Skip to main content
SpringerLink
Log in

Does Size Matter? Operating Cost Coverage for Water Utilities

  • Published:
Water Resources Management Aims and scope Submit manuscript

Abstract

This paper compares the operational cost coverage index from 1132 water utilities for five countries (Albania, Brazil, Norway, Russia and Poland). The data used is available through the International Benchmarking Network (IBNET) for Water and Sanitation Utilities. By comparing means or medians of different serving population groups, it was shown that significant financial gains can be achieved by larger utilities. Such analysis can assist decision makers pursue merging of water utilities for profit maximizing purposes. The importance of benchmarking is also emphasized in order to illustrate the utility of the perused statistical analysis.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4

Similar content being viewed by others

References

  • Abbott M, Cohen B (2009) Productivity and efficiency in the water industry. Utilities Policy 17(3–4):233–244. doi:10.1016/j.jup.2009.05.001

    Article  Google Scholar 

  • Berg S (2010) Water Utility Benchmarking Measurement, Methodologies, and Performance Incentives. IWA Publishing, London

    Google Scholar 

  • Brunner N, Starkl M (2012) Financial and economic determinants of collective action: The case of wastewater management. Environmental Impact Assessment Review 32(1):140–150. doi:10.1016/j.eiar.2011.07.001

    Article  Google Scholar 

  • Bucknall J, Kremer A, Allan T, Berkoff J, Abu-Ata N, Jarosewich-Holder M, Deichmann U, Susmita Dasgupta, Bouhamidi R, Ipe V (2007) Making the Most of Scarcity: Accountability for Better Water Management Results in the Middle East and North Africa. Washington DC

  • Corton ML (2003) Benchmarking in the Latin American water sector: The case of Peru. Utilities Policy 11(3):133–142

    Article  Google Scholar 

  • Da Cruz NF, Marques RC, Romano G, Guerrini A (2012) Measuring the efficiency of water utilities: A cross-national comparison between Portugal and Italy. Water Policy 14(5):841–853

    Article  Google Scholar 

  • De Witte K, Marques RC (2012) Gaming in a benchmarking environment. A non-parametric analysis of benchmarking in the water sector. Water Policy 14(1):45–66

    Article  Google Scholar 

  • Franceschini F, Turina E (2012) Proposal for a Performance Dashboard for the Monitoring of Water and Sewage Service Companies (WaSCs). Water Resources Management 26(1):63–80

    Article  Google Scholar 

  • Fraquelli G, Giandrone R (2003) Reforming the wastewater treatment sector in Italy: Implications of plant size, structure, and scale economies. Water Resour Res 39(10):1293. doi:10.1029/2003wr002037

    Article  Google Scholar 

  • Garcia S, Thomas A (2001) The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities. J Product Anal 16(1):5–29. doi:10.1023/a:1011142901799

    Article  Google Scholar 

  • Garvin DA, Leone RA (1981) Regulatory cost analysis: An overview. Environmental Impact Assessment Review 2(1):39–62. doi:10.1016/s0195-9255(81)80020-0

    Article  Google Scholar 

  • González-Gómez F, García-Rubio MÁ (2008) Efficiency in the management of urban water services. What have we learned after four decades of research? Hacienda Pública Española / Revista de Economía Pública 185 (2):39–67

  • Hernandez-Sancho F, Molinos-Senante M, Sala-Garrido R (2011) Cost modelling for wastewater treatment processes. Desalination 268(1–3):1–5. doi:10.1016/j.desal.2010.09.042

    Article  Google Scholar 

  • Hernández-Sancho F, Molinos-Senante M, Sala-Garrido R (2011) Energy efficiency in Spanish wastewater treatment plants: A non-radial DEA approach. Sci Total Environ 409(14):2693–2699

    Article  Google Scholar 

  • Houtsma J (2003) Water Supply in California: Economies of Scale, Efficiency, and Privatization. Paper presented at the ERSA conference papers, Aug

  • IBNET (2011) International Benchmarking Network for Water and Sanitation Utilities. The World Bank, Energy and Water Department [Available online at: www.ib-net.org, acessed 18-8-2011],

  • IWA (2010) International Statistics for Water Services. International Water Association (IWA), Specialist Group on Statistics and Economics [Available online at: www.iwahq.org/contentsuite/upload/iwa/Document/IWA_InternationalStats_Montreal_2010.pdf, acessed 16-8-2011], London

  • Kulshrestha M (2006) A scorecard for measuring the water supply utility performance: The case of large Indian metropolises. Int J Manag Decis Mak 7(4):418–437

    Google Scholar 

  • Marques RC, Monteiro AJ (2001) Application of performance indicators in water utilities management - A case-study in Portugal. vol 44.

  • Milnes D (2005) International benchmarking network helps utilities improve performance. Water and Wastewater International 20(3):33–35

    Google Scholar 

  • Mizutani F, Urakami T (2001) Identifying network density and scale economies for Japanese water supply organizations. Pap Reg Sci 80(2):211–230

    Article  Google Scholar 

  • Mutikanga HE, Sharma SK, Vairavamoorthy K (2011) Multi-criteria Decision Analysis: A Strategic Planning Tool for Water Loss Management. Water Resources Management 25(14):3947–3969

    Article  Google Scholar 

  • Nauges C, Van den Berg C (2007) How Natural are Natural Monopolies in the Water Supply and Sewerage Sector? Case Studies from Developing and Transition Economies. SSRN eLibrary

  • Parena R, Smeets E (2001) Benchmarking initiatives in the water industry. vol 44.

  • RCAP (2011) USDA Rural Utilities Service Borrower’s Guide. Rural Community Assistance Partnersip, Inc., Washington

    Google Scholar 

  • Rehan R, Knight MA, Haas CT, Unger AJA (2011) Application of system dynamics for developing financially self-sustaining management policies for water and wastewater systems. Water Res 45(16):4737–4750. doi:10.1016/j.watres.2011.06.001

    Article  Google Scholar 

  • Sauer J (2005) Economies of scale and firm size optimum in rural water supply. Water Resour Res 41(11):W11418. doi:10.1029/2005wr004127

    Article  Google Scholar 

  • Seroa da Motta R, Moreira A (2006) Efficiency and regulation in the sanitation sector in Brazil. Utilities Policy 14(3):185–195

    Article  Google Scholar 

  • Shih JS, Harrington W, Pizer WA, Gillingham K (2006) Economies of scale in community water systems. J Am Water Works Assoc 98(9):100–108

    Google Scholar 

  • Sudeshna B, Heather S, Vivien F, Cecilia B-G, Elvira M, Tarik C (2008) Africa infrastructure country diagnostic: Urban water supply in sub-Saharan Africa. World Bank and Water and Sanitation Program,

  • Torres M, Morrison Paul CJ (2006) Driving forces for consolidation or fragmentation of the US water utility industry: A cost function approach with endogenous output. Journal of Urban Economics 59(1):104–120. doi:10.1016/j.jue.2005.09.003

    Article  Google Scholar 

  • Tsagarakis KP, Mara DD, Angelakis AN (2003) Application of Cost Criteria for Selection of Municipal Wastewater Treatment Systems. Water, Air, & Soil Pollution 142(1):187–210. doi:10.1023/a:1022032232487

    Article  Google Scholar 

  • van den Berg C, Danilenko A (2011) The IBNET Water Supply and Sanitation Performance Blue Book The International Benchmarking Network for Water and Sanitation Utilities Databook, WSP. The International Bank for Reconstruction and Development / The World Bank, Washington

    Google Scholar 

  • Wolrd Bank (2011) Wolrd dataBank, World Developement Indicators, http://databank.worldbank.org.

Download references

Acknowledgements

The author acknowledges the agents of IBNET database for making available to the public, this valuable source of data.

Author information

Authors and Affiliations

  1. Business and Environmental Technology Economics Lab (BETECO), Department of Environmental Engineering, Democritus University of Thrace, 67100, Xanthi, Greece

    Konstantinos P. Tsagarakis

Authors
  1. Konstantinos P. Tsagarakis
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Konstantinos P. Tsagarakis.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Tsagarakis, K.P. Does Size Matter? Operating Cost Coverage for Water Utilities. Water Resour Manage 27, 1551–1562 (2013). https://doi.org/10.1007/s11269-012-0256-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11269-012-0256-1

Keywords

Search

Navigation