Financial Management of a Hypothetical Water Network Using System Dynamics

Document Type

Conference Proceeding

Publication Date


Publication Title

World Environmental and Water Resources Congress 2018


In the recent years, many metropolitan cities are facing economic problems with the rehabilitation of their water distribution system. With time, the failure rates and leakage in the pipes will increase even with some of the rehabilitation efforts taking place. Thus, water utilities should consider seeking strategies for water pricing and the system rehabilitation to prevent their existing distribution network from deteriorating. The objective of this study was to understand how different management techniques implemented on a hypothetical water distribution networks would result in a sustainable management of water infrastructure. Using System Dynamics approach, a simulation model was developed to study the impacts of management strategies on the distribution network functionality and financial health over a 100-year time horizon. The model considers the interactions among distribution network sector (existing water network differentiated by age), Finance Sector (user fee, profit/loss account, debt and available cash) and lastly, consumer demand sector (change in water demand due to population). The study exhibited a comprehensive analysis for a utility on achieving financial sustainability with a comparatively lower user fees with adaptation of rehabilitation measures. Results of the current study can be used by water utilities to analyze different approaches for sustainable financial and infrastructure management.


Water Resource Management



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