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Attributes of Well-Performing Water Utilities including two mapping tools for utility reforms. Capacity Building Module. Customer orientation. reporting & “listening” to clients. being answerable to another party for policy decisions, for the use of resources, and for performance.

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Attributes of Well-Performing Water Utilities including two mapping tools for utility reforms

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Attributes of well performing water utilities including two mapping tools for utility reforms l.jpg

Attributes of Well-Performing Water Utilitiesincluding two mapping tools for utility reforms

Capacity Building Module


Critical dimensions of a well run public or private utility l.jpg

Customer orientation

reporting & “listening” to clients

being answerable to another party for policy decisions, for the use of resources, and for performance

Accountability

being independent to manage professionally without arbitrary interference by others

Autonomy

Critical dimensions of a well run (public or private) utility


Customer orientation l.jpg

What?

Degree to which utilities report and “listen” to their customers, work to better meet their needs

Customer orientation increases accountability of the service provider to its customers

How?

Actively survey customers to learn their views and preferences in order to make better decisions

Use customer information to steer decision making

Have developed billings and collection systems that best overcome specific constraints faced by various customer groups

Inform customers about service changes and interruptions

Have developed effective complaint resolution mechanisms

Customer Orientation

Customer orientation ‘pays’! (happy customers pay for services)


Example simapag guanajuato mexico l.jpg

Invested in knowing what their customer wanted:

Surveys about 200 customers per month on their level of satisfaction with provided services

Uses customer information for management decisions:

Surveys feed into the Balanced Scorecard which is used to support strategic decision-making

‘client perspective’ is the most important of a number of ‘perspectives’ by which performance is measured in the Balanced Scorecard

Information is not yet methodologically used to define corporate strategies and priorities but scorecard focuses staff’s priorities thus increasing efficiency

Invested in mechanisms to improve services:

customer information through bill stuffers and the media

expanded modes of billing and collection to minimize waiting times at utility office

Established tracking system for complaints

frequent customer management training for staff

Example: SIMAPAG (Guanajuato, Mexico)

Results

  • Between 1996 and 2001: SIMAPAG’s income from customers increased by 280% from approximately $141,000 to over $400,000.

  • Funds have been reinvested to improve water supply services and helped to expand sewerage services

    But…in 2003: the city council lowered monthly automatic tariff increase from 1.1% to 0.01% (< inflation)


Critical dimensions of a well run public or private utility5 l.jpg

Customer orientation

reporting & “listening” to clients

being answerable to another party for policy decisions, for the use of resources, and for performance

Accountability

being independent to manage professionally without arbitrary interference by others

Autonomy

Critical dimensions of a well run (public or private) utility


Utilities with internal accountability autonomy l.jpg

Hard measures

Business plans

Systematic reporting between various levels

Incentives (rewards and penalties) to achieve well-defined performance targets

Standard processes, streamlined procedures

Cost accounting techniques that link resources to outputs

Outsourcing, market testing

Benchmarking

Soft measures

Training to improve staff skills

Strong corporate culture

Moral and behavior norms that inspire staff and management to excel

Clear vision and mission statements

Shaped by top management

Utilities with Internal Accountability & Autonomy

…have shifted from traditional hierarchical set up to flatter decision-making structures


Example public utilities board singapore l.jpg

Internal decentralization of responsibilities:

Multilayered organization

Departmental heads are accountable for results - expenditure approval ceilings for various management levels

Outsources 25% of the operating budget

Decentralization is supported by good info:

Performance indicators reported bi-monthly to the Board and published annually

Standard business processes and systems (ISO-9001)

Well-defined communication channels, including scheduled regular meetings

Corporate culture:

Clear merit-based promotion policies

Grooming of staff and rotation policies

Extensive training of staff (1.8% of operational budget)

Visible mission statement

PUB performance (2002)

Example: Public Utilities Board (Singapore)


External autonomy and accountability l.jpg

Degree of independence from external interference in utility manager’s decision-making

Extent to which external stakeholders (governments, financiers, customers) are able to sanction the utility for results and use of resources

External Autonomy and Accountability

Accountability

Autonomy


External autonomy creating room to deliver l.jpg

financial

financial

political

strategic

political

strategic

Space to maneuver

Space to maneuver

technical

technical

External autonomy: creating room to deliver


Effective autonomy is often lower than paper autonomy l.jpg

Effective autonomy is often lower than ‘paper’ autonomy


External accountability l.jpg

External accountability

A utility functions in a web of accountabilities to a variety of external actors with different functions

Actors

  • Central governments

  • Local governments

  • Customers

  • Financing institutions

  • Regulators

Functions

  • policy making

  • Ownership (utility and asset)

  • Regulation

  • Demand for services

  • Financing


Slide12 l.jpg

Example: Johannesburg, South-Africa

Several external actors fulfill different functions


Further information l.jpg

Further information

Available at:

http://siteresources.worldbank.org/INTWSS/Resources/Workingnote9.pdf


Slide14 l.jpg

Tool 1

Mapping internal vs external reforms


Slide15 l.jpg

Sustainable utility reform and reform of the environment have to go hand-in-hand

Our goal

good

Typical reform path

environment

Possible combinations environment status/utility provider status

poor

utility

poor

good


Slide16 l.jpg

03 staff performance contracts

02 automatic tariff indexation

00 ext & int performance contracts

98-00 service & revenue enhancement programs

98 new MD

97 new Board

97 corporate plan

95 new statute

end 80s & 90s Major rehab

mid 80s new government

70s political turmoil

How Uganda combined reform measures for the NWSC utility and its environment

Reform of the environment

Utility reform


And how reforms enhanced performance of nwsc l.jpg

…and how reforms enhanced performance of NWSC


Slide18 l.jpg

Tool 2

Mapping external accountabilities


Mapping the map ofaccountabilities of a utility l.jpg

Utility

Customers

National Government

Local Government

Mapping the map ofaccountabilities of a utility

A traditional utility: accountability skewed towards local government


Balancing and diversifying accountabilities l.jpg

Utility

Utility

Utility

Utility

Customers

  • Raise tariffs

  • Raise tariffs

  • Raise tariffs

Customers

Customers

Customers

Local Government

National Government

  • Source external funding

  • Source external funding

Local Government

National Government

  • Introduce regulator

Independent

regulator

National Government

National Government

Local Government

Local Government

Bank

Bank

Balancing and diversifying accountabilities

What could be done?


Slide21 l.jpg

Introduction of group work

  • Groups of 5-10 people each. Each group appoints a chair and a rapporteur.

  • Each group gets assigned a case.

  • Groups get 30 minutes to discuss.

  • Each rapporteur has 5 minutes to report back to the whole class (with flipchart)

    Questions for each group

    Define the accountability framework of the utility?

    • To which actors is the utility accountable?

    • Which of the following functions exercises each of these actors:

    • What is the relative ‘strength’ of each actor to hold the utility accountable on a scale of 0-3?

    • Based on (a), (b) and (c), draw the accountability map of the utility.

      If you have time left:

    • how could one better balance the utility’s accountabilities and create more autonomy for the utility?


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