The Tirana Directorate has proposed that water prices for the household category should increase to 55 lek/m3, up from 33 lek/m3 currently, citing rising service costs
TIRANA, Nov. 29 – Tirana household water consumers risk facing a 66 percent increase in water prices for 2012 if the proposal made by Tirana’s Water Supply and Sewage Company is given the OK by the Water Regulatory Entity.
The Tirana Directorate has proposed that water prices for the household category should increase to 55 lek/m3, up from 33 lek/m3 currently citing rising service costs.
Price increases have also been proposed for private, state institutions, alcoholic and refreshment manufacturers, swimming pools etc. The Tirana Directorate wants wholesale water prices to double to 20 lek/m3.
Bakeries are the only businesses not at risk of facing any price increase for 2012 as the proposal for water tariffs in this category have been left unchanged at 95 lek/m3. The proposal is justified by the fact that bread prices are at their peak following sharp price rises in international markets where Albania imports the overwhelming majority of its flour needs.
While the Water Regulatory Entity will probably not approve water price proposals varying from 25 percent to 100 percent, water prices risk facing a significant increase as a necessity also cited by a recent World Bank report.
Sahit Dollapi, the head of the Tirana Water directorate justifies the proposals as fair to cover company costs and improve service.
“The proposals are fair because on the one hand the new prices are based on water production costs, and, on the other hand, they are affordable by every category of consumers,” said Dollapi.
The Tirana Water Directorate has proposed a 25 percent increase for private companies and a 43 percent rise for plants using water for production of their beverages taking the prices at 150/lek m3 and 200 lek/m3 respectively.
In a recently published report, the World Bank suggested that with operating revenues covering only 68 percent of costs, water supply and sewage companies definitely need to raise their drinking water prices to improve their efficiency.
A comparative analysis in the report covering the 2006-2009 period shows the Regulatory Entity (WRE) approved an average of 11 percent increases in water tariffs for 30 companies serving 83 percent of the country’s population, while their total costs rose by 262 percent.
The bill collection rate remains low at 78.3 percent but there are also exceptions such as the southeastern city of Korca where the rate is at 97 percent. Overstaff in water supply and sewage companies remains another issue with an estimated 13.6 people per 1,000 connections compared to 4 employees per 1,000 connections under the EU standards. Political patronage and the complexity of water supply systems are the main explanations for the situation. The conclusions were made in the latest World Bank report called “Decentralization and Service Delivery in Albania: Governance in the Water Sector.” Albania has 58 water supply and sewage companies of which 55 have already turned into joint stock companies owned by local government units. Widespread illegal connections to the water supply grid and lack of water for 50 percent of the population also contribute to the low collection rate, says the World Bank.
