Risk Assessment and Management of Water Supply BusinessYasumoto MAGARA and Atushi Miyawaki
Professor, Graduate School of Public Policy
Hokkaido University, Japan

1. Introduction
The water supply coverage ratio in Japan is as high as 97 percent, which meansthat effectively all citizens have convenient access to hygienically problem-free runningwater, at any time, anywhere, and without restrictions on quantity. A steady supply of
piped water is important not only in the daily lives of citizens, but it also has many other
implications. It is significant for the maintenance and improvement of public hygieneand plays a fundamental role in sustaining the fabric of society. If the water supply wereinterrupted, the adverse effect on society would be drastic. Such an occurrence,
therefore, must be prevented at all measures. In particular, water suppliers serving a
population of 50,000 or more, making up about 80 percent of the annual water supply,
would be severely affected because only few of citizens can access to alternative
sources of water. In the case of large cities such as Tokyo, a disturbance in the watersupply would also affect areas such as the supply of cooling water for large-capacity
computing installations. It would lead to a disruption of financial services and public
transport, as well as stoppages in industries and services due to lack of industrial water.
Furthermore, living conditions would suffer and the supply of fresh foodstuff would be
affected. In short, a severe disruption of ordinary life would result.
The Water Works Law proscribes that in the event the water supplier
recognizes that water being supplied may be a risk to human health, the supply must be
stopped immediately, and measures must be taken to fully inform all concerned partiesof the fact that using the supplied water can be dangerous. The law defines water quality
standards and requires the supplier to monitor the presence of chemical substances andpossible health risks based on such standards, and to stop the supply according to thesecriteria. By implementing a thorough risk management system, the supplier must
prevent the occurrence of stoppages in the water system. Measures must also be taken to
deal with situations where water stoppages occur due to external factors that are beyond
the control of the water supplier, such as natural disasters including earthquakes, windand flood damage, drought, or wide-area power outages. In the event of such stoppages
due to non-predictable factors, the focus will be on how quickly the water supply can berestored in order to maintain the requested level of the water services.
Water supplier risks include not only physical aspects such as water supply
stoppage, but also aspects that pertain to the sustainability of water services. This
includes situations where the principle of full-cost pricing can no longer be adhered to,
making the goal of financial self-sufficiency unattainable and leading to a lack of funds
for day-to-day operations as well as for facility upgrades and maintenance. Where watersupply facilities are managed jointly with companies from the private sector,
responsibilities for risk management are often not clearly defined, which can lead to a

- 237 -

degradation of water services that in turn makes customers less willing to pay theirwater bills.
For the reasons outlined above, we will look at risk management under three
aspects: human health related risks, disaster related risks and management related risks.
2. Risk Management of Water Quality Requirements
In August 1996, an outbreak of waterborne cryptosporidiosis occurred in Ogose
Town, Saitama Prefecture. Out of a population of 13,000, about 9000 residents were
infected, and the water supply was stopped. This was the largest mass incident ofdrinking water related gastrointestinal infection so far encountered in Japan. The factthat a sewage treatment plant with a discharge outlet had been constructed upstream of
the intake point for the water supply was cited as a possible reason. A more direct cause
can be seen in the fact that even after the discharge outlet of the sewage treatment plant
became active, operation management of the water works purification plant, inparticular procedures for coagulation, flocculation and filtration management were notadjusted to reduce the existing emergent risks.
In order to prevent a future occurrence of incidents such as the mass
cryptosporidium infection at Ogose, in the same year the Ministry of Health, Labourand Welfare issued a provisional guideline for cryptosporidium control in drinking water.
According to this guideline, if a sewage treatment facility, livestock breeding facility orother possible cryptosporidium source exists in the drinking water source area, andwhen coliform bacteria and anaerobic spore forming bacteria are detected in the source
water, the risk of cryptosporidium contamination in the tap water is to be assumed andfiltering or other proper measures must be immediately implemented to reduce the risk.
In addition, the filtered water must be managed to keep turbidity less than 0.1 units.
Accordingly, filter installations were improved or newly constructed at a rapid pace, andmembrane filtration techniques were also put into place. No actual outbreak ofcryptosporidium infection has occurred since, but cryptosporidium detection in drinking
water has in fact led to water supply stoppage in a total of 17 cases.
Although the provisional guideline for cryptosporidium control as mentioned
above was issued in 1996, the number of water suppliers that have implemented
measures based on that guideline amounts to approximately 55 percent, as shown in
Table 1. In other words, many water works still do not have appropriate systems inplace. One of the reasons for this is to be found in financial limitations. The Ministry of
Health, Labour and Welfare therefore has renewed the guideline in 2006 and has
recognized the ultra-violet irradiation as a cryptosporidium control measure for water
Table-1 The enhancement of water purification plant for risk management of Cryptosporidium
Publicwater
supplySmall public
water supply

Bulk
water
supplyOthers

Total

Total No. of WPP

1679

3296

158

347

5480

No. of measured WPP

1147

1596

155

178

3076

No. of non-measured
WPP

532

1700

3

169

2404

Population served1)

4011

944

-

49

5005

- 238 -

works with sources other than surface water. This was done in order to promote theimplementation of anti-cryptosporidium measures. Whether by filtration or by
ultra-violet irradiation, the required efficiency of cryptosporidium inactivation isassumed to be 3log.
The number of watersuppliers that had to stop water intake
160
due to oil spillage or otherunpredictable events in the water120
source area, or that had to takemeasures to strengthen the water80
purification
processsuchaspowdered
activatedcarbonapplication, or that had to temporarily
40
stop the water supply amounts toabout 80 - 100 per year, as shown in0
Figure 1. This represents some 0.5
2004
1996
2000
1990 1992
percent of the total number of watersupplier. Frequent causes are oil or
Figure -1 No. of accidental spillsorganic matter contamination, as wellin the catchments area
as increased turbidity due to sediment
discharge from civil engineering works. Because most rivers in Japan have a rapid water
flow, there is often not enough time to stop the water supply before contaminants
emerge from the intake area. The capacity of valves and other water discharge facilities
designed to discharge contaminated water from the system after they have beentransported downstream is often too low. Maintaining water quality in the drinking
water source area is the most effective approach, not only with regard to accidents suchas chemical spills but also for disinfection byproduct precursors, odor-inducing
substances, agricultural fertilizers, etc. Close coordination with water environment
administration authorities and water source area management authorities is therefore
necessary.
Water stoppages are necessitated on occasion not only by contamination or
accidents in the water source area but also by a failure of taking appropriate risk
management measures within the water works system. In one example, painting inside apurification plant was done using solvents containing methylene chloride. The
sublimated methylene chloride was dissolved again on the water surface of thesedimentation and filtration basins, which led to an unacceptable level of methylene
chloride being detected in the drinking water, requiring a water stoppage. In otherinstances where sodium hypochlorite was used for disinfection purposes, bromate
impurities in sodium hypochlorite created by on-site salt electrolyzation exceeded thepermissible standard in water works with high chlorine injection rates, and water had to
be stopped briefly until substitute sodium hypochlorite could be purchased.
3. Disaster Risk Management
Japan is a country where natural disasters such as typhoons and earthquakes
occur with a high frequency. Consequently, there are regulations that require thestructure of water works facilities to be able to withstand the influence of such disasters.
However, it is usually not possible to fully preclude any disaster related damage. To- 239 -

reduce the risk of such
M8.0
damage, it is therefore
necessarytohavemeasures in place that are
aimed at the quick
M7.2
restoration of services inthe event of a disaster.
M6.8
The
damageM6.0
status due to natural
M7.3
6.4
disasters is shown inM
0Earthquake since 2000.
7
M
Figure 2. As can be seen,More than 5 disasters within 4years
damage occurs every year,
3~4 disasters within 4years
and about 12 billion yen
in government subsidies
Figure 2 Earthquakes and disasters in recent years
was needed in the period
from 2000 to 2005. Vastsums are spent for restoring facilities, and water stoppages or restrictions are frequent.
This of course affects not only the daily lives of citizens but also causes economic
damage through the impact on socio-economic activities.
Damage due to typhoons and localized torrential rains is listed in Table 2. Eachyear water facilities in about 10 areas are affected, with about 100,000 people
nationwide experiencing water stoppages of 30 to 100 days duration. Road collapses
causing pipeline rupture are a frequent cause, followed by lightning strikes and power
outages that interrupt operations. Damage due to internal problems at water facilities
such as operation stops because of an abnormal rise in intake water turbidity isrelatively infrequent. However, collapses or cave-ins of roads and road shoulders often
occur in locations where this can be predicted. Although these are counted underdamage by natural disasters, it should be possible to reduce this kind of damage byfortifying such sections and taking other preventive measures.
In 1995, the Great Hanshin-Awaji Earthquake struck an area inhabited by 20
million people, causing 5,000 deaths and leading to water stoppages of up to nine weeks
for 900,000 people. The costs for repairs to water facilities amounted to some 600
billion yen. This caused the Ministry of Health, Labour and Welfare to formulate a planfor the fortification of anti-earthquake measures by water suppliers, and theimplementation of these measures is being systematically promoted. Using the
prognosis of a large-scale earthquake in an area where about 30 percent of the Japanese
Table -2 Damage of water supply utilities by Typhoons and Heavy Storms
Year

2003

2004

2005

2006

No. of disaster

4

10

13

13

Population affected

59,079168,057

137,368

7,1089Total days of
stoppage/year

－

99

72

35

- 240 -

Table-3 Damage of water supply utilities by earthquakes
A

B

C

D

Date

2000,10,6

2001.3.24

2003.9.26

2004.10.23

Magnitude

M7.3

M6.4

M8

M6.8

Seismic intensity

More 6

Less 6

Less 6

7

M.P.260, S.P.612

MP213,Wreck offacilities

MP58,Wreck offacilities

MP 806,
Wreck of many facilities

No. of house150

40,26915887

129,750

Length5 days4 days8 days25daysCost for recover2)

20

21

26

650

Damage

1)

E

F

G

Date

2005.3.20

2006.7.23

2006.8.16

Magnitude

M7.0

M6.0

M7.2

Seismic
intensity

Less 6More 5Less 6

Damage 1)

MP31,SP101
800mm pipe in plant

No. of house

None

430

40

Lengthfor
Few days/ 2months fo
plant

4 hours

3 days18-

7

Cost for recovery

2)

MP: Transmission/Distribution pipe,
SP: Service pipe2)Million yen

MP37,Wreckof facilities

MP2

population lives, the Japanese government is calling for the strengthening ofearthquake-resistant design in important civil infrastructure sectors including watersupply facilities.
An outline of earthquake related damage since 1995 is given in Table 3. Every
year, somewhere in Japan there is damage from seismic activity. Increasingly, water
facilities are being quake-proofed according to governmental policy. In the event of anearthquake measuring intensity 5 on the Japanese scale, severe damage can be expected
for asbestos cement pipes, PVC pipes, and similar non-quake-resistant pipes. When theintensity exceeds 6, water supply trunk pipes will also suffer damage, as will water
treatment plants, water supply reservoirs, and other structural facilities. The damage andthe costs for restoration therefore can be expected to increase dramatically. Revisions ofbuilding standards in 1977 and 1988 have improved the earthquake proofing levels of
reinforced concrete structures. Piping facilities also have come to be designed along
similar principles, which is why structures and piping constructed in recent years areshowing better resistance to earthquake related damage. However, it is desirable thatearthquake proofing and updating of older facilities should also be carried out.
Out of the 506 water suppliers serving communities with over 50,000
inhabitants, about 80 percent have implemented earthquake proofing measures inaccordance with the government policy. However, among water suppliers serving
communities with over 10,000 inhabitants, this figure drops to only 25 percent. On anational average, the implementation of earthquake proofing stands at 20 percent for- 241 -

Table – 4 Performance Index relating the anti-seismic measures
A

B

C

D

E

F

G

H

I

J

K

L

M

Earthquake-resistanttreatment facility (%)

-

0

18.6

0

-

60.9

0

0

35.8

0

0

21.9

-

Earthquake-resistantpumping station (%)

72.3

59.3

26.7

30.5

-

53.1

17.6

0

15.7

0.3

0

-

0.7

Earthquake-resistantservice reservoir (%)

20.9

12.7

30.2

24.2

34.8

87.3

16.0

0.3

19.6

34.4

67.6

-

9.6

Earthquake-resistant pipeline
(%)

16.8

7.1

11.0

9.1

23.0

21.5

3.9

0.1

1.7

1.3

11.6

17.4

7.5

Chemicals stock (day)

24.1

32.0

51.9

27.7

19.8

-

32.4

19.1

35.4

23.9

60.6

30.2

29.7

Fuel stock (day)

1.1

2.7

0.7

0.15

0.6

0.8

1.6

0

0.38

0.7

0

0

0

Non-utility generation facility
(%)

54.3

32.9

91.3

100

72.4

100

88.0

61.5

66.7

42.9

-

78.4

55.1

- 242 -

Ratio of ACP to Total (%)

Total length of ACP (km)water purification plants, 30 percent for water supply reservoirs, and 14 percent for
piping facilities.
The Water Supply Business Guideline issued by the Japan Water Works
Association specifies various performance indicators. The rating of 10 major watersuppliers regarding earthquake proofing indicators is given in Table 4. Regarding
in-house power generating capability and stockpiling of chemicals, which are indicators
related with earthquake safety and disaster risk management, there is a considerable
difference among water suppliers. In particular, the level of earthquake proofing ofwater purification plants and pumping stations is very uneven, and there are many watersuppliers whose installations do not meet modern quake resistance reinforcement
standards. For piping facilities, earthquake proofing by using ductile cast iron pipes
with quake resistant joints, steel pipes with welded joints, ductile cast iron pipes withmechanical joints, polyethylene pipes with fused joints, or similar pipes isrecommended. However, the upgrading of older cast iron pipes or asbestos cement pipes
without quake resistance is not progressing at a great pace. For example, since 1990
there has been a government subsidy plan for upgrading asbestos cement pipes.
Consequently, this has progressed as shown in Figure 3, but in 2004, there were still
about 16,000 km of such pipes in existence. The cost for upgrading these is estimated at
450 billion yen, which is why progress in this area is slow especially in the case ofwater suppliers whose financial
condition is poor.
Becausetheoverall50
100,000
earthquake proofing progress is slow,
40
80,000point measures are being taken to30
60,000secure the water supply to criticalfacilities such as hospitals that will act
20
40,000as medical bases in case of disasters.
Ratio of ACP to Total (%)
1020,000
Pipes are being replaced byquake-proof
types,
and
some
0
0
1979
1985
1997
2001 2005
businesses also have taken otherFigure 4 Replacement of ACP
measures such as locating emergency
underground water supply tanks innearby parks, etc.. The biggest risk facing Japanese water suppliers is earthquakes.
While consumers are aware of this fact, the crisis awareness of the general populace has
not reached a level where an increase in water rates in order to cover the costs foradequate risk management could be easily tolerated.
4.

Business Operation Risks Management
Japanese water works are local public enterprises run in effect by local
governments, under the management of water works administrators. These represent the
local government and operate largely independently, except for making budget
adjustments, submitting measures to local councils, having their books examined byaudit commissioners, obtaining council approval, and imposing fines. In this sense, thewater works are public enterprises whose business accountability is effectively
self-supporting.
Normally, water rates are determined according to the multiple costing
principle. As seen on a national basis, income from water rates in the year 2004
accounted for about 90 percent of the gross income of water works, which means that
self-sustenance is largely achieved. However, 358 water suppliers were posting a net
loss, and 383 businesses had carryover losses. The highest items on the outgoing side
were costs for construction and renovation of 1128 billion yen, and debt repayments of
720.3 billion yen . Funds were obtained from corporate bonds, other account funds,
government and other subsidies as well as accumulated reserves. The effective shortagein financial sourcing amounted to 1.32 billion yen. On the national level and in the shortterm, business operations of water works therefore can be seen as largely functional, but
in the long term, lack of financial resources is likely to affect the upgrading of facilities.
This in turn leads to social problems such as the possibility of a degradation of water
services due to aging facilities, and the need for steep rises in water rates. The total debt
load of national and local government is on the order of 800 trillion yen, which
necessarily makes it increasingly difficult for water works to obtain funding andsubsidies from other accounts. Implementing risk management principles in thebusiness operations of water works therefore is becoming ever more important.
Under this viewpoint, the Ministry of Health, Labour and Welfare publicized its"Water Works Vision" in 2004, and analyzed the current situation as follows: (1) Manywater works have a weak business operation basis. (2) Management of operations istherefore also not fully developed. (3) Technical response to citizens' demands withregard to water services has run out of options. (4) Necessary investments are being put
off.
For example, as shown in Figure 5, the drop in the amount of supplied waterand the corresponding drop in income from water rates is especially pronounced in thecase of small and medium size water works serving areas where the demographics arechanging due to aging and depopulation. Lower birth rates and aging are expected tolead to lower population numbers in general, with a figure of 100 million instead oftoday's 125 million being predicted for 2050. The employment situation at water works
is also expected to change, as shown in Figure 6, with about 35 percent of the personnel
retiring over the next 15 years. Daily operations may well be affected by the much
lower number of employees that is to be expected.
With regard to facilities, piping accounts for some 70 percent of water works
assets. Figure 7 shows that from year to year, there is a steady increase in piping- 243 -

1000m3/day

facilities that exceed their statutory
60000
useful life of 40 - 60 years. As theMaximum
revenue from water bills falls, fewer
funds are available for the upgrading of
40000
equipment and facilities, and as thenecessary minimum is not being met,
the result is obsolete and aging
equipment. Eventually, failures will
20000
Mean
occur that will impact the stability ofwater services.
Many social infrastructure0
services including water suppliers
1975 1980 1985 1990 1995 2000 2005
operate according to a management
principle
that
can
be
calledYear“incrementalism”. This is based on the
Figure 5 Trends of water supply demands
assumption that both the income fromwater bills as well as the number of 60 years or older
personnel will increase every year, andoperations can be conducted simply by 55 to under 60
allocating these increased resources.
Office workers
Proper stock verification is not carried 50 to under 55
out, while attempting to maximize
Engineerswater services under the assumption 45 to under 50
Skill-based laborsthat past allocations of increased
40 to under 45
resources have been appropriate.
However, now that decreasing revenue 35 to under 40
because of a drop in population
numbers and in the amount of supplied 30 to under 35
water have become an unavoidable
trend, the efficiency of past allocations 25 to under 30
must be carefully examined and new
structures for allocating funds and Under 25 years old
0
4,000
8,000
12,000
manpower must be established. In other
employees
words,
achangetowards"decrementalism" is necessary. Services
Figure 6 Age distribution of employee
should still be maximized, but this must
be done while revising the old allocation structure and keeping budget restraints as well
as shrinking revenue in mind.
Of course, this means that efficiency must be a priority, but it is even more
important to uncover and eliminate hidden inefficiencies. This in turn can be done mostsuccessfully by adopting private-sector management policies, i.e. by managing water
works according to the mechanisms of the market. Advantages to be expected from thisapproach are as follows: (1) Provide efficient water services to the public. (2) Promote
cost awareness and the desire to devise and implement improvements. (3) Overcome thehigh cost concept. (4) Consolidate and integrate operations, implement downsizing offacilities, and realize the sustainability of the water supply business.
Because water works are public enterprises run by the local administration,- 244 -

Current

FutureLength of pipe (km)160,000
required funds for upgrading
facilities and other activities can
120,000
come from raising water rates andpursuing the merits of scale by water
80,000works
integration.
Small-scale
improvements aimed at allowing
existing facilities to be used on a
40,000long-term basis can help to control
the need for large-scale investments
01950 1960 1970 1980 1990 1991
and reduce outgoings by cutting
down on the interest burden and
Figure 7 Distribution of aged pipes
depreciation costs. However, it is
Public bodies
doubtful whether water works that
Privatefor a long time have been
Privatebodiesutility
DBO
PFI
accustomed to the decision making
patterns of local and central
Merging utilities
Outsourcing
government will be able toTransfer to public to private
successfully make the switch toCurrent
private sector type management
Public ownership/operation
based on market mechanisms. In
Lowest commitment of public
Public commitment
this respect, cooperation between
Low risk in private sector
High risk of private sector
public
water
works
and
Figure 8 Type of Public and Private Partnershipprivate-sectors seems a more
promising approach that should
allow the deliberate adoption of private-sector methods.
Reflecting such environments, revisions of the Water Works Law and thepromulgation of the PFI Law have made possible outsourcing to third-party suppliers.
At the same time, local governance regulations have been revised to introduce a systemof designated administrators for public facilities, and a law allowing the creation of
independent administrative corporations has been enacted. These and a number of otherregulatory changes have enabled a much more varied interaction between water works
and public-sector companies. As shown in Figure 8, such interaction can take various
forms, each with different characteristics. How to select an optimum pattern is an
important question that must be approached from various angles, taking the service
needs and expectations of customers into consideration. Since water works areproviders of a public utility, proper risk management allocation between the public andthe private sector is mandatory. In this regard, it must be acknowledged that in addition
to the traditional stakeholders of a public venture, the investors that effectively enable
operation of private-sector companies by providing funds will have to be included in theequation.
If a private-sector company is to partially or wholly provide a public-interest
service, a highly developed management structure capable of managing any involved
risks is necessary. A principle often adopted in joint undertakings between the public
and private sector is that risks should not be borne by a party that is not able to takeresponsibility. In other words, a party that is capable of taking the responsibility forrisks must be found and defined. Rather than information about current cost structuresand management principles, a private-sector enterprise looking to enter into a- 245 -

Table-5 Component of manual of audit to water supplier
SafetyStability

Sustainability

Management

Environment

Satisfaction of customer
Capability of facilities
Competence of Employee
Appraisal of asset
B/S assessment

public-private relationship will need information about the size of possible risks during
the intended contract period. This includes data about facility performance and aging
status, available manpower resources, type and reliability of compiled management data,
accident and failure history, amount and causes of payment arrears, history of warnings
or infringements against legal regulations, limitations at the end of operations, andinvolvement and support by the local administration. In particular, if facilities are to be
upgraded with funds raised on the open market, investors will require exact information
about the size of possible risks.
In order to assure sustainability, the water works business model will need to berevised from the ground up, including the aspect of joint operations between the public
and the private sector. It is necessary to fully examine what management style can be
adopted in order to properly manage the water supply business based on the situation ineach area from both the managerial and technical perspectives. In order to involve theprivate sector, it is necessary to evaluate objectively whether business operations carriedout by the private sector can achieve its goals, and obtain the agreement of customers.
Therefore, it is also necessary to develop a third party audit system that
includes an evaluation of the recommendation for better performance, including thesustainability, of water services. Although the water supply service level is characterized
by a sociological, cultural, economical, natural and environmental background, theminimum service level should be able to fulfill the human dignity right in the 25th articleof the Japanese government constituent, that is regulated by the Water Works Law.
Therefore, the audit system should be composed from the basic point such as protecting
public health to the sophisticated point such as aesthetic satisfaction of the water
services. And the implementation of the audit to each water service business should bedone by a type of de facto standard so as to publish the evaluation and therecommendation as an effective tool to develop consumers’ agreements of the
stakeholders with its water service business. The audit of the water supplier will be
implemented from the view points of safety, stability, management and environment inorder to evaluate the satisfaction of customers, capability of facilities, competence of
employees, and appraisal of asset and balance sheet assessment, as shown in Table-5.
The ISO/TC224, that will be ISO/WD24512, and the Water Supply Business Guidelines
issued by the Japan Water Works Association in 2005 will be referred in the manual,
because they have been standardized in the performance index.
5.Conclusions
In recent years when most people have access to tap water, their main concern iswhether the water supplied is safe to drink and easily available. However, according to
the results of on-site inspections of water suppliers nationwide conducted by the
Ministry of Health, Labor and Welfare, there are many cases where management of- 246 -

water supply system is inadequate. In addition, safe water is not yet available to all
because of the deterioration in water quality at the source, loss of water quality atconnecting points between the public water supply system and private water supply
facilities such as the customer’s water storage tanks and so on. Significant differencesamong areas are also present in terms of the availability of drinkable water; specifically,poor taste and odor, the presence of chlorine, color, and turbidity. In order to solve these
problems, it is necessary not only to exercise strict control over water quality based on
the Waterworks Law but also to implement the risk management from a wider point ofview. In order to implement an appropriate risk management it is necessary to identify
the goal of environmental management considering the social, natural and economical
conditions.
Because of the huge demands of fund for the renovation of exiting facilities thatwill be terminated the service life, it is necessary to promote public private partnerships
for sustainable service of water. In order to evaluate a risk of water utility management
it is necessary to develop a de facto standard to audit the water supplier.
Various globalization movements have been visible recently in the water supply
service, including progress in international standardization for water supply and sewage
treatment systems in connection with ISO/TC224. Under these circumstances, we canadvance international cooperation in water supply services and strengthen ourcompetitiveness by promoting bilateral and multilateral exchanges and adopting an
aggressive stance on globalization that will benefit to citizens
References
1.
Ministry of health, labor and welfares. The Water Works Vision. June 2005
2.
Japan Water Works Association. Water works management guideline. Oct 2005

- 247 -

Public Water Supply

Guidelines
for the management and assessmentof a drinking water supply service

 Continuous supply is the most importanttask for water supplier None alternative water source Civil and social activities dependent on water

Japan-US Governmental conference
Bankoku Sinryoukan Okinawa ,2007

supplied by public water supply Risk Water quality
 DisasterYasumoto MAGARA
Professor,
Graduate School of Public Policies,
Hokkaido University, Japan

 Management

Water Utility Management

Crypto. Risk management

 Onsite Inspection report :MHLW

Publicwater
supply Inadequate management
 Water Quality Management at OnOn-site ofcustomer Risk communication with customer

Earthquakes and disasters
M8.0
in recent years

Small public Bulk water Others Total
water supply
supplyTotal No. of WPP

1679

3296

158

347

5480

No. of measured
WPP

1147

1596

155

178

3076

No. of nonnon-measured
WPP

532

1700

3

169

2404

Population served1)

4011

944

-

49

5005

Damage of water supply utilities by
Typhoons and Heavy Storms¥260mil.
16000cstms.

M7.2¥6500mil.
7mil¥200mil. 130,000cstmsM6.8
40cstms
M6.0
150 customers
Unknown¥ 210.
M7.3
430cstms
40,000cstms.
6.4¥180mil.

M7.0

M

None.

Year

2003

2004

2005

2006

No. of disaster

4

10

13

13

Population affected

59,079168,057

137,368

7,1089

－

99

72

35

Earthquake since 2000

Total days ofMore than 5 disasters within 4years

stoppage/year

3~4 disasters within 4years

Great Hansin Earthquake 1995,The manual of antianti-earthquake
measures for water services (1996)
 Design standard of water supply

January 17

facilities

 5000 death / 2,000,000 habitants
 891,000 without service of Bench mark for physical strength of each

pipedunit facilitieswater 9 weeks to rere-supply of pipedwater to damaged customers
 60,000 million yen to restore thefacilities
Citizens waiting emergent water supply Guidelines for developing the antianti-

earthquake plan Guidelines for antianti-earthquake

construction practicein school play ground- 248 -

Anti-earthquake

100,000

50

90,00045

80,00040

70,000Ｔｏｔａｌ ｌｅｎｇｔｈ ｏｆ ＡＣＰ (km)60,00030

50,00040,00035

25
Ｒａｔｉｏ ｏｆ ＡＣＰ ｔｏ ｔｏｔａｌ ｐｉｐｅ(%)

20

30,00015

20,00010

10,00050Main facilities:23%
Ｒａｔｉｏ ｏｆ ＡＣＰ ｔｏ ｔｏｔａｌ ｐｉｐｅ(%)

Ｔｏｔａｌ ｌｅｎｇｔｈ ｏｆ ＡＣＰ (km)Replacement of ACP

Main pipelines:14%
Emergency Water Supply Plan :34%

0
１９７９

１９８５

１９９７

２００１

２００５

Repairing work of distribution main pipe

Water supply business
management"Water Works Vision"

local public enterprises run in effect by local
governments water rates are determined according to the multiple
costing principle
 The highest items on the outgoing side were costs forconstruction and renovation of 1128billion yen, and debt
repayments of 720.3 billion yen .
 The effective shortage in financial sourcing amounted to
1.3 billion yen
 business operations of water works therefore can beseen as largely functional, but in the long term, lack offinancial resources is likely to affect the upgrading offacilities.

(1) Many water works have a weak business
operation basis.
(2) Management of operations is therefore
also not fully developed.
(3) Technical response to citizens' demands
with regard to water services has run outof options.
(4) Necessary investments are being put off.

Corrections

Trends of water supply demands



60000

11.2 billion

1000m3/day

 Page 7, 18lines

1.120billion
 Page 7. 21 lines

Maximum

40000

20000

Mean

1.327 billion

1.3 billion

0
1975

1980

1985

1990

1995

2000

2005

Year

Distribution of aged pipes

Stock and Depreciation of water facilities
70

2.0

Investment 100 bil.yen

160,000

Length of pipe (km)Exceeddeprecation
costs frominvestment

120,000

80,00040,000

Facilities
not renewal

50

1.5

40

1.0

30
20

0.5

10

0.0
0

0
1965

1950 1960

1970

1980

1990

1991

2030

2012

2002
Year

- 249 -

60

投資額

除却額

ストック額

Stock 100 bil. yen

2.5

Total number of employees by age
bracket and job category inwater supply business“Incrementalism”
Incrementalism” / “Decrementalism"
Decrementalism"

60 years or older

50 to under 55
45 to under 50

Allocateincrement to X

Increment

After 15years
these group retire

55 to under 60

Optimize

Contentment

Decrement

40 to under 45
35 to under 40

Allocate decrement
to maximum service

30 to under 35
25 to under 30
Under 25 years old

0

2,000

4,000

Office workers

Engineers

6,000

8,000

10,00012,000employees

Skill-based labors (Blue-collar workers)

Uncover & eliminate hidden inefficiency(Total number of water suppliers: 1579; Total number of employees: 57,609)

Optimal Management Using
Various Forms of Collaboration

uncover and eliminate hidden
inefficiencies

To secure an abundant and stable supply of clear water at low cost
To provide a service that can greatly satisfy customers
Third party
organizations(1) Provide efficient water services to the
public.
(2) Promote cost awareness and the desire
to devise and implement improvements.
(3) Overcome the high cost concept.
(4) Consolidate and integrate operations,
implement downdown-sizing of facilities

Fair evaluation ofbusiness
performance, etc.

Selection of optimal management forms from various choices/ Disclosureof information on decision-making processes and business performance

Water suppliers• Joint management lead by large-scale water suppliers• Joint management of facilities, etc.

Water suppliers

Providingexpertise,know-how,etc.

National and local
governments

Private companies, etc• Improve skills to be commissioned bywater suppliers• Propose various forms of collaboration• Provide assistance for technicaldevelopment regarding efficientmaintenance of facilities

Partnership

Guidelines for the
management
and assessment ofa drinking water supply service(JWWA Q 100)
SafetyStability
Sustainability
Environment
Management
Globalization

Developing
systems forcollaboration,
providingtools, etc.

Water suppliers

Outsourcing• Implement and promote collaboration
by developing model projects andvarious guidelines• Supervise water suppliers
implementing outsourcing, etc.
• Provide assistance for technicaldevelopment of maintenance

Safety of tap Water
PI

22
33
49
7
24
2

Stability of Services

Definition

2001 2002(%) (%)

2003
(%)

200
4
(%)

Compliance (No. of Exceeding / No. 0
to DWQS
Test)x100000Complianceto Mustodor(2(2-MIB,Geosmin)/(DWQS)x100

67.5

67.5

62.5

100

Replaceme
nt of Pb
pipes

(No. Pb Plumbing/No.
connection)x100

13.0

10.3

7.7

5.8

Sustainability of water services

2001
(%)

2002
(%)

2003
(%)

2004
(%)

Rehabilitation ofaged pipe

Length ofrehabilitatedpipe/Total length

1.4

1.3

1.5

1.3

The accident ofwater source

No. of accident

18

26

7

6

- 250 -

2001

2002

2003

2004

Income per
employees (yen)(Income/employe
es/1000)

63723

65587

68841

71444

Ratio of owned
capitals(%)(Capitals+surplus)/Debt

59.7

61.4

62.8

64.8

Effectiveness of Amount of
capitals(m3/100 supplied /Capitals
00yen)

9.1

8.7

8.5

8.4

No. Claims

0.2
（‰）

4.6
（‰）

3.9
（‰）

1.0
（‰）

Claims/ customer

Performance Index
relating the anti-seismic measures

Environmental Governance2001

Reuse ofsludgeReused sludge/Total
sludge

2002

50.4

53.8

2003

66.0

2004

68.4

A

B

C

D

E

F

G

H

I

J

K

L

Earthquake-resistanttreatment facility (%)

-

0

18.6

0

-

60.9

0

0

35.8

0

0

21.9

-

Earthquake-resistantpumping station (%)

72.3

59.3

26.7

30.5

-

53.1

17.6

0

15.7

0.3

0

-

0.7

Earthquake-resistantservice reservoir (%)

20.9

12.7

30.2

24.2

34.8

87.3

16.0

0.3

19.6

34.4

67.6

-

9.6

Earthquake-resistant pipeline
(%)

16.8

7.1

11.0

9.1

23.0

21.5

3.9

0.1

1.7

1.3

11.6

17.4

7.5

Chemicals stock (day)

24.1

32.0

51.9

27.7

19.8

-

32.4

19.1

35.4

23.9

60.6

30.2

29.7

Fuel stock (day)

1.1

2.7

0.7

0.15

0.6

0.8

1.6

0

0.38

0.7

0

0

0

Non-utility generation facility
(%)

54.3

32.9

91.3

100

72.4

100

88.0

61.5

66.7

42.9

-

78.4

55.1

Model of private public partnership

2002
(%)

2003
(%)

2004
(%)

AntiAnti-earthquake
pipe ratio(Ductile+Steel)/Total length

95.1

95.8

96.2

96.9

Leakage

Leakage/Total
supplied water

7.1

6.4

5.4

4.7

Private bodies
Public bodies
Water services with the partnershipof private sector and public
Privateutility
Merging utilities
P F I
ＤＢＯ
Transfer to public to private

Outsourcing
To private sector

Current

2001(%)

FutureMaintenance/ Operation

Current
systemPersonal
contract

・Operation of Purification plant
・Metering and collecting water
charges・Water quality test
・Water distribution control

Public ownership/operation

Public commitment
Low risk in private sector

Component of manual of audit towater supplier
SafetyStability

Sustainability

Management

Lowest commitment of publicHigh risk of private sector

DeDe-facto standard to monitoring
and audit of water service

Environment

Graduate school of
Public policies

Satisfactionof customer
Capability offacilities

Public sector
MHLW
MHI
Local govts.

Competenceof Employee
Appraisal of
asset

De-facto
standard

Water service sectors
Customers
JWWA
Labor unions

B/S
assessment:High priority

M:Secondary priority

Conclusions
 Full cost pricing

 Monopoly system Water is essential not only in healthy

daily life but also economical/social
activities
 Sustainability
 Customers satisfaction
 Governance/Transparency of business Financial soundness
 Human resource- 251 -

Private sector
Bank
AuditsThink tanks
Consultants
Engineering
Monitoring &audit institutes