Drivers of water utilities operational performance An analysis from the Portuguese case

Abstract

The identification of the main drivers of performance is key to improve the sustainability of water utilities. The present study aims to identify the relevant drivers associated to the main sustainability-related operational indicators for water utilities, considering both drinking water supply and wastewater treatment. For this purpose, a range of data analysis methods are employed: i) cross correlations analysis to determine the interrelationships between the studied variables; ii) clustering analysis to highlight hierarchical aggregation; and iii) principal components analysis to capture and condense information in a smaller number of composite variables, representative of the service providers diversity. The results highlight the importance of the service provider size on both input and output operational indicators (suggesting the presence of economies of scale), the influence of the allocated personnel and water losses over expenditures and the essential role that the largest service providers attribute to certification policies (environmental and occupational health and safety). The largest and the certified service providers are mostly related to a concession-type governance model and predominantly of urban typology. The policy recommendations that can be driven from these results are the promotion of the aggregation of smaller service providers, the careful control of water losses and personnel allocation, as well as certification practices.