Conventional benchmarking measures focus mainly on water produced whilst ignoring water produced but not reaching consumers, unaccounted for water (UFW). Benchmarking must credit utilities for a reduction in UFW and improvements in service delivery. This study measures the performance of 20 urban water utilities using data from an Asian Development Bank survey of Indian water utilities in 2005. It applies directional distance function as an analytical tool for measuring performance of water utilities. The results reveal that at the mean level, Indian water utilities have the potential of increasing water delivery levels and reducing UFW by 20%. About half of that can be realized by changing the scale of operation. Metering of the water delivered and the length of the distribution network are major determinants of performance of water utilities.
Keywords: Data envelopment analysis (DEA), Directional distance function, India, Unaccounted for water (UFW), Urban water supply