1. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 1 KEBERKESANAN KEY PERFORMANCE INDICATORS PENGURUSAN AIR 2 – 3 November 2009 Shah Alam Convention Centre Simposium Pengurusan & Pengauditan Industri Air 2009

2. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 2 Why Performance Indicators? Indicators were derived to assess :  The availability of water and sewerage services to the public ;  The technical and financial condition of water and sewerage facilities / assets;  The economic and environmental aspects of water services and use These indicators provide comparable information on utility operations necessary for understanding and controlling deviations in the sector's performance.

3. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 3 The KPIs will assist the Licensee to:  Deliver quantifiable outcomes  Ensure rigorous assessment of Licensee Business Plans & Annual Reports and monitor regulatory compliance.  Deliver a framework for analysing and reporting on its effectiveness Why Performance Indicators?

4. S URUHANJAYA P ERKHIDMATAN A IR N EGARA SPAN’s KPI’s for Licensees : An Update Working Group met on 12 March 2009 to arrive at consensus Latest changes/updates presented at water operators meeting on 14 April 2009 Business Plans received from SAJH, SAINS, SAMP, PBA Penang, PAIP, AKSB, IWK License issued to SAINS, SAJH, SAMP, AKSB and IWK (in process) KPIs are imposed on all operators as part of licensing condition Introduction of consumer standard and code 4

5. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 5 KPIs : Customer Service Standards Framework

6. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 6 SPAN’s Approach to Establishing Good Performance Measures Meet policy objectives Set KPI framework based on what to measure Take into account different starting line Focus on a result: The result of the PM should provide you with information Must measure attainment of one or more of the utility goals Must be practical and data must be obtainable Accuracy must be tested over time Resistant to misrepresentation (cheating!)

7. S URUHANJAYA P ERKHIDMATAN A IR N EGARA IMPLEMENTATION: The First 3 Years 12 main KPIs had been identified Span will negotiate with operators to determine baseline figures for KPIs Target levels will be based on improvement to current levels of achievement KPIs of each licensee can be viewed in public domain Operators to request for funding to address the requirement to achieve KPIs through PAAB in 3 year Business Plan Penalty in relation of non compliance (license condition) – first 3 years – could be in form of undertaking by operators to rectify or take remedial action to make up shortfall. Draft Explanatory Notes on KPI being prepared to ensure standard definition and measurement by all operators TOR for appointment of Reporters (independent auditors) on cost and performance being prepared. 7

8. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 8 NATIONAL KPIs FOR WATER SUPPLY SERVICES

9. S URUHANJAYA P ERKHIDMATAN A IR N EGARA National KPIs for Water Supply Services 9 WATER SERVICES Treated Water Quality Section 41 Water Pressure Section 40 Security of Supply Section 34 Supply Coverage Section 31, 32 CUSTOMER SERVICE Section 33, 37, 52 Billing Complaints Response to Complaints Customer Contact OPERATIONAL & ECONOMIC PERFORMANCE Section 30 Water Loss Management Operating Cost Collection Efficiency Operating Ratio ENVIRONMENTAL PERFORMANCE Section 30 Sludge Treatment

10. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 10 KPIs Outcomes and Impact on Water Service Providers Old Paradigm : We invest in creating assets, but don’t address the OUTCOMES of investments adequately New Paradigm: A project is “completed” when service delivery levels improve – not when assets are created 1. We will see a shifting of focus from Technical Input to Performance Outcomes

11. S URUHANJAYA P ERKHIDMATAN A IR N EGARA Old Paradigm : See water provision as a job, an obligation rather than a service Limited emphasis and focus on satisfying customers’ needs Poor accountability New Paradigm : Welcome consumer inputs and feedback to shape performance improvements and priorities for improved accountability Internally, across the organisation  To consumers  To other stakeholders (shareholders, regulator, etc) 11 KPIs Outcomes and Impact on Water Service Providers

12. S URUHANJAYA P ERKHIDMATAN A IR N EGARA Optimise the use of their assets and resources Measure service levels to reflect operating performance Identify opportunities for revenue improvement Prioritise and track improvements Position and compare own performance relative to others 12 2.WSP will begin to track performance, and implement performance improvement planning KPIs Outcomes and Impact on Water Service Providers

13. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 13 Improve financial performance Improve customer satisfaction Increase competitive advantage Improve transparency to stakeholders 3. Develop a culture of continual performance improvement to stay in business in challenging times KPIs Outcomes and Impact on Water Service Providers

14. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 14 Reveal performance How well are you doing? Promote comparison How well are you doing, compared to others? Promote networking and sharing between peers Horizontal learning, mentors and ‘mentees’ Promote performance improvement Link government/PAAB funding to performance improvements 4. Benchmark performance among peer operator : KPIs Outcomes and Impact on Water Service Providers

15. S URUHANJAYA P ERKHIDMATAN A IR N EGARA Next Steps by Operators Data baseline housekeeping on current submissions (MWIG) for proper documentation towards coming KPI target level Identify Capex and Opex funding requirements in preparing Business Plans especially relating to addressing KPIs as part of licensing condition. Work out your proposed KPI target levels based on SPAN KPI framework and prepare to negotiate/discuss with SPAN and PAAB Leverage on ICT and establish dedicated team on performance measurement and monitoring as one of core business viz a viz licensing condition. 15

16. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 16 Holding water service lisencees accountable for performance Monitoring their performance Analysing their perfomance to identify support needs Providing technical and financial “support” via Business Plan submission Auditing their results – especially if tied to incentives! SPAN’s Regulatory Role

17. S URUHANJAYA P ERKHIDMATAN A IR N EGARA WSL submit quarterly report to SPAN Publish KPIs on SPAN website and Water Forum (to be agreed) Auditing by SPAN on regular basis Regular consultation sessions to refine methodology, target levels, implementation strategies, etc Discussions on non compliances and remedial actions 17 SPAN’s Regulatory Role Monitoring and reporting

18. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 18 One of the key tool in water sector reform Strengthens internal performance assessment Helps WSL prioritise interventions with their limited resources for efficiency gains and obligations Is an important tool for SPAN to track service delivery performance, set targets, monitor performance and prioritise regulatory interventions Improves accountability Key Performance Indicators Conclusion

19. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 19 TERIMA KASIH

20. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 20 BilKPI 2008/09 1 2.. SUPPLY COVERAGE % of water supply coverage TREATED WATER QUALITY COMPLIANCE RATE % Compliance WS1: % coverage urban areas WS1a: % coverage rural areas WS2:% QAP Programme Compliance i.Residual chlorine=2.3% ii.E.Coli=0.4% iii.RC&E.Coli=0.2% iv.Turbidity=2.2% v.Al=10.2%

21. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 21 BilKPI 2008/09 3. 4. WATER INTERRUPTIONS AND MAIN BREAKS % achievement of KPIs a), b), c) & d) WATER PRESSURE % Compliance WS3: % achievement of KPIs a)comm pipe failures to be repaired within 1 day; b)pipe repair and restoration of supply >200mm<600mm-within 1 day; c)>600mm-within 2 days; WS6: Minimum residual pressure of 10m for residential houses to be maintain for not less than 8 hour within a 24 hours period

22. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 22 BilKPI 2008/09 5.Security of Supply % of water supply treatment plant reserve margin for each treatment plant WS7: 10-15% of water supply treatment plant reserve margin of each treatment plant. Indicators -treatment plant reserve capacity of 15 - 20% should always be maintained at any one time -external storage capacity should not be less than 24 hours supply

23. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 23 BilKPI 2008/09 6.COMPLAINT Unit: % complaints responded within the KPIs CS1: Response Time To Complaints i)Billing complaints - % responded within 3 working days ii)Response to complaints- complaints meaningfully responded within 5 working days iii)Telephone complaints-% responded within 30 seconds

24. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 24 BilKPI 2008/09 6. 7. WATER LOSS: -% of total volume produced -Litres/day/km of mains -ILI Index Operating Cost Unit: RM/1000 account Unit: RM/m3 OP1: Non Revenue Water -% of total volume produced -real losses volume per day/km -infrastructure leakage index OP2: Operating Cost Per 1000 Accounts Operating cost per cu.m water produced

25. S URUHANJAYA P ERKHIDMATAN A IR N EGARA 25 BilKPI 2008/09 8. 9. 10. Collection Efficiency Operating Ratio Sludge Treatment Total Bills & Collected/ Total bills issued OP4: Operating Cost/ Revenue Ratio of operating parameters vs operating revenue, beginning with base year respective ratio. EP1: % of sludge treatment facilities versus total no of water treatment plants