From trickle to torrent

  • KUKL requires a qualified and capable manager to effectively deliver safe and potable water to the Valley residents
- Pramesh Kc
From trickle to torrent

Dec 22, 2014-

Kathmandu Upatyaka Khanepani Limited (KUKL) is currently facing major challenges in financial viability, infrastructure instability, operational rigidity, and water resource inadequacy. This utility often has a hard time satisfying demands for over 360 million litres per day as the current supply capacity is just about 125 million litres per day on average. The yearly population growth of the Kathmandu Valley is over 4.6 percent and this population’s demand for water is increasing by just over 6 percent whereas supply has increased just 3.5 percent.

This shortfall of water supply in the Kathmandu Valley is alarming, despite KUKL’s vision to provide potable, safe, and sufficient water supply to improve the health and quality of life of the people. Thus, the efficient management of water supply and sanitation is a key challenge, which requires effective operation and maintenance, prudent financial performance, and sustainability.

Though the Melamchi water project is underway, it is still struggling. Melamchi’s initial 170 million litres a day can hardly meet the current demand. Furthermore, the project is expected to supply 500 million litres per day by 2025, when current growth trends indicate that the demand will be 700 million litres per day by 2025. Even if Valley residents are fortunate enough to have Melamchi, by 2026, the supply deficiency is set to start increasing again. So KUKL will need another large-scale project like Melamchi.

To compound problems, ground water is drying up due to increasing concrete cover, excessive individual households pumping out water, and limited space to reserve rainwater during the monsoon. Tube wells, surface sources, and ground water pumping can thus be ineffective. The alternate options for KUKL are wastewater and rainwater treatment plants, but regulations and new policies are the same are required now. Insufficient supply of water costs expensive energy and healthcare of households, along with much capital investment. Households are compelled to use extensive electricity to pump out the water and due to poor sanitation in the Valley due to a lack of water, people face sickness and disease.

Problems galore

KUKL’s financial performance in liquidity, assets management, debt management, and profitability, along with utility measurement indicators are extremely poor. Efficiency percentage of 19.64 percent in their collection period of 22 months is an indicator of their dismal performance in managing working capital. Performance improvement programmes for staff, operations, revenue collection for basic revenue needs, tariff policies, and price fixation for financial sustainability are just as poor. The sufficient supply of water by improving increased volume of water supply daily is the prime concern. In addition, to meet the demand of prospective consumers, timely management of maintenance and fixation of equipment and collection of billed amount and overdue amount from the consumers are ineffective.

Building strong internal regulations, routine performance improvement programmes, and doing away with the influence of political parties and their sister organisations in the form of unions are prime management issues. Assuring compliance with accounting standards from effective internal audits and sufficient revenues and collection to cover operation costs, arranging financial reserves for new capital investments and creating sufficient tariff levels to meet debt interests and repayments are primary issues in financial performance. KUKL also has to prioritise operations, which include dealing with problems of water quality at the source, developing capital investment, expediting the tapping of water sources, and increasing accessibility to sewerage networks. Maintenance issues also need focus, which include reducing technical losses from visible leakage and availing and utilising quality parts and efficient workforce for timely repairs. Customer services include resolving service requests in time, along with computerised billing and prudent management of accounting systems.

KUKL is finding it difficult to break even to meet revenue needs until the Melamchi plant is marketed for consumption. Management, therefore, has to synchronise revenue needs as much as possible to maintain regular operation without decreasing KUKL’s current supply capacity.

Prescriptions to heal

Cutting-edge strategic goals to deal with upcoming challenges while efficiently implementing strategic goals are essential to ensure access to safe, quality, and adequate drinking water and sewerage services. Strategic goals must be specific, achievable, measurable, and time-bound. The best human capital must be utilised in specific areas to effectively implement goals. Strong dynamic leaders who can investigate, innovate, and seek new investments to enhance water supply and sewerage management are imperative.  To tackle KUKL’s challenges, an efficient managerial leader who can play a crucial role in total quality management and performance based management will be indispensable. In fact, unlike a technical leader, a prudent managerial leader who can lead a team of over 1,100 employees is essential to tackling upcoming challenges and resolving KUKL’s issues to provide potable water and efficient sanitation. Moreover, a managerial leader with an excellent understanding of the dynamism of the water market and experiences in technology-driven operation management is vital for KUKL.

Thus, the concerned authorities must recruit capable managerial leaders to handle KUKL’s operations, which 3.5 million people in the Valley depend upon. Political leaders and bureaucrats should not compromise when seeking a qualified leader for the ailing utility.

KC is a management consultant

Published: 23-12-2014 09:21

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