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Non-Revenue Water Pre-Feasibility Tool

A Non-Revenue Water Pre-Feasibility Tool for improved decision-making by Municipalities and Utilities

South Africa is ranked as the 30th driest country in the world, with extreme climate and rainfall fluctuations. Many regions in South Africa are currently or have recently been in a state of drought with water restrictions implemented in municipalities and dams at drastically low levels. As water losses and Non-Revenue Water (NRW) is a significant problem for many municipalities in South Africa, appropriate Water Conservation and Water Demand Management (WC/WDM) is a critical activity now and going forward.

A project was initiated by GreenCape and IMESA to assist municipalities with developing a pre-feasibility assessment of a municipality’s water business to highlight the potential opportunities that a NRW programme may have for the financial outcomes of the municipality. Such an assessment could be used to mobilise support for a NRW programme from possible funders, and also from the political and financial leadership in the municipality. The draft tool has been piloted at Laingsburg Municipality, and it is hoped that it will be further refined and enhanced at more municipalities in the near future.

The current NRW Pre-Feasibility Assessment Tool considers the impact of the following:
– Apparent/commercial losses changes (e.g. via removal of illegal connections)
– Real/physical losses changes (e.g. via pressure management)
– System Input Volume changes (e.g. via improved customer education)
– Authorised consumption changes (e.g. via increasing customers receiving bills)

The tool provides a selection of typical NRW interventions which can be analysed by providing basic data inputs. The spreadsheet-based NRW Pre-Feasibility Assessment Tool currently contains the following components:
Data input – forms are used to capture: (i) basic system data (e.g. length of mains), (ii) water balance components (e.g. system input volume)
– Current status – calculates the current status of the municipality including key performance indicators (e.g. Non-revenue water (% and L/connection/day)
– Target Setting and Scenarios – by entering additional information of relevance (e.g. revenue collection efficiency, energy/electricity costs, manpower costs, deferred capital costs), the tool aims to answer typical NRW related questions raised by municipal officials, for example: What will be the impact if we lower the average system pressure from 60 m to 25 m?
– Updated status – the tool predicts the anticipated water volume saving, cost savings, simple pay-back period and presents updated performance indicators.
– Value Impact Assessment – total NRW programme investment requirements are calculated, and the business case for investment (if it exists) is determined. The methodology supports decision making on complicated technical alternatives by comprehensively assessing the financial benefits and associated risks. A sensitivity analysis is also included.

Following the steps of the NRW Pre-Feasibility Assessment Tool therefore provides a sound basis for municipalities to make a decision on the most appropriate NRW interventions that should be pursued. In particular, the tool findings can be used to influence and inform non-technical municipal stakeholders (e.g. Councillors, Chief Financial Officer) and assist with developing motivations and business cases for funding from external stakeholders (e.g. DWS, National Treasury). The tool ought to be of strong interest to many municipalities in South Africa and beyond. An opportunity exists to make the tool more generic and applicable to a wider range of municipalities, thereby increasing uptake and use thereof to the benefit of the water sector.

The funding of tool development by GreenCape and IMESA is gratefully acknowledged.

For further information on the tool, please contact us.

Tool Components – Menu

Data Input

Complete Scenarios – Interventions

Updated Performance

Value Impact Assessment – Does this make financial sense?

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