The management of Non-Revenue Water (NRW) needs to be understood as a key human security challenge, especially in water-scarce regions of the world. The lack of reliable information on water distribution networks forms the base of ineffective NRW reduction efforts. Building a comprehensive management information system is the first step in producing actionable information that can inform management interventions. Effective NRW reduction needs effective information management.
NON-REVENUE WATER: A GLOBAL CHALLENGE
The relevance of water to human security cannot be overstated.
Rapid population growth and urbanisation, as well as income growth, can over-burden water resources and increase the gap between water demand and supply. Climate change, extreme weather patterns and the variable distribution of water resources across sovereign territories unlock further security challenges such as flooding, drought and potential water related disasters and conflicts that threaten livelihoods and social cohesion.
Utilities, especially those operating in water scarce regions of the world, need to ensure that quality water is provided to all relevant sectors of society and that populations are safe from the potential threats of water crises. In order to mitigate current and future water related challenges, the management of Non-Revenue Water (NRW) needs to be understood as a key human security challenge, especially in water scarce countries like South Africa.
WHAT IS NON-REVENUE WATER
Non-Revenue Water (NRW) refers to the considerable difference between water put into a distribution system and the amount billed to consumers1:
THREE COMPONENTS OF NON-REVENUE WATER
Physical loss – leakage from all parts of the system and overflows at the utility’s tanks caused by poor operations and maintenance,the lack of active leakage control, or poor quality of underground assets.
Commercial loss – Caused by customer meter under-registration, data-handling errors and theft of water in various forms.
Unbilled authorised consumption – water used by the utility for operational purposes – fire fighting and water provided for free to certain groups.
THE COST OF NRW
In 2012, the World Bank2 estimated that roughly 45 million cubic meters of water are lost daily on a global scale through water leakage in distribution networks. A further 30 million cubic meters go unaccounted for due to theft, employees’ corruption, and poor metering. These conservative global estimates translate into $141 billion of revenue lost per annum, of which one third can be attributed to developing countries.
With the global average at around 35%, some low-income countries lose up to 50-60% of water supplied. South Africa’s average of 36,8% (1580 million cubic meters) in 2012 compares favourably to the global average, but still translates into a financial loss of R 7, 2 billion a year 3. It is furthermore high compared to other water-scarce countries like Australia that boast per annum losses of below 10%.
High levels of NRW reflect badly on water utilities’ ability to manage their water assets and ultimately deliver key services to their clients. Apart from the negative impact on financial viability through lost revenues and increased operational costs, high levels of NRW can damage reputation and customer relations. It constructs an image of a poorly run water utility that lacks governance, autonomy, and accountability, as well as the technical and managerial skills necessary to provide reliable customer service 4.
THE VALUE OF ACTIONABLE INFORMATION
According to the urban water-supply optomisation company Miya, reducing NRW in developing countries can contribute to 5:
Supplying water to an additional 100 million people without further investment.
Generating US$3 billion in additional self-generated cash flow.
Obtaining a greater fairness between users by reducing illegal connections.
Improved customer service.
Uncovering new business opportunities that create thousands more jobs.
Utilities, however, struggle due to a myriad of obstacles that sometimes lie beyond their ability to control. Institutional and political pressures to keep numbers down, lack of financial and human resources, as well as incompetent managers populating high-level positions due to political or corrupt affiliations all determine where NRW lies on the political agenda.
One key area of concern, and opportunity for positive intervention lies in the area of data capture and the generation of actionable information. Managers need access to information on the entire water distribution network in order to fully understand the nature of NRW and its impact on utility operations, financial health, and customer satisfaction. They furthermore need to be able communicate this to executives, financial departments and other decision makers.
You can only manage what you can see and measure and the lack of reliable information therefore forms the base of ineffective NRW reduction efforts. Actionable information informs effective management. It turns decision-making into a more scientific process. It is only when data is captured, consolidated and visually represented that the bigger picture can be seen and further communicated.
A first and crucial step is to establish where all assets are located in space and how they have been functioning over time. By linking captured information to a spatially enabled management information system, a more accurate picture starts to emerge around which further actions can be strategised.
By harnessing holistic infrastructure asset life-cycle management software solutions, such as IMQS’s Asset Verification Mobile Application and Infrastructure Asset Management Solution, utilities can start building their financial and spatially linked asset register from the bottom up. So doing, utilities are able to turn their data into actionable information directed at the comprehensive management of water infrastructure assets.
Ultimately, the goal of better NRW management should be to better inform decisions made regarding the allocation of budget to capital and operational projects and expose theft and corruption where they before lay shrouded. Accurate and visual information facilitates communication and transparency between departments, especially between financial and technical practitioners who possess different skill-sets, agendas and focus points.
Along with robust water demand management practices, infrastructure asset management software solutions can help utilities in water scarce regions turn the tide on the challenge that non-revenue water poses.
1. Kingdom et al. (2006) The Challenge of Reducing Non-Revenue Water in Developing Countries. World Bank.
3. McKenzie, R et al. (2012) The State of Non-Revenue Water in South Africa. Water Research Commission.
4. Farley et al. (2008). The Manager’s Non-Revenue Water Handbook – Guide to Understanding Water losses. Ranhill Utilities.
5. Liemberger. R. n.d. The Challenge of Managing Non-Revenue Water. Miya Group.