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World Bank Water Week, 1-3 March 2005
Mapping and Interlinking Monitoring Activities on Water
William J. Cosgrove, World Water Council
Building is easy, Building is easy, Maintaining is not . Maintaining is not .
Asset Management for Asset Management for Irrigation Infrastructure.Irrigation Infrastructure.
Paul van Paul van HofwegenHofwegen
World Bank Water Week, 1-3 March 2005
Asset Management – is about:
• The systematic and structured combination of management, financial, economic and engineering practices to plan for the creation or acquisition, maintenance, operation, replacement and disposal of physical assets necessary to provide an agreed level of service in the most cost effective and sustainable manner.
World Bank Water Week, 1-3 March 2005
Case characteristics
Goulburn-Murray• Australia – high income• Large scale: Gravity +
storage• Drought sensitive• Volumetric pricing
• Large Farm holdings• Corporatized Public• Agreed service level
delivery at lowest cost• Water rights - volume
based
ORMVA de la Moulouya• Morocco – medium income• Large scale: Gravity + pump
+ storage• Drought sensitive• Volumetric pricing
• Small –medium holdings• Public – ‘semi-autonomous’• Reliable service delivery for
efficient and productive water use
• Water use right – crop based
World Bank Water Week, 1-3 March 2005
What triggered AMP introduction
• GMW: – new govt. policy reform water industry
• Consumption based pricing• Full cost recovery• New investments econ. viable – ecol. sustainable
– Public awareness on environmental impact– Desire farmers to manage scheme
• ORMVAM: – Gvt. policy on reform –
• Water efficiency + productivity• Financial cost recovery Decentralized and Decentralized and
independent independent management essential!management essential!
World Bank Water Week, 1-3 March 2005
AMP – Management context
SERVICE
INFRASTRUCTURE
COST OF SERVICE
Service Agreement
AMP
GM - Water Services Committee • WSC – 5 year Business Plan • Annual Customer Service Agreement
• Irrigation supply procedure• Performance indicators and targets• Maintenance services• Tariff structure and prices • Billing arrangements• Asset management and replacement program
ORMVAM – Individual Farmers
Access to water and participation in ‘tour d’eau’ regulated by law
Each ‘tour d’eau’ agreement on time and duration of supply.
World Bank Water Week, 1-3 March 2005
Actions for AMP introduction
SERVICE
INFRASTRUCTURE
COST OF SERVICE
COST ASSETS
TARIFFS AND CHARGES
SUBSIDIES
Service Agreement
Asset Management Plan
Cost Accounting
Subsidy Arrangement
Tariff regulations
GM Tariffs based on- renewal annuity,- agreed WSC – GM annual work plan
Some Annual variation
No specific subsidy arrangement
World Bank Water Week, 1-3 March 2005
Review
Planning
Condition Performance
Monitoring
Maintenance
Operations
Accounting
Construction
Rehabilitation
Replacement
Disposal/ Rationalisation
Audit
Total Life Cycle Asset Management FunctionsTotal Life cycle Asset Management Functions
World Bank Water Week, 1-3 March 2005
Renewals based long-term investment plan
C EN T R A L G O U L B U R N G R A V IT Y IR R IG A T IO N
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R E P L A C E M E N T Y E A R
World Bank Water Week, 1-3 March 2005
Actions for AMP introduction
SERVICE
INFRASTRUCTURE
COST OF SERVICE
COST ASSETS
TARIFFS AND CHARGES
SUBSIDIES
Service Agreement
Asset Management Plan
Cost Accounting
Subsidy Arrangement
Tariff regulations
GM Tariffs based on- AMP replacement cost- annual work plan- agreement WSC – GM- annual variation
No specific subsidy arrangement
ORMVAM
- tariffs set by government
- differentiation on service cost level (gravity, pumped, pressurized)
- Introduce a cost accounting system
- Tariffs < cost (AMP)
- Agreement with Govt on deficit.
World Bank Water Week, 1-3 March 2005
Actions for AMP introduction
SERVICE
INFRASTRUCTURE
COST OF SERVICE
COST ASSETS
TARIFFS AND CHARGES
SUBSIDIES
COLLECTION REVENUES
WORKPLAN
Service Agreement
Asset Management Plan
Analytical Accounting
Subsidy Arrangement
Tariff and charges regulation
Agreement on Release Payment
Rules for billing, collection, fines
Risk assessment
World Bank Water Week, 1-3 March 2005
Asset Management Program in overall management context
SERVICE
INFRASTRUCTURE
COST OF SERVICE
COST ASSETS
TARIFFS AND CHARGES
SUBSIDIES
COLLECTION REVENUES
PLANNING AND BUDGETING
Service Agreement
Asset Management Plan
Analytical Accounting
Subsidy Arrangement
Tariff and charges regulation
Procedures on Release of Payment
Billing, collection mechanisms, penalties
Asset Mgt Plan,Workplans
Procurement, supervision
Service Level Development
World Bank Water Week, 1-3 March 2005
Asset Management Program in overall management context
SERVICE
INFRASTRUCTURE
COST OF SERVICE
COST ASSETS
TARIFFS AND CHARGES
SUBSIDIES
COLLECTION REVENUES
PLANNING AND BUDGETING AGREEMENT
TRANSPARENCYACCOUNTABILITY
QUALITY ASSURANCE
Service Agreement
Asset Management Plan
Analytical Accounting
Subsidy Arrangement
Tariff and charges regulation
Procedures on Release of Payment
Billing, collection mechanisms, penalties
Asset Mgt Plan,Workplans
Procurement, tendering, supervision
Service Level Development
World Bank Water Week, 1-3 March 2005
Key Elements for success GMW Asset Management
• Decentralised – independent management
• Service Agreements • Levels of service, cost of service, price for service developed and
agreed with customers• Direct service relation with individual customers
• Asset Information System• Location, Value, Life Time, Condition, Degradation, Cost
• Renewals Accounting - Total Life Cycle approach• Focus on minimization of costs, condition of assets, risk of failure• Renewals based pricing
• Honest information and communication with farmers• agreed performance assessment
World Bank Water Week, 1-3 March 2005
The introduction of AMP : ORMVAM - Morocco
• Central Government (MoF+MoA)– Agreement with ORMVAM on performance based subsidies:
financial and water efficiency, productivity , costs and fee collection • Definition of performance indicators• Setting of performance standards
– Support for improvement infrastructure (partly to be recovered from customers) – (PAGI 1+2)
• ORMVAM – Ensuring provision of agreed service
• Turnout calibration, • Special inspection teams, • Performance assessment (esp pumping stations)
– Modernization / improvement infrastructure critical for reliableservice delivery
– Have every customer pay for service obtained • closing illegal taps closed/fined
– Asset based Cost Accounting - with int.accountant
World Bank Water Week, 1-3 March 2005
First IMPACTS of Improved service at ORMVAM
• Water Delivery Performance rose to > 90 %• Fee collection from 65 to 90 %• Conveyance efficiency improved from 50 to 78%• Cropped area increased• Value of crop increased • Productivity improved
World Bank Water Week, 1-3 March 2005
And could it be sustained?
• Prolonged drought Water availability dwindled– Production down farmers could not pay for water– Water sales down ORMVAM income dwindled– National problem deficits could not be matched by MoF– Assets could not be adequately maintained.
• Start of negative spiral of deficits. • Back to deficit budget – subsidy negotiations with Govt• Asset Management system used for cost estimates,
priority setting for allocations limited budget.
World Bank Water Week, 1-3 March 2005
Key Success Factors for AMP
• Management autonomy of service provider
• Reliable water supply – clear water rights
• Effective accountability to users and govt.– Customer Service agreements– Asset based Cost Accounting– Structural Performance Assessment– Asset Management Plans approved by users and govt.
• Sustainable Cost Recovery (service charges + subsidies)
– performance based subsidies– performance based service charges
• Adequate organizational capacity