The Determinants of Non-Revenue Water & Financial Viability for the Palestinian Water Service Providers

Abstract

Imagine that your water service provider gives your family at the end of the year $70 as a result of non-revenue water. Indeed, it is the value of Palestinian non-revenue water for year 2015; where, it was equivalent to a deposit $13 for each individual person. Due to its importance, this paper empirically evaluates the determinants of non-revenue water for the providers that deliver water services to 72% of Palestinian population. Two multiple regressions have been conducted; the first one measuring the non-revenue water. The findings of this measurement show that staff productivity, daily consumption, average price, energy cost, service providers' size and structure, have significant impact on the non-revenue water; wherein, the water production variable impact is not significant. However, those predictors have been included into another regression to explain the financial viability of the Palestinian Water Service Providers. The results indicate that staff productivity, daily consumption, average price, energy cost, and water production have significant effect on the financial viability. Only service providers' size and structure, have insignificant effect. In Palestine, the Palestinian Water Authority (PWA) is the policy maker. The results of this research implicate that PWA may put targets for Palestinian Service Providers at national level; such as non-revenue water, staff productivity, profitability, and water production. Therefore, this will lead to increase the performance of the water providers in non-revenue water and overall enhance their financial viability.