The operations of water companies in the Western Balkans are compromised by political considerations that force them to function as social welfare tools and prevent them from adapting to the ebbs and flows of the market and economy. This promotes an incredibly costly and fragile “social calm” that guarantees elite power. But how much longer can the status quo last?
During communism, the Western Balkan states owned their water supply companies. After the bloc dissolved in the 1990s, the companies were, in most cases, handed over to the municipalities and cities that now own them. Companies virtually have a monopoly on water supply, also called a “natural monopoly”, since water is undoubtedly the most essential public good.
It would therefore seem appropriate for authorities to control this valuable resource in order to provide broad and equal access to all citizens. This scenario would, however, seem less favorable if interests other than those of the public become a priority for the state.
In BosniaFor example, it is extremely unpopular to raise the price of water, even though the costs of all other utilities are increasing and this is completely justified.
ELECTORAL HYPOCRISY
“Over the past five years, the price (of water) remained the same. At the same time, the minimum wage increased by 44 percent and that of electricity by 10 percent. Fuel and food are at their ten-year highs these days. Inflation has exploded. We therefore asked last September to increase the price of water, and this was not allowed. For what? Because the elections were approaching at that time,” Vlado Reljić, general director of the water company in the Bosnian town of Prijedor, told FairPlanet.
On the other hand, Reljić pointed out, some countries transformed their state water companies into private companies only to later regret this decision, because the new owners were primarily interested in profit. At the same time, maintenance was marginalized and the quality of service was far from desirable.
“Cities like Bucharest and Budapest have had a hard time getting their businesses back. So I won’t say that public ownership is not a good solution. It could be if they let us (operate) in a public-oriented approach. in the market, not as a welfare organization. “Otherwise, we will continue to do business with losses forever,” he said.
“The countries of the region aspire to the European Union and standards according to which the consumer pays, because it is the rule according to which the polluter pays. Here the owner pays instead of consumers only to maintain social peace , that is to say electricity.”
PUBLIC COMPANIES USED TO EMPLOY “MERITOUS MEMBERS”
The city pays the water company about 0.6 percent of its annual budget to cover the deficit. In comparison, with these 340,000 BAM, the city could cover almost three times the annual costs of its art gallery or its soup kitchens more than twice.
“Politicians use public enterprises to employ deserving members, especially those who contributed to the well-known fraudulent election. The ruling parties chose their people to run the companies and then expected those people to employ many others,” an official told FairPlanet on condition of anonymity. “If you resist, they fire you. One day, I told my party leader that I no longer had any offices left to accommodate these people. Only corridors.”
The overburdened public sector increases the costs of public funds and ultimately keeps water prices artificially low. “These two things make us managers incapable of running a business. We don’t have enough money to run the operation, let alone invest in improvements.. Our hands are tied,” the anonymous source told FairPlanet.
consider a way forward
Murisa Marić of DON, a Bosnian consumer protection NGO, said water companies are in an even worse situation than, for example, electricity or telecommunications companies, since they cannot cut off electricity. supply of debtors.
“We cannot leave someone without water for reasons of health and hygiene. Even if we exclude this human aspect, the systems were built during communism 50 or 60 years ago, without even planning the possibility of disconnecting someone,” Marić told FairPlanet. “The only way to force consumers to pay their debts is to sue them. And the courts are overcrowded, so we have lawsuits dating back to 2011 that are still unresolved.
“We look forward to various services for citizens being conditioned by regular payment for water.”
According to Marić, privatization of water companies would not be an ideal solution to the problem.
“The system would collapse, I believe. Water is too important to exclude it from state ownership. Even within this so-called natural monopoly, there are standards that measure efficiency. On the other hand, people are used to having running water 24/7… They must be aware that it is a privilege that a few billion people on this planet do not have“, Marić added. “They should think about it once they are asked to pay more than 0.6 EUR per cubic meter.”
Image from pixabay.com
