EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
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Water tariffs are often too low<br />
In many <strong>Pacific</strong> countries water tariffs are held below cost. Vanuatu and Papua New<br />
Guinea are exceptions to the rule. In these countries, the higher tariffs reflect a<br />
requirement to recover reasonable costs and to generate a return on investment.<br />
When tariffs are held below cost, operation efficiency and maintenance often suffer. Nonrevenue<br />
water is an important measure of efficiency. While water utilities in many<br />
developing countries are able to achieve levels of between 20 and 30% non-revenue water,<br />
Figure 5.3 shows that in the <strong>Pacific</strong> only Vanuatu (Port Vila) has achieved this level of<br />
performance.<br />
Figure 5.3: Non-Revenue Water<br />
70%<br />
60%<br />
Non-Revenue Water (%)<br />
50%<br />
40%<br />
30%<br />
20%<br />
10%<br />
0%<br />
Vanuatu<br />
St. Lucia<br />
PNG<br />
Marshall Islands<br />
Pohnpei (FSM)<br />
Yap (FSM)<br />
Kosrae (FSM)<br />
Dominica<br />
Kiribati<br />
Solomon Islands<br />
Fiji<br />
Samoa<br />
Jamaica<br />
Source: Castalia Interviews, <strong>Pacific</strong> Water Association 2001 Benchmarking Survey<br />
Notes: PNG: Papua New Guinea, FSM: Federated States of Micronesia<br />
<strong>The</strong>re is room to improve efficiency and asset maintenance<br />
In the water and electricity sectors, <strong>Pacific</strong> countries have lower labor productivity levels<br />
than most comparator countries. <strong>The</strong>y also have high distribution system losses, increasing<br />
the cost of service.<br />
In the past, government policies in <strong>Pacific</strong> countries have emphasized construction and<br />
extension of infrastructure over maintenance. As a result, road networks in many countries<br />
are in poor condition and some ports and airports have also been poorly maintained.<br />
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