Privatisation, modernization and setting higher quality standards are affecting not only the energy but the water sector as well. In many of our member countries large investments and infrastructure upgrading are taking place (often with significant external financial support) along with massive industry consolidation and these need to be matched with proper regulatory oversight. Consequently, many utilities suffer from chronic problems such as poor performance, service quality and most importantly low tariff structures which do not recover costs. Regulation of the water sector has a steadily growing importance in the ERRA region due to the need for a stable environment in the provision of water services.
The growing importance is highlighted by the increased interest and readiness of international donor organisations to offer various funding mechanisms and ear-marked projects to the water sector, in particular to water regulators.
Water regulatory topics are often overlapping with energy regulatory tasks, especially in the field of tariffication and licensing such as subsidies to lo11w income consumers, incentive tariff system, improving cost recovery etc. The regulatory experience accumulated in the field of energy can result in improving water sector regulation and improving cost recovery of the industry. ERRA can play the prime role of bridging these two network services in the interest of all the stakeholders in these sectors with the aim to disseminate available regulatory practices and to contribute to the capacity development of water regulatory staff.
ERRA is experiencing a growing tendency among ERRA member regulators to assume water regulatory tasks as part of their multi-sectoral regulatory activities. While in 2008 only 35% of member organisations were responsible for water regulation to date 50% of our members are responsible for this sector.