Phnom Penh cut water losses by metering and paying above bribes

After war and the Khmer Rouge years, the Phnom Penh Water Supply Authority served 20 percent of the city. Less than 30 percent of the water produced was billed, and 87 percent of connections were unmetered, estimated bills bearing no relation to use. Bill collectors manipulated accounts; a new connection cost about $1,000 in bribes; staff earned around $20 a month — an environment where, a later evaluation noted, 80 percent of employees worked less than two hours a day, and corruption was not a moral failure but the real wage.

Ek Sonn Chan, a water engineer from inside the utility, was appointed general director in 1993. Royal Decree No. 52 of 1996 granted PPWSA administrative and financial autonomy with a board and the power to propose tariffs. Donor money followed — but the sequence ran the other way: staff, meters and billing were fixed first, and tariffs were raised in announced steps only after service visibly improved, with a lifeline block for small users and connection subsidies for the poor.

Metered every connection, automated billing to remove corrupt collectors, and paid staff private-sector salaries from recovered revenue, so performance preceded finance.

Universal metering turned water into a metered commodity, enabling accurate billing.

Automated billing removed the corrupt human collector, raising collection to 99.9%.

Market-rate salaries made jobs worth protecting, reducing corruption.

Recovered revenue funded raises and improvements, creating a virtuous cycle.

Stepwise tariff increases with lifeline blocks built political support.

Fix measurement, transactions, and incentives before seeking funding; donors fund what already works.

By 2008 unaccounted-for water was 6.19% (from 72%), supply 24-hour, collection near 100%, audited profit every year since 1993, no subsidy PPWSA became the reference case that a public utility can reform internally before taking external money or privatizing; utilities across the developing world sent study delegations, Ek Sonn Chan received the 2006 Ramon Magsaysay Award, and the evaluation concluded that governance, not scarcity or poverty, is what fails elsewhere.