Environmental Engineering Reference
In-Depth Information
8.3
Introducing Economic Mechanisms: from Free Usage to Payment for Service
The establishment of volumetric fees for water presented an enormous change as water use
had not to be paid for on a quantitative basis before. While also during Soviet times there was
no complete free access to water as a wholly unrestricted usage did not exist, delivery was not
determined by financial means but instead depended on allocation schemes developed top
down on base of production plans. In the perceptions of the water users, they were suddenly
expected to pay for something for which they had not to pay before. The main reason for the
government in both countries to introduce ISF was the wish and need to gradually handle the
financial crisis of the water sector and reach cost recovery. This coincides with the emphasis
on economic mechanisms by many donors, especially the multilateral development banks. Not
only cost recovery but also efficiency was the main target from their side: The expectation is
that payment will lead to more efficient water usage and reduce wasteful usage patterns.
While both governments had already introduced ISF in the mid 1990s, in both countries
the factual collection rates are about 50%. This does not mean that 50% of all water users do
not pay any fees, but that many only pay part of the fees. How many users do not pay at all,
cannot be said. Ten years after the decision on the reform it is still not fully realized. More
ambitious plans such as differentiated fees, which are discussed in both states, stay ideas. It is
interesting to note that the ISF reform, which can be expected to have more elite commitment
than others (no pressure by donor, interest in less state allocations to the water sector), did not
show better implementation results than those reforms where donors play a bigger role and
that might have less ownership.
While different mechanisms are in place to enforce payment (like partial payment in ad
vance) they are generally not applied. This shows that it is not only a technical problem (ca
pacity of fee collection, ability to cut off fields from water supply), but also of the will to en
force it. It is also noteworthy, that even if the reform would be implemented as decided, the
target of cost recovery would not be met, as the fees in both countries are rather symbolic. In
the local case studies, various interwoven reasons for the non payment of fees by farmers and
the non enforcement by the authorities have been identified. How are these reasons related to
the neopatrimonial context? In both countries, ISFs were introduced by government decree.
Only little information on the decision making process in Tajikistan was available, but it seems
not that there was any opposition to the ISF. However, this is not surprising, as the decision
making is generally characterized by a lack of open discussion. The decision making process in
Kyrgyzstan is interesting, however. It is frapping that the Parliament, usually not visible as a
key actor, evolved on stage: It was the Parliament that resisted introduction of water fees, first
in the Law on Water, where agriculture was excluded, and then as it refused to determine and
later raise the amount of ISF. Here, we could see an exception to the otherwise observable
institutions of decision making with a non prominent role of the Parliament. The reason for its
resistance to the ISF is generally not attributed to programmatic considerations but rather to
the Parliamentarians' commitments to their voters, which have to pay the ISF. In contrast to
Tajikistan, the institutions of the decision making process allow veto playing and a political
debate. However, this role of the Parliament for setting the level of the ISF was expelled in the
new Water Code of 2005.
The institutional conditions of the agricultural sector are the main variable influencing the
implementation of ISF reform. Both countries conducted a land reform in the 1990s, although
with different results: While agriculture in Kyrgyzstan is almost completely privatized, state
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