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Water Financing Program 2006-2010
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If cities are the engines of a country’s economic growth, then water is the oil that keeps those engines running. Common among many Asian cities, though, is the fact that water shortages and pollution are stunting growth, making it more expensive to do business and do it efficiently. This is true for the employer and the employee. The productivity and efficiency of the labor force suffer just as much as industries and services when water services are poor. Like businesses, people mitigate these circumstances by investing their own time and money into the problem—time and money that could be better spent if the proper water services were in place. Water could also be helping raise urban economic standards of living. Inside the miserable housing conditions of city slums are the bulk of a city’s workforce. Yet they are the ones often faced with the worst domestic water and sanitation conditions. Their ability to live healthy, productive, and efficient lives must be secured and preserved for their own sake as well the economy’s. From anyone’s perspective—the industrialist, the taxi driver, the hotel manager, or restaurant waiter—water is important for the urban economy, for urban livelihoods, and overall quality of city life. |
Cambodia 's Phnom Penh Water Supply Authority (PPWSA) can now proudly claim service efficiency, greater water productivity, and increasing consumer base. But it needed radical measures to transform itself from a decrepit and war-torn water supply system with missing water and missing customers.
In 1993, the state of Phnom Penh’s water supply system was prime evidence of the devastation that Cambodia’s 20-year civil war and the Khmer Rouge rule had dealt the city. The water system, the capacity of which had shrunk by 40% between the 1960s and early 1990s, was in a state of serious deterioration.
With century-old pipes and a poor distribution network, roughly only a quarter of the population received piped water. The Phnom Penh Water Supply Authority (PPWSA), the Government-owned water supply utility, was barely functioning. Employees were demoralized and underpaid. Only 13% of connections had water meters. Only 28% of the water produced for the system was actually sold, with the collection rate not even reaching 50%. Illegal connections were prolific. Even worse, the authority’s employees were responsible for much of the water theft. They were installing illegal connections at US$1,000 per connection and receiving kickbacks from large consumers in exchange for lower meter readings. |
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| Ek Sonn Chan, general director of the Phnom Penh Water Supply Authority, one of Asia's most efficient utilities, visited ADB while in Manila to accept the Ramon Magsaysay Award for Government Service. He worked with ADB staff member Xiaoyan Ye (right) on the Phnom Penh Water Supply Project in the 1990s. |
The year 1993 marked the dramatic turnaround of PPWSA. With funding from the Asian Development Bank (ADB), and through internal reforms, PPWSA transformed itself into an efficient, self-financed, autonomous organization. At the helm of the authority’s “culture of change” was the young engineer Ek Sonn Chan, newly appointed PPWSA Director General.
In his “culture of change”, Ek Sonn Chan did several things. He streamlined the utility’s workforce by giving more responsibility to higher management, promoting promising staff, raising salaries and providing incentives, and fostering teamwork.
He improved collection levels, installing meters for all connections, computerizing the billing system, confronting prominent non-payers and cutting off water if they refused to pay.
He rehabilitated the whole distribution network and treatment plants by hiring locals instead of international consultants. As most of the blueprints for the pipe system were destroyed during Cambodia’s civil war, he painstakingly searched for the pipes, and mobilized communities to report leaks.
He minimized illegal connections and unaccounted-for water by setting up inspection teams to search for illegal connections, penalizing water thieves, and giving incentives to the public to report illegal connections.
And he increased water tariffs to cover maintenance and operating costs , through a three-step increase in tariffs over 7 years, although the third step did not push through because revenues had reached sufficient levels. 
Phnom Penh ’s water service now operates 24 hours a day, covers all of inner-city Phnom Penh, and is being expanded to surrounding districts, with priority being given to urban poor communities. In particular, PPWSA now serves 15,000 families in 123 urban poor communities, giving the poor extra privileges such as subsidized tariffs or connection fees, installment connection fees and more. Nonrevenue water has also decreased from 72% to 8%, while bill collection is now at 99.9%.
Mr. Chan’s efforts have been duly recognized. He received the 2006 Ramon Magsaysay Award for Government Service, the region’s version of the Nobel Prize.
Looking back on his achievements, Mr. Chan says, “It doesn’t matter whether water distribution is done by the private sector or a public agency, as long as these institutions are transparent, independent from political pressures, and accountable.”| © 2008 Asian Development Bank Privacy | Terms of Use |
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