Effect of criteria weighting methods on the ranking of water suppliers’ performance

Abstract

Water supply systems are a structural part of public utilities and as such are vital to the general well- being, public health, safe drinking water use, economic activities and environment protection. Being the water “market” a natural monopoly, regulation must, mainly, protect the interests of the user, based on a benchmarking strategy that promotes the quality of the water supply service and assuring the balance of the ruling tariffs. Due to the complexity of service quality assessment, the use of performance indicators is essential as a means to provide a measure the utility’s effectiveness and efficiency. In Portugal, this task is conducted by an independent public entity, which has defined a specific set of performance indicators. Currently, the adopted system does not provide a quantitative and integrated evaluation leading to an overall ranking of utilities’ performance and sustainability. This work aims to contribute to the improvement of the Portuguese assessment system, through the development of a complementary methodology that defines a global index of service quality (GISEQ) for a given water supply utility, based on a new application of multicriteria analysis. The GISEQ value is calculated as a combination of the normalized scores of each performance indicator, previously aggregated in three main groups: protection of user interests, sustainability of the utility and environmental sustainability. In this proposed methodology, each one of the selected performance indicators represents a criterion to be considered and judiciously weighted. An innovative approach to weights definition was performed as well as a sensitivity analysis of different weighting methods on water supply utilities’ ranking positions.