The measurement of asset management performance of water companies

Abstract

This study explores asset management performance of Portuguese water supply companies operating in the bulk market. The focus of the analysis are the managerial practices and the condition of infrastructures. This assessment is based on the information conveyed by the indicators collected by the Portuguese water and waste services’ regulator authority (ERSAR) between 2016 and 2020. The main contribution of this research is to propose innovative methods to enhance the knowledge on asset management practices in the water sector. Two Benefit-of-the-Doubt (BoD) Composite Indicators are developed to highlight different aspects of asset management approaches. The first reflects organisations’ performance in maintaining their infrastructures at acceptable operational levels, and the other reveals their maturity in asset management practices. Robust and conditional approaches for estimating the BoD indicators are applied, allowing to obtain results that account for the effect of contextual variables on companies’ performance. Additionally, the performance of the companies is analysed over a 5-year period. The results show that there is significant room for improvement given the indicators’ values estimated in the benchmarking analysis. The type of management systems and areas of intervention (urban, semi-urban or rural) are factors that present significant impact in asset management performance. The analysis of trends in the evolution of performance over time revealed improvements both in the companies’ managerial practices and operational results.