Cambodia’s Phnom Penh Water Supply Authority has become one of the most successful water utilities in the region. Director General Sim Sitha sets out the path to progress.
Once a war-torn water utility, Cambodia’s Phnom Penh Water Supply Authority (PPWSA) has become one of the most successful water utilities in the region – and, in some respects, around the world – following internal turnarounds that brought the international recognition of the Stockholm Industry Water Award in June 2010. PPWSA is today continuing its mandate to supply clean water 24/7 at sufficient pressure and an affordable price to the residents of Phnom Penh and the neighbouring town of Takmao in Kandal province without overlooking the poor. It is also striving to fully attain the Cambodia Sustainable Development Goals (CSDGs) by 2030.
Looking back, PPWSA expanded in parallel with development of the city over the years. In 1975, its production capacity was 150,000m3/day with a supply network of 288km. However, during the Khmer Rouge regime (1975-1979), the water supply was out of operation and much of the utility’s production and distribution facilities and equipment were massively ravaged. Many of its qualified personnel were also killed.
After the liberation day of 7 January 1979, the utility was made operational again to meet the city’s urgent demand for clean water. With many of its facilities and its equipment destroyed, the utility had a hard time repairing and trying to supply water again. It could produce only 65,000m3/day or 45% of its initial capacity, delivered through the more than 70-year-old cast-iron pipe network. Lack of electricity, chemicals, funds, and qualified personnel to undertake proper operation and maintenance restricted the utility to delivering a service for only a few hours per day at a very low pressure.
On top of this, formal applications for connections were almost impossible, creating dissatisfaction with the service. Illegal connections cost about $1000 and could be made by middlemen linked to PPWSA’s top managers. Day-to-day problems were further compounded by the public taking matters into their own hands and making thousands of unauthorised and illegal connections with underground tanks. The situation meant some city inhabitants had to bathe and do their washing-up at the rivers and carry water (by hand or by cart) from the rivers to their homes for daily use, which continued until 1993. Furthermore, the utility was overstaffed (22 staff per 1000 connections), non-revenue water (NRW) exceeded 70%, and total revenue covered only about 50% of operational expenditure, prompting a heavy subsidy from the government in 1993.
Shortly after the 1993 General Election, assisted by the United Nations, a new government was formed and was eligible for external assistance giving high priority to the water and sanitation sector. Development partners started providing much in the way of resources and technical know-how to assist in the reconstruction of Cambodia. That created an enabling environment and opportunities within the whole of PPWSA. At that time, our vision was to build an appropriate water utility that served the people. To comply with the vision, and based on external financing and grant aid from France, Japan, UNDP, the World Bank and the Asian Development Bank, PPWSA engaged in a remarkable transformation by carrying out a number of tough jobs.
First, the management was reshuffled. A new organisation chart was set up with clear roles and less hierarchy, streamlining more direct responsibilities to the managers. More importantly, young, dynamic staff were promoted to the front line, while inefficient old timers were disempowered and moved to dormant roles. Promotion was made based on collective decisions and quality.
Second, the culture was changed. The concept ‘Leadership by Example’ was introduced, by which all the managers had to become role models for their subordinates. Furthermore, those who were hard-working and performed well were given a higher salary as well as incentives and, in some cases, promoted. Working times were also changed to improve staff performance and discipline.
Third, staff capacity building was also implemented in response to the above reforms, starting in 1994 with immediate training for managers and frontline staff. Then, in 1996, an in-house training centre was set up to provide PPWSA’s staff with regular and tailored training that fitted their actual daily work. Eventually, a staff quality assessment programme and a year-end examination programme for the purposes of staff quality evaluation were started.
Full cost recovery
In addition to these steps, an improvement programme was set up to ensure full cost recovery. This included a number of approaches.
Updating the Consumer Database
In 1993, PPWSA had no actual information on its customers, along with a dismal record of collecting payments from them. In addition, most PPWSA staff never paid their water bills, and also sold the water they received free from PPWSA to their neighbours. Likewise, various ministries, ministers, and many influential people, as well as the army, rarely paid their bills.
To be fair and transparent, a one-year comprehensive customer survey was initiated in 1994 with 100 staff touring Phnom Penh and checking house to house for water connections. The findings revealed that there were 13,901 households in Phnom Penh that were getting water but were receiving no bills. Equally, there were many households receiving bills but no water.
Through a financial grant from the French government, a computerised billing system with an up-to-date customer database was completed and fully operational by 1996. In 2000, PPWSA computerised all financial transactions and reporting; a comprehensive Management Information System was completed in 2003. With this system, the latest financial data and collection status were accessible. It not only helped to avoid manual errors and prevented the abuse of power but also helped in our management decisions.
Non revenue water (NRW) is a critical factor contributing to the financial viability of PPWSA. Because of the high NRW, PPWSA took prompt remedial actions in 1993.
Inspection teams were created to eliminate all illegal connections and the public were encouraged to cease such activities. Incentives were given to anyone who could provide true information about illegal connections, and a heavy penalty was imposed on those associated with such connections. Any staff of PPWSA found to be associated with the activity of illegal connections were removed immediately. Consequently, the number of illegal connections dropped from one in a day to less than 10 a year.
A repair team was also organised to stand by 24 hours a day to make proper and immediate repairs to all leaks. PPWSA staff and the public were encouraged to call with information about the leaks in the system.
With the assistance of donors, PPWSA replaced all the old and non-working distribution pipes and installed a telemetry system for better monitoring and control of water flow and pressure in the network.
As a result, NRW dropped from more than 70% in 1993 to 5.9% by the end of 2009. But, to keep NRW sustainably below 10%, PPWSA has set up and adapted an eight-pronged strategy:
(1) Effective leak repair
(2) Updating the customer database,
(3) Metering of all service connection
(4) Fight against illegal connections,
(5) Standardised design of last mile service connection
(6) Gradual replacement of the old supply network
(7) District metering area (DMA) programme, and
(8) Introduction of internal service contracts.
Improving bill collection
An effective bill collection system has been established. The water meter readers and collectors have been encouraged with incentives for good collection, but penalties for poor results. Awareness and education of the public, including government institutions and the top management of PPWSA, promoted payment of water bills. This was not an easy task. However, with the strong support of the Prime Minister and the ‘Leadership by Example’ concept, PPWSA was able to convince effectively all its consumers to pay their bills. As a result, the collection ratio has risen to 99% from just 48% in 1993.
To further increase its collection efficiency, PPWSA put a spot-billing system in place from mid-2017. Every water meter reader has been equipped with mobile devices to print and issue bills to customers on site, and customers can make payments online via third party applications after half an hour.
Updating the masterplan
As the roadmap and the blueprint for its long-term improvements and developments, PPWSA has formulated three masterplans: Phase 1 (1993-2010), Phase 2 (2006-2020), and Phase 3 (2016-2030). In parallel, consecutive five-year and yearly action plans were set up and revised to achieve the strategic goals.
Given now the ambition to achieve CSDG 6 – ensuring “100% of urban population nationwide will get access to clean water by 2025” – the third masterplan has been reviewed and is being updated, work expected to be completed by early 2022.
Revising the tariff
The water tariff inherited was too low and needed to be increased to cover all costs. To avoid a huge jump, PPWSA proposed a three-step increase within seven years alongside delivering service improvements. With the support of the banks and strong political backing at home, from the Prime Minister, Finance Minister and Phnom Penh Governor, a cross-subsidised tariff was approved by the Council of Ministers on 1 June 1997, enabling PPWSA to become financially sustainable. The second step was adopted in 2001. However, the third step did not take place until May 2017, even though the electricity tariff and chemical costs increased year by year. This was because the revenue fully covered the cost due to the higher collection ratio and lower NRW.
Before 2015, software was used to assist in the network design with consulting input from SAFEGE. During the period, a telemetry was introduced to run a SCADA system to collect data from water networks and control the operations of a treatment plant.
Subsequently, to benefit from smart technology and to adapt itself to Industry 4.0, PPWSA has initiated an information technology revolution with installation of a new integrated system. The Geographic Information System (GIS), equipped with Knowledge Information System, SCADA and Sense Water water loss management system, assists in hydraulic works, NRW reduction, water production, water quality control, meter reading, and so on. In addition, the spot-billing system has been implemented widely to help drive commercial activities. After the application of these systems, PPWSA’s performance has improved, and the service has delivered greater satisfaction.
Innovations in the production line helped PPWSA reduce its costs to generate more income and profit.
In July 2012, polyaluminum chloride (PAC) was used to replace alum and lime in the treatment process. This has led to cost savings.
In addition, in June 2016, PPWSA began to modernise its treatment system equipped with sodium hypochlorite system, where chlorine gas was substituted by liquid chlorine. This has helped reduce risks in using chlorine gas, and saves a unit cost of US$0.0007 per cubic metre of treated water.
Several energy saving projects have also been implemented to contribute to addressing global warming challenges through the reduction of greenhouse gas emissions as well as to PPWSA’s cost savings.
To date, PPWSA has a total production capacity of 592,000m3/day. The water network has been rehabilitated and expanded to 2,845 km, increasing the number of customers to 333,288 households – almost 12.4 times that in 1993 – and covering more than 90% of Phnom Penh capital and Takmao town.
The coming years
To contribute to realising CSDG 6 by 2025, and based on its third masterplan, PPWSA has to increase production capacity from
592,000m3/day in 2020 to more than 1,000,000 m3/day by late 2023. This will allow it to fully serve an estimated 2.5 million people until 2030. In parallel, both the transmission and distribution network will also be extended gradually to increase service connections from 333,288 in 2020 to 550,000 in 2030.
To achieve these tasks, PPWSA has to implement four key investment projects. With the strong support of the Royal Government of Cambodia, especially the tutelary ministries, three of the four projects have reached the financing agreements, and the other has been the subject of a feasibility study. The first project for constructing the water treatment plant of 195,000m3/day started in early 2021, and the second with construction of the same-production capacity plant will also start late this year.
In my own view as the Director General, I am strongly confident and optimistic that PPWSA will be able to overcome all the possible challenges and achieve these tasks successfully with thorough considerations of the PPWSA management, and based on its considerable experience. •
Dr Sim Sitha is Director General of Phnom Penh Water Supply Authority