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Institutional Consultant (IC)

Key performance Indicators

The WPIP / MIP V support is characterised by ‘performance based financing’. This means, that the foreseen investments for each UKR will be set free under the condition of INCREASED COST COVERAGE. Cost coverage can be increased

  • by reducing costs (water production and delivery, sewerage collection
    and treatment costs, overhead/administration costs, payroll (salaries),
    materials, electricity, external services, cost of repair & maintenance, cost
    of purchased water and other direct costs)
  • by increasing revenues (increased collection of water fees, new clients,
    adapting tariffs)


Costs can be reduced and revenues can be increased by improving performance.

Performance is measured by Key Performance Indicators (KPI).

The most relevant KPIs and the target values for 2027

Key Performance IndicatorTarget Values for 2027
Direct Operating Costs (DOC) coverage (%)about 120% (in order to cover Total Operating Costs)
Integrity Management Index (%)More than 20% as compared to the baseline (which is in average about 50%)
Staff efficiency (admin&water employees / 1000 active connections)8 employees / 1000 active connections
Average water supply hours (h/day)>16 hours
Non-Revenue Water (NRW) (%)There is no fixed value as the situation depends from UKR to UKR. One condition common for all is, that NRW is continuously reduced.
Connections metering level (%)100 % targeted
Average collection efficiency (collection rate) (%)100 % targeted

IC support for improving KPIs

Reduction of direct operating costs (DOC)

In most of the cases, the DOC is related mainly to two cost items: personnel and electricity costs constitute between 80-90% of the DOC of the utilities.

Measures:
reduce costs for energy by: i) replacing old pumps, ii) reduce water loss through the broken network, iii) reducing staff (target value: 8 employees / 1000 active connections)

Reduction of Non-revenue water (NRW)

NRW is a major problem and cost driver in many UKRs, with few exceptions.

Measures:
Main emphasis is put on improving the administrative and commercial causes for non-revenue water. This is an important precondition for knowing more exactly, how much of the NRW is due to leakages and broken pipes.

The IC support includes:

  • improved customer databases,
  • improved billing and collection processes,
  • customer care,
  • continuous follow up of water balances in existing DMAs, and if required
    the upgrade of data management systems,
  • working procedures for detection and prevention of illegal connections
    and meter bypasses,
  • establishment of disconnection procedures


Technical support measures are more demanding, and it was decided to implement it through a pilot activity. UKR Vlorë has been proposed by AKUK to be a Pilot UKR for implementation of the LOTUS framework, which includes GIS / DMAs / hydraulic model and other technical measures, which can provide guidance and an example to all other UKRs toward successful and sustainable NRW reduction.