Increasing Demand for Piped-Water Supply in Mandalay: Athena Infonomics’ Research Outcomes


The Mandalay City Development Committee (MCDC) is facing severe challenges in improving its water service coverage. It is also facing mounting financial losses. In this context, MCDC called for actionable insights on improving its coverage and the potential for tariff hikes to ensure financial sustainability. In this context, Athena Infonomics won an International Growth Centre-funded grant to look at the demand for water service across six townships.

The recently-concluded 5 month study builds on existing support provided in the region by the Asian Development Bank (ADB), L'Agence Française de Développement (AFD) and the Japan International Cooperation Agency (JICA). It looked at the socio-economic challenges in the region, and examined the feasibility of additional mechanisms, like tariffs and taxation. The study survey sampled 1480 households and small businesses and involved qualitative interviews with various stakeholders to understand water usage patterns in the region. The findings of the study will play a key role in influencing the decisions that MCDC takes to expand Mandalay's piped-water supply network and improve its financial viability.

Mandalay's Water Challenges

The biggest challenge in improving water service coverage is the capital cost of laying pipes, which is required to expand the piped-water supply network. Water supply service reaches only a fraction of the population, lacks water and sewage treatment capacity, and faces exorbitant financial losses (> K3700 million in 2016-17). This problem is compounded by the fact that the tariffs are currently low in Mandalay to ensure that low-income population can afford water. According to Athena Infonomics' survey findings, about 38% of the population in Mandalay city is connected to the water supply network (thus 62% are not connected). For the year 2019, it is estimated that non-revenue water represents around 75% of the water currently supplied at the source by MCDC (figure obtained from MCDC Water Revenue Department).

About the Study

Athena Infonomics' study adopted a mixed method approach including surveys and key informant interviews. The in-depth interviews were conducted with city officials and other organisations (International NGOs, bilateral donors, and consulting firms involved in water projects in Mandalay) currently involved in projects/studies that work on piped-water supply. A structured survey was conducted with 1480 households (80%) and businesses (20%) across all townships in the city to understand patterns in water access and usage within Mandalay city, as well as expectations and attitudes towards piped-water supply.

Through the study, Athena Infonomics designed a tariff rate and mechanism that addresses the issue of equity and sustainability. A tariff revision must increase revenue for MCDC to reduce its deficit, while remaining affordable for the low-income population.

Finding Solutions: Assess and Reduce Non-Revenue Water

The study found that water lost to breakages, billing errors, and theft represents both environmental costs and economic inefficiency. Reducing non-revenue water can increase cash flow for utilities, which may then expand the supply network without squandering water resources. The assessment and reduction of non-revenue water in Mandalay can therefore play a key role towards ensuring sustainable coverage of operation and maintenance costs:

  • Measuring the water consumed by unbilled authorised users can help the city understand the opportunity cost such 100% subsidy represents in the budget.
  • Monitoring accurate meter readings using benchmarks and formalising payment schedules for users unable to afford their bill can go a long way in streamlining the Water Revenue Department's bi-monthly billing.
  • Incentivising meter readers and users to report damaged meters, and technician teams to repair broken meters can also reduce non-revenue water by significantly reducing unmetered piped-water consumption.
  • Additionally, gradually switching to reliable automatic meter readers for large users, particularly businesses, and for areas where there is lower substitutability between piped and ground-water could efficiently decrease commercial losses.

The Need to Raise Water Revenue

In parallel to reducing non-water revenue, raising water revenue is critical to increase the capacity to improve water service coverage and quality in Mandalay. The study suggests:

  • Metering all businesses and using graduated tariffs for those using large amounts of water can significantly increase water revenue. As Mandalay grows and attracts more businesses it is critical that their use of all water sources be regulated. Unregulated tube-well drilling is likely to lead to groundwater depletion and future water access problems.
  • Raising household tariff levels up to 385 kyats ($0.25) per unit at current income levels to generate around MMK 720 million ($473,000) additional water revenue, an increase of 27%.

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