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I. FINANCIAL PLANNING TOOL FOR WATER UTILITIES (FPTWU)
The purpose of the Project is to help water utilities in the EECCA region reach operational and financial sustainability, by providing them with the opportunity to (i) rationalise the way their capital expenditure programme is established, (ii) determine the conditions for the balancing of their sources and uses of funds, (iii) to improve the monitoring of their overall performance by analysing performance indicators output by the tool and (iv) in the long run eventually raise finance on their own books. To achieve this the EAP Task Force has developed a financial planning tool which is being tested and fine-tuned in the framework of a couple of pilot projects.
The FPTWU’s Project’s specific objectives are listed below:
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assist water utilities in improving their financial status through the implementation of sound medium term financial planning;
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improve their investment decision making process by enabling them to assess the relative merits of each proposed investment or project using a number of criteria (operational, financial, environmental, social, level of customer service, etc.);
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contribute to the improvement of their operational performance through (i) a systematic tracking down of potential sources of savings (for instance more energy efficient equipment), (ii) a more realistic assessment of the water demand (anticipated growth of the customer base, water consumption forecast based on the number of meters in operation, leak reduction target through planned investments/repairs etc.) and (iii) a better understanding of collection rate levels;
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enhance - and contribute to a more systematized - communication between water utilities and municipalities through the use of the tool’s outputs to help establish (i) medium-term capital expenditure and maintenance and repair programmes, most often to be financed by the municipality (ii) tariff levels over a short- to medium-term period, (iii) the level of operational subsidies (aimed for instance at compensating water utilities for financially adverse decisions imposed by municipalities) and (iv) the amount of finance to be raised from municipalities based on the capital expenditure programme under discussion.
The model/excel file (English, Russian)
The user's manual (English, Russian)
II. MUNICIPAL WATER TARIFF REFORM
It is essential to ensure the long-term financial viability of water utilities, while ensuring that water services remain affordable for the poor. The EAP Task Force helps to develop and implement better practices for the financial management of utilities, as well as new policies and procedures for setting water tariffs that reflect financial. The EAP Task Force is also assiting EECCA countries in the development of water sector financing strategies that take full account of the social dimension, and has published a reference book that discussed these issues. It can be downloaded below.
Publication:
Key Issues of Tariff Reform in the Water Sector in EECCA
The documents available:
Practical Tools for the Water Reform in the EECCA
The result of the municipal water tariff reform is long-term sustainable development of the utility based on demand for services and proper financing of all utility costs. The on-going tariff reform implies substantial changes not only in tariff formulas and levels, but also in water regulation, business environment, financial management approaches, subsidies and public relations. At the same time, it calls for commercial orientation, transparent accounting, long-term investment programs, and social and equity aspects.
The documents available
III. PUBLIC PARTICIPATION AND CONSUMER PROTECTION
The Almaty Guiding principles identify a participatory multi-stakeholder process as one of the key elements of socially accepted and sustainable water sector reforms in the EECCA. They specify that gradual tariff increases required for financial stability of the sector "should take full account of affordability constraints and be part of a strategy for service improvement which has been developed through a participatory process". At their first meeting the Group of Senior Official on Urban Water Reforms in the NIS discussed social aspects of sector reforms, and adopted its work programme which calls for the development of Guidelines on Consumer Protection and Public Participation.
In order to launch the development of a Report an expert workshop on Consumer Protection and Public Participation in the Reforms of the Urban Water Supply and Sanitation in the EECCA was organised 4 and 5 March 2002 to identify key social issues to be covered. The experts from the EECCA, CEE and OECD countries agreed that the Report would focus on the three main issues including affordability of water, social protection measures for the poor and public participation in the sector reform. It is expected that the first draft of the Report will be presented at the second meeting of the Group of Senior Water Officials. The final Report was presented at the Kiev 2003 "Environment for Europe" ministerial in May 2003.
Documents available
Publications:
Financing strategy for the urban water supply and sanitation sector in Georgia (Russian)
Consumer Protection In Urban Water Sector Reforms In Armenia: Ability To Pay And Social Protection Of Low Income Households (Russian)
Key Issues and Recommendations for Consumer Protection (English), (Russian)
Working papers :
Social Protection to the Population in Transition to Full Cost Recovery for Housing and Utilities and Social Consumption Norms for Water in the Russian Federation
Social Protection in the Urban Water Sector
NGO position paper from Almaty
Report from the expert workshop
In order to promote public debate about urban water sector reform in the EECCA, EAP Task Force jointly with Regional Environmental Center for Central Asia have launched a water web site. The water web site provides access to various publications and documents developed for the Group of Senior Water officials for the broader public, in Russian language. The site also has a discussion forum open for all stakeholders. http://www.carec.kz/water/
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Keeping Water Safe to Drink
Improving Water Management: Recent OECD Experience
Public-Private Partnerships in the Urban Water Sector
