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Water Prices in CEE and CIS Countries. Volume I: Main Text Foreword by the Danish Environmental Protection Agency (DEPA)by Karsten Skov, and Ulla Blatt Bendtsen, Although large achievements have been made over the past 10 years to improve the water supply and wastewater treatment systems in Eastern Europe, these countries still face large investments in water infrastructure in order to meet international standards. Meeting EU water legislation is among the most difficult and expensive challenges facing the 10 Eastern European accession countries in the first decade of the 21st century. Implementing urban wastewater treatment requirements alone is estimated to cost more than 15 billion EURO. Other demanding water acts include the Drinking Water Directive, the Bathing Water Directive and the Nitrate Directive a.o. In the CIS meeting international standards is even more costly as water systems have seriously deteriorated over the past 10 years due to lack of maintenance and rehabilitation. The present service level is generally low and in many cases peoples' health is at risk. At the same time public budgets are squeezed and local water companies are required to cover costs fully through increased tariffs from their customers. Hence, tariffs are likely to rise dramatically, and in some cases this could be impossible or unacceptable. Therefore, there is a strong need to prepare surveys of consumers' willingness and ability to pay for improved services as part of the investment planning. On this background the Danish EPA has financed the preparation of this new Toolkit to assess the acceptability of increased water prices in the CEE and CIS countries. The work is based on a number of concrete case studies and has been developed in close co-operation with the EBRD. The Danish Consultant COWI was commissioned for the work. The tool is relevant for both larger and smaller cities (a reduced survey is recommended for smaller towns) and in cases of both public and private funding of the municipal investment project. Although it was developed for Eastern Europe, the methodology may also be applied to water investments in developing countries. We are pleased that, with this toolkit, we have a well structured manual for conducting household demand analysis at three different levels: Willingness to pay, affordability and political acceptability which combined with the technical baseline study forms a good foundation for any decision to invest in new water infrastructure as well as any discussion on possible compensation schemes for those households that may not be able to pay for the increase in service levels. It is our hope that the toolkit will find wide applicability among many different user groups (municipal investment planners, sponsors, international financing institutions, consultants, etc.) and we would like to thank the many stakeholders who have provided valuable information for the project.
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