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8/6/2019 Performance Benchmarking (Presentation BM Werner Brenner Indonesian Experiences)
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INDONESIAN EXPERIENCES IN WATER
UTILITY BENCHMARKING
PERPAMSI Persatuan Perusahaan Air Minum Seluruh Indonesia
Indonesian Water Supply Association
www.perpamsi.org
South East Asia Water and Waste Water Convention
Hanoi, 7-9 June, 2005Werner BRENNER, Advisor
The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the
Asian Development Bank (ADB), or its Board of Directors, or the governments they represent. ADB does not guarantee
the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use.
Terminology used may not necessarily be consistent with ADB official terms.
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Overview of Presentation
Introducing the Indonesian water
sector and the BM program
Sustainability aspects of the water utilityBM program
Water utility BM – what next?
8/6/2019 Performance Benchmarking (Presentation BM Werner Brenner Indonesian Experiences)
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Introducing PERPAMSI
- Established in 1972 by the Indonesian Government
- Since 2001: Independent water supply association Organization:
- Head quarter in Jakarta (30 employees)
- 27 PERPAMSI offices in all Indonesian provinces
Members:
- All 306 Indonesian water utilities with 40.000 employees
- Around 100 extraordinary members (suppliers, investors,…)
Services:
- Services to water utilities, governmental institutions, financing
institutions, investors, donors and other stakeholder in the sect
- Training foundation under PERPAMSI
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Introducing the Indonesian Water Sector
Water utilities are owned by local governments andcontrolled by local parliaments (tariff setting!)
Coverage for piped water supply less than 35% for urban areas and less than 20% for all Indonesia(currently 220 mio. inhabitants; around 6 millionhousehold connections from public utilities are
installed)Water supply is provided through 306 water utilities
Utility structure: 5% of all water utilities have morethan 50,000 and 60% have less than 10.000connections.
Overall coverage for public sewerage services lessthan 1%
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Water Utility Benchmarking in
Indonesia – A tremendous task !
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Investors:Receive reliable /
comparative information
on utility performance and
PSP opportunities.
Water Utilities:
Identify strengths / weaknesses in performance & efficiency inservice delivery, compared to other utilities.
Government:Give appropriate
guidance regarding
institutional, managerial
and financial issues.
Water Utility Benchmarking in Indonesia
- PERPAMSI implemented a World Bank supported program
(PPIAF) in 2002/2003 where 80 water utilities participated.
- Increase to 150 utilities by the end of 2007 planned.
8/6/2019 Performance Benchmarking (Presentation BM Werner Brenner Indonesian Experiences)
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Central Benchmarking
Team (Jakarta)
BM System operation:
Provincial
Bench -
marking
teams
Utilities Benchmarking team
Raw data
Verified data
Results & Support
Support
I n v e
s t m e n t s ,
L o a n s , P o l i c i e s
ExternalStakeholders:
Government
Donors
Investors
Results
$$$
$ $ $
$ $ $
Utilities
R e s u l t s & S
u p p o r t
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Benchmarking – Improving byComparing
“BEST IN CLASS” -> TARGET
Performance at present ?
or is performance here?
or… here?
8/6/2019 Performance Benchmarking (Presentation BM Werner Brenner Indonesian Experiences)
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But … comparing with what?
Utilities? Consumers?
Local Government?
Central Government,Planners, . . .
City Council?
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Benchmarking Indicators used in Indonesia
1. Standard set of key performance indicators:
Primary indicators (10)
Secondary or supporting indicators (19)
2. Calculation of additional indicators possible. Upto 82 different items are collected from the utility.
Technical
Financial
Managerial
Customer orientation
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Benchmarking Results (1)
%n. a.AVERAGE AGE OF TANGIBLE ASSETSS11
%158DEBT EQUITY RATIOS10
%13RATIO OF COMMERCIAL CHARGESS9%2RATIO OF SOCIAL CHARGESS8
months4COLLECTION PERIODS7
US$ / M30,163AVERAGE WATER CHARGESS6
%20ENERGY COST RATIOS5
%44LABOUR COST RATIOS4
US$ / M30,103UNIT OPERATIONAL COSTS3
%1RETURN ON NET FIXED ASSETSS2
%70TOTAL COST RECOVERYS1
%109TARIFF REVISIONP4
%188CURRENT RATIOP3
%108DEBT SERVICE RATIOP2
%86WORKING RATIOP1
Financial Indicators:
Sample: 80 water utilities / Year: 2002
12%0,2TRAINING BUDGETS19
Staff/1000 con.8,8EMPLOYEES / 1000 CONNECTIONSS18
-n. a.EMPLOYEE SATISFACTION INDEXP10
IV Personnel Indicators:
%1MAINS REHABILITATIONS16
%45OPERATING BULK METERSS15
hours / day18CONTINUITY OF SERVICEP9
-n. a.WATER QUALITY INDEXP8%35NON REVENUE WATERP7
III Operational Indicators:
%n. a.AFFORDABILITYS17
%6METERS REPLACEDS14
%48SERVICE AREA RATIOS13
%34IDLE CAPACITYS12
%52POPULATION SERVED IN SERVICE AREAP6
-n. a.CUSTOMER SATISFACTION INDEXP5
II Customer Indicators:
Benchmarking Results (2)
Sample: 80 water utilities / Year: 2002
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Introducing the Indonesian water sector
and the BM program
Sustainability aspects of the water
utility BM program
Water utility BM – what next?
Presentation Overview
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Part of PERPAMSI mission is to
assist water utilities in improving
their performance .
Why is BM done by PERPAMSI?
One of the key strategies in PERPAMSI strategic
plan is to develop and maintain a good BMsystem, for 150 utilities.
BM can help to improve the performance of utilities
and to increase possibilities for sector development.
A strong well performing water sector strengthens
automatically the role of PERPAMSI.
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Challenges Faced in Utility BM (1)
Poor raw data quality provided from the utilities
and some information is not yet available in theappropriate form (data verification routines)
Appreciation of the BM initiative still low
(recognition of usefulness, competition for best
services, transparency versus supportive infor-
mation for the utility management for lobbying)
Managers have difficulties to transfer the results
in the day-to-day operation of the utility (external
support needed)
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Challenges Faced in Utility BM (2)
Difficulties in business target setting
Difficulties to get key stakeholders from the
government on board (every institution uses their
own, different data base)
Establishing utility internal performanceimprovement teams
Philosophy of process BM for the daily operation
of utilities not yet disseminated
Market for BM information needs to be developed
(sustainability of the BM system)
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Annual BM budget: US$ 50.000 Costs for personnel (4 fulltime positions) and
running costs for the Jakarta office Travel costs for advisors form Jakarta to the
Province Operating costs at provincial level (PERPAMSI
part-time staff working in the province) Provincial PERPAMSI staff promotion
seminars and training Reports and national awareness seminars
Future Financing (1)
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Financial support through World Bank Institute(WBI) for three more years as part of a WBI-PERPAMSI twinning program. This includes
technical assistance (TA) for training moduledevelopment and training provision for expansionfrom 80 to 150 utilities.
Current annual contribution from participatingwater utilities around US$ 10.000 (BMmembership fee).
Future Financing (2)
Short term BM budget development:
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150 participating utilitieseach contributing 200 US$ /year (average)
40 Clients each contributing500 US$ / year for receivingup to date BM information
Future Financing (3)
Long term BM budget development:
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Presentation Overview
Introducing the Indonesian water sector
and the BM program
Sustainability aspects of the water utility
BM program
Water utility BM – what next?
8/6/2019 Performance Benchmarking (Presentation BM Werner Brenner Indonesian Experiences)
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The way forward (1)
A permanent Water Advisory Service Centre
(WASC) in Jakarta is currently established withfinancial support from GTZ.
Involvement from PERPAMSI offices in theprovinces.
To constantly promote it to all stakeholders(utilities, financing and governmental institutions)
to join and use the BM system. To use BM results and analysis for sector policy
development, planning, and determining longterm financin and investment re uirements
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To gradually increase number of participatingPDAMs from 80 to 150 (over the next threeyears).
To continue with external support from WorldBank Institute, for at least three more years to
further develop and expand the BM system. To promote the use of BM data by external
stakeholders for a reasonable fee to recover partof future cost.
To exchange Indonesian BM data with other water utilities in the ASEAN region (SEAWUN)
The way forward (2)
8/6/2019 Performance Benchmarking (Presentation BM Werner Brenner Indonesian Experiences)
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To work with PERPAMSI staff (part-time) in
the provinces and assist all parties in datacollection, verification and analysis.
To train PERPAMSI staff in the provinces onresults interpretation, to be able to use BMresults as an effective management tool.
To offer awareness seminars for local and provincial stakeholders
The way forward (3)
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The way forward (4)
Disseminate best practices to stakeholders and
other utilities and create a ‘competitive
environment’ in the sector
Give feedback to staff to understand and motivate
improved performance
Danger: Avoid BM becoming and end in itself-
only tool!
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Thank you for your attention!
PERPAMSI
Persatuan Perusahaan Air Minum Seluruh Indonesia
Indonesian Water Supply Association
www.perpamsi.org