Billions of euros needed to secure 24/7 water supply

Tirana Times
By Tirana Times March 13, 2015 10:47

Billions of euros needed to secure 24/7 water supply

The Water Regulatory Entity says Albania needs to invest a staggering 6.4 billion euros in order to provide uninterrupted water supply all over the country, an amount which is around 64 percent of the country's GDP and considerably bigger to Albania's total annual public investments of around 5 percent of the GDP

TIRANA, March 9 - Albania will have to wait for a long time before it settles its long-standing water supply issue due to the huge investments needed in the dilapidated distribution system where around two-thirds of running water is lost.

In a hearing with the parliamentary productive activity committee this week, the head of the Water Regulatory Entity Avni Dervishi said Albania needs to invest a staggering 6.4 billion euros in order to provide uninterrupted water supply all over the country.

The amount which is around 64 percent of the country's GDP and considerably bigger to Albania's total annual public investments of around 5 percent of the GDP (at Euro 560 million for 2015) is completely unaffordable by the state budget and would take decades under current investment levels, experts say.

Albania's average water supply in 2014 ranged from 4 to 24 hours a day, with the average supply at 11.5 hours, says the Water Entity in its annual report.

Only three towns in south-eastern Albania, Korça, Pogradec and Librazhd offer uninterrupted water supply thanks to investments by foreign donors.

Losses in the dilapidated distribution water system remained unchanged at 67.4 percent in 2014, but are projected to drop to 48 percent in 2015 when the government plans to undertake a nationwide campaign to curb thefts and collect accumulated unpaid bills.

Losses of around two-thirds in the production, distribution and billing of tap water cause the Albanian state budget around $180 million in annual losses, deputy Transport and Infrastructure Minister Ylli Manjani has earlier warned.

The losses are almost the same to those in the electricity sector which suffers around Euro 150 million in massive power thefts and distribution losses annually.

"The level of losses continues remaining one of the most serious issues in the water sector, with a negative impact in the financial sustainability of Albania but also the quality of water for public consumption," says director Dervishi.

"Failure to provide uninterrupted supply of running water is a result of cuts for technical reasons and as a result of the dilapidation of the distribution grid which also affects the quality of water for public consumption. The high level of water losses remains the key concern, causing scheduled water supply and a poor financial situation of operators," says the Water Regulator.

Only 60 percent consumers have water meters while the remaining part pays fixed rate.

With operating revenues covering only 68 percent of costs, water supply and sewerage companies definitely need to raise their drinking water prices to improve their efficiency, says the World Bank in report called "Decentralization and service delivery in Albania: governance in the water sector."

Overstaff in water supply and sewerage companies is another issue with 9.5 people per 1,000 connections compared to 4 employees per 1,000 connections under the EU standard. Political patronage and the complexity of water supply systems are the main explanations to the situation, says the World Bank.

The report notes that the companies' performance remains unsatisfactory, partly because of the complex drafting and implementation of the institutional framework managing the sector. Water companies fail to provide access to 10 percent of consumers in urban areas and 42 percent of consumers in rural areas with the average water access being 11 hours a day.

Widespread illegal connections to the water supply grid and lack of water meters for 50 percent of the population also contribute to the low collection rate.

According to the World Bank, Albania is better off in water resources than many developing countries, but not for all yet. Data show Albania is endowed with an estimated 8,600 m3 per capita per year in water resources – an enviable position from the vantage point of many countries. The country has relatively high access to water in urban municipalities at 90 percent, but much lower access to piped water connections in rural municipalities at 58 percent.

Water prices for household consumers in Tirana are currently at 45 lek/m3. State institutions pay 120 lek/m3, while private companies 135 lek/m3. Special customers, which include companies producing alcoholic beverages and refreshment and swimming pool owners will pay 170 lek/m3. Water prices for bakeries have remained unchanged at 95 lek/m3.

Tirana Times
By Tirana Times March 13, 2015 10:47