Ćorić: There Will Be No Increase in Water Prices

Minister of Environment and Energy Tomislav Ćorić stated on Thursday that water will not become more expensive starting next year.

“There will be no increase in water prices,” Ćorić briefly stated at Croatian Waters during the celebration of the 141st anniversary of organized water management in the Republic of Croatia.

According to some announcements, an increase in water prices of 10 to 30 percent could occur at the beginning of next year.

Namely, the Ministry of Environment and Energy submitted a proposal for amendments to the Water Management Financing Act for public discussion in the first half of August, to which the Croatian Water Supply and Sewerage Group reacted at the end of August.

>>> We are becoming more skilled at ‘creating’ water from air

From that group, in a comment signed by CEO Ivan Jukić, it was noted that the proposed amendments do not affect the provisions of the existing Act, according to which, starting from 2018, water service providers would become obligated to pay fees for water usage based on the cubic meter of water extracted.

This fee is currently paid based on the water consumed and billed to consumers, and the implementation of the provision that would require suppliers to pay the fee based on the cubic meter of extracted water has been postponed multiple times. This would also mean that the calculation would include water that does not reach consumers.

Jukić emphasizes in the comment on behalf of the Croatian Water Supply and Sewerage Group that the previous postponements of implementation were not without reason, explaining among other things that to date, work on the new regulation for calculating the fee for water usage has not even begun, which could include corrective coefficients for calculating the fee on the quantities of water that are not sold, i.e., for the so-called losses in the system.

>>> Snobmodities: Water for $400 is the new status symbol

“The effect of changing the calculation of the fee for water usage from the end user (consumer) to the water service provider will reflect not only on the cost side of the Supplier but also on the revenue side (losing 5 percent revenue as a fee for billing to end users). As for the cost side – the fee becomes taxable VAT (13 percent), the group notes in the comment, estimating that consequently, the price of water per cubic meter for the end consumer will rise by 10 to 30 percent, without any real effect on improving service or reducing losses.

“All public water supply service providers need to address the issue of reducing losses and determine methods for analyzing and controlling losses, which will be applicable for different types of water supply systems through consolidation. The new regulations for calculating the fee for water usage should come into effect on January 1, 2018, and the restructuring of water service providers has not yet been completed, and due to the specificity of these systems, time is needed to enable monitoring of losses and to conduct good maintenance and oversight of losses in the system,” the Croatian Water Supply and Sewerage Group states.

They also note that if it is indeed an obligation arising from the EU Accession Agreement or from any of the decisions of the European Commission, processes of adaptation and/or amendments should begin, at least by securing funds from EU funds for reducing losses in water supply systems.