Improving efficiency in utility companies: a case study of the Ghana Water Company

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Since its establishment in 1965,the Ghana Water Company limited (GWCL) has been managed as a public utility and non-profit oriented institution and this has led to the situation where this strategic company is saddled with multiple constraints that have worked against efficiency in the delivery of its services to customers. The main objective of the study is to establish the main cause(s) of inefficiency in the management of water production and distribution by the GWCL and recommend strategies to improve its operational efficiency. Using the conventional questionnaires administration, interviews and physical observations, analysis of data collected from GWCL and corporate consumers revealed that 46.7% of actual water produced is considered as non-revenue water which the GWCL lost revenue of ¢886.60 billion. At 99.9% confidence level, significant difference exists between the volumes of actual water produced and actual water sold by GWCL, which shows that GWCL is inefficiently being operated and managed. Major constraints that adversely affect an efficient management of water production and distribution are increasing cost of production, lack of motivation and employee satisfaction, inadequate record of information on the operations of GWCL, poor quality service delivery, non payment of bills by consumers, consumers refusal and/or reluctance to pay economic price for service consumed and high cost of imported equipment and international expertise. To reduce cost of production GWCL should ensure effective monitoring of all functional activities and link reward of staff to performance. GWCL should introduce electronic data processing scheme to handle data generation, processing and storage. A good understanding of the customer should be identified and special attention be paid to quality service. Public education on the need to pay economic price and prompt payment of customer bills should be embarked on. The Water Resources Commission (WRC), Public utilities Regulatory Commission (PURC), and GWCL should develop guidelines to enhance water conservation and management practices, observe regular maintenance of the equipment and manage water as an economic good. Finally, it should ensure that all consumers are supplied with meters, make it easier for consumers to purchase and be responsible for their meters.
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the award of Master of Arts degree in Industrial Management, 2002