Performance Measurement of Water Supply Services: A Cross-Country Comparison between India and the UK.

Abstract

Increased emphasis on efficiency improvements has brought the benefits of internal savings and improved service deliveries of water supplies to the developed countries. However, water supply services in developing countries often exhibit large inefficiencies making it difficult to expand coverage or improve supply services. A comparative assessment of efficiencies in the developed and developing countries is therefore essential to estimate the actual lag that developing countries typically experience, and to arrive at an estimate of their efficiency improvements. This manuscript makes an effort in this direction by undertaking a cross-country benchmarking study on the level of inefficiencies prevailing in Indian urban water supply services (IUWSS) relative to the utilities in the UK-England and Wales. This manuscript uses data envelopment analysis approach to measure relative efficiencies of water supplies for a sample of 30 water utilities in India and the UK-England and Wales for the year 2015. The results indicate that there exist significant technical and scale inefficiencies in water supply operations of Indian municipalities compared with the UK-England and Wales. DEA results also show a significant scope for savings with respect to operating expenditures and non-revenue water, if Indian utilities were to adopt the best practices and managerial tools of the utilities in the UK-England and Wales. Further, it was found that IUWSS need a restructuring of their municipalities to become more efficient. This manuscript discusses the above results in the context of policy implications and suggests few mechanisms that are relevant from a developing country perspective for possible improvement in water supply services.