For developing countries the World Bank has estimated that, on average, apparent losses – in particular theft through illegal connections – account for about 40% of NRW.
Reducing apparent losses from illegal connections is often beyond what a utility can achieve by itself, because it requires a high level of political support.
[3][4] Unvalidated water audits are desktop studies that include many estimates and their results can have an error range for real losses of ± 50% or more.
Validating water audits is a complex process that involves testing of production water meters, testing of a representative random sample of customer meters, eliminating systematic errors created through the billing process and validating the number of illegal connections through aerial mapping, field surveys or cross-references between various existing databases.
This problem can be eliminated by measuring NRW not as a share, but in terms of absolute losses per connection per day, as recommended by the International Water Association (IWA).
The concept of NRW as an indicator to compare real losses of water utilities has been criticized as flawed, particularly because real losses depend to some extent on factors largely outside the control of the utility, such as topography, age of network, length of network per connection and water use per capita.
The World Bank has estimated the total cost of NRW to utilities worldwide at US$14 billion per year.
[37] The reduction of commercial losses, while politically and socially challenging, can also improve relations with the public, since some consumers may disgruntled to know that others are underbilled.
All required a long-term commitment by utility management and the government – local or national – over a period of at least four years.
Both apparent and real losses have a natural tendency to increase if nothing is done: more leakage will occur, there will be more defective meters, and information on customers and networks will become more outdated.
[46] Additionally the implementation of an Intelligent Pressure management system is an efficient approach to reduce the total real losses in the long term.
[47] According to a study by the World Bank some of the reasons why NRW levels in developing countries have not been reduced significantly are the following.
There are fewer financial incentives for a utility to reduce NRW if water production is cheap, if there is no or little metering (so that revenues thus are independent of actual consumption), or if volumetric tariffs are low.
The first national study on the topic was published in 1980 setting down a methodology for the assessment of economic leakage levels.
As a result of a drought in 1995/96 a number of companies initiated major leakage management programmes based on economic assessments.