Managing Water Services Through Service Differentiation and Pricing in an African City

A key challenge for managers of water utilities in developing countries is to provide services to the rising urban population in a financially sustainable manner. The paper examines the management of water services in an African city which piloted service differentiation and pricing. Among the key findings was that substantial improvement in the provision of water services to the urban poor was attained. Cost recovery was achieved through innovative structuring of public/private partnerships, an appropriate pricing policy, and flexible payment systems. The project demonstrates that (a) by structuring service delivery with appropriate pricing, utilities could serve more customers (including people living in informal settlements) at affordable cost and achieve financial sustainability, and (b) service differentiation and appropriate pricing has the potential to improve urban water services in low-income countries.     

Water services performance: do operational environment and quality factors count?

Decision makers must keep in mind that water services have an invaluable ‘price’ for the public budget and society’s welfare. However, due to the specific features of the service, water utilities are prone to inefficiency. Thus, performance evaluation becomes indispensable to face this constraint. Besides the application of the traditional technique of Data Envelopment Analysis to evaluate the performance of Portuguese water utilities, this study also implements the robust technique of order-m to assess the influence of operational environment on water utilities’ performance. In spite of several reforms, the Portuguese water sector still reveals significant levels of inefficiency, partially caused by an inappropriate operating scale. Concerning the operational environment, it was possible to observe a positive influence of private sector participation, economies of scope, and groundwater sources on efficiency. The influence of the ‘quality of service provided’ was also studied in this performance analysis.     

Utility governance,incentives, and performance: Evidence from India's urban water sector

In developing countries, managing trade-offs between socioeconomic and environmental objectives in water utilities is challenging. The Indian water sector suffers from financial losses, lack of access, and poor service quality. We use a stochastic frontier analysis approach to study 304 urban water supply services during 2010–2015. We examine the role of socioeconomic and environmental aspects. Results indicate that water supply exhibits significant inefficiencies and, thus, scope for improvement. Measures to reduce non-revenue water, increase water quality, and improve cost recovery and bill collection, may help induce efficiency. Results also indicate that increasing water supply hours would improve service performance.     

Is the price of water for residential use related to provider ownership? Empirical evidence from Spain

This paper assesses the relationship between provider ownership and the price of water for residential use set by 386 Southern Spanish municipalities. Our main contribution to the previous literature is that we go much further than merely distinguishing between private and public ownership. First, we find that prices are lower when the urban water service is directly provided by town councils. Second, when water services are contracted out to external companies, the prices set by public utilities are higher than the prices of private utilities due to larger fixed quotas. Finally, water prices are also higher when the provision of the service has been privatised to an institutionalised public-private partnership compared to contractual public-private partnerships.     

Re-examining the ‘low water tariff’ hypothesis: lessons from Hyderabad,India

Researchers suggest urban water utilities in India operate on low tariffs, consequently earning revenue insufficient to recover operation and management (O&M) costs of water storage, treatment and distribution. From findings of a field study conducted in Hyderabad, India, the paper suggests otherwise. While ‘stated’ tariffs are low, households currently pay tariffs far higher than in other regions of the world because of institutional indifference toward improving service attributes, particularly quantity and poor measurement of domestic water consumption; following which, poor communities pay more for less. While poor cost recovery precludes improved performance of urban water utilities, targeting this facet alone at the cost of other aspects of service does not, as the paper demonstrates, necessarily lead toward qualitative service improvement or toward improved households' perception of water services.     

Operating in the shadowland: Why water utilities fail to manage decaying infrastructure

Decaying water infrastructure is a growing challenge in high-income countries while at the same time being under pressure from other socioeconomic and environmental issues. This paper analyses why addressing these challenges is so challenging, despite the critical role of water service for society. The paper is based on a study of the Swedish water sector and reveals how the utilities are influenced by several factors that constrain their agency. Most importantly, the utilities operate in a ‘societal shadowland’ where the public and politicians take their services for granted, lowering the sense of urgency and impeding their ability to take action.     

Finding locations for public service centres that compete with private centres: Effects of congestion

We propose a locational model for public service centres when they compete with private centres. Customers may be captured by the centre offering shorter distance or lower waiting times. Both types of centres provide paid services to high-income customers, and public centres also provide subsidised services to low-income customers. Equilibrium must be found in public centres between low-income population coverage and high-income population capture. We analyse the effects of waiting times on the design of the public service and apply the model to data for Santiago, Chile.Received: 8 February 2003, Accepted: 9 September 2003, JEL Classification: C61, I18, L33This research has been partly funded by FONDECYT (Chilean Science and Technology Research Fund) Project Nr. 1020778.     

Capture and corruption in public utilities: The cases of water and electricity in Sub-Saharan Africa

The paper focuses on public utilities services located in poor countries with a special attention to capture and corruption issues. It confronts the optimal policy of Auriol and Picard [Privatization in Developing Countries and the Government Budget Constraint, Nota di Lavoro 75.2002. Fondazione Eni Enrico Mattei, Milan, Italy] regarding private sector involvement in public utilities with empirical evidence on water and electricity in Sub-Saharan Africa (SSA). As predicted by the theory, the participation of private unregulated firms in the supply of services for the middle class and poor people is fairly common in SSA. By contrast, services for rich people are provided by public utilities. Theory suggests that their prices should be high so that the public firms make a profit. Yet piped water and electricity are subsidized. This suggests that there is a problem of capture by the ruling elite. Since ruling elites design privatization programs, there is concern about their optimality. The paper shows that the social cost of corrupted privatization is non-monotone in the opportunity cost of public funds. Because of the fiscal loss it represents, privatizing profit centers of public firms entails huge social costs in very poor countries.     

Aligning stakeholder interests: How ‘appropriate’ technologies have become the accepted water infrastructure solutions for low-income areas

Service differentiation and the use of "appropriate technologies" are often presented as alternative approaches to providing water service to low-income areas. Service differentiation allows water service providers to manage the risks associated with service expansion to these areas. We argue that rather than a choice of the service provider alone, the decision for service differentiation should be seen as a consensus between different actors in the water services sector. A review of secondary data, and semi-structured interviews with diverse stakeholders in three Kenyan cities, show that managers of water utilities also choose these strategies because they appeal to and align with the interest of donors, governments, sector organisations, and alternative providers.     

Public values as essential criteria for public entrepreneurship: Water management in France

Historically, major private companies were the dominant players in urban water supply in France. However, a new era of water supply restructuring is underway, whereby formally private water corporations are being made public. Given that many such public water corporations adopt practices associated with private entities, it is essential to identify what is expected of “public” entities by virtue of the fact that they are public. In this article, we examine the foundational ideas behind the raison d'être of public entities, which engender priorities that differ from their private sector counterparts. Using a research-action methodology, water utility management, staff and consumers of Greater Nantes were asked to specify the meaning of “public” and how it should be operationalized in the case of publicly owned utilities. The research shows that the attainment of public values is what lends legitimacy to a public utility charged with the provision of essential services. In this case, even in a context of neoliberal governance, where private values of an economic nature conflict with public goals; public values take precedence in the management and the regulation of the service.     

Electric services and building fires

This paper discusses various issues regarding the supply of electric power and building fires. The scope of the paper is limited to services, service entrances and power supply. Electrical fires involving customer property are rarely caused by electric services or supply problems but instead are usually caused by customer systems and equipment. Physical evidence of shorting or faulting of the service or service entrance is commonly found at fire scenes but seldom is evidence of fire cause.Those service-related problems which do create fire hazards involve the customer system, physical damage, lightning, or improper service voltage. Fire hazards created by the connected service typically willinvolve either lightning or improper service voltage. Electric utilities are responsible for the supply system and for power supply within the system voltage range. Customers are responsible for premises wiring systems.     

人群活动导向的老城区公服设施供给模式研究

在我国城镇化转向注重质量发展背景下,传统公服设施配置思路已难以适应居民多元化需求,尤其在用地紧张的老城区,公服设施需求与供给的矛盾十分突出。以广州越秀老城区为例,基于公服设施POI数据和步行轨迹大数据解析老城区现有公服设施存在问题,同时结合对越秀区梅花街道86位居民的访谈调研,以不同人群活动特征为出发点,通过测度设施布局与人群活动轨迹特征,提出有别于新区的老城公服设施优化策略。研究表明：现有相关设施配置标准更多是解决“有”与“无”的问题,而忽视设施实际设施使用效果;老城区设施规划应区别新区集中式设施服务中心,结合不同人群生活需求和出行特征,以点状分散、路径串联的模式优化设施布局,可以一定程度上改变老城区发展困境。     

Strategic planning for water utilities in developing countries

A common feature of public water utilities in developing countries is their lack of a commercial orientation. As a result, many utilities find themselves locked in a cycle of poor corporate performance—with low coverage of services, huge amounts of non-revenue water and insufficient funding for maintenance and expansion. Strategic planning in such turbulent times should be relevant, cost-effective and transforming. This paper discusses a strategic planning framework to assist utilities in developing meaningful and useful performance improvement plans. Recent application of this framework in Africa has demonstrated its relevancy, cost-effectiveness and potential to transform poorly performing water utilities.     

Quo vadis efficiency analysis of water distribution? A comparative literature review

Recognizing the growing importance of scientific benchmarking in water distribution, we provide a comprehensive survey of the available literature. We begin with a discussion about the (limited) use of benchmarking in the regulation of UK water utilities, and then extend the analysis to regulated water sectors in other countries. We find no clear impact of public or private ownership; instead, the institutional settings appear to be a dominant driver of efficiency. Quality and structural variables are significant parameters; and water losses and population density are also important drivers. Analysis reveals that economies of scale only exist in fragmented water industries, whereas economies of density are omnipresent. We find evidence suggesting important economies of scope (e.g. between water and sewerage). Finally, we summarize the tensions that exist in attempting to measure efficiency in the water industry and draw conclusions about how to improve efficiency analysis in the future.     

To corporatize or not to corporatize (and if so,how?)

Governments around the world are increasingly turning to the use of stand-alone, state-owned utilities to deliver core services such as water and electricity. This article reviews the history of such ‘corporatization’ and argues that its recent resurgence has been heavily influenced by neoliberal theory and practice, raising important questions about whether it should be adopted as a public service model. Not all corporatizations promote commercialization, however. The article also discusses stand-alone utilities that have managed to stave off market pressures and develop in more equity-oriented directions. The scope for non-commercialized corporatization is narrow, but given the expansion of this organizational model it is important that we understand both its limitations and potentials, particularly in low-income countries in the South where service gaps are large and equity is a major challenge.     

Citizen Preferences and Paying for Police

Abstract: Researchers frequently approach questions dealing with local fiscal decision‐making using economic models. These models typically base the demand for public services on a set of socioeconomic characteristics that serve as rough proxies for voter preferences. Our study focuses more directly on preference formation and explores the nature of the relationship between citizens’ attitudes about police services and their willingness to pay for them. We pay particular attention to the role of demographic traits, television media, and direct contact with service providers. We present data from a survey of Connecticut adults and use these data to test direct and indirect effects models with regression analysis. We find evidence that attitudes about police predict willingness to pay for police services, holding the demographic attributes of respondents constant. We also find that the effects of some demographic traits on demand for services are mediated by preferences, as are some types of experience and media exposure.     

COORDINATION OF WATER AND SEWER EXTENSION POLICY WITH LAND USE PLANNING: Key Factors Influencing the State of Practice

City planners have argued for over 20 years that water and sewer extension decisions should be coordinated with comprehensive land use and growth management plans. It is shown that a modicum of coordination, in fact, is occurring among utilities in nine southeastern states. Key factors promoting coordination include rapid population growth, a highly educated utility director, and adoption of sophisticated internal capital programming techniques. Those findings suggest that state capacity-building programs designed to improve the effectiveness of utility leadership and operations will help foster increased coordination of utility investments with community land use and growth management planning. It is found, however, that the use of special districts to provide utility services tends to stifle coordination. That finding suggests that states should take steps to discourage the use of special districts to provide services, such as water and sewerage, that strongly affect population distribution and whose provision therefore should be closely coordinated with community growth management policies.     

Regional consortia and transaction costs for sanitation services in Brazil

Studies on public cooperation usually focus on its impact on the service costs experienced by service providers. However, engagement in public cooperation in service provision often seeks other outcomes, like service coverage (measured by the population served) rather than simply minimizing service expenditure. Moreover, public cooperation by local governments, as either ‘providers’ or owners, generates transaction costs arising from negotiation, monitoring, agency costs and the enforcement of cooperative agreements. However, to date, little empirical effort has been directed at determining the impact of transaction costs on service provision owners and service outcomes. This paper addresses this gap in the empirical literature by examining the relationship between cooperative agreements between Brazilian municipalities for water and wastewater provision and service coverage in the light of transaction costs. We find that transaction costs are higher for cooperative providers due primarily to low service coverage levels, especially in sewage services that demand high investment in assets with high specificity. However, lower expenditures may occur after initial up-front investment.     

新时代街道和社区公共服务设施规划探索——从“服务短缺”到“治理协同”的重庆实践

街道和社区是居民日常生活的基本单元和社会治理的重要平台,街道和社区级公共服务设施是城市基本公共服务的重要载体。本文从“服务补缺”和“治理协同”的视角,揭示当前基层公共服务设施规划、建设、管理中的短板与问题,探索基层社会治理单元与基层公共服务单元相耦合的公共服务设施规划路径和实施政策机制,提出通过建设街道和社区综合服务中心,构建“20分钟街道公共服务圈”和“10分钟社区生活服务圈”,弥补基层公共服务设施建设的短板,优化城市基空间组织结构,促进城市规划与社会治理的结合。     

当前居住区公建配套标准的制订

本文从分析影响居住区公建配套的主要因素出发 ,归纳了 2 1世纪初居住区公建配套设施的发展趋势 ,并结合上海市 5 0年住宅公建配套设施建设的实际经验 ,以及《城市居住区公共服务设施设置规定 (DBJ0 8- 5 5 - 96 )》在实施中出现的问题 ,按照市场经济发展的要求 ,重新设计了居住区公建配套设施的项目指标及其规模 ,并提出若干建议 ,为政府部门提供决策支持参考