World Bank - IAWD - GIZ 2014 Danube Water Conference

At the World Bank - IAWD - GIZ 2014 Danube Water Conference on 9 May 2014 Mr. Péter Kaderják, the director of REKK gave the introductory presentation before the panel discussion of the Hungarian water utility sector reform. Mr. Kaderják reviewed the problems that triggered the reform in the late 2000's, described the reform initiative of the government, and summarised what progress has taken place since the 2011 adoption of the Water Utility Act. The presentation was followed by a lively discussion of the panelists and the audience.

The presentation can be downloaded from here.
More on the conference is at: http://www.danube-water-program.com/cms/pages/events/2014/danube-water-conference-89-may.php

Benchmarking Club of Mavíz

The Benchmarking Club of the Hungarian Waterworks Association was founded in 2007. While water and wastewater service providers had for some time already been planning to start process benchmarking in Hungary, the impetus came after the IBNET benchmarking survey was successfully completed and participating companies could start to compare their performance to that of their peers.

The feedback from the IBNET survey was appreciated by the participating companies as well as the officers of the Hungarian Waterworks Association. Besides receiving useful results, the IBNET benchmarking exercise also served as an example showing how a benchmarking process can be executed in practice.

The IBNET survey was a good start, but some of the companies wanted to go even further. They sought to collect additional data, some of it rather country-specific, compute additional indicators, and start an actual exchange of best practices. Thus, in early 2007, the Benchmarking Club was founded.

REKK provided the technical background for the data collection and quality control, it generated the indicators and provided economic analysis about the sector based on the synthesized information.

Our summary about the experiences of the first years of the activity can be accessed here.

UNDP/GEF - Danube Regional Project

The management of the UNDP/GEF funded research project on municipal water and wastewater tariffs and effluent charges in seven countries of the Danube River Basin belongs to the professional experience of our colleagues at their previous job (MAKK). They coordinated the work of national experts, ensuring that common methodology is used in all study countries and practically useful results are achieved.

During the project a microeconomic model called ASTEC was developed. ASTEC is capable of broadly examining the interaction of a water and wastewater utility’s service prices with investment strategies, cost structures, customer behaviour and physical conditions. ASTEC has been successfully used in many cases as a decision support tool to test reforms related to new tariffs designs, investment strategies and corporate changes.

One of the results of the project is a comprehensive overview of the status of municipal drinking water supply and wastewater treatment in seven Danube countries: Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Romania and Slovakia. The paper assesses the theory and practice of water and wastewater service pricing, and effluent charge designs, as well as proposals for reforming water utility bookkeeping, financing, management and institutions. This is a valuable handbook for policy-makers, utility managers, and municipal decision-makers. Or anyone interested in the efficient provision of public water-related services and future utility challenges for reaching full-scale effluent reduction.

Another result of the project is a volume of papers consisting of three documents for each of the above seven countries (21 documents total) covering water and wastewater systems. The first are national profiles discussing the legal, regulatory, economic and institutional setting of the sector, data about water and wastewater services and service providers, and key policy issues and challenges facing the water and wastewater service sectors of each country. The second document presents a case study covering one particular water utility in each country, including the results of modelling reform proposals appropriate to that utility with the ASTEC model. The third document is a summary focusing on the most important issues discussed in the national profile and the case study.

Reports can be found on the Danube Regional Project website

Tariffs and Effluent Charges, Final report - phase 1
Tariffs and Effluent Charges, Final report - phase 2

Country-Specific Issues and Proposed Tariff and Charge Reforms:Hungary – Summary 
Country-Specific Issues and Proposed Tariff and Charge Reforms: Hungary – National Profile
Country-Specific Issues and Proposed Tariff and Charge Reforms: Hungary – Case Study

WB-IBNET - International Benchmarking Network

The World Bank launched a large scale benchmarking initiative in the water and wastewater utility sector at the end of the 1990’s. As part of the program, called International Benchmarking Network for Water and Sanitation Utilities (IBNET), participating utilities fill data on their operations in a standardized questionnaire. From individual company data a database is created, making it possible to compare the processes, services and related efficiency of the participating companies. The program has a website: www.ib-net.org

As part of IBNET, utilities from more than 80 countries, including Hungary, have been surveyed to date.
Between 2006 and 2011 we participated in three rounds of data collection for Hungary in close collaboration with the the Hungarian Water Utility Association (MAVÍZ) and also coordinated data collection - including data validation and database management - from Central and Eastern European countries.

The Hungarian IBNET exercise served as the trigger for the launch of the Benchmarking Club of MAVÍZ. 

The regional data collection gave us the opportunity for an econometric analysis of the performance of utilities in the CEE region as well as an analysis of their energy efficiency.