On Monday, the Ministry of Industry and Handicraft alerted private water suppliers to expand their distribution areas through a proposed plan, warning that their licenses will be revoked and their monopolies lost if they do not fulfil the requirements.
The minister, Cham Prasidh, said there are many private water suppliers that have not expanded their distribution area according to the plan’s guidelines for license approval.
The comment was made at a seminar, Pay As You Save, which was initiated by global water pumps leader Grundfos. It was revealed that Takeo province’s Krong Donkeo Clean Water Supply is the first operator to join the programme.
Prasidh said the ministry plans to take strict action on those who don’t comply, saying that compliance should no longer be a challenge due to new technologies and business models available from Grundfos to lower costs and expand their coverage.
“If water supply operators cannot expand their distribution network to areas according to the plan, the ministry will take action starting from next year to allow new operators to compete.
“I give you monopoly rights, but you do not use [them] correctly. You just sleep and do nothing, so I will revoke your licence or [rights to] an area that you don’t operate and let others work there instead,” he said.
The minister also encouraged water suppliers to be equipped with the latest technology and new business models and be involved with Grundfos’s programme, as pilot test results have shown to be successful in boosting water management efficiency to expand coverage.
According to ministry figures, it has provided 240 licenses for private water suppliers nationwide. There are another 10 state-owned water enterprises. Through the combined efforts of all operators, only about one-third of the Cambodian population are supplied with water, mostly in urban areas.
One of the biggest water management challenges for Cambodia is its water infrastructure, which is prone to leakages and insufficient water pressure when serving cities and provinces during peak hours of water consumption.
This leads to cases of 40 per cent non-revenue water, which is water that is lost or otherwise unaccounted for in the system.
Grundfos last year created a new business model to remove the barriers of the usual upfront investments.
It introduced a pilot project in Takeo province using its Demand Driven Distribution solution. The system automatically adjusts water flow using remote sensors, reducing excessive pressure in water pipes. This limits water leakages and losses, minimising costs and energy.
Grundfos funded the installation of the system for water suppliers. The operators are paying for the pump system through annual instalments, which are financed by money saved on energy and water bills due to equipment upgrades.
The company’s area managing director for South Asia Leong Chee Khuan said the new system helped water suppliers to save more than 270,000kWh in electricity and around 200,000 cubic metres of water per year, with a projected payback period of two and a half years.
“Our work in Takeo has shown us that our new business model has a huge potential in Cambodia and other countries where water utility authorities need not be held back by financial considerations when investing in new and efficient technologies."
“The success of this pilot project is encouraging, and we look forward to introducing this approach to the rest of Cambodia,” he said.