Input allocative efficiencies for operation and maintenance of rural piped water supply systems in highland areas of Vietnam

Abstract

Strengthening the functioning of existing rural piped water supply systems is a critical strategy for ensuring household water security, particularly in water-scarce contexts. Improving operation and maintenance (O&M) of the systems is an important area of focus, commonly plagued by poor reliability and functionality over time. From an economic perspective, there is an opportunity to optimise O&M input efficiencies as a foundation for improved management. This paper presented challenges and opportunities to optimise O&M input efficiencies based on an analysis of water supply systems in Vietnam’s highland areas characterised by mountainous terrain and water scarcity. The analysis focused on state-based agencies for O&M given their mandate for restoring the inefficient systems and identified input norms for guidance on how to optimise O&M activities. We applied an input-oriented data envelopment analysis (DEA) model under constant returns to scale assumption to estimate technical, economic and allocative efficiencies. The results identified efficiency levels of 90%, 30% and 33% respectively. The study suggests a 10% reduction in general input amounts and identified efficient input target values reveal potential reduction rates for technical labour (12%), electricity (12%), as well as the technical and economic norms of technical labour (0.86 person- day∙(100 m3)–1 water sold) and electricity (0.53 kWh∙m–3 water sold). The policy implications for O&M state-based agencies include the adoption of input-based contracting mechanisms, while the government is encouraged to approve water tariffs and provide compensation based on input items to promote water service supply as a public good in water- scarce and challenging areas.