PNG water agencies do well

Business, Normal

The National, Friday 21st September 2012

WATER PNG and Eda Ranu compare favourably on technical performance parameters with other water utilities in the Pacific region, according to the Asian Development Bank.
Both have high-cost recovery rates and in the case of Water PNG, low non-revenue water levels of 38%, ADB said in its Finding Balance: Benchmarking the Performance of State-Owned Enterprises in Papua New Guinea.
Eda Ranu, in contrast, suffered from high non-revenue water rates of 58%, due in large part to its inability to disconnect illegal users.
Both utilities provide 24-hour supply and comply 100% with residual chlorine and microbiological quality benchmarks.
In the Pacific Water and Waste Association benchmarking study, Eda Ranu and Water PNG are the best performers in the key results area for drinking water quality, with 100% compliance for residual chlorine and microbiological quality compliance.
The report compared Water PNG and Eda Ranu to Samoa Water Authority (SWA), Solomon Islands Water Authority (SIWA), Tonga Water Board (TWB), Unelco Vanuatu and Rodney District Council of Auckland, New Zealand.
“Eda Ranu and Water PNG achieved an average return on equi­ty (ROE) of 7.49% and 2.25%, respectively, over the period from financial year 2002 to 2009, higher than any of the other utilities in this comparative study,” the report says.
“However, as the two PNG utilities provide both water and waste water services and separate accounts for the water division are not available, these figures should be treated with some caution.
“Eda Ranu, moreover, is an operator that does not have the responsibility to invest in the network nor does it rely on user fees for its revenue.
“In 2012, Eda Ranu’s non-revenue water consisted of 10% physical loss and 48% commercial loss, whereas, Water PNG’s consisted of 28% physical loss and 10% commercial loss.
The report said although Eda Ranu reported a cost of US$0.28 per cubic metre of water distributed, this could not be fully relied upon, as Eda Ranu did not fully separate costs between its water and waste water activities.
“Total costs divided by volume of water distributed amount to US$1.75, which if the US$0.28 figure were accurate, would mean that the costs attributable to the waste water activity are 84% of total costs, which is unlikely,” it said.