Indicative FSP

Developing a pricing model for water supply providers

The purpose of the following project is the development of a model for the dynamic pricing of water services. The model should be able to produce a set of prices for water services that if applied would ensure viability and financial independence for the organizations that offer such services, while in the same time and by means of an appropriate pricing policy ensuring the rational use and long-term availability of the water resources. The first part of this project is concerned with setting the necessary theoretical basis behind all the factors involved in the pricing of water services. In addition to this, and due to the fact that in order for a pricing policy to be render applicable from the Water Companies, it should be in accordance with the current legislation, an extensive account of the corresponding Greek and European legal frame is also included. In this chapter the legislation the, relevant to water issues, laws of Chile and South Africa are covered to some point, because of the interesting peculiarities that they present. The complete assessment of the present situation concerning water issues in the Greek market, as well as the need for a thorough understanding of the standing pricing policy, required a number of on-site visits to Municipal Water and Sewage Companies. The conclusions drawn, together with a presentation of each Municipal Company are in the second part of this study. The third part is about the Water Pricing Model itself, accompanied by the necessary manual. Following that comes an analytical assessment of the rationale and the concessions behind its development as well as an explanation of the parameters, the variants and their interconnecting relations.

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