Performance Assessment and Benchmarking of Gondar Water Supply Services, Ethiopia

Master's Thesis, 2019

74 Pages, Grade: Very Good


Table of Contents





1.1 General
1.2 Background of the Study Area
1.3 Statement of the Problem
1.4 Objectives of the Study

2.1 Background
2.2 The Benchmarking Concept
2.3 The Existing Benchmarking Framework for Water Supply and Sanitation
2.4 International Efforts in Water and Sanitation Benchmarking
2.5 Key Performance Indicators
2.6 Water Service Level to Promote Health
2.7 Overview of the Urban Water Sector Performance in Uganda

3.1 Research Design and Data Collection
3.2 Data Analysis
3.3 Definition and Methods of Calculation of Key Performance Indicators

4.1 Water Supply Coverage
4.2 Average Total Per Capita Consumption
4.3 Average per Capita Domestic Consumption
4.4 Continuity of Piped Water Supply
4.5 Percentage of Treatment Capacity Utilized
4.6 Water Quality Compliance
4.7 Number of Persons per Domestic Connection
4.8 Non-Revenue Water
4.9 Revenue Collection Efficiency
4.10 Working Ratio (Tariff Cost Recovery)
4.11 Operating Cost Coverage
4.12 Personnel Expenditure (%)
4.13 Staffing level

5.1 Summary
5.2 Conclusion
5.3 Recommendations



Appendix A: Tables of Data and Results of Key Performance Indicators

Table A.1 Gondar Water Supply Coverage

Table A.2 Average Total per Capita Daily Consumption of Gondar

Table A.3 Average per Capita Daily Domestic Consumption of Gondar

Table A.4 Continuity of Piped Water Supply of Gondar

Table A.5 Percentage of Gondar Angereb Treatment Capacity Utilized

Table A.6 Percentage of Gondar Angereb Treatment Capacity Utilized

Table A.7 Numbers of Persons per Domestic Connection in Gondar

Table A.8 Non-Revenue Water of Gondar

Table A.9 Bill Revenue Collection Efficiency

Table A.10 Working Ratio (Tariff Cost Recovery) of Gondar

Table A.11 Operating Cost Coverage of Gondar

Table A.12 Personnel Expenditure of Gondar Water Utility

Table A.13 Staff per 1,000 Water Connections of Gondar

Appendix B: Data Requested From GWSSS for the Last Eight Years


Figure 1.1 Location Map of Study Area, Gondar City, Amhara Regional State, Ethiopia

Figure 4.1 Gondar Water Supply Coverage

Figure 4.2 Average Total per Capita Daily Consumption of Gondar

Figure 4.3 Average per Capita Daily Domestic Consumption of Gondar

Figure 4.4 Continuity of Piped Water Supply of Gondar

Figure 4.5 Angerb Water Treatment Plant of GWSSS

Figure 4.6 Percentage of Gondar Angereb Treatment Capacity Utilized

Figure 4.7 Water Quality Compliance

Figure 4.8 Numbers of Persons per Domestic Connection in Gondar

Figure 4.9 Non-Revenue Water of Gondar

Figure 4.10 Bill Revenue Collection Efficiency

Figure 4.11 Working Ratio of Gondar (Tariff Cost Recovery)

Figure 4.12 Operating Cost Coverage of Gondar

Figure 4.13 Personnel Expenditure in Gondar

Figure 4.14 Staff per 1,000 Water Connections of Gondar


Table 2.1: Key Performance Indicators

Table 2.2: Summary of Requirement for Water Service Level to Promote Health

Table 4.1 Benchmarking of Gondar Water Supply Services

Table 4.2 Summary Statistics of Gondar Water Supply Services Performance Indicators

Table 5.1 Performance Ranking Summary of GWSSS Based on Benchmarked Utilities


AWWA American Water Works Association

ESAWAS Eastern and Southern Africa Water and Sanitation

GWSSS Gondar Water Supply and Sewerage Service

IBNET International Benchmarking Network for Water and Sanitation Utilities

ISO International Organisation for Standardisation

IWA International Water Association

KPI Key Performance Indicators

l/c/d liter per capita per day

NWSC National Water and Sewerage Corporation (in Uganda)

NRW Non-Revenue Water

OCC Operating Cost Coverage

PIs Performance indicators

SDGs Sustainable Development Goals

STDEV Standard Deviation

WHO World Health Organization

WSS Water Supply System


Water supply systems are one of the most important and expensive core public infrastructures. The primary objective of a water supply utility is to have this valuable asset operate at its maximum possible efficiency with minimum cost throughout its design period. This can only be achieved by evaluating the existing efficiency of all the components of a water supply system using a suitable performance assessment framework, consisting of the relevant performance indicators and identification of areas that require improvements. Benchmarking in the water supply and sanitation sector is being promoted as a low-cost and effective tool to assist the improvement of water utility performance. The main objective of the study is to establish performance of GWSSS in terms of quality of water services, economical efficiency and operational sustainability against widely accepted key standard performance indicators and benchmarking the water utility against other well performing utilities around east Africa for purposes of development of decision support tools for better management of the system. The last eight year data from the annual report and from management information system of the Gondar utility are used in the analysis of indicators and to see the performance trend. Performance evaluation of water supply services for Gondar city was carried out using thirteen key performance indicators. From the first category six indicators in the quality of water services one indicator on water quality compliance has the utility performing well. The other five indicators that are water supply coverage, average total per capita consumption, average per capita domestic consumption, continuity of piped water supply, and number of persons per domestic connection are the performance of the utility is poor and much below the benchmarked utilities. From the second category of four indicators in improving economic efficiency one indicator in improving personnel expenditure has moderate performance; one indicator on tariff cost recovery has shown low performance, and two indicators in improving bill revenue collection efficiency and operating cost coverage are well performed. The third category of three indicators in improving operational sustainability; one indicator in staffing level is poor performance and two indicators in non-revenue water and treatment capacity utilized the utility is performing well compared to benchmarked utilities. In general GWSSS is performing well in five indicators, moderate performance in one indicator and the rest seven indicators the performance of Gondar is poor and much below the benchmarked utilities. Therefore it is highly recommended that Gondar utility should take much focus in improving: the water supply services, water production, number of water connection, water consumption, tariff cost recovery, and staffing level.

Key Words: Performance indicators, Benchmarking, Water Utility, Water Services, Gondar



1.1 General

Access to safe drinking water in sufficient quantity and at affordable cost is the right of every human being, irrespective of the location and size of their community (WHO 2012). The main purpose of a water supply utility is to ensure that it has satisfactory water supply services that can fulfill to its domestic and non-domestic customers. Since population continues to grow alarmingly nationally, and at faster rates in major cities of Ethiopia, utilities often need to consider whether it is appropriate to develop additional water supplies. Water supplies may be provided by greater withdrawals from surface water or groundwater resources, construction of reservoirs, or construction of water treatment facilities. Any of these types of projects carries a huge cost. As water utilities consider options, it makes sense to ensure that they are effectively managing the water resources al­ready under their control. More efficient use of water may avoid impacts to aquatic resources, provide greater ecosystem protection, and/or free up the water saved to serve additional needs.

Water Supply utilities are facing significant challenges as they struggle to increase the quality and lower the cost of services to their customers. These challenges include:

- Increased customer level of service demands
- Financial constraints
- Aging infrastructure
- Security and emergency response concerns
- Population Growth
- Climate change and reduced environmental footprint pressures

Over the past two decades, the use of performance indicators has emerged as the main tool for measuring and monitoring the performance of water utilities (Canneva and Guerin-Schneider, 2011). Benchmarking techniques have become a strategic tool for water regulators (De Witte and Marques, 2012). Benchmarking tools are used: (i) to promote and moti­vate competition between different water utilities in order to improve their performance, (ii) to identify the strengths and weaknesses in the performance of water utilities, (iii) to pro­mote information sharing and improve transparency in the reporting process, (iv) to identify performance trends, and (v) to provide information regarding the performance of water utilities to water consumers (Corton, 2003; Alegre et al., 2009; Padowski, 2008).

Performance benchmarking is a powerful tool to make service providers more accountable, and to measure progress while improving performance. Benchmarking in the water supply and sanitation sector is being promoted as a low-cost and effective tool to assist the improvement of water utility performance. The performance assessment is the key towards sustainability, where performance assessment can be defined as “any approach that allows for the evaluation of the efficiency or the effectiveness of a process or activity through the production of performance measures” (Alegre and Coelho, 2012). Performance assessment is currently a well-established practice in the water sector - water supply and wastewater collection (Cardoso et al., 2004; Kanakoudis and Tsitsifli, 2010; Sadiq et al., 2010)

Performance evaluation methodologies, such as the International Water Association (IWA) Performance Indicators System (PIS) (Alegre et al., 2000, 2006), are used to evaluate the water utility’s performance where a performance indicator is defined as a “quantitative measure of a particular aspect of the water undertaking’s performance or standard of service”. Performance indicators are used to assess the performance of the whole service, covering all its sectors of activity (Skarda, 1997; Alegre et al., 2000, 2006).

Unplanned and rapid growth of cities of developing countries poses major threat to service providers. Water supply management becomes critical aspect in the above scenario. The responsibility of managing its supply and distribution rests on the water utility of the cities. Gondar being Ethiopia’s fastest growing city has been selected for performance analysis of water supply services.

1.2 Background of the Study Area

The Gondar City Water Supply and Sewerage Service are located in the Central Gondar Zone of Amhara National Regional State. Central Gondar is one of the thirteen administrative zones in the Amhara National Regional State. The City of Gondar, founded by Emperor Fasiledes in 1636 A.D, is also the current capital of the Central Gondar Administrative Zone. It was once the Capital of Ethiopia for more than 200 years. Gondar City is located about 725 km away from Addis Ababa. The main highway connects Addis Ababa with Gondar via Debremarkos and Bahir Dar. The city is situated in the foothills of Simien Mountains at an average elevation of 2200 meters above sea level. The city is endowed with historical sites registered by UNESCO at international level and it provides a big stimulus to the economy by attracting tourists to the area.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1.1 Location Map of Study Area, Gondar City, Amhara Regional State, Ethiopia

Gondar is one of the most populated and historic cities in Amhara region. The urban population of Gondar including University of Gondar students is estimated as 338,026 in 2018 (GWSSS, 2012). The city is growing enormously in all sectors. However, the city is currently in critical shortage of water supply that requires urgent intervention. The current source of water for the town is from Angereb dam reservoir and sixteen boreholes with small yield per second. The current combined average production capacity of the Angereb and the operational wells are in the order of 13,629 m3/day, while the current water demand of the town is estimated to be more than 34,461 m3/day (GWSSS, 2012). Due to siltation of the reservoir, amount of the water in Angereb reservoir has been diminished from time to time and reached its critical level. The ground water resource near to the dam and Koladiba well field is diminishing from time to time due to depletion of water resources. The current sources all together cover not more than 40% of the water requirement of the city. This critical shortage of water constrained investment works, tourist resorts and other socio-economic development of the city.

The modern water supply system of Gondar city was constructed in the late 1930s from spring during the Italian invasion. A modern water supply system was introduced in 1945 and later improved in 1968. However, as a result of population growth and the expansion of the city in the mid-1970s a number of boreholes were drilled and springs were developed in order to comply with the ever increasing population and water demand. In the late 1980s, the construction of Angereb Dam and its Treatment Plant was started with the construction of an earth fill dam across Angereb River, about 2.3 km from the city center. Although the project implementation was deemed to be completed in 1988, the works took eight years and the system was commissioned in 1993. At the end of 2017 a new Koladiba ground water development project commenced by drilling of eight deep wells, construction of reservoirs, installation of water pumps and laying of transmission pipes. From this new project currently 6000 m3/day of additional water produced and distributed to the city.

Presently, the main sources of water for the city are the Angereb Treatment Plant and the sixteen boreholes located in Angereb Valley and Koladiba well field. Water produced from the, Angereb treatment plant, main water sources is lifted from clear water tank located at the treatment plant to Debre Berhan Selassie reservoir, where water is being distributed by gravity to the customers. Currently, due to shortage of water sources, aged of water supply system, rapid population growth and further expansion of the city, presently the residents of the city are facing critical water shortage and the existing system is unable to satisfy the required water demand.

In the near future and in the long term, the main challenge is to cover the needs and the demand in drinking water and sanitation of a rapidly growing population in Gondar City. The water resources are located in the surrounding areas of the city but due to the climate and the environmental conditions the construction of large reservoirs is required in order to cover the water needs during the long dry season. The Angereb Dam was constructed in the 1990s and is currently the main water resource for the City. A new dam (Megech) near Gondar is currently under construction for irrigation and water supply purpose will offer an important resource in the coming 50 years. The surface water needs to be treated before it can be used for drinking water purposes. This gives high investment cost for drinking water supply. The topography of the region is a major constraint given the energy costs too high to pump water to the City. Groundwater resource near the city is depleted and not sustainable options for large cities like Gondar.

1.3 Statement of the Problem

As a public utility responsible for water and sewerage services in Gondar and its environs, GWSSS is providing inadequate services to its customers. These include low service coverage and intermittent mode of water distribution characterized by long period of cut-offs and frequent water limitations. The problems could be attributed to limited or scarce water sources, substantial rate of water loss, inadequate hydraulic capacity and aging water distribution infrastructure, coupled with technical incompetence and inefficient management. The consequences of poor water and sanitation services in terms of health and financial costs especially to the low-income households could be enormous and could affect national economic development. Facing with the challenges of limited resources and also due to increasing demand for water, there is a need to establish how GWSSS has been performing against a set of standard and internationally accepted key performance indicators. The systematic investigation will help to establish the position of GWSSS in terms of its technical, financial and management capacity and develop mechanisms to improve the overall capacity of the utility to deliver better services to its customers. Moreover, the perception of residents regarding the quality of service delivery by GWSSS needs to be established as there is no as such a regulatory body to protect the interests of consumers.

1.4 Objectives of the Study

The main objective of the study is to establish performance of GWSSS in terms of quality of water services, economical efficiency and operational sustainability against widely accepted key standard performance indicators and benchmarking the water utility against other well performing utilities around east Africa for purposes of development of decision support tools for better management of the system.

The specific objectives are

- To make an assessment of the service delivery indicators applicable for GWSSS in order to determine its performance of quality of water services, economical efficiency and operational sustainability.
- To conduct benchmarking assessment of GWSSS’s performance against one of the well performing utilities in east Africa namely Uganda National Water and Sewerage Corporation (NWSC).
- To provide decision makers and the management with information and decision support tools for improvement of service delivery.
- Helping to increase the monitoring and evaluation capacity in utilities using the data available and benchmarks for performance in East Africa as a baseline for water utility performance in Africa.



2.1 Background

Access to safe drinking water in sufficient quantity and at affordable cost is the right of every human being, irrespective of the location and size of their community (WHO 2012). Like all other infrastructure systems, the water sector also faces a number of global challenges in the 21st century, including population growth, uncertain climate changes, socio-environmental issues, limited water resources, and economic crises (Berg and Danilenko 2011). A water supply system (WSS) may face a number of problems associated with its continuous aging process, including low pressure, water loss, and water quality deterioration (Alegre 1999; Alegre et al. 2006). To operate and maintain a WSS at its maximum possible efficiency at a viable cost is one of the prime objectives of any water utility. This goal can only be achieved by adopting rational and optimum maintenance, rehabilitation, and renewal strategies.

The first step towards a sustainable WSS is to evaluate the performance of a given WSS, which further provides the basis for detailed investigations. The performance of a WSS can be assessed by selecting suitable performance indicators (PIs) Berg and Danilenko 2011). The general concept of evaluating the performance of a WSS is to compare its performance with established benchmarks through cross-comparison with similar utilities (Alegre et al. 2000). Cross-comparisons at the international level require wider application of the overall performance evaluation framework, as well as the individual PI.

Performance is the degree to which infrastructure provides the services to meet the community expectations and it is a measure of effectiveness, reliability, and cost (NRC 1995). The performance of a WSS depends on efficient and reliable working of all functional components including water resources, physical assets, operational activities, personnel, and environmental and financial activities. The performance of a WSS is evaluated to indirectly estimate the conditions and rehabilitation needs to ensure continuous and reliable working of all of these components of a WSS during their entire service life before the occurrence of a failure. Once a failure has occurred, the cost of corrective action is much more than planned preventive action would have been. The difference between the planning and management cost and the cost of corrective actions justifies the need for PA.

The provision of water is vital to all communities. Water Service Authorities/Providers are often monopolistic and not subject to market competition, therefore, it is important that water provision is independently monitored to ensure that the performance of service providers is at an acceptable standard. Key Performance Indicators (KPIs) and Benchmarks are management tools for monitoring and improving the performance of people, systems, processes and organizations. Depending on the context, there may be some overlap in the definition between KPIs and Benchmarks. However, for the purposes of this paper, Key Performance Indicators and Benchmarks are defined as follows:

Benchmark: A benchmark is a measurement describing a key aspect of an entity that is being studied. It is typically an aspect that changes little with time, if at all. For example the length of water pipe per customer served is a benchmark which will vary according to housing density and to level of service. The number of Water Service Provider staff per 1000 customers served would be an indicator of WSP efficiency, and so on. Benchmarks are useful for comparing the performance of entities at the same time.

KPI: A Key Performance Indicator, or KPI, is a measurement that describes how well an entity is meeting its objectives, or the health of an entity, and may vary significantly with time. For example, the volume of water which cannot be accounted for in a system is a measurement that can vary significantly with time, depending on the frequency and the seriousness of leaks, and the length of time it takes to deal with those leaks.

2.2 The Benchmarking Concept

Benchmarking ‘a tool of both performance assessment and performance improvement’, originated in the manufacturing industry in the 1970s as a strategic tool to stay ahead of competitors (Lema and Price, 1995). After some time, benchmarking also entered the public domain where it is increasingly being used by regulators, national and local governments and public enterprises as a means to enhance both the transparency and the performance of public services (Braadbaart, 2007; Nyarko et al., 2009). Water utilities have been using benchmarking since the 1990s and the use of water utility benchmarking has since spread and is now being used worldwide. There are varied definitions of benchmarking. De Witte and Marques (2009b) define benchmarking as a process of comparing current performance of a utility with a reference performance and as such, benchmarking is seen as a tool to improve performance. Boxwell (1994) defines benchmarking as a process of systematically identifying, analyzing and learning from others’ best practices, ‘learning how much and, perhaps more important, learning how’. Harrington (1996) states that benchmarking is a “systematic way to identify, understand, and evolve superior products, services, designs, equipment, processes and practices to improve an organization’s real performance” and describes the approach as a ‘never-ending discovery and learning experience’. Generally, the overall objective of benchmarking is to assess and compare performance with others to identify the underlying superior processes and practices used by others and to adapt and apply these to improve one’s own performance. Benchmarking involves two stages that is performance assessment and performance improvement. Performance assessment looks at measuring performance for example percentage of people served or labour productivity. It enables performance comparisons overtime, or with other water providers or against stipulated guidelines or standards. Performance improvement deals with discovering the difference in the underlying policies, processes and methods being used. It enables comparison of processes for example between water utilities. Best practices are identified and these can be fine-tuned to suit context specific situations to enhance performance. This paper focuses on performance assessment.

Scrutiny of business practices has intensified in recent years, and the need for transparent and standardized information with which to compare utilities’ performances has gained prominence, leading to increased emphasis on measurement of results, on transparency, and on accountability. As a result, the use of benchmarking has increased, and its value is widely recognized. The primary objectives of benchmarking (Caroline, 2011) are as follows:

1. To provide a set of Key Performance Indicators (KPIs) related to a utility’s managerial, financial, operational, and regulatory activities that can be used to measure internal performance and provide managerial guidance
2. To enable an organization to compare its performance on KPIs with those of other relevant utilities to identify areas needing improvement, with the expectation of developing more efficient or effective methods to formulate and attain company goals as set forth in its business plan

Two types of benchmarking can be distinguished. Metric benchmarking involves systematically comparing the performance of one utility with that of other similar utilities, and even more importantly, tracking one utility’s performance over time. A water or wastewater utility can compare itself to other utilities of a similar size in the same country or in other countries. Similarly, a nation’s regulators can compare the performance of the utilities operating there. Metric benchmarking, essentially an analytical tool, can help utilities better understand their performance. Such benchmarking is most powerful when carried out over time, tracking year-to-year changes in performance.

Process benchmarking is a normative tool with which one utility can compare the effectiveness of its processes and procedures for carrying out different functions to those of selected peers. A utility can compare its billing and collection system, for example, to those used by other utilities to see which system performs better. When the comparison reveals one utility’s system to be more effective or efficient than the others, the underperforming utility can adopt and internalize those processes and procedures as appropriate. The performance indicator constitutes the building block of both types of benchmarking. Indicators are quantitative, comparable measurements of a specific type of activity or output. Often based on ratios and percentages, water sector indicators measure, for instance, the percentage of population served by the piped water-supply network or a utility’s ratio of total revenues to total costs during a given year (Caroline, 2011).

2.3 The Existing Benchmarking Framework for Water Supply and Sanitation

Internationally, benchmarking is being embraced, even though participation in benchmarking schemes is still quite low. The International Water Association (IWA) has taken on a leading role and has published benchmarking manuals for water supply (Alegre et al., 2006). The manuals define hundreds of performance indicators supplemented by contextual indicators where the latter allow the capturing of contextual information that may be useful in the understanding the outcome of the performance assessment. Apart from defining the indicators, the manuals also provide a rationale and approach for selecting indicators where IWA proposes that benchmarking should be part of a utility’s strategic planning efforts and serves the conversion of strategic objectives into goals, targets, critical success factors and ultimately the choice for fitting performance indicators. The indicators are selected from the set of indicators provided by the manual.

Performance Benchmarking has been adopted by the Authority as one of the tools for monitoring the performance of WSSAs. Benchmarking (comparative analysis) can be defined as: “A systematic process of searching for best practices, innovative ideas, and effective operating procedures that lead to superior performance--and then adapting those practices, ideas, and procedures to improve the performance of one’s own organization” (AWWA, 2005). Benchmarking seeks to identify standards or best practices to apply in measuring and improving performance.

Benchmarking enables utilities to identify the following:

i. What they are doing;
ii. How they are doing it;
iii. How others do it;
iv. How well they are doing it with reference to standards and best practices/performance; &
v. What and how to improve.

2.4 International Efforts in Water and Sanitation Benchmarking

Some notable efforts have been made by the American Water Works Association (AWWA), the International Water Association (IWA) and the International Benchmarking Network for Water and Sanitation Utilities (IBNET) of the World Bank. The IWA provides a framework within a utility perspective and a comprehensive set of indicators for water supply and waste water. Both the IBNET and AWWA provide ready-to-use frameworks and platforms for data collection, analysis, quality checks and dissemination of results. Both the IBNET and IWA highlight the importance of reliability of information and suggest methods for assessing the reliability of indicators and related level of confidence. However, the reported results do not always show the reliability assessments. For example, the utility results, as reported on the IBNET website, do not provide reliability bands for any of the results posted (CEPT University, 2013).

In 2007, three International Organization for Standardization (ISO) series were developed for services related to drinking water supply and waste water for both public and private utilities. The ISO 24510 series relates to service delivery to consumers or end users. It specifies three activities related to water and wastewater services to meet user expectations: provision of service; contract management and billing; and fostering user relationships. The ISO 24511 and 24512 series deal with infrastructural and management components of water and wastewater utilities. These series are intended as guidelines to manage the utilities. It is also applicable for cities with intermittent supply (less than 24 hours supply per day) as well as where supply is through non-piped means (for example, trucks, bottles, etc). Wastewater systems specified in the standard includes both sanitary and industrial wastewater that is drained into sewers, and sanitary waste in undiluted form Over the past two decades benchmarking in the water sector has been facilitated by different actors including: (a) utility associations in several different countries and regions, mainly for comparative assessments and process benchmarking; (b) national governments for improved information systems that can then be used for performance-based sector funding and process benchmarking; and c) for regulation – by regulators as well as through performance-based contracts (CEPT University, 2013).

2.5 Key Performance Indicators

There are many performance indicators that are used by water supply services to monitor the achievement of their activities and objectives as stipulated in the Business Planning Guidelines. However, only key performance indicators which address overall performance and common objectives of water supply services, have been selected for use in the benchmarking process. Key Performance Indicators have been assigned Service Level Benchmarks which are best practice for each of the specified indicators within the African Region (For example the Water Operator's Partnership Report of 2008, Impact Report from WASREB (2012), NWASCO report (2013), and benchmarks set by the Ethiopian Ministry of Water, Irrigation and Energy. The Key Performance Indicators are presented in Table 2.1. Formulation details for each benchmarking indicator are provided in chapter three. Key Performance indicators and Service Level Benchmarks may change subject to developments in the water sector.

Table 2.1: Key Performance Indicators

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A well-performing utility is a utility that is able to provide high-quality water and/or wastewater services to its customers in a sustainable manner. This definition of a well-performing utility includes elements of good financial and operational performance, but also universal access to water and wastewater services that are affordable to all. The analysis will look at three elements to define a well-performing utility: financial performance, customer performance (an index that covers the quality of access to water services), and operational performance. Water coverage is looked at separately because in many cases investments to support an increase in access to water and wastewater services are mostly funded by government and hence not fully under the control of the utility (Van, 2017).

While the use of performance indicators is widespread across government and private sectors, there are some factors to consider so that performance indicators are appropriate and effective. Establishing and capturing performance indicators requires resources. Therefore, the benefits derived from data must outweigh the costs of collection. Performance indicators should also be selected and used carefully to ensure data is aligned and representative of an area of performance or outcome that is desired. This will also help water utilities to collect data efficiently and prevent collecting unnecessary data.

In addition to the difference between compliance monitoring and performance indicators, a further distinction is between lag and lead indicators. Currently the performance indicator information we collect is based on lag indicators. Lag indicators are a historical measure, typically output-oriented and easy to measure, but can be hard to influence.

In contrast, lead indicators are predictive and are typically input-oriented, harder to measure but easier to influence. They generally measure changes associated with the overall outcome sought, and therefore can inform decisions to influence whether that outcome will be met. Because lead indicators measure expected performance, they are most usefully employed by organizations who intend to make proactive decisions or adjustments within a hands-on management approach. Clarity about the outcome sought is an important precursor to effective use of lead indicators (IPART, 2018).

2.6 Water Service Level to Promote Health

The basic need for water includes water used for personal hygiene, but defining a minimum has limited significance as the volume of water used by households depends on accessibility as determined primarily by distance and time, but also including reliability and potentially cost. Accessibility can be categorized in terms of service level. A summary of the degree to which different levels of service will meet requirements to sustain good health and interventions required to ensure health gains are maximized is shown in table 2.2 below (Howard, 2003).

Table 2.2: Summary of Requirement for Water Service Level to Promote Health

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Table 2.2 indicates the likely quantity of water that will be collected at different levels of service. The estimated quantities of water at each level may reduce where water supplies are intermittent and the risks of ingress of contaminated water into domestic water supplies will increase. Where optimal access is achieved, but the supply is intermittent, a further risk to health may result from the compromised functioning of waterborne sanitation systems.

The public health gains derived from use of increased volumes of water typically occur in two major increments. The first relates to overcoming a lack of basic access, where the distances and time involved in water collection result in use of volumes inadequate to support basic personal hygiene and may be marginally adequate for human consumption.

Further significant health gains occur largely when water is available at household level. Other benefits derived from the second step in improving access include increased time for example, child-care and food preparation and productive activity. Health gains derived from increased access between these two major steps appear limited, although other gains in relation to increased time for activities such as child-care, food preparation and productive activity (including education) may be significant and progressive. Further incremental improvements may also occur at higher levels of service, associated with further increased access and drinking-water quality control, but also linked to improved socio-economic status.

Where the basic access service level has not been achieved, hygiene cannot be assured and consumption requirements may be at risk. Therefore providing a basic level of access is the highest priority for the water and health sectors (G. Howard, 2003).

2.7 Overview of the Urban Water Sector Performance in Uganda

In Uganda, the water and sanitation sector falls under the Ministry of Water, Lands and Environment (MWLE). Since 1998, the MWLE has been undergoing a number of water sector reform initiatives to improve performance. One of the major arms of the Ministry that has undergone significant reforms is National Water and Sewerage Corporation (NWSC). The NWSC is a public corporation wholly owned by the government of Uganda, having been established in 1972 by decree No. 34. The corporation’s legal position was strengthened by NWSC Statute No. 7 of 1995, which was later enacted into NWSC Act of 2000. Under the new legal framework, the powers and structure of NWSC were revised to enable the corporation operate on a commercial and financially viable basis. Accordingly, the corporation is currently mandated to manage water and sewerage services in 19 Urban Areas under its jurisdiction. Uganda’s urban population is about 4 million people and out of this NWSC towns constitute about 2.5 million people (62 percent). The service coverage in the NWSC towns, as at June, 2005 was 68 percent. This is a clear indication that much more needs to be done to increase accessibility the water – the basic need. It must be noted that Uganda’s urban population is about 15 percent of the total population that stands at about 25 million people (Silver Mugisha, 2006).

The performance situation in NWSC as at 1998 was extremely appalling! At that time, the World Bank noted in their report that: “Over the last 10 years, the Government of Uganda in partnership with the World Bank and other Donors have made significant investments (over US $ 100 million) in the Urban Water and Sewerage sector. These investments have contributed immensely in rehabilitating the existing infrastructure under the NWSC management. Unfortunately, these investments have not been matched with the necessary efficient commercial and financial management capacity that can ensure the delivery of sustainable services in the medium to long-term”. This conclusion was after a thorough situation analysis in which it was found out that the corporation had sound infrastructure, abundant water resources and enabling legislative framework. However, the corporation had a number of problems. There was a large and inefficient labour force with conflicting and overlapping roles, high Unaccounted for Water (more than 50 percent), poor customer care, low collection efficiency (about 71 percent), huge debts aging about 14 months and corrupt field staff. The corporation had to contend with a number of threats, which included debt servicing obligations and a Value Added Tax (VAT) law that compelled it to pay taxes on any bills raised. The only consolation was that Government was willing to give support to proactive managers and the economy was relatively stable. But, in a nutshell, there was urgent need to improve operational and financial performance of the corporation.

More specifically, the following outlines the practices/lessons learned in NWSC in respect to monitoring performance indicators for improved performance (Silver Mugisha, 2006).

1. Purposive-based performance targets: The practice has been to set and emphasize performance targets in areas that specifically enhance financial viability and operating efficiency. The selected targets are also easy to measure without creating conflict between the regulator/monitor and the operators during the performance evaluation exercise.
2. Performance targets whose effects are easily informed by regular customer satisfaction surveys: Most targets in the contracts are such that the operator’s efforts toward achieving them can be verified through a service effectiveness assessment conducted via regular customer perception surveys.
3. Carefully planned performance evaluation and feedback to operators: The practice has been to monitor process performance indicators as proxies for ultimate output performance indicators. This monitoring is carried out at relatively shorter time intervals, giving timely feedback to operators to pre-empt inadequate performance. An example of a proxy process performance indicator is proportion of water leaks responded to out of the number reported. This measure is monitored on a monthly basis as a proxy for the quarterly unaccounted-for water target.
4. Incentive mechanisms that rationally apportion operating risks to both parties: The practice has been to strike an acceptable balance between what the operators, through experience, view as highly effort-intensive targets and those requiring minimum effort to achieve. The guiding criteria for the balance are: (a) fairness and acceptability, (b) a net added financial benefit to NWSC after an incentive has been earned and paid, (c) a simple incentive structure easily marketable to the operator’s lower level staff who will implement the contracted business plans, (d) variability of incentives earnable must correlate well with variability in the operator’s unobserved performance efforts.
5. Adequate provision in contracts for possibilities of an integrated monitoring system as part of the employer’s obligations (regulator is part and parcel of the employer): The emphasis has been to structure the monitoring/regulatory framework so as to achieve knowledge synergies from differently skilled staff. The monitoring structure has, throughout the contracts, been built around the core performance areas relating to technical operations, finance and accounts, and administration and customer care.
6. Tailor-made performance incentives as performance drivers: Performance incentives incorporated in all contracts were arrived at after prior detailed inquiries to find out what motivates staff most. The cash amount of the incentives is dependent on the number of optimum staff in each town, and was/is generally dictated by the town’s internal cash generation capacity. It also depends on the performance expectations and ambitions for each town. The orientation was not how much the key operator staff “pocket” but how much all staff who actively participates in operations get. The sharing rules were/are very explicitly defined in the contracts before they are signed.

As the first conclusion, the performance improvement programmes in NWSC have demonstrated that public organizations can deliver adequate performance if well managed. Management and staff of the organization need to embrace change as a constant factor and this approach has helped to ensure continuous innovation and hence improved performance in NWSC. There is need to implement effective commercial and customer care management to derive optimal value from water infrastructure investments. In this respect, what has happened in NWSC is not unique to Uganda but can be replicated in other developing countries of comparable operating environments. The second conclusion is that, after a long spell of heavy engineering orientation in a water utility, a shift from significant commercial/customer to engineering orientation is positively associated with reduction in technical inefficiencies. The result contributes to the body of knowledge in respect to water infrastructure management policy in low income countries. It is a good primer for managers seeking to carry out performance-led reforms aimed at enhancing financial and commercial sustainability. It is a good lesson for policy makers who think that only engineers can lead water-based companies (Silver Mugisha, 2006). Details of the performance improvement programmes that have been implemented in NWSC since 1998 can be found on



3.1 Research Design and Data Collection

This research was based on a case study approach. GWSSS was used as a case study to carry out investigation on performance of water services. The case study is preferred in examining contemporary events, but when the relevant behaviors cannot be manipulated (Yin, 1984). Further Yin (1984) reiterated that although the case study approach relies on many of the same techniques as a history, the advantage of case study approach is that it adds two sources of evidence not usually included in the historian's repertoire: direct observation and systematic interviewing and the case study's unique strength is its ability to deal with a full variety of evidence documents, artifacts, interviews, and observations-beyond what might be available in the conventional historical study.

Performance evaluation of water supply services for Gondar city was carried out using thirteen key performance indicators. These performance indicators are: Water Supply Coverage, Average Total Per Capita Consumption, Continuity of piped water supply, Per Capita Domestic Consumption, Percentage Treatment Capacity Utilized, Water quality compliance, Number of Persons per Domestic Connection, Non-Revenue Water, Revenue collection efficiency, Working ratio, Operating Cost Coverage (OCC %), Personnel expenditure, and Staffing level. Required data was collected from Gondar City Water Supply and Sewerage Service (GWSSS).

The data of this study was derived from a combination of different sources, including field research of public utility cases, a desk review of literature, and surveying operational experience from sector professionals. The study was carried out by extensive review of other water utilities which for the most part represent better-performing public water utilities in different country settings. To supplement the case research, the study drew from a wide body of literature in the areas of public sector management, with particular focus on the water supply and sanitation sector. Consultations were also carried out with experts in water supply and sanitation reform.


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Performance Assessment and Benchmarking of Gondar Water Supply Services, Ethiopia
Business Administration
Very Good
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Performance indicators, Benchmarking, Water Utility, Water Services, Gondar City
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Yirga Alemu Azene (Author), 2019, Performance Assessment and Benchmarking of Gondar Water Supply Services, Ethiopia, Munich, GRIN Verlag,


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