Asset management – the overlooked gains from efficiency projects

Efficiency is a key topic nowadays in the water sector as customers' expectations are continuously increasing, legislation becomes more demanding, utilities become more exposed to public opinion and expectations are increasing towards a high-quality service at an affordable cost and both combined with high risk avoidance. The implementation of efficiency projects, such as non-revenue water (NRW) reduction projects are fundamental both from an economic and an environmental perspective. However, decisions on the implementation of these projects are often reduced to short-term economic criteria or to a cost-benefit analysis at best, not considering an adequate timeframe that would potentially allow the accommodation of the adopted NRW reduction measures (capital and operational expenditures). Infrastructure asset management requires a strategic view on water systems based on the long-term balance of performance, cost and risk aiming at the adequate management of utilities' physical, human, technological and intangible assets. Water managers should take these principles into consideration when deciding whether to implement efficiency projects, since the long-term effect of current water systems' inefficiencies can translate into significant capital expenditures in the future. This paper presents an evaluation of tangible and intangible gains that result from NRW reduction projects and why intangible gains should be part of decision-making processes on whether to implement them or not.