Since the beginning of the year, I have mulling on this topic of water pricing. Water services is not free. The supply of treated clean safe water cannot be free, as there is a cost to all aspect of the process, from sourcing (be it groundwater, river water, reservoir), storage of raw water, treatment, distribution and finally collection and treating the used water for discharge such that there is minimal impact on the environment. The cost have to be borne, in addition to maintaining and upgrading/building the water systems.
I am not a financial scientists, but water pricing is a critical part of water management. A water utility cannot supply water to the customers sustainably unless there is proper financial management, which means that there is a need to collect tariff as well as manage the cost of delivering the water services.
Water tariff is part of water pricing, and is what water utilities collect for water services. There is advantage in the economies of scale, as implementing water services is expensive, a cost which needs to be shared by all customers. But what is the right price, which is fair to all stakeholders involved? I will blog more in the next few blogs as the ideas come in... :)
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