Prepaid water is a contentious issue. But widespread prepayment of water is fast becoming a reality, following the development of a new water and electricity prepayment dispensing system developed jointly in South Africa by Syntell (formerly Tellumat Electronics) and water-flow specialist Rhomberg.
South Africa has provided a unique testing ground for this remarkable innovation, which offers a failsafe solution to the worldwide problem of collecting revenue in arrears for core services. It will also facilitate the recovery of hundreds of millions in outstanding water revenues, in much the same way that it has done for electricity.
Already installed by over 100 local authorities throughout South Africa, Syntell's electricity prepayment vending system bridges the gap between the end-user and the utility. Key to its success is the Synapse system, supplied by Syntell Networks (a Syntell joint venture company) which uses a graphic user interface and operates on multiple platforms. It employs a centralised database with real-time integration and billing for on-line transaction processing.
“Our vending system controls the sale of over R60 million in electricity per month in South Africa, and provides management information for the most successful prepayment sites in South Africa,” says Syntell Networks director Michael Evans.
According to Mark Chewins, managing director of Syntell, electricity arrears have been reduced to around R70 million in Cape Town, South Africa, where the system handles over 170 000 meters and sales of over R40m per month.
“The corporatised electricity utility of Greater Johannesburg Council, City Power, has recently commissioned the Synapse system to manage their prepayment customers and to facilitate free electricity. It is possible to upgrade the system to manage prepaid water supply as well,” explained Chewins.
He said a fresh approach was required to continue to develop and incorporate the latest IT technology into these systems, and Syntell Networks Software proposed an inventive upgrade and development path. Synapse extends the existing vending system from an off-line to on-line transaction processing model but allows both models to operate together.
The benefits of on-line transaction processing are:
- Far simpler client software and hardware.
- No data synchronisation issues.
- Real-time integration with billing system.
- Centralised database and security modules.
The benefits to utilities are:
- More vending points at a lower cost of ownership.
- Easier system management.
- More efficient arrears collection.
- Increased database and encryption security.
Centralising the transaction database and encryption modules which generate the electricity tokens is the safest architecture for an electricity prepayment vending system. It gives utilities complete control and peace of mind that the vending system is not mismanaged in the field.
The system deployed in Cape Town has been an enormous success and the feedback from consumers, the vendor and vending staff was very encouraging and positive.
Tamperproof and debt-proof
Crediting an individual account with free water and electricity is a simple matter, but collecting outstanding revenues for consumption in excess of these levels is more tricky. Consumers can rightly demand their free water every month, leaving the service provider with the problem of connecting and disconnecting the service to deliver on credit where it is due. The answer clearly lies in a prepaid system.
“Syntell also offers a complete outsource model to local authorities. We supply, install and operate the entire vending system for a fee linked to the revenue collected by the system,” said Chewins, adding that this innovation is also applied to the collection of other revenues, including account and fine payments.
The new water and electricity prepayment dispensing system has already been commissioned by the local authorities of Ladismith and Mossel Bay in the Southern Cape, South Africa. These are both rural towns in traditionally dry areas where the meter has been welcomed as a ideal solution to water and power measurement problems.
The impact on revenue flow is nothing less than spectacular. Ladismith reports that there is not one cent outstanding in water arrears from new housing developments with the new meters. Francois Human, town clerk of the Ladismith municipality, said: “We are highly impressed with this system, which creates an invaluable mechanism for local authorities to manage and control resources over a vast area. Our experience is that the poor do want to pay for their services. For people who do not have a regular income, it provides the opportunity to pay for water and electricity when they have the money.”
Ladismith residents who've had the prepayment system installed in their homes say the technology is a real win, from the point of view of managing the monthly budget. “It has never been this simple to monitor our power and water consumption,” says resident Michael Pietersen. “We can purchase power and water each week without the fear of running up a huge debt with the municipality. The unit also shows us exactly how much power each implement in the home uses. This helps us to adapt our domestic habits, enabling us to save power and money.”
The system consists of two elements – the Syntell customer interface unit (CIU) and a Rhomberg water dispenser unit, which provides measurement and control of the service and replaces the conventional water meter.
“The two elements of the system are installed separately and connected by a unique link-cable that provides a high level of security to ensure stable operation and reliable data transfer,” explains Syntell's Technical Manager, Roger Lewis. Any attempt to bypass this connection will result in the water supply being cut off.
According to Lewis, the Rhomberg water dispenser unit is a fully enclosed entity containing an SABS approved water measurement unit with a flow sensor control valve and an electronics interface. A thorough and careful analysis resulted in this system, which was designed and manufactured in South Africa, meeting the requirements of both the service provider and the consumer. For example:
- No batteries or limited life components are used, eliminating costly routine maintenance and upgrade imperatives.
- Materials used are mostly plastic, limiting theft for scrap value.
- Environment-friendly, rugged construction.
- Convenient entry of credit – from home.
- Simplicity of installation and operation.
Mark Chewins explains how management information is readily available, as the tokens are generated from vendors, and data associated with each consumer is stored in the master station’s database. “Customer trends can be tracked, and defaulters easily identified. Additional charges can be structured for each individual user, to take care of other levies such as service connection fees, variable tariff structures and recovery of previous debts,” said Chewins.
“One CIU accepts tokens for both electrical and water services, but each can be monitored separately within the CIU. When electricity credits expire, the water supply will continue until those credits are used. For the supply authority this means that the investment cost for the provision of a prepayment water solution is dramatically reduced,” he said.
Streamlining revenue management
“Good news,” says Chewins, “is that for local authorities equipped with a vending infrastructure from Syntell, the additional need for water management can be incorporated into the same system through upgrading the existing system. The Syntell system will maintain separate water and electricity records and revenues can be streamed to the appropriate operational accounts without losing flexibility or data transparency.”
The system is also able to integrate with vending systems supported by other suppliers through Standard Transfer Specification (STS) software. It allows the Tellumat CIU to accept tokens generated by other vending systems that support the STS standard.
The key to the success of any prepaid system lies in the vending system. Perfected over five years, the system is designed to overcome the problems of economic viability, reliability and security, which have bedevilled the development of an extensive prepaid water metering network. The service provider won't be burdened with connections, disconnections, meter-reading or costly debt collection. And the payer will no longer have to subsidise arrears. There are benefits all round.
“Syntell has invested over R50 million (US$10 million) in public-private partnerships, and we are enormously proud of the role we play in helping to improve service delivery to local communities and in improving the quality of life of communities,” said Chewins.