IFC – Manual for Performance-Based Contracting by Water Utilities in Brazil

Performance-based contracting can improve public water utility operational efficiency levels, and consequently, the quality of the public services rendered.

This manual has seven sections. Section 2 offers a brief description of the current situation regarding Brazil’s water utility companies’ water losses and energy use. Section 3 explains why it is advantageous to use performance contracts as a means to reduce water losses and to foster energy efficiency in water utility companies. Section 4 demonstrates how to conduct a technical evaluation of the water losses and use of energy by water utility operators. Section 5 prescribes how to carry out an economic-financial feasibility study, enabling water utility operators to verify if the benefits of undertaking a water loss reduction program justify the costs. Section 6 offers details on the legal aspects of a performance contract. Finally, Section 7 presents a brief summary and some conclusions.

IDB – Case Study for NRW Reduction and Control (New Providence, Bahamas)

Performance-based contracts can, under conditions delineated in this document, be a very effective, and, ultimately, cost-efficient mechanism for implementing NRW projects.The case of the WSC-Miya PBC in New Providence, Bahamas is a very good illustration of the attributes and benefits of a well designed PBC – 1) baseline study and target/plan adjustment period; 2) a “minimum scope” combined with flexibility for the contractor to adjust specific plans to the evolving situation, to both exceed targets and receive additional performance-based remuneration; 3) rapid NRW reduction, with its technical, financial and political benefits and results; 4) reduced project risk for the utility; 5) a lengthy maintenance phase to promote sustainability of the NRW reductions and 6) overall improvement of technical and financial performance at a competitive price.