Water Loss Management – Cutting Gross Loss Cheaper Than Setting Up New Projects

By Sourav Daspatnaik, CEO, Swach Environment Private Limited, a SREI Group initiative.

Water Loss Management – Cutting Gross Loss Cheaper Than Setting Up New Projects

In India, almost one-third of the population lives in cities and this is set to grow to half of the population in the decades to come. With economic growth, the urbanization is happening rapidly and resulting in major pressure on water supplies, wastewater collection and treatment, water quality and public health.

The water demand will continue to grow and by the year 2025, it is expected to increase by over 20%, fuelled by the industrial requirements which are projected to double from 23.2 trillion liters at present to 47 trillion liters. Domestic demand is expected to grow by around 40% from 41 to 55 trillion liters while irrigation will require 14 per- cent more to 592 trillion liters up from 517 trillion liters currently. The water ministry predicts that per capita water availability will reduce by 36% in 2025 and by about 60%p in 2050 from the level of 2001.

Non-Revenue Water

One of the major issues affecting water utilities in India is the considerable loss of water from the amount of water put into the distribution system and the actual water billed to consumers. A phenomenon called as non-revenue water (NRW), a well-known issue that results in large volumes of water being lost through leaks in the supply system and not being invoiced to customers.

In India, the non-revenue water level is quite high which results in huge volumes of treated water being lost during transmission and distribution that affects the financial capability of water utilities through lost revenues and increased operational costs. A high level of NRW indicates that our water utilities are poorly managed with governance issues, lack in accountability and technical and managerial skills necessary to provide reliable service. The problems have been further aggravated with the lack of policy making and governance issues.

Water Loss Management

Reducing water loss is critical to efficient resource utilization, efficient utility management, enhanced consumer satisfaction, and reduction in capital-intensive capacity addition. The costs of water service are much lower when undertaken through investments in reducing water losses rather than through investments in capital projects to augment supply capacities. The utility, which has initiated and sustained water loss management programs, has significantly gained in terms of financial returns and better consumer services.

Cities like Singapore, Manila, Phnom Penh and even Dhaka have successfully implemented water loss management programs to reduce NRW to below 20% levels. In India a few successful examples of utilities (e.g. BWSSB, Nagpur, Aurangabad, Mysore, Lattur & Khandawa) where serious actions for water loss management have at least started. For all water utilities in India, reducing NRW should be the top priority to follow when addressing the increased demand for piped water supply.

Expanding water networks without addressing water losses will only lead to a cycle of waste and inefficiency. The high rate of NRW is also related to poor energy efficiency since water transported in the distribution system is loaded with energy through the distribution and treatment processes. Therefore, reducing NRW is important to overall efficiency and financial sustainability of the utilities, since it provides additional revenues and reduces costs.

Suggestions

Recharge Aquifers

The World Bank report found that up to 80% of subsidies in the country went to medium and large farmers whereas the most affected by falling water tables are the rural poor and marginal farmers who lack the means to deepen their wells and install more powerful pumps. Make regulation to delinking water rights from land rights and treat groundwater a common resource so that the over exploitation can be controlled. At the same time, start the process of recharging aquifers through both natural processes and human efforts.

Demand Management and Tariff Reform

The tariff reform must be combined with water delivery mechanism that consistently works and eliminates inefficiencies such as transmission losses and theft of water. For agriculture, the ideal policy is to promote water-saving crop and adoption of new irrigation technologies. The tariff structure that truly works for domestic, agricultural, and industrial users needs to be considered

Delivery Efficiency with Technology

Water delivery mechanism should be accurate as a fully functional consumer metering system can limit drinking water wastage and enforce conservation. Bulk metering for all water sources should go with consumer metering for domestic, industrial, and agricultural use. A stringent legislation can help streamline equipment supply by discouraging production of inefficient conventional devices.

Groundwater Management

In many states of India, the groundwater withdrawal has surpassed recharge capabilities. In many parts of the country physical transportation of water is the only solution to meet drinking water needs, an unsustainable practice. Micro watershed planning and restoration of traditional water bodies can help recharge underground aquifers across the country.

Water Harvesting

With surface water not available, rainwater harvesting is the most viable solution to meet drinking water needs. Rainwater harvesting must be a part of the micro-watershed planning and undertaken in all rural and urban settings to meet the demand for drinking, domestic, agriculture, and industrial water.

Improving Affordability

Improving affordability of service would require cost optimization together with cost recovery strategies. This can be done through transparent, well-targeted subsidies for the poor, both to help obtain proper connections to service and to encourage the consumption of a minimum quantity of water.

Institutional Arrangements – Project Design and Contract Management

A meaningful focus on service delivery improvements and realistic contract management is possible only when the entity accountable for service delivery is the key counterpart to the contract and clear institutional mechanism are provided to buffer the contract against external and extraneous interests. Institutional fragmentation weakens PPP design and implementation. The PPP designs require the city to develop sophisticated contract management skills and decision making capability.

Capacity Building

A professional association of service providers could play a key role in disseminating best practices, implementing full scale benchmarking, and providing training and certification for sector professionals. Training institutions would need to adapt their programs, currently focused mainly on technical design issues, to the new needs of the urban sector. Special information programs would need to be developed for key stakeholders including local politicians, consumers, decision makers, engineers and the non-government organizations with a special interest in water supply and sanitation. In the rural sector, special training programs would also need to be developed to build the capacity of local municipalities and panchayats.

Communication and Stakeholder Engagement:

If upfront communication about the rationale for a PPP is weak it puts the projects at risk. This will have a cascading effect when citizen support is poor and political consensus across party lines is lacking. An effective communication strategy helps mitigate political, social economic technical and even commercial risk. Effective stakeholder management and communication helps to mitigate the damage that can be done by lack of stakeholder buy in.

Way forward

A strategic and pragmatic approach, based on real-time data and business processes analysis has to be implemented in order to address properly some of the key challenges if they are to thrive and remain competitive over the coming decades.

The good news is there are inspirational efforts currently in place in many of our cities to improve the provision of water. We need to prioritize greater investment and move faster from the strategizing and goal setting into actions that improve the availability of water with quality.

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