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Evolution of cost recovery levels in the Portuguese water supply and wastewater industry 1998-2005

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  • Monteiro, Henrique

Abstract

This paper assesses the situation in Portugal in 2005 regarding cost recovery in the water supply (WS) and wastewaterdrainage and treatment (WWDT) industry by type of system (bulk and retail water and wastewater), by type of utility and by NUTS III, halfway between the publication of the Water Framework Directive (WFD) and the meeting of the 2010 deadline. For that purpose, we build on the previous contribution by Monteiro (2007), which reported the situation in 2002, by updating the indicators to 2005 and assessing the evolution since 1998. We also present a brief historical overview of the presence of the cost recovery principle in Portuguese law regarding the industry. The main conclusions that stand out are: the introduction of the cost recovery principle is prior to the WFD and the more recent Water Law, although it lacked practical implementation; the level of revenues collected by the WS and WWDT utilities is insufficient to meet the financial costs of their activities; the situation is worse for wastewater than for WS systems, revealing evidence of cross-subsidization within the utilities which manage both systems; the situation has worsened in recent years; cost recovery levels are lower in the less densely populated and poorer inland regions; finally, we find no evidence associating cost recovery levels and the type of utility.

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File URL: http://mpra.ub.uni-muenchen.de/11490/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 11490.

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Date of creation: Oct 2008
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Handle: RePEc:pra:mprapa:11490

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Keywords: Water Supply Systems; Wastewater Drainage and Treatment; Cost Recovery; Water Framework Directive; Water Law;

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  1. Bithas, Kostas, 2008. "The sustainable residential water use: Sustainability, efficiency and social equity. The European experience," Ecological Economics, Elsevier, vol. 68(1-2), pages 221-229, December.
  2. Monteiro, Henrique, 2007. "Recuperação de custos no sector de abastecimento de água e drenagem e tratamento de águas residuais em Portugal
    [Cost recovery in the Portuguese water supply and wastewater drainage and treatme
    ," MPRA Paper 4237, University Library of Munich, Germany.
  3. David J. Evans & Haluk Sezer, 2005. "Social discount rates for member countries of the European Union," Journal of Economic Studies, Emerald Group Publishing, vol. 32(1), pages 47-59, January.
  4. Rita Martins & Fernando Coelho & Adelino Fortunato, 2012. "Water losses and hydrographical regions influence on the cost structure of the Portuguese water industry," Journal of Productivity Analysis, Springer, vol. 38(1), pages 81-94, August.
  5. Foster, Vivien & Yepes, Tito, 2006. "Is cost recovery a feasible objective for water and electricity ? The Latin American experience," Policy Research Working Paper Series 3943, The World Bank.
  6. Komives, Kristin & Halpern, Jonathan & Foster, Vivien & Wodon, Quentin & Abdullah, Roohi, 2006. "The distributional incidence of residential water and electricity subsidies," Policy Research Working Paper Series 3878, The World Bank.
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Cited by:
  1. Rita Martins & Carlota Quintal & Eduardo Barata & Luís Cruz, 2010. "Water Pricing and Social Equity in Portuguese Municipalities," GEMF Working Papers 2010-17, GEMF - Faculdade de Economia, Universidade de Coimbra.

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