Managerial skills are usually underdeveloped in a public sector utility. To create the basic pre-conditions for introduction of performance and output oriented, commercial business principles, OMS supports WAJ in the:
Having realised the limitations and extreme restrictions in applying commercial business principles in the public sector, OMS in 1996 started supporting the Ministry of Water & Irrigation in the introduction of private sector participation (PSP) in operations management.
Being part of the official Government Counterpart Team, OMS assisted WAJ in the operation of the first management contract for Greater Amman area (1.8 million population), funded by Worldbank, awarded in 1999. To enable WAJ in monitoring and controlling PSP activities, OMS further assisted in the establishment of a Programme Management Unit (PMU) for Greater Amman, funded by the European Union.
OMS activities focused on the preparation of the second, performance based
management contract in the Northern Governorates in Jordan (1.4 mio. population),
comprising Irbid, Jerash, Ajlun and Mafraq. This contract was envisaged to
be partly funded by KfW (Kreditanstalt fuer Wiederaufbau) of Germany. However,
the Jordanian Ministry of Water and Irrigation decided to cancel the tendering
process since there was only one interested bidder.
Other forms of PSP scenarious were thoroughly discussed in a GTZ organized
workshop with the result decision to move into a Management Consultant option
to aid NGWA achieve a 105% operating after six years. OMS participated in
the preparation data needed for the bidding process.
Other intervention areas related to PSP is the preparation of the terms of reference for Micro-level PSP in billing and revenue collection for Madaba Governorate (16.000 customers).
The experience made since 1994 prompted OMS to develop a complementary concept for micro-level PSP, basically envisaging the outsourcing of specified functions like maintenance, repair, billing & revenue collection, vehicle repair, etc.. to local private companies in form of service contracts. This approach yields immediate results and improvement in operations, proven through execution of several pilot projects in the project area.
Within one year, revenue in those areas improved by more than 30%, accounts receivable reduced by 22%, and leakage was reduced from more than 40 to less than 10%.
