Efficiency benchmarking of wastewater service providers: An analysis based on the Portuguese case

Abstract

Sustainability is increasingly important in the wastewater treatment sector, and benchmarking studies are needed to identify the best practices in using resources efficiently. This work addresses this need by characterizing and benchmarking this sector in Portugal. Data from around 120 service providers, from 2015 to 2019, regarding inputs consumption, desirable and undesirable outputs, are used in a data envelopment analysis to benchmark these operators and to determine improvement potentials. A productivity change analysis revealed an increase from 2015 to 2019, essentially due to an increased technical efficiency. On the other hand, no real technological change seems to have occurred. A positive effect of the service providers dimension and certifications (quality, environmental and energy) on efficiency was found. Service providers with concessionary governance models and urban typology presented the highest efficiencies, whereas treatment plants underuse contributed negatively to efficiency. These results can inform the definition of strategic policies for the water sector, namely concerning the aggregation of small providers. The proposed methodology, based on the use of a comprehensive new set of studied variables and explanatory factors, allowed to determine the best characteristics regarding the techno-economic efficiency of Portuguese service providers, and can potentially be applied to identify role models in other countries.