Tariff setting methodology for water services in the Federation of Bosnia and Herzegovina

Having adopted the Water Services Improvement Program at its previous session, the Government today passed a Decision adopting the tariff setting methodology for water supply and sanitation services in the Federation of Bosnia and Herzegovina.   

In order to remove a number of long-term challenges in the water supply, sanitation and treatment sector in the municipalities and towns of the Federation of BiH, there has been an urgent need to adopt a methodology on setting water tariffs that will cover the real costs of public utilities and ensure sufficient funds and capacities for adequate maintenance of water supply and sanitation infrastructure.

The Federal Ministry of Agriculture, Water Management and Forestry established a working group and coordinated its work with international development partners (European Commission Delegation, World Bank, UNDP, Swedish and Swiss embassies) on the development of a regulation on the water tariff setting methodology. The resulting document was deemed acceptable to cantons and municipalities with procedures easy to harmonize and apply in order to improve water services and ensure sustainability of utilities and their eligibility for loan and grant funds of international development partners for capital infrastructure projects in water supply services. This will also help the country avoid obstacles on its EU integration path and stop further aggravation of the sector.  

Water sector reform requires harmonized regulation and functional institutional framework through rearrangement of existing or establishment of new structures, as well as controlled financial flows. Due to complexity of upcoming reforms, ministries competent for water as well as other water competent institutions will be included in this process.