Non-revenue water : most suitable business model for water services authorities in South Africa : Ugu District Municipality

Water is a critical resource in Southern Africa. The region thus needs to protect both the quality and the quantity of its water resources through robust water conservation and demand management (WC/DM) measures. Water demand management encompasses activities that aim to decrease water demand, improve the efficiency of water use and prevent the deterioration of water resources. Water conservation refers to policies, measures or consumer practices that promote the conservation of water resources. Water resources should be used wisely to secure a water supply that is of good quality and enough for South Africa’s people and its natural environment, which provides the ecosystem that supports all forms of life. When a water utility systems experience water losses, the amount of water available to consumers is reduced, making it difficult to satisfy demand. Water losses also occur as a result of inaccuracies in customer meters, data errors in the billing system and unauthorised consumption. Such losses result in non-revenue water (NRW), which is a serious threat to the water supply sector. NRW refers to the water that is produced and lost without generating revenue for the utility. This research study investigated strategies that could be used to address the challenge of water losses, by developing a more suitable business model that could be incorporated into Ugu District Municipality (DM)’s existing NRW reduction strategies. The study was carried out in Amandawe and Umzinto zones of the District Municipality and it covered the period 01 March 2014 to June 2015. The study objectives were made up of four components. The first was to identify and prioritise the implementation of NRW reduction strategies. This was achieved by identifying the pipes to be closed off, which were supplying a significant number of consumers. For those pipes that were not closed off, flow meters were installed to measure the flow into and out of a zone. The system was then tested for zero pressure by isolating all closed valves to ensure that there were no potential feed-backs into the zone. Pressure gauges were set up on standpipes for routine pressure monitoring. The test was run at night (between 01.00 and 05.00 hours) when the system was under pressure. When the pressure dropped consistently, this meant that there was no feedback into a zone. Leaks were detected by logging the system in order to obtain night flows, which were analysed to determine the system behaviour. The results for Amandawe Zone after implementation of the pressure management programme, indicated that the average zone’s night pressure (AZNP) decreased from 7.38 bars to 5.95 bars. For Umzinto Zone, the AZNP dropped from 5.5 bars to 3.3 bars. The minimum night flows (MNFs) dropped from 34.80 m3/hr to 15.20 m3/hr in Amandawe Zone and from 6.4 m3/hr to 1.70 m3/hr in Umzinto Zone. The daily cost of excess night flow due to bursts was reduced from R2276.17/day to R862.61/day in Amandawe Zone and from R361.24/day to R40.46/day in Umzinto Zone, which provided huge savings. The second objective was to identify the sources and causes of water losses in the study area by conducting field measurements and observations. This was achieved by physically inspecting the infrastructure using visual observation, mechanical listening sticks, correlators, ground microphones and system loggers. The following indicators were used to physically identify underground leaks: unusually wet surfaces in landscaped areas, pools of water on the ground surface, noticeably green, soft and mouldy areas surrounded by drier surfaces, a notable drop in water pressure or flow volume, unexplained sudden increase in water demand or water use at a fairly steady rate for several billing cycles, cracks in paved surfaces, potholes or sink holes and the sudden appearance of dirty water in the main distribution system. For this study, the water losses in the system were found to be as a result of various causes including leaks, aging infrastructure, high pressure in the system, damaged pipes and illegal connections, among others. The third objective was to construct a water balance in order to determine the key performance indicators for the NRW reduction strategies. This was achieved by determining the system input volume (SIV), billed authorized consumption (BAC), unbilled metered consumption (UMC), unbilled unmetered consumption (UUC), real losses (RL), apparent losses (AL) and IWA Key Performance Indicators. Bulk and domestic meter readings were used to calculate the components of the water balance. The results of the water balance indicated that there was a decrease in the SIV from 904 kL/day to 523 kL/day in Amandawe Zone and from 382 kL/day to 221 kL/day in Umzinto Zone. The physical water losses were reduced from 611 kL/day to 377 kL/day in Amandawe Zone and from 93.8 kL/day to 45.8 kL/day in Umzinto Zone. The NRW was reduced from 659 kL/day to 395 kL/day in Amandawe Zone and from 94.2 kL/day to 46.2 kL/day in Umzinto Zone. The fourth objective was to develop the most suitable business model for Ugu DM based on the results arising from the first three objectives. Ugu DM needs to ensure both operational and financial efficiency. Operational efficiency could be achieved by minimising real water losses through reviewing water services standards, developing district metering areas, pressure management, leak detection and repair, reservoir control to stop overflows and pipe replacement programs. Financial efficiency could be achieved by carrying out regular meter testing and calibration, securing database integrity, managing illegal connections, ensuring that all customer connections have meters and ensuring that the tariff structures were cost reflective in order for the municipality to cover costs and generate revenue. Findings of this study could assist other water utilities operating under similar conditions. The implementation of this study’s results could have positive economic, social and environmental effects on Ugu DM. It was concluded that rezoning, pressure management and leak detection were the most critical NRW reduction strategies as they had a positive impact on the system. The main causes of leaks in the system were identified as aging infrastructure, high pressures in the system, and illegal connections. All the critical KPIs of IWA water balance responded positively after the implementation of the strategies by reducing. The operational and financial efficiencies were identified as critical for a WSA to develop a business model that could sustain itself.