Calculation of the Real Costs of O&M of Wastewater and Drainage Systems in the Nine Provinces

Created on 28 November 2013 Print Email

After consultation with ATI and leaders and officials in the nine programme provinces, the establishment of the real cost of O&M of wastewater and drainage systems was identified as the critical first step in the drafting of the tariff roadmap for WWM and the drafting of the management contract between the asset owner and the service company.

The GIZ team prepared a spreadsheet to calculate the real costs of O&M and provides comments and coaching for stakeholders in the nine provinces. This spreadsheet was piloted in Bac Ninh and revised for replication in other provinces. Provincial stakeholders revise the spreadsheet according to local conditions and use the spreadsheet to calculate the real costs for the provincial capital, other urban centres and industrial zones. The spreadsheet outlines all elements in the WW system and units of these elements, all O&M activities, cost norms for each of these activities. In addition to the calculation of the O&M costs, the GIZ team also promotes the provision of a lump sum for small repairs of the wastewater and drainage system. The actual costs for small repairs would be acquitted at the end of each financial year.

In most provinces, asset ownership of WW systems has not been clarified in PPC decisions and regulations, which is a remnant of the central planning era. In some provinces, the service company functions as the temporary owner of the wastewater and drainage system as well as provide O&M services. This arrangement is not conducive for promoting transparency, efficiency and accountability.

In the nine provinces, service companies do not have a clear picture of assets in all elements of the WW system.

The work on calculating the real costs of O&M has highlighted significant gaps in the policy framework with regards to the need for a comprehensive set of cost norms for the O&M of WW systems as well as an updated set of technical standards/specifications for WWM so as to respond to present conditions.

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