TIRANA, Feb. 5 – A nationwide campaign that the Albanian government launched in 2018 in a bid to reform the critical situation in the country’s state-run tap water sector by cutting illegal connections and collecting accumulated unpaid bills has failed to have any significant effect in either improving access to water or boosting the financial situation of local government-run water companies.
The conclusion is unveiled by the water supply regulatory authority in an annual report showing that performance indicators for most water companies remained the same or only slightly improved at a time when more than a fifth of the population has no access to tap water and the average water supply hours are at less than 12 hours a day, but in reality range from as low as one hour a day in rural areas.
“In 2018, as a result of a reform, the sector performed well regarding the elimination of illegal connections, the increase in the installation of water meters as well as the collection of accumulated unpaid bills,” says the water supply watchdog.
“A slight improvement in the sector’s financial situation was observed at the end of 2018, but the reform’s expectations were not met, especially in cutting losses by eliminating illegal connections,” adds the watchdog.
Illegal connections to the supply system is one of the main causes for non-revenue water accounting for two-thirds of water fed into the network during 2018, a 1.5 percentage point improvement compared to 2017.
Authorities say per capita water production in 2018 was at 304 liters a day, but only around a third, some 107 liters/day, were billed at an average nationwide collection rate of around 80 percent for the third year in a row.
In addition, an outdated supply system in huge need of investment which Albania is gradually replacing contributes to the critical situation in Albania’s water supply system.
Despite consecutive hikes in fees, 42 out of the 58 nationwide water companies still fail to meet operation and maintenance costs, requiring subsidies of up to 30 percent by the municipalities that supervise them or the central government.
However, the 17 largest companies covering around two-thirds of the country’s 2.8 million resident population, have managed to meet operation and maintenance costs, but yet face challenges with further increasing collection rates and reducing losses to handle much-needed investment on their own.
Average water tariffs for household consumers in Tirana and Durres, Albania’s largest cities and home to around half of the resident population are at around 70 lek (€0.55)/m3, and twice higher for business consumers and state-run institutions.
Albania’s water supply watchdog has earlier estimated the country’s network needs huge investment of around €6.4 billion, almost half of the country’s national output and significantly higher compared to annual public investment of more than €500 million in all sectors, to bring it to normal operation.
The huge investment needs which could take decades to carry out given the limited funds at disposal signal that providing 24/7 water supply will be a tough challenge for the Albanian economy.
Water shortages in many cities including key tourist destinations are a serious problem during summer, the peak of the country’s tourist season, hampering progress in the tourism sector.
In addition, household and business consumer face extra costs due to having to buy water tanks and pumps to get access to water.
Nationwide campaign
In late 2017, Prime Minister Edi Rama announced a nationwide campaign to crack down on illegal water supply connections with household and business consumers given a three-month deadline until March 2018 to self-regulate and sign deals to pay off accumulated unpaid bills.
Similarly to a late 2014 nationwide campaign on curbing electricity thefts and unpaid bills, illegal connection to the water supply was made punishable with prison. However, unlike the nationwide campaign that was applied in rather aggressive style and managed to significantly cut electricity losses and trigger a major hike in collection rates, the water reform was applied in softer style with only sporadic legal action against violations, mainly against business consumers.
“We are Europe’s second richest country in natural [water] resources, but Europe’s sole country with problems in tap water supply,” Prime Minister Edi Rama said in late 2017, adding that water supply hours ranging from as low as 1 hour a day in villages to 4 to 5 hours a day in towns, put Albanians in a ‘survival mode.’
“The situation couldn’t be worse. Only a crucial reform with iron determination, similar to the reform in the electricity system, could provide a solution and way out to this degraded system, which remains in agony,” he said.
Water supply companies hired an extra 333 employees in 2018, but staff efficiency only slightly improved to 5.32/1,000 connections due to a significant hike in new water supply and sewerage connections.
In 2017, when Albania held general elections, the water supply watchdog cited electoral grounds for a deterioration in the companies’ performance.
“One of the main reasons of this downward trend in performance was that 2017 was an electoral year which is usually accompanied by an artificial increase in the number of water company employees and a lower law enforcement reflected on decline in bill collection rates,” said the water supply authority.
The World Bank and KfW, Germany’s Development Bank, have been investing millions of euros to rehabilitate Albania’s water supply and sewerage systems in soft loans with a significant impact on providing thousands with access to water and improving the quality of bathing waters through new wastewater treatment plants.
