Water Tariffs Divorced From Reality

EghtesadOnline: A key contributing factor to high water consumption and waste in Iran is that the precious commodity is sold inexpensively to households, industries and farmers, says the director of Natural Science Department of the National Commission for UNESCO in Iran.

News ID: ۷۴۶۸۸۱

10 March 2019

"Consumers barely pay 40% of real cost. Moreover, little attention has been paid to water resources and economics which address the financial dimensions of water resource management," Ali Chavashian was quoted as saying by Fars News Agency.

Iran's annual water consumption is over 100 billion cubic meters and the country has 88 bcu of renewable sources.

According to the official, water has a 0.5% share in the Iranian family expenditure basket per annum. This amount is 2.7% and 2.5% in Germany and England respectively.  The two countries are much greener compared to Iran as it continues to grapple with drought, according to Financial Tribune.

Referring to outdated rules in water sector, Chavashian said, "The Fair Water Distribution Act is one the water regulations that was approved 36 years ago and is in dire need of revision."

As per law, all water resources in Iran are government property and the Energy Ministry is responsible for distribution. A key objective of the legislation was to regulate water demand and supply and rethink water pricing for all sectors.

The official said when this law was approved Iran’s population was 36 million and many industries that exist today had not been born then. He called for rewriting laws compatible with the present conditions.

Water pricing is largely based on delivery --- cost of transfer from the source to consumers.

Water experts including Chavashian complain that the price of water sold to homes does not even cover the delivery costs, let alone R&D or expansion projects.

An estimated 95% of the population has access to cheap potable water, the Energy Ministry says.

The government pays 25,000 rials (25 cents) for delivering a cubic meter of water to consumers whereas the latter pay 10,000 rilas (10 cents) which explains why they take water for granted.

Europe has the highest water cost in the world. Germany, Denmark and Turkey pay the highest prices for water on the continent, at $1.78, $1.72 and $1.36 per cubic meter respectively. Rates in the UK, France, Belgium and the Netherlands are all above $1 per cubic meter of water.

Economists argue that without real prices, there's no reason why people will reduce waste and consume less.

Spreading Awareness

Chavashian says spreading awareness about water scarcity and the impending related problems can play a key role in containing the crisis. “Although this will not produce the desired results in the short-term.”

Large sectors of the society are apparently unaware of the scale of the water crisis, its adverse effects and the increasing number of people suffering from it. Globally over 1 billion people lack access to safe and clean water.

"We should educate the people on how to preserve water and the importance of water. Spreading awareness and educating people on the reality of water scarcity, its effects as well as the significance of preserving water is crucial."

Serge Nakouzi, representative of the UN Food and Agriculture Organization in Iran, has warned that Iran’s water crisis, if left unchecked, will become dangerous  in the next two decades.

"Population growth, climate change, mismanagement of underground water resources and the government’s efforts for food self-sufficiency are key factors contributing to the country’s water scarcity problems," he said.

Isa Kalantari, the head of the Department of Environment, has blamed the government's wrong policies and mismanagement for the worsening water crisis.