PREPAYMENT WATER METERING MY Singh_0.pdf · Metering Central America & Caribbean 2008, Bogotá, Colombia PREPAYMENT CHALLENGES Free-Payment technology SANS 1529-9 (Nov 2003) - Strict

Metering Central America & Caribbean 2008, Bogotá, Colombia

PREPAYMENT WATER METERING

MY PROJECTOPERATION GCIN’AMANAZI (OGA) IN SOWETO

JOHANNESBURG, SOUTH AFRICA


SOUTH AFRICA (RSA)� COMMON ASSOCIATIONS:

� NELSON MANDELA � HIGH LEVEL OF CRIME � ZIMBABWE

� SOUTH AFRICA IS THE ECONOMIC HUB OF THE CONTINENT OF AFRICA

� JOHANNESBURG IS THE ECONOMIC HUB OF SOUTH AFRICA� INCREASED POPULATION AT 5% PER ANNUM � INCREASED INDUSTRIALISATION � INCREASED WATER DEMAND AS A RESULT� ONLY CITY THAT DOES NOT HAVE A RIVER RUNNING THROUGH IT � UNEMPLOYMENT LEVELS ARE HIGH – UP TO 35%� WATER STRESSED COUNTRY � HIGHLY POLITISISED ENVIRONMENT


WHERE ARE WE


WHAT DO WE HAVE IN COMMON

� SOUTHERN HEMISPHERE � DIVERSE COMMUNITIES � HIGH CRIME � HIGH POVERTY � HIGH UNEMPLOYMENT � EMERGING COUNTRIES � STRONG FOCUS ON CUSTOMER SATISFACTION

COMMON CHALLENGES DEPLOYMENT OF COMMON APPROPRIATE

TECHNOLOGIES


WHO IS JW?� JOHANNESBURG WATER (Pty) Limited (inc. 2001) – WSP� 100% owned by the City of Johannesburg (CoJ) – WSA � Provide water and sanitation services � A revenue of R3 billion (USD420 million)� Supplies to 750 000 domestic, commercial and industrial customers� Serves a population of 3.2 million� Employs 2 800 people� Delivers potable water through a reticulation network of

� 10 000km of distribution pipes � 120 reservoirs and water towers and � Collects wastewater through 9 200 km network of sewer and � 6 wastewater treatment works

� Johannesburg Water purchases 460 000 Ml (Mega-litres) per annum from Rand Water (Bulk Raw Water Treatment Service Provider). Average daily purchases of

1 236 Ml per day� Global UFW of 31.5% with a target of 29% by end June 2008

NB: 1 USD = 8 SOUTH AFRICAN RANDS, 1 GALLON = 4 LIT RES


JW CUSTOMER AND BILLING DATABASE

� Number of Townships/Suburbs 4,522� Number of Registered Properties 752,500

� Number of metered properties 305,000 � Un-metered properties (deemed) 197,000

� Total prepaid properties in deemed 100,007� Section Titles Units (Estimate) 150,000


NON-REVENUE WATER

100 kℓ 91 kℓ

Customer Meter

RAND

WATER

SYSTEM

J WATERSYSTEM

UNACCOUNTED FOR WATER 19%

PHYSICAL LOSSES 9% COMMERCIAL LOSSES 10%

81 kℓ

Bulk Meter

W ATER BILL

81 kl

= R - - - - -

UFW IN METERED AREAS


CUSTOMERS PROFILE

Free servicesBasic or below

basic±1.2 Million

Informal settlements

LOWFull service / not metered

±1 MillionLow income

OKFull service /

metered±1 Million

High/mediumIncome

PaymentServicePopulationSocio

Economic Profile

CUSTOMERS PROFILES


NON-REVENUE WATER

65 kℓ 58 kℓ

Boundayof Customer property

RAND

WATER

SYSTEM

J WATER

SYSTEM

UNACCOUNTED FOR W ATER 69%

PHYSICAL LOSSES 11% COMMERCIAL LOSSES 58%

20 kℓ

Bulk Meter

WATER BILL

20 kl

= R - - - - -

DEEMED CONSUMPTION/UFW IN UNMETERED AREAS


PHYSICAL LOSSES


PREPAYMENT INSTALLATION AREAS- AS IS

PRIVATE NEW343 (34%)1 000PG EXT 8

103 540 (48%)214 130 TOTAL

PRIVATE NEW 708 (20%)3 500PG EXT 16

HOUSINGNEW500 (18%)1 100PENNYVILLE

JW NEW1 800 (50%)3 100LEHAE

COJ AND EXTERNAL

NEW 4 300 (39%)15000COSMO CITY

COJ AND EXTERNAL

DEEMED 94 500 (52%)169 989SOWETO

JWDEEMED 1 389 (7%)20 441ORANGE FARM

FUNDINGAREA TYPE

TOTAL NUMBER OF METERED PROPERTIES

TOTAL NUMBER OF PROPERTIES

AREA


BACKGROUND TO SOWETO

� 30% of purchased water is supplied to deemed consumption areas (Soweto, Alex, Orange Farm)

� 90% of deemed volume is supplied to Soweto� Soweto is approximately 100 years old� Infrastructure approximately 60 years old – Mild Steel� However, deemed consumption for water and sanitation is

billed at 20Kl per/m/hh (flat rate) @ 20 USD per/m/hh)� 7 Million Kl is lost monthly� Equivalent monetary loss of 2.5 Million USD/month –� 30 Million USD/annum � Hence, selection of SOWETO as a priority for the birth of OGA

in March 2004� Payment levels of approximately 15%� Commercial Losses = 113 Million USD to date


BENEFITS TO THE COMMUNITY

� Once-off repair of household plumbing fixtures, free of charge

� Ownership of consumption

� More affordable services and lowering of billed amounts

� Better, more consistent service delivery

� Eradicating future arrears amounts and Debt Write-Off Policy

� Reduction in credit control action

� Creation of employment opportunities

� Creation of vending opportunities through SMMEs

� Creation of regional economic efficiencies

� Creation of a customer relationship between JW and individual users rather than a one-way consumer relationship


PROJECT OBJECTIVES � To reduce unaccounted for water (UFW) by rehabilitating the

water network infrastructure � To reduce UFW by fixing all leaks on properties � To change customers from deemed consumption

(20 Kl billed) to metered consumption� To reduce UFW through the installation of prepaid meters

(consumer ownership of consumption)� To move away from billing & credit control

(credits are bought up front from Vendors)� To dispense Free Basic Water via the meter� To complete the project in 5 years from 2004� Return on investment in 5 years � To transfer ownership of consumption to the customer� To create a general awareness on water conservation� To increase efficiency around customer service


GEOGRAPHICAL AREAS


GEOGRAPHICAL POSITION OF SOWETO

32

4

5

6

7a

8

9

10

11

12

13

1

7b


SCHEMATIC OF RETICULATION INTREVENTION

H O U SE H O U SE

H O U SE H O U SE H O U S E H O U S E

H O U S E H O U S E

T T

T T T T

T T

R O ADR O AD

4

EX IST IN G YAR D C O N N EC TIO N

RO

AD

SU

PP

LY P

IPE

OR

SE

CO

ND

AR

Y M

AIN

RE

TIC

ULA

TIO

N

S H O P

C H U R C H

N EW TYP E H O U SE

6 6

7 7

6 6

7 7

6 6

7 7

6 6

7 7

5 5 5

2 3O R

23

OR

7 7IN S TALL

8 8

8 8

8 8

8 8

8

8

8

RO

AD

2 3O R

9

R EPLA C E 7R EPLAC E


� Ward Committee briefings and workshops

� Public Meetings

� Targeted sectoral information sessions held with sectoral stakeholders

� Consumer education workshops and study tours

� Door-to-door campaign

� Consumer information packs �

� Establish and Capacitate Water Committee

PUBLIC PARTICIPATION


TOTAL INTERVENTION (ISD, TECHNICAL & PREPAYMENT)


DistributorCash Deposit

Bulk Credits

Customer pays Cash

Credits Downloaded

Into Meter

Credits Used Up

Complaints

Data

Data

CustomerToken

JW Call Centre

1

27

8

6

4

3

JW Satellite Office/COJ Cash

Office

CURRENT PREPAYMENT PROCESS

CDS

5


CUSTOMER RESPONSIVENESS

7072125238923542037269729941998Total

0%01%130%10%00%00%00%0%In progress

0%11%170%111%241%121%240%0%Greater than 24

hours

2%143%642%402%514%847%1865%1395%106120 mins - 24

hours

2%122%372%372%402%475%13611%31612%23690 - 120

minutes

7%537%1447%1577%1628%17312%31210%2879%18060 - 90 minutes

89%62787%185090%214388%207784%172176%203975%225274%14760 - 60 minutes

OGA

31/03 - 06/04

Week 1MarchFebruaryJanuaryDecemberNovember

OctoberSeptember


Not Recommended-Ground Level

Preferred -Above Ground level


TOTAL PREPAYMENT SYSTEM TYPE 1






BEFORE & AFTER (as of 31 March 2008)

29 Million USD

55%Percentage topping up (consuming less than FBW)

6 USDAverage cost of topping up

21 USD Pre-intervention deemed consumption billing amount

78 Billion litresTotal of Reduction in Bulk Purchase to date (within 48 months w.e.f. July 2004)

*** 3.75 Million USD

12 Kl per property per month Post-intervention water consumption

81%Percentage reduction in water consumption

66 Kl per property per monthPre-intervention water consumption


BEFORE & AFTER

In excess of 1,700NO OF PLUMBERS

147,657 of 169,989 (86%)PROGRESS ON METER AGREEMENT SIGNAGE

20,000 out of a target of 50,000(47% of target)

METERS INSTALLED in year to date (07/08)

COJ – 17 (CUSTOMER CENTERS)SMME LOCAL BUSINESS – 70

NO OF VENDORS @ 2.5km radii

R102 MillionLOCAL ECONOMIC DEVELOPMENT

19,700 (Since project inception)2,005 persons (current)

109 000 person-days

NO OF EMPLOYMENT OPPORTUNITIES

From more than 69% to 10% NON-REVENUE WATER

94,500 out of a total of 169,989(56% of total)

METERS INSTALLED


Definition – To be classified as indigent basic mini mum requirements to register with the City of Johannesburg:1. Gross income of less than 150 USD/MONTH2. Pensioner 3. Unemployed 4. Chronically ill

94,498EMERGENCY WATER OF 4Kl/ANNUM

AS AND WHENSPECIAL CASES ALLOCATION THROUGH AN APPEALS MECHANISM (as of 1 July 2008)

94,498 FREE BASIC WATER OF 6Kl/MONTH

26,158FREE BASIC WATER OF 10Kl/MONTH (ONLY REGISTERED INDIGENTS

SOCIAL RELEIF MEASURES


PROJECT CHALLENGES

� Total of 169 989 properties in four years � Ideological debate around the concept of prepayment

and user-pay principle� Organized resistance organizations� Project scheduling allowing for multiple contracting

and procurement for Super-Blocks� High staff turn-around

� Construction Industry Development Board (CIDB)Compliance


PREPAYMENT CHALLENGES

� Free-Payment technology � SANS 1529-9 (Nov 2003) - Strict Compliance…Dec 05 rev� STS enhancement or an urgent aligned alternative (CDS)� User-friendly meter technology for JW Customer � Stimulation of the prepayment market (limited meter suppliers)

� Affordability for the consumer – Communication/Transfer of Ownership

� Vandalism , Tampering and Illegal Connections � VENDING TECHNOLOGY, EQUIPMENT AND ACCESSIBILITY � Customer Service Responsiveness and Complaints Handling� Preventative maintenance programs and KPI Monitoring� Proprietary prepayment systems – Inter-operability


VANDALISM/ ILLEGALCONNECTIONS

Gate Valve


COMMON DISTRIBUTION SYSTEMBUILDING TOWARDS CARLOS ’S SYSTEM


PROJECT FINANCIALS

� Project Estimate: 150 Million USD � To date 77 Million USD has been spent

(50%)� Monetary savings at the completion of the

Project: 31 Million USD per year � Pre-intervention monetary loss of 3 Million

USD per month� External and shareholder funding sources


RETURN ON INVESTMENT

By doing a simplified calculation, the annual reduc tion in water purchases from rand water on completio n of OGA can be easily calculated as reflected in the table below:

OGA Potential Savings on completion of project:Number of stands to be retrofitted ………. 170,000Potential saving per stand per month (take conservative figure of 40 Kl/month) 40The monthly projected savings for the entire Soweto = 170,00 x 40 Kl/stand/month 6,800,000 Total Kl / mAnnual projected savings = 6,800,000 x 12 81,600,000 Kl / annumRand value of water loss reductions at R3.0698/Kl (water sales excluded) R 250,495,680.00 per annumPotential water sales on an annual basis R 34,000,000.00 per annumProjected annual revenue generated by OGA (provided certain sustainaboility procedures are implimented)R 284,495,680.00

Total of Reduction in Bulk Purchase to date 78 Billion litresR230 MillionR30 Million

The IRR on the OGA Project is exceptional (43%),43 cents for every R1.00 spent on OGA has already been recovered.


Estimated O&M Payback

117 Million USD Total profit amount

Profit on project after maintenance payback

Payback period for meter replacement after payback period of Capital

38 M USDCapital Cost for Maintenance 5 year battery replacement 10 year meter replacement

150 M USD Payback amount to 2019

31M USD31M USD31MUSD

31MUSD

31M USDPayback amount per year

2018/201917/1816/1715/1614/15METER REPLACEMENT PAYBACK

31 M USD/annumPayback amount per year

150 M USDPayback amount

Payback period is 5 years from project completion

169898No of meters installed at end of project

2013/2014

2012/2013

2011/2012

2010/2011

09/201008/0907/0806/0705/0604/0503/04CAPITAL PAYBACK

Excludes:Cost 0.5% meter related queries for meter t echnicians and call center agentsGains made on customer satisfaction, reduced bi lling, meter reading and clearances


CUSTOMER SATISFACTION


CUSTOMER SATISFACTION SURVEY


THE FUTURE

IS NOW…

OGA PROJECT MANUAL


R 85 535 400.00

R 897 931 712.00

R 31 212 000R 27 165 000R 8 991 360R 3 659 040R 14 508 000

10404 Ml9055 Ml5352 Ml5544 Ml7800 Ml

1st1st2nd3rd2ndRanking

554.754.54.75Weighting

(1)(1)(1)(1)(0.5)

Limited number (tenants)

None Limited number

(tenants) Limited number

(tenants) Large numbers in Old

AlexandraInformal settlements or back yard shacks or erven encouragement

7.

(1)(0.5)(0.5)(0.5)(0.5)

None Majority number Limited number Limited number Limited numberMulti-storey buildings6.

(TBD)(TBD)(TBD)(TBD)(TBD)

TBDTBDTBDTBDTBDLevel of acceptance5.

(1)(1)(1)(1)(1)

NoNoNoNoNoEase of meter reading 4.

(1)(0.5)(0.75)(0.0)(1)

76%30-40%56%22%62%

UFW per annum3.

(0.0)(1)(0.5)(1)(0.75)

R31,148,798R385,223,857R98,960,653R215,189,600R167,408,804

Debtors amount2.

(1)(1)(1)(1)(1)

99%82%86%87%92%

Debtors days1.

Orange FarmJohannesburg Inner City

Ivory ParkEldorado ParkAlexandra

Target areaCriteria No.

PREPAYMENT IN OTHER AREAS


MUCHAS GRACIAS

THANK YOU FOR YOUR ATTENTION

Randhir Singh (Nico)Prepayment Manager : New Services Division

Johannesburg Water, South AfricaCell Number: + 27 82 339 8544

Work Number: + 27 11 946 0600Fax Number: + 27 11 947 1353

E-mail: [email protected]: www.johannesburgwater.co.za

Providing water. Providing Life

Documents

PREPAYMENT WATER METERING MY Singh_0.pdf · Metering Central America & Caribbean 2008, Bogotá, Colombia PREPAYMENT CHALLENGES Free-Payment technology SANS 1529-9 (Nov 2003) - Strict