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Financial approaches

85 bytes added, 14:28, 16 December 2008
Cost recovery for operation and maintenance
The principle that users should pay for recurrent costs has gained widespread acceptance in recent years, specifically for the rural sector in many countries. In the urban context, users use to 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 The tariff structures and through which cost recovery strategies are put in place, as well as costing mechanisms need better incentives, strategies and support to enhance efficiency (benchmarking, water metering etc.). Poor need The -poor needs differential (social) tariffs. In rural Gujarat 25 water user committees have successfully started to set-up 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>.
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