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One of the central principles for water supply and sanitation services is that they should be provided in accordance with the User-Pays and Polluter-Pays Principles. The implementation of these principles is the best way of guaranteeing utilities a financially sustainable basis to cover operation and maintenance costs and to make the necessary investments. In the OECD this principle is widely recognised.
In the NIS the User-Pays Principle is not yet being applied. In most countries, cost recovery rates from household consumers are as low as 20 to 50%. Many governments recognise that this needs to change though. In order to support efforts in the NIS to implement the User-Pays Principle, the EAP Task Force has endeavoured to develop a guide that provides an overview of the key options and elements for the reform of water tariffs. Issues such as the regulatory options to regulate utilities, different tariff structures and metering are all being discussed. The guide has been developed with an important involvement of NIS experts through two workshops.
Report from the first meeting
Report from the second meeting
Selected papers from both workshops
Key Issues of Tariff Reform in the Water Sector in the EECCA (English), (Russian)
While the application of the User-Pays Principle is an important prerequisite for the reform of the NIS water sector, important efforts are also required to improve financial planning at the central and municipal levels of government in the NIS. The EAP Task Force has developed a number of tools and approaches in this respect. Environmental Financing Strategies have shown to be an important tool to plan sectoral strategies in a financially sound manner. Similarly, multi-year investment planning is an important approach to be developed at the municipal level of government.
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