'Non-Revenue Water - An agent for change!' with Andrew Donnelly, Board Director, Águas de Portugal International

[00:00:00] Piers Clark: Welcome to the Exec Exchange 15-minute podcast, in which a leader from the water sector shares a story to inspire, educate, and inform other water sector leaders from around the globe. My name is Piers Clark and my guest today is Andrew Donnelley, a member of the board at Aguas de Portugal International in Portugal. But as you're about to hear. Andrew is not Portuguese. Andrew, very good to have you with us.
[00:00:23] Andrew Donnelly: Nice to be invited to speak to you again.
[00:00:26] Piers Clark: That's a rich Newcastle accent from here in the UK. How has a Geordie, that's the name that we give people derived from Newcastle. How did a Geordie end up in Portugal?
[00:00:37] Andrew Donnelly: I originally left school at 17 when I didn't know why I was having to work to do A Levels. I ended up being a trainee at the geography department at Newcastle University. And that's where I found that I like things to do with environmental science, geography, and water. After three years being a trainee technician there, the head of department allowed me to go back to school to finish my A levels so I could go to university to do environmental science. So, the first person who changed my life direction- head of geography at Newcastle University. So, I went to Sterling University in Scotland to do environmental science, which was the only place in Scotland that did environmental science at the time. The first day of my last year of the four-year course there, I met my future ex-wife...
[00:01:18] Piers Clark: Your future ex-wife!?
[00:01:20] Andrew Donnelly: Future ex-wife, exactly. Who was also doing her degree. And she's from Porto. We went on to do master's and PhD as well. I can't remember the discussion about moving to Portugal, but we did. I moved here 25 years ago in October this year. But the third person who changed my direction was actually a colleague of my future ex parents-in-law who's also a university professor who was also head of Águas de Gaia. This is the water supply company for Villa Nova de Gaia on the south side of the river in Porto; where Port Wines comes from. He'd taken over the management of this company. He really wanted to put in the practice a renewal of the utility in terms of water supply, wastewater, the whole urban water management circuit. And my ex-parents-in-law facilitated a meeting with him. I ended up doing a proposal as to what I could do for the company, which was based on my environmental background, so water quality monitoring. The company also took over the Blue Flag beaches Project. So, I thought I'd do a proposal about monitoring the water quality in the river systems and the streams within the council area, and also developing the sewage network, which at the time only had about 20% of the population connected. He said yeah, do that. We can give you a job here, but I want you to head up a non-revenue water losses project, of which I knew nothing. This guy set me on my way on my professional career at the start of 2001 in the north of Portugal.
[00:02:39] Piers Clark: It's an intriguing answer 'cause it's a very different journey that most people have followed and, without wishing to pry, obviously you are no longer with your wife or indeed your father-in-law, yet you have stayed in Portugal.
[00:02:50] Andrew Donnelly: This is the second part of the story and it involves your good self actually. Because after three years, this was really the first successful non-revenue water project in Portugal. It was already underway when I joined, but we continued the work, and by the end of 2003, we got losses down to below 15%. All the network monitoring was included. We were well on with project to do wastewater management and most of the beaches had blue flags already awarded to them. But before then, I got divorced and part of the non-revenue water project was coming to conclusion as well. I was only there for professional reasons and it weighed heavily on me. I was looking maybe to go back to Scotland, and I had an interview with one of your colleagues, Mackins. I ended up moving back to Scotland in the end of 2003, and in collaboration with Scottish Water, to do leakage management and DNA, district needed areas, creation management monitoring. And I have to say, you were the best boss I've ever had because all you did was signed off my expenses and life went on. There was a good command of management throughout the company, and I have to say, the work that we did at the time, I've tracked that as a master's degree in leakage management in DNA creation, planning, and operation. I didn't realize at the time, but it gave me a very good grounding in how to organize and implement a successful non-revenue water project. During the year and a half there we implemented something like 80 odd DNAs within the Fife area, whereas the other consultants who were working with Scottish Water didn't get out of single figures. We did extremely well, and it set me up for what came next. So, I spoke to my ex-boss, he said, I need somebody like you in Lisbon. When can you come over? I came back over to Portugal on the last flight of 2004 with two suitcases, and started on 2nd of January, 2005 with the remit for reducing non-revenue water.
[00:04:36] Piers Clark: That's a perfect bridge to talking about the organization you work with; Aguas de Portugal International.
[00:04:42] Andrew Donnelly: It's a fairly distinct setup in the sector in Portugal where the majority of water supply and wastewater treatment is undertaken by operational companies within the state water utility, which is Aguas de Portugal. We have one shareholder, which is the Portuguese government. And I don't think there's any risk of it being on the privatization agenda from either of the main parties. So, we have the central holding company and other central support companies like AdP VALOR. The great power of the group though, are the 13 regional water treatment and wastewater treatment utilities. Some do just water, some do just wastewater. Some do both. But these are essentially bulk, treatment and supply companies who supply to mostly municipal utilities or municipal companies, or there are some relatively small number of private concession operators.
So it's very much bulk supply. And so, the power of group is in the operational companies and the international company then represents the Portuguese water sector internationally. For example, a few years ago there was a hurricane in affected Mozambique. The Portuguese government delegated millions of Euros in terms of support to the Mozambican government. And the vehicle to provide that support was the AdP and AdP International to facilitate and coordinate that support of reestablishing water supply and wastewater supply in Mozambican cities. We are essentially a business; we have technical support and consultancy projects. We also do a significant number of training capacity building with other utilities worldwide. Largely or historically, mostly connected with the former Portuguese colonies, but for various circumstances, be that social or economic, those perspectives are changing and we are very active in the Indian subcontinent and the far east now. So, it's very much based on the capacity that is inherent within the group. International is a very small company, but more like we're the ambassadors of the other companies and the colleagues in the other groups. And as I said, of the company outside of Portugal.
[00:06:41] Piers Clark: That's a great summary of international. And a couple of weeks ago we actually interviewed Nuno Brôco, who runs one of those operational companies. Give me some scope around the size of international. You've mentioned who you work for. How many people are involved in Aguas de Portugal International?
[00:06:57] Andrew Donnelly: It's very small because there's only about 25 of us, but we act as the coordinators for other colleagues from the group. You mentioned Nuno Brôco from Aguas do Tejo Atlantico. Some of his team members have been involved with us in various projects. They're subcontracted or delegated from Tejo Atlantico, the operational company, to a specific project, which could just be a week of training. It could be a month abroad, three months, or we have projects which go up to four years.
[00:07:24] Piers Clark: I think I've got it. You've got Aguas de Portugal, which has got these, mothership companies that sit across all of the assets. And then you have the individual operational companies firefighting the day-to-day projects. Yet the strategic expertise sits up in the top companies of which Aguas Portugal International is one of three and you are the sort of gatekeeper, the owner of some of the particular expertise around non-revenue water. Have I got that right?
[00:07:52] Andrew Donnelly: Yeah. My whole career in Portugal has been dealing with non-revenue water. But since I've moved to international, I think something like 80 or 90% of the projects or proposals and the topics that we've been involved with have involved non-revenue water in some form or other. I use the phrase it's a catalyzer for change. It's at the center of change of utilities. A lot of the projects that we're involved with are about governance, reorganization, restructuring of other utilities, and I see non-revenue water as a tool for change. You need inputs from virtually every part of a company. Be that maintenance, operations, commercial, water quality, and if the data isn't there that you need to create your indicators for non-revenue water, then these operational areas need to contribute to them. But you will create tools which they can then use to improve their operations of their network.
[00:08:42] Piers Clark: Let's get to some case studies of taking non-revenue water expertise that you've developed and finessed inside Portugal, and exporting that to some of the international areas.
[00:08:52] Andrew Donnelly: I think what we have to do is repeat the story that we did at EPAL in Lisbon where, apart from some leak detection training with the utility in the UK, we did everything in-house. We help others create their own capacity so they can manage their own house accordingly. We adopt and adapt best practice because no utility, especially in the international situations where we work in, has the same situation. Projects that we've done in Angola, in Mozambique we are talking about intermittent supply. You can't straightaway use the same set of indicators that you would use in the UK or Portugal or Europe or North America. You don't have the same level of data.
[00:09:27] Piers Clark: It's the level of data rather than there's different metrics that you need to be looking at?
[00:09:31] Andrew Donnelly: It's different metrics that you need to be looking at. You need to be looking at daily consumption patterns, weekly consumption patterns. And the project that we did in capital of Angola in Rwanda was to create DNAs not necessarily as a leakage management tool, but as a network operational tool that you know how many clients you are supplying for how long and where exactly they are. Now to do that, you need your DNA setup, your GIS, your customer relationship management software, your customer database, all updated so that you know exactly where and when your water is going. Your objective with the DNAs is non-revenue water, but first you need to get the network operational. And lots of times in these projects we're aiming to improve the duration of supply to get 24-hour seven-day supply.
[00:10:15] Piers Clark: So tell me about the Angola experience. How did that appear on your desk and what drew you there?
[00:10:20] Andrew Donnelly: The project was to create a monitoring system. They already had an internal leak detection team. It was just open networks coming from a relatively small number of reservoirs where they didn't know where the water was going. And especially in the center of the city, they were aiming for 24-hour seven-day supply. Go through the process of how you plan doing DNAs, what you need to do that, again, we go back to the GIS and the customer database. How you pull all your data together to come up with a DNA plan, how you implement that DNA, what are the procedures you need to do to monitor that DNA, and look at the data once you've got it to decide whether it's performing well or not. Both in terms of water supply, in terms of leakage.
[00:10:57] Piers Clark: How long did the project take?
[00:10:59] Andrew Donnelly: It was meant to take three years. But, as with many projects in the African continent, other factors get in the way. It's been on pause for a while now, but we've been in back in touch with them and we're hoping to go forward again. It's the oldest and largest water company in Angola as well. It was a natural sort of partnership. And hopefully we establish contacts and practical work again in the future. Lots of this is political and financial influences. Angola has been in a particularly difficult financial situation where they don't want to take on any more external debt.
[00:11:28] Piers Clark: Can you provide any comment on the commercial arrangement?
[00:11:31] Andrew Donnelly: There's a real mixture; there's probably three different areas. There are pure commercial activities where it's international competitive tenders. These will generally be funded either by the local government or in collaboration with one of the funding authorities, say the World Bank, the Asian Development Bank, African Development Bank. So, there is some sort of financial security behind that, but it is a competitive process. So, we spend an awful lot of our time for proposals to gain these contracts. The other times they can be direct awards from either the government ministries. And a lot of these are commercial activities and a lot of them are not-for-profit; it's training, collaboration, capacity building. It's very much just covering our costs. And it's with the ambassador hat representing the group in the country that we're promoting the country itself and possibly opening the doors for commercial contracts.
[00:12:18] Piers Clark: I'm trying to get my head around whether Aguas de Portugal International is a profit-making venture. Its shareholders have it existing because they want it to deliver a financial return or whether it's more about soft power and influence and sharing expertise.
[00:12:33] Andrew Donnelly: I think it's a mixture of both. Obviously, the last few weeks and months we've had great influence from the other side of the Atlantic where USAID has been stopped. That's not an entity that we dealt with directly, but it sends ripple through the whole area. There's a lull in funding of projects at the moment, and then, in a few months’ time we can have another peak. We've got several very profitable projects underway. We've been stretched in terms of the number of projects that we've had. So, it just depends on various factors, both regional and completely international.
[00:13:04] Piers Clark: Tell me about something you are particularly proud of that you've achieved over the last 25 years.
[00:13:09] Andrew Donnelly: It's creating new professionals who were available to replace me. I was there for 18 years and the fact that when I left, there was a natural progression of the team who'd largely been with me for 15 to 18 years, who were then promoted within the team and took over without any great dramas. And I think that is probably the biggest feeling of success that I feel is that I've replaced myself. We were lucky that we could contract newly graduated engineers, a blank sheet of paper, who are now, 15 years later, experts in non-revenue water and DNA management and telemetry and all this sort of thing. And I think that's the best thing that we can do- not be dependent on any one person. Water and wastewater is a very conservative sector because we need to be there 24 hours, seven days a week without any great dramas and issues. And we need that continuity of supply and continuity of support.
[00:13:59] Piers Clark: We're coming to the end of our time together. I'd like to ask you; what do you owe your parents?
[00:14:04] Andrew Donnelly: The basic support of letting me find my own way, of always being there to support me in whatever I chose to do. Not complicating things and just being there and knowing that reassurance and that support is there behind me.
[00:14:18] Piers Clark: You have been listening to the Exec Exchange with me, Piers Clark, and my guest today has been Andrew Donnelly, a board member at Aguas de Portugal International, and we've been talking about how to export non-revenue water experience to other countries. Hope you can join us next time. Thank you.