Regionalization of Water Supply and Sewerage Companies as a Solution for the Efficiency of Water Supply and Sewerage Sector: Case of Albania

Evis Gjebrea,Oltjana Zoto

doi:10.5901/mjss.2013.v4n6p37

Abstract

The aim of this paper is to analyze the efficiency of water supply and sewerage sector in Albania. The study focuses on the current situation of water supply and sewerage companies for the entire year 2011, as well an analysis of factors creating premises for achieving efficiency benefits. For the purposes of this study an analysis of three performance indicators that have a serious impact on the financial sustainability of a typical water and sewerage company is carried out using the data from the Performance Monitoring and Benchmarking Program for all water companies in Albania. The data are calculated based on weighted average basis for groupings of water companies/utilities using the “population served” by the company as the basis of “scale”. The main result of the analysis is that the potential for economies of scale can exist in the case of Albania since 74% of water supply and sewerage companies serve a number of populations of less than 50,000 inhabitants. The result of the analysis shows that an increase in served population will normally be related to an increased population density, which also direclty contributes to achieving economies of scale and getting above a served population of 100,000 people are where economies of scale can start to make a real difference. In order to achieve this efficiency, the aggregation of companies and creation of regions may be the solution for this efficiency to be realized. DOI: 10.5901/mjss.2013.v4n6p37

Highlights

On a global level water is becoming a rare resource and there are several factors that cause this phenomenon such as global warming, population growth causing pressure for more water and demographic changes, meaning population move from rural to urban areas
This study aims to analyse regionalization as one way to improve the efficiency of the water and sewerage sector in general and in Albania having as main criteria that of reaching “economies of scale”
Many previous econometric studies have shown that economies of scale are stronger for smaller water supply and sewerage companies and strong economies of scale exist when the number of connections or the population served is used as an indicator for the size of the company

Summary

Introduction

On a global level water is becoming a rare resource and there are several factors that cause this phenomenon such as global warming, population growth causing pressure for more water and demographic changes, meaning population move from rural to urban areas. In the wake of increased competition for this commodity which is becoming rare a debate has started on new approach to water management These debates became part of the discussion in the International Conference for Water and Environment (Dublin, Ireland, 1992) in which were defined the main principles of water sector for sustainable development. These principles stipulate that water is a limited resource, essential to life, development and environment, has an economic value and its management should be based on a participatory model that includes planners, users and policy makers at all levels. Easter and Feder (1996) reached the conclusion that it is necessary a review of methods used to manage and allocate water according to the needs of customers and sectors

Objectives

Methods

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Conclusion