GoAL WaSH - Regulatory Framework for Water Supply and Waste Water Tariffing

The key challenge in Bosnia and Herzegovina’s water sector is the lack of financial sustainability of water utility companies. As a result, water utilities are incapable of investing in equipment, infrastructure maintenance or development. They also lack performance-based management systems and rarely assess public satisfaction with their services. 

The project activities include:

• Provide technical assistance to the Government of the Federation of Bosnia and Herzegovina to establish a legislative and institutional framework for the water supply and sewerage sector;
• Develop a draft methodology for tariff setting for water supply and sewage services in Bosnia and Herzegovina that shall define tariffs enabling costs recovery. The methodology should also include detailed guidelines for developing a business plan to improve financial and operating performance;
• Develop a proposal on the best administrative positioning of the Regulatory Body for tariff setting of communal affairs of water supply and waste water collection and treatment services. Define tasks and competences of that body, including necessary amendments of Law(s) on Communal Affairs;
• Test the tariff setting methodology, providing support for its implementation in two selected pilot communities (one in each of the entities).

Flagship results achieved thus far:

• In 2017 the water tariff methodology was tested in two municipalities: Tešanj and Teslić. The testing resulted in the introduction of new accounting procedures in utilities which enable proper control of different costs. Both utilities have prepared action plans for water losses reduction. The pilot testing continued in 2018 with the municipalities of Trebinje and Ljubuški and their Water Supply Utilities that have Waste Water Treatment Plants in the system, to assess tariffs and eventual bottlenecks in this scenario
• The Government of the Federation of Bosnia and Herzegovina has proposed changes of the Water Law, which include request for a tariff methodology rule-book. These changes are now pending approval by the Parliament
• Methodology presented to mayors and municipal councilors within the General Assembly’s of the Association of Cities and Municipalities of Federation of BiH and the Association of Cities and Municipalities of Republika Srpska
  
• Thematic workshops organized for 50 representatives of civil society organizations in  Banja Luka, Sarajevo and Tuzla
  
• Over 200 pupils and teachers visited water utility companies in Banja Luka, Bosanski Petrovac, Istočnu Ilidžu and Neum
  
• Consultative meeting with the members of the Project Board and government institutions regarding “Tariff setting methodology for water supply and sewerage services in Bosnia and Herzegovina” was held.
  
• Project activities presented at the RENEXPO BiH conference
  
• World Environment Day and World Water Day marked
  
• Educational materials developed for: (1) municipal councilors „Guidelines for councilors:  When considering request for changes in tariff of water supply, sewerage and wastewater treatment“, (2) citizens „ How does water get to your faucet?“, (3) pupils „Advices how to reduce water usage”
• The Methodology is integrated in the Draft law on modifications and amendments of the Law on Water of Federation of BiH from 2017. For the adoption and application of the Methodology it is necessary that the Federal Ministry of Agriculture, Water-Management and Forestry and Federal Ministry of Environment and Tourism adopt a Decree on methodology for defining lowest tariffs for water services

Website:
http://www.ba.undp.org/content/bosnia_and_herzegovina/en/home/operations/projects/environment_and_energy/goal-wash.html
http://www.watergovernance.org/programmes/goal-wash/bosnia/

Contact:
Alisa Grabus, Energy and Environment Sector Associate, alisa.grabus@undp.org