JWU depends totally on its revenues from its business to cover operational costs and provide service to its customers. The two main revenue sources are: 1) water sales which constitute 88% of its total income, and 2) income from new plumbing, surveying fees, and other fees that comprise about 12% of the total income. As for investment projects, particularly rehabilitation and development of water networks, JWU faces problems securing necessary funds, because of the fact that water tariffs do not allow for covering investment projects. Despite the fact that JWU depends on donor money, especially from the KFW, it still needs regular and constant revenue to cover this key part of its work. Between 2005 and 2011, JWU sustained a cumulative operating deficit of 40 million ILS; where the operating deficit has reached 12.5 million ILS in 2011. The Main reason behind this is the tariff applied since 2005, which hindered JWU from recovering the costs and saving sufficient operational income to balance the expenditures which have continued to increase.
In addition to the tariff factor, the other operating deficit escalating reason is the constant increase in the different operational costs, which involve the prices of procured water from the Israeli side (Gihon Company). The tariff of electricity, maintenance and materials also impose a serious challenge on the organization’s ability to recover costs and expenses.
Even though JWU has achieved a modest surplus during 2012- 2015 (as anticipated), it has not been able to make up for the accumulated operating deficit totaling 40 million ILS in 2005-2011.
Proportional Allocation of Operational Expenses
As the following figure illustrates, expenses on water procurement comprise 45% of the total JWU operational expenses. The next highest expense category is salaries and savings that form about 27% of the total expenses. Doubtful debts and consumption costs comprise up to 14.1% , in addition to 5.5% as maintenance and materials, while electricity costs form 8.4% of the expenses.
Figure 2: Proportional Allocation of Operational Spending during 2015
receivables owed by subscribers
During the years after the second “Intifada” (Palestinian Uprising), and the following political and economic detoriration; including withholding of PA tax money in 2006 by the Israeli government, causing the incapability of the PA to pay salaries of its civil servants during the given period, subscribers’ debts raised to unprecedented rates in the history of JWU.
our analysis of water debts on users during these years show that it raised in aoubt 107 million ILS during the past ten years. The total debt rased from 24 million ILS in 2004 to 137 million ILS by the end of 2015. Generally, analyzing reasons behind such debt raise shows several, among them: the weak legal environment that didn’t enable JWU to hold responsible and sue in courts users who hadn’t pay their fees, the absence of enforceable laws to incriminate illegal consumption of water, lack of inclusive systems in the PA to impose paying water fees as prerequisite to their different governmental applications, as applicable in several nations around the world (including travel banning, stopping auto license renewal, etc)
in addition to the feeble legal context of JWU levying, the other factors of the high debit are: the accumulated debts after the second intifada, especially on the camps, as well as the harsh economic conditions and negative perceptions of paying in return for fees, and the group subscriptions.
Operational Performance Indicators at the JWU – Comparative Figures
To preserve its position as the best water institution in Palestine, JWU exerts it best efforts to enhance it performance in the different aspects. A water providers competence is not measured merely through success in providing safe running water to its users, but also by producing and delivering cost- efficient water, and selling it with reasonable price to its users.
The following table shows JWU operational indicators for 2012-2014:
|1||Staff productivity (staff members per 1000 users)||4.3||4.49||4.25|
|2||Lost percent (unpaid for water)||25.3||25.8||25.7|
|3||Storage size per individual/ day (in liters)||66||64||62|
|4||Total delivered water (million m3)||15.7||15.95||16.5|
|5||Sampled water (from network including main lines)||96.4%||100%||100%|
|6||Fecal coliform bacteria free sampled water (from resource)||100%||100%||100%|
|7||coliform bacteria free sampled water (from network including main lines)||99.3%||99%||98.9%|
|8||Fecal coliform bacteria free sampled water (from network including main lines)||100%||100%||100%|
|9||Tests showing pollution free results in line with WHO||726||768||730|
|10||Tests showing pollution free results in line with Palestinian Specifications||727||770||732|
|11||Tackled citizens’ private complaints||10||21||41|
Main Outputs of the Operational Indicators
Lost: difference between delivered water and billed water (paid for). It represents the organization competence and commitment to preserve water resources through regular AMR maintenance, network rehabilitation and fighting illegal consumption. JWU has succeeded in restraining a lost percentage varying from 25.3% and 25.8% between 2012-2014, which is the lowest among water providers.
Storage volume: the declining storing volume is a serious concern at JWU, particularly since daily emergency water is not sufficient. This increases likelihood of turbulent delivery to users in our service area. This drives JWU to inevitably construct new tanks.
Staff Productivity/ Number of Staff members per 1000 Subscribers: this indicator represents an organization’s capability to use human resources. JWU continued to build its staff capacities and promote work ethics and values. This indicator proves JWU competence in staff wise; the number of staff members per 1000 users is 4.
Water Quality: water quality indicators show that JWU delivers high quality water. All JWU tests achieved success with more than 99%, which is the best among water service providers. Besides, the number of users’ complaints regarding water quality was only 10 -41 between 2012 and 2014, all of which were tackled. The number of submitted complaints is very little compared to the number of JWU subscribers which is about 65,000.