Page 130 - Water Loss Control

112 Cha pte r Ni ne

9.4.4 Combination of Activities
The methodologies described above all require the assessment of the benefit in leakage
terms from the proposed activity. Each case has been considered independently, that is,
the assessment of the economic level of pressure management or rehabilitation. How-
ever, the implementation of one option will affect the economics of the implementation
of the other, that means, the benefits from rehabilitation will be reduced if average pres-
sures have already been reduced due to pressure management. In practice, an operating
company will want to develop a strategy that looks to establish the economic balance
between all activities, that is, active leakage control, leakage repair, mains rehabilita-
tion, service pipe replacement, sectorization, and pressure management.
The normal approach to solving this problem is to choose a small increment of
activity in each area and work out the cost/benefit. These are ranked and the one with
the best benefit is implemented. The leakage benefit for the other schemes are then reas-
sessed due to the change that this scheme imposes and compared again. The next
scheme is then chosen and the leakage benefits reassessed and so on. This process is
continued until the marginal cost of any activity is equal to or greater than the marginal
cost of water. This then establishes the economic level of leakage and the list of schemes
that will be implemented and their associated costs to achieve this level.
By following this procedure of “squeezing the box” (i.e., the box containing the
level of losses shown in Fig. 9.1) using each of the primary activities of a well-developed
program of leakage management in turn based on best value, a point will be reached
where any further activity is uneconomic, that is, its marginal cost will be greater than
the marginal cost of the water saved. At this point the marginal cost of further leakage
control activity will be the same for all activities. 14

9.5 Deficiency in Water Supply Reliability

9.5.1 The Supply-Demand Balance
The calculations described above establish the economic level of leakage against the mar-
ginal cost of water production. In effect, this could be called the unconstrained ELL. In prac-
tice, this level of leakage, when combined with consumption, may be insufficient to provide
the necessary reliability of supply for the operator. The excess of water available for supply
compared to the demand is often referred to as headroom. Some countries have standards for
determining the appropriate level of headroom in order to provide the required security
15
of supply against factors such as climate change, and the like. If, after working out the
unconstrained ELL there is insufficient headroom, then an operating company needs to
decide whether it is more economic to carry out further leakage control or whether to
develop a new water resource, or to implement measures to reduce customer demand.
In order to evaluate the least cost solution to meet the supply-demand balance, the
cost of leakage control activity described above should be compared to the marginal cost
of the optional water resource development. This marginal cost is calculated as follows:

• The one-off capital cost of construction is estimated and discounted using an
agreed discount rate.
• The ongoing maintenance cost of the resource once constructed is estimated.
• A “sensible” yield of the scheme is assessed.