Appropriate Pricing Policy Needed Worldwide for Improving Water Services Infrastructure

Abstract

This article highlights the enormous and growing gap between the projected and required financing of water services infrastructure, which is caused by unviable pricing and/or cost‐recovery regimes. Globally there is a growing funding gap in rehabilitation, renewal, and replacement of aging water infrastructure and the need for future greenfield investments. Underpricing of water services and the need for rehabilitation seem to be worldwide phenomena. There are diverse constraints in OECD (Organisation for Economic Co‐Operation and Development) and non‐OECD countries contributing to underpriced water services; however, the message is clear: the global water industry must stop underpricing precious water resources. Future enjoyment of sustainable water services will require customers to bear all or at least a major part of the costs. Better awareness of broader economic and social benefits of water supply, and particularly of sanitation, also will be needed.