Tuesday, March 22, 2011

Phnom Penh Water Supply Authority

Mar 22, 2011

Excerpts from article.


Three paradoxes

By Asit K. Biswas & Leong Ching

The Phnom Penh Water Supply Authority is a fine example of this fresh approach. PPWSA is in the capital city of Cambodia, a relatively poor country, which still relies on foreign aid for more than half of its government spending.

Yet because of the work of PPWSA, people can drink straight from the tap. Its water meets World Health Organisation drinking water standards.

There is universal access and, more astonishingly, not more than six drops are lost out of every 100 through the pipes. In contrast, a private sector organisation such as Thames Water loses up to 25 per cent of its water because of losses and leaks through pipes.

PPWSA has been able to do this because it has successfully tackled the three paradoxes dogging most urban water reforms.

The first paradox is: Do we price water as an economic good to provide the necessary incentives to use water well, as well as give water for free as a matter of equity to the poor? From the start, PPWSA decided it needed to price water to reflect its value and to control its use.

So PPWSA bit the bullet and charged a volumetric price for water. The very poor were not exempt - they received a bill but if they could not pay, their supply was not cut off.

The second paradox, which applies especially to countries which have to take loans from outside agencies, is this: Do we put in place a system of rigid rule and regulations to ensure accountability or do we allow personal discretion?

PPWSA shows that the two are not always in conflict. Water collectors for PPWSA are paid much higher than others in the public sector. A large part of pay is tied to collection rate bonuses, especially for 100 per cent collections. It was nearly impossible for the collectors to get 100 per cent of the bills.

What the collectors did was to pay the last few bills themselves as the bonus they would get would be higher than the bills themselves. PPWSA knew this, but it did not hold the water meter readers to a strict accounting especially since the outstanding bills were often from the very poor.


The learning lies in the fresh-eyed and practical approach taken to solve an urgent problem. Phnom Penh is a pocket of success and good governance in a country like Cambodia which, in 2009, ranked 158 in the world in the corruption perception index of Transparency International.

If Phnom Penh, with its serious constraints, can supply all its residents, both rich and poor, with clean and drinkable water 24 hours a day, there is no reason other major urban centres of the developing world cannot do the same.

Asit K. Biswas is distinguished visiting professor and Leong Ching is a PhD candidate at the Lee Kuan Yew School of Public Policy, NUS.

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