Strategic Moves - Regional Environmental Center for Central and ...

• importance of public health and other environmental issues; and
• past experience with private sector involvement in the provision of public services,
if the planned tariff increase is related to service improvement that involves
a public-private partnership.
Willingness to pay is commonly assessed and quantified by carrying out special
surveys focusing on identifying service consumers’ behaviour. The recommended
approach to determining willingness to pay for changes in water and waste
management service levels is to use methods based on hypothetical behaviour, such
as contingent valuation or stated preference technique (conjoint analysis). It is particularly
important to disclose to service users the tariff-setting methods and the
benefits of extending the service area, improving service efficiency (e.g. reducing
losses in water supply networks by their rehabilitation), and counteracting health
risks (e.g. by constructing wastewater treatment plants and/or sanitary landfills).
Campaigns can therefore be a catalyst towards increasing willingness to pay for improved
services. Assessments of willingness to pay can be an important tool for
those preparing investments in order to demonstrate the credibility of investments
where current bill collection rates are low (as in most SEE countries) but where
service providers wish to upgrade the entire system.
Regionalisation
Maximising the efficiency of environmental investments generally requires cooperation
between small and medium-sized municipalities in the sharing of infrastructure
and service systems. This is particularly necessary in the waste management sector
and can enable municipalities greatly to improve the affordability of their planned investment
projects. Regional water management facilities, and central wastewater treatment
plants in particular, require less investment capital and have lower operation and
maintenance costs. Such cooperation is also a requirement for accessing certain grant
funds, particularly those from the EU. This is an obstacle for many local governments,
which tend to be highly politicised and wary of cooperation with outside institutions.
It also requires sophisticated planning and cooperation experience and skills, which
local governments lack. Failure to cooperate and/or surrender competencies to regional
institutions is a major bottleneck to proper investment planning.
In order to overcome insufficient funding and inadequate logistics in the
process of planning and implementing waste management projects in smaller municipalities,
regionalisation allows for the pooling of resources and the application
of economies of scale.
Regionalisation requires an appropriate institutional form in order to bring
those who intend to use the regional facilities under one umbrella. Within a region,
it is vital to establish an organisational structure that will facilitate cooperation
and the development of regional infrastructure. In particular,
mechanisms must be identified that will enable the necessary shared capital expenditure
and the shared recovery of capital and operating costs. The main challenge
is to bring tariffs, operational costs, available waste collection equipment
C H A P T E R 6
WAT E R A N D WA S T E U T I L I T I E S I N S E E — S TAT U S A N D R E F O R M
S T R AT E G I C M O V E S 137