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Madaba Micro PSP

Background

The Ministry of Water & Irrigation is responsible for Jordan’s scarce water resources, playing a vital role in the management collection, allocation and distribution of the country’s water. Over the past years, in an effort to further develop its capacity to do this, the ministry has cooperated with various international donors and consultants on a number of successful projects.

One such project, implemented in 2004, introduced a new concept in water utility management. The Progamme Management Unit of the Water Authority of Jordan (WAJ) worked with the German Technical Cooperation (GTZ) OMS project to improve the efficiency of water utilities and, at the same time, develop private-sector capabilities to enable local companies to carry some of the responsibility in the years to come. The concept entails private sector participation in WAJ services on a micro scale (micro-PSP). Effectively, this aims to involve Jordanian companies in the operation, maintenance and management of selected business activities and smaller business units of WAJ, in order to support commercialization and efficient delivery of WAJ services.

This concept was piloted in managing water utilities in Madaba. Engicon O&M was awarded the management of the subscriber section of the Madaba Water Authority, and this marked the first time a local company was entrusted with such an important task. The project was successful, and this success has prompted the government to replicate this experience in other areas, including NRW reduction, energy efficiency and more. 

Required Services

The governorate of Madaba lies southwest of the capital city of Amman. It spans an area of 2,000 km2 and has a population of 150,000. Prior to the 2004 micro-PSP project, the Madaba Water Administration (MWA) had 20,000 subscribers and faced severe challenges. These are summarized as follows:

  • System of estimating quantities led to inaccurate billing
  • Poor implementation led to high loss of customers
  • Lack of an information system resulted in bills not being distributed
  • Large volumes of water were unaccounted for (between 45% and 60%)

The services required from Engicon O&M under the contract were to manage water and wastewater billing and revenue collection. This included developing and implementing Geographical Information System (GIS)-based tools, a Customer information System and a Sewerage Database for the Madaba governorate.

The contract was split into two phases:

  1. Phase I: Preparatory Period
  2. Phase II: Performance-based period

General Objectives

The following objectives were identified to guide implementation of the project:

  • Increase revenue from water and wastewater services
  • Reduce outstanding customer debts
  • Improve efficiency of customer management
  • Install computer-aided customer management system
  • Develop technical and administrative capabilities of the Madaba Customer Management Center.

Achievements and  Results

Engicon began by renovating the MWA Offices in order to create a modern customer service facility. This took place over the first nine months of the project, and included procurement of software and hardware that enabled the administration to issue its own water bills. Previously, MWA had relied on WAJ headquarters in Amman to process and issue bills. Engicon also surveyed and mapped all service subscribers, and digitized all surveyed routes in the governorate. This enabled Engicon to then re-assess the existing system, and plan more efficient routes. The meter readers were then assigned certain routes and switched to others in order to eliminate reader monopoly. In addition, a sewerage database system was installed.

To motivate the seconded staff, a bonus scheme was developed and the remuneration procedures were made transparent. Staff was then given training on computer skills, customer care, data entry, and appraisal (for management)

These changes led to a complete overhaul of the system of operation at MWA. Most notably, the administration was now able to issue its own bills and this dramatically improved efficiency. The consistency achieved by following the new procedures was quickly felt by the subscribers. The changes made, particularly the use of reader routes, increased the accuracy of meter reading. In a survey conducted in 2008 by GTZ, more than 99% of the sampled respondents said they were receiving their bills on time.

Quantitatively, the success of the project exceeded all expectations. Engicon’s involvement in this project resulted in the following major successes:

  • Net billed water increased to 75% in the first year of operation.
  • Net collections increased dramatically, from JD 0.9 million in the base year 2005, to JD 1.3 million in 2006, JD 1.8 million in 2007, and JD 1.9 million 2008.
  • WAJ recovered the entire cost of the project in less than two years.

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