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Water tariffs : Methods for an Efficient Cost Recovery and for the Implementation of the Water Framework Directive in Portugal

Monteiro, Henrique Pedro Currais
Fonte: Instituto Superior de Economia e Gestão Publicador: Instituto Superior de Economia e Gestão
Tipo: Tese de Doutorado
Publicado em /11/2009 ENG
Relevância na Pesquisa
66.22%
Doutoramento em Economia; This work is a contribution to the study of how the Portuguese water industry can meet the goals of cost recovery and water use efficiency set out by the Water Framework Directive. We describe the Portuguese water and wastewater tariffs implemented from 1998 to 2005 and the cost recovery levels for that period. The tariff revenues collected by the water utilities are insufficient to meet the financial costs of their activities, especially regarding wastewater, and the situation has worsened in recent years. We review the existing water pricing models, highlighting some important results like the fact that efficiency requires marginal cost pricing, which may not be feasible while respecting a revenue requirement. It is not evident whether the best scheme is a two-part tariff or some other pricing mechanism like increasing block tariffs (IBT), which are abundantly used in Portugal. We incorporate the scarcity cost associated with insufficient water availability into the optimal tariff design. We show that when both demand and costs respond to climate factors, increasing marginal prices may come about as a combined result of scarcity and customer heterogeneity when the fixed charge is only allowed to cover fixed costs and the utility is required to maintain a balanced budget. Ultimately...

Cost Recovery, Equity, and Efficiency in Water Tariffs : Evidence from African Utilities

Banerjee, Sudeshna; Foster, Vivien; Ying, Yvonne; Skilling, Heather; Wodon, Quentin
Fonte: Banco Mundial Publicador: Banco Mundial
Relevância na Pesquisa
66.18%
Water and sanitation utilities in Africa operate in a high-cost environment. They also have a mandate to at least partially recover their costs of operations and maintenance (O&M). As a result, water tariffs are higher than in other regions of the world. The increasing block tariff (IBT) is the most common tariff structure in Africa. Most African utilities are able to achieve O&M cost recovery at the highest block tariffs, but not at the first-block tariffs, which are designed to provide affordable water to low-volume consumers, who are often poor. At the same time, few utilities can recover even a small part of their capital costs, even in the highest tariff blocks. Unfortunately, the equity objectives of the IBT structure are not met in many countries. The subsidy to the lowest tariff-block does not benefit the poor exclusively, and the minimum consumption charge is often burdensome for the poorest customers. Many poor households cannot even afford a connection to the piped water network. This can be a significant barrier to expansion for utilities. Therefore...

Philippines : Meeting the Infrastructure Challenges

World Bank
Fonte: Washington, DC Publicador: Washington, DC
EN_US
Relevância na Pesquisa
46.1%
The Philippines enjoys tremendous endowments of natural, and human resources that provide great potential for economic development and poverty reduction. However, overall development outcomes over the last decades have fallen short of potential. The gap can be largely attributed to weak performance of public institutions in providing services to citizens, which leads to a vicious cycle of weak public services, lack of trust in the government, and unwillingness on the part of citizens to provide adequate resources to the government. The key development challenge, therefore, is to reverse the cycle to one of virtuous development where increased government revenue translates into improved service delivery and greater public trust in the government. Infrastructure plays an important role in this development process. Insufficient infrastructure has been a major constraint to economic growth and poverty reduction in the Philippines. Though the country has relatively high access levels to water, sanitation, and electricity, service levels have failed to keep up with rapid population growth and urbanization. Infrastructure development in the country is hampered by a poor business environment; weaknesses in planning, coordination, and financing; and a decrease in private sector involvement in infrastructure provision. The report presents a road map which will help spur the expansion...

Water Markets, Demand and Cost Recovery for Piped Water Supply Services : Evidence from Southwest Sri Lanka

Nauges, Celine; van den Berg, Caroline
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Relevância na Pesquisa
66.19%
In many countries water supply is a service that is seriously underpriced, especially for residential consumers. This has led to a call for setting cost recovery policies to ensure that the tariffs charged for water supply cover the full cost of providing for the service. Yet, the question arises on how consumers will react to such price increases. The authors illustrate the impact of price increases on consumption of piped water through a study of the demand for water of piped and non-piped households using cross-sectional data from 1,800 households in Southwest Sri Lanka. The (marginal) price elasticity is estimated at -0.74 for households exclusively relying on piped water, and at -0.69 for households using piped water but supplementing their supply with other water sources, with no significant differences between income groups. Those households that depend on non-piped water sources have a time cost elasticity (as a proxy for price elasticity) of only -0.06. The authors discuss the implications of these results in terms of pricing policy.

Is Cost Recovery a Feasible Objective for Water and Electricity? The Latin American Experience

Foster, Vivien; Yepes, Tito
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Relevância na Pesquisa
66.13%
Given the relatively small segment of the population that faces genuine affordability problems in Latin America, there appears to be a promising case for using targeted subsidies to reconcile the cost recovery objective with social protection concerns. Social tariff schemes of various kinds are already widespread in Latin America, but they suffer from a number of design flaws. Increasing block tariff (IBT) structures are the most prevalent form of social tariffs in the region. These are likely to be more successful in the electricity sector than in the water sector because the correlation between consumption and income is much stronger in the case of electricity than water. Moreover, IBT structures in electricity tend to be much better designed than in the case of water, with lower fixed charges, lower subsistence blocks, and steeper gradients. A number of more sophisticated social tariff schemes are also being applied that combine consumption criteria with some form of socioeconomic screening. These are generally found to perform better than IBTs, although they also present significant room for improvement.

Measuring Financial Performance in Infrastructure: An Application to Europe and Central Asia

Ebinger, Jane O.
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
EN_US
Relevância na Pesquisa
46.24%
Unintentional implicit subsidies (hidden costs) to public utilities can be considered an illegitimate claim on public resources. This paper examines the role and sources of hidden costs in the energy and water sectors in the Europe and Central Asia (ECA) region. It reviews available data and introduces a model-the Hidden Costs Calculator-that can be used to quantify the burden on governments of infrastructure policy and implementation decisions. This simple-to-apply model provides insight into three key components of hidden costs that affect infrastructure-poor bill collection rates, excessive losses due to inefficient operations or theft from the networks, and tariffs set below cost-recovery rates. The major advantage of this model is that, using existing data, it can provide a single measure for hidden costs that can be easily calculated, tracked, and reported. Therefore it can monitor and benchmark trends across sectors and countries without extensive or costly data collection. The model compares the difference between actual revenues and revenues that could be anticipated in a well-functioning system operating with cost-covering tariffs, bills paid, and losses normative for networks of a certain age and design. The underlying premise is that quantifying the order of magnitude of each component of hidden costs has potential for strengthening infrastructure policy dialogue and influencing decisionmakers who allocate scarce budgetary resources.

Sierra Leone : Power Sector Recovery Strategy, Phase I

World Bank
Fonte: Washington, DC Publicador: Washington, DC
EN_US
Relevância na Pesquisa
46.1%
Power Planning Associates has been appointed by the World Bank to prepare a strategy for the recovery of the National Power Authority (NPA). This Preliminary Report presents the findings of the audit and proposes potential counter measures to improve NPA s technical and financial performance. These counter measures are presented at the end of each section of the report and are summarised below. NPA is locked in a downward spiral of under-performance, wherein generation plant breakdowns and fuel shortages exacerbate cash flow constraints. In addition, poor commercial performance, including high losses and low revenue collection rates, are also at the root of the cash flow problems. This cycle needs to be broken at a number of points, and the following series of counter measures represent the Consultant s initial proposals, in order of priority.

The Financial Performance of Non-Urban Passenger Rail Services

Amos, Paul; Bullock, Richard
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
EN_US
Relevância na Pesquisa
46.11%
The paper has three parts. It first summarizes the main factors that influence the costs and fare box cost recovery of rail passenger services, with illustrations from a range of different countries in which the Bank is involved in rail passenger operations. Second, it provides a generalized passenger service costing model, including indicative sets of input unit costs representing different levels of efficiency: this model is used for illustrative purposes in this paper but the structure can be readily applied by transport planners and policy-makers, with use of local parameters, in developing and transition countries. Third, it illustrates the cost drivers of services and the sensitivity of costs to different market and operational drivers. This report also addresses the sensitivity of cost to changes in key scenario assumptions. This shows that operating costs are minimized (but revenue not necessarily maximized) when operating speed is around 80 km/h. Above that speed, above-rail unit costs gradually increase as continuing reductions in time-related costs...

Cost Recovery in Urban Water Services : Select Experiences in Indian Cities

Gupta, Anjali Sen
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
EN_US
Relevância na Pesquisa
66.27%
The report draws on a Water and Sanitation Program (WSP) study from 2008 which made a comparative analysis of 23 Urban Local Bodies (ULBs)-looking at seven cities in detail and another 16 based on secondary data-to understand the factors affecting cost recovery in India and provide an indication of current performance. It also draws out examples and lessons to inform reform approaches and guidelines for reform. The first part of the paper discusses operational and tariff-related factors that impede cost recovery by urban water service providers in India, especially low service coverage; high water losses and nonrevenue water; inefficient metering, billing and collection; and high staffing levels. It also shows that distorted tariff structures and subsidies undermine cost recovery further, and often benefit middle and upper income levels, rather than the poor. The second part of the note discusses policy reform and practical initiatives and options to achieve improved cost recovery and, by implication, achieve service improvements...

Options for Financing Lifelong Learning

Palacios, Miguel
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
EN_US
Relevância na Pesquisa
46.19%
How should lifelong learning be financed? The author attempts to answer the question by creating a framework for analyzing different education financing mechanisms in light of particular characteristics of lifelong learning. The framework compares the different financing alternatives on four dimensions: (1) who ultimately pays for the education, (2) who finances its immediate costs, (3) how payments are made, and (4) who collects the payments. The author uses specific characteristics of lifelong learning to determine which among the financing alternatives are most useful. The characteristics are that the individual should decide what and where to study, carry a significant part of the financial burden, and be encouraged to continue learning through all life stages. The author analyzes the financing alternatives according to who ultimately pays for the education. Hence, the alternatives are classified either as cost-recovery or cost-subsidization alternatives. Cost-recovery alternatives include traditional loans...

Operation and Maintenance Expenditure Cost Recovery

Misra, Smita
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
EN_US
Relevância na Pesquisa
66.1%
The operation and maintenance (O&M) expenditures incurred on rural water supply schemes in India is commonly much less than required and this has serious implications on their performance. This is one of the major findings of the 10-state (Punjab, Maharashtra, Kerala, West Bengal, Orissa, Tamil Nadu, Karnataka, Andhra Pradesh, Uttar Pradesh, and Uttarkand) study on the Effectiveness of Rural Water Supply Schemes undertaken by the World Bank at the request of the Government of India. The study also analyzed the issue of cost recovery, which is generally low, but differs across states, among technologies, and between demand-driven and supply-driven schemes.

Armenia Water Sector Tariff Study

World Bank
Fonte: Washington, DC Publicador: Washington, DC
Tipo: Report; Economic & Sector Work; Economic & Sector Work :: Other Infrastructure Study
ENGLISH; EN_US
Relevância na Pesquisa
46.19%
The Republic of Armenia’s water and sanitation services (WSS) sector has seen impressive improvements over the last decade. The Government of Armenia (GoA) has restructured, reformed, and invested in the sector in ways that have improved access, continuity, and quality of WSS. The purpose of the report is to help the GoA: analyze the current levels and structures of water and wastewater tariffs compared to the costs of service; forecast costs under alternative scenarios, and forecast revenues under alternative tariff levels and structures; and recommend how Armenia can move from current tariffs to the tariffs required for full cost-recovery in the sector. This includes recommendations on: a transition plan for phasing in gradually higher tariffs; ways to improve the protection of the customers most vulnerable to tariff increases. The World Bank commissioned this study to inform the GoA’s work in developing tariff policy and regulation in the WSS sector. The report is structured as follows: section one gives introduction. Section two analyzes the current affordability of WSS in Armenia and describes results from a nationwide willingness-to-pay (WtP) survey. Section three analyzes the cost of WSS in Armenia. It estimates revenue requirements for the service providers...

Cost Recovery and Water Pricing for Irrigation and Drainage : What Works?

Easter, K. William; Liu, Yang
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Publications & Research :: Brief; Publications & Research
ENGLISH
Relevância na Pesquisa
66.15%
No silver bullet exists to improve cost recovery or water use efficiency of irrigation systems. However, many countries provide examples of successful reforms that policymakers and system managers can draw upon for inspiration and ideas. A successful system will have the appropriate mix of technology, management, policy, and institutional arrangements that facilitate transparent and efficient service delivery and increase farmer's willingness to pay and to use limited water resources more efficiently. This note is based on the larger volume of the same name, which outlines guidelines for designing a successful system for cost recovery and efficient water use and provides numerous case studies of successful implementation.

Achieving Financial Sustainability and Recovering Costs in Bank Financed Water Supply and Sanitation and Irrigation Projects

McPhail, Alexander; Locussol, Alain R.; Perry, Chris
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Economic & Sector Work :: Other Poverty Study; Economic & Sector Work
ENGLISH; EN_US
Relevância na Pesquisa
46.24%
This note is a partial response to the above mentioned 2010 Independent Evaluation Group (IEG) evaluation. It covers the specific issues to be addressed in the Water supply and Sanitation (WSS) sector and in the irrigation sector in two distinct parts, because if WSS and irrigation have some common features, there are many distinctions to be made. Among the various water-using sectors, that include navigation, fisheries, hydropower, rain fed agriculture, irrigated agriculture, WSS, and more generally 'the environment', cost recovery issues are of primary concern, and are the focus for this note, in the WSS and irrigation sectors. This preliminary background Note is divided in four parts: a 'history' of the call for financial sustainability and cost recovery and the parallel documenting of the lack of progress. This section ends with what this Note hopes to achieve in the face of what is clearly a deeply rooted problem; an outline of options to be considered for achieving financial sustainability of WSS service providers and recovering the costs of the WSS service through tariffs...

Power Tariffs : Caught between Cost Recovery and Affordability

Briceno-Garmendia, Cecilia; Shkaratan, Maria
Fonte: Banco Mundial Publicador: Banco Mundial
Tipo: Publications & Research :: Policy Research Working Paper
ENGLISH
Relevância na Pesquisa
66.27%
This is the first paper to build a comprehensive empirical picture of power pricing practices across Sub-Saharan Africa, based on a new database of tariff structures in 27 countries for the years 2004-2008. Using a variety of quantitative indicators, the paper evaluates the performance of electricity tariffs against four key policy objectives: recovery of historic power production costs, efficient signaling of future power production costs, affordability to low income households, and distributional equity. As regards cost recovery, 80 percent of the countries in the sample fully recover operating costs, while only around 30 percent of the countries are practicing full recovery of capital costs. However, due to the fact that future power development may be based on a shift toward more economic technologies than those available in the past, existing tariffs look as though they would be consistent with Long Run Marginal Costs in nearly 40 percent of countries and hence provide efficient pricing signals. As regards affordability...

Utility Pricing and the Poor : Lessons from Armenia

Lampietti, Julian A.; Kolb, Anthony A.; Gulyani, Sumila; Avenesyan, Vahram
Fonte: Washington, DC: World Bank Publicador: Washington, DC: World Bank
Tipo: Publications & Research :: Publication; Publications & Research :: Publication
ENGLISH; EN_US
Relevância na Pesquisa
46.19%
Increasing cost recovery for utilities is a cornerstone of the Government of Armenia's economic reform program. This report assesses the 1999 electricity tariff increase and the potential for future improved water sector cost recovery, with particular attention to questions of service accessibility and affordability for the poor . The burden of energy expenditures is large for most households, particularly for the poor. Electricity makes up the bulk of these expenditures, and a further increase in tariffs, without increasing access to low cost substitutes, would lead to the greatest hardship for the urban poor. Future electricity tariff increases should be closely coordinated with improved price response prediction and credible action to mitigate the potential impact on the poor and the environment. The water utilities are caught in a low-level equilibrium trap, characterized by decreasing service quality and revenue. The water utilities must break out of this trap by generating more revenues through improved service delivery. A two-stage approach is recommended. In the first stage...

Republic of Armenia : Power Sector Tariff Study

Kochnakyan, Artur; Balabanyan, Ani; Antmann, Pedro; Laderchi, Caterina Ruggeri; Olivier, Anne; Pierce, Lauren; Hankinson, Denzel
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Economic & Sector Work :: Energy Study; Economic & Sector Work
ENGLISH; EN_US
Relevância na Pesquisa
46.19%
Armenia's energy sector has achieved a level of electricity reliability, service quality and efficiency of sector operations that stands out among countries participating in Commonwealth of Independent States (CIS). Much of this can be attributed to a decade of regulatory reform including a long-standing commitment to cost-recovery tariffs. The study is structured as follows: section one provides definitions of the key terms used and a background on the current tariff setting process in Armenia. Section two indicates how far tariffs have departed from cost-recovery levels and what costs have not been covered as a result. Section three describes how new investments will affect the average cost of service and the average residential tariff. Section four proposes a marginal cost-based tariff structure and explains why this differs from the current tariff structure. Section five discusses the poverty and social impact of tariff increases needed to cover new investments in 2021. Section six identifies options for subsidization and mitigating rate shock that will help transition to higher...

Health Financing Options for Samoa : Challenges and Opportunities

Anderson, Ian
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Publications & Research :: Working Paper; Publications & Research
ENGLISH; EN_US
Relevância na Pesquisa
46.18%
Samoa currently faces two important public policy challenges in the health sector. One is to stem, and then reverse, the rapid rise of non-communicable diseases (NCDs). The second challenge is to put the country on a health-financing path that is effective, efficient, and financially affordable and sustainable. The two challenges are interconnected. This discussion paper examines eight options to address these challenges. The eight options are the following: (1) increasing government expenditure via higher general taxation; (2) increasing government expenditure via deficit financing; (3) increasing the share of government expenditure to health; (4) increasing external and donor financing; (5) increasing specific taxes; (6) mobilizing additional nongovernment resources via insurance (including social health insurance, and community and private insurance); (7) increasing cost-recovery measures; and (8) increasing efficiency. The paper concludes that the chief opportunity arises from more efficient use of resources already in the health system that are not presently used to maximum effect. Improving technical and allocative efficiency of the existing system has the potential to make a large difference and is technically feasible.

Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus

World Bank
Fonte: Washington, DC Publicador: Washington, DC
Tipo: Economic & Sector Work :: Energy Study
ENGLISH; EN_US
Relevância na Pesquisa
46.13%
The Government of the Republic of Belarus (GoB) plans to increase district heating (DH) tariffs to cost-recovery levels and gradually phase out subsidies, replacing them with social assistance programs. Residential DH tariffs in Belarus are currently at roughly 10-21 percent of cost-recovery levels. DH subsidies are highly regressive, add costs to business, and create significant fiscal risks and macroeconomic vulnerabilities. The purpose of this report is to analyze the social, sectoral, and fiscal impacts of the proposed tariff reform, and to identify and recommend measures to mitigate adverse impacts of DH tariff increases on the households. The analysis shows that: 1) the burden of higher DH tariffs will fall most heavily on low-income groups; 2) the current system of subsidies is unfair, benefitting wealthy customers more than the poor; 3) cross-subsidies undermine the competitiveness of industries in Belarus; and underpriced residential heat places an increasing fiscal burden on the GoB and risks macroeconomic instability. The analysis shows that a negative social impact is manageable if a tariff increase is accompanied by countervailing measures to compensate for the loss of purchasing power...

Evolution of cost recovery levels in the Portuguese water supply and wastewater industry 1998-2005

Monteiro, Henrique
Fonte: DINÂMIA Publicador: DINÂMIA
Tipo: Trabalho em Andamento
Publicado em /10/2008 ENG
Relevância na Pesquisa
66.27%
DINÂMIA, Outubro de 2008.; This paper assesses the situation in Portugal in 2005 regarding cost recovery in the water supply (WS) and wastewaterdrainage and treatment (WWDT) industry by type of system (bulk and retail water and wastewater), by type of utility and by NUTS III, halfway between the publication of the Water Framework Directive (WFD) and the meeting of the 2010 deadline. For that purpose, we build on the previous contribution by Monteiro (2007), which reported the situation in 2002, by updating the indicators to 2005 and assessing the evolution since 1998. We also present a brief historical overview of the presence of the cost recovery principle in Portuguese law regarding the industry. The main conclusions that stand out are: the introduction of the cost recovery principle is prior to the WFD and the more recent Water Law, although it lacked practical implementation; the level of revenues collected by the WS and WWDT utilities is insufficient to meet the financial costs of their activities; the situation is worse for wastewater than for WS systems, revealing evidence of cross-subsidization within the utilities which manage both systems; the situation has worsened in recent years; cost recovery levels are lower in the less densely populated and poorer inland regions; finally...