The Benefits of Performance-Based Contracts

Mar 27, 2023
 by Seven Seas News Team

Performance-based contracts put all aspects of water and wastewater treatment in the hands of professionals.

In water and wastewater treatment, these financial structures can streamline operations without risk

Water is a basic necessity of life. It’s essential not only for our health and well-being, but also for social and economic development, so it’s critical that water supplies be managed efficiently.

However, managing water supplies may be only one responsibility carried by business executives and municipal officials, who may lack the experience, capacity, or resources to thoroughly understand its complexities . There are many advantages to outsourcing water management to water-industry professionals through performance-based contracts.

For example, with a performance-based water management contract such as those provided with Seven Seas Water Group’s Water-as-a-Service® (WaaS®), clients are provided with a reliable and safe supply of water managed by a team of knowledgeable water professionals with experience in addressing water challenges including contaminant removal, meeting increasing demand, dealing with aging infrastructure, and mitigating the risk of water scarcity.

Payment Is Based on Water Output

Expertise isn’t the only advantage of using a performance-based contract. Rather than having to finance the construction or upgrade of a treatment plant, and deal with operations and management, water management needs can be outsourced to water professionals who will take care of business by designing, building, and operating the plant on their client’s behalf.

With a performance-based contract, the client is guaranteed a specified quantity of water at an agreed price, and pays only for the water delivered according to this agreement. There are no upfront capital costs and no day-to-day running costs, other than the contract-specified cost of water supplied.

Addressing Non-Revenue Water

Non-revenue water is produced water that is pumped into a water distribution network but is lost due to leaks, theft, or other problems before it reaches customers and can be billed to them. It is estimated that the average water utility loses approximately 20%, or one-fifth, of the water it produces as non-revenue water.

Addressing non-revenue water means more income and less pressure on freshwater resources, offering environmental benefits and improved water security, too.

Signing a performance-based contract with a team of water professionals could help a water utility overcome these challenges in several ways. It’s in the water managing company’s best interest to do so, because they are paid only if they achieve targets in terms of the quantity and quality of water supplied.

The water management contractor takes responsibility for how this will be achieved, including appropriate implementation of technology and allocation of staff. An experienced contractor scrutinizes practices across operations, and maintains production and delivery infrastructure, and all other issues that might arise.

With Seven Seas’ WaaS®, you get a reliable supply of good quality water at a guaranteed cost within your agreed-upon budget. From the design and construction of a plant to its operation, maintenance, and management, Seven Seas bears all risks associated with the project. Contact Seven Seas to learn more about WaaS® and how it can benefit your water utility.

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