water deficiencies. Development's (MoUD) need for than 50,000 connections to more baseline data on the state of the urban than 250,000. Highly capable and professional water sector, in order to assess how water utilities are needed to From the start, the WSP-SA adopted a best to direct reform initiatives. With overcome these challenges and participatory, networked approach to the support of the WSP-SA, the provide effective and sustainable benchmarking. The emphasis was on Ministry initiated a project in 2003 to water and sanitation services. first helping the utilities and local and collect and analyze performance data Government regards performance state governments to appreciate the from 13 water supply and sanitation benchmarking as a valuable tool for concept and its benefits--both internally, utilities. Project partners included state improving water utility management within each utility as a management tool, governments and the Indian Water and business planning, through and externally, to support comparative Works Association (IWWA). revealing what kinds of assessment. The focus then shifted to inputs and improvement strategies The term `water supply and sanitation developing the methodology, using are needed to strengthen (WSS) utilities' covers a wide range of indicators and definitions developed by utility performance. service providers, ranging from state- the IB-NET. The WSP-SA helped to set level departments, authorities and up, train, and support work teams within The first phase, beginning in 2005, agencies, to city-level water supply and each utility, who were then tasked with focused on introducing the concept sewerage boards, technical service collecting, checking, and assessing the to 11 utilities; the participants departments within municipal data. Key findings were analyzed in included the Dhaka and Chittagong corporations, and companies owned detail across the different utilities to WASAs, a city corporation and eight by the private sector. Representatives reveal performance trends, and the smaller urban local authorities known locally as pourashavas. As in India, Figure 1: Average availability of water in India, compared the WSP-SA worked closely with the to international norms local government division of the MLGRD&C to introduce key IBNET performance indicators and data collection methodologies to utility managers, and gain the support of city and town mayors and pourashava chairs. The focus then shifted to providing hands-on support to work teams within each utility, to assist them in collecting and assessing the data. The findings from this first phase provided the most comprehensive assessment to date of the state of urban water services in Bangladesh. Source: WSP (1996). 12 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities (HUD&PHED). A World Bank study in Box 2: Gaining a `whole organization perspective' eight Punjab cities had identified the lack through benchmarking of proper water and sanitation services as a major impediment holding back their Data gathering is not new to most utilities. But the benchmarking indicators economic potential. The HUD&PHED integrate this information across different functional areas, and reveal wanted to use benchmarking to improve performance in a whole new way--daily per capita consumption, unit the performance of the WASAs, and production cost, staffing per connection, working ratio, and so on. The process of data collection also reveals significant gaps in the management thereby achieve the service improvements information systems of most utilities. needed to support economic growth and development. Dhaka WASA in Bangladesh has always collected data, but through assembling indicators for benchmarking, it gained a `whole organization In 2006 the Government of Punjab's perspective' for the very first time. The WASA formed a high-powered new Urban Unit drew up a roadmap for Benchmarking Committee comprising top management and the section reforming urban water and sanitation heads of Finance, Revenue, Operations, and Development. For the first time, services in the province. It outlined a section heads said they could see the links between leaks and revenue. This program of institutional reforms, integrated perspective is drawing attention to performance gaps, and culminating in the formation of more shifting organizational perspectives beyond management of supply, to a autonomous, professionalized water customer orientation which looks at service outcomes. utilities, operating within a regulatory Other utilities in South Asia echo this. Senior managers in Faisalabad WASA, framework that emphasized greater in Pakistan, say the process of assembling data for benchmarking is helping accountability. One of the provincial the different directorates within the WASA understand how performance in government's first steps in implementing one area impacts on another. The WASA has always collected data on the roadmap was to appoint new high- service coverage, but analyzing consumption against the number of caliber managing directors for WASAs, connections was new. A comprehensive revamp of the customer database, recruited on merit from the private sector, assessed against connections on the ground, revealed just how prevalent to drive the process of sector reform at unauthorized connections were; 31,000 illegal connections have since been the utility level. The provincial government regularized. The revised, more accurate data now show that consumption signed a performance contract with per capita was lower than previously believed. each director. The starting point for benchmarking was for the WSP in late 2006 to bring on board sample average was compared with Pakistan the top management of the key provincial international benchmarks. government departments responsible for In Pakistan's Punjab province, water Despite limitations in the reliability of the driving infrastructure development and services in the five largest cities-- data, the results were sobering. service delivery, including the HUD&PHED, Lahore, Faisalabad, Gujranwala, Comparison with benchmarking results the WASAs' parent department. The Multan, and Rawalpindi--are provided with norms elsewhere showed clearly HUD&PHED nominated a senior official as by five publicly-owned Water and that the performance of the the provincial focal person, and each Sanitation Agencies (WASAs). WASAs participating Indian utilities compared WASA established a benchmarking team are accountable to both local- and poorly with that in other developing with a team leader. Following a similar provincial-level authorities, but there is countries. Perhaps the most striking approach to that used in India and little oversight of their performance. finding was that no utility is able to Bangladesh, the first phase focused on provide a continuous supply of safe In late 2005, the WSP-SA launched building awareness of the concept, drinking water; two provide water for performance benchmarking in these localizing the IBNET indicators. The data less than two hours a day. More five WASAs at the request of the was collected by WASAs' teams and comprehensive findings are described Housing, Urban Development and analyzed by the WSP-SA, to show trends in later sections of the report. Public Health Engineering Department over the previous three to five years. It was 13 a steep learning curve for the utilities, production and consumption, to submitted. Following an approach particularly when analysis of the data revenue management, tariff revision, developed by the IB-NET, each data by the WSP-SA revealed substantial and improved energy efficiency. item and indicator was graded on a performance gaps. Utilities' experiences in developing four-point scale, A to D, with A having and implementing performance the highest and D the lowest reliability. Phase 2: improvement plans have been shared This grading approach was necessary and discussed in detail at a series of to assess whether the data supported Institutionalization national workshops, where ministry credible comparison between and Consolidation representatives have participated. utilities, and helped utilities to identify problems in the reliability of the data The findings from Phase 1 revealed a Bangladesh utilities are hoping that they collected. number of shortcomings in the quality the findings from benchmarking will alert municipalities to the quantum Within each utility, data were refined of the data reported. Phase 2 aimed to of funding needed to improve over two collection cycles. The first strengthen performance reporting service delivery. They also hope to was for initial data gathering, learning, through embedding measurement, motivate them to raise funds and error checking; this was followed monitoring, and reporting systems in through the Municipal Development by further data collection and each utility. Concurrently, the WSP Fund for sector improvements refinements. From the original list of 16 worked with the relevant ministry or ranging from rehabilitation of water participating utilities, only 10 were able department in each country to treatment works to renewal of to provide adequate data for build a platform in government to networks and investment in bulk and performance measurement and drive, coordinate, and support consumption meters. analysis. Key findings are shown in benchmarking in utilities. Table 2 (see page 20). A change of government in December Bangladesh 2008 affected plans to institutionalize The value of the data being generated through benchmarking was now very benchmarking in the ministry Phase 2 in Bangladesh focused on responsible for local government. evident. After the release of the strengthening data collection, and Benchmarking in Bangladesh Phase 2 results, in late 2007 the using the findings to address continues to rely on impetus MoUD took benchmarking to a new performance gaps identified through provided by WSP support. level in India when it decided that benchmarking. A second round of service level benchmarking should benchmarking data were collected for India be institutionalized across government 2006­07, and the findings were as an integral part of improving service subsequently collated into a A second phase of benchmarking was delivery and public accountability in the comprehensive data book for launched in 2005, involving 16 utilities context of urban renewal. Water supply wider dissemination. approached by the MoUD. Again, is being devolved to urban local bodies IB-NET indicators and definitions were (ULBs), who are overseen by state- The WSP-SA worked closely with each used, but this time there was greater level authorities. The strategy of the utility to help them use their findings to emphasis on understanding the MoUD in central government is to work develop performance improvement internal systems used to collect data with state-level authorities to promote plans. They target a wide range of on the different indicators, and grading the adoption of benchmarking at issues from increased metering of the reliability of the information ULB level. Phase 2: Activities 14 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Pakistan Figure 2: Profile of utilities participating in Phase 2: South Asian benchmarking, by size Benchmarking gathered momentum in Pakistan in 2007. Participants at a major benchmarking workshop in Lahore in June 2007 noted the importance of institutionalizing benchmarking, within WASAs and in government, to make the collation and analysis of benchmarking data an integral part of organizational management and sector practice, rather than a one-off event. After reviewing various options, it was evident that the HUD&PHED, the provincial government department responsible for the urban water supply sector in the Province of Punjab, was the most appropriate institutional home for the Punjab benchmarking program. In late 2007 the Department made a commitment to establish a Provincial Benchmarking Data Cell. The HUD&PHED would drive coordination and institutionalization, setting up systems to collect, collate, and respond to the data. The Urban Unit, established within the Department of Planning and Development to drive urban sector reforms, would provide further coordination and technical analysis, performance improvement Within the five WASAs, meanwhile, support. The WSP-SA would provide planning, and capacity building. considerable attention was given to technical support, including data detailed performance improvement The Department sent a formal planning to address gaps identified instruction to each WASA through an through metric benchmarking. official notification in late 2007 to collect and submit data on defined Utilities focused on developing and performance areas every six months to implementing PIPs, improving revenue the provincial government, with a management through collecting standardized datasheet and definitions arrears and regularizing unauthorized for each indicator. A remaining connections, reducing nonrevenue challenge is, however, to mobilize the water, upgrading water and sewer resources needed to establish a networks, and so on. As Provincial Benchmarking Data Cell that benchmarking data became available, would have the capacity to drive the milestones have been improved and process across utilities. monitoring strengthened. 15 Phase 3: Box 3: Required performance levels for water and sanitation defined by the Ministry of Urban Development Strengthening Water Sanitation and Sewerage Performance Assessment and G 100 percent households have direct water connections G 100 percent toilet coverage G 100 percent coverage by Improvement G Minimum supply of 135 lpcd sewerage networks G 24x7 water supply G 100 percent collection and Phase 3 activities have focused on strengthening benchmarking practices G 100 percent consumption metering treatment of sewage within utilities, and building the systems G 20 percent nonrevenue water G 100 percent capacity available needed to entrench performance to treat sewage G 80 percent of customer complaints measurement, monitoring, and G 100 percent compliance with addressed within 24 hours improvement to achieve better service specified secondary sewage G 100 percent compliance with delivery outcomes. treatment standards standards specified for potable water G 20 percent of treated effluent reused Bangladesh G 100 percent cost recovery, where G 100 percent recovery of costs for total operating revenue is sewerage management In Bangladesh, 11 urban water utilities expressed as a percentage of total G 80 percent of customer complaints (two WASAs, eight pourashavas, and operating expenses incurred in the addressed within 24 hours one city corporation) have developed corresponding time period baseline datasets, managed their G 90 percent efficiency in collection of benchmarking data, and prepared PIPs G 90 percent collection efficiency sewerage charge for improved service delivery. This included a revision of the rules for services to the low-income communities in the World Bank-funded the network. The network regularly India convenes to address key issues such Water Supply and Sanitation Project in as the impact of climate change, tariff The MoUD is now using benchmarking Dhaka. A recent analysis reveals that setting, billing and collection, water to drive improvements in urban service access to piped water supply in the 11 losses, and so on. The number of delivery through a pilot program in 26 utilities increased by 30 percent, and network members has increased to Indian cities, and aims to expand this average revenue collection period 18, and it is anticipated that a further coverage comprehensively. reduced by 35 percent, from 2004 19 pourashavas from the World Bank- to 2008. funded Bangladesh Water Supply and During 2008 a core team working with Sanitation Program (BWSSP) will join the ministry defined aspirational Eleven utilities have come together to the urban utility after the completion of benchmarks for service performance form an urban utility network to the project. WSP has been supporting across four services: water supply, promote knowledge sharing, with more the scaling up and institutionalizing of sewerage, solid waste management, utilities expressing an interest in joining the utility network. and storm water drainage. Phase 3: Activities 16 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities The MoUD identified key performance initiating performance assessments underwent a detailed training and indicators, defined the requirements for at a wider level. mentoring program on process supporting data and--extending the benchmarking. The approach entails a Going forward, the MoUD is committed to learning from Phase 2--specified criteria close analysis of the causes of problems using its already existing major national to grade the reliability of performance or inefficiencies in a given area, and a urban renewal program for the largest 63 data. Following wide consultations, the rigorous assessment of ways to cities, the Jawaharlal Nehru National resulting national framework was streamline and enhance operating Urban Renewal Mission (JNNURM), as formalized in a Handbook on Service procedures. Rawalpindi has focused on the vehicle for embedding benchmarking Level Benchmarking, and issued to all leak detection and repair, as a means to at state and city levels. Sixteen of the state governments in September 2008. It achieving its broader goals of better water participating pilot cities are covered under provides a uniform framework of 28 quality and lower nonrevenue water. the JNNURM. The MoUD is keen to performance indicators across the four Faisalabad has pursued revenue assess the improvements in service services, enabling a systematic approach improvement through strengthening its provision as a result of the vast to performance monitoring and inter-city billing and collection systems. investments being made. The aim is to comparisons. In February 2009, the shift the focus of sector practitioners from An important component of the MoUD launched a pilot Service Level asset creation to service outcomes. Cities benchmarking initiative has been the Benchmarking program, with WSP wanting to access the JNNURM's funding emphasis on information sharing and support, to build awareness of the new through the MoUD will need to commit to networking. In practice, the comparative framework, demonstrate its value, and collecting data against defined service assessment dimension of benchmarking learn by doing. The response of cities and performance indicators, and commit to has proved to be less about competition state governments has been positive; the achieving improvements in their service than about learning from the experience number of participating cities has grown delivery performance. A similar approach of others. Under a planned phased swiftly from the initial 10 to 26, drawn is being implemented for other urban approach, the learning from Punjab was from 14 states and one union territory. funding programs of the MoUD. used to scale up this initiative in the The cities range in size from those with a utilities of two more provinces (Sindh and population of 100,000 to those with over 12 million people. Pakistan the NWFP) and in the federal capital (Islamabad). As a first step, the officials The pilot program is leveraging funding In Pakistan, four rounds of benchmarking from the utilities of Sindh, the NWFP, for swift roll-out through existing donor- data have been collected to date, and and Islamabad were invited in sector funded governance-strengthening the findings are being used to track workshops to learn and interact with programs at state level, and the ministry performance improvements and inform Punjab WASAs. By end 2008, the initiative has indicated its willingness to provide debate on priorities for sector reform. was formally launched in the Karachi funding support for implementation of More systematic engagement by the Water and Sewerage Board (KWSB) and plans to improve utilities' performance provincial government with the findings is in 2009 in the Peshawar Development and data reliability. Apart from the WSP, needed to sustain momentum and Authority (in the NWFP). In 2009 the other development agencies partnering in provide the support and institutional KWSB institutionalized the initiative by the initiative are Japanese International reforms the WASAs need to operate establishing a dedicated cell in the utility Cooperation Agency (JICA), Department more effectively--in particular, a clearer with dedicated staff and funds. The cell for International Development (DFID), separation between authority and has been tasked not only with collecting Deutsche Gesellschaft für Technische operator roles. Performance and analyzing supply side data Zusammenarbeit (GTZ), Gates improvement planning has been boosted (benchmarking) but also carrying out its Foundation, and Public Record of with the introduction of CIB, or validation through demand side tools Operations and Finance (PROOF). The Continuous Improvement and (CRC and consumer perception survey). pilot initiative has lent momentum to Benchmarking, in two WASAs. With Growing interaction with SAWUN/ADB, existing initiatives in other states, for support from the South Asian Utility the South Asia Water Utility Network instance, Karnataka, Gujarat, Network and Asian Development Bank, funded by Asian Development Bank, is Maharashtra, and Madhya Pradesh, benchmarking representatives from promoting wider knowledge sharing and where efforts are under way for Rawalpindi and Faisalabad WASAs learning from good practices elsewhere. 17 Table 1: Summary of benchmarking developments (across Bangladesh, India, and Pakistan) Category Bangladesh India Pakistan Benchmarking 2005 2003 2005 initiated Driver in government Ministry of Local Government, Rural Ministry of Urban Development Housing, Urban Development, and Development, and Cooperatives (MoUD) Public Health Engineering Department (HUD&PHED), Government of Punjab, and the Urban Development Unit Number of current 11 utilities across Bangladesh 26 cities in 14 states and one Five WASAs in Punjab; one each in participants Union Territory Karachi, Peshawar, and Islamabad Key achievements G Two rounds of benchmarking G Two rounds of benchmarking G Four rounds of benchmarking data collected, for 2005­06 data collected, for 2003­04 and data collected to date: and 2006­07 2005­06 for 2003­06, 2003­08, MoUD aims to embed June to December 2007, and G Benchmarking performance G benchmarking into the way January to June 2008 indicators are informing the development of the first year towns and cities monitor and G In principle, agreement of performance agreement between report on their performance Government of Punjab to Dhaka WASA and government nationally, using nationally- establish a benchmarking cell sponsored urban renewal in HUD&PHED G Formation of an Urban Utility initiatives to pilot implementation. Network to promote G Learning from Punjab scaled up Growing engagement by knowledge sharing in three utilities--serving Karachi, state governments Islamabad, and Peshawar--in G At least three further utilities are G National Benchmarking Cell 2008 and 2009 keen to participate in established in the MoUD to benchmarking from 2009 G Punjab data hosted on coordinate and support state- IB-NET website and city-level benchmarking G Performance benchmarking/CRC G Strong emphasis on improving cell established in Karachi data quality G PIPs developed and implemented Across all three countries: with WSP-SA and SAWUN/ADB G Development of a range of performance improvement plans assistance Key benchmarking G Limited funding to implement G Limited engagement by challenges improvements government with benchmarking data G Little progress towards institutionalizing benchmarking in government Across all three countries: G Limited metering, which compromises the reliability of key indicators G Poor data reliability G Benchmarking largely externally driven rather than internally motivated G An organizational culture which is often slow to accept performance measurement, accountability to customers and to government, and improved service outcomes G Development of capacity within government to drive benchmarking, and use the findings to shape and drive sector reforms G No strong incentives for water supply and sanitation service providers to improve performance 18 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Benchmarking Findings The data generated through these data submitted was based on where utilities graded the reliability of regional benchmarking initiatives estimates without measurable their data on each indicator on a scale provides valuable information on verification. This is evident from data from D (estimate) to A (based on certain areas: the state of service from Phase 2 benchmarking in India, robust auditable data). provision in the region; and on the quality of data that may support comparison of performance. The Reliability of Benchmarking Data The findings on the utilities' performance cannot be assessed without an awareness of the limitations of the reported data. The next section highlights some limitations in the data, before reviewing the performance findings. Rigorous assessment of benchmarking data indicates a number of problems which currently compromise their value for comparing performance between utilities or over time. First, data collection and management systems are poorly developed in most utilities, and often data collected by different sections within a utility cannot be reconciled. This reflects the low priority that is given to performance measurement and monitoring within many utilities and the challenges that are faced by governments' attempts to improve monitoring. Second, many utilities simply do not have the data requested; much of the 19 Table 2: Reliability grading of data from Phase 2 benchmarking (in India, 2005­06) Utilities in Water Production Daily supply Metering Operating ratio Nonrevenue Staff per participating cities coverage (lpcd) (hours per (% of total (operating water 1,000 (%) day) connections) expenses/ (%) connections revenue) India, Bengaluru 91 143 2.5 90 1.1 48.63 5.42 2005­06 Bhubaneswar 45 269 3 1 3.3 59.78 11.7 Chandigarh 100 290 12 71 1.3 24.85 10.6 Chennai 98 107 3 4 1.4 15.81 12.6 Dehradun 80 149 4 8 1.4 26.76 6.3 Hyderabad 95 192 1 93 1.1 49.55 9.9 Indore 54 102 0.75 0 5.4 49.99 8.8 Jamshedpur 79 608 6 1 0.9 9.36 6.9 Pune 88 274 7 16 0.80 40 16.6 Rajkot 98 126 0.33 0.40 6.6 12 1.62 Source: WSP (2008). Explanation of color coding: Graded from A to D, where A has the highest reliability A B C D This grading system provides a useful and limited production and grading of data may be an important tool as it indicates the greater or lesser consumption measurement. next step in Bangladesh and Pakistan. reliability of the reported data. Even so, Information provided by utilities in Third, because measurement remains the validity of some of the grades Pakistan and Bangladesh reveals largely inadequate or even absent, assigned remains open to debate. For similar problems with the reliability of comparative benchmarking is not example, it may well be premature to assign an `A' grade for reliability on reported data, with the added necessarily accurate. For example, the indicators such as water production challenge that the reported data does International Benchmarking Network for and consumption per capita per day, not differentiate between estimates and Water and Sanitation Utilities (IBNET) given incomplete customer databases auditable records. Introducing similar indicators used for benchmarking in 20 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities the vast majority of connections across the region is not metered. The average across the Indian benchmarking participants was 30 percent, and far lower in Bangladesh and Pakistan; just 3 percent of connections in Punjab WASAs have functioning meters and are being read. Compare this with almost universal consumption metering--an average of 99.4 percent--across 40 South East Asian utilities surveyed in 2005 (SEAWUN/ADB, 2007). South Asia assume that each utility Figure 3: Metered domestic connections (in percent) measures water production and consumption comprehensively. The data are then used to derive the indicators for production and consumption per capita, nonrevenue water (NRW), unit cost of water produced and sold, and so on. However, measurement of production and consumption is inadequate across the region. Widespread reliance on tubewells across the region compounds the challenge of measuring flows at source. Lahore Water and Sanitation Agency (WASA), for example, reported in August 2008 that it had 373 tubewells with no bulk flow meters at all, and just 44 of the meters installed in the remaining 172 tubewells were functional (HUD&PHED/WSP/SAWUN, 2008). Given this reality, Punjab WASAs estimate production on the basis of the rated capacity of aging pumps, multiplied by the hours of pumping; actual flows and pumping rates are seldom measured. Benchmarking indicators for meter coverage show that consumption in 21 Phase 2 Benchmarking Findings what their aggregated demand is, and how effectively they are billing and The State of on the Extent of Consumption Metering in South Asian Utilities collecting payments from them. Service Provision Meter coverage is improving. However, Estimates, over-estimates, and faulty in the Region even where bulk and consumption data compromise the overall data-set, meters have been installed, many with implications for internal Overview malfunction and give incorrect readings performance assessment and The benchmarking findings confirm because an intermittent water supply comparison with other utilities. Weak data skew the average and the median the dire state of service provision affects the performance of meters. Few across several utilities, and distort and utility management across utilities test the performance of their performance reporting. Bangladesh, India, and Pakistan: meters regularly. Because of faulty meters, at least one Punjab WASA Despite these limitations, the data G No water utility in Bangladesh, derives data on the total volume of reveal some performance gaps and India or Pakistan is able to metered consumption from an estimate highlights areas where improvements provide continuous water. of nonmetered consumption. are needed urgently. Within utilities, the G A significant percentage of need to provide credible data for Most utilities use estimating techniques citizens do not receive services benchmarking is spurring efforts to and their best judgment to quantify the from their local water utility, and strengthen performance measurement volumes of water supplied and and data management systems. It spend many resources to cope consumed. Without comprehensive seems practical for utilities to try and with this failure in service. measurement of flows and metering of work towards improvement even within Reported water service coverage consumption, however, utilities cannot the limitations of the available data, ranges from 30 percent to 100 reliably calculate consumption per to help target and track service percent, with a simple average connection and per capita, the actual improvements. To become more across 26 utilities in the region of volumes of water they sell on a flat rate, effective in the longer term requires that 66 percent. unit costs, or how much water is lost reliability remains a priority and that through leaks and bursts, or the extent current data are not just simply G Relatively little water is being of nonrevenue water. Without accepted as the basis for planning metered, which makes costing, comprehensive and up-to-date without systematically improving data cost recovery, and effective customer databases, utilities can only itself. Introducing volumetric measures planning impossible. estimate how many people they serve, is essential. G Utilities are losing vast amounts of revenue from water losses in the network and unbilled consumption. The reported nonrevenue water figures are all based on estimates; real losses are likely to be substantially higher than the average of about 30 percent that was reported. This figure would be even higher if the systems were pressurized 24 hours per day. G Very little wastewater is treated before it is discharged into the region's water courses. This is 22 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities causing severe water Figure 4: Water coverage (in percent) contamination on a large scale, in a context of growing water scarcity and rising demand. G Tariffs lag far behind the real cost of water supply, and expenditure far exceeds revenue in most utilities. The average collection period for service payments is generally well over one year. The service performance of utilities in these countries lags far behind the average performance across 40 South East Asian water utilities, as assessed in 2005. Findings against Specific Indicators Selected benchmarking findings are reported below for Bangladesh (2005­06), India (2005­06), and Pakistan (2007­08), and are color-coded by country. Data from Bangladesh were not available or sound across all indicators. Wherever possible, a comparative benchmark is provided from a survey of 40 South East Asian utilities in 2005 (SEAWUN/ ADB, 2007). Coverage: Water Self-assessed coverage levels range from 15 percent to 100 percent, with average coverage markedly higher in India. No consistent approach was length of the water supply pipeline percentage of the total number of used to assess coverage, however. network as a percentage of the road properties, and make provision for Some estimated the population network. More advanced efforts are buildings with multiple dwellings. serviced by the geographical emerging such as to reflect the Even where water coverage is relatively coverage of their water and number of properties provided with a high, access is compromised by sewerage networks; others used the direct service connection, as a intermittent supply. 23 Water Availability the simplest and most important that it does, because intermittent benchmarking indicators. The absence supply has many serious social, No water utility in Bangladesh, India of benchmarking in the past has meant economic, and financial costs, or Pakistan is able to provide that this problem has not been such as: continuous water to all customers. highlighted. One of the benefits of Reported water availability ranges from G Poor water quality. It is almost introducing benchmarking could, 23 hours to less than half-an-hour a impossible to provide water that is therefore, be that simply by recording day, with the hours of water supplied safe for drinking with an interrupted how many hours water is available particularly low in India.2 This compares each day, attention is focused on the supply, because of secondary poorly with the average 22.9 hours problem, and on what is inhibiting more contamination in the network linked daily reported across South East Asia continuous water availability. By to no or negative pressure when the in 2005. tracking performance year on year, flow of water stops. Intermittent supply is both a cause and increasing availability may begin to a symptom of dysfunction, and one of receive higher priority. It is important G High maintenance costs. A high incidence of pipe bursts, with further interruptions to supply and water Figure 5: Availability: Hours of water supply per day wastage, as a result of frequent pressure changes; this in turn increases the maintenance burden and staffing costs. G High infrastructure development costs. Networks must be designed with larger pipes to accommodate continuous peak flows during limited hours of supply. G Users have to pay coping costs related to inconvenience, storage, disease, and so on. Once essential rehabilitation has been achieved, providing continuous water supply need not cost utilities more. With intermittent supply, the utility is simply forced to supply the same quantity of water in fewer hours, effectively providing peak flows at all times (Yepes et al, 2000). With continuous water supply, a range of demand management and water conservation measures becomes possible to reduce losses and make more efficient use of the water that is available in a context of rising demand. 2 The above data have been supplied by the utilities. They are not used to compare the performance of utilities within a country or region. The level of understanding of indicators and their definitions vary within utility and country. 24 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Nonrevenue Water losses are compromised. These NRW losses are costing utilities literally Without up-to-date customer billions in foregone revenue; equally, databases to ensure that all users are NRW represents the loss of being billed correctly, and without comprehensive measurement of substantial volumes of water, in a production and consumption, data context of growing water scarcity. on NRW are, at best, indicative. Weak data on physical water losses Where there is no consumption also makes forward planning for metering, customers pay a fixed tariff, supply augmentation difficult, as it is and there is no relationship between difficult to assess whether sufficient the prices customers pay for water and supply gains can be achieved through the volume they consume. Without loss reduction, or whether new comprehensive metering, utilities' source development is needed to efforts to track NRW and minimize meet demand. Figure 6: Nonrevenue water (in percent) Note: The 2007­08 data from Punjab WASAs of Pakistan revealed an annual loss of Rs. 2.0 billion on account of nonrevenue water. 25 Coverage: Sewerage Figure 8: Secondary wastewater treatment (in percent) Sewer coverage is harder to quantify than water supply, as connections are less visible. Using a simple average, Figure 7 shows that sewer coverage is higher in the five Pakistani cities than the 10 Indian cities; Bangladeshi utilities did not report on this indicator, and sewering is known to be severely inadequate in that country. In India, water coverage is higher than sewer coverage. In Pakistan, there is higher sewer coverage than water coverage; this is because of widespread reliance on private boreholes for water in those cities. Wastewater Treatment The reported data reveal the extent to which the participating utilities are discharging untreated sewage back into water sources. Sewer coverage is inadequate, even Figure 7: Sewerage coverage (in percent) by the reported data. This means that a significant amount of wastewater is not collected. Of the wastewater that is collected, a significant proportion is not treated at all before it is discharged. This situation is particularly severe in Pakistan, where just 7 percent of the wastewater collected in Faisalabad receives secondary treatment; none of the other four WASAs treat their wastewater at all before discharge. The result is severe contamination of ground and surface water sources (with particularly worrying implications for those who draw their water directly from tubewells and rivers), higher water treatment costs, and wide-ranging negative environmental impacts. 26 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Figure 9: Staff per 1,000 water connections Staffing vary, and at least becoming more orientation required for effective consistent with a benchmark practice performance. At least three constraints Official staffing levels in most utilities should be an area of follow-up work are evident: civil service staffing policies are high when compared with as part of performance improvement constrain utility managers from hiring international averages, which are planning. Compounding this the staff they require; they cannot below five per 1,000 connections. inefficiency is the fact that too few of incentivize them appropriately; and Again, it should be emphasized that the staff employed have the on-the-job training seems to be limited the methods of recording staffing level competencies or customer service by most accounts. 27 Operational Expenditure A significant number of Indian and Pakistani utilities are spending a very high proportion of their total operating expenditure on salaries and energy costs. This leaves very little for the essential maintenance needed to prevent a further deterioration of service quality, let alone service improvements. The high staffing levels raise the salary bill. Energy costs form another major cost element, and in several cities are driven upwards due to the high reliance on tubewells and associated pumping costs. There are indicators that pumps are not suited to the Figure 10: Salaries and electricity as a percent of total operational expenditure particular conditions and drive up the pumping costs. As a consequence of this high expenditure, relatively little is being spent on preventative maintenance and good asset management. In a vicious cycle, decaying infrastructure raises the maintenance burden and operating costs. Operating Ratio This indicator shows the ratio of expenditure to income. Ideally, it should be around 0.68, to fund a surplus for good asset management, network expansion, and renewal. Even with inadequate spending on operation and maintenance, it is evident that expenditure far exceeds income in most utilities. The combination of subeconomic tariffs, inadequate customer account data, and poor collection efficiency means that utilities depend on 28 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Figure 11: Operating ratio municipal or government subsidies responding to the symptoms of to close their funding gaps (and under-funded operations and asset some default on their electricity bills decay. The reliance on subsidies as well). Many subsidies are also makes managers of the service generally ad hoc so that it is more providers accountable and difficult for utilities to do forward responsive mainly to the municipal budgeting or medium-term planning. governments and politicians at a As a result, many utilities are very operational level rather than to engaged in reactive `fire-fighting', their customers. 29 Assessment These findings show just how poorly citizens are being served, across Bangladesh, India, and Pakistan, and highlight the unsustainability of urban water services across the region in a context of rapid urbanization. They underscore the urgency of wide-ranging reforms in the water sector. In each country, the findings have been presented at benchmarking workshops attended by government, utilities, and civil society representatives. The discussions emphasized that benchmarking should not be a goal in its own right, but that its value is best extracted if it forms part of wider performance improvement planning and monitoring. With this in mind, utilities can define a clearer focus to address improvements. The next section describes some of these performance improvement initiatives, before assessing the broader scope of the reforms needed across the sector. 30 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Performance Improvement Planning In the light of the findings reported Box 4: Examples of areas which utilities are targeting for through benchmarking, it is evident performance improvement that metric benchmarking cannot be regarded as an end in itself. The · Increase water coverage. objective is to improve performance, within each utility and across the · Build overhead reservoirs to increase continuity of water supply. sector. A strong feature of the Water · Update and upgrade customer database. and Sanitation Program­South Asia (WSP-SA)-supported benchmarking · Conduct customer surveys. initiatives across Bangladesh, India, · Establish a customer call center. and Pakistan is the emphasis on using the findings from · Mitigate arsenic contamination through developing alternative sources benchmarking assessments to drive of supply. performance improvement planning. · Develop surface water sources to reduce reliance on declining With support from a range of groundwater sources. initiatives from government, regional · Improve leak detection and repair. networks, and funding partners, action plans are being developed · Relocate pipelines running alongside sewer lines or through drains. and implemented to remedy · Rehabilitate decayed pipelines. identified gaps and weaknesses. · Extend metering and replace dysfunctional meters. The data suggest that many performance weaknesses will not be · Implement comprehensive nonrevenue water reduction strategy. remedied only through capital · Optimize power consumption through auditing electricity investment projects. Within utilities, consumption and resizing pumps. the development of more effective internal performance management · Improve delivery of bills. systems is needed just as much as · Increase the number of pay-points. is infrastructure development. Upgraded customer databases, · Reduce the collection period. improved billing and collections, and · Decrease staff per 1,000 connections. more metering will improve financial · Revise organogram and fill critical posts. performance, and fund some service improvements--before · Improve communications with nongovernmental and citizens are asked to pay more community-based organizations. for services. 31 Support initiatives are giving particular departments in Bangladesh, India, specific aspects of their billing and attention to reducing nonrevenue water and Pakistan. The Clinic, which took collection systems that required (NRW), because it makes more water place in Bangkok and Singapore, attention. Two years later, examples of and revenue available to support better exposed participants to revenue some of the improvements were service delivery. In May 2007, for management best practices at the presented at a follow-up workshop in example, the WSP-SA hosted a water supply agencies operating in New Delhi, showing some results `Customized Clinic on Billing and those cities. The Clinic required achieved by participating utilities and Collection' for revenue officials from six participants to develop reflecting on challenges in taking this water utilities and municipal water implementation plans to address work forward. 32 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Box 5: Rawalpindi WASA: Improving services through better revenue management Recognizing that low payment levels reflected customers' dissatisfaction with the quality of services, Rawalpindi Water and Sanitation Agency (WASA) developed a comprehensive strategy to deliver service improvements. Under the leadership of its Managing Director, since 2006, the organization developed a multifaceted performance improvement strategy. In early 2007, with technical assistance from the Water and Sanitation Program­South Asia, the WASA began a comprehensive survey of all domestic and commercial customers to establish precisely who its customers were, whether their account information was captured correctly on the WASA's database, their billing status, whether they had outstanding payments and the reasons for this, how many were metered, how many people were served per connection, average daily water consumption, and so on. Equipped with this enhanced understanding of its customers, the WASA was able to upgrade its database from around 78,000 to around 124,000 accountholders, regularize unauthorized connections, pursue collection of arrears, and steadily improve revenue collection rates. The WASA is now financially self-sustaining for all operational expenditure, and is able to pay all staff salaries and electricity bills from its own funds. These measures have enhanced revenue recovery from the previous 53 percent to 86 percent now. This improved revenue is providing funding for new service improvement strategies. A top priority is to improve water quality through reducing contamination. Most Punjab WASAs have been reluctant to include water quality among their benchmarks--because they know there are severe problems but are not necessarily equipped to fix them. Rawalpindi WASA, however, is tackling this head-on. Testing of water quality at source showed that while 36 percent of samples were unfit for drinking, the quality of water deteriorated significantly in the network. After treatment, the water that reached consumers was contaminated in 64 percent of samples. Aging, leaking water lines were passing through sewage drains, and with intermittent water supply, contaminants were entering the network. Over the course of one year, the WASA reduced the number of samples failing water quality tests at the point of consumption from 64 percent to 26 percent. This was achieved by relocating distribution lines out of common service channels and gutters, and rehabilitating water treatment plants so that they are no longer a source of contamination. Water quality improvements are being taken further, using Continuous Improvement and Benchmarking approaches to improve the integrity of the water network. Leak detection and repair operations are being process-mapped, to identify ways of streamlining and strengthening operational management as well as developing standard operating procedures to institutionalize improvements. The increase in annual collection of reported nonrevenue water figure from indicators. Despite a huge increase water charges by Rs. 30 million since 12 percent in 2006 to 30 percent in in revenue, the collection rate has 2006 has reduced its dependence on 2009. These results illustrate several declined because overall billing has state subsidies, and is enabling the important points with wider relevance increased faster than payments. organization to implement service for using performance data: improvements--including network G Performance improvements include extensions--without having to rely G Reporting on ratios (for example, the increased reliability of data, solely on external funding. Furthermore, billing versus collection) can obscure and may result in an apparent with improved data quality, the Rajkot real performance improvements if deterioration in reported Municipal Corporation has revised its seen in isolation from other performance. In the Rajkot example, 33 the revision of reported NRW figures Box 6: Rajkot: Acting on benchmarking findings to refine performance from 12 percent to 30 percent reflects far more credible data. The Rajkot Municipal Corporation (RMC), in the west Indian state of Gujarat, G Public education and awareness was an active participant in the Water and Sanitation Program­South Asia's campaigns are needed to build (WSP-SA's) Phase 2 benchmarking initiative in 2005­06. Findings from understanding of what performance the benchmarking process helped inform a range of service delivery data actually show to prevent possible improvements. misinterpretation. In 2006 the RMC reported nonrevenue water of 12 percent, but with just In some instances, benchmarking is 1 percent of connections metered, it acknowledged that this was purely an helping to focus and refine existing estimate. It set up a work team to improve billing and collection performance. support strategies. Dhaka Water and It developed improvement plans tackling five areas: data cleansing, Sewerage Authority, for example, is regularization of illegal connections, outsourcing of collection, improved receiving assistance from the Government collection rates, and the establishment of a call center. of Bangladesh and the World Bank through a five-year integrated The results, achieved over three years, have been impressive: performance improvement plan focused · Customers can now engage with the Corporation more easily through on improving its financial and operating a 24x7 call center. Software was developed in-house to manage efficiency. Data collation and assessment complaints received by phone, fax or face-to-face at a zonal office. for performance benchmarking was undertaken while the performance There was some initial resistance from staff when poor performance improvement plan (PIP) was being was revealed by the new response tracking system, but this has developed; the performance gaps been overcome. revealed through benchmarking · Over 20,000 unauthorized connections have been regularized; strengthened the PIP significantly, by citizen resistance was addressed through information campaigns in the highlighting specific performance local media. parameters needing attention and making the plan more systematic and strategic. · Payment has been made easier by providing pay-points within a radius of Similarly, a Bangladesh government water 3 km from customer residences, and allowing payments through the Post supply program is using benchmarking Office. The RMC is now planning to make provision for web-based data from five pourashavas to plan and payments. Considerable effort was put into publicizing the new ways of fund service expansion. In Punjab, paying service charges. Pakistan, two World Bank-funded projects The improvements achieved are summarized in Table 3. in the pipeline--Punjab Large Cities Project and Punjab Water Supply and Table 3: Rajkot Municipal Corporation: Performance improvement in water billing and collection Year Water billing Water % increase in % increase in Collection No. of payers No. of new collections billing collections rate connections 2005­06 81,660,410 62,191,965 76% 83,196 3,345 2008­09 209,273,305 92,465,813 48% 31% 44% 87,446 11,087 34 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Sanitation Project--are also utilizing functional area--for example, Box 7: Some performance the information generated through complaints handling or leak improvements require funding performance benchmarking and detection--to map the existing might be financing some of the PIPs process flow and identify Chapai Nawabganj, a small town in developed so far. opportunities for streamlining or Bangladesh, is severely affected by strengthening performance. arsenic contamination. Two-thirds of the pourashava's (that is, municipality's) 21 Using Process Effective, efficient ways of getting the job done can then be formalized wells have been taken out of production Benchmarking through standard operating because of severe contamination, resulting in a supply of 35 liters per person per day. to Drive procedures (SOPs) so that good practice becomes institutionalized, Benchmarking, meanwhile, has revealed Improvements and does not rest on the ideas other performance weaknesses--notably and experiences of individuals the extent of the gap between the cost of Benchmarking does not explain who may leave. Performance on service provision and income, as a result the causes of the gaps exposed, the basis of these SOPs can be of poor collections and low tariffs. but it does reveal areas that measured and monitored regularly, are contributing to weak and benchmarked against In response, the town's Mayor worked performance--poor collection other organizations, to drive hard to persuade citizens to accept a inefficiency, unrealistically low continuous improvement. tariff increase, arguing that service tariffs, limited metering, and so on. improvements were not possible without In Punjab, Pakistan, the analysis of increased revenue. He succeeded in A growing number of utilities are using data has identified gaps and a few getting their approval, and tariffs were process benchmarking approaches to WASAs have developed PIP to plug raised. In parallel, the pourashava set up identify process inefficiencies and the performance gaps. The a water bill collection and maintenance correct them. Where metric, or Rawalpindi and Faisalabad Water committee, comprising the Water Super quantitative, benchmarking reveals and Sanitation Agencies (WASAs) and four ward councilors, to track areas of comparative strength and are two utilities who are benefiting complaints handling and go from house to weakness, process benchmarking from a rigorous training and house motivating people to pay their bills. explores the underlying drivers mentoring program in process The combination of their efforts and those of performance. benchmarking provided by the of the pourashava's billing and collections Asian Development Bank and A work team assesses in detail the staff saw collection efficiency rise from SAWUN/ADB. Rawalpindi WASA sequence of activities in a specific 53 percent in 2006 to 82 percent is using Continuous Improvement two years later. and Benchmarking methodologies However, the Mayor faces growing to analyze its work flows to improve dissatisfaction from the people, because leak detection and repair, towards despite the best efforts and a tariff its goal of better water quality increase, the pourashava has not been and lower NRW, while Faisalabad able to deliver the improvements it is working to strengthen its billing promised as funding anticipated from the and collection systems to arsenic mitigation program failed to improve revenue. materialize. Chapai Nawabganj's plight Process benchmarking is an echoes the experience of several integral part of the business Bangladeshi benchmarking participants approach of Jamshedpur Utilities where lack of capital funds is holding and Services Company, a private back the implementation of a number of company formed in 2003 to drive urgently needed investments for service service improvements in delivery improvements. Jamshedpur. Its approach is described in Box 8. 35 Box 8: JUSCO: A private sector approach to performance measurement and benchmarking Jamshedpur Utilities and Services Company (JUSCO) emerged as one of the strongest performers in the 2005­06 Phase 2 benchmarking initiative supported by the Ministry of Urban Development and the Water and Sanitation Program­ South Asia (WSP-SA). In August 2009, its achievements were recognized with a National Urban Water Award for Citizen Services and Governance. Jamshedpur is an industrial town of 700,000 people in eastern India's Jharkhand province, which was created in 1905 to serve the Tata Iron and Steel Works. Municipal and power services were built, operated, and maintained by Tata Steel's Town Division until 2003, when the Town Division was converted into a wholly-owned subsidiary. This new company, JUSCO, is the only corporate private sector provider of civic and municipal services in India, including water and wastewater services. In 2003, shortly before JUSCO was established, Tata Steel brought in an international water services company, Veolia Water, to help improve the management of drinking water supply and wastewater services. With Veolia Water's assistance, the new company addressed a range of performance areas--customer management, metering, nonrevenue water management, detailed mapping of its operations to streamline processes and enhance efficiencies, laboratory upgrading to improve water and wastewater quality monitoring, asset mapping with geographic information systems, and so on. Implementation of the new performance improvement strategies was then monitored closely. Performance measurement, benchmarking, and continuous performance improvement are fundamental to the corporate culture of the Tata group of companies, and JUSCO is no exception. Like every Tata company, JUSCO identifies strategic challenges, strategic objectives, short- and long-term plans, and performance indicators to track progress in achieving its goals. A detailed Balanced Scorecard is used to spell out its annual and medium-term year objectives and targets in four dimensions: financial management; customer-related service delivery (customer satisfaction, service coverage, water quality, complaints handling, and so on); internal business processes (operational management, performance efficiency, and so on); and community-oriented initiatives such as water conservation through rainwater harvesting. Targets are set, with close monthly monitoring, and managers are made personally responsible for performance--with rewards for achieving targets and penalties if they do not. This is an important feature that differentiates JUSCO from its public sector peers. Continuous improvement in JUSCO is achieved by involving all levels of employees in assessing performance and process. Each business process is mapped in detail, scrutinized, and discussed, and small group improvement discussions involve staff at all levels to build a sense of common purpose and involvement. Operations are divided into small functional areas, called circles. Each circle analyzes its performance to identify shortcomings and ways of performing better, and formulates an action plan with clear time-based targets and monitoring indicators. Performance against targets is monitored monthly to understand the impact of the actions, and refine the performance improvement plan further. Managers are held personally accountable for achieving set targets. Performances on internal and outcome-based indicators are then compared to regional and international benchmarks. It was on this basis that JUSCO participated in the WSP-SA's 2005­06 benchmarking initiative. However, a JUSCO spokesperson maintains that while comparison with other utilities is valuable, JUSCO's main goal is to out-do its own performance: "We are competing against ourselves, not anyone else." Each year, JUSCO's reported performance against each target on its Balanced Scorecard is assessed rigorously by specialized Tata performance auditors, who assign the company a grading out of 1,000. Achieving a high score in this assessment is the chairman and executive officer's first priority. 36 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Strengthening Benchmarking to Drive Sector Reforms Institutionalizing performance measurement systems systems to drive and coordinate data needed to demonstrate improvements. collection, and if it does not dedicate Benchmarking It is evident that decisive government resources to engage with the intervention is needed to drive reported findings, interrogate them, in Government performance improvements. and act on them. Utilities need both monitoring and support. The introduction of benchmarking Institutionalization of benchmarking in represents an attempt to build government is essential to enable it to The proposed establishment of a awareness of the value of good track and shape sector performance. Performance Benchmarking Data Cell information management, to reveal In Pakistan and Bangladesh, in the Punjab's Housing, Urban performance, and track progress benchmarking by Water and Sanitation Development and Public Health towards defined performance Agencies/Water and Sewerage Engineering Department is hoped to improvement goals. Governments have Authorities will lose impetus if enable regular data collection and a critical role to play in incentivizing government does not set up its own assessment. Dissemination of key utilities to report their performance, and introducing disincentives for poor quality data and poor performance. The main reason for the poor quality of much of the data reported by the benchmarking participants is that, to date, public utilities have not been incentivized to collect credible data. Unlike private sector entities, which are held to account by their shareholders, and whose performance affects their market share and survival, public sector utilities are seldom required to report to government--at any level--on their performance, and are not required to account for dismal performance. This is perhaps related to the fact that public reporting reflects on the action or inaction of local or national government (Kingdom & Jagannathan, 2001). Consequently, public utilities have had few incentives to change their performance, or develop the 37 data and analysis in a user-friendly to function more effectively, there central government funds for urban format is equally important to will be limited improvement in the renewal to a commitment from support public debate and decision quality of their data or the caliber of individual urban local bodies (ULBs) to making in provincial and city their performance. report their performance--and those district government, and inform of service delivery agencies in their In India, the leadership of the Ministry of targeted interventions. areas--against defined service level Urban Development (MoUD) has engaged closely with the benchmarking benchmarks. It requires each ULB to In the absence of other sector process and findings since its grade the reliability of its each regulatory mechanisms, utility inception, culminating in the launch reported indicator, and to prepare an benchmarking represents one of the in 2009 of the Service Level information management few sources of information available to Benchmarking pilot program. Working improvement plan in addition to a government to track and assess in tandem with state governments, the service quality improvement plan. It sector performance and inform ministry aims to institutionalize envisages data verification by decision makers about strategic benchmarking across government as independent third party agencies to priorities and funding needs. an integral part of improving service cross-check the validity of the data Currently, there are few delivery and public accountability. that ULBs report. consequences for utilities that submit poor data or perform poorly. Until The MoUD is incentivizing More information on the MoUD utilities are incentivized and enabled benchmarking by linking access to approach is provided in Box 9. 38 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Box 9: Linking Service Level Benchmarking to national funding programs In India, the national Ministry of Urban Development (MoUD) is seeking to embed benchmarking into the way towns and cities monitor and report on their performance nationally, using the US$10 billion Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and other nationally sponsored schemes to pilot implementation. Rapid urbanization and the scale of urban growth calls for a thorough overhaul of service delivery and reform to enhance local government accountability for service delivery. The government sees benchmarking as an important mechanism for supporting this, especially through public disclosure of commitments, performance against targets, and links to Performance Improvement Plans. Building on the lessons of benchmarking experience in India and elsewhere, the ministry has led the development of a Handbook for Service Level Benchmarks. The Handbook identifies nine key performance indicators for water supply, nine for sewerage management, eight for solid waste management, and two for storm water drainage. It provides detailed information on what information is required and how to report it. Each participating city is advised to collect and submit data to reveal its performance against each of the listed indicators--annually to state and central governments, and more frequently at local level. A report card format has been developed to capture performance objectives and data. An example of how each Service Level Benchmark indicator will be reported in a performance report card is presented below. Service Level Benchmark: Coverage of water supply connections Time period Performance Performance Data Action plan for achieving the target achieved targeted reliability FY 07­08 71 B (baseline) FY 08­09 75 All backlog applications for new connections will be cleared within 12 months FY 09­10 85 Major source augmentation and transmission project will be completed Regularization of all illegal connections in north of the city FY 10­11 90 Distribution improvement project will commence Standposts will be replaced in wards 13 and 17 Regularization of all illegal connections in south of the city FY 11­12 95 Standposts will be replaced in wards 19­23 In due course, the report cards are expected to be made public, and used by governments and other stakeholders to hold utilities to account against their improvement targets and action plans (MoUD, 2008). Strengthening Information Systems Reporting on performance is meaningless unless the data used for performance measurement are reliable. To ensure consistency in reporting and comparability of the performance data within and between cities, the requirements for each indicator are specified in detail. Each indicator is defined clearly, with a practical explanation of what data to collect, how to calculate the indicator, and how frequently it must be measured. To monitor service delivery differences within and across a given city, the Handbook defines the geographical area for which the indicator must be measured--water distribution zone, ward, urban local body or city. The reliability of measurement for each data input must be specified, on a scale from A to D, in line with defined reliability criteria for each. National Technical Advisors have been appointed, with the Water and Sanitation Program's support, to provide guidance on data gathering methodologies, indicator definitions, and later to advise cities and consultants on the preparation of performance improvement plans. Regional and national benchmarking workshops will be convened to share information and reflect on the lessons of experience. Beyond the first 12-month period, each city's performance will be reviewed against its action plans for improving service delivery and information management. Scaling up Based on implementation experience in the pilot cities, the MoUD will encourage state governments to prepare a benchmarking scale-up plan. This would include arrangements for the creation of a state-level Benchmarking Cell to coordinate and drive benchmarking in the state; extension of the benchmarking program to other cities in the state; and, crucially, identification of how to integrate benchmarking information into state government decision-making processes. In this way, the national government aims to promote the use of benchmarking data to inform policy development, funding transfers to states and cities, evaluation of personnel involved in service delivery, and so on. 39 Moving Box 10: Rajshahi: Comparing supply-side with demand-side data beyond Utility Benchmarking In Rajshahi, Bangladesh, the Water and Sanitation Program­South Asia (WSP-SA) worked with the City Corporation and the local NGO Forum on Data Drinking Water Supply Sanitation in 2008 to pilot a customer satisfaction survey. The aim was to compare supply-side data from service utilities with Third party auditing and verification of demand-side data from users. A survey questionnaire was drafted and plans reported benchmarking data is essential prepared for the survey, working in conjunction with representatives of the to establish the integrity of what utilities City Corporation, NGO Forum, and Department of Public Health Engineering. report--even if only on a random basis; The survey was conducted by nongovernmental organization volunteers in this is particularly important where five of the city's 30 wards, with 200 people surveyed in each ward. government offers financial incentives to evidence of performance improvement. Three key findings stood out: But if the aim of benchmarking is to G Residents rated the quality of the drinking water lower than the utility had, improve utility performance and service with less than half of respondents using the water directly from the tap delivery, it is essential that without boiling or filtering it; 27 percent rated the water quality as poor, benchmarking moves beyond a utility against the City's assessment that just 15 percent failed to meet supply-side perspective. The views, quality standards. needs, and experience of local citizens are needed to shape assessment of G Most users spend eight times more on electricity than they do on water. service delivery, and validate (or not) a G Average daily water consumption was far lower than the utility assumed. utility's reported performance. Demand- Instead of 98 liters per capita per day (lpcd), the customer survey showed side data are essential to enable utilities that the average was 78--but this varied sharply by income group. Well-off and government to understand consumers used on average 99 lpcd, while poor and hard core poor improvement priorities from the perspective of citizens and users. This consumers used 43 and 28 lpcd, respectively. Volumetric data would approach is being used productively in clearly have helped to highlight differences across a town or city Manila to complement and strengthen move effectively. supply-side benchmarking. House-to-house surveys by a utility to collect information on the number of connections, people served per connection, hours of supply, and so on, are an important starting point. Even more valuable are efforts to engage citizens about their service needs, and their experience of service delivery by the utilities. Utilities are generally wary of engaging with their customers where services are poor, but experiences with citizen engagement initiatives in Bengaluru (India) and Karachi (Pakistan) show that dialog can build understanding of the respective needs and challenges of citizens and utilities. 40 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Key Lessons from Regional Benchmarking Experience Simply measuring performance accustomed to revealing their which each indicator is based. One and sharing information within and performance. Utilities need to know option is to use the International between utilities is a significant that government will scrutinize the Benchmarking Network for Water performance driver data they submit, ask questions, and and Water Utilities' data reliability engage with its implications. grading system, and to reward a utility Performance data are being increasingly recognized as a critical for each reported indicator that Government gains real insight into driver of strategic planning, progresses from a low towards a service delivery gaps, utilities' real performance management, and higher reliability grading. challenges, and the sector's reform improved sector accountability, by the needs when it puts in place systems Third party verification should be participating utilities of the WSP-SA at state and national level to drive, introduced to validate the data which and higher tiers of government in the coordinate, collect, and assess utilities report. three countries. Poor performance, benchmarking data. The insights it and the reasons for poor performance, gains are invaluable for driving policy Keep performance improvement are obscured when performance is not development for service delivery planning pragmatic measured and monitored regularly. reform, and shaping the governance Through revealing how service Utilities are responding to the findings frameworks that the sector needs. provision by one utility compares with of their benchmarking results with bold another, benchmarking is drawing Benchmarking requires clearly- improvement plans across a range of attention to the good practices of the defined performance indicators performance areas. But `less' can be strong performers, and sending and consistent data sources `more': too many objectives can mean signals to the poor performers of the a loss of focus and effectiveness, and Benchmarking is premised on need for corrective action. without clear time-based targets and comparative assessment, and secured funding, improvement plans Through quantifying performance comparison is not feasible unless a may well lose momentum. across a range of operational and standardized approach to collecting service parameters, management can and analyzing data is used. Networks between the utilities that set improvement targets and start to do benchmarking allow success Where a utility is required to provide identify what is getting in the way of stories to be shared and promote data for an indicator which it does not achieving performance goals. Through adoption of good practice normally measure, it is likely to provide stimulating the development of ad hoc information. Most utilities will systems for collecting and assessing Mutual support and knowledge need support and guidance in setting performance data, benchmarking is sharing between utilities is one of the up consistent performance laying the basis for improved sector most valuable outcomes of regional measurement systems and robust governance and regulation. benchmarking initiatives. It shifts information management systems. the focus beyond comparative Institutionalize benchmarking to Without this it is not possible to track performance assessment to optimize the benefits of utility trends or monitor improvements recognition of successes and benchmarking for sector reform over time. discussion on how to improve Benchmarking can be onerous and Wherever possible, utilities should performance and implement good compromising for utilities who are not indicate the reliability of the data on practices in a different context. 41 42 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Next Steps The value of water utility benchmarking In India, the 26-city Service Level · Widen dissemination of is increasingly recognized in Benchmarking pilot initiative aims to benchmarking data to citizens' Bangladesh, India, and Pakistan, and stimulate the adoption and groups, and promote dialog about programs across the region are being institutionalization of benchmarking how best to use the findings to scaled up. nationally as a key part of service support improved service delivery. delivery reform. · Build government's capacity to drive In Pakistan, the country's biggest water Key priorities moving forward include: benchmarking, and use the results utility, Karachi Water and Sewerage to shape sector reforms and provide Board, as well as the Peshawar · Improve the reliability and investment support. Development Authority in the North comparability of benchmarking West Frontier Province and Islamabad Following on from the introduction of data, by incentivizing and assisting Capital Development Authority are benchmarking over three phases, as utilities to strengthen their gearing up to begin benchmarking. described at the beginning of this management information systems. review, the fourth phase of In Bangladesh, at least three more · Broaden the scope of performance benchmarking in Bangladesh, India, utilities will join the benchmarking assessment so that it should and Pakistan might look like the figure initiative in 2009. include customer perspectives. given here. Phase 4: The way forward 43 44 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Conclusions The introduction of performance water utilities. Without reliable The benchmarking data also highlight benchmarking is driving a new quantitative data, managers are the limits of what internal utility reforms recognition of the importance of operating largely in the dark, unable to can achieve, and the need for wider- measurement as a management tool. It identify trends or track the impact of ranging sector reforms--to clarify and is exposing performance gaps, and their decisions. Equally, the lack of streamline the lines of accountability, highlighting the value of integrated credible performance information provide a clearer separation between information systems to support decision makes it difficult for government or the role of authority and provider, and making and track progress towards citizens to hold service providers to incentivize a greater customer and defined targets. The information has account, and contributes to commercial orientation. Performance critical importance for performance ongoing poor service delivery improvements will be limited as long as improvement planning, and for shaping across the region. utilities are structured as technical the evolution of government policy and service departments of government, By tracking performance outputs and institutional frameworks. It enables but required to perform like outcomes, benchmarking supports a development partners to target their commercial utilities. reorientation in the way utilities assess assistance more effectively. their performance--beyond The emergence of an organizational Given the absence of formal monitoring infrastructure development to network culture that strives for continuous systems to track the performance of management and customer service. performance improvement--with water utilities, the institutionalization of This, in turn, paves the way for a new the associated data generation, benchmarking represents a major step era in service provision, where performance management, and forward to building the necessary comparative performance data are benchmarking systems that go with it-- systems, procedures, and structures made public and provides a basis for is unlikely as long as all the current needed for sector oversight. A key dialog between government, citizens, disincentives to real change prevail. finding from benchmarking across and service providers around how Benchmarking lays a basis for stronger South Asia is that performance tracking best to achieve the service governance systems and accountability systems are poorly developed in most improvements the region needs. across the sector. 45 References Cabrera, Enrique Jr. 2008. `Benchmarking in the Water Industry: A Mature Practice?' Water Utility Management International, June 2008. Corral, Violetta P. 2008. `Training on Performance Benchmarking for Philippine Water District.' October 21­24, 2008, MCWD Regional Training Centre, Cebu City. Dassler, Thoralf, David Parker, and David S. Saal. 2006. `Methods and Trends of Performance Benchmarking', Utilities Policy Vol. 14:3, September 2006. Government of Bangladesh, Ministry of Local Government, Rural Development, and Cooperatives, Local Government Division, and the Water and Sanitation Program­South Asia. 2008. Bangladesh Water Utilities Book. Draft. Government of India, Ministry of Urban Development. 2008. Handbook on Service Level Benchmarks. Government of Punjab and the Water and Sanitation Program­South Asia. 2009. Data Book: Punjab Water Utilities. Draft. Housing, Urban Development and Public Health Engineering Department, Government of Punjab, Water and Sanitation Program­South Asia, and the South Asian Water Utilities Network. 2008. `National Workshop on Performance Benchmarking.' August 26-29, 2008, Burbhan. Unpublished proceedings. Kingdom, Bill. 1996. Performance Benchmarking for Water Utilities. Kingdom, Bill, and Vijay Jagannathan. 2001. Utility Benchmarking: Public Reporting of Service Performance. Public Policy for the Private Sector, Note Number 229. World Bank. South East Asian Water Utilities Network and Asian Development Bank. 2007. Data Book of Southeast Asian Water Utilities, 2005. Water and Sanitation Program. 2006. Urban Water Sector in South Asia: Benchmarking Performance. Water and Sanitation Program. 2008. Phase II Benchmarking Urban Water Utilities in India. Yepes, Guillermo, Klas Ringskog, and Shyamal Sarkar. 2000. `The high costs of intermittent water supplies.' http://www.liemberger.cc/downloads/publicationsfiles/Yepes.pdf 46 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Appendix South Asian utilities participating in performance benchmarking, 2005­07 Country Town or city Utility name Indicative size: Number of water connections Bangladesh Dhaka Dhaka Water Supply and Sewerage Authority (WASA) 243,000 Chittagong Chittagong Water Supply and Sewerage Authority 43,810 Rajshahi Rajshahi City Corporation 22,650 Bagerhat Bagerhat Pourashava 3,200 Chandpur Chandpur Pourashava 4,620 Chapai Nawabganj Chapai Nawabganj Pourashava 3,750 Chuadanga Chuadanga Pourashava 2,250 Gazipur Gazipur Pourashava 4,010 Jessore Jessore Pourashava 8,950 Manikanj Manikanj Pourashava 4,500 Narsingdi Narsingdi Pourashava 2,060 India Bengaluru Bangalore Water Supply and Sewerage Board (BWSSB) 479,720 Bhubaneswar Public Health Engineering Organization 52,210 Chandigarh Municipal Corporation of Chandigarh 137,409 Chennai Chennai Metropolitan Water Supply and Sewerage Board 365,680 47 South Asian utilities participating in performance benchmarking, 2005­07 Country Town or city Utility name Indicative size: Number of water connections Dehradun Uttarakhand Jal Sansthan 62,370 Hyderabad Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) 526,870 Indore Indore Municipal Corporation 158,920 Jamshedpur Jamshedpur Utility Services Company Limited (JUSCO) 42,000 Pune Pune Municipal Corporation 106,500 Rajkot Rajkot Municipal Corporation 192,000 Punjab, Faisalabad Faisalabad Water and Sanitation Agency (F-WASA) 93,000 Pakistan Gujranwala Gujranwala Water and Sanitation Agency (G-WASA) 31,413 Lahore Lahore Water and Sanitation Agency (L-WASA) 570,000 Multan Multan Water and Sanitation Agency (M-WASA) 34,347 Rawalpindi Rawalpindi Water and Sanitation Agency (R-WASA) 124,000 48 A Review in Bangladesh, India, and Pakistan: Benchmarking for Performance Improvement in Urban Utilities Water and Sanitation Program E 32 Agargaon, Sher-e-Bangla Nagar Dhaka 1207, Bangladesh Phone: (880-2) 8159001-14 Fax: (880-2) 8159029-30 55 Lodi Estate New Delhi 110 003, India Phone: (91-11) 24690488, 24690489 Fax: (91-11) 24628250 20 A Shahrah-e-Jamhuriat Ramna 5, G-5/1, Islamabad, Pakistan Phone: (92-51) 2279641-46 Fax: (92-51) 2826362 E-mail: wspsa@worldbank.org Web site: www.wsp.org February 2010 WSP MISSION: WSP's mission is to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services. WSP FUNDING PARTNERS: The Water and Sanitation Program (WSP) is a multi-donor partnership created in 1978 and administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services. WSP provides technical assistance, facilitates knowledge exchange, and promotes evidence-based advancements in sector dialog. WSP has offices in 25 countries across Africa, East Asia and the Pacific, Latin America and the Caribbean, South Asia, and in Washington, DC. WSP's donors include Australia, Austria, Canada, Denmark, Finland, France, the Bill and Melinda Gates Foundation, Ireland, Luxembourg, Netherlands, Norway, Sweden, Switzerland, United Kingdom, United States, and the World Bank. For more information, please visit www.wsp.org. AusAID provides WSP-SA programmatic support. PEER REVIEWERS: Alexander V. Danilenko, Chris Heymans, Jemima T. Sy, Vandana Mehra, and William Kingdom. TASK MANAGER: Masroor Ahmad, supported by Md. Akhtarzaman and Vandana Bhatnagar. AUTHOR: Katherine Eales, supported by Masroor Ahmad. Editor: Anjali Sen Gupta ACKNOWLEDGMENTS: Pictures by: WSP­SA, Asad Zaidi, and Sajid Darokhan Senior officials of the provincial and national governments, utility heads, and performance Created by: Write Media benchmarking focal persons in utilities in Bangladesh, India, and Pakistan. Printed at: PS Press Services Pvt. Ltd.