Portugal’s Secretary of State for the Environment sayid that current water charges do not cover the costs of services and that low prices benefits those who need help alongside those that do not.
The Government is preparing the country’s water users for across-the-board price rises “to cover costs,” in particular the cost of fixing the nation’s leaky network.
The Secretary of State for the Environment, Carlos Martins, today claimed that, "in Portugal, most of the tariffs in place do not cover the true costs of water and wastewater services."
Martins then hid behind the socialist government’s interim report from the Support Group for the Management of the Strategic Plan for Water Supply and Wastewater Sanitation- ‘Pensar 2020,’ which was presented today.
"What we are striving for are tariffs that can cover costs, namely network rehabilitation costs," claimed Martins, adding that "the entities that manage water services" are charging rates below what is necessary and subsidising these services."
Bringing tariffs closer together will allow water companies to fix and renew the supply networks as "the pace at which managements are fixing their networks is still slow," said the Secretary of State.
Martins said that an increase in tariffs will allow water companies to support those who in fact need the low-rate social tariff, so that this social dimension "is not provided through ‘below-cost’ tariffs.
The report of course states that consumers must pay more to support their poorer neighbours, also to fix the entire network of leaking pipework.
Filled with phrases such as the "optimisation of operating expenses" "to balance the accounts and the economic sustainability of the managing entities" "the economic accessibility of the service is not a concern" the report simply is a long justification to hike water prices across the country under the guise of ‘helping the poor.’
The report did refer to the "the high level of water losses and the number of structural collapses" and the "poor financial capacity of many management entities," but failed t address the reasons why councils don't care if their pipes leak as it is financially more advantageous to raise prices than spend money on fixing pipes.
When the socialist party took over government in 2015, one of the first things it did was to cancel the PSD water privatisation programme which predicted that merging the nation’s water supply companies into larger units was a good way forward.
The socialists realised that merging water suppliers would take power away from the (over-charging) councils which use their in-house water companies to prop up inefficient administrations by charging astronomical mark-ups (Albufeira, Loulé et al).
If water companies had not been part-privatised by councils, there would be no need to pay dividends and the surpluses generated could have been reinvested in the supply network.
The current government wants to see water charges rise, with the profits flowing into council coffers, and is not interested in the country’s leaking supply network as the hpuseholder must pay up, whatever the cost and however inefficient the industry remains. Justifying higher charges by saying "costs are not covered" and "helping the poor" appear disingenuous.
