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→Cost recovery for operation and maintenance
== Cost recovery for operation and maintenance ==
According to the BMGF lanscaping, this approach has been identified mainly in water related SDAsservice delivery approach. The idea is that the actual user pays the cost for operation and maintenance as a contribution to the system.
The principle that users should pay for recurrent costs has gained widespread acceptance in the last years, specifically for the rural sector in many countries. Urban users pay through regularised billing in many cases. However, tariffs are often set too low (sometimes for political reasons) and generally do not cover the true costs of system replacement over the long-term.
Tariff structures and costing need better incentives, strategies and support to enhance efficiency (benchmarking, water metering etc.). Poor need differential (social) tariffs. In rural Gujarat 25 water user committees have successfully started to set-up O&M operation and maintenance funds.
<ref>http://www.wsp.org/publications/sa_indiapoor.pdf</ref> However, most urban and rural schemes in India survive on large operating subsidies. <ref>http://siteresources.worldbank.org/INTINDIA/Resources/Bridging_the_Gap_Exec_Sum.pdf</ref>.