From Water Loss to Savings: A Nonrevenue Water Intervention in Sri Lanka

Nonrevenue water presents more than just a financial metric on the cost of water supply and revenue loss. At elevated levels, it severely impacts the quality of the water delivered.

Degraded water quality. The high level of nonrevenue water led to intermittent water supply due to the system’s inability to maintain sufficient pressure amid numerous leaks. Reduced pressure increases the risk of contaminated groundwater entering the water system, posing health risks to the consumers.

Unreliable water supply. Economically disadvantaged areas often rely on public standposts as their primary water source. However, these standposts frequently suffer from unreliable supply.

Illegal water connections. The prevalence of illegal water connections exacerbates the problem, further straining the system and contributing to inefficiency.

Impact on women and girls. A recent UNICEF report identified that the burden of inadequate water supply often fell on women and girls. They spend hours each day collecting water for family needs, which detracts from their productive capacity and education opportunities.

The National Water Supply and Drainage Board implemented the Greater Colombo Water and Wastewater Management Improvement Investment Program financed by a $202 million multitranche financing facility from ADB and $73 million from the Government of Sri Lanka.

The program, which aimed to reduce nonrevenue water to below 18% from 49%, included the replacement and rehabilitation of water distribution network pipelines, enhancement of domestic service connections including new customer meters, installation of bulk meters, formation of district metered areas, reduction in the use of standpipes, and installation of customer meters for tenement housing. It also conducted a comprehensive review of water production costs and the development of detailed geographic information system (GIS) data for the pipeline network for improved asset management.

This article focuses on two main components: (i) district metered areas development, and (ii) use of standpipes and installation of customer meters for tenement housing.

District metered area development
District metered areas were established to better manage and reduce nonrevenue water. This approach divided large areas of the distribution network into small and distinct zones. Water inflow to each zone was measured and compared with the volume measured by customer meters within the same zone. This process allowed nonrevenue water managers to identify and address specific areas with higher nonrevenue water rates. Without district metered areas, managers would only have systemwide nonrevenue water data and would need other assessment tools, making it challenging and time-consuming to pinpoint high loss areas.

The project adopted a “step testing approach” by dividing each district metered area into four sections and reducing nonrevenue water section by section until it reached less than 18%. It established 78 district metered areas, each covering approximately 2,500 service connections. While designing the district metered areas is straightforward, implementing them requires a complex network of meters and valves. By 2022, 47 district metered areas have been fully commissioned and in service within the Colombo Municipal Council area. Efforts are ongoing to resolve metering issues in the remaining district metered areas.^[1]

Standpipes and customer meters for tenement housing
The absence of 24/7 pressurized water in distribution systems disproportionately affects lower socio-economic communities, especially women and children. Residents often wait in long queues at shared standpipes to get water for their families.

The program addressed this issue by installing individual meters in tenement housing areas previously reliant on communal standpipes. This improvement provided direct water supply to homes and reduced nonrevenue water by eliminating unmetered standpipes.

Nonrevenue water reduction
The Greater Colombo Water and Wastewater Management Improvement Investment Program achieved its goal of reducing nonrevenue water to below 18% by 2020. By 2022, with 47 district metered areas fully operational, the average nonrevenue water recorded was 15%. While monthly nonrevenue water values varied, which may be attributed to the timing of meter readings and other factors, only a few district metered areas reported nonrevenue water of over 17% while others achieved nonrevenue water rates under 5%.

In addition, the intervention led to a 20% increase in revenue for the utility. The combination of pipeline rehabilitation/replacement and enhanced customer metering resulted in positive financial outcomes for the utility.

Figure 1: Nonrevenue Water Reduction (Evolution by Month in Colombo City)

Source: National Water Supply and Drainage Board.

Water pressure and availability
Prior to the program’s implementation, surveys in the Colombo Municipal Council area showed approximately 50% of households did not have 24/7 pressurized water supply. This occurred due to leakage reducing water network capacity and peak demand that caused low water pressure in parts of the system.

Post-project surveys showed that 100% of households in the improved areas are receiving 24/7 pressurized water supply. This has ensured that tens of thousands of households now benefit from continuous safe water supply throughout the day.

Water supply and production cost review
Managing Colombo’s growing water demand was a main objective for the National Water Supply and Drainage Board. Excessive nonrevenue water strained the water supply system and increased the costs of treatment, transmission, and distribution.

With the nonrevenue water reduction achieved by the project, the total input of water required to meet the demand remained constant at the 2012 level of 500,000 cubic meters per day. Without the project, the National Water Supply and Drainage Board would have needed more than 31% additional water to meet the demand, which would exert substantial pressure on water sources and increase the costs for treatment, pumping, and distribution—ultimately leading to higher losses through leaks and bursts in the aging network.

The review of water production costs (e.g., energy, chemicals, other factors) revealed significant savings. Although Sri Lanka experienced energy tariff increases in 2022 and 2023, which dramatically raised water production cost, the reduction in water that needed treatment and pumping led to substantial cost savings for the National Water Supply and Drainage Board. The surplus—approximately 85,000 cubic meters per day—enabled the utility to sell the saved water, generating additional revenue of about 3.5 billion Sri Lankan Rupees per year.

Improved service delivery
The program implemented several initiatives that significantly improved the National Water Supply and Drainage Board’s service delivery capacity and efficiency. Key initiatives included staff capacity building, establishment of a Center of Excellence for Water and Sanitation, enhanced communication with customers and stakeholders, and creation of a dedicated call center for timely complaint resolution. It also integrated digital solutions and advanced technologies, such as energy-efficient pumps, solar panels, state-of-the-art monitoring center, SCADA systems, and online nonrevenue water management. These efforts improved decision-making through better systems and processes.

The Greater Colombo Water and Wastewater Management Improvement Investment Program encountered several challenges and noted key areas for future improvement.

Challenges:

• The commissioning of several district metered areas faced delays due to technical problems with input flowmeters.
• Maintaining a large number of complex metering systems proved challenging to sustain.
• The lack of records for old pipe networks required additional surveys and adaptation, leading to extra costs.
• The definition of warranty periods in district metered areas, once transferred for operations, should be clearly defined.

Areas for improvement:

• Integration of geographic information system data with asset management system should be established as a core function.
• Reorganization of pumping and water transmission systems.
• Regular monitoring and updating of nonrevenue water operations and maintenance facilities.
• Enhancement of the nonrevenue water monitoring teams' capacity.
• Integration of call center functions with a customer portal to facilitate public reporting water system issues and improve complaint management.
• Enhancement of training for engineers and technicians on nonrevenue water management, with emphasis on the management of district metered areas and their associated hardware and software components.
• Evaluation and eventual promotion of private sector participation in future projects that could offer better cost-effective solutions, such as nonrevenue reduction performance-based contracts.

^[1] The issues with the district metered areas were mainly due to inlet metering problems that included improper grounding, data logger failures, power supplies, and communications issues.

Asian Development Bank. Sri Lanka: Greater Colombo Water and Wastewater Management Improvement Investment Program.

National Water Supply and Drainage Board.

World Health Organization. 2023. Women and Girls Bear Brunt of Water and Sanitation Crisis – New UNICEF-WHO Report. 6 July.