I. INTRODUCTION

WATER AUTHORITY OF JORDAN

The Water Authority of Jordan (WAJ) was created as a national government agency by Law n°18/1988 entrusted with the provision of water and wastewater services and the management of water resources.

Responsibilities include the monitoring of water sources, regulating groundwater use and providing water supply and sewerage services for the entire Kingdom. The Authority has a board of directors consisting of related government representatives and one private representative. The Board is chaired by the Minister of Water & Irrigation. The executive manager of the Authority is the Secretary General.

Upon its establishment, WAJ inherited the functions of the municipalities as well as Central Government with respect to bulk and retail supply of water, and wastewater services. Network, facilities, treatment plants, staff, and debts were all transferred to WAJ. The Authority was set up as an autonomous corporate body with financial and administrative independence. In reality, however, civil service constraints were imposed, government procurement by laws were followed, and all activities were scrutinised by the Central Audit Bureau and the Bureau for the Supervision and Inspection.

Regarding domestic services, the country is divided into 12 n° administrative governorates, each as an individual Water Authority. Each governorate was also set up as an autonomous unit but, due to the rigidity of laws and bylaws, ended up centrally managed, budgeted, staffed, and so on.

AMMAN GOVERNORATE WATER DIRECTORATE

This paper focuses on Amman Governorate and its water and wastewater activities. The focus emanates from the urgent need to select the path to follow in resolving problems within the Governorate in particular and the Water Sector at large.

Greater Amman is highly urban covering approximately 530 km² out of which only 170 km² are built-up and 220 km² are classified as Zoned Land, i.e. area which is open for different types of use like residential, commercial and industrial according to the " Planning and Building Law ". By law, the Water Authority is obliged to provide zoned areas with water services.

WATER RESOURCES AND SUPPLY TO AMMAN ARE CHARACTERIZED BY THE FOLLOWING :

1. Groundwater resources within Amman reached their full production capacity by 1977. Today, these resources represent only about 35% of the total capacity. The remaining 65% involve major transfer schemes. Some are as remote as 70 km and, in one particular case, water is conveyed under a dynamic head of as high as 1.350 m.
2. The service area of Greater Amman exhibits elevation differences of about 400 meters which, when combined with the multiplicity of the sources, outline the complexity and the sophistication of the supply and distribution set-up of the system.
3. The most significant characteristic, however, is the fact that the resource are extremely limited. Groundwater aquifers supplying Amman with 47% of its water are being largely over-exploited. Intermittent supply in the summer months is the norm.
4. The distribution network, at least in the core of Amman, was designed and constructed some 30 years ago and since that time, has been expanded to cope with the growth but has not been re-structured to match horizontal and vertical growth nor to meet topographic and demand conditions. Since expansion was given the priority, maintenance degraded to ever-increasing repairs mostly with insufficient means and of poor quality.
   

2 - DESCRIPTION OF PROBLEM

TECHNICAL SYSTEMS DESCRIPTION

As expected, the rapid population growth, and the widely scattered settlement areas were beyond any planning capabilities for infrastructure development. WAJ was obliged to follow this development by expanding its services in a " wild growth " pattern. The initially installed production and transport facilities were expanded and cross - linked to the extent that initially reasonable hydraulic conditions became inadequate.

This loss of control caused the assessment of unaccounted - for- water on a global basis basically covering the entire Greater Amman rather that evaluation of individual areas. Therefore, selection of a particular area for rehabilitation over another (i.e. prioritizing) is not supported by hard facts.

Demand exceeds the supply throughout the year. Water shortage is acute in the summer period during which all production and pumping facilities are fed directly into the system with excessive pressures over wide areas. Also during the summer, water is rationed thus leaving pipes empty for certain periods.

Networks exhibit severe corrosion through improper selection of materials and poor workmanship in installation and repair. These factors along with high system pressures, a considerable portion of the water produced is wasted through leakage. As of present knowledge, pilot investigations and other indications, physical water losses are assessed around 35%. Without elaboration on existing sources of supply, some of which are as far as 170 km away and some are pumped over a dynamic head of nearly 1.350 meters, the leaked water represents the most immediate and least cost solution for source of supply. Potential savings when reducing the UFW to 20% over a period of 10 years account for JD 63 million or nearly 100 millions US$ (Fig. 1.1)

ici coller tableau de la page 4 intitulé fig. 1.1. Saving

potential ufw reduction amman

Similar to organization and management aspects of WAJ, the technical sector also suffers from a work environment which is non - demanding and is not performance - oriented. The majority of network is not sufficiently documented. Repair statistics, when kept, are not analyzed as a tool for maintenance planning and for control of the performance of repair crews.

The forecast for infrastructure development and rehabilitation costs indicates investment needs which are rather excessive. Zoned land development for the various categories classified according to population concentration would cost nearly JD 128 million or about 180 million US$ (Table 1). Total rehabilitation costs for the development areas account to nearly JD 235 million or 350 million US$ (Table 2).

Table 1 - Cost of Infrastructure Development in Zoned Land
Land Use Category	Optimum Density (capita / km²)	*Construction Cost (mio JD / km²)	Zoned Land to be Developed (km²)	Total Cost (mio JD)
A B C D	28.500 36.500 51.000 8.200	1.4 2.0 2.4 3.2
Average cost per km²		2.25
Core Area Greater Amman		2.25	27	60
Development Areas Directly Surrounding Amman		2.25	30	67.5
GRAND TOTAL 127.5				127.5
* based on actual construction cost price levels of 1995.

Table 2 - Rehabilitation Areas
Land Use Category	% of Total Area	*Estimated Rehab. Cost mio (JD/km²)	Area (km²)	Total Amount (mio JD)
A B C D + others	32 23 29 17	0.7 1.0 1.8 2.4	54 39 49 27	37.8 39.0 88.2 69.6
Grand Total			171	234.6
* Assumption : rehabilitation cost 75% of new infrastructure development in C&D, 50% in A & B

REHABILITATION AND INITIAL PROCESSES

In March 1989, a study was concluded for the ''Hydraulic Analysis of the Water System in the Greater Amman Area'', whereby 6 priority areas for rehabilitation were identified. The project was appraised in 1990 and in 1992. Delay is attributed due to the Gulf War and resulting political effects. In April 1993, the first scheme (C3) was commenced from WAJ's own budget after realizing the negative effect of its postponement. In December 1993, a limited financing agreement was concluded. In April 1994, a design contract was awarded and by December 1994 the first rehabilitation scheme under the signed loan was tendered. The contract, termed Contract (1A) was signed in June 1995.

This was years and 3 months after the area was identified to be in dire need for rehabilitation. The second contract termed (1B) was signed in December 1995. The following highlights some of the key milestones with respect to the individual contracts.

Contract	Identified	Designed	Tendered	Awarded	Field Works Commenced
C 3	March 1989	Jan. 1993	Feb. 1993	April 1993	June 1993
1 A	March 1989	Sep. 1994	Dec. 1994	June 1995	Feb. 1996
1 B	March 1989	April 1995	June 1995	Dec. 1995	June 1996
2 A1	March 1989	Feb. 1995	not yet	not yet	not yet

OPERATIONS & MAINTENANCE SUPPORT (OMS) AND HYDRAULIC STUDY

An agreement was concluded in September 1993 to provide Greater Amman support in operational and management matters, called the OMS project. The study, under this project, detailed analysis of organization and management of the Amman Governorate and WAJ in general. It also conducted a detailed analysis of the technical aspects of the system supported by accompanying physical measures. Managerially, the study confirmed the presence of a vicious cycle between organizational set-up, management practices, staff performance and the deterioration of services and physical assets. The investigations outlined measures and means where additional revenues of approximately 50% in Amman operations could be achieved. The major conclusion was the need to transform WAJ into a commercial entity outside the control of civil service regulations.

The rapid growth of Greater Amman and the related extension and expansion of the water supply facilities necessitated the need to update the original hydraulic study conducted in 1986 to 1989. A Hydraulic Study was initiated in August 1995 to be concluded in April 1997. The scope of work (expanded from the last study) would include now all aspects of transmission of water from the respective sources to the individual areas in the city. Main results from this study are expected to :

• establish digitized maps and inventory of existing water supply systems
• propose restructuring of existing supply network in order to provide distinct and controllable supply areas and pressure zones
• elaborate on expansion plans to the horizon year of 2025
• propose optimization of sources taking into account the limitations of these sources, and
• recommend future rehabilitation strategy by incorporating measures taken todate and findings of other studies.
  

3 - AVAILABLE OPTIONS

As outlined earlier, the approach that WAJ took in the past was more of the technical nature, continuously hindered by lack of sufficient resources to take the problem within a comprehensive long-term oriented strategy.

The problem is more acute today as it has become apparent that the following have to be acted upon in parallel :

• development of water resources
• extension of supply systems
• reduction of water losses through extensive rehabilitation and
• upgrading of organization/managerial systems to operate a water supply efficiently and on cost recovery basis.

The total investment needs are in the order of JD 1 billion or 1,5 billion US$ up to the year 2010 (Fig. 2.1.) These figures by far overstretch the available financial resources.

Fig. 2.1 - Total Investment Requirements
Time Horizon
Measures	2000	2005	2010
1. Water resources development & transmission (Disi - Adasiya, Deir Alla) 2. Extension of network 3. Rehabilitation / Restructuring

It is of primary importance that, WAJ has to develop an optimum strategy to guarantee a safe water supply to Greater Amman beyond the short term horizon of the year 2005. The following options are considered to develop such needed strategy. These options can be materialized in various forms and modifications depending on the urgency of addressing issues, and the political will behind the change needed to successfully implement these options.

This option is not comprehensive in nature since it considers the prevailing political and administrative conditions as static and rigid thus limiting radical and efficient strategic thinking.

The focus in this option is on technical issues through progressive rehabilitation schemes except that a higher technical quality of the water supply system has to be introduced. This will partially compensate for the existing operational staff and managerial problems which operate in a rigid bureaucratic structure.

The primary advantage of this option is that it is manageable with existing staff and methods and includes very few unknown parameters. The methods have been used before and have been proven. It may and may not address important political parameters like tariff, redundant staff and haphazardous town development with resulting serious financial implications.

This option will result in the need, on more urgent basis, for substantial short-term investments in both water resource development for additional supply of water to supply the additionally needed water and in replacing large parts of the distribution system. It will not result in minimizing short-term investments, nor operate on a cost - recovery basis in order to reduce operating cost-recovery basis in order to reduce operating costs and build up capital for longer-term investments.

OPTION 2 - INSTITUTIONAL REFORM AND IMPROVED MANAGEMENT

The basic assumptions here are funding constraints but there are no limitations on institutional reform. The option focuses on utilizing existing resources of all types to the maximum.

New developments and costs of initial installations of the systems as the city grows horizontally will either have to be borne by the Municipality which is outside its legal jurisdiction or by housing societies and development entities which can only be done under specific policy decisions. Alternatively, WAJ has to limit piped supply (due to the limited financial resources) and only provide, for example, major feeded points using the tanker supply system until a reasonable population density is reached. The same applies to sewerage services with less pools and tanker relief transporting sewager to treatment plants.

This is with respect to the technical aspects of water and wastewater services. On the other hand, on managerial grounds, priority will be given to modernize the organization and managerial structure of WAJ/Greater Amman in order to operate on commercial basis. This requires, on the macro level, adaptation of the proposed institutional restructuring of separating bulk and retail supplies and changing the basic parameters such that the Ministry of Water & Irrigation can function with increasing flexibility and commercial business practices. On the micro level of individual utilities such as the WAJ of Greater Amman, a commercially - run new water company could provide the framework for more efficient operation and control of the water supply systems. Intermittent supply during peak periods will remain. Services could improve immediately by :

• cost reduction due to increased efficiency in operations targeting energy consumption and pump operation,
• reducing excessive operating pressures in the system,
• increasing the revenue by efficiently managing meter reading, billing and collection
• reducing losses through targeting investments in the distribution networks to be limited to restructuring distribution zones, replacing of service connections and minor pipelines up to DN.50 (2'') where more than 80% of physical losses occur.
• injection of qualified expertise and reducing redundant or under - qualified staff, and,
• introducing advanced computer geographical information systems (GIS) for operations, monitoring, billing and cost accounting and control.

Such restructuring of the organizational and managerial system, will input an additional 5 - 7 million JD (total revenue for Amman is presently 12 million JD) i.e. an increase of nearly 50%. Along with cost savings of approximately 2 million JD, up to 10 million JD can become available for restructuring and rehabilitation the distribution systems without increasing the present budget. Saving potential has already been illustrated in Figure 1.1.

Whereas this option provides these financial advantages and gives a higher degree of flexibility and before decisions on substantial investments for new supply can be made , (a grace period of up to 5 years) nevertheless, supply problems on the medium-term horizon after year 2005 will not be solved.

OPTION 3 - OPTIMIZATION INPUTS

The assumption here is that there will be no constraints on finance or on institutional change. This option represents an integrated comprehensive approach and needs, by far, the most drastic changes. Through a combination of required changes. Through a combination of required changes which include technical, managerial and financial inputs, the overall objective to provide adequate, good quality services to all customers can be achieved in a considerably shorter period.

The time / cost relationship clearly indicate the need to let out management contracts. Optimizing all inputs imply the need for a higher degree of private sector participation to outsource functions like billing and revenue collection leak detection and repair and so on.

Like Option 2, top priority shall be given to institutional reform, modernizing the organization, managerial systems, and system operations to become on commercial basis. Unlike Option 2, however, the levels of service will improve. Intermittent supply although will remain, shall be controlled and subject to minimum criterion. Piped water supply, however, will be provided only in areas with reasonable population density and supply through water tankers will be an element in newly developed areas but no longer needed in built-up areas.

The provision of adequate funding, combined with cost savings through improved management and operations, shall result in full implementation of the planned rehabilitation strategy, which envisages water loss reduction by :

• restructuring of the water supply system with clear distribution zones based on a comprehensive hydraulic model which limits operating pressures to a maximum of 5 bar.
• rehabilitation of network based on parameters such as return on investment (ROI), a detailed water loss analysis based on actual measurements, and more targeted investments.

The implementation of the rehabilitation strategy would result in the reduction of unaccounted-for water and in the region of control over the supply and distribution systems.

4 - SELECTION OF OPTION AND CONSTRAINTS

The following is a simplified tabulation of the assumptions for each of the options.

	Constraints		Efficiency Gains
	Financial	Institutional	Time
Option 1	Yes	Yes	long term
Option 2	Yes	No	medium term
Option 3	No	No	Short term

Obviously a fourth option of no financial constraints simultaneously with institutional constraints does not exist.

The following page indicates the clear economic advantages for the three options.

A brief risk analysis of the three options indicates obviously that the risk increases as the economic advantages increase.

Option 3, appears to be the most reasonable of options but implies drastic decisions and the need for political will.

The decisions relate to :

• changes in the legal and institutional framework of the water sector, basically requiring a complete re-structuring with the objective to provide the necessary freedom and flexibility to WAJ and separate regulatory from operational functions,
• acknowledgement that municipal & industrial water is basically an economic good, and all investments must be justified in this context.
• private sector participation and management of system.
• reduction of redundant staff.
• modification of the levels of service (no piped systems in thinly populated areas, higher involvement of water tanker supply by increasing filling points in Greater Amman area).
• introduction of effective demand management (water tariffs, demand capping) and water saving strategies.
  

5 - IMPLEMENTATION

The severance of already visible symptoms of crisis, like intermittent supply, extensive visible leakage and financial bottlenecks prompted WAJ to work of remedial measures and start implementing part of the anticipated supply and rehabilitation strategies :

• re-design the necessary institutional framework by restructuring the whole water sector of Jordan, separating regulatory from operational functions, bulk supply from retail systems and giving the necessary freedom to WAJ to operate commercially and to decentralize services under private sector management.
• preparation of the technical concepts by updating the hydraulic design of Greater Amman area.
• providing adequate funding for rehabilitation and restructuring measures through international funding agencies, and
• preparing the existing organization and personnel through technical assistance programs like OMS providing training to all staff levels, screening and improving the quality of existing database systems to support management decisions, defining the future supply areas and introduction of cost centre based accounting.