Enhancement of Waterworks’ Revenue Water Ratio (RWR)

Kim, Cheol Han

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Reducing water losses within a waterworks system, particularly in the face of water shortage problems, is an important issue faced by modern water providers. Since the early 2000s, the government of the Republic of Korea has worked to reduce the water leakage in local waterworks facilities and, as a result, to enhance the portion of water supplied to customers and increase revenue. This case study examines the reasons for Korea’s establishment of a nationwide policy to reduce waterworks leakage and the difficulties confronted while implementing the policy. Due to the weak financial status and technological level of local governments, the policy was implemented through the consignment of local governments’ water facilities to more professional water management organizations. K-water, a governmentowned specialized water management organization, undertook most consignment projects. The main challenges were related mistrust about the necessity of the policy, which made it difficult to actualize the consignments. Another barrier that was difficult to overcome was the resistance from local governments’ water sector workers because of concerns related to job security. Through the national effort to reduce water leakage, for eight waterworks facilities that were operated by K-water in the form of consignments and have been operated for over 10 years, the average revenue water ratio (RWR) was increased from 52.0 percent in each initial stage to 82.3 percent in 2016. The establishment and promotion of a desirable model and the apparent benefits were critical factors contributing to the policy’s success. Part of the policy’s effectiveness was due to the establishment of standard procedure and guidelines and the use of various methods such as subsidies and performance appraisals to motivate local governments to participate.

Issue Date
KDI School of Public Policy and Management, Global Delivery Initiative
22 p.
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