This study explains that one of themajor issues affecting water utilities in the developingworld is the considerable difference between the amount ofwater put into the distribution system and the amount ofwater billed to consumers (also called "non-revenuewater" [NRW]). High levels of NRW reflect huge volumesof water being lost through leaks, not being invoiced tocustomers, or both. It seriously affects the financialviability of water utilities through lost revenues andincreased operational costs. In this report, a number ofcase studies, taken from some of the largest and most recentperformance-based NRW contracts, are studied and discussedin terms of their technical and financial performance.Lessons learned from the case studies are analyzed, showingthe potential benefits of NRW performance-based servicecontracting with the private sector. This paper was preparedas part of a Public-Private Infrastructure Advisory Facility(PPIAF)-financed study to investigate opportunities for theuse of the private sector to assist water utilities indeveloping countries in reducing non-revenue water. Thisstudy indicates that the private sector help ailing publicsector utilities in developing countries reduce NRW eventhough the performance- based service contracting approachdescribed should not be seen as a substitute for overallsector reform. The case studies, while limited in number,provide examples of both good ideas and those to beavoided-but hopefully enough to help a utility and itsconsultants devise better cost-effective contractualarrangements suited to their conditions.
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