Government have invested in lots of budget to Local Sewage Systems but criticism is rising over the efficiency of it's construction and operation. The purpose of this report is to evaluate the relative efficiency of Local Sewage Systems. This report estimates the relative efficiency and productivity change of Local Public Enterprises through Data Envelopment Analysis(DEA) and Descriptive Statistics.

The results of evaluation are as follows: First, the analysis shows that there are severe inefficiencies of investment and management on the Sewage Facilities. For example, there was 40% surplus on the employment and operating expenses of some sewage facilities compared to the efficient ones. Second, it is proved that Local Sewage Systems wasn't influenced by economies of scale because they are constructed and operated on an excessively small scale.

In this report, several policy recommendations are suggested. In the first place, National Sewerage Plan should be established based on reasonable demand estimation. In the second place, Competition on sewerage projects should be activated by expanding private commission or investment. Furthermore, Horizontal and vertical reform of structure must be carried out as multi-region sewerage projects.