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→Cost recovery for operation and maintenance
== Cost recovery for operation and maintenance ==
Users pay the cost for operation and maintenance
The principle that users should pay for recurrent costs has gained widespread acceptance in the last ten 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 tariffs. In rural Gujarat 25 water user committees have successfully started to set-up O&M funds.
(http://www.wsp.org/publications/sa_indiapoor.pdf). However, most urban and rural schemes in India survive on large operating subsidies.
(http://siteresources.worldbank.org/INTINDIA/Resources/Bridging_the_Gap_Exec_Sum.pdf). The most suitable model for service delivery which can even have a higher impact if also repairs and replacement can be financed.
== Cost sharing for capital investment ==
