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Financial approaches

17 bytes added, 14:06, 16 December 2008
Cost recovery for operation and maintenance
== Cost recovery for operation and maintenance ==
According to the BMGF lanscaping, this principle has been identified mainly in water related service delivery approaches. The idea is that the actual users pay the cost for operation and maintenance as a contribution to the whole system.
The principle that users should pay for recurrent costs has gained widespread acceptance in the last recent years, specifically for the rural sector in many countries. Urban 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 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 operation and maintenance funds.
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