"We want to become a key competitor in the Spanish concession market"
'Ensuring water abundance through efficient management'. Miya was born in 2008 with that mission. Eleven years later, and just after being bought by the international PE group Bridgepoint, we can say the company has proven through its actions that the dream of founder Shari Arison could become true. After a successful trajectory reducing non revenue water (NRW) that includes textbook cases of success such as the one in the Philippines with Maynilad Water Services, in 2016 Miya entered into the water operator business. The results of the acquisition of Portuguese company Indaqua confirm we are before an impressive competitor, whose next objective is Spain. To learn first-hand about theirs plans for expansion in Spain, we spoke with Amit Horman (CEO of Miya), Noam Komy (Chief Growth Officer) and Enrique Castiblanques (CEO of Indaqua). From our conversation, which you can read below, we can see that their proposal will stir the peaceful waters of the Spanish concession market.
Question: Firstly, we would like to know about your career paths up to your current position at Miya.
Amit Horman: I have more than 10 years' experience in the water sector. I started my career in the financial sector, leading some IPO processes in the tech sector. Later on, I moved to the high tech field in various positions, including Senior Operation positions in multibillion companies. In 2008 I joined Miya Water, where I have been Chief Executive Officer and Chief Financial Officer.
Noam Komy: I started my career in law specializing in utilities, administrative and environmental aspects. I joined Miya in 2013 as Vice President Strategy Corporate Development. Currently I lead the growth activities of Miya including M&A and international business development.
Enrique Castiblanques: I have more than 20 years of experience in the water sector mainly in Portugal and internationally. Prior to Miya, I worked in Aguas de Portugal as CEO of the concession arm, that was later privatized. In 2016, I joined Miya as Vice President of Concession Management and CEO of Indaqua.
After a successful trajectory reducing non revenue water (NRW) that includes textbook cases of success such as the one in the Philippines with Maynilad Water Services, in 2016 Miya entered into the water operator business.
Q: Miya Water was born with the goal of ensuring an abundant supply of freshwater through efficient management of existing resources. What have been the main milestones for the company since then?
A.H.: Miya was established in 2008 to change the way that people interact with and use water resources. The idea was that through efficiency you can achieve significant results and change the way water utilities conduct their operation. After winning and performing large scale efficiency projects focused on non revenue water reduction for utilities worldwide, Miya decided to purchase and operate utilities, aiming to create value through improving the operational and financial results. In 2016 Miya acquired the control of the largest private water operator in Portugal, establishing itself in this segment.
We operate in two segments: as a water operator, and in the field of water efficiency. We provide end-to-end integrated solutions for urban water systems and act as the operator of water and waste water assets, mainly through long-term concession-based business models.
Nowadays, we are one of the leading efficiency-oriented companies in the water sector, with vast experience and a full range offering for water utilities including water efficiency, commercial management and water treatment. Miya provides urban water efficiency tools, designing and implementing solutions that significantly improve the clients' financial and operational efficiency. Moreover, it supplies water and wastewater services to more than 1.4 million people in Europe, North America and Africa through various engagement models.
Q: Early in 2019 the acquisition of Miya from Arison by the British fund Bridgepoint, for 260 million dollars, was announced. What will this acquisition mean?
A.H.: The acquisition of Miya by Bridgepoint represented a milestone for the company. It showed the confidence the financial sector has in Miya and its management team, which has remained in place and invested significant capital in the company. Thanks to Bridgepoint, Miya has strong financial backing to support growth, including through M&A.
It also gives us more capacity to expand our presence, not only at the local level but also internationally. Bridgepoint is a relevant player in Iberia holding in companies such as the Spanish Dorna, an international sports management, marketing and media company, or the Portuguese Sapec Agro Busines, an agricultural crop protection and nutrition business.
Q: Miya has been present in the Iberian Peninsula since 2016, through its subsidiary Indaqua. What is the company's experience in Portugal?
E.C: Through our subsidiary Indaqua, we operate, within six municipal concessions and one public-private partnership (PPP) company, comprehensive solutions for managing the entire water cycle, including the distribution and collection of water and wastewater resources. Indaqua is the largest private operator of municipal concessions in Portugal; it delivers water to more than 600,000 residents (approximately 30% of the market share in terms of population served) and maintains commercial relations with more than 200,000 customers. Indaqua also manages the water cycle in Angola, in three provincial capitals, through the company Vista Water, providing services to more than 500,000 people.
Miya has assisted Indaqua in expanding and growing its offering for its municipal water clients, while working to improve the company’s financial turnover and overall economic benefits from each of the concessions projects. Since 2016, the EBIDTA has grown 15% per year with no tariff increases, while growing the HR budget. The growth is the result of increased efficiency and excellent operating performance. Worth noting is we have implemented, for the first time in Portugal, a performance based business model, similar to one used in projects in other countries. Under this model, municipalities only pay a variable rate based on the performance indicators we achieve or the value we deliver at each point in time. We are already partnering with two important Portuguese cities using this novel business model, and we hope to win new contracts in the near term.
Q: What do you think about the Spanish concession market? What would you say are its strengths and weaknesses?
E.C: We believe the Spanish market is strong and stable. It is an interesting, mature market. We believe that new players in the market, such as Miya, can offer new possibilities both to local municipalities and end users.
We are aware of all the bid opportunities that will be in the market in the coming years and our goal is to become a relevant player in the Spanish concession market. In Portugal, which is a different market, we introduced the performance based contract. Under this type of model, the benefits and the efficiency achieved are shared between operator and client, with situations where the remuneration of the operator varies, depending exclusively on performance. That is something we would like to implement also in the Spanish market.
One of the main weakness that we have found is the efficiency in the sector. We want to encourage efficiency in the market, implement our knowledge and know how. We consider that the market is somewhat outdated, without an efficiency-driven, comprehensive approach. Our goal is to offer, both to customers and clients, efficient performance thanks to new proposals and ideas, and meet the client's needs with a comprehensive model.
Q: What are your plans for expansion in Spain?
N.K.: We deeply believe in the Spanish market. We are going to bet for it. We want to become a key player in the concession market; moreover, we want to implement and apply our knowledge about water losses, an area where we are world leaders. We understand this is a local market, and thus, we are looking to partner with local companies. For example, in Catalonia we have reached an agreement with RUBAU, a Spanish construction company, engaged in both civil engineering and building, that is well established throughout Spain and has a significant presence abroad. RUBAU has more than 600 employees and is currently undertaking important works, some of which have become industry benchmarks.
We choose projects and places where we can make relevant contributions thanks to our know-how and experience - Noam Komy
We want to be part of the market, shake it, offer new models. We believe that end users deserve a better quality service. We intend to improve the service with a technical approach and with new financial models. We believe our growth engine is the water operation segment, in which we operate mainly through the concession framework in urban distribution networks; our goal is to optimize their efficiency and improve the quality of service for the public, while working to increase returns for our shareholders.
Q: What about at the international level? What world regions are you most active in?
N.K.: In addition to Europe, internationally we focus on Latam and Caribbean. We choose projects and places where we can make relevant contributions thanks to our know-how and experience, both in the concession and water efficiency markets. We also focus on those international projects that have a significant impact on the industry. For instance, Miya has been shortlisted in Saudi Arabia for a first stage project of privatization. Moreover, in the American continent we have been awarded a 15 year multi-billion dollar project, where the company will improve the metering system and customer experience.
Nowadays we have an important presence in the Caribbean Area, in particular in Bahamas and Jamaica, two countries where we found high needs which can be met by applying our knowledge about non revenue water.
Q: You mention the award of a significant project in the American continent. Could you give us some more details about it?
A.H.: Well, we cannot say too many things yet, but we can confirm that Miya has been awarded a project worth several billion USD. For the next 15 years we will implement and apply our knowledge to improve the metering system and customer experience applying smart water network technology.
Q: One of Miya's hallmarks is the commitment to increasing the productivity and efficiency of urban water services. What are the keys to achieve this?
A.H.: The origins of Miya are reflected in its Water Efficiency segment, in which Miya optimizes urban water distribution systems (both private and public) through the execution of performance-based water efficiency projects. They are aimed at decreasing non-revenue water, that is, water that is pumped into the distribution system, but that is not billed by the water utility. Miya has developed a four stage approach to implement measures that improve efficiency. The first one involves an in-depth analysis of the existing water system. Next, we produce a work plan detailing required activities, timing and necessary resources. After that, the plan is implemented, comprising a full range of cutting-edge technologies. Finally, maintenance is secured through training (from the beginning of the project) and certification of utility management and staff.
These steps are applied in projects that include both physical and commercial losses, as well as in projects that only involve commercial management: meters, billing, payments or reading routes, among others. The purpose is to gain important commercial efficiency for the utility.
Q: You specialise in reducing non revenue water. It is a broad concept. Which variables are included?
N.K.: When we talk about reducing NRW we must consider real losses and apparent losses. To reduce real losses, we work on four aspects: leak detection, pressure management, the speed and quality of repairs using good quality materials and lastly the rehabilitation and renewal of infrastructure that are beyond their useful life.
On the other hand, there are apparent or commercial losses. They comprise meter errors or readings errors that cause financial losses to the company. To minimise them we work on meter replacement, we address meter reading errors (due to false, incorrect or estimated reading data), and we reduce data input mistakes, thereby improving billing accuracy.
Q: How does Miya work in this specific area, and what are your main success stories?
N.K.: Miya has developed several successful projects applying its water efficiency know-how. The main objectives are: improving efficiency, mainly through cost effective NRW reduction, and enhancing the utility's capabilities. We found several variables to follow. First we identify the most relevant KPIs for the client, then, we develop a commitment regarding KPI goals. Then, we arrange both technical and financial resources to reach (and exceed if possible) the KPIs, and finally we ensure the continuity and efficiency of the project even after our departure.
Bahamas. In 2012, The Water and Sewerage Corporation of the Bahamas (WSC) — a government-owned water utility that manages, maintains, distributes and develops the country's water resources, and supplies drinking water to 250,000 residents of New Providence, home to more than 70 per cent of the country's total population — signed a ten year performance-based contract with Miya. The purpose was to reduce water losses in marking the utility's commitment to a comprehensive long-term solution to maximizing the efficiency of its water delivery systems and reducing the amount of NRW. Thanks to Miya's performance and expertise we achieved 24/7 service for customers, and reduced NRW from 60% to 17% (2019).
Jamaica. In 2015, The National Water Commission (NWC) — a statutory organization that provides more than 700,000 m3 of potable water each day to more than 2 million people in Jamaica — signed a five year contract to maximize the efficiency of NWC’s water systems in Kingston and Saint Andrew (population over 600,000), reduce leaks, and create a productive structure in NWC. Before the project (2015), water loss for the utility was estimated at 60% of the water produced. Thanks to Miya’s performance, the water loss was reduced to 40% (2019). Moreover, comprehensive training of NWC personnel was completed, as well as improvements to the network infrastructure, including better GIS data, replacement of hundreds of system valves and isolated repairs.
INDAQUA. Efficiency is more than NRW. This is the case of INDAQUA. In 2016, when Miya arrived to the company, we decided to implement again our knowledge and expertise. We applied our value based approach. The idea is doing more with less. Since 2016, tariffs have not been increased, our HR budget has grown, and we have transformed the company into a more productive one, improving our assets from a sustainability point of view. A level of water quality, suitable for human consumption, was assigned, and performance was enhanced, reducing NRW by 15% (average of the Group's concessions) and reaching an Infrastructure Leakage Index (ILI) close to 1.
Philippines. In 2009, Maynilad Water Services Inc., a utility providing water and waste water services to the 17 cities and municipalities in the west metropolitan area of Manila, partnered with Miya to carry out a NRW management project to reduce commercial and real losses over five years. The results after the work done by Miya were: NRW reduction from 64% to 34%; more than 2.5 million (433,000 customers) connected to the water supply, as well as 24/7 water services for 99% of the population.
Read all the latest news from Miya, the world leader in efficient water management, in their Smart Water Magazine microsite.
Q: Digitalization offers great opportunities to improve efficiency, in the water sector too. Based on your experience, which technologies are having the most impact?
N.K.: We truly believe in the importance of data for decision making, to the point that it is part of our daily activities in all of our projects. We believe that a Smart Water Network is having the most impact. It helps us to collect and use comprehensive data to reduce water losses. The process helps the company to increase revenues, optimise the billing system and improve customer experience. Moreover, in the long term it also helps to improve the efficiency, durability, and reliability of the water network through data collection and analysis, and acting upon a wide range of network events. All of that is possible because at Miya we work with the latest technologies available.
Q: When we talk about implementing this type of tools, we often encounter a significant barrier: cost. How can it be overcome?
N.K.: From our perspective, it is not a cost, but an investment. Why? Because we are interested in obtaining results that are consistent with the investment needs and will bring about the desired impacts. We make all kinds of investments as long as they bring value to the project, which is, in our opinion, the main objective that any operator should have. We tell our clients that we do not have any commitment to any particular technology, we understand that different systems have different capacities. Every single project has singular aspects so we adapt to customer’s needs.
Q: Do you think these new technologies such as Artificial Intelligence, Big Data or IoT can lead to a disruption in the water sector, to the same extent we have witnessed in other industries?
A.H.: Absolutely. The water sector needs a change. Perhaps, the question should be when will it happen and which companies are ready for these changes. At Miya we believe that efficiency is a precondition for the optimal use of new technologies. Beyond technologies, the impact can also happen through other types of innovations, specifically concerning business models. It is here where Miya tries to stand out. How? By introducing new proposals into the market. For instance, differentiated contract models, that encourage both public institutions and citizens. A clear example is Bahamas, where thanks to the performance based contract, both institutions and citizens benefit from record results obtained in less time than expected.
Q: Finally, you would like to increase your presence in Spain and for that you will need to attract talent. Why is it attractive to work for Miya?
We do not have any commitment to any particular technology, we understand that different systems have different capacities - Noam Komy
A.H.: Miya employs over 700 individuals around the world, which makes the attractiveness of the company as an employer a material issue for the company. Exciting opportunities and inspiring international teams are emerging. Every individual should feel fulfilled, be provided with opportunities to realise their own potential and be actively engaged with the organization, its mission, values and way of doing business. Miya is an international company. We are a young but well established company; our leaders have an open mind that brings out the best in each person and encourages team work. The Human Resources Department invests a lot of effort on training that covers different areas, professional development programmes according to each employee's potential, and the design of national and international careers based on emerging projects. Our communication is horizontal and transparent. In addition, we have policies to favour a work-life balance (flexible work schedule, flexible remuneration, teleworking, etc.) Ultimately, at Miya we defend those values aligned with those of the employee.