Collection and Analysis of Utility Performance Benchmarks for Macedonia ( ) ADKOM
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1 Collection and Analysis of Utility Performance Benchmarks for Macedonia ( ) ADKOM
2 BENCHMARKING DEFFINITION, OBJECTIVES AND BENEFITS It is understood as the process for identification, understanding and adaptation of remarkable practices and processes of other organizations to help the improvement of its own performance. Providing the water companies with information that will help them to improve their management and operation; Allowing local and central authorities to compare water utilities performances; Providing key policy-makers and decision-makers with the information they need to benchmark sector performance and organize their support; Increase transparency towards the public by publishing the water companies performance results and the decisions made to improve the service quality; Raising awareness about the interest of such an exercise and increasing dialog between the water companies, the civil society, the local authorities, the central government and the Donor community.
3 THE BENCHMARKING PROCESS REQUIRES: Humility to accept that there may be other Companies with a better performance but under similar socio-economic environment Wisdom to learn the changes that may arise from comparison Ambition to introduce the necessary actions Effectiveness to accomplish the programmed goals
4 HISTORY OF THE BENCHMARKING PROJECT Unknown up to Reasons - Limited public availability, reliability and affordability of data - Very little information integrated in standard statistical publications of the communal services enterprises, as well as of the standard country statistical reports. Realization of the project - Reasons - The water sector currently ranks behind that of recent EU accession countries, and especially of the EU-15, in institutional practices (commercialization and political autonomy) and in key performance indicators. - Urgent need of work optimization and cost reduction - Improvements in performance efficiency and effectiveness of communal services enterprises
5 HISTORY OF THE BENCHMARKING PROJECT There were two complementary benchmarking initiatives for Macedonia: by GTZ-sponsored project on the Improvement of Economic Efficiency of Public Utility Services - workshop organized by the World Bank and ADKOM in December 2007 on performance assessment of Macedonia water utilities according to IBNET. The IBNET benchmarking project realized binding on the contract signed by the Association of communal service providers of Macedonia (ADKOM) and the IBNET World Bank. ADKOM was designated to take the lead in initiating benchmarking in communal sector service in the Strategy and Action Plan for Reform of Communal Services Enterprises with focus on Water, Sewerage and Solid Waste Management (Diagnostic and Strategy Final Report), prepared by Economic Consulting Associates in association with MCIC, BAR E.C.E. and IGE Consulting. The realization of the IBNET Benchmarking Project started in August 2008 and ended in January 2009.
6 REALIZATION OF THE BENCHMARKING PROJECT Developed performance monitoring and benchmarking of the water sector in Macedonia through collection of technical and financial data for the year from the biggest 15 water companies. Company name JPKR Usluga'' JKP Vodovod J K P "Standard" JP "Komunalec" JK Komunalec KJP Vodovod JP "Vodovod" J.P. Komunalec MJP Proakva JP Plavaja JKP Proleter JPKD Isar J.P. Vodovod I Kanalizacija -Skopje JPKD Komunalec JKP Derven Berovo Bitola Debar Gostivar Kavadarci Kocani Kumanovo Negotino Struga Radovis Resen Stip Skopje Strumica Veles Municipality
7 REALIZATION OF THE BENCHMARKING PROJECT Developed performance monitoring and benchmarking of the water sector in Macedonia through collection of technical and financial data for the year from the biggest 15 water companies. it was considered participant companies (the sample) to be enough representatives, having in mind their capacity to supply the most of the population in MK with water and sewerage (representing at least 75% of Macedonian s urban population). The selection of separate companies that need to collect and provide data, was on companies voluntary basis.
8 THE APPLIED METHODOLOGY Data was collected through survey work, focus group discussions and reports review. The collected data are provided back in EXCEL template format, supplied by the World Bank Within the EXCEL sheets, key performance indicators are calculated automatically upon inserted data and already inserted formulas and functions.
9 INTERNATIONAL BENCHMARKING NETWORK WATER AND SANITATION UTILITIES DATA Utility Information Customer Relations Contact Information Tariff Information General Information IBNET DATA Financial Information Service Area Sewerage Service Staff Water Service
10 INTERNATIONAL BENCHMARKING NETWORK WATER AND SANITATION UTILITIES INDICATORS Affordability / PPP Service coverage Water consumption & production Assets Non revenue water Financial performance IBNET INICATORS Meters Billings & collections Network performance Quality of service Operating costs & staff
11 DATA HAVE BEEN ENTERED, VALIDATED AND REPORTED BY THE IBNET TOOL KIT SOFTWARE
12 ACTIVITIES Initial workshop was held in Negotino (October,2008) with general managers and technical staff of the 15 th selected communal enterprises. The content and the importance of the Project were in details explained. The technical staff of each company was identified and appointed as responsible individual project coordinators. The EXCEL benchmarking template format for data collection was delivered in electronic and hard format and explained to responsible. Several group discussions have been organized with appointed project coordinators on site, as well as through many telephone conversations, questions and concerns were discussed and explained. Additional workshop was organized in Skopje (December,2008) with project coordinators - all identified problems during data collection and data filling in EXCEL sheets on general level were explained in depth again
13 Water sector performance indicators for 15 Utilities for the years Country Report Macedonia Indicator Water Coverage (%) 100,0 94,6 95,3 95,2 95,3 2.1 Sewerage Coverage (%) 4.1 Total Water Consumption (l/person/day) 4.7 Residential Consumption (l/person/day) 6.1 Non Revenue Water (%) 6.2 Non Revenue Water (m3/km/day) 8.1 % Sold that is Metered (%) 94,3 82,3 78,4 79,2 79,5 173,0 199,8 180,6 176,0 171,0 115,8 135,9 123,8 121,7 123,6 58,2 57,3 58,6 59,9 60,2 72,37 115,84 108,36 110,00 105,82 99,2 95,9 94,2 94,2 94,0
14 Water sector performance indicators for 15 Utilities for the years Country Report Macedonia Indicator Operational Cost W&WW (US$/m3 water sold) 12.3 Staff W/1000 W pop served (W/1000 W pop served) 18.1 Average Revenue W&WW (US$/m3 water sold) 23.1 Collection Period (Days) 23.2 Collection Ratio (%) 24.1 Operating Cost Coverage (ratio) 0,437 0,282 0,292 0,318 0,363 2,37 1,12 1,10 1,11 1,10 0,515 0,469 0,492 0,478 0, ,5 427,1 479,3 511,8 485,6 121,2 84,5 86,8 84,9 83,2 1,179 1,644 1,686 1,503 1,906
15 WATER CONSUMPTION AND PRODUCTUION 250 Total Water Consumption (l/person/day) Residential Consumption (l/person/day)
16 NON REVENUE WATER 300 NRW (%) 2007 NRW (m3/km/day)
17 BILLINGS AND COLLECTIONS 250 Collection Ratio (%)
18 FINANCIAL PERFORMANCE 3.5 Operating Cost Coverage (ratio)
19 DISSEMINATION OF RESULTS Hard copy and electronic copy report Report announced and published in ADKOM s electronic newspaper Results internationally presented on workshop in Prishtina, Kosovo (June, 2009), organized by Water and Waste regulatory office in Kosovo under the topic Performance evaluation of Water Companies in Region (Albania and Macedonia) and the comparisons with Water Sector in Kosovo
20 SUMMARY This Project should be considered as initial step in developing benchmarking practices in Macedonia. The positive experience of this project was thought to motivate involved communal enterprises in the first project to collect data for the next years and to continue to calculate performance indicators according to IBNET benchmarking template format, and to expand the benchmarking toward communal enterprises, which did not participate. Need to continue Benchmarking project among previously involved communal enterprises and spread to new ones The project will enhance transparency in key areas of operations, finances and quality of services, initiate promotion of a process of improving efficiency, target settings and cooperation between each utility, collection of data on regular basis and benchmarking annually.
21 WHAT WE HAVE LEARNED While not technically difficult, it IS hard work This is a communication project To improve, we have to change, and change is always hard. Performance measurement and benchmarking mean nothing if we don t do something with the results. Strategy: Start with some quick wins to get buy in, then move to more ambitious improvement programs. It actually works! We can easily measure progress with numbers and facts Breaking the habits of the past is hard,but it MUST start.
22 WHY ENGAGE IN REGIONAL BENCHMARKING? The ultimate objective for engaging in regional benchmarking is, of course, to improve regional development. Regional benchmarking is a powerful strategic policy tool which contributes to regional development by effectively serving a number of key functions. These include: Raising awareness - One of the most important reasons and value added by the regional benchmarking process is raising awareness of regional stakeholders on the region s position as compared to other regions. Generation of knowledge - By learning how to effectively address major challenges based upon others policy-learning experiences Trans-regional Co-operation - Trans-regional benchmarking projects can be an opportunity to collaborate with other regions and build trans-regional partnerships Regional Marketing - Benchmarking can be seen as a regional marketing tool
23 OVERVIEW OF REGIONAL INNOVATION BENCHMARKING METHODOLOGY The steps for the implementation of the regional innovation benchmarking methodology should include: Selection of indicators Creation of the benchmarking database Production of the benchmarking data Analysis and interpretation of statistics Suggestions for improvement
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