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Cross subsidies - Differential tariff systems

66 bytes removed, 01:23, 17 May 2016

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The idea is to differentiate tariffs based on a specific factor common to a group of users, as the volume of water consumed or users' living area. This can also also be used for connection fees.

This approach is considered to be a good way to reach the poorest. However, the [[Asian Development Bank (ADB)]] concluded that whereas it helps to sustain existing systems, current approaches do not reach the poorest [http://www.adb.org/Water/Policy/consultations/IND-2005-Consultation-Report.pdf#page=3]. Tariffs based on volume are interesting, but metering is normally a problem, since it is costly. Customer involvement in the process is also very important. China’s Rural Water Supply program, for instance, has over 90% payment compliance in households with metered systems whereby the salaries of the operations staff are tied to monthly bill collection and raising tariffs if they do not cover operating costs

[http://www.wsp.org/]. Cross subsidies have high potential however, particularly for poor slum dwellers, but innovative ways of dealing with the problem of metering are needed.

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