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

World Bank Water Week, 1-3 March 2005

Thank you for your attention!