Raising Revenues: Quick Solutions for Better Services

Tell consumers that increasing water tariffs is in their best interest and you’ll get scorn and skepticism. But the truth is low tariffs leave utilities with revenues too meager to cover their operation costs, resulting in leaky pipes, low water pressure, poor water quality, and intermittent supply. Consumers are reluctant to pay for such service, revenue collections get difficult and the cycle of poor service continues. How can utilities step out of this vicious cycle?

KyongAe Choe, Principal Urban Development Specialist at the Asian Development Bank (ADB) lists 5 doable steps to help utilities improve their revenues:

1. Prioritize actions; start with easy ones that will result in tangible quick revenue increases with the least cost
2. Establish small-scale pilot projects demonstrating that consumers will pay for full price if improved water service is delivered at satisfactory level
3. Develop an alternative, small-scale power source to run a local water supply system
4. Conduct public information campaigns
5. Secure upfront seed investment and recover cost investments afterwards

Read more: ADB, May 2008