Tools to reduce the cost of services: Water Pricing

In July 2010, the UN general assembly proclaimed access to safe drinking water and sanitation as a human right. At the same time, water and sanitation are also economic goods. There is a need to get a balance of these two aspects of water. Pricing water fairly and equally is important to sustain and extend the water and sanitation system. In many countries, consumers pay too little for water services. Revenue from water charges does not even cover operation and maintenance of water utilities, let alone (re)investment for the infrastructure. Water and wastewater tariffs determine the level of revenues that service providers receive from users in centralised or semi-centralised systems for the appropriate treatment, purification and distribution of freshwater, and the subsequent collection, treatment and discharge of wastewater. Here, we will introduce water pricing as an important economic instrument for improving water use efficiency, enhancing social equity and securing financial sustainability of water utilities and operators.