The influence of commercial and customer orientation on utility efficiency: empirical evidence from NWSC, Uganda

Many water utilities in low income countries, in an effort to revamp their performances often begin with heavy infrastructural investment projects. Experience has shown that focussing on this engineering approach alone does not deliver the required efficiency gains. In this paper, we make use of data drawn from the operations of 14 NWSC utilities and our study covers the period 1995-2004. Due the non-availability of input price data and the need to account for ‘noise’ the study uses stochastic frontier analysis(SFA) to show that after a long spell of engineering orientation, a shift in emphasis to commercial/commercial orientation has a positive impact on reduction of utility technical inefficiencies.