1. Performance assessment & benchmarking IBNET as toolfor utility management and policy decisionmakers Caroline van den Berg November 24, 2008

2. What is IBNET? • IBNET started as an initiative to collect data on performance of WSS utilities to improve policy dialogue in the early/mid-1990s • Since then, it has developed in three separate products that can be found atwww.ib-net.org

3. The Elements of IBNET • IBNET Toolkit is a suite of software and guidance documents to help utilities compile, analyze and share performance information • IBNET website includes a searchable database with indicators from more than 2500 utilities from more than 80+ countries: • Toolkit can be downloaded in different languages • Database with indicator search mechanism & reporting formats • A section with links and resources to assist measurement and benchmarking • IBNET helpdesk at ibnet@worldbank.org

4. Basic principles of IBNET • Focus on utilities, while also of use for governments, consumer regulators, consumer organizations, donors • Voluntary participation • Easy to implement tool, focusing on a basic set of performance indicators: create a common language between financial and operational staff • Low cost tool • Learning by doing approach • Information on indicators is easily accessible – sharing lessons between utilities

5. What IBNET can tell you? • Understanding utility performance on the basis of a set of objective indicators: • performance of the individual utility over time • performance of the individual utility with other utilities operating in the sector, or similar utilities elsewhere in the world • Analysis to see how the performance of the utility and/or the sector can be improved upon • Advanced research and comparisons: • Trends in utility performance (benchmarking) • Development of new indicators that reflect the specific utility needs/sector needs • Econometric work -- frontier and productivity analysis

6. Utility managers and IBNET data • Common language for technical and financial staff • Performance assessment: • Set-up baseline: where are we now?: detecting weaknesses • Set-up performance objectives: where we want to go?: setting priorities and targets • Performance monitoring: are we getting there? • Advocacy – detect what impedes progress and what has to be done to overcome the impediments • Comparisons between utilities, best practices, tool for analysis

7. Basic Analytical Tools in IBNET

8. Utility Scorecard

9. Benchmarking utilities: Operational Cost Coverage Ratio – multi-city, large utilities

10. Country scorecard

11. Sector Scorecard

12. Examples of Other Analyses: The Case of Moldova

13. Impact on efficiency improvements: convergence Staff Ratio

14. Impact on efficiency improvements: convergence (2) Collection Ratio

15. Impact on efficiency improvements: convergence (3) Non Revenue Water m3/conn/day

16. Impact on efficiency improvements • Two impacts: • Efficiency levels: trend is going in the right direction; • Convergence of performance: the “bad” performing utilities get better • Benchmarking as tool for yardstick competition pays off

17. Impact on policy development • Sector reform has been pushed supported by benchmarking • The efficiency of the sector has increased as implicit subsidies have declined significantly over time

18. Examples of Other Analyses: The Impact of the Triple Crisis

19. Impact of the Triple Crisis O&M Cost per m3 water sold

20. Demand for IBNET • Even though no major dissemination has taken place so far, with the push for dissemination, access to website has grown significantly from 7,000 hits in Sep05 to about 80,000 in Oct08 • Use of IBNET data in projects, reports and other publications in-and outside the Bank • Use of IBNET by countries to improve their benchmarking • Standard tool for assessment of utility performance in Moldova, and Latin America’s ADERASA • Use of IBNET by countries to improve their benchmarking • Working with many different partners – both national and regional partners

21. Issues in IBNET • Data collection issues: • Use of standardized data definitions and data tools to ensure comparability of data within and between countries • Looking for national partners that can collect data and ensure future data collection efforts: the benefits of institutionalization • Data quality requires a lot of attention: • Capacity building with data collecting agencies: process takes time • Control mechanisms to check on inconsistencies in the collected data • Need for follow-up on data collection with analysis of collected data and actual assistance to utilities wherever is needed

22. Conclusions • By providing access to comparative information key stakeholders will get the information to do their jobs better: • Utility managers and employees can identify areas for improvement, adopt realistic targets and—not least—convince authorities of the need for change; • Governments can monitor and adjust sector policies and programs; • Regulators can ensure that customers get value, and providers have incentives to perform; • Customer groups and NGOs can exercise “voice” in an informed way;

23. Conclusions (2) • IBNET: • Use of IBNET as a tool with a tested methodology with adjustments and expansions • Sharing data to ensure that learning and communication can take place • We hope to ensure your participation in IBNET – directly or indirectly so that this tool can help to improve the sector to provide better and more universal access to its services • Collaboration with WOP – we hope that WOP can move the agenda forward with focusing on • further analysis with secondary data links; and • create the link with performance improvements

24. THANK YOU For more information, please contact: Caroline van den Berg (cvandenberg@worldbank.org) Alexandar Danilenko (adanilenko@worldbank.org)