Mapping and Interlinking Monitoring Activities on Water
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1 Mapping and Interlinking Monitoring Activities on Water Building is easy, Maintaining is not. Asset Management for Irrigation Infrastructure. William J. Cosgrove, World Water Council Paul van Hofwegen
2 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.
3 Case characteristics Goulburn-Murray Australia high income Large scale: Gravity + storage Drought sensitive Volumetric pricing ORMVA de la Moulouya Morocco medium income Large scale: Gravity + pump + storage Drought sensitive Volumetric pricing Large Farm holdings Corporatized Public Agreed service level delivery at lowest cost Water rights - volume based Small medium holdings Public semi-autonomous Reliable service delivery for efficient and productive water use Water use right crop based
4 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 independent management essential!
5 AMP Management context SERVICE Service Agreement INFRASTRUCTURE AMP GM ORMVAM - Water Services Individual Committee Farmers WSC 5 year Business Plan Access Annual to Customer water and Service participation Agreement in tour d eau regulated by law Irrigation supply procedure Performance indicators and targets Each tour d eau agreement on time and duration of Maintenance services supply. Tariff structure and prices Billing arrangements Asset management and replacement program COST OF SERVICE
6 Actions for AMP introduction SERVICE Service Agreement INFRASTRUCTURE Asset Management Plan GM Tariffs based on - renewal annuity, - agreed WSC GM annual work plan Some Annual variation No specific subsidy arrangement TARIFFS AND CHARGES SUBSIDIES COST OF SERVICE COST ASSETS Cost Accounting Tariff regulations Subsidy Arrangement
7 Total Life Cycle Asset Management Functions Total Life cycle Asset Management Functions Audit Review Planning Disposal/ Rationalisation Construction Accounting Replacement Rehabilitation Operations Condition Performance Monitoring Maintenance
8 Renewals based long-term investment plan 9 CENTRAL GOULBURN GRAVITY IRRIGATION R E P LA C E M E N T Y E A R
9 Actions for AMP introduction SERVICE Service Agreement ORMVAM - tariffs set by government GM Tariffs based on -level AMP (gravity, replacement pumped, cost -pressurized) annual work plan - agreement WSC GM -system annual variation - differentiation on service cost - Introduce a cost accounting -Tariffs < cost (AMP) No specific subsidy arrangement - Agreement with Govt on deficit. INFRASTRUCTURE TARIFFS AND CHARGES SUBSIDIES Asset Management Plan COST OF SERVICE COST ASSETS Cost Accounting Tariff regulations Subsidy Arrangement
10 Actions for AMP introduction SERVICE Service Agreement INFRASTRUCTURE Asset Management Plan WORKPLAN COST OF SERVICE Risk assessment COLLECTION REVENUES COST ASSETS Analytical Accounting Rules for billing, collection, fines TARIFFS AND CHARGES Tariff and charges regulation Agreement on Release Payment SUBSIDIES Subsidy Arrangement
11 Asset Management Program in overall management context Service Level Development SERVICE Service Agreement Procurement, supervision INFRASTRUCTURE Asset Management Plan PLANNING AND BUDGETING COST OF SERVICE Asset Mgt Plan, Workplans Analytical Accounting COLLECTION REVENUES COST ASSETS Billing, collection mechanisms, penalties Procedures on Release of Payment TARIFFS AND CHARGES SUBSIDIES Subsidy Arrangement Tariff and charges regulation
12 Asset Management Program in overall management context Service Level Development SERVICE Service Agreement Procurement, tendering, supervision INFRASTRUCTURE Asset Management Plan Asset Mgt Plan, Workplans PLANNING AND BUDGETING COLLECTION REVENUES AGREEMENT TRANSPARENCY ACCOUNTABILITY QUALITY ASSURANCE COST OF SERVICE COST ASSETS Analytical Accounting Billing, collection mechanisms, penalties Procedures on Release of Payment TARIFFS AND CHARGES SUBSIDIES Subsidy Arrangement Tariff and charges regulation
13 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
14 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 reliable service delivery Have every customer pay for service obtained closing illegal taps closed/fined Asset based Cost Accounting - with int.accountant
15 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
16 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.
17 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
18 Thank you for your attention!
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