Miya
Urban Water Efficiency
Performance-Based
Non-Revenue-Water (NRW) Contracts
in South Africa
PUBLIC-PRIVATE PARTNERSHIPS CONFERENCE
JUNE 5-8, 2012 | DAKAR, SENEGAL
Ariel Moshkovitz, General Manager, Miya EMEA
Presentation Outline
 Background on Non-Revenue-Water
 PPP Performance-Based Non-Revenue-Water
Contracts
– Examples
– Benefits
 About Miya
 Summary
Background on Non-Revenue-Water Projects
Section Title
More than 30% of the world’s drinking water is
lost from urban water systems before it
reaches consumers
Section Title
Reducing water losses is
the preferred solution to
increase the water
network capacity
It will help mobilizing
private financing for
investment
Non Revenue Water (NRW) - Definition
Non Revenue Water (NRW) is defined as the difference
between the amount of water put into the distribution
system and the amount which is billed to consumers.
It consists of:
– Physical (Real) Losses: leaks and system overflows caused
by poor infrastructure and maintenance
– Commercial (Apparent) Losses: theft, customer meter
under-registration and data handling errors
The economic value of NRW – Example
 City with 1,000,000 residents
–
–
–
–
–
Water Production: 400 MLD (Mega Liters per Day)
Physical Losses: 40% (= 160 MLD)
Commercial Losses: 10% (= 40 MLD)
Price of Water: 1 $ per m3
Cost of Water: 0.5 $ per m3
 There can be two cases
– Case A – The City has enough water for its residents, even
though it loses a lot of water
– Case B – The City does not have enough water
Case A - The city has enough water
 The economic value of the NRW is 43.8 M $ per year
– Physical Losses: 160 MLD * 0.5 $ / 1000 * 365 = 29.2 M $
– Commercial Losses: 40 MLD * 1 $ / 1000 * 365 = 14.6 M $
 If we reduce the losses by 50% we can save 21.9 M $ per
year
 There are substantial savings will also in energy and CO2
emissions
 Enables the utility to provide lower tariffs to low income
areas
Case B - The city does not have enough water
 In this case – all savings can be re-sold to residents
 The economic value of the NRW is 73 M $ per year
– Physical Losses: 160 MLD * 1 $ / 1000 * 365 = 58.4 M $
– Commercial Losses: 40 MLD * 1 $ / 1000 * 365 = 14.6 M $
 If we reduce the losses by 50%:
– We can save 36.5 M $ per year
– We can resell ~30,000 ML per year
 In many cities in Africa there is not enough water
 Water savings -> Additional Revenues -> additional
investments
Conclusion on NRW
 Reducing NRW is the most effective way to
improve the water network and increase
capacity
– Operationally
– Financially
– Management wise
 It is the most elegant way to drive a positive
change, a reform
Performance-Based Non-Revenue-Water Contracts
Examples
Section
Title
Sebokeng/Evaton, South Africa
Section Title
Project Background
 Project Dates: 2005 - 2010
 Objectives:
– Increase capacity
– Improve level of services
– Reduce water leakage and levels of wastage in the water distribution system
 Design and commission one of the largest and most advanced pressure
management installations in the world
 Challenges:
– ±500 000 residents with a dire need of leakage reduction due to major water
losses in the municipal system.
– Population: 420 000
– NRW: 80%
 100% Performance-Based
Hourly Savings = 1000 m3/hr
A large swimming
pool every hour
Section Title
Savings after 5 years – $20 million
Section Title
Before…
After…
Community Awareness and Involvement
Schools Education
Community Education
Job Creation
Results
 More than 50 million m3 in water purchases which translates
to a saving of more than $20 million.
 The project provides annual energy savings in excess of
14,000 MWh, equivalent to reduced CO2 emissions of
12,000 Tons per annum.
 A comparison made by the customer showed that the
alternative of construction a water treatment facility
to produce the same amount of water savings, would cost
150 times the investment in this NRW project.
New Emfuleni Project, South Africa
 Started on March 2012
 Financed by SASOL and GIZ
 Combination of Fixed & Performance Based
 All savings are calculated – and are returned to the
project – for further improvement of the network
 Thus, a small investment can substantially improve the
network
Manila, Philippines
Background
 Performance Based Contract
with Maynilad structure:
– Fixed fee
– Performance-based fee:
received if annual targets are
met
 Specific annual NRW targets set
DMA Instrumentation
Integrated Meter Management
Leak Detection
NRW Management
Software
Training
Training and Certification
 Comprehensive
training in partnership
with Miya
 4 training Levels
 Examinations and
certification
 NRW expertise
developed in Maynilad
will be certified and
marketed worldwide
The situation in 2007 and now
 2007:
– 66% NRW
1,530 MLD
– 54% of the system had intermittent supply
– 47% of the system had < 5m average pressure
– 700,000 customers
 2011:
– 42.3% NRW
885 MLD
– < 30% intermittent supply
– < 15% < 5m pressure
– 1,005,350 customers
The situation in 2007 and now
 Maynilad has tripled its net income since 2008
 1.8 million additional people connected to the network
 420 local employees were trained and employed in the
project
New Providence, Bahamas
Project Overview
 Customer – Bahamas Water and Sewerage Corporation
 10 years project
 Performance Based project
– 30% - Performance fees linked to targets
– 70% - Fixed fees covered by IDB funding of the first phase (Quality Based
competitive bidding process)
 The project is designed to repay itself within its lifespan,
with a double digit project IRR for WSC
 Over 10 Billion gallons of water will be saved
 83 Million USD; 51M by Inter-American Development
Bank
The uniqueness of the project
 Output Based Contract
 Output-driven contract
– The targets are in NRW level
 High Performance Based (PB) component directly related to
the actual achievement of the targets
 IDB loan is not financing the entire project, but rather assisting
WSC in the first years while the project cash flow is still
negative
 The turn-key holistic approach and the high PB component
ensure full accountability of Miya to strive for best results
 As a contribution to the community, Miya will run a water
efficiency education program in local schools, including
implementation of water conservation measures
Performance-Based Non-Revenue-Water Contracts
Benefits
Section
Title
Performance Based Contract Benefits
 Total Alignment of Interests
– The water utility wants to improve the water network
– The contractor is being compensated according to how it
meets or exceeds the customer’s objectives
 Risk Sharing with the private contractor
 Lower Investment Required
– The contractor is paid out of the increased revenues
 Better Performance by the Contractor  Higher
Project Revenues and Profit
There are many benefits to a comprehensive
NRW project
Cost & Revenue Benefits:
– Increase revenues
– Reduce costs
– Extend the lifespan of
existing infrastructure
– Defer investments in
alternative solutions
Community Benefits:
– Water supply
– Service level
– Creation of jobs - NRW
teams, construction
teams, etc.
Environmental Benefits:
– Less chemicals in the
water system
– Save drinking water
– Save energy
Health Benefits:
– Lower contamination
resulting from bursts
and antiquated pipes
– Better water quality, less
diseases (typhoid and
cholera)
About Miya
About Miya
 Established at 2007 by the Arison Investments, a leading business
and philanthropic group, that operates globally
 Miya offers utilities Comprehensive, economic and sustainable
solutions through turnkey projects, which increase water supply,
revenues and profits.
 A global contractor of comprehensive solutions for urban water
efficiency and water loss management
Miya’s solutions are tailored to the water utility’s
budget, needs and priorities
Veritec Consulting,
North America.
Designed and
implemented
some of the
largest water loss
reduction
programs in
Canada
Crowder
Consulting,
consultant
engineering &
software
development
company
specializing in
the fields of
water supply
Miya Worldwide
Regional Headquarter,
Luxemburg
Regional Headquarter,
Israel
Miya Bahamas
Miya Manila,
Philippines
Miya
Puerto Rico
BBL Engenharia is a
leading engineering
company, specializes in
NRW management
projects in the Brazilian
market. BBL Engenharia
has several contracts with
SABESP
WRP, South Africa is a
specialist engineering
consultancy of
international standing in
the fields of water
resource planning and
management, water
conservation and
environmental
management
Summary
 Public-Private-Partnerships are a very effective tool for
water infrastructure projects
 Reducing water losses and NRW is the first and most
efficient program for improving the water service and
building capacity and improve water networks
 Turnkey NRW projects are the optimal instrument for
engaging IFIs
 Performance Based NRW projects ensure the contractor
and the customer are on the same side
Thank You
www.miya-water.com