TIRANA, Feb. 7 – As the government has launched a nationwide campaign to crack down on illegal water connections and accumulated unpaid bills, a report by the country’s water regulator has unveiled a grim picture in the performance of water companies which slightly deteriorated in 2017 when the country held general elections.
In an almost common trend during the past quarter of a century of the country’s transition to democracy and a market economy, the performance of state institutions deteriorates on general or local elections years due to weaker law enforcement and fictitious employments by central and local government authorities to apparently gain an electoral advantage.
The report by the Water Regulatory Entity shows the bill collection, the operation and maintenance costs and staff efficiency indicators slightly deteriorated in 2017. Meanwhile, the key non-revenue water indicator only slightly improved by 2 percent to drop to 65 percent, a staggering amount that shows the inefficiency in the management of the country’s local government-run water companies, the high level of thefts and a dilapidated distribution grid that is estimated to need huge unaffordable investment.
Although Europe’s second richest country in water resources per capita after Norway, Albanians get an average of only 11.4 hours a day in tap water access and about a quarter of population in remote rural areas still don’t have access to water.
“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 last November, 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 bill collection rate dropped by 8 percent to 84 percent in 2017 and staff efficiency deteriorated to 9.2 employees per 1,000 water connections, the report shows.
Water metering only slightly improved to 68 percent, while half of the population continued to lack access to sewerage services.
“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,” says the report.
“The bill collection rate dropped by 8 percent as a result of the tendency of not enforcing law during the electoral period as well as the increase in areas covered by water companies with the inclusion of rural areas that have poor bill collection rates,” the water regulator says.
Albania has some 61 water companies, the same as the number of local government units which in 2015 were cut to 61 from a previous 384 municipalities and communes.
“Staff efficiency deteriorated by 1 person to increase to 9.2 people per 1,000 water connections with a total of an extra 519 employees, which is mainly a result of the electoral year effect on artificial employments,” it adds.
Commenting on the price hike some major water companies such as that of Tirana and Durres are applying this year, the water regulator says current prices are yet four times lower compared to an average of 300 lek (€2.24)/m3 it estimates based on an affordability formula calculating water expenditure at 5 percent of the average €500 monthly income in an Albanian households of four.
Household consumers in Tirana and Durres, the country’s two largest municipalities covering about half of the country’s population, are facing 44 percent and 10 percent hikes respectively in water prices this year, with many describing them as unaffordable.
The report shows the country’s water network needs huge investment of about €3.7 billion, about a third of the country’s GDP in order to bring the water infrastructure to normality.
A national strategy on the water and sewerage system estimates Albania needs to invest about €170 million annually in the next 22 years to improve the sector’s efficiency, but “the government and its donors can handle only about half of that amount.”
Nationwide campaign
Three months after Prime Minister Rama announced a nationwide campaign to crack down on massive illegal water connections and accumulated unpaid bills, a field inspection has been initially launched with business to continue with household consumers next March.
The campaigns come after consumers were left a 90-day deadline to self-regulate by cutting illegal connections, getting water meters and signing deals to pay off accumulated unpaid bills with the water companies.
The energy ministry says some 9,000 new contracts have already been signed, 26,000 new water meters installed and 7,500 consumers have signed deals to pay off accumulated unpaid debts in monthly instalments.
About a third of consumers were charged fixed rate bills in 2017 due to not being equipped with water meters.
The same as with the late 2014 nationwide electricity campaign, consumers who are found with illegal water connection face the threat of criminal charges and imprisonment.
In the late 2015 nationwide campaign against electricity, hundreds of household and business consumers were arrested over illegal grid connections. Dozens of thousands are still paying their accumulated debts in installments which has made state-run OSHEE electricity operator from a loss-making company into the country’s largest and most profitable.
Although significantly stabilizing the electricity sector, Rama’s rule of law platform with electricity came under criticism for targeting the poorest Albanians. One man committed suicide in prison after he was arrested for reconnecting to the electricity grid when he was cut off because he couldn’t afford to pay the bill.
