MIYAHUNA Study Tours (2007-2008)
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  • 1. ORGANIZATIONAL LEARNINGOPPORTUNITIESSTUDY TOURS CONDUCTED FOR MIYAHUNAIN 2007 - 2008Colombia, United States of Americaand SpainContract No. AFP-I-00-03-00035-00, Task Order No. 539SEGURA / IP3 Partners LLCMay 2009The authors’ views expressed in this publication do not necessarily reflect the views of the UnitedStates Agency for International Development or the United States Government.
  • 2. AcronymsAGBAR Aguas de BarcelonaAMR Advanced Meter ReadingASERCO AGBAR Servicios CompartidosAWC Aqaba Water CompanyCOP Chief of Party SEGURA/IP3DCWASA District of Columbia Water and Sewer AuthorityEMASESA Water Company of SevilleEMIVASA Water Company of ValenciaGWh Giga watts per hourIT Information TechnologyITA Instituto de Tecnología del Agua (Water Technology Institute)JD Jordanian DinarJVA Jordan Valley AuthorityLBWD Long Beach Water DepartmentMIYAHUNA Jordan Water CompanyMW Mega wattsMWDSC Metropolitan Water District of Southern CaliforniaMWI Ministry of Water and IrrigationNRW Non-revenue WaterPRV Pressure-reducing ValveSWP State Water ProjectUFW Unaccounted for WaterO&M Operations and MaintenanceUSA United States of AmericaUSAID United States Agency for International Development€ Euro$ United States DollarWAJ Water Authority of Jordan UnitsKm2 Square kilometerKw-h Kilowatt-hourlcd Liters per capita per dayMCM Million cubic metersMCM/year Million cubic meters per year Currency equivalents (2008)1€ = 1.31 $ dollars1 JD = 1.43 $ dollarsThe authors’ views expressed in this publication do not necessarily reflect the views of the UnitedStates Agency for International Development or the United States Government.
  • 3. CONTENTSINTRODUCTION ..............................................................................................................2WATER PRICING..……………………………………………………………………….4MANAGING WATER SCARCITY………………………………...……......................13CUSTOMER SERVICES………………………………...……......................................38CORPORATE GOVERNANCE ….………….………………..………...…...................46INFORMATION TECHNOLOGY ...……………...........................................................56STRATEGIC PLANNING …………………………………………...……………........69CORPORATE CULTURE ………………………………………………….…………...75TRANSIENT MANAGEMENT ………………………………………………....... ......83BULK WATER MANAGEMENT…………………….………………………………...90OTHER INNOVATIONS …………………………………………………………….....94 ANNEX – STUDY TOURS DETAILS………………………………………...106ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 2
  • 4. INTRODUCTIONMaking MIYAHUNA’s vision, mission, and values real and not empty words on paper is amajor challenge for everybody in the company -- the management committee, senior andmiddle level management, and all employees.For the management committee and senior management, the challenge is to createconditions that make productive change a natural way of life in MIYAHUNA. This way ofthinking is aptly expressed by Rosabeth Moss Kanter when she says that all managers havetwo jobs – “handling today’s issues and getting ready for the future.”1In line with the above thinking, this report was prepared by MIYAHUNA’s management incooperation with SEGURA/IP3 to assist management and employees at all levels in gettingready for the future by identifying, considering, and implementing opportunities forimproving the quality and efficiency of the services. The report seeks also to encourage theexchange of ideas with staff of sector government agencies and other water companies.The report consolidates the results of study tours conducted in 2007 and 2008 as part of thetechnical assistance provided to MIYAHUNA by USAID through SEGURA/IP3. The studytours were to Colombia, Spain, and the United States2. The participants in the tours weremembers of the management committee and directors.The observations during the study tours reflected in this report should provide anopportunity for organizational learning aiming at developing MIYAHUNA into a change-adept rather than a top-down bureaucratic organization. In the words of Moss Kanter, achange-adept organization anticipates, creates, and responds effectively to change while thetop-down bureaucratic organization lacks those characteristics.The expectation of the management committee and senior management is then thatMIYAHUNA’s managers and employees at all levels learn from the lessons and experiencesincluded in the report and use them for developing and acting on an agenda for continuouschange and improvement, and for identifying and implementing specific projects. TheSuper Client Program, the NRW Reduction Program and the Tariff Review Program underimplementation at MIYAHUNA are good examples of the potential of the ideas in thereport.The management committee and senior management are determined to continue searchingfor opportunities for organizational learning. To make this approach effective,management expects the collaboration and direct involvement of all MIYAHUNA’semployees without consideration of ranking. Initiatives and suggestions from everybody arewelcome.1 Moss Kanter Rosabeth. On the Frontiers of Management. Harvard business review, 1997, page, 3.2 Detailed reports for each visit were prepared including analysis and recommendations from tour participants.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 3
  • 6. TARIFF POLICY: THE EXPERIENCE OF COLOMBIA Cost recovery and tariff policyThe Colombian government and sector authorities have made sustained efforts since theearly 1990s to raise water and sanitation tariffs closer to cost recovery levels. Those effortshave been instrumental in lifting the average domestic water and sewerage tariff from USD0.33 per m3 in 1990 to USD 0.78 in 2001. The tariffs vary from municipality tomunicipality taking into account the particular characteristics of each system, particularlytheir cost levels.The impact of the tariff increases in low-income groups has been alleviated by a cross-subsidy from some group of consumers to other groups. This cross-subsidy scheme datesback to the 1960’s and was subsequently included in the 1991 Constitution and, morerecently, developed in more detail by law 142 of 1994. The cross subsidy system is part ofa national tariff framework applicable to the electricity, telephone, and water and sanitationservices.The system considers a six-level social stratification of all customers throughout thecountry, according to the physical quality of the housing and general amenities. Theclassification is undertaken by local authorities in line with broad national guidelines.Households in the upper two strata (strata 5 and 6) have surcharges added to the cost of theservices provided. Strata 4 pay the cost of the services, while those consumers in the loweststrata (strata 1 through 3) receive subsidies (discounts over the cost of the services).The funds generated by the surcharge to strata 5 and 6 and to non-residential consumers ineach company are applied to cover the cost of the subsidies to strata 1 through 3 in the samecompany. If the surcharges exceed the subsidies, the difference goes to a “Solidarity Fund”in the municipality. On the contrary, if the surcharges are insufficient to cover the subsidies,the municipal government should cover the difference with resources from the “SolidarityFund” or from its own source of revenue.The surcharges and the discounts are explicitly reported on the customer’s bills. Two-Step tariff determinationStep 1: Establishment of referential cost by the regulatory commissionThe water companies prepare estimates of the full costs incurred to deliver the services(Referential Cost), following a methodology defined by the Regulatory Commission. Themethodology includes a detailed description of acceptable costs in each cost category andalso provides for “efficiency cost adjustments” based on statistical cost analysis carried outby the Commission.The typical monthly bill (average bill) has a cost structure that shows investments as thepredominant component, followed by operation and maintenance cost, administrative costand, environmental charge. See graph below.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 5
  • 7. Typical Monthly Bill Components (14.34 cm/month) Average Environmental Average Charge Administrative Cost Average Operation & Maintenance Average Cost investment cost 23% 60%Step 2: Establishment of final tariffs by the municipality or the districtThe final tariffs are determined by the company in accordance with the Referential Cost asapproved by the Regulatory Commission. Tariff componentsFix Component ($/subscriber):It includes the total administrative costs divided by the number of customers. This amountis denominated the average administrative cost (CMA) and it is included as a fix charge inthe water bill.Variable Component ($/m3):Is based on the volumetric consumption and is the result of the addition of: 1. Average operation and maintenance cost 2. Average Environmental Tax cost 3. Average cost of investments Referential cost formula Ref.Costw = CMAw + Billed m3 * (CMOw + CMIw+ CMT) Ref.Costww = CMAw w + Billed m3 * (CMOw w + CMIww+ CMT)ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 6
  • 8. Where: CMA: Average administrative cost CMO: Average operation and maintenance cost CMI: Average investment cost CMT: Environmental tax Tariff calculation by Strata Tariffi = CMAref * fi + CMLPref * Billed m3 * fi Tariff is indexed by inflation every year Where: • CMAref : referential administrative cost • CMLPref : the variable operation and maintenance cost • i: tariff Strata (from 1 to 6, being 4 the referential cost) • fi: percentage of subsidy or contribution of the referential cost Solidarity contributions (Subsidies)According to Decree 57 of 2006, categories 5 and 6 of subscribers and the commercial andindustrial categories have a tariff with the following contributions to the average tariff of thereferential cost: Contributions: • Strata 4: 0% • Strata 5: 50% • Strata 6: 60% • Commercial: 50% • Industrial: 30%The main purpose of the tariff regulation as defined in decrees 57 and 1013 is to achieveequilibrium between subsidies and contributions from other subscribers and the externalfunds provided by the municipality or central government. CONTRIBUT SUBSIDIES ION STRATA 5 AND 6 COMMERCIAL, STRATA INDUSTRIAL 1, 2 Y 3 CONTRIB. STATE AND MUNICIPALITYORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 7
  • 9. SubsidiesThe tariff as percentage of the referential cost is presented in the table below for the city ofBogota for the month of September 2007: Typical Tariff Bill for As % of Aug. 07 Refferential JD (equiv.) Cost Strata 1 4.7 29% Strata 2 9.8 61% Strata 3 14.4 91% Strata 4 15.9 100% Strata 5 30.4 191% Strata 6 37.9 238%The percentage contribution from each category compared to the percentage variation of thetypical bill (average) per category as depicted in the last table is different because thedifferent water level consumption between categories. For example in the case of Bogota inSeptember 2007, the customers in strata 5 contributed 50% of the surcharges of contributionto finance the subsidy, but due to the higher level of consumption, their average bills end upbeing 91% more than the category 4.The financing of the cost of services for strata 1, 2 and 3 is presented in the following graph. Estrato 1 1 Strata Estrato 2 Strata 2 Payment Payment by Payment PAGAN  by User Other Users by User PAGA  USUARIOS  in 30% Strata 34% in 60% Strata USUARIO APORTANTES 30% 30% 34% 60% PAGAN  PAGA  Payment by USUARIOS  USUARIO Other Users APORTANTES 60% 60% 60% PAGA CIUDAD from the Payment by the city Payments Payment by the the PaymentPAGA CIUDAD from City 10% 10% Solidarity Fund Solidarity Fund 6% 6% 10% 6% Payment by PAGAN  USUARIOS  Other Users Estrato 3 3 Strata APORTANTES 7% 7% Payment PAGA CIUDAD Payment by the the Payment from city by Users by User 1% Solidarity Fund 1% in 92% Strata 1% 92% PAGA USUARIO 92%ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 8
  • 10. TARIFFS: THE EXPERIENCE OF EUROPE AND SEVILLE - SPAINThe delegation listened to various presentations related to tariffs: • The tariff adjustment process in the European Union • Seville Water Company (EMASESA) tariff adjustment programEuropean Union Tariff Experience: Water Framework Directive (FWD)The ITA made a presentation about a directive approved by the European Parliament in2000 establishing the water policy framework (Water Framework Directive- FWD) to beapplied by the member countries. The framework established a 9-year period for all statesin the Union to adopt it. The FWD also established deadlines for the member states toreport to the European Commission on progress made in its implementation. The principlesfor water costing are presented in the graph below. Principles for Water Costing FWD Directive The member states commit themselves to adopt no later than 2010 a policy of water prices that will provide adequate incentives for an efficient use of water resources that contributes to achieving the environmental objectives of the present directive.Implementing the above principles was a significant challenge, as most European countrieswere far from applying them. Greece, Portugal, Ireland and Spain were the countries thatneeded the major adjustments. The countries requiring comparatively less adjustment wereUnited Kingdom, France and Germany. See graph below.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 9
  • 11. Water Tariffs in European Countries before the Implementation of FWD €/m³ Portugal Greece Ireland Spain  France U.K. Germany Denmark   Water Tariff in 2000 Water Tariff needed to recover full costSome European cities had experienced steep adjustments in tariff rates even before thedirective. Copenhagen, for example, increased tariffs 20 times between 1972 and 1992 and,then, in the ten years between 1992 and 2002 increased tariffs again by 25% or 2% per year. Copenhagen Water Tariff Evolution €/m³            YearInnovative Tariff System in SevilleEMASESA implemented in 2006 an innovative tariff system for residential users. The newsystem replaced the progressive tariff block system implemented in 1995, which awarded abonus to households with low consumption, and charged higher prices to households withhigher consumption. The decision to change was due to EMASESA’s perception that thesystem had one major flaw, as large number of households with only one or two peoplebenefited unfairly from the allowance for low consumption, and, conversely, a large numberof families with a higher number of members were penalized with higher tariffs.After reviewing various options, EMASESA introduced in 2006 a tariff system forresidential consumption that takes into account the number of inhabitants per household andprovides bonuses to customers with consumption levels below 10 m³ per quarter per personORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 10
  • 12. and penalties for those that consume more than 15 m³ per quarter per person. The rest of theclients are grouped in categories I and II.The system has been gradually developed since 2006 initially being some customers billedfor per-capita consumption while others billed on the basis of household consumption. In2009 all customers are billed on a per-capita base.The tariff system is based on EMASESA’s estimates of average members living in aresidency. If a family has more members living in the house, it should notify it to thecompany so its consumption can be measured and thus be entitled to a bonus. The bonus isequivalent to 26% of the total bill.The tariff in process of implementation had the following stages:YEAR 2006: Blocks I and II are calculated onBlock with bonus: less than 3.33 m³/person/month the basis of 4 people perBlock I: From 0 to 16m³/household/month household.Block II: More than 16 m³/household/monthAfter new information showed that the average household had 2.4 people per household, anew estimate was obtained for 2008 decreasing the average household from 4 to 3.YEAR 2008:Block with bonus: less than 3.33 m³/person/month Blocks are calculated on theBlock I: From 0 to 12 m³/household/month basis of 3 people per household.Block II: From 13 to 15 m³/household/monthBlock III: More than 15 m³/household/monthFor 2009, it is planned that the tariff will be calculated by person. If this information is notavailable, the limits of the blocks will be calculated based on 2.75 persons per household.YEAR 2009:Block with bonus: less than 3.33 m³/person/monthBlock I: From 0 to 4 m³/person/month Blocks are calculated per person.Block II: From 4.1 to 5 m³/person/monthBlock III: More than 5 m³/person/monthNon Residential ConsumptionThe non-residential consumption has a single block tariff with incentives and penalties, asshown below:ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 11
  • 13. • Night consumption: a 39% bonus estimated on the base tariff for industry. • Irrigation: EMASESA estimates the level of “efficient water consumption” according to the surface and the technologies available. Consumptions above EMASESA’s estimates are penalized with higher tariffs, and even with suspension of service. • Contamination: customers are charged a penalty for contamination. EMASESA offers, however, assistance to remedy contamination problems.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 12
  • 15. DEMAND MANAGEMENT: THE EXPERIENCE OF BOGOTA -COLOMBIATariff policies based more on the cost of services than on political considerations, and waterlosses reduction programs carried out by service providers have had a significant impact onwater consumption levels. The average consumption per connection in Bogota has had asignificant reduction (from 31.5 m3 in 1993 to 14.9 meters in 2006) while maintaining acontinuous service (24 hours a day and 7 days a week) to a growing number of customers(from 5.5 million in 1993 to 7.4 million in 2005). See graph below. Consumption Index By Billed Customer (Billed Customer/Average users)/12 Consumption per Billed CustomerThe changes in consumption per connection have allowed EAAB to postpone substantialinvestments in water production, as shown in the graph below. The postponement of theseinvestments significantly reduces the marginal cost of water and alleviates EAAB’sfinances.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 14
  • 16. Water Supply - Demand Trend in Bogota 24,00 Projection of demand before Supply equal to demand Water supply projected (2012) 1997 22,00 22.0 20,00Flow (m3/s) 18,00 16.5 16,00 14,00 12,00 14.2 m3/s (2005) 10,00 90 82 06 98 80 86 92 94 96 00 02 04 10 14 16 84 88 08 12 18 20 19 19 20 19 19 19 19 19 19 20 20 20 20 20 20 19 19 20 20 20 20 Year Factors that reduced consumption of potable water Law 373/97 – Rational use of water Emergency in supply due to Chingaza crisis Increase of tariffs associated to Law 142 (tunnel collapse) 1997 of 1994. Economic crisis since 1997 Implementation of Non Revenue Water ProgramThe other cities have had similar experiences. Triple A, for example increased its number ofcustomers by 75% between 1996 and 2007 while supplying less water to the system (thevolume of water supplied declined from 16.5 to 15.0 million m3). See following graph.In addition to provide service to a growing number of customers, Triple A has been able toprovide continuous service. The water supply service before Triple A was intermittent (3 to4 days on average in the service area).ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 15
  • 17. BARRANQUILLA EVOLUTION OF SUBSCRIBERS VS. DELIVERED WATER 1996 - 2007 324.545 Subscribers 18.0 340,000 16,5 320,000 17.0 mil m3 300,000 15,0 280,000 mil m3 16.0 260,000 240,000 15.0 220,000 185.047 200,000 14.0 Subscribers 180,000 160,000 13.0 140,000 1/1/1996 7/1/1996 1/1/1997 7/1/1997 1/1/1998 7/1/1998 1/1/1999 7/1/1999 1/1/2000 7/1/2000 1/1/2001 7/1/2001 1/1/2002 7/1/2002 1/1/2003 7/1/2003 1/1/2004 7/1/2004 1/1/2005 7/1/2005 1/1/2006 7/1/2006 1/1/2007 7/1/2007 M ill. M3 Water SubscribersA similar case is observed in Cartagena where approximately 160,000 customers in 2007 areserved with the same quantity of water supplied to 90,000 customers in 1999. From anapproximate consumption of 152 m3/ person/ y to 83 m3/person/y. More Users With Less Water Distributed Cartagena 78,000,000 180,000 76,000,000 160,000 74,000,000 72,000,000 140,000 Cubic Meter /Year Subscribers 70,000,000 120,000 68,000,000 66,000,000 100,000 64,000,000 80,000 62,000,000 60,000,000 60,000 Agua dit ribuida (M3 año) Distributed water Abonados at endidos Customers servedORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 16
  • 18. WATER DEMAND MANAGEMENT: THE EXPERIENCE OFSOUTHERN CALIFORNIA - UNITED STATES OF AMERICACalifornia is suffering from an 8-year-old drought in the catchments of the Colorado River,with the lowest deliveries on record of bulk water from different sources. The levels oflocal precipitation are also at record lows. The allocation of exceptionally limited waterresources among users is then a difficult task for water authorities. The difficulties arecompounded by local environmental laws protecting certain fish species, thus reducing thewithdrawal of water from rivers and lakes below historical levels.In response to the water shortages in its service area, MWDSC has been implementing anumber of programs aiming at achieving a more efficient water usage. The programs areconcentrated on three main areas: 1) research and development, 2) incentives for waterconservation, and 3) changes in consumer behavior. See graph below. Water-Use Efficiency Programs Research and Consumer Incentives Development Behavior Innovative Conservation Residential Legislation Enhanced Conservation Advertising & Outreach Commercial Annual Program Review Education Water Recycling Outside R & D Code Compliance Seawater Desalination Groundwater Recovery Price BMPsORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 17
  • 19. Since 1990, Metropolitan has invested $ 251 million in its conservation programs saving about 1,164 MCM of water, equivalent to $0.22 per m3.Some of the conservation programs implemented to achieve the results in the box above areoutlined below.Water-saving programsThese programs include; implementation of water-savings regulations, promotion of low-flow toilets and showerheads, high- efficiency clothes washers, water conservation gardens;educational programs; and more strict plumbing codes. The achievements of some of theseprograms are summarized below: High Efficiency Item Average Saving /Year Toilet 10 m3 Washer 34 m3 Irrigation Controller 51m3Water-saving RegulationsMWDSC and the partnering companies have enforced a number of regulations aimed atreducing water consumption. These regulations include the following: 1. Banning washing of driveways, sidewalks, parking areas, patios or other outdoor areas using a hose. 2. Prohibiting irrigation of gardens between 9:00 AM and 4:00 PM. 3. Prohibiting the operation of non-water conserving pre-rinse nozzle in food- preparation establishments such as restaurants and cafeterias. 4. Banning watering of any area beyond saturation thus causing excessive runoff into the streets. 5. Prohibiting operation of fountains and other water features that do not re-circulate the water. 6. Banning washing vehicles with a hose.The regulations require hotels and motels to provide customers with the option of not havingthe towels and linens laundered daily. This option must be prominently displayed in eachbathroom and sleeping room, using clear and easily understood language.Rebate ProgramsMWDSC is increasingly using rebate programs to promote savings on water consumption.As residential water consumption is mainly used in irrigation of gardens and landscaping (inORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 18
  • 20. many areas over 50% of total consumption), MWDSC puts strong emphasis on programs toreduce irrigation at residents’ premises as well as on the promotion of plants that requireless water. Water Usage and Rebate Programs 30% Inside the House 70% Outside the House Rebates offered for houses: Rebates offered for gardens: - High efficiency toilet: $ 75-180 - Synthetic turf: $ 1/sq meter - High efficiency clothes washer: $130 - Rotating irrigation nozzles: $ 4 - Weather based irrigation system: $ 0.15/sq meterThe rebates executed by most of the water departments in Southern California haverestrictions such as:- Rebate is limited to available financial resources (companies allocate a limited budget for each program)- Rebate is not available for new developments- Rebate requests are processed on a first-come first-served basis- Only one rebate per household- The equipment must be purchased new and installed before submitting application- New developments are not included in the program (they are held to stringent water conservation standards from the beginning)- Subject to onsite installation verification- Based on approved list of items to be installed- Request must include the original receipt with the model and serial number- Form filled and signed by the beneficiary WATER SAVINGS REWARD PROGRAM FOR NON RESIDENTIAL CUSTOMERS $ 3.00 per every 4 cubic meter of water saved This program rewards companies or institutions that: - Install equipment that will capture, treat and reuse water that would otherwise be discharged to the sewer. - Replace existing process equipment with more efficient resulting in reduced water demand. - Upgrade with more efficient irrigation equipment such as rotating nozzles, spray heads, valves, sensors, smart controllers, etc.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 19
  • 21. Institutional Water Saving ProgramsMWDSC, together with its participating agencies, has been successfully promoting thereduction of water consumption in private and public institutions. Through incentives,training and awareness programs, many institutions have developed their own programs tosave water. The incentives include payments for conservation efforts and results. Followsome examples of these programs. Institutional Water Savings Programs Estimated Institution/Agency Project Title Savings/Year (In MCM)San Diego County Water District Landscape Auditor Interns 1.4Western Municipal Water District Smart Controller Irrigation Installation 1.1Los Angeles Water Department Water broom Distribution 0.9West Basin Municipal District Landscape Reform Program 0.6Western Municipal District High Efficiency Toilet Installation 0.5 Total in 15 programs 10.5The California Friendly ProgramMWDSC started in early 2000 the “California Friendly Program”, which is a branding effortto make it easier for customers to identify which products, organizations, and programsmake efficient use of water. This idea came as a follow-up to a poll indicating thatrespondents did not know the water needs of different plants. In addition, about 81% ofrespondents said they would purchase more drought-resistant plants if they were clearlylabeled as such. The program is expanding its branding effort so that products, builders,businesses, gardeners and cities carry the California Friendly designation. The California Friendly Landscape Program assembled a panel of experts to approve the official list of nearly 300 drought resistant plants; then partnered with Home Depot and 70 independent gardens that sell plants.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 20
  • 22. Programs launched under the California Friendly brand are the following: 1. Outdoor Conservation Outreach Program (education and public outreach). 2. Marketing and advertisement (website, radio, TV and print). 3. Consumer research. 4. Landscape Program (marketing, outreach and incentives). 5. Home Certification Program (a partnership with builders to build water efficient landscapes and devices).Water brooms have rebates of $150. California Friendly houses use 30% less water.Under the California Friendly program, the Long Beach water utility has installed ademonstration site where visitors or customers can see and learn about plants andarrangements that can both save water and beautify the environment.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 21
  • 23. Long Beach Water Department “drought tolerant garden” demonstration siteIncentives for Research and DevelopmentMWDSC has a program to provide grants to universities for research and development ofcost-effective water saving technologies that can be implemented in water stressed regions,locally or globally.The program has exceeded MWDSC’s expectations. Thus, the funding was increased from$ 120,000 in FY 2007 to $ 150,000 in FY 2008. Some of the results of the program arepresented below:1. University of Southern California: new showerhead with touch activated on/off switch.2. University of California at Riverside: rooftop rainwater harvesting.3. University of SC Long Beach: conservation by onsite recycling.4. Pasadena City College: biofiltration of household gray water.The California Urban Water Conservation CouncilIn addition to utilities, the California Urban Water Conservation Council (CUWCC), a veryinfluential organization, benchmarks progress on water conservation by utilities and otherentities, and also allocate funding to different programs related to water.The CUWCC was created to increase water-usage efficiency in the State, throughpartnerships among urban water agencies, public interest organizations, and private entities.The Councils main goal is to integrate urban water conservation “Best ManagementPractices” into the planning and management of Californias water resources.The Council was created by nearly 100 urban water agencies and environmental groups thatsigned a Memorandum of Understanding in December, 1991. Since then, the Council hasgrown to 384 members. Those signing the MOU pledge to develop and implement fourteencomprehensive water conservation programs denominated “Best Management Practices".Once a year, the CUWCC publishes the names of institutions and their performance againstthese 14 best practices and awards grants to programs of the best performing agencies.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 22
  • 24. Long Beach Water utility believes that the results of the Council’s programs are mixed, andthat the net result is difficult to evaluate. On the one hand, the Council has succeeded inpromoting water conservation amongst all its members. On the other hand, the utilitybelieves that the Council’s programs inhibit new ideas for water conservation in areas whichare not included in the “Best Practices” list. The utility also believes that the staff-intensivepreparation of the reports to evaluate compliance with the “Best Practices” list is a majoreffort for their organization, and that the system should be simplified and, perhaps, reducedto a single indicator that effectively measures the results of water conservation efforts ofeach utility.The Best Management Practices list is presented below. California Urban Water Conservation Council Best Management Practices 1. Water survey programs for residential customers 2. Residential plumbing retrofit 3. System water audits, leak detection and repair 4. Metering for all new connections and retrofit of existing connections 5. Large landscape conservation programs and incentives 6. High-efficiency clothes-washing machine financial incentive programs 7. Public information programs 8. School education programs 9. Conservation programs for commercial, industrial, and institutional accounts 10. Wholesale agency assistance programs 11. Retail conservation pricing 12. Conservation coordinator designation 13. Water waste prohibition 14. Residential Ultra Low Flush Toilet replacement programsAmerican Leak Detection FranchiseAmerican Leak Detection (ALD) is a company founded 30 years ago in Palm SpringsCalifornia, now turned into a franchise with presence in 8 countries. ALD specializes inaccurate, non-destructive detection of all types of leaks, including hidden water and sewerleaks.The company identifies leaks in swimming pools and in concealed plumbing systems, usingsophisticated electronic devices without bashing holes in walls or digging. The franchise isconsidered one of the top 25 Franchise High Performers in the USA by The Wall StreetJournal. Also, for the seventh straight year, American Leak Detection was ranked #1 in itscategory by Entrepreneur Magazine. .ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 23
  • 25. ALD Opening Eye Statements: • A leak the size of a pinhead can waste 1.3 MCM of water per year, enough to fill 12,000 bathtubs to the overflow mark. • A leaking toilet can use 340 m3 of water in 30 days. • Approximately one in every 318 homes or buildings has a leak.ALD partners with associations and water companies to assist on water leak surveys, andwater conservation programs. For example, in March 2008, it teamed with the CaliforniaRural Water Association to carry out educational programs in rural water districts. Thecompany gives free training seminars throughout the state titled, "Introduction to WaterAccountability and Leak Detection". The seminars are sponsored by the California RuralWater Association and the California Department of Water Resources.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 24
  • 26. WATER LOSSES REDUCTION: THE EXPERIENCE OF BOGOTA -COLOMBIA Program scheduleThe three companies visited have developed successful programs of water losses reductionduring the past 7 to 18 years. An illustrative example is the program in Bogota, whichstarted in 1989 with a non-revenue water study. The study was followed up by theestablishment between 1992 and 2001 of four district zones covering the whole service areaof EAAB. Then EAAB management contracted with three private companies the operationof the five zones.3 The bidding for the zones was completed during 2002 and 2003. So, bynow, EAAB has a five-year experience with private operators in the service area. Main steps for the implementation of the programThe steps taken to reduce water losses are similar in the three companies, and include:Step1: Mapping of sectors and sub-sectors, flow measurement points, feeders, isolation of sectors and districts, and pre-modeling of the distribution zone.Step 2: Field work including installation of valves and temporary/permanent closing of sectors.Step 3: Measurement of flows and pressure points in specific places: identification of consumption curves and minimum night flows per district.Step 4: Construction and calibration of mathematical models.Step 5: Actions to reduce losses, including: • Commercial activities: - Identifying and regularizing illegal customers - Replacing faulty meters - Harmonizing billing cycles •Technical: - Establishing macro-sectors and districts - Pressure control and bulk-water metering - Rehabilitating networksStep 6: Implementation of hydraulic optimization works, including: pipe renewal and replacement, and installation of pressure-reducing stations. Prioritization of tasks and areasThe financial and economic benefits of water losses reduction programs within a city varyamong hydraulic districts. This point is illustrated by the case of Bogota shown in the graphbelow, which shows the financial gains or losses results per m3 for 37 districts.3 One company won the bid for two zones.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 25
  • 27. Gains y G $ por Sector por P or Losses per M3 Saved M t3 $1,500 $1,000 $500 $ Col. $0 ($ 5 0 0 ) ($ 1 , 0 0 0 ) ($ 1 , 5 0 0 ) 01 07 14 17 21 23 25 30 32 34 36 T ota l 06 13 15 20 22 24 26 31 33 35 37 Districts Se ctore sThe cumulative result is positive, but there are districts where the cost of the programexceeds the financial benefits associated with the reduction of water losses.Likewise, the benefit-cost of different projects or activities varied substantially in the case ofBogota. See table below. Benefit-Cost Analysis of Projects or Activities Bogota PROJECTS Litters/Sec Benefit/Cost Connections 55 4.5 Massive fraud 227 2.3 Meters 185 3.1 Network Repair 710 12.0 Pressure reduc. valves 82 2.2 Others 10 1.1 TOTAL 1,269 3.2As seen in the table above, the network repair and rehabilitation has had the highest benefitcost ratio in Bogota. It has been followed by the repair of leaks at the connection point andthe meter repairs. The average ratio of benefit to cost has been very high (3.2).EAAB’s information system includes a breakdown of the technical and commercial lossesby sub-district (see Annex 1), providing a powerful tool to help in the design and thestrategy for the implementation of the water losses reduction program. Pressure Reduction ValvesDuring a period of two years between 2003 and 2005, Bogota installed pressure reducingvalves in most districts, achieving substantial results as shown in the graphic below. As it isORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 26
  • 28. known excessive pressures are an important factor explaining water losses. The benefit-costratios of the investments in pressure reduction were high as shown in the table showing thebenefit-cost of different projects and activities. Pressure Control and Reduction of Losses 47.24 m Comportamiento Behavior Losses de las pérdidas 42.14 m 45 90.28 100 40 90 74.13 32.95 m 35 80 66.74 Pressure (m) 30 Presión [m ] 70 Flow (l/s) Caudal [L/s] 60 25 40.44 42.54 41.47 50 20 40 15 30 10 20 F.P. 55.21% F.P. 42.62% F.P. 37.86% NRW 55.21% NRW 42.62% NRW 37.86% 5 10 0 0 Alta Media Baja High Middle Período de Operación Low Period of Operation Presión Pressure Caudal macromedición Bulk Meter Flow Customer Meter Caudal micromedición FlowThe graph above shows how water losses are reduced with pressure control measuresimplemented in the city of Bogota.The formulation of hydraulic optimization works including the renovation of the areas, thereinforcement of pipes and the implementation of pressure reducing stations producedimportant results that reduced the losses. Pressure map WITHOUT works of hydraulic Pressure map WITH works of hydraulic optimization in Bogota optimization in Bogota Reinforce Renovation Regulation Stations mentsORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 27
  • 29. During a period of two years between 2003 and 2005, Bogota city covered most of theirdistricts with pressure reducing valves contributing significantly to the reduction of losses. Service with PRV 2003 Service with PRV 2005 TechnologyDuring the visit the georadar equipment was identified to detect illegal connections. Theexperience in Barranquilla shows that when customers see this equipment in action they aremore willing to declare their illegal connections and negotiate with the company. GEORADAR (Noggin)ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 28
  • 30. Reduction in water lossesEAAB has achieved substantial reductions in the volume of water losses since 1995 untilnow. This is shown in the table below which represents both the absolute volume of waterlosses and the water losses measured in m3 per connection (user). The latter index is knownas the “Water Losses per User Index” (IPUF in Spanish).. NRW Vs. Losses Per Customer Better Indicator Volume Volume IPUF Year m3 losses/ NRW Supplied Lost user/month 1995 567 Mm3 207 Mm3 17.2 36.5% 2002 456 Mm3 165 Mm3 10.6 36.2% 2005 448 Mm3 161 Mm3 8.8 35.9% Reduction 21% 22% 49% 0.6%The above table illustrates both EAAB’s substantial accomplishments in reducing waterlosses (from 207 million m3 in 1995 to 161 million m3 in 2005) and the failure of thetraditional indicator of non-revenue water (water losses as a percentage of production) toreflect these accomplishments, as the non revenue water index remained virtuallyunchanged at around 36%. This failure is the consequence of a weakness of the traditionalnon-revenue indicator in an environment of contracting water demand and production. Infact, it is even likely that in this type of environment, the unaccounted-for or non-revenuewater index as a percentage of total water production increases even though the volume ofwater losses decrease in absolute terms, as was EAAB’s case. Water Losses Index per User (IPUF) Bogota, 1993-2005 The graph (Non-billed volume/average number of customers)/12 shows how this progress has been achieved over the past 13 years since 1993 with a significant M3/Month achievement during four years during 1994 and 1997 and then stable progress during the last 9 years.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 29
  • 31. WATER SAVING PROGRAMS: THE EXPERIENCE OF SEVILLE -SPAINEMASESA’s efforts to reduce water losses from the water source, up to the metering anddistribution to customers were of particular interest for the Jordanian delegation. The resultsof these efforts between 1997 and 2007 show a reduction of total water losses from 26.3%to 14.8%. See table below. EMASESA Ten-year Improvements in Hydraulic Efficiency ANNUAL EXECUTED 1997 2007 Losses MMC % MMC % Total Losses 38.96 26.3% 17.75 14.8% Losses from the source up to the treatment 3.37 2.5% 1.06 0.9% plant Losses in Treatment 2.95 2.1% 0.11 0.1% Losses in Distribution 32.64 21.7% 16.58 13.8% Efficiency Hydraulic Return in Collection 97.5% 98.3% Hydraulic Return in Treatment 91.9% 99.9% Hydraulic Return in Distribution 67.0% 76.5%From the Source to the Treatment PlantThe implementation of the water saving program helped to reduce from 2.5% to 0.9% thelosses from the water source to the treatment plant. This improvement is the outcome ofactions like the improvement of the raw water pipe illustrated below.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 30
  • 32. Improvement of the raw water pipe • Repairs Plan for the Minilla canal. • Interconnection works with other systems for the exchange of resources.Treatment PlantsThe reduction of water losses in the treatment plants from 2.1% to 0.1% was achievedthrough investments in upgrading water recovery systems, filters, treatment lines, andcontrol systems. Improvements in Water Treatment • Introduction of new treatments which guarantee quality in adverse situations: ozone, activated carbon. • Water tightness of the principal reservoirs. • Recovery systems of processed water.DistributionThe reduction in water losses in the distribution system from 21.7% to 13.8% was the resultof EMASESA’s most intensive efforts in the distribution network through actions in thefollowing areas: • Expanding and improving measurement and control of water flows. • Establishing a continuous tracking of unaccounted for water (UFW) values. • Establishing districts and introducing systematic leakage control. • Renovating networks.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 31
  • 33. Measurement of Flows Improvement of Flow Meters • Installing additional and more accurate flow meters. • Implementing a Main Control Center. • Implementing real time tracking and control. • Detecting problems in the primary and secondary network due to breakages. • Improving repair response times.Continuous Tracking of UFWEMASESA has established an integrated control of subsystems covering water treatment,transport and distribution, equipped with meters that continuously report to a central controlroom.Establishment of Districts to Reduce LossesEMASESA has established water distribution districts to help in the management andimplementation of systematic leakage control through observation of minimum night flows. Districts Establishment and Measurement • EMASESA network is divided into 170 sectors, which represent a total network of 3.450 km. some of them are of a permanent nature and the rest are temporary. • They are observed for period of 15 days at least once a year. • Control of sectors is carried out by means of measuring the Minimum Night Flows. Their comparison with standards and if is necessary leakage detection by traditional methods: correlation, geophones, etc. • Analysis of causes of leaks serves as a base to establish priorities in the network renovation plans.Network RehabilitationEMASESA also carried out a major network rehabilitation program, which amounted toabout 50% of the annual investment plan during 1997-2007. Through these investments, thecompany rehabilitated 40 to 50 KM per year or the equivalent to 1.5% to 2.0% of the totalnetwork per year.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 32
  • 34. DEMAND MANAGEMENT: THE EXPERIENCE OF SEVILLE - SPAINAs a result of a severe drought in 1992, EMASESA has implemented a number of waterdemand managent initiatives, which have resulted in significant reductions in waterconsumption (16% between 1992 and 2007), as shown in the table below. EMASESA Water Consumption Profile in Seville 1992 1998 2004 2007 Consumption (MCM) 83.4 72.0 73.9 70.0 Breakdown by type of customer Residential 69% 74% 71% 70% Industrial 21% 22% 25% 27% Government 10% 4% 4% 3%The initiatives have included the promotion of water-saving devices, grey water use, andconsumption metering.Water Saving DevicesAfter carrying out market studies and a careful testing of different water-saving devices,EMASESA implemented a communication campaign to promote the use of such devices inshowers, toilets, and faucets. The customers reacted favourably to the campaign, asEMASESA and the Municipality provided valuable information to the customers bypublishing the results of the testing of the devices produced by different manufacturers.The types of devices are illustrated below. Three Types of Devices Promoted Showers Toilet FaucetMODELS AVAILABLE AT EMSASESA MODELS AVAILABLE AT MODELS AVAILABLE AT EMSASESAECO-Ducha 245-A MULTISHOWER Antical EMSASESA Econ-System Martí de 22 mmECO-Ducha CADET MULTISHOWER Antical Toilet discharger (IMPULS280A) Econ-System Martí de 24 mmECO-Ducha GALANT MULTISHOWER System model KOMBIFIX ECO-Grifo Monomando MULTISHOWER AnticalAntical System model DUOFIX ECO-Grifo Temporizado MULTISHOWER AnticalECO-Reductor Ducha MULTISHOWER System model GISEcon-System Martí Model IMPULS280B Model IMPULS280CORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 33
  • 35. The promotion of the water-saving devices included several steps:1. First, EMASESA and the Municipality installed the devices in their offices.2. Second, a municipal ordinance made it mandatory to install the devices in new homes or refurbished buildings. It was also mandatory in public bathrooms.3. Third, EMASESA and the municipality also entered into collaboration agreements with the Hotel Association, the universities, the catering associations, and other confederation of businesses organizations to install such devices in their premises.4. Fourth, EMASESA implemented a campaign denominated denominated “Saving 55 liters per person per day”, showing how the use of the saving-devices would result in these significant savings in water consumption with the correspondin reduction in the water bill.The graph and the box below illustrate the campaign denominated “Saving 55 liters perperson per day”. CAMPAIGN SAVING 55 LITERS PER PERSON PER DAY TOILET SAVINGS: 21 LITERS Normal consumption per person per day: 10 Litters x 4 discharges = 40 liters Using saving devices per person per day: 10 liters x 1 discharge = 10 liters 3 liters x 3 discharges= 9 liters TOTAL=19 litters SHOWER SAVINGS: 20 LITERS Normal consumption per person per day: 60 liters Using saving devices per person per day: 40 liters FAUCET SAVINGS: 14 LITERS Normal consumption per person per day: 40 liters Using saving devices per person per day: 26 lttersGrey Water UseThe Water Technology Institute presented the case of grey water use in toilets. Thetechnology consists of collecting water used in faucets and showers and treating it through aa two-stage treatment process with 1) sand filter, and 2) sand filter and activated carbon.The recycled water is mixed with rain water and repumped to a roof storage to be circulatedto the toilet system.New and old buildings can be equiped with two networks, one that collects the toilet waterthat is sent to the sewerage, and the the other that collects water from the rest of uses to berecycled for toilet use. The system also consists of a small treament facility, storage tanksand pumps. The Water Technology Institute estimates that with an adequate level of tariffORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 34
  • 36. and according to the type of house, the cost of a grey water use system can be amortized in2.5 to 5.0 years. Grey Water Systemes and Savings of Water Tank of recycled  water for toilets Toilet sub  network to  Rain water  sewerage to recycling Faucet and  shower sub  network to treatment  and recycling Pump Treatment process • Septic tank • Pump Sewerage • 1st: Sand filter Tank of recycled  Tank • 2nd: Activated carbon waterSavings of this system can be broken down in various categories as the graph above shows.The three main contributers to the savings are reuse of water from faucets (39%), toilets(22%) and showers (20%).PLAN 5: Individualization of ConsumptionMultifamily buildings, which accounted for 43% of residential water consumption, had asingle meter, making it difficult for families to rationalize their consumption and thus reducetheir water bills. EMASESA considered, then, that those buildings had a good potential forachieving substantial water savings, provided that the individual households had the rightincentives. Based on this consideration, EMASESA implemented a plan denominated “Plan5” to encourage customers to install individual household meters in multifamily buildings.Approximately 26.000 buildings participated in “Plan 5” during a five-year period. Theresults were highly satisfactory, as it resulted in water savings equivalent to 25% of theaverage water consumption per household before the plan. See graph below.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 35
  • 37. Water Savings Achievement with Plan 5Plan 5 included five steps designed to align the interests of the customers, EMASESA andprivate contractors. The five steps were: 1. Organizing the community in each multifamily building and reaching agreement on the implementation of the plan. Once 60% of the households in a builiding favored the program, the community filled out a form and sent it to EMASESA or contacted directly one or more contractors assigned to the area. 2. Inviting bids for the work. Private contractors asigned to the area prepared quotes for the work, and the one with the best offer continued with the necessary paperwork. 3. Financing the works. EMASESA offered a financing plan for each building, including a subisidy for the installation of the meters. The financing plan offered by EMASESA is presented in a box below.Meter Station in a Multifamily Building Financing Offered by EMASESA Funding agency: Local bank Award: Automatic Amount: 100% of cost Period of repayment: Five years Prepayment: Allowed without penalty Payment: Deduction from the bill Interest rate: 8.5% Commission: 1.5%ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 36
  • 38. 4. Carrying out the works. The work started once the financing plan was agreed between the community and ASESA, and the contractor received the downpayment. 5. Paying the contractor. Once the contractor completed the work in a satisfactory manner, the customers gave their approval to the work and EMASESA or the customers payed the contractor.Advantages for customersThe advantages for customers included the following: 1. Potential savings in water bills, and access to bonus offered by EMAESA for low consumption. 2. Control of water consumption in the household and, thus, of the water bills. 3. Rehabilitation of water connections in building, improving pressures and reducing leaks. 4. Accessing to subsidies provided by EMASESA including: a. No subscription costs. b. No deposit or warranties. c. Incentives for connections (€ 93.76 per building) d. In case there was the need of a pumping system to increase pressure, EMASESA increased the subsidy by € 36.06 per building e. In case there was the need to increase the intake points to two, the subsidy wasl increased by € 57.70 per building. f. If there are additional legal steps to follow, the subsidy was increased by € 2.88 per building. 5. Access to preferential loans provided by a financial institution and payment in 5 years. 6. No individual paperwork; it was done by the contractor.Advantages for EMASESA 1. Improving control of consumption per individual users, reducing the levels of demand of water by 25%. 2. Rehabilitating networks inside houses that have problems of leaks and pressure. 3. Updating the database of customers. 4. Installing high precision digital meters. 5. Facilitating the implementation of tariff systems based on individual consumption. 6. Sharing with customers the costs of service improvements in the premises.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 37
  • 40. CUSTOMER SERVICE: THE EXPERIENCE OF BARRANQUILLACOLOMBIA Clear visionThe three companies’ mission and vision statements put the customer at the forefront of theutilities success. The vision statement of the Triple A illustrates the point well: Commercial Vision– Customer Management Directives: 1. We do not generate unconformity to our clients 2. If our client need us, they dont have to come to our offices 3. We will attend our clients nice and diligently 4. We add value to our best clientsThe three companies back up the mission statements with innovative programs to satisfycustomers’ desires and needs. The paragraphs below outline some of the programs currentlyin place, which may be readily applicable to MIYAHUNA. Bill collection strategy: Super ClientTriple A implemented a successful program denominated Super Client aiming at providingbetter service to the customers and simultaneously improve bill collection. The programconsisted in creating a status of Super Client for all those customers that pay promptly theirbills in full (in the next week or so after receiving the bill). Clients included in this categoryenjoy benefits like the following: • Faster attention (VIP line at customer centers) • Special bill (including, for example, vouchers for discounts in stores, participation in raffles) • Special recognition in the call center of the company (116 line) • Special letter of recommendation after 12 months of status as Super Client (These letters are highly valued by the banking and commercial systems as a way to obtain references for potential customers)ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 39
  • 41. Special design of bills Special characters and Special branding for SuperclientsThe success of the Super Client program can be illustrated by the rapid membership growthsince the program started in mid-2005. The number of clients that were included in thiscategory has reached close to 30% of total clients. Triple A management objective is toreach 100% in the next 5 years. Evolución mensual del Supercliente Triple A Superclients Billing 100.000 94.859 93.491 93.120 90.000 88.819 86.176 83.524 80.000 76.881 74.285 74.468 71.574 68.112 69.420 69.715 70.000 67.737 64.913 67.529 66.369 64.481 65.813 63.216 64.755 62.808 63.682 62.915 60.943 60.945 60.000 50.368 50.000 38.743 40.000 37.025 30.000 Ju 6 Ju 7 Se 5 O 5 Fe 6 Se 6 06 Fe 7 Se 7 O 7 05 Ag 5 D 5 En 5 M 6 Ab 6 M 6 06 Ag 6 D 6 En 6 M 7 Ab 7 M 7 07 Ag 7 N 5 N 6 7 -0 -0 0 -0 r-0 0 -0 r-0 l-0 0 0 -0 -0 -0 0 l-0 0 -0 -0 -0 0 l-0 0 0 -0 o- p- e- b- o- p- e- b- o- p- n- n- n- ay ay ov ov ar ar ic ic ct ct ct Ju Ju Ju Ju OThe impact of this strategy on bill collection has been significant, as the number ofcustomers up-to-date on its payments has increased from 41% at the beginning of theprogram to 61% eighteen months later. This is illustrated by the number of bills outstandingfor no more than one month after the issuance of the bill. The graph below illustrates thenumber of customers with bills outstanding one month or less between June 05 and October07.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 40
  • 42. 0 + 1 Facturas 205.500 0 – 1 Bills 204.247 202.238 200.617 195.500 185.500 175.500 165.500 155.500 20/04/05 11/05/05 02/06/05 22/06/05 15/07/05 09/08/05 05/09/05 30/09/05 02/11/05 24/11/05 15/12/05 04/01/06 25/01/06 14/02/06 09-03-06 03-04-06 25-04-06 17-05-06 07-06-06 29-06-06 20-07-06 10-08-06 31-08-06 20-09-06 10-10-06 01-11-06 23-11-06 15-12-06 09-01-07 29-01-07 21-02-07 13-03-07 03-04-07 25-04-07 16-05-07 06-06-07 28-06-07 24-07-07 14-08-07 04-09-07 24-09-07 16-10-07 Market segmentation for better imageTriple A has implemented a program of segmentation of clients that has been verysuccessful mainly on improving the customer’s perception of the company and its publicimage. Three key groups of clients receive customized treatment: i) retired person; ii)highly influential persons; (mainly opinion leaders); and iii) VIP clients including largecustomers, private sector executives, and government officials. The number of members ineach one of the segments of the market is presented in the graph below. 4,600 affiliated in 190 affiliated with a 1,100 affiliated with the program with collection of 100,7% a collection of 101% collection of 101% average (121,000 in average (13 (1,3 MU$D/year) U$D/year) MU$D/year) Program for Retired Program Influential VIP clients program Customers Retired person Clients that require a Large customers that receives pension once special treatment require special a month attention Understand the needs of the marketORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 41
  • 43. The program includes customized treatment to customers in areas such as: establishment ofdue dates for bills for retired individuals, in accordance to pension payment dates; moretolerance on bill collection and special communications with the customers, which includesvisits from Triple A higher executives to influential individuals and VIP customers. Facilitate customer contact / minimize visits to officesVarious strategies have been developed to facilitate the customers’ interaction with thecompanies. These strategies include the ones outlined below.Bill collection in banks and supermarketsThe three companies have implemented important programs to facilitate the customers thepayment of their bills. One of these programs is the bill collection in banks andsupermarkets.The costs associated to these points vary from 1% to 3% commission for supermarkets or a0% commission for banks that handle company’s accounts.Mobile customer officeACUACAR has put in place an innovative approach to facilitate low-income customerstransactions with the company. It is a van equipped with all necessary software andcommunications equipment to attend customers’ requests. The van visits low-incomeneighborhoods following a pre-announced itinerary. The van is connected to the data basesin the main office and, thus, it can process on-line requests, from bill payments tocomplaints and registration of new customers. 2Impact of strategyThe management’s of the companies consider that the strategies to serve the client by thecall center or by means other than visits to offices not only help to control costs of operationand of infrastructure needed to attend customers but also, and more importantly, help toORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 42
  • 44. improve the image of the company as being more responsive to the clients needs by saving their time and cost to come to the offices. The graph below shows that the call center in Triple A has become in a short period of time, from late 2005 to late 2007, the main contact point between the company and its customers. In fact, the participation of the call center in the number of contacts increased from 35% - 40% in late 2005 to 65% in late 2007. Call Center Vs. Commercial Offices 65% 60% 45,000 55% 50% of Call Center Participatio 35,000 45% Served Clients 40% 35% 25,000 30% 25% 15,000 20% 15% 5,000 10% Call Center Atención Contact Center Atención Oficinas Comerciales Commercial Offices %% Participation call center Participación Contact Center Accelerated response time As part of the strategy to facilitate customers’ contacts with the company, Triple A developed and implemented new software to support the call center so as to ensure the rapid and accurate provision of information to the customers and the acceleration of actions to be taken in response to customers’ requests. The results of this strategy are presented below. Response times in labor days Tiempo Promedio de Resolución Complaints (Includes immediate response) (Incluye Resoluciones Inmediatas) Inconformidades Radicadas (Quejas, Reclamos y Recursos) 18 16 15 14 14 13 14 13 13 12 12 Less 9% 1224.000 12 11 9 9 923.500 10 9 8 823.000 8 7 7 722.500 622.000 421.50021.000 220.500 0 May-06 May-07 Mar-06 Jun-06 Nov-06 Mar-07 Jun-07 Jul-06 Ene-07 Jul-07 Abr-06 Ago-06 Sep-06 Oct-06 Dic-06 Feb-07 Abr-07 Ago-07 Sep-0720.000 Ene-Oct/06 Jan/Oct/06 Ene-Oct/07 Jan/Oct/07 ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 43
  • 45. OutsourcingDuring the visit, participants observed in detail successful programs of outsourcing, forexample, as indicated in Chapter 1, EAAB outsource most of the customer services (meterreading, bill collection, and operation and maintenance of small diameter networks). TripleA also outsourcers most of its customers services, as showing the graph below. Customer Service Outsourced Areas We only pay successful actions • Payment for reading Reading • Discounts and sanctions for errors • Sanctions for lack of meeting goals • Payment for distributed bill Distribution • Discounts and sanctions for errors • Sanctions for lack of meeting goals • Payment for money collected Collection • Limited time for payment • Discounts and sanctions for errors • Sanctions for lack of meeting goals Disconnection • Payment for disconnection or reconnection and Re- • Discounts and sanctions for errors connection • Sanctions for lack of meeting goals Points of • Payment of a commission collection • Average commission : 1.6% • Average cost/coupon: $C 801 (300 fils) (IVA incl.) Debt managementThe high frequency of communication between Triple A and its customers has helped thecompany to carry out successful programs to regularize and to reduce the level of accountsreceivable in arrears, particularly from low-income customers. One important program hasbeen the subscription of debt payment contracts between the company and its customers.Under this program, company debtors subscribe contracts to pay their debts under terms thattake into account their ability to pay. In some cases, the repayment period is up to 10 years.The graphs below show the number of debt repayment agreements signed and the reductionin the number customers with 2 to 6 bills in arrears.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 44
  • 46. 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 Ene-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Ene-06 Mar-06 May-06 Jul-06 Convenios activos Agreements Sep-06 Debt Re-Payment Nov-06 Ene-07 Mar-07 May-07 Jul-07 Sep-07 71,533 7.000 9.000 11.000 13.000 15.000 17.000 19.000 21.000 23.000 25.000 27.000 29.000 25/04/05 20/05/05 15/06/05 12/07/05 11/08/05 12/09/05 18/10/05 18/11/05 14/12/05 Impact of Debt Repayment Agreements 06/01/06 01/02/06 24-02-06 29-03-06 25-04-06 22-05-06ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 15-06-06 13-07-06 2a6 08-08-06 2 – 6 bills 01-09-06 26-09-06 20-10-06 17-11-06 14-12-06 11-01-07 05-02-07 05-03-07 29-03-07 25-04-0745 22-05-07 15-06-07 16-07-07 10-08-07 05-09-07 28-09-07 29-10-07
  • 48. CORPORATE GOVERNANCE: THE EXPERIENCE OF UNITEDSTATES OF AMERICA, SPAIN AND COLOMBIAThis chapter summarizes the exchanges between representatives of the water companiesvisited, USAID’s representatives, and the Jordanian delegation on corporate governance. Italso summarizes the lessons learned by the members of the Jordanian delegation.Boards of Directors - Main HighlightsFairfax Water: The Longest Term-Serving BoardFairfax Water is governed by a board made up of ten members with voting rights, andmembers with voice but not voting rights. The board members with voting rights areappointed by the Board of Supervisors of Fairfax County, Virginia, for a three-year term,renewable at the discretion of the supervisors. The board members without voting rights areappointed by wholesale customers.The average serving period for the ten board members with voting rights is 14 years. Thelongest-serving member has been in the board for 38 years, and the most junior memberjoined the board in 2008. Forty percent of the board has served at least 19 years, and 50percent at least 4 years.The board is a multidisciplinary group which includes lawyers, engineers, economists andfinancial experts, drawn mainly from the private sector. The board meetings are held twicea month and are open to the public. The board members are highly committed to serve thecommunity, without any significant financial reward.DCWASA: Board Representing Three ConstituenciesDCWASA is governed by a board of directors consisting of 11 principal and 11 alternatemembers representing the three constituencies served. The District of Columbia has amajority in the board, with six principal and six alternate members. Montgomery and PrinceGeorge Counties in Maryland have two principal and two alternate members each. FairfaxCounty in Virginia has one principal and one alternate.The Mayor of the District of Columbia appoints, and the DC Council confirms, all sixDistrict board members and alternates, including the Chairman. The other five principalsand alternates are nominated by the other jurisdictions and formally appointed by the Mayorof the District of Columbia.DCWASA decisions require a simple majority (six votes). All board members vote indecisions directly affecting the management of joint-used wastewater treatment facilities.The decisions affecting only the customers in the District of Columbia are voted only by theDistrict representatives.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 47
  • 49. The DCWASA board has implemented a successful strategic planning and performancemonitoring program. It also has achieved significant successes in the implementation of ITprograms, in achieving a national leadership on Advanced Meter Reading, and inimplementing a reform process through the IT strategic plan covering critical areas of thecompany’s operation.Long Beach Department: Small Board with Strong InfluenceThe Long Beach Water Department is governed by a board of five water commissioners,each appointed to a five-year term by the mayor, subject to approval of the City Council.The board members are appointed taking into account the need of having a board with adiversity of competencies. Those competencies may include political relations, qualitymanagement, finance, engineering, law and others. Their appointment terms overlap so asto provide continuity.The small size of the board facilitates close interaction with company executives, andexpedites program implementation and decision-making. The following decisions requireboard approval: • Acquiring or selling real estate property • Deciding on large acquisition contracts • Establishing mission and goals • Adopting major policies and strategies • Submitting the annual budget to the City Council • Setting water and sewer rates • Selecting and hiring the general manager • Establishing compensation policies for all LBWD employeesThe Company has a remarkably streamlined operation, with only 200administrative/technical staff and personnel in the field.MWDSC Board: A Complex and Successful Governance Model for Bulk Water SupplyThe MWDSC manages bulk water in a highly water-stressed area. The company is thelargest bulk water supplier in the United States, with a large number of high consumersmade up by utility companies in the area.The board has thirty seven directors representing 26 metropolitan agencies. Everymetropolitan agency has at least one representative. Some agencies have more than one,depending on the assessed valuation of their service. The assessed valuations take intoaccount the number of customers and their consumption levels. The board of directorsapplies a weighted voting system, defined by the population and water consumption in therespective areas. For example:– San Fernando 144 votes– San Diego 36,606 votesORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 48
  • 50. – Los Angeles 37,539 votesThe number of directors can change every August after an annual assessed valuation. Thedirectors do not receive any remuneration from MWDSC, but some directors do receive aper-diem from the member agency they represent. The directors are appointed or elected atthe member agency level. Most items reviewed by the Board require 50%+1 of the totalnumber of votes to pass.The board of directors of MWDSC faces a great challenge in keeping its members well-informed, so as to facilitate the evaluation of initiatives under its consideration, as well asthe decision-making process. The efforts placed by the utility’s board and management oninforming board members and establishing an adequate working environment for thespecialized committees4 include the nomination of a high level executive to mediate allcommunications between board members and management, and to facilitate the work ofspecialized committees.MWDSC board has demonstrated a superior ability in consensus-building and negotiationunder the difficult circumstances emerging from the water scarcity in the region, and fromthe need to allocate water resources, which often are not sufficient to satisfy the demand ofall participants. The outstanding performance of the management team in charge offacilitating the work of specialized board committees has been an important factor in thesatisfactory board’s performance.Board CommitteesThe water utilities’ boards review and decide on complex issues that require specializedknowledge and detailed analysis. As it is impracticable for the whole board to go into thedetails on these issues in plenary sessions, the boards in all visited companies have institutedspecialized committees in each of the main fields of the utilities’ work. The committeesanalyze the issues and submit their recommendations to the whole board. This approachfacilitates enormously the decision-making process in the board.The committees are normally made up by at least three board members and theircounterparts in the management team. The counterparts in the management team may bethe general manager/CEO/Director or the head of the specialized area of the committee.Other senior managers can participate in the committee, bringing the total to 6 to 7members; external consultants can also be participants in the committee. Only boardmembers have vote in the committees.The committees meet for a specific purpose such as review of a project, policy or otherproposal presented by management. The scheduling of meetings depends on the urgency ofthe matter and the availability of board members. In large boards like the MWDSC, thecommittees have also a voting system with one vote per board member integrating thecommittee.4 The specialized committees are discussed in the next section of the report.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 49
  • 51. The proposals and recommendations presented by the committees to the Board have,generally, more weight than proposals directly presented by management; the discussion isnormally shorter, thus expediting the decision-making process.The graph below illustrates the committee structure in the MWDSC. It has 6 permanentcommittees; special committees can be added at any time. Structure in MWDSC’s Board of Directors And Committee StructureThe benefits of such committees can be summarized as follows: • More fruitful interaction between management and board members. • More buy-in of projects by board members, and better access to the company’s information. • More effective participation of senior managers in presenting and justifying specific proposals. • Less confrontation and disagreement between management and board. • Accelerated decision making and improved outcomes.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 50
  • 52. Effective BoardsBased on the interviews, presentations and discussions with board members and topexecutives of the utilities, the Jordanian delegation concluded that the main elements thatmake a board effective are the following:• Well-defined mission. All companies visited had a permanent presence of their mission and values in all activities and projects presented. The mission and values are the reflection of a clear understanding of board’s and management’s expectations.• The right board composition. The city or county officials responsible for appointing board’s members generally consider that it is important to appoint a multidisciplinary team representing a variety of stakeholders and interests.• The right processes. An adequate organization of the work of the board is a very important concern to all utilities visited. They consider that a carefully-prepared work program makes a significant difference in boards’ performance. Elements of the organization include: pre-agreed agendas, committee’s reports, information availability, and frequency of meetings.• Effective leadership. The chairperson of the board has a key role in engaging members on the discussion of key issues, leading to effective discussions and decision-making. The chairpersons of the boards of the companies visited have demonstrated strong leadership capabilities.• The right information. Utilities’ executives and board members assign high value to open communication and information sharing. Effective boards engage in effective dialogue aiming at obtaining a deep understanding of the issues at stake. This dialogue is made possible by well-planned communications and organization of work, as well as by effective committees’ work.• The right culture. Board members are policy makers and as such they should build and encourage the development of the company’s culture. Based on its values and own characteristics, the utilities should build a culture that translates into a network of collaborative relationships among all employees, groups, and organizations that have something to contribute to the utility’s good performance.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 51
  • 53. ContractualizationUSAID’s representatives gave a brief presentation to the Jordanian delegation on“contractualization”, understood as formal agreements reached at various levels of thecompany and with outside parties to achieve specific goals; the agreements also defineperformance measures and incentives. USAID’s representatives emphasized the provensuccess in the implementation of the contractualization concept in various water utilities.The purposes of contractualization are to improve performance, to increase accountability,and to establish a meaningful framework for introducing incentive plans that can befinancial and/or emotional, while at the same time building the capacity of managers inbusiness planning and contract negotiation. Contractualization includes the explicit andtransparent definition of obligations of the parties involved.Contractualization can take different forms and can be between different participants. Threeways of contractualization are the following: 1. Contracts between the government/city or municipality and the utility 2. Contracts between the utility board and the utility executives 3. Contracts between the utility and an external party to provide a service Three Levels of Contractualization City/Government 1) Contract/Agreement Utility Board Outsourced 3) Contract/ Operator/ Agreement Service Provider 2) Contract/Agreement Executive Management Main features of successful contractualization are: • Objective. Contracts need to be clearly tied to specific goals and objectives; these are necessary to increase performance accountability. • Clear principal/agent relationship. The counterparts of a contract should be clearly established with enough powers and authority to enforce the contract or be responsible for the service delivered. • Performance standards and tracking. The contract should have agreed performance standards and an adequate framework for tracking progress. • Objective cause of termination. A key of successful contract management is the presence of objective mechanisms to terminate the services of non- performing operators.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 52
  • 54. Performance Indicators and IncentivesSuccessful contractualization models in water utilities introduce clear performanceindicators and incentives at all levels. Managers and employees that have direct and indirectrelation to the tasks subject to contractualization should benefit from the incentives agreedin the contractualization model. In the experiences reviewed by USAID, contractualizationhas helped utility employees felt reinvigorated and with a higher morale and commitment.Below are some examples of such performance measures and incentives.Contract between Government/City and UtilityThis macro contract is similar to a concession agreement, or to theAssignment/Development Agreement, in the case of AWC and MIYAHUNA. It representsa form of regulation by contract. In this type of contract there are, generally, performanceindicators that are defined in agreement between the assignor (government/municipality)and the assignee (utility). These indicators are reported regularly, and are the basis formonitoring the utility’s performance. The incentives or penalties for this type of contractvary according to the degree of independence of the utility and the level of development ofthe regulatory body.In some examples in the United Kingdom, incentive-based regulation is applied having theregulator setting performance paths and allowing higher profits if the path targets areachieved. The regulator generally allows operators freedom to determine the best way toachieve the targets, and concentrates on monitoring performance indicators as seen in thegraph below.Contract between Board and ManagementSuccessful utilities have shown interesting progress in the relationship between board andmanagement teams through the follow-up of the business plan developed by companyexecutives and employees, and approved by the board.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 53
  • 55. The business plan is a document that should clearly present the goals, the means to achievesuch goals and the schedule to do so. In other words, this tool will clearly show thecommitment of the company’s staff to reach specific results, in line with the guidelinesdefined by the board.Once the draft business plan is approved by the Board, it becomes an implicit contractbetween the board and management. Monitoring management performance under thebusiness plan becomes an important task for the board. In addition, the business plan, asapproved by the board, empowers the executives and provides them with the authority andresources necessary to achieve the plan’s goals.Key components of this implicit contract in successfully corporatized utilities are: • Employment contracts for executives with limited duration (3 to 5 years) linked to implementation of the business plan, with the possibility of indefinite renewals. • Incentive payments to executives that increase compensation by 50% to 100% based on clear performance criteria. • Incentive payments to employees according to degree of responsibility for the implementation of the business plan.The costs of the incentives in the business plan should be amply compensated by additionalresources gained from improvements resulting from the implementation of the plan. Business Plan and Incentives Business Plan - Tool •Executes projects •Increases net revenue Corporate Incentives •Increases profitability •Enhances sustainability Personnel Incentives •Performance based •Profit sharingContracts between Utility and Operators/Service ProvidersSuccessful utilities have executed outsourcing contracts with other firms to operate orprovide services to critical areas of the utility. A key factor of the outsourcing contract isthat the head of the utility and the corresponding executives remained accountable to theORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 54
  • 56. board for the outcome of the outsourcing contract. The contractor is accountable to theutility’s management.Incentives under outsourcing contracts include the following modalities: • Fixed fee and bonus – Yerevan • Bonus based on operating income – Uganda • Fixed bonus per cubic meter of water billed & collected – Cote d’Ivoire, Senegal • Fixed tariff schedule and fixed lease payment to government – Lathur - IndiaA key success factor was related to the existence of shared bonus pools between thecontractor and employees of the contracting agency forming “alliances contracts”. Alliance Contracts with OutsourcingAnother key element for the success of this outsourcing program is that it helps to buildstaff capacity in planning and contract negotiations. Information asymmetry is a keychallenge in negotiating and monitoring outsourcing contracts. A way to face this challengeis to use short/pilot contracts, as a way to reduce the information asymmetry over shortperiods of time and reduce the cost of experimentation.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 55
  • 58. PLANNING AND INFORMATION TECHNOLOGY: THE CASE OFBOGOTA - COLOMBIAThe shareholders and the management of EAAB, ACUACAR and Triple A have broughtstrategic planning and process to the forefront of business and information technologydepartments. Accordingly, the three companies have recognized that modern informationtechnology is a vital component of business planning and monitoring and, thus, have madesubstantial investments in developing and refining their respective business processplatforms. A business process platform is the unified environment that companiesimplement to perform core business processes and reorganize, extend, and create newbusiness processes flexibly at predictable costs across the IT landscape.5 Strategic planningAll three companies had the strategic planning elements of vision mission and values veryclearly outlined, however the Barranquilla Company was more proactive using suchelements as part of its internal and external communication as well as for the customerservice programs.The strategy pyramid developed by the company of Bogota has the following elements withits explanatory notes detailed below. How we want to be the EAAB Vision perceived in 4 years “What” does EAAB do to get Mission the Vision and “How” doest it Values Guide for our individual behavior in front of the customers Guide to take decisions at a managerial Policies level and in our own work places Objectives Strategies Guide to plan and execute projects and activities Corporate Goals (Control Panel) Expected resultsDuring the past five years, EAAB has implemented this view of strategy and has translatedthis into their operations through a group of systems that are explained in this section.5 SAP. Evolving to a Business Process Platform with SAP Solutions. www.sap.com/contactsapORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 57
  • 59. The company of Bogota showed a more mature planning process that started 5 years agowith a change in the management model and the restructuring of its operation with theimplementation of the SAP program. Management ModelThe Bogota Company has as business value chain expressed in the graph below: Planeación de la Gestión Control de la Gestión Sistema de Control Interno PLANNING AND CONTROL INVESTMENT UNDERSTANDING CLIENT RAW WATER RAW WATER RAW WATER CLIENT NEEDS PLANNING AND CLIENT NEEDS CONNECTION COLLECTION TRANSPORT TREATMENT EXECUTION TREATED CUSTOMER TREATED TREATED COLLECTION OF TREATMENT OF WASTEWATER CLIENT SERVICE WATER WATER SEWERAGE SEWERAGE DISCHARGE SATISFACTION MANAGEMENT TRANSPORT DISTRIBUTION SUPPORT PROCESSES AND FACILITATORS Technology Services Legal Services Security Services Procurement Services Human Resources Services Financial Management Stakeholders Management Service Contract Management Quality Control Management Internal Audit ManagementThe Company is operated under a management model using three types of agreements: i)management agreements as the agreements between the company areas and internaloperation, ii) industry agreements between the company asset management areas and iii) theoutsourced areas and the service agreements between the support processes and facilitatorsand the company user as well as the outsourced areas operators.The following graph shows the interdependence of different areas of the company and theframework of agreements that guide and norm the participation of each area.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 58
  • 60. Planning and Control Management Financial Management Asset Owner Corporate Committee Formed by all Area Managers Management Agreements External Client Coverage and Quality Customer Service Master System of Service Area 1 Industry Water Service Delivery Agreements Management Management Management Area 2 Sewer Asset Asset Asset Area 3 Storm Water Area 4 Bill payment Area 5 Environmental Service Agreements Service Providers Areas Support Service Areas Technology Manager Legal Manager HR ManagerThe five areas outsourced under a management contract have three sub-agreementscomponents: i) with the corporate committee, ii) with the asset management area and iii)with the service providers within the company. The interface of the company with the publicis through the outsourcing companies and these have to meet certain coverage of service andquality. Company ERPAll three visited companies had Enterprise Resource Planning (ERP) systems and they usethem as a central tool for its planning exercise and its operations in all segments of thecompany. The Bogota Company has a SAP system after an investment of $us 28 million and5 years of implementation and has all systems integrated and operational as shown in thegraph below: Planeación de la Gestión Control de la Gestión Sistema de Control Interno PLANNING AND CONTROL PS - IM FO WM PP PM QM INVESTMENT UNDERSTANDING CLIENT RAW WATER RAW WATER RAW WATER CLIENT NEEDS PLANNING AND CLIENT NEEDS CONNEXTION COLLECTION TRANSPORT TREATMENT EXECUTION PM PM QM Utilities TREATED CUSTOMER TREATED TREATED COLLECTION OF TREATMENT OF WASTEWATER CLIENT SERVICE WATER WATER SEWERAGE SEWERAGE DISCHARGE SATISFACTION MANAGEMENT TRANSPORT DISTRIBUTION SUPPORT PROCESSES AND FACILITATORS GIS DMS Financial Treasure Control MM HR SMORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 59
  • 61. The Company’s SAP system has 30 modules in 8 main areas: Control, Finance, Treasure, Utilities, Logistics, Utilities, Human Resources, Business Information Warehouse and Work Flow. ERP System Logistics Utilities Human Resources:Control Financial Treasury: PM Plan maintenance Customer Care Internal Orders Special Ledger Treasury Cash CCS Business Information SL TR Servicie, Front IO Management FO Office CM Production Planning Warehouse PP Cost Center GL General Ledger - Process Industry DeviceCCA Accounting Treasury PI DM TR Management Management TM Work Flow AM Assets management Quality Management Profit Center QMPCA Accounting Treasury Founds Billing and TR B&I Management Invoicing Accounts Receivables FM SD Sales and AR Distribution Profitability AnalisysPA Financial Contract SM Service Management FI AP Accounts Payables Accounting CA Activity based costingABC Project System Work management PS WM Producto Costing MaterialPC IM Investment MM management Management Control function The EAAB from Bogota has a clear internal control function that belongs to the Planning Directorate and includes the following components as detailed in the graph below: Corporate Planning and Control Management Planning Directorate Planning Directorate Planning Directorate Quality and and Control of and Control of and Investments Processes Control Expenses, Costs Corporate Results Control Directorate and Profitablity This division was in charge of the implementation of the strategic plan and the restructuring process undertook with the assistance of Booz Allen and then followed up by the implementers of the SAP program. The process covered all areas of the company and integrated its operation around the initial vision. The plan at EAAB is controlled at three levels with control panel at every level: • Strategic level • Tactical level and • Operational level ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 60
  • 62. Levels of Control Strategic Level Tactical Level Operational Level Corporate Control Master System Process 1 Panel Control Panel Control Panel Customer service Process 2 Control Panel Control Panel Areas providers of Process n Service Control Panel Control Panel Integration with GIS The GIS system is used across the organization in all three companies visited and is linked to other systems like the SCADA, the customer system data base, the asset management system and planning and economic systems used in the companies. Examples of the use of this are shown in the graphs below: GIS Linked with the Customer and SCADA Systems Tanks Tibitoc Socioeconomic Primary Network Stratification in Hydraulic Sectors Barranquilla Areas of Service76% of customers belong to Strata 1,2,3, Zone Low North Zone Low South Intermediate Zone The access to accurate data with geographic information for all actions of the company allows for a more effective decision taking process with high impact to the company performance. ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 61
  • 63. INFORMATION TECHNOLOGY: THE EXPERIENCE OFBARCELONA - SPAINMIYAHUNA is looking for options to bring new knowledge to the company and solve theproblems of isolated or missing critical information systems. The study tour was conceivedin part to bring additional elements for further developing MIYAHUNA’s informationtechnology.Main Components of an IT SystemDuring meetings with various companies during the study tour, mainly with ASERCO, theteam had the opportunity to take a look at effective IT solutions applicable to watercompanies. The areas for IT systems were structured in the categories listed below.Commercial CycleThe successful implementation of this subsystem should help MIYAHUNA in improving thequality of the services to its customers, and in optimizing the company’s cash flows. Themain components of the commercial cycle subsystems are the following:• Contracts Management. This subsystem helps in accelerating the contracting process, in reducing contracting errors, and in enhancing the information on the customer base.• Meter & Readings Management. This subsystem helps in optimizing meter investments through the implementation of mobile and remote reading technologies.• Billing. This subsystem helps in improving the accuracy of the bills and of the revenue forecasts, and in facilitating the implementation of rate changes.• On-line Office. This website subsystem helps in improving communication with customers by facilitating access to their accounts, and making it easier to follow-up on pending requests and inquires.• Collection Management. This subsystem helps in reducing the collection time and the number of errors, in facilitating customer payments, and in monitoring the work of bill collectors.• Outstanding Payments Management. This subsystem helps in implementing a more effective control of accounts receivable, and in increasing the effectiveness of debt collection.• Complaints Management. This subsystem makes available a communication channel, with enough flexibility to facilitate and accelerate the resolution of customer complaints.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 62
  • 64. Asset ManagementThe area of Asset Management as presented by ASERCO includes various components suchas:• Facilities Technical Management. This subsystem helps in rationalizing maintenance costs of existing facilities (plants, equipment, etc.) and in improving maintenance planning.• Geographical Information Systems (GIS). This subsystem, adapted to water businesses has many advantages such as helping in determining optimal cost of different activities such as operation, maintenance, expansion and repair. It is a basic tool that helps in managing the database of the whole system by integrating all IT subsystems.• Projects & Street Works Management. This system incorporates best practices for planning and carrying out small works, optimizes works management and, thus, helps in increasing productivity and reducing operating costs.Infrastructure OperationThis is an efficient water operation program that includes water distribution schedules acrossdifferent areas of the city, and a monitoring system, using a database with key networkinformation. This program includes various subsystems amongst which are the following:• Meter Reading. This subsystem is generally provided as part of the SCADA and other systems. The accuracy of real time reading is crucial to have an online system reporting continually. The graphic representation of the data is a very effective way to help the users in understanding the water network operations.• Alarm Management. This subsystem, by comparing data recorded on-line with data collected in the past, helps the operators in anticipating problems in different areas of the network and, thus, in taking the necessary actions to solve the problems, or at least minimize their negative impact.• Interface Management. This subsystem is used to manage complex situations where water sources from different systems interface causing an impact that is difficult to analyze and predict without specialized software.• Hydraulic modeling. The management of water distribution systems in cities with significant variations in the terrain, as is the case of Amman, requires a detailed follow-up of the water volumes and pressures throughout the distribution system. This information, combined with additional information like number of households, time of the day, time ofORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 63
  • 65. the year, and historical data on consumption can be processed and analyzed, thus providing a valuable input to for operational decisions.Water QualityAnother subsystem mentioned as part of the ASERCO’s presentation is the one related towater quality. This subsystem incorporates innovative practices and tools that help inincreasing the efficiency and effectiveness of the water quality control system. Amongst thesubsystems in this area the following were mentioned:• Sample Management. This subsystem helps in defining the sample, handling sample- gathering, and a wide range of inquiries.• Database Management. This subsystem includes data from industries, laboratories, legal indexes, waste types, and contamination risks.• Analysis and Reporting. This subsystem provides tools for identifying items such as customers by type, and water quality in the treatment plants and sampling points in the network, thus helping in identifying non compliant samples under different points of view: legal, administrative and technical.The graph below represents the Infrastructure Operation program. IT Solutions for Infrastructure Operation Water supply Networks (metering management) Readings Meter Alarm Grouping Management Agbar Solutions Meter Interface Modeling Management • Meter Readings, Meter Grouping, Alarm handling, • Dashboard Meters Modelling & Interface managementOutsourcing IT ServicesASERCO has provided different modalities of assistance in IT services to companies inEurope and Latin America. While the visit, the company presented the steps for ITORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 64
  • 66. outsourcing according to their experience. The presentation can be summarized in thefollowing graph. AGBAR Outsourcing Approach Design Diseño Transition Regular Service End of Capabilities Implementation Service take Service Delivery Service evaluation model over Production Contract Capacity Finalization Trust Generation Stabilization Continuous Improvement Service Start-up Phase Continuous Improvement Phase Organizational Added Value Added Value in cost, technology and qualityDesign PhaseThis phase includes the following key steps: • Scoping, where the client company defines its business objectives, the key issues to be addressed, the proposed scope and constraints of the IT project, and the likely implication of the project on the staff. • Feasibility, where the consultant and the client agree on the scope of work, the expected benefits, the contractual framework, the approach to risk management, and the human resources requirements. • Preparation which includes contract preparation, compensation agreement and refinement of previous agreements.Transition PhaseThe transition phase starts once the consultant and the client have completed the initialdesign phase and signed the contract. The transition phase includes the following activities: • Service consolidation or the grouping of different activities that will be subject of the IT support. • Staff transfers to work under the responsibility of the consultant. During this stage the consultant provides guidance to the staff allocated to the project, including help to overcome the uncertainties and risks of the transition, progressive induction intoORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 65
  • 67. the proposed IT solutions, culture, career planning assistance, and definition of responsibilities. • Assets Equipment. The new program is equipped with the assets that are required to perform the task. The required equipment has been identified by the client and the consultant during the design phase. • Once completed all the above steps, the new service starts-up with the introduction of the new systems and the full implementation of the service.Regular ServiceOnce completed the implementation phase, the customer and the consultant continueoperating the system for some time until all bugs are fixed and the system is workingsatisfactorily. In this phase we distinguish the following stages: • Service management and reporting. The consultant continues supporting the client in the management and operation of the different systems and completing the implementation of the training program for the staff. • Benefits realization. The consultant continues helping the client in consolidating the benefits provided by the new IT system. In this stage, the systems that do not show significant improvement can still be adjusted to maximize its potential. • Continuous improvement. The consultant also trains the staff in the continuous evaluation, assessment, and improvement of the system.End of the ServiceAt the end of the regular service delivery, the consultant completes the transfer oftechnology following a methodology developed by ASERCO. Then, the consultant team isable to leave the project without any negative impact on the service. Additional assistancefor the maintenance or the upgrading of the systems after this stage is subject to a newcontract.Services ManagementAs the success of the IT consultancy services depends highly on how the client manages theIT system after the consultant completes its assignment, ASERCO has developed a servicesmanagement program that helps the client in enhancing the process of implementation of thenew systems and processes. Under this program, the client and the consultant work togetherin overseeing and adjusting the new system to the company’s needs. The servicemanagement for AGBAR has the components shown in the graph below.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 66
  • 68. AGBAR Service Management Approach SSM Review Service Quality Plan Service Level Reporting Service Level AgreementsService Strategic ManagementAt this initial level of the service delivery, the client establishes its priorities and agrees withthe consultants on the methodology to identify required improvementsService Quality PlanThe Service Quality Plan developed by the consultant during the regular consultancyservices defines the operational procedures. It remains with the client at the end of thecontract. These procedures are critical for the transfer of knowledge, and have to beconsistent with procedures applied in other parts of the organization. ASERCO, as part ofthe services management contract assist the client in implementing the service quality plan.Service Level ReportingMonitoring progress during the execution of the technical assistance is essential for thesuccess of the program. The monitoring reports should include planned and actual values ofthe performance indicators, as well as trends. The monitoring system should also includecomparisons between budgeted and actual inputs to the process. The managementdashboard should be continuously updated.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 67
  • 69. Service Level AgreementsA basic requirement for a successful implementation is the clarity of the contractualrelationship based on the initial contract that should include a clear scope of work and thetype of services to be provided by the consultant. The service agreement should alsoinclude the performance indicators.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 68
  • 71. STRATEGIC PLANNING: THE EXPERIENCE OF FAIRFAX – THEUNITED STATES OF AMERICABulk Water PlanningMWDSC provides water to 18 million people distributed over 13,500 square km, with anannual demand of 5,109 MCM. The high water demand in this area, coupled with limitedwater resources has made the agency one of the leading implementers of programs tooptimize water availability from various sources, including: An interesting program developed by MWDSC in irrigation districts follows two modalities: i) Introduction of water saving technologies. Using this 1. Conservation program MWDSC develops agreements with agriculture 2. Recycling producers whereby MWDSC invests in water saving 3. Desalination (planned) technologies for agriculture production in exchange of 4. Storage rights of use of saved water. 5. Aquifer storage and recovery ii) Crop Rotation Program. Under this initiative, MWDSC provides income to farmers that agree not to irrigate 1/3 6. Watershed initiatives of their land for a year and have it as an increased 7. Water exchange programs with rotation program to the traditional agriculture rotation agriculture practice. Through agreements of this type, the MWDSC secured 267 MMM of additional water to the system in 2006, or 5% to 6% of the total demand.MWDSC’s medium term planning until 2025 has the following targets.6 MWD 2025 Dry-Year Resource Targets Dry-Year Conservation 17% Local 41% SWP Transfers and Storage 14% SWP Delta Deliveries 10% Colorado River 19% SWP: State Water ProjectMWDSC long-term planning comprises a 50-year horizon. It encompasses investments ineach of 7 areas in the graphic above. The investment plan is executed through annualprograms. Each of the annual programs is developed jointly with the 26 partnering6 Local resources in the graph include sea and brackish water desalination.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 70
  • 72. organizations in the area. Each of the partners follows the guidelines provided by MWDSC,but also introduces their own programs in response to the local needs and communityexpectations. Each district develops its own regulations and incentive programs.Business Case Preparation and Project Selection for ITDCWASA carried out an IT Strategic Plan for 2002-2005 following a methodology thatsought to assure that the plan would be responsive to the needs of the entire usercommunity. The plan started with input from DCWASA’s senior managers and personnel,and followed a prioritization process of specific projects. Every project above $ 100,000should follow the business case evaluation methodology described in a manual developedfor this purpose. The methodology includes: 1. Option identification. This section should define the problem or opportunity, identify and screen the options, and present the steps and methodology for the evaluation. 2. Cost scenarios. This section should estimate direct up-front costs, direct ongoing costs and indirect or hidden costs. 3. Benefits definition and analysis. This section should identify comparative advantages and level of service improvements. It will also quantify tangible and intangible benefits. 4. Risks. This section should present the assessment of risks and the plan of action to manage and minimize them. 5. Options analysis. This section should include cost benefit analysis, identifying moderate and optimistic scenarios, sensitivity analysis, probability analysis, etc. Business Case Approval Process Department Prepares the Business Case yes Decision for Case presented to IT Committee Budget Review IT Committee Endorses? no Department Prepares yes Department the Business Case Revises no yes Presents Department Revises Exec. Committee Exec. Comm. Project Dead Approves yes Project BeginsORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 71
  • 73. The main highlights of this system of selection of projects are the following: 1. The projects emerge from an exercise of long-term planning (10 years) 2. The projects should be presented within the context of a mid term-horizon (2 to 3 years), and should include detailed definition, budget and implementation plan. 3. The template used follows a long-term and mid-term simulation exercise that is translated into the annual budget.Discussing the experience of DCWASA on project management implementation, theJordanian delegation recognized as valuable the following specific experiences: 1. The decision on who is going to manage approved projects - DCWASA’s personnel or an outside party - depends on factors such as size and required effort. 2. The analysis of available internal resources to manage a project is critical for its success. The hiring of an external manager (consultant) with the supervision of the company might be advisable in some cases. 3. The additional cash outlays of projects managed by outside personnel are generally offset by the savings from shorter implementation periods and lesser risks. The risk reduction is the outcome of having a well qualified implementer dedicated full time to the project. 4. DCWASA reduces implementation risks of large IT projects by hiring a project manager and, thus, avoiding delays, wastage of funds, or distortion of the projects as originally conceived.Strategic PlanningFairfax Water Utility gave an interesting description of its strategic planning function,including a detailed breakdown of the steps in progressive level of detail as follows: Step 1. Based on the Mission andFitrt Vision, the company defines its goals in every major area of work.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 72
  • 74. Step 2. Every goal has a list of strategies to achieve it. Water Quality Goal FAIRFAX Water seeks to provide customers with water in the top range of quality and will constantly explore avenues to ensure an adequate supply of raw and finished water. Strategy #1 Continue efforts to ensure the quality of raw water for the Washington Metropolitan Area. Step 3. Every strategy to support Action Steps every goal has its own action 1. Support Potomac Rives source water protection effort, including studies steps. and program implmentations through the Potyomoac River Basins Drinking Water Source Protection Partnership 2. Support and actively participate in efforts to protect the Occoquan Watershed including the Occoquan Watershed Monitoring Progra, and the Occoquan Nonpoint Source Program. 3. Implement and refine Occoquan Reservoir management strategies such as water quality monitoring, aeration and algaecide application.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 73
  • 75. Step 4. Every action step has a measurement of benchmark, the name of the accountable person and the deadline for its completion. ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 74
  • 77. COMPANY CULTURE: THE CASE OF COLOMBIA IndependenceEAAB, ACUACAR and Triple A operate with a sound degree of independence from themunicipalities and from the central government for their day-to-day activities. Yet,ACUACAR and Triple A, with private partners, have demonstrated more independence thanEAAB. ACUACAR and Triple A, however, depend to a large extent on governmentfinancing for their investment programs. EAAB, on the contrary, finances its investmentswith loans and internal cash generation. This is remarkable if we think that the companywas bankrupted less than 15 years ago. Self confidenceThe successes achieved by the three companies during the past 5 to 10 years, including theachievements of their own staff have created a notable self confidence and pride on themanagement capabilities of the top executives and staff at all levels.The systems development in all three cases counted with the initial support from the mothercompanies in the cases of Triple and ACUACAR, and from system implementers in the caseof EAAB. The adjustments and customization of the systems during the past few yearshave been mostly done by local staff who have reached a high level of competency. Localstaff has also implemented successful programs and projects in areas such as customerservices and water losses reduction. TrainingACUACAR and Triple A executives have been trained intensively on managerial andtechnical fields. The case of the operations manager of ACUACAR is illustrative of thistraining. He spent almost a year in Spain taking a high level executive management course,together with on-the job training at the mother company in Barcelona. All staff receivesperiodic training.Other executives like the customer services manager who is a Colombian had previousexperience with the parent company in Dominican Republic. Personnel benefits and workplace environmentThe observation of the attitude of the staff in the three companies suggests that pride in thework and opportunities to learn are important sources of motivation. The physicalconditions of the workplace seem to be another important motivator. For example,ACUACAR and Triple A have placed a lot of importance to the office equipment,particularly computers, to office furniture, and to clean and well-illuminated locations. Thecustomer service facilities have decorations, announcements and places for the customer tosit while conducting business with the staff.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 76
  • 78. Innovative personnel benefits were seen in the company of Barranquilla where allemployees are offered free lunch in the company premises. Field crews are also providefree lunch in three different place in the service area..The work schedule in the case of Barranquilla includes 8-hour-work shifts with one hourbreak. Employees can choose the early schedule from 7 am to 4 pm or from 8 am to 5pm.They can also choose to have an-hour break at their homes or at work. In the case ofCartagena the company has a fixed schedule for all workers with the exception of the fieldand special workers.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 77
  • 79. WORKPLACE ENVIRONMENT AND COMMUNITYINTEGRATION: THE EXPERIENCE OF FAIRFAX - UNITED STATESOF AMERICAImportance of the WorkplaceAll visited utilities consider that the design of physical space is essential for good staffperformance, creativity, and job satisfaction. Three of the utilities visited, which areparticularly aware of the importance of good physical space, have carried out renovations inrecent years, and also maintain in place continuous improvement programs. In parallel withinformation technology innovations, the utilities have modernized office equipment andworkplace layout and facilities.One of the most important features of the visited installations is the predominance of areaswith natural light and clean environments. Work-stations have ample storage areas tofacilitate the access to documentation and to help maintain clean and neat working places.There is also ample space for group meetings, equipped with boards and screens that facilitatethe exchange of ideas among the staff.The meeting rooms, entrances to buildings, and corridors are generally professionallydecorated, with designs and colors that encourage innovation and creativity. All workenvironments are non-smoking.All the utilities have state-of-the-art information technology. In the case of Fairfax Water, forexample, there are touch-screens for interactive presentations, where a presenter can write onthe screen and perform functions like accessing files, modifying texts, and executingcalculations.Workstations, natural light, comfortable chairs. Small meeting places for workgroups.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 78
  • 80. Workstations with boards for annotations, clean walls. Touch screen TV for interactive presentations.Lab corridors with natural light and artistic signs. Meeting room with modern design/livelycolors.Integration with the CommunityFairfax Water has a remarkable policy of integrating its infrastructure with the community,without affecting the landscape (see pictures below). This practice is highly appreciated bythe community since it helps to preserve the high investments they made in real estate. Pumping station with the appearance of a normal residence.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 79
  • 81. Well and pumping station in the middle of a neighborhood with the appearance of a farm. 77 MGD Clearwell Pump Station 4.5 MG Various water infrastructure elements as a pump station and a well in the middle of a neighborhood transformed in tennis courts or basketball courts.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 80
  • 82. EMPLOYMENT BENEFITS: THE EXPERIENCE OF THE UNITEDSTATESWater utilities in the USA have a quasi governmental status, and pay salaries lower than thosein the private sector. The utilities, however, offer higher job security and long-term benefits.The latter characteristics attract professionals that opt for a long-term career, with less of thecomplications or risks of most jobs in the private sector.Long -term Vision and Job SecurityAll the visited utilities have a long-term vision and prospects, which translate into potentiallong-term careers for their employees. The staff rotation is low for most employees in theutilities. The IT professionals are the exception, as the unusually high demand for theseprofessionals translates into salary levels well above those in the public sector.This overall environment translates in a work environment that supports the timelyimplementation of long-term projects. It translates also in continuous improvements ofoperation and maintenance practices.Long-term BenefitsOne of the main reasons explaining why water utilities can attract competent professionals,even with relatively low salaries, is the long-term benefit package, which is similar to othergovernment agencies throughout the USA.The quasi-governmental retirement plans covering the employees in the visited utilities offera lifetime pension adjusted for inflation (defined pension plan) or lump-sum payments,together with other benefits such as disability protection, pension for survivors, deathbenefits, and comprehensive health insurance coverage. Some pension schemes areguaranteed by the water company like in the case of Fairfax. In the case of California,employees’ pensions are funded and guaranteed by the California public employees’investment fund, one of the largest in the world.Difficulties in Attracting Talent in Certain AreasAll the utilities visited face difficulties in attracting talent in IT and in other technical areas,such as hydraulic modeling and some engineering fields. These difficulties are due to non-competitive salary levels. To compensate for this lack of competitive capacity, the utilitiesuse external consultants and contractors. Some of the strategies used are the following: 1. Outsourcing engineering talent for planning, designing and supervising construction, thus keeping a very small staff of 4 to 5 people at the company (DCWASA) with responsibilities in these areas.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 81
  • 83. 2. Recruiting young engineers, and offering them a special package for postgraduate studies and specialized training, in exchange for a minimum number of years of service in the company (case of Long Beach and Fairfax). 3. Outsourcing specific tasks like hydraulic modeling. 4. Outsourcing IT project management (DCWASA).ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 82
  • 85. TRANSIENT MANAGEMENT: THE EXPERIENCE OF SEVILLE -SPAINThe Institute of Water Technology has studied for several years the impact and behavior offluid transients, or its most common occurrence called the water hammer. A significantoutcome of these studies has been the software denominated Allievi to model fluidtransients.Allievi has been used by water companies in cities experiencing extreme water shortageslike Seville, which in some occasions has temporarily suspended or provided intermittentwater supply.Transient Management and the Experience in SevilleDuring the water shortages in Seville in the 1970s, EMASESA suspended water distributionand temporarily emptied the network. This operating regime created significant damage tothe network because of the transients or water hammer impacts. EMASESA, based on thelessons learned during this water shortage, handled differently a second water crisis in 1991-1993. This time EMASESA also suspended water distribution but without emptying thenetwork, which was kept with enough pressure to fill-in the network at the highest elevationpoint of the city. The results this time were much better than the results during the 1970sshortage.Transient: the MeaningThe transient is a temporary state in the network that is between two permanent states. Atransient is also known by the name of its effect, shock or water hammer. The impact of thistemporary situation in systems with interrupted supply causes serious damages in thenetwork. The graph below is a conceptual representation of a transient.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 84
  • 86. Equilibrium 1 Shock Equilibrium 2 A shock produces a transient between two permanent statesOrigin of the TransientTransients are present in systems that are characterized by significant changes in waterpressures, flows or speed. The extreme cases happen in systems that operate underinterrupted or intermittent supply conditions. The “on-and-off” distribution of water causesinnumerable transients in the system with all its negative consequences.Types of TransientTransients can be of various types depending on diverse elements combined in specificcircumstances, including the type of pipe, the elevation difference, the quality of water, thesize of the pipe, the existence of different elements of the network such as pumps, storagetanks, valves, and others.The main types of transient are listed below:Rigid models of mass oscillation • Non flexible pipe • Non pressure fluidElastic models of ariete shock • Elastic pipe • Pressure fluidORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 85
  • 87. Transients have important effects on the network, limiting its life, reducing its value, andcausing water losses, that in many cases go undetected for long periods of time. Thenegative pressures created by the transients are also a cause of water contamination,particularly when water and sewerage networks are in close proximity.The main possible consequences of transient are the following: • Maximum pressure that causes broken pipes • Minimum negative pressures that collapse pipes • Minimum pressure that reaches vapor tension o Rupture of liquid column o Recovery of liquid column o Smash of liquid columns o Surge of pressureThe graph below is a pipe collapse as a result of low pressure. Minimum Pressure reaches  vapor tension Pipe collapsedThe Allievi SoftwareAllievi simulates hydraulic transients in all kinds of water distribution systems, from simpleto sophisticated ones. The systems can have constant or variable storage levels as well asstorages with cross flows or side overflows. Also the systems can have pumping stationswith parallel pumps. The systems can have valves for regulation, retention, pressure relief,extra speed, and localized losses.The Allievi software recognizes protection devices like small tanks, chimneys (equilibrium,differential, variable section) and unidirectional tanks. With the help of this software thecompany can simulate hydraulic transients originated by: • Start or stop of pumpsORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 86
  • 88. • Closing and opening of valves • Network breaks • Any combination of the aboveThe variables incorporated in the Allievi software are: • Flow oscillations: Q = Q(x, t) • Speed oscillations: V = V(x, t) • Pressure oscillations P = P(x, t)The Allievi software provides graphs of the temporal and physical evolution of the waterflows, speed, and pressure in the network. It also provides numerical values for each instantof the calculations. The graph below illustrates a transient due to valve closing. Open Valve Closing Valve Closed Valve Transient due to  valve closingHow to Deal with TransientsThe Allievi software can provide valuable information to inform decisions on how to dealwith transients and avoid its negative consequences. Some of the basic recommendations toavoid pipe breaks due to hydraulic transients are the following: • Installing mechanical resistance to support extreme pressure • Limiting the ranges of pressure oscillations o Slow-closing of valves o Programmed stoppage of pumps o Installation of protection systemsThe graphs below illustrate protection systems.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 87
  • 89. Level of static pressure Burst Distribution  network fed   by  elevated storage Protection Systems Protection Systems Inertia between  rolling masses Retention valves         Protection Systems By‐Pass Stove• Retention valves by-pass• Stove or mini boiler• Inertia between rolling masses Equilibrium • Equilibrium chimney Chimeney• Relief valve• Vent• Unidirectional tank Relief  Unidirectional  Valve Vent TankIntermittent Supply and Physical LossesAllievi provides estimates of water losses in intermittent supply systems, mostly caused bytransient states in the network. These estimates are highly relevant, as they illustrate theimpact of measures to reduce leakages and to provide continuous service.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 88
  • 90. Traditional Indicators of Intermittent Water Supply¹ Flow Leaks Consumption Leaks Hours of Service m³/day m³/hour l/per/day m³/day m³/day % Start 1000 50 10 100 500 500 50% Stage 1 1000 40 11 112 560 440 44% Stage 2 1000 30 13.3 120 600 400 40% Stage 3 1000 20 17.5 130 650 350 35% Final 1000 10 24 152 760 240 24% Notes: ¹ Estimates provide by ITA. The critical part of a program to achieve the above results is the transition from intermittent to continuous water supply, together with a strategy to reduce physical losses.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 89
  • 92. BULK WATER MANAGEMENT: THE EXPERIENCE OF SPAINThe delegation visited two bulk water agencies; the Water Agency for Andalusia in Seville,and the Guadalquivir Hydrographic Confederation in Granada. These agencies areresponsible for allocating water rights in their respective regions. In discharging theirresponsibilities, the two agencies should follow directives issued by the European BasinManagement Agency and the Ministry of Agriculture in Spain.Water is a very scarce resource in Andalusia, with marked seasonal variations. Thesevariations are smoothed by a large number of water reservoirs regulating the rivers,particularly the Guadalquivir, which is the main river in Andalusia. There are 52 reservoirsin the Guadalquivir basin.At present, 80% of the water availability is allocated to agriculture and 20% to all otherusers, including urban water supply which has the highest priority.Main Features of Bulk Water Agencies in SpainConsensus BuildingBoth Andalusia and Guadalquivir are examples of effective approaches to reach consensusfor allocating water among different users and to enforce effectively and peacefully thecorresponding decisions. Both regions have forums to deal with sensitive issues related towater uses, encouraging broad participation of different stakeholders. The forums come upwith recommendations that are translated into formal agreements that end up in studies,regulations, or specific projects that are gradually implemented. The agencies understandthat attempts to move fast without seeking consensus are likely to result in forceful reactionsfrom negatively affected parties.Assigning Limited Water RightsNew water users have to pay for the rights of existing users, as there are no more waterrights to allocate. The agencies emphasize the concept of “Garantia”, that is, to make everyeffort possible to deliver fully the existing water rights. In time of severe water shortages,the agencies operate with the help of Crisis Committees, which provide a space for dialogueand transactions among affected users. These Committees have been very helpful inreducing social tensions.User CommitteesThe Agency of Andalusia distributes water for agricultural use through “UsersCommittees”. The Agency delivers bulk water to the Committee, and the Committee isresponsible to allocate it among its members. It is also responsible for operating thedistribution system. There is a history of about 80 years of Users Committees.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 91
  • 93. Efficiency in Water Use MattersThe water allocation to the agricultural committees in Andalusia is based on 5,500 m3 perhectare per year. The farmers under each Committee may trade water allocations. TheAgency is promoting a more efficient water use in agriculture through incentives likefinancing investments required to improve distribution channels.Prices of Bulk WaterThe price of water to the farmers in Andalusia has two parts. One which corresponds to theagency’s cost of delivering the bulk water to the committee (price in “Alta”); and the otherwhich corresponds to the costs of the Committee. The price in “Alta” depends on the timeof construction of the infrastructure providing the service to a particular Committee. Thesupply through infrastructure built before 2000 has the lowest price (about € 0.016 per m3).The price for supplies from infrastructure in the Guadalquivir built after 2000 is about fourtimes the first one. The desalinated water has a cost of about € 0.80 but it is beingsubsidized to the users. The subsidy is about 50% of the cost.When possible, water users mixed fresh and desalinated water as a means to avoid rationing.The higher costs for infrastructure built after 2000 are due to more stringent environmentaland social provisions. For example, it is not longer acceptable to resettle population to buildnew reservoirs.Water BankThe Andalusia water agency is considering the establishment of a bank for water (Banco delAgua) to facilitate transactions of water rights among water users, with governmentintervention. The bank would also be an instrument to help the government in balancingeconomic and social considerations in allocating water resources. For example, it is likelythat the transference of water rights affects not only the owner of the rights but a number ofpeople with industries and services associated to the activities of the owner of the waterrights. The bank would be along the lines of the one (s) in California, United States.The water agency emphasizes that a flexible but controlled system for transacting waterrights is essential to ensure that the water is allocated to the more productive users. In thiscontext, the agency assigns priority in the allocation of water rights to agricultural activitieswith a high value added, like vegetables and fruits exported to other countries in Europe.The same applies to other uses like industry and tourism. The water availability has to beguaranteed.Water Agreement for AndalusiaThe Andalusia Water Agency recently concluded the denominated “Water Agreement forAndalusia”. This agreement is the outcome of 12 months of discussions in forums withalmost 1 million participants. The objective of the agreement is to define the policy forORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 92
  • 94. distributing water among stakeholders, taking into account the need to promote the region’ssocial and economic development. The agreement has the following structure and content:1. Situation of Aquatic Systems. Includes the agreement to carry out of studies on wastewater treatment, procedures for monitoring groundwater quality, processes for treating contaminated water, plans for recovering ecosystems, and plans for introducing tourist and recreational water uses.2. Delivery of Water Services to Customers. Includes a program for studying issues like wastewater treatment in rural areas, water provision in low-population-density areas, low prices of water services, water deficits, modifications to the regulations for residential water distribution, new regulations for wastewater treatment, creation of a monitoring body to oversee the quality of water delivery, new financing systems to allocate infrastructure costs among differing users, including tariff adjustment in the next five years, and the water law objectives of minimum hydraulic efficiency levels for urban areas.3. Sustainability of Water Services. Includes developing consensus for the management of water catchments areas, developing plans for increasing investments in catchments areas, freezing extraction in water systems with deficit, plans for completing modern irrigation programs, plans for introducing billing according to volumes of water, mechanisms to reach consensus among water users, and priorities for water uses.4. Floods. Includes developing regulations to protect land affected by floods, plans for introducing a hydrologic model covering the Andalusia territory, and flood emergency plans.5. Drought Management. Includes early warning systems for dry periods, mechanisms for enforcing drought emergency plans in municipalities with more than 10,000 inhabitants, mechanisms for providing technical assistance to municipalities, and ways for promoting agreements among users to allocate water during drought periods.6. Economic and Financial System. Includes the introduction of corrector tax coefficients for the availability of water for different rural and urban uses, modernization of tax instruments like occupation fees, use and benefit from public hydraulic resources, and tariffs for water use. Introduction of a fee for use of groundwater, gradual implementation of a fee for water and sewer treatment in urban areas.Management of Water in Andalusia. Includes a new water management system for theregion, including provincial delegations, increasing the administrative efficiency, plans forimplementation large infrastructure projects, establishing the economic regime, andpromoting stakeholders participation in the decision making process for water allocation.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 93
  • 96. TECHNOLOGICAL INNOVATIONS: THE EXPERIENCE OF FAIRFAX -THE UNITED STATES OF AMERICAOzone Retrofit for Water TreatmentThe water treatments plants visited in Washington (DCWASA) and in California (MWDSC)have incorporated ozonization into their water treatment processes. Ozone, a form ofoxygen, is an excellent water disinfectant. The ozonization process produces fewerbyproducts that would otherwise form in the chlorine treatment. This technology destroys awider range of organisms in drinking water than chlorine and requires less contact time thanchlorine. Utilities generally use both chlorine and ozone.The impact of this technological improvement has been felt by customers of the FairfaxWater Utility that now see their water as the one with the highest quality compared withother companies providing the service in the region. There are many benefits to using ozone, such as the inactivation of Cryptosporidium and Giardia, with improvements in taste and odor and reduction in the formation of disinfection by-products. Ozone treatment tanks at Fairfax Water.Ozone is created by applying an electrical current to pure oxygen in specially designedchambers. From the chambers, ozone is dispersed in the settled water. Ozone breaks downorganic matter in the water into small particles that are then captured in the filtrationprocess.Advanced Meter Reading TechnologyDCWASA is a leader in Advanced Meter Reading systems in the water sector in the USA.The technology applied by DCWASA enables it to read meters remotely, without having tophysically visit the property. The system is as follows. An electronic module is installedinside the meter. The module sends information on water-usage, using wirelesstransmission, to a central data collection unit. Then, the data received in the data collectionunit is automatically forwarded to DCWASA’s customer service headquarters for billing.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 95
  • 97. DCWASA’s fixed-wireless technology enables the utility to collect data from meters on realtime, thus, allowing it to obtain information when it is needed and at low cost per reading(excluding installation costs). This fixed-wireless network not only minimizes meter-reading costs; it also facilitates leak detection (e.g. by looking for unusually high night flowsat individual residences), other conservation activities, and improves customer service.DCWASA’s total investment in AMR was $ 36 million (130,000 meters with an averagecost of $ 277 per meter - all types of meters included: bulk, for buildings, and forresidences). The investment cost includes the meters, the transmitter, the receiving stations,and the software and systems needed to monitor it. For residences only, DCWASA’srepresentatives estimate that the total investment cost would be about $ 130 to $ 150 permeter.• The main benefits of the project were: o Increased revenues because more accurate measurements. o Reduced cost of service since there is no need to read manually each meter. o Improved customer satisfaction, mainly through assistance to reduce wastage or losses. o Additional service offerings. The technology allows for additional services that can be provided for the benefit of customers like leak monitoring programs.• The main challenges of the project were: o Long implementation time. It took 5 years; 2 more than expected. o Underestimation of the network condition that required more than expected funds for system repairs and upgrading. o Support costs, including program developers and IT staff, higher than originally planned. o Technological issues related to equipment performance and reliability. AMR Technology Data Collector with modem and cellular Readings can be done as data transmitter Headquarters frequent as desired. In system DCWASA meters are read compiles and once a month but can be read 2500 meters per data collector cleans data up to 4 times a day to investigate any abnormal Meter with pulse Bills situation. Bills Reports sensor and Reports Analysis radio frequency Analysis transmitterORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 96
  • 98. After 5 years of implementation, DCWASA concluded that the investment on AMRtechnology pays for itself through the following means: 1. Reduction of reading and billing costs. 2. Reduction of connection costs for new customers (in the US, meters are under the name of the person living in the residence, so there is a cost involved in the change of customer). 3. Increased revenues (7%) through more accurate readings, and reduction in the number of estimated bills (down to 1%). 4. Reduction of water losses through theft and illegal connections (mainly through more accurate monitoring of consumption). 5. Reduction of meter monitoring and maintenance costs. 6. Preservation of network value allowing more effective preventive maintenance. 7. Reduction of call center costs (36% less calls from customers) and costs to solve customer’s complaints (50% reduction in bill investigations).ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 97
  • 99. INNOVATIONS: THE EXPERIENCE OF SPAINITA Experience with MetersITA considers meters a crucial element in water supply systems. Water meters are the onlytool that provides data from the field, which is essential to base critical water supplypolicies. The meters collect data to determine the amount of water delivered to customers.This data, together with the relevant tariff schedule determines the revenues of the watercompanies. Meters also allow the water companies to evaluate water losses, and customer’sbehavior. The reliability of the meters is crucial.Selection of MetersA first key step is the selection of meters, taking into account the following factors: • Materials used to manufacture the meter • Quality of water • Installation conditions • Degradation of mobile partes • Alteration of speed profile • Volumes consumed • Flow pressure • Meter designAn important element before the company’s management decides the purchase of aparticular meter is the experience on the ground. To do this, there should be a carefulmonitoring and analysis of meters installed in the field, and the results of its interaction withthe customers, the conditions of installment, and the response to water quality, volume,pressure.Metering System AuditThe water company should put in place a meter audit program to continuously evaluate thequality and state of meters in all the service area. To make this program cost-effective, thecompany should apply adequate sampling methods. The Information provided by the auditshelps in maintaining the integrity of the metering, and in guiding future meter purchases.Selection of Meter ModelThis decision should take into account the results of the audit of installed meters. A deepknowledge of the quality of the meters on the ground and of their response to differentconditions should allow the company’s management to make informed decisions about themost cost-effective meters.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 98
  • 100. The graphic below shows the cycle of an integrated program for water meters management. Water Meters Integral  Management Metering  Cost Benefit  Systems Audit Analysis Selection of  Replacement  Meter Model Program Continuing  Quality  Monitoring of  Controls Meters Maintenance of  MetersQuality Controls. A detailed quality control system at every stage of the purchase andinstallation of meters is essential for the success of the metering program. The companyshould thoroughly check the meters before installation. It also should make sure about thequality of the installation workmanship.Maintenance of Meters. Once installed and registered in a data base system, the metersshould have a scheduled maintenance that should be completed properly, including tests,and replacement and cleaning of parts. This activity should be properly funded and staffedwith trained personnel.Continuing Monitoring of Meters. The meters should be checked at the time of reading,and a system of random checks should be in place to verify the consistency of theinformation provided by the meter and relevant information available from other sources.Replacement Programs. The meters come with factory recommendations for replacement,but it is the company’s responsibility to develop and implement its own replacement policybased on the quality of water, the type of distribution network, and the culture of customers.A good data base on meters is essential for developing and implementing a cost-effectivereplacement program.Cost Benefit Analysis. The metering program should be cost effective.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 99
  • 101. Woltmann, ITA Software to Manage Meters The optimum management of the meter system requires knowing both the metrological characteristics of the meters that are installed and the water consumption conditions of the users. This knowledge can only be attained by performing a considerable number of tests, both in the laboratory and on the ground. The tests should help in determining the effective error curve of the meters in use. Woltmann software stems from ITAs experience in studies and analysis of the metrological behavior of meter systems. Woltmann is both an extremely flexible database and a sophisticated analysis tool for calculating errors in measurement. Woltmann allows the user to store the data on tests performed on water meters, and to monitor the users consumption patterns in a single format, specially designed for this purpose. It also has powerful analytical tools which enable the measuring of error in different types of meters to be worked out quickly, reliably and accurately. Meter Program in EMASESA  Meter reading is not only an instrument for invoicing. It is also a way to get information about consumption. EMASESA set the objective to reduce the average age of the meters in use to less than 4 years. EMASESA stock of meters is made up of: electronic meters (77%); mechanical class B (8%); and mechanical class C (15%). Electronic meters are very accurate. They detect with great speed small interior leaks. This contributes to the objective of reducing non- necessary water consumption. Three Ideas from ITA to Take Home 1) Meters are a key element in the water services • Have a great influence in the financial balance • Provide information required for strategic decisions 2) Meter errors are something “ALIVE” • Depend on the demand • Evolve with time • Depend on multiple interrelated factors 3) Meter management is a continuous cycle exercise • Meters installed require constant supervision and study • Perseverance has the price of best decisionsORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 100
  • 102. Drought Management in EMASESAEMASESA has developed an emergency plan for periods of water scarcity. The plan laysdown specific actions to be taken by the company during drought periods. The actions aregrouped in four categories: demand-side management, external resources, legal andinstitutional action, and coordination with other communities and organizations.EMASESA’s Emergency Plan envisages the creation of a Drought Committee as thedecision-making unit responsible for implementing the Plan. The Committee should workin coordination with the city’s Resource Protection Committee (RPC), which wasestablished by the municipality with the role of designing and implementing city-wide waterconservation policies.To enhance the management of the droughts, EMASESA has also developed a set ofdrought emergency indicators, as shown in the graph below. Emergency Indicators in EMASESA Pre Alert Alert Emergency Strategic Reserve Volume in ReserveDrought OfficeEMASESA has also established a drought office. This office is a support structure whoseprimary function is to promote the efficient use of water for irrigation. The main activitiesof the office include inspecting and repairing the infrastructure, and installing water-savingdevices and meters in irrigation facilities and fountains.External Communications PlanEMASESA has in place an external communications plan to inform the community aboutwater issues. EMASESA publishes, as part of the communications plan, a catalogue ofwater-saving devices, and distributes guidelines for sustainable water consumption.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 101
  • 103. EMASESA Experience in Raising FundsEMASESA signed in 2002 an agreement with a consortium of banks for a 100 million eurosloan to finance infrastructure improvements, including new reservoirs, replacement oftertiary networks, reduction of losses, and improvements of water treatment plants mainly toreduce electricity consumption. To repay the bank loans, the Municipality approved a newtariff level for the period 2001 to 2016. As part of the process, it was necessary to get atransaction grading from Standard & Poor’s and Moody’s.Crisis of Water Supply in SevilleJust at the end of the International Exposition in Seville in 1992, the water system collapsedand the city had to shift from permanent to intermittent water supply, and also had to usewater of a river that was not considered appropriate for drinking water without an expensivetreatment. The reasons for such collapse are the following: 1. Inadequate calculation of available resources. EMASESA did not have in place adequate methodologies to quantify the reservoirs capacity. 2. Lack of appropriate demand management. EMASESA did not have an adequate measurement of the evolution of consumption, and did not have in place a tariff system encouraging efficient water usage. 3. Lack of strategic planning and availability of long-term water rights. The water allocations for agricultural uses did not take into account recent urban developments. 4. Poor management of surface and ground water. The poor knowledge of the interaction of both types of sources and the long-term planning that has to be implemented to adjust both hydraulic cycles had not been taken into account. 5. Restrictive environmental measures that reduced the capacity of the reservoirs in various locations. 6. The lack of communications channels with customers the lack of consumer education on water issues.Innovation at EMASESAEMASESA has implemented a number of innovations in recent years. These innovationsare outlined below.• Global Reporting Initiative (GRI). EMASESA is a member of GRI, a large multi- stakeholder network of thousands of experts in dozens of countries worldwide. The GRI issues the Sustainability Reporting Framework, which provides guidelines for the water companies to inform the public about their economic, environmental and social performance. In line with the Framework. EMASESA prepares an annual report thatORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 102
  • 104. includes a detailed account of the activities that make EMASESA sustainable in the community of Seville.Energy Efficiency• Electricity Savings in Dams. EMASESA has installed 4 mini plants with an installed capacity of 11.277 MW at its dams to harness their hydroelectric potential. The power generated by its dams and wastewater treatment plants meets 44% of the company’s entire energy demand. The actual output varies according to climatic conditions and precipitation.• Electricity saving in wastewater treatment plants. EMASESA has achieved a total generation of electricity of 16.13 GWh of electric power through cogeneration equipment to harness biogas produced in its wastewater treatment plant.• Photovoltaic solar power. EMASESA installed a solar 10,000 Kwh power plant in the wastewater treatment plant. This capacity is the equivalent to the annual consumption of 250 households.• Biosolid management and reuse. EMASESA produced in 2007 72,000 tons of sludge suitable for farming.Quality PlanISO has awarded a number of certificates to EMASESA since 2004. These certificatesinclude the following:• ISO 9001 compliant with Quality Management System• ISO 14001 compliant with Environmental management System• ISO/IEC 17025 accreditation of its laboratories for technical competence for drinking water, metering laboratories and water hygiene.• ISO/IEC 17025 accreditation for in situ effluent control of pH, temperature and conductivity.• ISO/IEC 17020 accreditation as an inspection body.Various ProgramsSECORA system is a corporate communication system intended for municipal services thatoffer a broad coverage based on the single Tetra digital network which is four times moreefficient than analogue systems.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 103
  • 105. Hipsalnet project, entails laying over 100 km of optical fiber in the city of Seville sewersystem to provide broad-band communications infrastructure for voice, data, video andinternet services.DeSevilla Bottled Water EMASESA presented at the ExpoZaragoza in 2008 the bottled water “DeSevilla”. The bottled water initiative is part of a broader program aiming at developing the image, identity and pride of Seville. The bottled water has a citric flavor and the smell of a flower typical of Seville. The water has low content of minerals and sodium, and is recommended for people with hypertension and kidney problems. The glass bottle is decorated with the name of Seville in vivid red color. EMASESA is the first water company in Spain that presents a product like this. The first phase of commercialization will be restaurants, hotels and special foods stores. In a second round, this bottle will be distributed to supermarkets and the general public, but without losing its high-quality image. In a third stage EMASESA plans to sale it internationally, starting inLondon, New York and Dubai.All proceeds from the sale of this product will be allocated to fund the 10 most crucialproblems affecting water in Seville. As presented in the Zaragoza Expo such problems are:water waste, uncontrolled fishing, toxic discharges, world thirst, floods, disposal of waste tothe sea, extreme drought, shortage of water reserves, and contamination.Benchmarks: SIGMA SoftwareITA developed SIGMA, which is software that collects, calculates and processes data toassess performance of water services.The SIGMA software uses as basic information performance indicators (PI) which arecomparable measures of performance that usually are ratios or a relationship betweensignificant measures of utility performance. The PI’s are related to a specific time period,allowing for clear comparisons with targeted objectives. These should be simple and easyto understand, objective and unbiased, avoiding any personal or subjective appraisal.Indicators only become meaningful when compared to previous values in time, identifyingtrends. They should be also comparable with the values of previously established objectivesand with the values of the same indicators from peers.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 104
  • 106. SIGMA- System of Performance Indicators for Monitoring Supplies • SIGMA is the first general software of Management Indicators for water services. With SIGMA, the selection, evaluation and analysis of management indicators can be handled more easily, guaranteeing the consistency of the data and the calculations. The indicators can be imported from well-known sources (such as those of the World Bank or the IWA) or these can be created from zero. • SIGMA enables following-up and controlling the key information in the program. SIGMA is useful for detecting trends, or for comparing the indicator values with those of other companies. • The Lite version of the program is the official software of the system of indicators of the International Water Association and can be downloaded from the program website. The professional version of the program incorporates countless improvements. In July 2008 Sigma 2.0 was launched, with the possibility of performing metric benchmarking projects over the web.ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 105
  • 107. ANNEX STUDY TOURS DETAILS• STUDY TOUR TO COLOMBIA Dates: From December 1 to 11 of 2007 Participants: Kamal Zoubi MIYAHUNA’s CEO Ghazi Khalil MIYAHUNA’s Operations Director Majed Okour MIYAHUNA’s Acting Technical Services Director Mohammed Malkawi MIYAHUNA’s Customer Services Director Nidal Akieli coordinator with MIYAHUNA/Greater Amman Municipality Bader Kassab USAID/Jordan Bernardo Gomez SEGURA/IP3 Jose Valdez SEGURA/IP3 Entities Visited: Bogota Water and Sewerage Company (EAAB) Water, Sewerage and Solid Waste Company of Barranquilla (Triple A) Water and Sewerage Company of Cartagena (ACUACAR)• STUDY TOUR TO THE UNITED STATES Dates: From April 26 to May 6 of 2008 Participants: Saad Abu Hammour MIYAHUNA’s Deputy CEO Imad Zureikat Aqaba Water Company’s General Manager Tiseer Murad MIYAHUNA’s Finance Director Samih Al Amad MIYAHUNA’S Human Resources Director Maen Al Bawad MIYAHUNA’s Distribution Manager Vince Byrne SEGURA/IP3 Roger Patrick SEGURA/IP3 Jose Valdez SEGURA/IP3 Entities Visited: Fairfax Water District of Columbia Water and Sewer Authority (DCWASA) The Metropolitan Water District of Southern California (MWDSC) The Long Beach Water Department (LBWD)ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 106
  • 108. • STUDY TOUR TO SPAINDates: From October 23 to November 2 of 2008Participants: Munir Oweis General Secretary WAJ/ Chairman of MIYAHUNA’s Board Mousa Jamaani General Secretary JVA/member of MIYAHUNA’s Board Kamal Zoubi MIYAHUNA’s Chief Executive Officer Imad Zureikat Aqaba Water Company’s General Manager Jeries Dababhneh MIYAHUNA’s Technical Services Director Nasser Bathaineh MIYAHUNA’s Information Technology Director Joumana Alayed MIYAHUNA’s Communications Manager Bader Kassab USAID Water Directorate Bernardo Gomez SEGURA/IP3 Jose Valdez SEGURA/IP3Entities Visited: AGBAR GROUP and ASERCO in Barcelona EMIVASA, Valencia Water Company EMASESA, Seville Water Company Water Agency for Andalusia in Seville Guadalquivir Hydrographic Confederation in Granada Water Technology Institute (ITA) in Valencia ***ORGANIZATIONAL LEARNING OPPORTUNITIES - STUDY TOURS FOR MIYAHUNA IN 2007-2008 107