The Theory of Water and Utility Pricing - Global Drinking Water Management and Conservation - page 103

Fig. 5.8 Legal forms for the management of urban water services in Spain (Garc í a-Vali ñ as et al.

2013 )

í ñ

signi as et al. 2013 ). For exam-

ple, Table 5.9 shows the relative share of different ownership regimes for the
provision of urban water services in Andalusia (within Spain). Town councils
provide water services to nearly 49 percent of Andalusian municipalities but only to
12 percent of the population, while public companies provide urban water services
to 29 percent of the municipalities and to almost one half of the population in
Andalusia. Contractual and institutionalized PPPs jointly provide urban water
services to 23 percent of the municipalities and to almost 40 percent of the pop-
ulation of Andalusia. Accordingly, private utilities have established their business
in medium and large-sized municipalities to pursue pro

cant revenue for local governments (Garc a-Vali

ts.
Even though a two-part tariff system is applied in most municipalities of Spain,
water pricing varies greatly from one municipality to another due to lack of reg-
ulation. The

findings from a recent case study in Andalusia demonstrated that the
prices are lower when the urban water is directly provided by the public authority
than when the service has been outsourced to the private sector (Garc as

et al. 2013 ). Once the service is outsourced, private companies set higher prices
than municipalities due to larger

í a-Vali ñ

fixed costs. Furthermore, institutionalized PPPs
charge higher prices for water than contractual public

private partnerships.
It is unclear whether the Spanish water sector has reached compliance with the
EU Water Directive; it is possible that Spain is in a transition phase.

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5.7.3 Water Pricing Practice in Australia

The distribution of water and the provision of water services in Australia are
managed by the public sector. In particular, local governments manage the provi-
sion of water services. Currently, most urban water utilities in Australia with