Ministry of Regional Development and Public Works ENSURING

Ministry of Regional Development and Public Works ENSURING INCLUSIVE SERVICES PROSPECTS OF IMPLEMENTING SOCIAL TARIFF IN BULGARIA 3 May 2018

Ministry of Regional Development and Public Works What does the WSS sector provide? Ø Ø Ø Basic human right Economic growth Safe environment Work places Education and innovation

Ministry of Regional Development and Public Works Limitations to universally inclusive services: No investments – no universal access to safe water and sanitation services Significant investments Inefficiency of some technical solutions – need to balance of social and economic considerations Tariffs – capped by social affordability issues Taxes – unpredictable and scarce Transfers – limited and conditioned on to many requirements Highly qualified and experienced staff In company: Capacity building, attractive remuneration, motivation and professional growth; Across companies: standardization, guidance, cooperation; Consumer orientation Water as obligation, as well as right; Participation;

Ministry of Regional Development and Public Works The solution proposed with the new WSS Act: Ø Ø Ø Ø Ensure sustainable and predictable funding – implementing the Sector financing strategy; Promote investment efficiency – individual solutions, better planning, integrated approaches; Support to vulnerable groups to “free” cap on tariffs and improve the financing mix; Regulation – consultative approach; Creating mechanisms to ensure the development of human resources in the WSS sector; Capacity building, including international cooperation and exchange of experience; Consumer oriented, participatory approach to service provision.

Ministry of Regional Development and Public Works Tariff affordability for WSS services:

Ministry of Regional Development and Public Works Water Supply and Sanitation Sector Financing Strategy: Ø Increase the cash-flow of the WSS utilities by improving their operational efficiency; Ø Maximizing revenues from tariffs while ensuring affordability for the vulnerable consumers; Ø Minimum water consumption guaranteed; Ø Support for installation and maintenance of metering devices; Ø Optimizing the capex cost through optimizing the compliance cost and prioritizing (postpone) investments and PPPs;

Министерство на регионалното развитие и благоустройството Inclusive approach to financing the sector: Tariffs Taxes Transfers Investment needs Full cost recovery, incl. depreciation and adequate renewal; Predictable financial flows (fixed component); increased ability to draw on commercial capital. Redistribution of revenue – “solidarity fee” accumulating a fund on national level; synergies; integrated planning; Motivate specific changes in the sector – innovation, efficiency; Social needs Protection of vulnerable groups; Flexibility – efficiency without sacrificing access: individual solutions, price discounts, etc. The “solidarity fee” (+ other sources) accumulate predictable financial flow, mobilizing additional concessional or private funding to support struggling utilities Financing of the funding gap, to avoid unaffordability of compliance; mobilization of private capital

Ministry of Regional Development and Public Works Consumer oriented service provision: Information – empowers and increases Monitoring and Control – improves data, enforces rules Participation – informs, improves and legitimizes policy and investment decisions Responsible citizenship – leads to continuous improvement

Ministry of Regional Development and Public Works Thank you for your attention! Malina Kroumova Deputy Minister of Regional Policy and Public Works mkroumova@mrrb. government. bg