International Price Of Water
Author(s)
A. R. Perks & T. Kealey
Abstract
Full cost recovery is a desirable goal for Water Service Delivery, but achieving
that goal may require institutional reforms and subsidies to ensure services can
be extended to the poor at affordable rates. This study reviewed available data
on international water costs and prices, and developed analytical models for
O&M renewal and replacement costs for typical water systems. The results may
be used to assess the implications for water service costs, subsides and rates, and
the affordability of extending water services to the urban poor.
Keywords: water supply, capital cost, O&M cost, cost models, tariff,
sustainability, affordability, level of service.
1 Background and introduction
The purpose of this project was to assess the capital and operational costs of
urban water supply systems in developing countries, examine the impacts of full
cost recovery on tariffs and rates, and contribute to the development of a
rationale for where and when subsidies may be required for urban water services.
The Millennium Development Goals include targets to reduce the global
population without access to safe drinking water by 50% by the year 2015. To
achieve this target, these utilities, agencies and local urban bodies responsible for
the provision of drinking water will have to markedly improve operational
efficiency and financial sustainability.
Obstacles to be overcome are primarily weak operational capacity and
inadequate revenues to support ongoing O&M and long-term asset replacement.
Institutional strengthening without corresponding financial reforms will likely
prove insufficient. The lack of clarity in financial operations, confusing patterns
of subsidies, and reluctance to raise water rates to sustainable levels all play a
role in the current situation.
Keywords
water supply, capital cost, O&M cost, cost models, tariff,
sustainability, affordability, level of service.
Related Book
Other papers in this volume
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