Attributes of well_performing_utilities_mv_g_0807
•Als PPT, PDF herunterladen•
0 gefällt mir•465 views
This 90 minute face-to-face module presents some of the external and internal factors associated with good performance of water utilities, as well as practical tools for assessing their functioning, and past and future reform paths. The intended format is a seminar which incorporates both a lecture and question and answer period.
Empfohlen
Empfohlen
Weitere ähnliche Inhalte
Andere mochten auch
Andere mochten auch (9)
Ähnlich wie Attributes of well_performing_utilities_mv_g_0807
Ähnlich wie Attributes of well_performing_utilities_mv_g_0807 (20)
Kürzlich hochgeladen
Kürzlich hochgeladen (20)
Attributes of well_performing_utilities_mv_g_0807
- 1. 1 Attributes of Well-Performing Water Utilities including two mapping tools for utility reforms Capacity Building Module
- 2. 2 Critical dimensions of a well run (public or private) utility Autonomy being independent to manage professionally without arbitrary interference by others reporting & “listening” to clientsCustomer orientation being answerable to another party for policy decisions, for the use of resources, and for performance Accountability
- 3. 3 Customer Orientation What? Degree to which utilities report and “listen” to their customers, work to better meet their needs Customer orientation increases accountability of the service provider to its customers How? Actively survey customers to learn their views and preferences in order to make better decisions Use customer information to steer decision making Have developed billings and collection systems that best overcome specific constraints faced by various customer groups Inform customers about service changes and interruptions Have developed effective complaint resolution mechanisms Customer orientation ‘pays’! (happy customers pay for services)
- 4. 4 Example: SIMAPAG (Guanajuato, Mexico) Invested in knowing what their customer wanted: Surveys about 200 customers per month on their level of satisfaction with provided services Uses customer information for management decisions: Surveys feed into the Balanced Scorecard which is used to support strategic decision-making ‘client perspective’ is the most important of a number of ‘perspectives’ by which performance is measured in the Balanced Scorecard Information is not yet methodologically used to define corporate strategies and priorities but scorecard focuses staff’s priorities thus increasing efficiency Invested in mechanisms to improve services: customer information through bill stuffers and the media expanded modes of billing and collection to minimize waiting times at utility office Established tracking system for complaints frequent customer management training for staff Results Between 1996 and 2001: SIMAPAG’s income from customers increased by 280% from approximately $141,000 to over $400,000. Funds have been reinvested to improve water supply services and helped to expand sewerage services But…in 2003: the city council lowered monthly automatic tariff increase from 1.1% to 0.01% (< inflation)
- 5. 5 Critical dimensions of a well run (public or private) utility Autonomy being independent to manage professionally without arbitrary interference by others reporting & “listening” to clientsCustomer orientation being answerable to another party for policy decisions, for the use of resources, and for performance Accountability
- 6. 6 Utilities with Internal Accountability & Autonomy Hard measures Business plans Systematic reporting between various levels Incentives (rewards and penalties) to achieve well-defined performance targets Standard processes, streamlined procedures Cost accounting techniques that link resources to outputs Outsourcing, market testing Benchmarking Soft measures Training to improve staff skills Strong corporate culture ∼ Moral and behavior norms that inspire staff and management to excel ∼ Clear vision and mission statements ∼ Shaped by top management …have shifted from traditional hierarchical set up to flatter decision-making structures
- 7. 7 Example: Public Utilities Board (Singapore) Internal decentralization of responsibilities: Multilayered organization Departmental heads are accountable for results - expenditure approval ceilings for various management levels Outsources 25% of the operating budget Decentralization is supported by good info: Performance indicators reported bi-monthly to the Board and published annually Standard business processes and systems (ISO-9001) Well-defined communication channels, including scheduled regular meetings PUB performance (2002) Population served 4.19 million Service coverage – water supply 100% Service coverage – sewerage 100% Avg domestic tariff for water supply 0.68 US$/m3 Unaccounted for Water 4.8% Working Ratio 0.58 Staff per 1000 connections 2.94 Corporate culture: Clear merit-based promotion policies Grooming of staff and rotation policies Extensive training of staff (1.8% of operational budget) Visible mission statement
- 8. 8 External Autonomy and Accountability Degree of independence from external interference in utility manager’s decision- making Extent to which external stakeholders (governments, financiers, customers) are able to sanction the utility for results and use of resources Autonomy Accountability
- 9. 9 External autonomy: creating room to deliver political strategic financial technical Space to maneuver political strategic financial technical Space to maneuver
- 10. 10 Effective autonomy is often lower than ‘paper’ autonomy
- 11. 11 External accountability A utility functions in a web of accountabilities to a variety of external actors with different functions Actors Central governments Local governments Customers Financing institutions Regulators Functions policy making Ownership (utility and asset) Regulation Demand for services Financing
- 12. 12 Policy making OwnershipRegulation Demand for services Financing customers Local government Central government Banks Example: Johannesburg, South-Africa Several external actors fulfill different functions
- 14. 14 Tool 1 Mapping internal vs external reforms
- 15. 15 Sustainable utility reform and reform of the environment have to go hand-in-hand Our goal utilitypoor good poor good Typical reform path environment Possible combinations environment status/utility provider status
- 16. 16 How Uganda combined reform measures for the NWSC utility and its environment Utility reform Reformoftheenvironment 70s political turmoil mid 80s new government end 80s & 90s Major rehab 95 new statute 97 new Board 98 new MD 98-00 service & revenue enhancement programs 00 ext & int performance contracts 02 automatic tariff indexation 03 staff performanc contracts 97 corporate plan
- 17. 17 …and how reforms enhanced performance of NWSC indicator 99/00 02/03 Water supply coverage 54% 63% Unaccounted for water 42% 39% Staff per 1000 connections 21 11 Collection period (months) 6.2 4.7 Tariffs (Ushs/m3) 881 1015
- 18. 18 Tool 2 Mapping external accountabilities
- 19. 19 Mapping the map ofaccountabilities of a utility Local Government Customers National Government Utility A traditional utility: accountability skewed towards local government
- 20. 20 Balancing and diversifying accountabilities Local Government Customers National Government Utility What could be done? Local Government Customers National Government Utility • Raise tariffs Local Government National Government Bank Customers •Source external funding Utility • Raise tariffs •Introduce regulator Local Government Customers National Government Utility Independent regulator Bank • Raise tariffs •Source external funding
- 21. 21 Introduction of group work Groups of 5-10 people each. Each group appoints a chair and a rapporteur. Each group gets assigned a case. Groups get 30 minutes to discuss. Each rapporteur has 5 minutes to report back to the whole class (with flipchart) Questions for each group Define the accountability framework of the utility? ∼ To which actors is the utility accountable? ∼ Which of the following functions exercises each of these actors: ∼ What is the relative ‘strength’ of each actor to hold the utility accountable on a scale of 0-3? ∼ Based on (a), (b) and (c), draw the accountability map of the utility. If you have time left: ∼ how could one better balance the utility’s accountabilities and create more autonomy for the utility?
Hinweis der Redaktion
- There is no perfect model for public utilities that guarantees good performance. A review of 15 case studies in 11 countries using a standard analytical framework validated a series of common attributes of well-functioning utilities. These attributes are: customer orientation ~ Reporting and “listening” to clients, and working to better meet their needs. autonomy ~ being independent to manage professionally without arbitrary interference by others. accountability ~ being answerable to other parties for policy decisions, for the use of resources, and for performance. These attributes apply to the relationship between the utility and the environment in which it operates as well as to the internal functioning of the utility. Of course, the two levels influence each other. &lt;&lt;CLICK&gt;&gt; Let’s first look at customer orientation.
- Customer orientation is the degree to which utilities report and listen to their customers and work to better meet their needs. Customer orientation increases the accountability of the service provider to its customers and thus helps depoliticize the provision of services. It matches supply and demand for services and stimulates innovation, as the utility investigates improvements to increase customer satisfaction. Improving customer orientation requires a balance between measures to improve services with measure to increase income from customers. By building its relationship with customers, utilities can start to ensure that all who receive services pay, through better billing and the collection of the charges in a timely manner. This can increase utility income substantially and is critical for the credibility of subsequent tariff increases. Important service improvement measures – beyond reliability of the actual service - are timely information to customers on developments in relation to water services and involvement of customers in decision making.
- SIMAPAG is the utility serving the city of Guanajato in Northern Mexico. The drive towards customer orientation was triggered by droughts in the 1980s, which caused severe water shortages. This built political and popular support for drastic measures to improve WSS services. An automatic tariff increase of 1.1% per month was introduced to slowly raise the tariffs to cost-recovery level. A policy of terminating service provision to defaulters was introduced. SIMAPAG invested in an awareness campaign on tariff adjustment, frequent customer management training for staff, and customer information through bill stuffers and the media. Customers, sensitized by the awareness campaigns, were willing to pay the increased tariffs, but complaint about billing and collection mechanisms. In response SIMAPAG expanded modes of billing and collection to minimize waiting times at SIMAPAG offices. A tracking system for complaints improved the utility’s response time. The utility started surveying about 200 customers per month. Survey result fed into a Balanced Scorecard to monitor performance and support strategic decision-making. Between 1996 and 2001 the income received from users increased by 280%. Funds were invested to improve and expand services. In 2003, the municipal council of Guanjuato lowered the automatic tariff increase to 0.01%, well below inflation. This is an indication of the difficulty of maintaining the momentum of reforms once an acute crisis has been resolved
- So we looked at customer orientation. &lt;&lt;CLICK&gt;&gt; Let’s look at accountability and autonomy. These go hand in hand. Let’s first look at accountability and autonomy within the utility and then at external accountability and autonomy.
- Well functioning utilities have moved away from the traditional hierarchical setup towards flatter decision-making structures in which management and employees are held accountable. Of course, the optimal level of internal decentralization depends on the size of the utility. Measures to enhance accountability in a utility include hard measures and soft measures. Hard measures include business plans, standard processes and streamlined procedures, cost accounting techniques that link resource use to outputs, and decentralization of responsibilities to lower tiers of management. Studies of ill-performing utilities consistently point to faulty human resources practices as one of the main reasons for failure . Utilities are often grossly overstaffed. Labor reform is critical to performance improvements. However, it is one of the most politically charged and difficult areas of reforms, as labor unions are often vocal and well-connected. Labor reforms replace traditional utility employment (high job safety, good pensions, low stress, and low salaries) with more incentive-based approaches. This often goes hand in hand with more transparent hiring, firing, and promotion practices. Soft measures to establish a good corporate culture plays an important role in the reform process. Developing a shared sense of vision and mission appears quite important. Training activities appear important in developing the shared commitment of the employees. Although the direction of the reforms or change should be clear to all employees the mechanism by way of which this is done can differ.
- The Public Utilities Board (PUB) is a statutory body that operators the water supply and sanitation services in Singapore. PUB is famous for its excellent performance. The enabling environment in functions in is rather unique for Singapore the utility is given the autonomy and accountability to operate efficiently and effectively just as the other public service organizations do in this city-state. One strength of PUB is that operational decisions can be made at field level, especially those dealing with customer service.
- Let’s look at accountability and autonomy of the utility and its environment. The way in which a utility functions is intrinsically linked to environment it operates in. The relation between the utility and its environment is characterized by the utility’s accountability to, and autonomy from, entities that exert direct power or influence on the utility. Well functioning utilities have a considerable degree of autonomy combined with an accountability framework that balances various external forces, while poorly performing utilities mostly have a low autonomy.
- Badly performing utilities are often ruled by a plethora of conflicting rules. The overall effect of these government formalities is to leave little autonomy for the utility to operate. While a number of basic rules must be put (or remain) in place to set the outer boundaries of the autonomy of utility managers, obsolete or contradictory provisions must be simplified or abolished. The rules of the game need to be clearly spelled out, as should the consequences for violation of the rules, and have built-in arbitration enforcing mechanisms built in. This figure shows the transition from a large web of rules to a simple framework of basic rules. Within boundaries, a utility thus has the autonomy to choose its ways of improving performance, thus taking the measures with the highest value for money first. Basic rules that must remain include the introduction of hard budget constraints, tariffs, and technical and environmental standards. Governments may consider limiting rules in the following areas and based on utilities’ proven track records: Increased delegation of financial responsibilities within budget authority, subject to an effective internal control system. Increased flexibility between budget line item categories, subject to adequate budget planning and forecasting. Relaxation of central procurement requirements, subject to satisfactory organizational procurement and contract management. hiring and remuneration of staff, subject to transparent hiring Greater flexibility of and firing process and staff performance appraisal
- The legal authority bestowed upon a utility is often restricted in practice by the external environment. The effective autonomy of utilities is thus lower than its legal authority. This figure shows a number of factors that influence the effective autonomy of a utility.
- The allocation of authority to a utility must be accompanied by the duties to give account for results. A utility functions in a web of accountabilities to a variety of actors and groups. A balanced web of accountabilities to multiple actors can prevent capture by one actor. The nature of accountability to each actor depends on the functions it fulfils vis-à-vis the utility. Often actors combine various functions. The main functions include: Policy-making: Setting principles that guides the management of a given organization. This function normally lies with various tiers of government. Ownership: Owning the utility. In the case of public utilities, this function lies with one or more government agencies. Regulation: setting, monitoring, enforcing and changing the allowed tariffs and service standards for utilities (Groom, 2006). This function can lie with the government agency that owns the utility or with another government agency. Financing: Providing financial resources both in debt and equity. This function is normally shared by customers and governments, and sometimes with private investors and donor agencies. Demand for Service: This function lies with the customers of the utility. The degree of accountability to any actor depends on the actor’s ability to sanction the utility for good or bad performance. To a large extent, financial flows determine accountability. Thus diversifying sources of financing is part and parcel of creating balanced accountability.
- Johannesburg Water in Johannesburg, South Africa, is a government-owned company. The Company has the mandate of providing water and sanitation services to the three million inhabitants of Johannesburg. The main lines of accountability for Johannesburg Water include: To its owner ~ Johannesburg Water must report quarterly to the Contract Management Unit on a set of performance indicators. It maintains regular contact, and on certain matters reports daily. The board reports to and meets the Mayoral Committee of the City of Johannesburg Council monthly. Performance targets for service delivery are set in the Service Delivery Agreement between Johannesburg Water and the City of Johannesburg. These targets are monitored quarterly. Neither reward nor penalties are applicable. Financial targets are set in the Business Plan. To its regulators ~ The Department of Water Affairs and Forestry has traditionally been the regulatory authority for wastewater standards. In line with current government policy, the role is developmental rather than punitive. To financial institutions ~ The utility must report to the City of Johannesburg Mayoral Committee and the Contract Management Unit on the predicted and actual cash flows according to the different sources of the funds. This is done quarterly. To customer organizations and non-governmental special interest groups ~ There are no formal customer organizations interested in the delivery of water services. There are other organs of civil society that are not solely concerned with water services but who have avenues through which complaints and problems can be registered.
- Mapping tool to illustrate how reform in the utility and the environment are combined and sequenced into a coherent reform program. Improvements in the environment in which the utility operates, are likely to have only a limited impact if the utility does not have the systems or internal capacity in place to take advantage of it. Internal reforms are limited by what can be supported by the environment. A successful reform path always combines environment and utility reforms – in the diagram this means that a reform path will always center around the diagonal.
- The reform program in Uganda, illustrates how steps in reform steps in the utility and the environment can be combined and sequenced into a coherent reform program. The reforms made the utility as a whole, its business units and its individual employees more autonomous and accountable for outputs.
- The internal and external reform steps have led to substantial improvement in service delivery.
- Mapping the accountability framework of the utility to actors in its environment is a useful tool to analyze the functioning of the utility.
- In this mapping tool, each corner of the diagram represents an actor that the utility is accountable to. The surface area represents the relative degree of accountability to various actors. The accountability framework of unreformed utilities is often skewed towards one actor, which powers are not balanced by others. The powerful actor is often the local government that combines the functions of ownership with these of financing, policy making, and regulating.
- A more balanced accountability includes more actors, and thus more corners in the diagram. It also includes more balanced accountabilities to various actors, and thus a larger surface area. To a large extent, financial flows determine accountability and thus the shape of the diagram. Examples of reforms to balance accountabilities: Raising water tariffs would create incentives for the utility to be more accountable to those paying the high tariffs – i.e. customers Sourcing external funding (e.g. from Banks) and introducing a regulator expands the web of accountabilities- hence maximizing the surface area