**8. References**

284 Current Issues of Water Management

participate might be the quality of the feedback they receive. Currently, the structural variables which a company faces are not taken sufficiently into account. Many reasons, besides inefficiency, can explain why one company encounters higher costs than another

Efficiency analysis techniques, which imply not only a comparison of companies according to key performance indicators but a measurement of performance, are tools which better analyze the existing benchmarking data. They take into account differing structural conditions of the companies and, therefore, give a more valuable feedback to a company in which parts of the value chain they have potentials to increase their efficiency. Using the data of Rödl & Partner, the most prominent metric benchmarking consultant in the German water supply industry, we showed for the first time that these methods can be easily applied. Our results show that the rank correlations between DEA- and SFA-results are much higher than in other network sectors and other countries. They also display that companies should be clustered. A small and a very large company seem to have different production functions and can hardly be compared with one another. It, therefore, makes sense to cluster the companies according to groups. Overall, we may conclude that the enhancement of the current metric benchmarking systems by performance measurement is displaying if a company seems to have potentials to increase its efficiency in the operational distribution costs. It may also give a quantitative indication of the extent of inefficiency.

The analysis of the operational distribution cost, which has been performed here, certainly is only the first step. The feedback for the companies will further increase if a performance measurement is offered for all parts of the water supply value chain and the total cost.16 An introduction of performance measurement into the current benchmarking is, therefore, a big leap forward. We may hope that such an improved benchmarking system is giving

Otherwise, the question certainly arises of how to proceed. Due to the situation, that companies in a natural monopoly sector are particularly accountable to the public, the German water sector faces similar questions than those ones in other European countries which are employing metric benchmarking systems. Sooner or later the countries face the necessity to decide which kind of information they want to display publically and whether companies should be obliged to participate in benchmarking. The Netherlands, for example, made it compulsory to take part in such programs. Every three years they are publishing reports which also display the performance development of a water supply company both in relation to all other companies as well as over time. By publishing these data, companies did not only detect efficiency potentials but also faced the public pressure to use measures to actually improve their performance. Between 1997 and 2005 the average efficiency of a Dutch water supply company increased by 23 % (Dijkgraaf et al., 2006, p. 8). Such incentives in benchmarking systems to actually increase performance are essential that benchmarking could be regarded as an alternative to an introduction of an economic water utility regulator.17

16 First, preliminary results for the total cost calculations reveal that the rank correlations between DEA

17 Cross-country comparisons of benchmarking systems in the drinking water sector in the Netherlands, England and Wales, Australia, Portugal and Belgium recently revealed that the average efficiency

incentives for more German companies to participate voluntarily.

and SFA-results are even higher than for the operational distribution costs.

correlates with the incentives of such benchmarking systems (De Witte/Marques, 2010).

water supplier.

ATT et al. (2011). Branchenbild der deutschen Wasserwirtschaft 2011, Berlin, Germany, available from:

 http://www.bdew.de/internet.nsf/id/40873B16E2024175C125785A00350058/\$file /110321\_Branchenbild\_dt\_WaWi\_2011\_Langfassung\_Internetdatei.pdf


 http://www.tilburguniversity.edu/research/institutes-and-researchgroups/tilec/events/seminars/dijkgraaf.pdf .


**14** 

*Jordan* 

Rania A. Abdel Khaleq *Ministry of Water and Irrigation* 

**Water Soft Path Analysis – Jordan Case** 

In water management today, there are two primary ways of meeting water-related needs, or two "paths". One path can be called the "hard" path which relies almost exclusively on centralized infrastructure and decision making: building dams and reservoirs, pipelines and treatment plants, and establishing water departments and agencies. It delivers water, mostly of potable quality, and takes away wastewater. The second path or the "soft" path may rely on centralized infrastructure, but complements it with extensive investment in decentralized facilities, efficient technologies, and human capital. It delivers diverse water services matched to the users' needs and works with water users at local and community scales. –

The purpose of this chapter is to present the "Soft Path Analysis" as an approach that improves the overall productivity of water use, rather than the business as usual approach

The water soft path is modelled on the highly successful approach to energy known as the soft energy path. The "soft path" planning approach for fresh water differs fundamentally from supply focused planning. It starts by changing the conception of water demand. Instead of viewing water as an end product, the soft path views water as the means to accomplish certain tasks. The role of water management changes from building and maintaining water supply infrastructure to providing water related services, such as new forms of sanitation, drought-resistant landscapes, urban redesign for conservation and rain-

What calls for new approaches are also the inadequacies by which water planners and policymakers are addressing the new challenges that are further complicating the traditional approaches to solving the water problems. Issues such as regional and international water conflicts, the dependence of many regions on unsustainable groundwater use, the growing threat of anthropogenic climate change, and our declining capacity to monitor critical aspects of the global water balance are all currently inadequately addressed by water planners and policymakers. If these challenges are to be met within ecological, financial, and

Soft paths can be defined briefly as approaches to natural resources management that rely on a multitude of distributed, relatively small-scale sources of supply coupled with ultra

with the endless search of new sources of water supplies.

social constraints, new approaches are needed (Gliek, 2003).

fed ways to grow crops (Brandes et. al, 2005)

**1.1 Concept of soft paths** 

**1. Introduction** 

