Utility Benchmarking for Improvement IWA PI Conference, Vienna, 17.05.2017

Introduction Bulgarian Water Association Bulgarian Water Association / BWA / is a non-profit organization that was established on December 1, 2005 in the city Sofia, Bulgaria Its members are companies and individuals who have interests related to water and sanitation, including the quality and treatment of drinking, industrial, agricultural and domestic waste water; management, protection and utilization of water resources More than 200 individual and 96 corporative members BWA is a member of IWA, EWA, EUREAU, IAWD

Why benchmarking in Bulgaria and why facilitated by BWA? “Establishment of a benchmarking system will enable WSSC managers to identify possible areas for improvement”– Strategy for Development and Management of the Water Supply and Sanitation Sector in the Republic of Bulgaria 2014 -2023 Provides a clear picture of the performance of the utility (“dashboard”) Learns utility in detail how it perform against his peers (“performance gaps”) Enables utility to jointly find explanations and ways to improve the service BWA: Great confidence in BWA and being independent fits one of the major successes factors – guarantee that data will be used only for the purposes of improvements of WSSCs BWA has a capacity to manage this process Close cooperation between BWA and IAWD who support benchmarking process in Danube region

History of the project (1/3) DWP together with EBC and national utility associations develop regional benchmarking hubs for utility improvement in: Ex-Yu (Bosnia-Hercegovina, Croatia, Macedonia, Montenegro, Serbia, Slovenia) Kosovo & Albania Bulgaria Ukraine first pilot (2014): 36 utilities involved

History of the project (2/3) Beginning of 2014, BWA has been selected as a beneficiary of the project "Process benchmarking in water utilities in Bulgaria" within the competitive grant scheme operated by the provisions of the grant agreement TF012722 Contract between IAWD and BWA with the support of the WB The project duration is two years (data 2014 and 2015) with the idea to be implemented as a permanent tool used by water operators EBC methodology – standard level 12 water operators participate in 2014 and 16 in 2015

History of the project (3/3) In 2016 project was split and offered in two variants: Internal benchmarking 2017,2018 International benchmarking Methodology More benefits for utilities in International benchmarking

Next steps Continue in 2017 with both approaches: Internal and International benchmarking and make efforts to convince as many as possible WSSCs to upgrade from Internal to International benchmarking Create acceptance that WSSCs to use benchmarking as a tool for improvement Improvement phase – start from May 2017, practical help to some WSSCs for improvements in few processes (increase revenue or save money with relatively simple and cheap improvements, e.g. collection and commercial losses) Preparation for next years – sustainability of the project

How benchmarking helps in BG water sector? (1/2) Learned lessons Large differences in the values of individual PIs of the compared WSSC as this is typical for all functional areas Data quality - lack of proper registers and data bases Big potential for optimisation of key processes – higher costs hide reserve optimization Find areas for improvement Exchange of good practices between utilities, aimed at improving the work of each of them

How benchmarking helps in BG water sector? (2/2) Benchmarking and Regulator New rules in BP 2017-2021 (few of the important…) Number of PI’s decreased from 79 to 29 Individual objectives for each water operator Regulation method – price cap New financial model for calculating the price New content of the business plan (set by the regulator) Very close link between PI’s, investments and final price Regulatory limit for affordability of the price – 2.5% Adjustment mechanisms (incentives and corrections) Split of WSSC’s on 4 different group depending of their specifics

Thank you for your attention!