TIRANA, Feb. 22 – The coverage of population with water supply and the average duration of tap water slightly deteriorated in 2016 when only about 79 percent of the population had access to an average of 11.7 hours a day of water, but the local government-run companies’ financial performance considerably improved, according to a report by the state-run Water Regulatory Entity, ERRU.
Back in 2015, some 81 percent of the population had access to tap water at an average of 12.1 hours a day.
Data shows the situation has remained unchanged in the past three years with water supply hours ranging from 3 to 24 hours a day and only three towns in southeastern Albania providing uninterrupted tap water thanks to funding provided by foreign donors. Water supply shortages are problematic everywhere, but especially in tourist areas where limited access to tap water is a huge barrier for the emerging tourism industry, making water tanks and pumps a common view in almost every apartment block and house.
The annual report shows the coverage of operating and maintenance costs and bill collection rates slightly improved, but access to wastewater services remained unchanged at about two-thirds of total water produced, unveiling poor management and a dilapidated distribution network in huge need of investment.
“There are still operators operating at low tariffs and considering the relatively low bill collection rates, they hardly manage to cover at their own income half of the their operating and maintenance costs, i.e. direct costs. Unfortunately, some 39 water supply companies out of a total of 59 companies are facing this issue,” says the report.
For the majority of operators, covering the total costs for the services provided would require a significant increase in tariffs, likely unaffordable by consumers, and that is why the Water Regulatory Entity’s goal is the immediate coverage of operating and maintenance costs, while the coverage of total costs, that also includes depreciation and credit costs is a longer-term objective which in addition to improving infrastructure and management will also require a gradual increase in tariffs, says the regulator.
The coverage of operating and maintenance costs rose by 18 percent to 120 percent in 2016 while total cost coverage rose to 90 percent, up from 79 percent in 2015. The number of companies which fully covered their operating and maintenance costs is 19, while only eight companies managed to cover the total cost.
The 2016 data cover only the first three quarters of 2016 while the full picture of the local government run water supply companies will be unveiled later in a performance report.
Reducing losses, increasing the bill collection rate, installing meters, improving staff efficiency and energy efficiency are indicators that have a huge impact on reducing spending and management plays an important role, say energy regulator experts.
Currently, only 79 percent of the population is provided water supply, compared to only 49 percent of households who are offered collection and wastewater disposal and only 10 percent of residents covered with treatment of wastewater.
The water regulator says the decline in access to water is a result of an increase in the number of population under the jurisdiction of water supply companies following the 2015 administrative reform that cut the number of local government units to 61 from a previous 384 municipalities and communes, but which has not been accompanied by an increase in water supply service of the extra consumers.
Rural areas are strongly disadvantaged when it comes to services provided by water companies with only two-thirds of people living in villages having access to water and only 6.6 percent to wastewater services, compared to a rate of 90 percent and 76.7 percent for urban areas, respectively.
The report notes Albania’s staff of 8.3 workers per 1,000 connections is almost double compared to regional countries, unveiling the inefficiency of human resources and often political patronage as noted in a previous World Bank report.
The level of losses at 67 percent shows that the majority of water produced is lost and as a result not generating income and increasing water supply costs, remaining the main concern in the past few years. More than a third of consumers are still charged fixed rate bills due to not being equipped with water meters.
Losses are a result of the companies’ poor management such as illegal connections, inaccurate metering and technical losses caused by depreciation of water systems. Both managerial and technical water losses are estimated at the same level.
Avni Dervishi, the head of the Water regulator, had earlier warned 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 ten times higher compared to total annual public investments of around 5 percent of the GDP, (some €560 million) is completely unaffordable by the state budget and would take decades under current investment levels, experts say.
Only Korà§a, Pogradec and Librazhd provide uninterrupted water supply at adequate pressure.
According to the World Bank, Albania is better off in water resources than many developing countries, but not for all yet. 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 (€0.32)/m3. State institutions pay 120 lek (€0.87)/m3, while private companies 135 lek (€1)/m3.
