public-private synergies for water public service...
TRANSCRIPT
1
Public-Private Synergies for Water Public
Service Management
The Experience of Triple A de Barranquilla
Javier MaliaTriple A de Barranquilla
WB´s Water WeekFeb 2004
Washington
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Public-Private Synergies for water public
service management
1. An efficient company2. Group Structure3. Our market4. Triple A´s Public-Private Partnership
experience and threats1. The Institutional Enviroment2. The Internal framework of Triple A
5. Conclusion
Index
3
BarranquillaTriple A in figures
• Our market: Barranquilla, Colombia (including metropolitan area) • 1.970.000 inhabitants• 840 employees• Ratios:
• Water provision: 170 hm3/year• Water service rate: 0.4 US$/m3
• 99% Water service coverage• 94% Sewage coverage
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A road to efficiency (1990 – 2003)
RATIOSEPM 1990
TRIPLE A* DEC 1993
TRIPLE A* DEC 1996
TRIPLE A* DEC 2003
WATER COVERAGE 60% 66% 78% 99%
SEWAGE COVERAGE 50% 54% 68% 96%
SOLID WASTE COLLECTION COVERAGE ND 67% 90% 100%
NON-INVOICED WATER 70% 67% 55% 38%
No. OF EMPLOYEES/1000 USERS 13,5 6,8 5,4 2,9
NUMBER OF USERS (BARRANQUILLA) 133.194 141.486 171.192 267.482
WATER PRODUCTION ND ND 17.209.218 14.814.569
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Triple A´s efficiency target
• Depolitization and savings: Improves competition in contracts and supplies.
• Decentralization of authority: empoweredstaff
– Flexibility to changes– Increase effectiveness– Stimulate innovation and moral of
employees
• Quality management: 19 processes ISO 9001 v 2000 certified
– Customer orientation of processes– Yearly customer satisfaction survey
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POWER CONSUMPTION VS. CUSTOMERS1996 – 2003
1996 1997 1998 1999 2000 2001 2002
PO
WE
R (
Mill
ion
KW
)
CU
STO
ME
RS
8
9
10
11
12
E M M J S N E M M J S N E M M J S N E M M J S N E M M J S N E M M J S N E M M J S N E M
180000
200000
220000
240000
260000
280000
300000
MILLION KW CONSUMED CUSTOMERS
2003
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EXCELLENCE IN CUSTOMER RELATIONS1996 - 2003
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
E M M J S N E M M J S N E M M J S N E M M J S N E M M J S N E M M J S N E M M J S N E0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
Complaints Collection
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Financial sector recognizesTriple A´s efficiency and
soundness
• AAA rating (Duff &Phelps, BRC) • 2003 Bonds issue US$ 60 million• IFC partial guarantee
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Keys to Triple A´s success
• International operator’s know-how– Wide application of technology:
• Amérika software, GIS, automation, remote control
– Training and Specialization of local staff
• Effective management strategies– Triple A’s independence of management– Strong links with community – Solid communication policy
• Public partner’s commitment with the WSS problems
• Initial regulatory and policy strengths
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Group Structure
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The Triple A local operator model
Big InternationalOperator
Regional ColombianOperator
Small Local Operator
� Technology and know howtransfer
� Financial support� International Market synergies
� Technology and know howtransfer
� Financial support� International Market synergies
� Qualified staff� Local market efficiencies� Local experience� Operative support
CANAL DE ISABEL II(ES)
CANAL EXTENSIA S.A.(ES)
GIS(CO)
AAAECUADOR
(EC)
METROAGUA(CO)
AMAGUA(EC)
AAADOMINICANA
(RD)
AAAVENEZUELA
(RD)
TRIPLE A(CO)
INFORESA(RD)
INASSA I(CO)
TECVASA(ES)
tecvasaTÉCNICAS VALENCIANAS DEL AGUA, S.A.www.tecvasa.es
1996: Starting changes in Triple A: Association with the Qualified Partnersearching for added value in the company :
• technical and technology
• financial
• Independence
• commercial terms
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CANAL DE ISABEL II: A public company with 154 years of successful experience
Public Company:
Titled by the Government of the Comunidad Autónoma of Madrid
Experience in management of the integrated water cycle:
14 reservoirs, 16 WTP, 164 WWTP, Over 10.000 km of
networks, Population served: 5.300.000 inhabitants in Spain.
Wide commercial experience
Provides service to 168 municipalities in Spain
845.000 customers
2.995.205 invoices issued a year
Income : 335,3 Million € in 2002
Grupo Canal:
Diversification in flourishing sectors:
Communications, energy (electricity and gas)
Environmental management, Contact Centers
Expansion to new operations in the water sector
Latin America, Central Europe, North Africa
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Our market
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Socioeconomic Stratum in Barranquilla and metropolitan area.(1.900.000 inhabitants)
305.573TOTAL
533SPECIAL & OTHERS
775OFFICIAL
911INDUSTRIAL
20.270COMERCIAL
11.132ESTRATUM 6
16.241ESTRATUM 5
23.378ESTRATUM 4
62.213ESTRATUM 3
86.601ESTRATUM 2
83.519ESTRATUM 1
Residential
# of usersType of users
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Our low income users (76%)
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Our high strata (5 & 6) users(9%)
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The Triple A´s Public-Private Partnership
experience and threats
The institutional enviroment
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Drivers of Triple A´s changes: Legal authority
• Private management: the same legal framework than private companies
– Staff hiring, Works and supplies contracting• Private governance structure:
– Private Control: Ensured by Company´s Charters even with public majority shareholding(depolitization of management)
– General manager appointed by the Board• Investment priorities: targets are
negotiated (P-P)
– The company has an strong social aim– Technical and financial criteria prevail
Board ofShareholders
Board of Directors
General Manager
Managers Committee
5Members:Public: 2Private:3
Functionalmanagers ofTriple A
35.1%
64.9%
(Public)District ofBarranquilla
(Private)
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RESULTS FROM PUBLIC AND PRIVATE COMMITMENT:
The water and sewage investment for the southwestern area of barranquilla 1999 - 2003
• Cost of the project: US$ 45 Million• Objective of the project: Installation of:
• 310 km of water systems• 357 km of sewage pipes• Pumping station and WWT Pond
• Area: 2000 Hectares• Population served: 350.000 InhabitantsStratification:1 (76%), 2 (20%) y 3 (4%)
•Coverage:•Water: 99%•Sewage and treatment: 96%
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Regulatory framework
• Strong regulator• Strengths:
– Investments attraction: established a solid basis and balancedworking conditions
– User’s defense: ample rights, and solid mechanisms for defense– Financial viability: established cost recovery of the companies
• Weaknesses:– Independence of the regulator: pressured entity.– tariff reviewing: too slow and unflexible process.– Regulatory unstability: is worrying utilities and potentially new
operators.– Financial viability: Most companies are not recovering all operational
costs.
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Policy framework
• Water sector is prioritary for President Uribe’s Government
• WB´s support and advice to government is important in the sector´s main issues
• Income unstability: central and local Governments are harming the Utility’s Income Statement
– New taxes: Increasing fiscal pressure is harming the sector
– Subsidies provided by the State and local authorities to operation don´t cover the real deficit
• Legal uncertainty
• Political use of tariffs in political campaigns, creating lack of confidence and dissatisfaction from users to utilities
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Accountability for results• Too many control entities: more than 20
– Regulation of service: CRAPSB– Inspection, control and vigilance: SuperServicios– Enviromental activities control and vigilance: BAMA, CRA– Management and decisions: 3 ‘Contralorías’– Users: ‘Veedurías’, ‘Personerías’– Financial and Securities: SuperValores– Societary: SuperSociedades– External Audit Company– Health: Health Ministry and 2 local health care entities– Fiscal Inspector: Management Control
• High cost for utilities– High staff effort is devoted to controllers– Duplicated (even tripled) controls– High monetary cost
• Control organisms often are politically used
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The internal framework of Triple A
The Triple A´s Public-Private Patternship
experience and threats
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Strong corporate culture
• Staff has been carefully selected and qualified
• Democratization of Triple A’s objectives– Strategic planning set democratically by 40 top staff members:
Mission, Vision, objectives and indicators definition
• Most managers have strong leadership skills
• Triple A’s staff has a strong sense of belonging– The ´Triple A family´ involves staff and their relatives
– Corporate target for worker´s family protection and development
– Staff feels proud of working for the company
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Conclusion
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Past, Present and future
• Triple A has made a good job: today,– We provide an excellent service– Our users are satisfied (and they pay their WSS
bill)– We have operational and financial stability
• Private + Public owned utilities are a balanced solution for WSS operation andinvestment
• But...
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Past Present and future
• Triple A and all Colombian utilities are facingserious threats:– Regulatory unstability– Tax pressure– Legal framework changes– Political use of tariffs
• Utilities are subsidising the poorest´s WSS bills• As a consequence: The Colombian WSS sector
is not attractive for investors
