Last Updated:
25 Aug 2019

Case Study on the Performance-Based Contract in Ho Chi Minh City

In 2005, Vietnam’s largest city, Ho Chi Minh City (HCMC), did not have enough water supply to meet demand. More than 40 percent of the water produced was lost as leakage. Supply was intermittent. To increase supply to customers, the state-owned water utility, Saigon Water Corporation (SAWACO), competitively procured a contractor to enter a performance-based contract (PBC) for non-revenue water (NRW) reduction, with a focus on leakage reduction in one of its six hydraulic zones. In a different zone, SAWACO implemented a traditional approach for leakage reduction, with remuneration based on inputs instead of outputs. SAWACO chose to implement both approaches at the same time to learn the strengths and weaknesses of each approach.