Measuring Efficiency of Water and Wastewater Company: A Dea Approach (original) (raw)
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Two Water Supply Systems (WSSs) have been operating and providing drinking water services to two discrete districts, namely, Second Ayno Maina (AM-WSS), District 10, owned and managed by a private sector: AFCO Corporation, and Central Kandahar (CK-WSS), Share-Naw, District 2, owned and managed by government entity: Department of Kandahar Water Supply and Sewerage, for four and ten years respectively. Both the WSSs use groundwater as source of drinking water, and due to overpopulation and urbanization, they tend to expand their services and improve their performances, despite the fact that the primary step to do so is the performance assessment of the existing systems, lacking at the moment and needs a careful consideration. Therefore, the research study is aimed at assisting the responsible authorities of the performances being carried by their existing systems and satisfaction level of their customers against the services provided, along with their international comparisons, with s...
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This paper presents an introduction to the use of Data Envelopment Analysis (DEA) technique for assessing the relative performances of water supply utilities. The DEA is a non-parametric, linear programming technique that generates an efficiency frontier for the sample utilities and measures performances relative to the frontier. The paper details the technique and its applications, and discusses some of the input and output variables that can be employed for evaluating performances of the water utilities. The paper notes that some of the important variables often need omission, as relevant data is often not available with most utilities in the developing countries. This highlights the need for evolving mechanisms to collect, and make public, the data pertaining to significant indicators of performance; and to evolve standardized definitions of various performance indicators for reliable appraisal of water supply utilities.
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Efficiency improvement is one of three patterns a public utility should follow in order to get funds for investments realization. The other two are recourse to bank loans or to private equity and tariff increase. Efficiency can be improved, for example, by growth and vertical integration and may be conditioned by environmental variables, such as customer and output density. Prior studies into the effects of these variables on the efficiency of water utilities do not agree on certain points (e.g., scale and economies of scope) and rarely consider others (e.g., density economies). This article aims to contribute to the literature by analysing the efficiency of water utilities in Denmark, observing the effects of operational and environmental variables. The method is based on two-stage Data Envelopment Analysis (DEA) applied to 101 water utilities. We found that the efficiency of the water sector was not affected by the observed variables, whereas that of wastewater was improved by smaller firm size, vertical integration strategy, and higher population density.
87th Annual IMESA Conference, 2024
As a water-scarce country, South Africa must efficiently manage its water to ensure the required service levels are delivered cost-effectively. However, there is a collective anecdotal perception that South African municipalities are inefficient in the use and management of water. This inefficiency manifests itself in poor delivery of water and sanitation services. The delivery of water and sanitation services is inextricably linked to the management of water and sanitation infrastructure, i.e. inadequate investment in infrastructure, deficient infrastructure operational procedures and insufficient infrastructure maintenance. Therefore, measuring water and sanitation infrastructure management efficiency will provide insight into the performance of municipalities in delivering water and sanitation services. Efficiency here relates to how well the service providers (municipalities) use the available resources to deliver services. Such a measure of efficiency must 1) be based on meaningful performance indicators and credible data, 2) be done transparently, 3) foster accountability, and 3) enable decision-makers to identify areas for improvement. Currently, there is no quantitative tool to objectively measure South African municipalities' efficiency in delivering water and sanitation services. It is not unreasonable to assume that the absence of such a model (quantitative tool for efficiency measurement) has contributed to our collective inability to measure, monitor and improve infrastructure management efficiency; after all, what is not measured cannot be improved. There is therefore a need to re-engineer and revolutionise our understanding and approach to municipal water services management efficiency. In this paper, the authors present a novel Data Envelopment Analysis (DEA) based tool for efficiency quantification in the form of the Municipal Water and Sanitation Services Infrastructure Management Efficiency (MWaSSIME) Index. The MWaSSIME Index determines the relative efficiencies of the 144 Water Services Authority (WSA) municipalities from the 2015/16 to 2022/2023 financial years. The analysis covers all 144 WSAs by category (grouping) as follows (number analysed in each category): A (8), B1 (18), B2 (20), B3 (68), B4 (9) and C2 (21). This grouping allowed for meaningful comparison of WSAs in the same category and the observation of patterns and trends across their respective categories. The results are both surprising and expected, as it is clear that infrastructure management efficiency is not possible with very limited resources (as shown by B4 and C2), but resource availability does not automatically equate to efficiency (as shown by A and B1). These and other MWaSSIME Index findings provide an evidence-based foundation for the engineered revolution of efficiency in municipal water and sanitation services infrastructure management, through appropriate benchmarking tools and techniques.
Malaysian Water Utilities Performance Using Two-Stage DEA
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Most previous studies on the performance of water utility services have adopted the standard data envelopment analysis (DEA) with slight modification. However, there are some loopholes which they have neglected the internal structure of proper measures of the operating performance of water utilities. This study uses a two-stage DEA to measure the performance of water supply services in Malaysia. The first stage uses operating cost and other factors to sustain the water production in terms of length of pipes involved and the number of clients. While in the second stage, the water production will generate revenue due to water delivered or consumed by clients. The two stages are an integrated efficiency model where optimal performance can be measured for both stages at the same time. The model will forms efficiency breakdown for both individual stages and uniquely it provides informative comprehensions compared to the traditional DEA.