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WG Economics

Forum for discussion and knowledge sharing

 

EWA calls for improved transparency, and adequate tariff systems and financial cost structures of water services with an expressed focus on the real costs related to the reconstruction, renewal and modernisation of the ageing water infrastructure.

EWA calls for action

  • EWA calls for improved transparency, and adequate tariff systems and financial cost structures of water services with an expressed focus on the real costs related to the reconstruction, renewal and modernisation of the ageing water infrastructure.
  • EWA calls for a strong support of small and medium enterprises in the digital transition, knowledge sharing within the water community and an aligned education in the water sector.
  • EWA supports transparent and sustainable decision-making by development and deployment of life cycle cost based evaluation and indication methodologies and communication of values of water.

 

Interested?

Please send an email to Karoly Kovacs, Chairman of the WG Economics, if you are interested in more info or participating in the work of the WG Economics.

 

DIGITAL WATER EVEN THOUGH (OR: VERSUS, OR: DESPITE) AGEING INFRASTRUCTURES

We have to balance a long term approach with an appropriate level of flexibility, allowing rigid infrastructure to be responsive and adapt to a fast changing environment and innovative solutions.

Water and wastewater infrastructures in Europe are ageing and require unpostponable investments to prevent even more expensive and potentially dangerous system failures, loss of resources, water crises and meeting ever increasing requirements of environment, users and costumers. Water services look at the long term when planning, constructing and operating our distribution networks, collection systems and treatment plants. The most expensive parts of the water infrastructure (more than 6.000.000 Km of public pipelines in Europe, 150 times the equator!) have to last for at least 50-100 years.

Digitalising the water sector is already in progress. This entails tremendous opportunities in detecting, metering, data processing, modelling, planning, cost optimisation and improving resource and water efficiency. Digital data supported management systems enables the formulation of proper financing strategies and transparent pricing systems. Most water tariffs in the EU cover the costs of everyday operation but they barely provide coverage for the costs of digitalisation, reconstruction and replacement of existing facilities reaching the end of their useful lifetime. Digital implementation is associated with high investments in both equipment and training. Especially small and medium facilities demand support at all levels.

Due to the nonexistence of a commonly accepted cost recovery indicators in most calculations and reporting, the real magnitude of the replacement and modernisation costs of the ageing infrastructure remains hidden, and uncovered. Due to the long term existence, the depreciation (even if taken into consideration) based on the historical book values of the infrastructure, have lost their capacity to provide coverage to the present replacement and development costs.

Building Information Modelling (BIM) is a tool, which soon will enable water management units to display their processes digitally, from the initial design process up to and including the decommissioning process. By this, the plants will increase their potential of optimisation already at the planning stage. Moreover, all information concerning object characteristics are detectable during the operation and maintenance stage.

According to Article 9 of the Water Framework Directive, water-pricing policies should follow the polluter pays principle and also take account of the principle of the recovery of all costs. Besides the consideration of many other aspects, like affordability and solidarity, effective and responsible decision-making in this matter would require reliable, transparent information.