C. Sector financing
138. The sector financing calculations focus on the public water and wastewater sector. Expenditure made by the share of population using onsite water and sanitation facilities, whether piped or not, are not considered. The annual overall financing of public services in the water and wastewater sector was assessed using data from 2011, 2012, or 2013, depending on the available information for each. The methodology consisted of (a) assessing the yearly revenues from tariffs and the yearly operating costs of utilities; (b) using the data collected regarding investments, local and national taxes, and international transfers to consolidate total funding and total spending values; and (c) verifying the data to make sure that the overall assessed yearly funding, through tariffs, taxes, and transfers, would match overall annual spending composed of operation costs and investments.
139. Assessment of utilities revenues coming from tariffs. Revenues of water services coming from tariffs were estimated by multiplying the average water price expressed in €/m3 (for sources, see the “Country Data Summary” section in the Annex) by the average water consumption expressed in liters per capita per day. Consumption values were reported in water surveys computed by local consultants. See the bibliography of each Country Note for a comprehensive source list of consumption appraisal. This amount was annualized to obtain the annual average water invoice per capita, which was then multiplied by the share of population connected to public water service (for sources, see the “Access Data” section in the Annex). This amount was then corrected by the billing collection ratio (for sources, see the “Country Data Summary” section in the Annex) to assess the cash income effectively perceived by water utilities. The billing collection ratio is defined as the ratio between cash income and billed revenues (IBNET indicator 23.2). Revenues of wastewater services coming from tariffs were estimated by multiplying the average wastewater price expressed in €/m3 by the average water consumption expressed in liters per capita per day. This amount was annualized to obtain the annual average wastewater invoice per capita, which was then multiplied by the share of population connected to public sewage service. This amount was also corrected by the billing collection ratio in order to assess the cash income effectively perceived by wastewater utilities. As a result of this calculation, the yearly revenues effectively collected by water and wastewater utilities through tariffs were assessed.
140. Assessment of utility operation and maintenance costs. The operation and maintenance expenditure of utilities was appraised by dividing the sector revenues from tariffs calculated according to the above-mentioned methodology, by the operating cost coverage ratio (for sources, see the “Country Data Summary” section in the Annex). This ratio is defined as the total annual operational revenues divided by the total annual operating costs (IBNET indicator 24.1).
141. Assessment of utility revenues coming from taxes and transfers. Funding from transfers, expressed in euros, were assessed using official reference documents such as Sector Operational Programme (SOP), Operational Programme for Environment (OPE), and Instruments for Pre-Accession (IPA) reports, World Bank reports, OECD reports, and national reporting. See the bibliography of each Country Note for a comprehensive source list. When the transfer amounts were known for a several-year period, they were linearly annualized to allow a yearly calculation. Funding from national and local taxes, expressed in euros, was assessed using official reporting documents computed by local consultants in water surveys. See the bibliography of each Country Note for a comprehensive source list.
142. Assessment of investment costs. Investment costs, expressed in euros, have been assessed using official reference documents such as audits of the National Master Plan or National Water Strategy Program, data from the Statistical Yearbook, and reporting assessments on the spending of EU funds and IFI loans. See the bibliography of each Country Note for a comprehensive source list. When the investment amounts were known for a several-year period, they were linearly annualized to allow a yearly calculation.
143. Data verification. To ensure that yearly funding matches yearly spending, data verification was performed for each country. If a discrepancy was noticed between total funding and total spending in a specific country, an adjustment would be made mainly on transfers or investment values, since these data have been linearly annualized for the purpose of the yearly calculation. But they actually do vary from one year to the other.
