Utility Management

Trends in utility management

WRP Consulting provides a range of services in the water sector: from strategy development at a water supply system level to the water conservation and demand management for municipalities and utilities. Zama Siqalaba, CEO of WRP Consulting, highlights trends and concerns within the utility management space. By Kirsten Kelly

Currently, greater attention is placed on reducing water demand than increasing water supply with additional infrastructure. “When looking at tenders over the past few years, there has been a definite shift from large infrastructure projects to tenders around the management of infrastructure, with a special focus on reducing non-revenue water (NRW),” says Siqalaba.

Reducing water demand WRP Consulting completed its first NRW benchmarking study of all municipalities in South Africa in 2012, with a further update in 2015. The 2012 report showed NRW sitting at 36.8%, while the 2015 report put NRW at 41% – revealing a serious regression. “Increasing water supply does not help anything if we are unable to manage our existing water supply,” states Siqalaba. “Large water infrastructure projects require a significantly larger portion of capital investment when compared to NRW projects. In fact, NRW projects can defer future capital investments on infrastructure projects.”

The Department of Water and Sanitation (DWS) has turned down a lot of requests from municipalities around the expansion of water resource use licences when there has been a failure to prove that advanced water demand management systems are in place.

WRP Consulting is currently working on a project in a metro funded by a prominent international financing organisation, where it will develop and package an NRW project for funding. “We are focusing on a particular area and establishing a baseline of water losses and NRW. Recommendations will then be made on the types of interventions needed to reduce NRW – it is a trend across a number of metros,” adds Siqalaba.

Benchmarking “Benchmarking NRW is a massive exercise, and most of our work has been done under the DWS and Water Research Commission. It requires interaction with municipalities where there is constant communication, verification and interrogation of all data – if there is any available. Information is needed on assets in the ground as well as their operational status. Data is aggregated from different sources. It has helped to have a standard – the International Water Association Water Balance,” explains Siqalaba.

Some municipalities in rural areas do not have even the most rudimentary information needed to reduce NRW because metering is a challenge. “The difference between rural and urban settings is that urban areas can be divided into manageable zones that will each be individually metered – providing a greater amount of detail than rural areas. But in a rural setting, one can use bulk meters to establish a municipality’s system input and consumption, with the difference being water losses,” says Siqalaba.

WRP has developed the Zednet platform – a fully hosted software solution that manages infrastructure and assists in identifying and reducing losses in water distribution systems and aggregates logging information. “The Zednet platform is a real-time monitoring system that gives water managers access to information. It can determine pressures and flows from bulk meters that can provide a greater amount of detail in terms of where water losses are occurring – the main principle being that there is a direct link between high pressure profiles and leaks. Ideal for rural areas, Zednet supplies information that assists water utilities and municipalities in making investment decisions based on sound information on the performance of their water distribution or supply system,” explains Siqalaba.

Community awareness, public participation and PPPs There are many opportunities to change water practices and inefficient water use at community level. Siqalaba believes that communities must be involved in all Increasing water supply does not help anything if we are unable to manage our existing water

demand-side management and NRW programmes, as a lot of the changes and adaptations that need to be made usually rest at that level. “There is no point in implementing expensive infrastructure investments if there is no buy-in from the community to protect that infrastructure. Communities need to fix water leaks that they are responsible for and improve their own efficiencies. This will drive demand-side management.”

While there is a growing realisation that a water crisis will affect both citizens in the public sector as well as businesses in the private sector, public-private partnerships (PPPs) and concessions are difficult to get off the ground.

When preparing a project for funding, there must be a profit-based plan in place. Siqalaba adds that with limited government guarantees available, many public entities are increasingly exploring off-balance-sheet financing for these types of projects.

“There are a few examples of longterm concessions where the private sector will manage and operate water and sanitation infrastructure for municipalities, but I believe that there should be more. It is very difficult, costly and time-consuming to make these types of negotiations. National Treasury is trying to facilitate the process and make it easier for everyone,” Siqalaba notes.

WRP has been a part of some successful water-stewardship-type projects and performance-based projects that are not PPPs in the strictest sense. “With NRW, an example would be where business will see an incentive in investing in a municipality to reduce water use in a catchment from which the business draws water – thereby reducing their water business risk. We still need PPPs to look at larger-scale investments to bring NRW under control. But I have noticed that many client RFQs and tenders are structured to try to bridge the gap between the private and public sector,” she explains.

According to Siqalaba, when including the private sector in an NRW project, there must be a common, accepted and realistic understanding between the two parties on a baseline and the potential reduction of NRW. “In addition to a financial transaction, there has to be a relationship-building transaction, and a skills development transaction. There must be a good working relationship between parties on the project. A lot of time must be invested in building rapport and trust. The sustainability of these types of projects relies heavily on working relationships.”

It is also important for the public sector to have suitable knowledge and expertise to manage the project from its side. “This is critical for the sustainability of the project. WRP has worked on projects where great gains are made initially but, as soon as the consultant leaves the project, it starts to digress. The skills transfer component plays a major role in the long-term successes of these types of projects. There has to be an investment in systems, procedures, skills and expertise to manage and operate the project over the short, medium and long term – with the long term being key. To protect investment, these projects need to be programmatic and institutionalised in municipalities and utilities,” explains Siqalaba.

Smart technologies She states that another trend is the integration of smart technologies into the functioning of utilities and municipalities. “But the importance of human competence and skills cannot be ignored, as technology needs to be operated by skilled people. There is little point when utilities and municipalities have complicated systems that no one has the skills to use. There have been times when WRP has requested management information like a billing report from an entity and, while there may be good systems in place, no one has the skills to extract that information.

“The key is fit for purpose – when choosing a technology, one needs to consider the context of a municipality, as they are all in different stages of maturity in terms of skills and management systems. There is little point in buying the most expensive, technologically advanced systems when an entity does not have the expertise to operate them,” concludes Siqalaba.

In a rural setting, one can use bulk meters to establish a municipality’s system input and consumption