B. Efficiency

70. Nonrevenue water (NRW) has followed quite a diverse evolution across the region over the past few years, with half of the Danube countries making improvements in the reported NRW figures or keeping it stable, and the other half reporting increases (Figure 39). Although the observed NRW trend over the past 15 years shows no clear and positive evolution for countries (particularly those with rates higher than 30 percent), a few countries—including Austria, Albania, Bosnia and Herzegovina, Croatia, and Moldova—have made important improvements in the last three years (especially Bosnia and Herzegovina). But NRW continues to be a key challenge for most utilities, especially in non-EU member countries. The average NRW level in EU member states is 33 percent; it is 58 percent in candidate and potential candidate countries and up to 43 percent in non-EU countries. Austria and the Czech Republic are the only countries reaching international good practice with less than 25 percent of NRW. In Montenegro, reported NRW has increased steadily and deteriorated significantly in the past few years since the last SoS. In addition, a capacity building program on NRW reduction has been initiated under the Danube Learning Partnership Program (see box 7).

Box 7 Nonrevenue Water Program from the Danube Learning Partnership

High levels of NRW (water either physically lost or not paid for by customers) is a major problem in many utilities. The Danube Learning Partnership, launched in 2016, is a capacity building program for utilities on basic NRW management; it offers specific tools for diagnosis of water losses withthe aim to increase understanding of utility staff and management on where the losses are and how they can be tackled. This program raises awareness of physical and commercial water losses among the participating utility companies and of activities to be undertaken to decrease them to consequently improve the operational and financial performance.The program has been developed in cooperation with the technical partner Una Consulting, which reviews existing activities and programs on NRW and develops guidelines, tools, training material, and manuals regarding NRW providing their applicability for water utilities in Danube region. The program is delivered by national or regional hubs in local languages. Participating hubs are Aquasan Network in Bosnia and Herzegovina, Water Supply and Sewerage Association of Albania, and Wastewater Works Association of Kosovo. The one-year program consists of workshops as well as hands-on exercises at the utilities with support of trainers. Participating utilities pay a registration fee.

71. The performance of service providers and countries with regard to energy efficiency continues to require further research. Information at the country level is not systematically available (Figure 40), and evidence from a limited sample of utilities undertaken in the first SoS report shows that the adoption of energy efficiency measures could help offset the generally increasing energy costs at the time.  For most countries, the steady increases in unitary costs observed until 2013 have not continued, at least not as strongly. This is in line with world energy price developments, and the secular decline in oil prices. Moreover, when looking at available data at country level, energy costs are reported to represent from 7 percent to 24 percent of overall operating expenses (opex).

72. Staff efficiency has followed a generally positive trend in most countries in the region during the last few years, following steady progress since the early 2000s. However, despite the noticeable recent efforts in several countries, utilities still show staffing levels above international good practices, and overstaffing remains an issue in most utilities (see Chapter III). Continuing to improve staff productivity is a key aspect to enhance utilities’ efficiency because staff costs often represent the most important operational expenditure. Since the SoS 2015, eight countries have managed to keep stable or improve their staff per 1,000 connections productivity (but updated data are missing for Romania).

73. The commercial efficiency of utilities in the region has improved (from an already solid base) or remained stable and high; currently 10 countries are reaching, on average, collection ratios above 90 percent (Figure 41). Four countries have improved their collection ratio, while six still have ratios below 90 percent. Collection ratio in Romania remains above 100 percent, showing that utilities are collecting both current invoices and arrears. The medium-term trend shows a convergence of collection ratios in the region above 85 percent, and annual variations are steadily smoothing, except for North Macedonia.