The old adage says: be rich, [you must] never forget the time you were poor; improve, never forget your times of trouble. The Stockholm Industry Water Award brings us great joy and reminds us of difficulties in the past as if they have just occurred.

I was appointed by His Excellency the former governor of Phnom Penh to lead the Phnom Penh Water Supply Authority on September 11, 1993. In organization's situation at the time was very difficult, the dilapidated production system and lacking electrical power enabling us to produce only 30% of our installation capacity of 150,000 cubic meters per day. The dilapidated system and lack of management caused the loss of 2/3 of the water produced along the roads and 10 hours per day for supporting with water of pressure at only 2 meters. The employees of the Water Supply Authority earned less than $1 per day which was less than their basic necessity. As a result of this problem those who lived in Phnom Penh sometimes went to the confluence of the four rivers to bathe and do washing. Some families relied on the wells rich in iron and sometimes these contain arsenic acid. The Water Supply Authority can be operated by using the electricity that is free of charge and subsidy provided by the Royal Government. This was the legacy of the Pol Pot Regime and also the economic embargo from the international community after Victory Day on January 7, 1979.

In that situation, the whole organization is full of the culture of serving the individual interests and no provision of welfare for the people with not certain mission. From this, we organized a new organizational chart to employ employees with a strong work ethic, qualifications and virtue, not employing on the basis of nepotism. Simple basic vocational training with this leading mechanism, we started to observe the clients, equipped meters in the houses and did all we could to collect a water fee, fix the leakages of water system and reduce lost water. Step-by-step, we strengthened discipline, and established statutes and legal documents. On December 19, 1996, the Royal Government decided to name us as a public enterprise with economic status and modified the water fee that could cover the expense. The new situation helped accelerate the reform of our internal affairs. With donors from France, Japan, the World Bank, the Asia Development Bank etc. The rate of water lost was reduced, allowing us a water supply. Nowadays 100 cubic meters of water produced with only 6 cubic meters not consumed (NRW). Ninety percent of people, including the poorest families can access a clean and quality water service available directly from the faucets 24 hours per day. We have tried to keep the same water consumption fee since 2001 to date despite the fact that the cost of the goods has increased one, two and three times. All protests or questions by the clients relevant to our clean water service are always promptly and faithfully resolved. Impolite words have become modest manner. The bad environment has become positive. On October 18, 2006, it was our great honor that at the Council for the Development of Cambodia, Samdech Akka Moha Sena Padei Techo HUN SEN, named me Hero of Water Resources instead of the title as Water Spirit, at the first stage of this reform. Recently on September 8, 2010, we won a great award, the Stockholm Industry Water Award. The jury announced that the Phnom Penh Water Supply Authority, under the leadership of the General Director Mr. EK Sonn Chan, is acknowledged as the world class achievement in the provision of a clean and sustainable water service and awarded the Stockholm Industry Water Award 2010.

The success of the Phnom Penh Water Supply Authority shows the world that the seventh goal of the Cambodia Millennium Development Goals of the Royal Government, led by Samdech Akka Moha Sena Padei Techo HUN SEN, will be achieved. Recently, the Phnom Penh Water Supply Authority established a new vision: "a commitment to abide by the leadership and all instructions of His Excellency the Minister who is our parent to provide a better clean water service available directly from the faucets at a reasonable price for people in Phnom Penh and the poorest families".

Our efforts are at last acknowledged both locally and internationally. I will never forget the support of the Royal Government, led by Samdech Akka Moha Sena Padei Techo HUN SEN, who provides us with opportunities and words of advice, and His Excellency the Phnom Penh Governor and His Excellency the Minister, our parent, who have confidence in us and have provided complete support for me.

On behalf of the employees of the Phnom Penh Water Supply Authority and on my own behalf, I wish you best wishes and may you be blessed with good health and longevity to serve the interests of all Cambodian people.

Accepting the award on behalf of PPWSA, Mr. Ek Sonn Chan said the Stockholm Industry Water Award puts his organisation in the same league as other world class water industry organisations, reinforcing their drive towards achieving future objectives. "My team is encouraged by this prestigious award to carry on our mission to increase our collection efficiency, improve water regulation, and deliver affordable water to the poor. We will continue to work to provide water continuously for a price affordable by our society through good management and cost-recovery practices and despite increases in electricity and other costs," he said.

In 1998, the PPWSA provided clean drinking water to all households in the city area. Water losses due to leakages in pipes and pumps declined from 72 per cent in 1993 to 6 per cent by 2008, which is very low in an international comparison. Meanwhile, the bill collection ratio reached over 98 percent - which improved the PPWSA's costs-recovery. Today, the authority meets international standards as it provides leading edge services to its customers.

According to Mr. Ek Sonn Chan, the road ahead is full of ambition. "Our future goals pave a challenging road ahead, as we aim to expand water provision at the same rates and standards to Phnom Penh's suburban areas and surrounding regions. We're working on reducing water loss from current 5.9 percent to 4 percent by 2020, which would place us in the same league as Singapore and Tokyo. We will continue to improve the efficiency of our staff and revision practices as we work towards providing water at a cheaper price."

The PPWSA was supported by international donors in its efforts to reach where it is today. However, it managed to become entirely self-sustainable as it benchmarked itself against the best operators in both developing and developed nations. PPWSA's work has contributed to visible improvements in public health and a reduction of constraints to industrial, social and economic developments in Cambodia's capital. "The PPWSA has a strong commitment to social and environmental responsibility. It has shown the developing world as a whole that large cities can expect continuous access to clean water. It stands as a role model for those committed to improving their business practices and increasing their level of service to customers. The PPWSA has now taken on the challenge to improve Phnom Penh's sanitation system, and is also scheduled for an initial public offering on Cambodia's new stock exchange later this year," said the Jury in its citation.

Mr. Ek Sonn Chan is proud of the PPWSA's achievement. "We provided an important role model for the development of our nation, Cambodia, which helped improve the country's image internationally after decades of strife and conflict. Developing nations must believe in their own people's capabilities to achieve their own goals," he said.

From an empty city to almost 1 million-person city took only around three months. When Cambodians returned to their capital after the defeat of the Khmer Rouge regime in 1979, they repopulated a city whose basic infrastructure, including the blueprints to Phnom Penh's former water system, had been destroyed.

After four years of devastation between 1975 and 1979, attempts at recovery within Cambodia were stalled by international trade sanctions that were not lifted until 1993. To restore the city's water supply, PPWSA faced one of the most extreme situations in modern history.

When I was appointed General Director (GD) of the Phnom Penh Water Supply Authority in 1993, the city's water service was plagued with the maladies of inefficiency, high NRW, poor coverage, and staggering financial losses. In 1993, unaccounted water loss in Phnom Penh ran as high as 72%. At that time, only 13% out of 26,881 connections had water meters, making it difficult to collect payments for water use. The lucky few who were connected to the city's 70-year-old water system–representing just 25% of the coverage area–had running water for only 10 hours each day.

a 17-year period, we at the Phnom Penh Water Supply Authority (PWSA) have undertaken major reforms that have transformed us into an exemplary international model of an urban water utility. In 2010, our results include achieving 100% metered connection, 91% coverage, a 99.9% billing collection ratio, and 6% NRW. We take pride in our accomplishments, but we are not resting. Instead, we are continuously expanding our coverage area, especially to the urban and suburban poor; building new water treatment plants; providing subsidized water to poor communities; and working to reduce our non-revenue water (NRW) to less than 5% by 2020—a rate comparable to ultra-modern Tokyo and Singapore.

Our process of transformation began with three major reforms: 1) Restructuring management, 2) Creating a "culture of change," and 3) Becoming self-reliant. With these reforms, new processes were introduced in each of our five departments to bring about dramatic change. We were granted autonomous status with independent management in 1996. Political support for the reform process came with MIME minister and Prime Minister Hun Sen, and available funds in the form of grants and loans from various multilateral agencies, creating an enabling environment. Over a decade of peace and stability within Cambodia has undoubtedly helped us execute our mission. A skilled set of enthusiastic employees, combined with a leader with vision and a focused commitment have transformed our organization, leading to improved service provisions for all consumers across every social spectrum in Cambodia.

Some of the factors that allowed us to spearhead this remarkable turnaround include investing in staff and providing incentives, promoting transparency, involving civil society, and investing in modern management procedures and technology. Our top management was restructured, and dynamic younger personnel with more advanced qualifications were promoted to senior positions with greater responsibilities. Senior management was given more direct responsibilities, while inefficient senior staff were moved into less essential roles. Incentives such as higher salaries and bonuses for good performance were introduced; penalties were also imposed for bad performance.

Our remarkable transformation was also made possible by the dedicated support of the Royal Government of Cambodia, as well as countless donors, consultants, contractors, suppliers, and the cooperative citizens of Phnom Penh.

This book is our way of telling the story of our transformation, as well as saying thank you to all the individuals and institutions that have helped us each step of the way.

Phnom Penh, the capital of the Kingdom of Cambodia, has a population of approximately 1.5 million. The city is uniquely situated at the confluence of what the French called the "Quatre Bras" (four arms) of the Mekong, Tonle Sap, and Bassac rivers.
Each of Phnom Penh's water treatment plants draws its water from a different river:
The oldest of the water treatment plants, Chruoy Changwar, was built in 1895 by the French and takes its water from the Mekong.
Phum Prek plant draws its water from the Tonle Sap, and Chamkamon water treatment plant gets its water from the Bassac River.

• 1895: The Compagnie des Eaux et Electricité de l'Indochine (CEEI) has been created. Chruoy Changwar Water Treatment Plant (WTP) with a capacity of 15,000 cubic meters per day has been constructed on the west bank of the Mekong River with a distribution network of 40 kilometers, but only within Daun Penh district.

• 1957: 36-kilometer distribution network expansion by Degremont, a French company.

• 1958: Supply Capacity expands with the creation of Chamkamon Water Treatment Plant; the plant, constructed by Degremont, has a 10,000 cubic meter per day capacity.

• 1959: Capacity of Chruoy Changwar upgraded to 40,000 cubic meters per day. Distribution expands by 32 kilometers with the assistance of Kubota, a Japanese company.

• 1960: The Royal Government of Cambodia transforms the CEEI-owned utility to the Regie des eaux de Phnom Penh (RDE) and Electricite Du Cambodge (EDC), by Royal decree of King Norodom Sihanouk, #164NS, 24 March 1960. The city's water supply is now under the jurisdiction of the Municipality of Phnom Penh. Distribution expands by 165 kilometers.

• 1966: The last of Phnom Penh's current Water Treatment Plants —Phum Prek—is constructed. Contracted by PICCHABAL and financed by the Royal Government of Cambodia, Phum Prek has a capacity of 100,000 cubic meters per day. Distribution to Phnom Penh city is expanded by 233 kilometers. Total capacity is increased to 155,000 cubic meters per day.

• 1970 – 1979: With multiple changes to Cambodia's political regime, the water supply is unstable and operations are scaled back drastically.

• 1975 – 1979: Under Khmer Rouge occupation more than 3 million Cambodians are killed. Water distribution is abandoned.

• 1979 – 1993: Civil war continues for 14 years. Municipal water supply resumes operations on 25 January 1979. Water supply is free of charge during this period.

• 1984: After nearly a century, Chruoy Changwar can no longer operate due to disrepair and no electrical supply to the other side of the Tonle Sap.

• 1988: The water authority, which had been called Regie Des Eaux De Phnom Penh (RDE) and was under the management of the Transportation

Department of the Municipality, becomes an autonomous public enterprise by letter of the Phnom Penh People Committee No. 286, issued 1 August 1987.

• 1989: Chamkamon can no longer operate. Operations are resumed, however, after a grant for technical assistance from the Soviet Government allows for maintenance and repair. Phum Prek Water Treatment Plant resumes operating at 15% of its former capacity.

• 1990 – 1993: Water charges start to be implemented. Bills are based on an estimated average consumption of 80 liters per day; only 3,391 of connections are metered. The water tariff is 166 riel per cubic meter and the yearly revenue only covers 50% of the total operating expenses.

• 1991: The water authority loses money continuously until 1994.

Changes to the Water Tariff from 1981 - 2001:
o 1981                                                 2 riels/m3
o 1988                                                 3 riels/m3
o 1989 Jan.                                         8 riels/m3
o 1991 Jan.                                         32riels/m3
o 1992 Jan.                                         166riel/m3
o 1993 – 1994 June                            (166 riels/m3 for domestic, 515 riels/m3 for industrial)
o 1997 24 July                                    Block tariff
o 2001 1 Jan.                                      until now revised block tariff




RENAISSANCE

• 1993: Still called RDE. Phum Prek receives grants from Oxfam and EDC, allowing for the plant to be repaired and expanded by Kubota, and capacity increased to 65% of original capacity.

• 1993 (27 July): A general election assisted by the United Nations Transitional Authority in Cambodia (UNTAC) helps to form the new Cambodian government. Country becomes eligible for external assistance; water/sanitation is considered a priority sector.

• 1993 (1 November): the Royal Government of Cambodia is established.

• 1993 (11 September): Ek Sonn Chan appointed General Director of RDE.

• 1993 -1994: With support of a grant from the Government of France and assisted by SAFEGE and the Municipality of Phnom Penh, the Commercial Department of PPWSA forms a Community Commission to carry out a critical yearlong customer survey.

• 1994: With the establishment of a Customer Data Management Center, PPWSA begins computerized billing.

• 1994 – 1999: 268-kilometers out of 282-kilometers of old pipes are replaced.

• 1995: Implementation of metered connections on existing and new house connections.

• 1996: Full autonomy granted by government sub-decree #52, 19 Dec. 1996. Name Phnom Penh Water Supply Authority (PPWSA) was introduced for RDE in English.

• 1997: First block in water tariff since autonomy.

• 1998: "Regaining the Public's Trust" program begins. "Clean Water for the Poor" program is launched, allowing installment payments for water connection fees to the city's poorest residents.

• 1999: National reconciliation begins through "Win-Win" policy of Prime Minister Samdech Hun Sen. "Water for All" program commences. Through Clean Water for the Poor program, the poor are allowed overall discounts of 20% and up to 20 months installment payment of water connection cost.

• 2001 (1 January): First adjustment in water tariff and kept unchanged until now.

• 2004 (27 January): PPWSA wins ADB Water Prize "Water for All" in 27 January.

• 2005: Commencement of Subsidies to the poor 30%, 50% and 70% on connection cost.

• 2006: Ek Sonn Chan received many award:
     o Hero of Water Resource from Prime Minister Samdech Hun Sen in 08 October.
     o ADB Water Champion. "Pulling the Plug on Nonrevenue Water" in October.
     o Ramon Magsaysay Award from Ramon Magsaysay Award Foundation in 31st August.

• 2006: The city's poorest families now receive subsidies of up to 100% of their water connection fee.

• 2008: PPWSA Social Fund was established to assist the community in the construction of Infrastructure, to provide scholarships for poor students, to provide health care for the vulnerable family, and other charitable activities.

• 2010:
     o Ek Sonn Chan received the great medal "Chevalier dans l'ordre de la légion d'honneur" from the President of France in 1st February.
     o PPWSA wins Stockholm Industry Water Award and the ceremony was held in Stockholm along the World Water Week in 08 September 2010.













PPWSA'S TRANSFORMATION IN THREE STEPS

I. RESTRUCTURING MANAGEMENT

PPWSA's transformation began with the strategic marshalling of human resources. From 1993 to 1994, we reshuffled our basic management structure to install the most active and dynamic managers while recruiting and promoting talented younger staff. Tenured staff members who were ineffectual were moved to positions of decreased influence and responsibility. Promotion was now made by collective decision and strictly based on work quality.

Mr. Ros Kim Leang, Director of Finance, graduated in 1991 with a bachelor's degree in economics. After his graduation, he was working at PPWSA as an accounting staff. During this period, very few Cambodians had a degree in economics; Mr. Leang was the only staff member at PPWSA to hold such a degree, but he was still working as basic staff.

"One story I'll never forget," tells Mr. Leang, "is that three months after Ek Sonn Chan was appointed GD, he gathered all the young staff with university degrees to have a meeting in his room. He asked each staff for their job description and duties within PPWSA, and then he and we committed together—at that meeting—to transforming the quality of service at PPWSA for the common benefit of all employees."

"Due to these changes," Mr. Leang continues, "in 1994 I was appointed as vice-chief of the accounting office and then chief of accounting. Then in 1997, after PPWSA was given autonomy, I was appointed Director of Finance—a position I hold to this day."

Mr. Khut Vuthiarith, Director of the Production and Distribution Department, echoes the sentiment of his colleagues: "I graduated as an engineer in 1993 and found a job at the Battambang province water authority. In 1994, I was transferred to work for PPWSA. Here, I found a new environment, a new leadership model. I think that only at PPWSA, a young engineer like me could have had the chance to be recognized and promoted in a very fair manner."

In addition to empowering young, dynamic staff with greater opportunities for advancement, the management restructuring of 1993 - 1994 also equipped staff with a new mission before sending them to the frontlines: Assuring the provision of clean water at an affordable price to everyone in Phnom Penh, and a new vision of becoming the reference company for the region.


II. CREATING A "CULTURE OF CHANGE"

Like the Three Muskateers, PPWSA's informal motto is "One for All and All for One." Integral to creating a "culture of change" was fostering a spirit of teamwork through: 1) Spearheading socially responsible programs such as "Clean Water for All" and the "Water for the Poor" program; 2) Our staff-care program; 3) Establishing a social fund.

Smart teambuilding, fair salaries, and highly effective incentive programs have allowed us to get the best from our employees. Like a heart with many chambers, each of our five departments pumps talent and expertise toward the good of the whole: a pure, life-sustaining water supply for all of Phnom Penh.

"Here in PPWSA we work as a family," says Ros Kim Leang, Director of Finance. "I'm taking part in the setup of all regulations and rules at PPWSA. I remember an ADB project in 2002 to lay a transmissions pipe along Monivong Boulevard that had to be completed before schedule. All our technical managers and staff, as well as our GD, worked together day and night for two months to complete the project at a very critical stage. Me, acting as accounting and finance manager, I also worked with them during the nighttime to support them through team building. And finally, we succeeded."

With the aforementioned changes to our management structure, our managers not only had to be knowledgeable, but needed to serve as models and mentors for their subordinates. At PPWSA, we make decisions collectively, but the individual is responsible for their actions. For example, procurement is held accountable for the choices they make in buying pipeline materials. If an individual in procurement buys a lower-quality pipe that is prone to leakage, then that staff member is personally responsible for the NRW created by his/her purchasing decisions.

Although roles and responsibilities are clearly defined at PPWSA, the planning activity is decentralized," explains Samreth Sovithia, Director of the Planning and Project Department. "For example, each department makes their own yearly plan but we give them the indicators, such as water production capacity, house connection projection, NRW projection, etc. To have the right number of projected house connections, I have to work with Mr. Sim Kheng Lin, the head of the Commercial Department, and Mr. Khut Vuthiarith, the head of Production and Distribution, to identify the project area, type of customer, and the demand for water compared to the total water production capacity. And the performance indicators need to have prior review by the GD. Whether the teamwork is effective or not is based on how the team leader, the GD, instructs us in the right rhythm and right direction."

In 1994, realizing that we needed to improve the quality of our human resources, we instituted Urgent Training—an immediate training for all managers and frontline staff. In 1996, we set up an in-house training center and in 1997, began a program of Regular Training, where we started a tailored training program to closely fit into our staff 's daily work routine. In 2000, we implemented a quality assessment program. In 2005, we began a year-end examination program for the purpose of annual staff evaluations.

Beginning in 1998, our GD increased the salaries of PPWSA employees to make them equal to or better than private sector remunerations. He also implemented a strict incentive and penalty program for all departments, whereby an employee's salary level depends upon his/her yearly performance.

An ADB comparison of median monthly salaries of PPWSA employees versus employees at other Cambodian government agencies tells more of the story: a chief officer at PPWSA makes over $600 a month; a government worker in the same position makes $50. A normal worker at the water authority makes around $180 monthly while a government worker at another Cambodian agency makes only $23.

"Pay the people correctly for them to work hard. The people who don't have enough money are not far from corruption," says GD Ek Sonn Chan. "I don't want to have a boss who is unfair, so I must be fair."

III. BECOMING SELF-RELIANT

"We knew from the beginning that we could not depend on the national budget to run our waterworks," says the GD. "I remember our first job very clearly—it was to run around looking for US$50,000 dollars to buy our aluminum sulfates. We finally got the money from the Japanese Embassy. Even US$50,000—the authority does not have the budget at the time to pay. We learned early on that we have to rely on ourselves."

We have become self-reliant through three crucial programs: IMPROVING COLLECTION EFFICIENCY, REDUCING NRW, and AGGRESSIVELY EXPANDING SERVICES. This is how we did it.

           1. IMPROVING COLLECTION EFFICIENCY THROUGH:

                     1.1. Updating the Customer Base to Increase Water Bill Collection

"The first thing we needed to know is who are our real customers," says Sim Kheng Lin, Director of the Commercial Department. "We survey from house to house—who has a connection with supply and who has a connection without supply."

• Diagnostic survey by 100 staff from Phnom Penh Municipality's line departments carried out a comprehensive customer survey for one year.
• The data collected by Sim Kheng Lin and his team was astounding: of the 26,881 customers counted in 1993, only 40% were paying their water bill. Of those "customers," over half—or 13,722—had a connection but didn't receive a water bill from the authority.
• New customer file of 26,881 customers was set up in 1994.

                     1.2. Setting a Strong Example

When the reform project was inaugurated, the Prime Minister made a public statement asking everyone, including government employees, to pay their water bill. With a public habituated to using illegal, underground tanks and, since 1979, getting municipal water for free, the Prime Minister's public show of support went a long way toward allowing PPWSA to initiate the process of billing the public. The GD reiterated the PM's directive and made bill payment mandatory for all PPWSA employees. "Now," says Ek Sonn Chan, "100% of our staff pay their water bill on the first day."

• Within PPWSA.
• Within society and government.
• Formulate the SOP for water bill collection by doing.

There is French saying "L'example vient d'en haut" that can be translated to "The model comes from the top". This means that bill pay was encouraged through model and example: "We get the strong man to pay his water bill first," explains the GD, "the top man pays first; the general pays first. If we show the strong man was forced to pay his water bill on time, then the people will follow."

                     1.3. Installing Water Meters

• A new Water Meter Management policy allowed the department to start replacing mixed-class water meters in 1998. All of Phnom Penh is now on Class C water meters, and yearly calibration of each of the city's water meters requires a reading accuracy of within±3% accuracy for house connection, and ±2% for the manufacturer's quality test.







                     1.4. Applying Incentive and Penalty System

A new incentive program also increased the effectiveness of the department. Bill collectors were responsible for collecting a minimum of 1,400 payments each month. If they doubled their collection ratio by collecting 2,800, they received an incentive of 1,000 riel, or $0.25, for each of the 1,400 additional bills. "This incentive program has pushed our collection ratio to nearly 100%," says Sim Kheng Lin.

• Incentive for good results.
• Penalty for bad intentions.

                     1.5. Computerized Billing

The Finance Department at PPWSA has come a long way from the days when 100% of its accounting rules were copied from French accounting systems: "We have been autonomous since 1997," says Director of Finance, Ros Kim Leang. "That year, we started to run like a business. Our donors were UNDP and World Bank, and we began implementing commercial accounting standards with the help of a financial consultant from UNDP. Also since 1997, Price Waterhouse Coopers independently audits us each year. Since 2001, we have had fully integrated accounting systems with computerized billing that feeds into our general ledger."

• Much easier, faster, and accurate billing.
• Providing more information for deeper analysis.
• Increasing customer confidence.

                     1.6. "Regain the Public's Trust" Program

"Before this program, it was a hard time where PPWSA had a bad image. At that time, no one wanted the public to know they were PPWSA staff. With the change of service policy, good care and fair service for every customer—accompanied by staff discipline—we have regained the public's trust. This trust makes us prouder to be part of PPWSA." – Visoth Chea, Assistant to the General Director

• Convenient payment: Cashiers check, bank check, ATM.
• Village-to-village dissemination of information.
• Information desk to deal with customer complaints.
• Water quality and water meter control at the customers' request.
• Response to customer calls classified into four categories: one hour, one day, three days, and one week.

"When I have a house leak, immediately I call and the water people come. Everyone who comes to the cashier to pay their water bill waits less than 5 minutes—it takes less time than a cigarette break." –PPWSA customer




2. REDUCING NRW THROUGH:

2.1. Replacing old pipes

In 1993, the United Nations Development Program (UNDP), the Government of France, and Safege, a private French company, sent consultants to PPWSA to assist with the laying of new pipes.

"To lay a small pipe like this we needed a consultant," says Khut Vuthiarith, Director of the Production and Distribution Department, making a circle with his hands the size of can of Coca-Cola. "Now big pipes—up to 1.6 meters—we lay by ourselves." In 1996, when PPWSA's NRW rate was 57%, a British consultant began helping department employees build their capacity. By 2000, the consultant had worked with PPWSA to help reduce NRW to 33%.

Khut Vuthiarith tells the story: "In 2000, the consultant said to us, 'You still need me—you cannot do it yourself.' I went to our GD, and he asks, 'Are you ready to do it yourself?' I say yes, we will try."

• Old cast iron pipes totally replaced by 1999.
• Procurement ensures state-of-the-art but cost-effective materials are purchased to prevent leakage.
• Zero outsourcing—all work carried out by PPWSA staff for economic and technical reasons.
"In 1993 we made a commitment to the GD that we will be building pipes ourselves. We now have made the commitment that in 2011 NRW will be 5.8%," says Khut Vuthiarith.










2.2. Metering all connections

• Target to the stronger, harder head first.
• 1993: Only 3,391 out of 26,881 connections were metered.
• 2001: 74,945 connections were 100% metered.
• Now, 192,514 connections are 100% metered with Class C water meters calibrated yearly for accuracy. Meters are also tested if water consumption is unusually high.
• SOP developed for water meter management.




2.3. 24/7 standby teams to repair leaks

• 1993: One team with four unskilled staff.
• 1996: On-the-job training provided for staff by expatriate expert.
• 1996: standby service increased to four teams with 48 skilled staff.
• 2010: 24/7 standby teams ready to respond to any reported leak within one hour.
• IT system provides information on water flow so that staff can analyze where anomalies occur; technician is then sent to suspected area to listen for leaks.



2.4. Eliminating illegal connections

In 1993, it was reported that some PPWSA employees were making illegal connections for the rich and powerful at US$1,000 per connection. To combat corruption and nepotism within PPWSA, salaries were increased. Citizens who reported incidences of illegal connections began receiving concessions in their billing statements.

• Creation of an inspection bureau.
• Strictly disciplining internal staff.
• Customers receive incentive for reporting irregularities/illegal connections.
• Penalty applied strictly and without favor.

2.5. Discouraging wholesalers in coverage area

• Through keeping a low cost to the consumer. In the early 1990s, the city's unconnected residents paid 1,000 riel ($0.25) a day for water purchased from private vendors. Today they spend about 5,000 riel per month, or a little over $1, for safe and reliable PPWSA-supplied water.

2.6. District Metering Area (DMA) program

• Started with a pilot zone,
• Created one team with 5 staffs, OJT with an expert,
• Introduce modern technology (data monitoring system),
     » Regular step test
     » Consumption balance every bill period
     » Analyze Daily Data
     » Detection if any suspect

• The experiences from the pilot zone have been recorded and applied to other areas
• Rapidly expand control to the whole network with 66 zones, System of reward base on result have been provided fairly.
     » Started with 5 staffs with an expatriate exp,
     » Now, PPWSA have 66 staffs in this field, which all of them are local expert level.
     » Apply internal service contract


3. AGGRESIVELY EXPANDING SERVICES THROUGH:

In planning its water supply routes, the Commercial Department assesses the capacity of production, as well as the potential construction of new water treatment plants and pipelines: "We consider areas with high potential for economic growth," says Sim Kheng Lin, "but we never forget the poor communities."

3.1. Aggressive expansion of surface coverage area

• 1994 -1999: Replaced old pipes.
• From 2000 onward: Distribution network expansion.
• Service coverage outreach to areas of high potential for economic growth—without overlooking the poor.

3.2. Increasing production to cover demand

• 1993: 65,000 m3/d, and now: 300,000 m3/d.
• PPWSA staff sent to new coverage areas for customer outreach and welfare: educate customers in how to apply for connections; prohibitions;
water quality and tariff; how to disclose information if they witness any irregularities/illegal connections.

3.3. Revising tariff to cover costs

The inherited water tariff by the utility was far too low to generate the necessary revenue. PPWSA had to increase tariff to cover operational costs. To avoid registering a big hike in the water tariff, PPWSA proposed to have a three-step increase in the water tariff over a period of seven years, along with service improvement. With strong support from the donors and commitment from the Government of Cambodia, particularly the prime Minister and the Governor of Phnom Penh, the first step increase was achieved in 1997 and the second step in 2001. After that, PPWSA did not need to push for the third step, as its revenue had already fully covered all its costs. This was basically due to the higher collection ratio and the drop in the NRW that preceded tariff increases. ( International Union for Conservation of Nature and Natural Resources (IUCN), 2010 ).

A water loss rate of only 6% allows PPWSA to vend water at a low cost of $0.25 per cubic metre with a reasonable margin of profit. According to estimates by the WB, the average global water tariff is $ 0.53 per cubic meter. Only 30% of utilities globally, and only 50% of utilities in developed countries, generate sufficient revenue to cover operation, maintenance, and partial capital costs. In contrasts, PPWSA fully recovers all of its costs, and the utility is now making a modest profit and investing in more water infrastructure.

Even though the cost of electricity has doubled (electricity accounts for 56% of total production cost) and the costs of chemicals necessary for water treatment ( such as alum and chlorine) have increased 300%, the water tariff has not been changed since 2001.

"Our solution for keeping the tariff low is to reduce water loss," says the Director of Production and Distribution. "Reducing our water loss by just 1%—or 1 million cubic meters—equals a US$250,000 revenue increase for PPWSA. Our GD pushes us very much—every two weeks we have an NRW meeting, and 'no result' is considered very bad."

"In my heart I believe and I trust in my people. We should do everything for our people. Our people are so poor—if we sleep, nothing is coming. Yourself—you should do first, you should try first. Our GD, he does not work for himself, for his family—he works for his country."

"This," says Khut Vuthairith, settling back into his chair, "is better than sleep."





RESULT OF REFORMS

The reform process initiated in 1993 and carried out over the past 17 years has dramatically improved our performance. Phnom Penh residents on average consume 108 liters/capita/day of water with a 24/7 ensured supply and metered connections. Industrial use is 6,976,346 cubic meters in 2009 out of the total use of 84, 754,045 cubic meters.

PPWSA fully recovers its operations costs and is now making a profit while continuously increasing coverage to outer Phnom Penh. Even though people are now paying for the water they actually consume, per capita daily water consumption has nearly doubled.

Now, at PPWSA, the word "impunity" does not exist; everyone is responsible for their work, and staff efficiency has increased accordingly.

"In 1993," says Roeun Nary, Director of Human Resources, "an 18 person staff per 1,000 connections was considered an efficient ratio. In 2010, we have 2.97 staff per 1,000—we are much more efficient."

From 1993 until 1999, JICA provided capacity building for the Human Resources department and UNDP, World Bank, and ADB provided short-term technical assistance. Since 1999, each department makes a one-year plan, which they now implement through teamwork—not outsourcing. As part of the reforms, managers were given clear job descriptions and direct responsibility and a new organization chart was drawn up to reflect more defined roles within the authority.

For 2020, our GD has made an ambitious planhe wants to have 2.5 staff per 1,000 connections. He wants to help the provincial waterworks to achieve what we have achieved in Phnom Penh.

Our operations were also made more efficient by overhauling the old infrastructure and streamlining the billing process, among a slew of new measures. Because of these reforms, we have widened our distribution network from serving 40% of Phnom Penh with clean and affordable water in 1993 to over 90% in 2010. Other improvements include establishing a complete consumer database, a long-terms plan to reduce NRW to 5% by 2020, improving collections, metering all of the utility's water supply coverage, and introducing a 24/7 water supply.




SPOTLIGHT ON SOCIAL RESPONSIBILITY: CLEAN WATER FOR ALL

In 2005, a grant from the World Bank further aided our "Clean Water for the Poor" program—a social policy that has been at the heart of our mission since 1998.

The World Bank, the City of Paris, and the Association Internationale des Maires Francophones (AIMF) have all donated generously to this program, with the AIMF paying for pipeline for poor urban communities.

"From 2005 until now we have subsidized over than 100,000 connections for the poor," says Sim Kheng Lin, Director of the Commercial Department.

Since 2005 and with help from the World Bank, PPWSA has applied the subsidy: 30%, 50% and 70% of the total connection fee for Phnom Penh's urban poor. The combined worth of these subsidies is approximately half a million US dollars.

In 2006, PPWSA introduced an additional category of 100% subsidy for the city's poorest families—families who could not afford to make installment payments even after a water subsidy of 70%.

Through this program, we have helped the poor save a total of about $5 million, through putting an additional $5 dollars each month into the pockets of Cambodian families who receive a water subsidy. Subsidized water has also contributed to lasting health improvements and freeing up time for women and children to pursue education and employment opportunities.



CLEAN WATER IS GOOD FOR BUSINESS

A listing of past years' Stockholm Award winners reads like a who's who of extremely developed, hygienic countries: Canada, Norway, the United States and Singapore. Singapore is the only other ASEAN country to have also been recognised by Stockholm.

The PPWSA's "incredible progress within such a short time frame," states a 2010 report from the ADB, "is perhaps unrivalled by any utility anywhere in the world."

This recognition from Stockholm is very good for business. International companies already operating in Cambodia such as Coca-Cola and Nike will be pleased with the international stamp of approval, which could help attract more investors in the future.

In 2009, we made a significant contribution to the growth of industry in Cambodia by providing water connections to 2,755 factories with 6,976,346 cubic meters of water.

Without clean, reliable, and low-cost municipal water these factories—ranging from garment and ice factories to breweries and paper manufacturers—could not operate, and thus over 300,000 workers from the countryside would be out of work and unable to earn an income for their families.







OUR VISION FOR CONTINUED PARTNERSHIP

The story of Phnom Penh demonstrates that access to water does not mean that it has to be free and that the urban poor will be considerably better-off paying for safe, piped water than they would be buying water of questionable quality from private vendors.

—Asian Development Bank, "Country Water Action: Cambodia Phnom Penh Water Supply Authority: An Exemplary Water Utility in Asia

The PPWSA's next major task is to take a distribution pipe across the Tonle Sap River, to the rapidly developing land to the east.

"Since 1973 we have had no water on the other side," says DGD Long Naro. "The sellers, they pump the water untreated and sell to the people over there five times higher than our treated water. We don't have drawings related to the underground systems so we cannot bring the machinery to lay the pipe in this location. We need to dig by hand. But after we cross the bridge we can lay the pipe by machinery."1

But we have other "bridges to cross," including increasing our collection efficiency, improving water regulation, and expanding water delivery to the poor and water provision at the same rates and standards to Phnom Penh's suburban areas and surrounding regions—all while decreasing NRW from the current 6% to < 5% by 2020.

In addition, all of PPWSA's five departments are hard at work making a new plant—Niroth Water Treatment Plant—a reality.

Niroth is being co-financed by JICA, AFD, and PPWSA, and will be completed by 2013—when it is expected to be moving 260,000 cubic meters of water per day.

In 2011, PPWSA has public listing on Cambodia's first-ever stock exchange to look forward to. Our Finance Department is now teaming with ACLEDA Bank, the Foreign Trade Bank of Cambodia (FTB) and Mobitel to allow customers to pay their water bill online, at the ATM, or with their mobile phone.

As for the low water tariff, the GD says he believes the water tariff at its current level can be maintained for at least another five years, ensuring safe, affordable water to Phnom Penh's citizens now and for years to come.

PPWSA is no stranger to international recognition. In 2006, our General Director was recognized with the Magsaysay Award for his government service. This year, the Government of France awarded him with their highest decoration, the Chevalier dans l'ordre de la légion d'honneur.

In 2004, PPWSA won the ADB Water Prize; in 2006 alone, our most respected Prime Minister Samdech Hun Sen named our GD the Hero of Water Resource. He is now recognized as ADB Water Champion.

The Stockholm Industry Water Award greatly adds to the authority's prestige. Nevertheless, to our employees and development partners this honor does not represent satisfaction itselfstead, the Stockholm Award reflects the pride, determination, and creativity with which we approach our work each day.

"Winning this award," says Ek Sonn Chan, "Is some kind of introspection to me. I like justice. I have no relatives who work here and all my subordinates are like my children or brothers. We are a family. This is not a private business. We are not looking for money to fill our own pockets. We are here to fill the pockets of our fellow citizens."

"I never was trained or educated on my management style," he says. "My principle is do to the other people whatever you would have them do to you. Be fair. Treat people with respect."