Much that has been written about leakage economics and strategy, has been aimed at either the leakage specialist or the economic regulator. This paper aims to make the practitioner aware of the key messages from the theory, and the issues which have to be taken into account, when developing appropriate policies and practices.

The most important aspect of any leakage strategy is the leakage target. What level of leakage should the water supplier aim for, and what level should be maintained in the longer term? In an ideal world, every water supplier would like to eliminate leakage from water distribution systems. However, there will always be a level of leakage which has to be tolerated, and which has to be managed. The paper gives an overview of the prime techniques for leakage management, which have been referred to as the four “pillars”. Each of these follows a similar law of diminishing returns on investment to make savings in leakage. The key issues for introducing these four elements are discussed, together with the steps required to calculate the economic level of leakage.

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