New water rates a boost to infrastructure upgrades

Previously inadequate water prices in relation to the real cost of maintaining water and sewage infrastructure are becoming a thing of the past. Their increase paves the way for necessary investments in the water sector, which have long been postponed due to insufficient funds in the budgets of local governments and water companies. Lack of necessary repairs and development of networks systematically increase the risk of failure and pollution. In the face of climate change, the need to modernize water and sewage systems is becoming extremely urgent. They must cope with extreme weather events and new regulations, while guaranteeing protection of the environment and public health.

The Polish Water Authority’s decision to freeze water rates has had a significant impact on the state of Poland’s water and wastewater infrastructure. The inability to raise prices directly affected the revenues of companies operating these systems. As a result, limited financial resources hindered the implementation of necessary investments. Meanwhile, many facilities in Poland require modernization and the implementation of modern, climate-change-appropriate solutions to ensure reliable water supply and efficient sewage disposal. It should be emphasized that water and wastewater services are very capital-intensive and require systematic expenditures. The interruption of steady funding causes avalanche effects. Not only concern for residents obliges local governments to guarantee access to clean water, but also numerous national and EU regulations. In addition, a directive on the quality of water for human consumption is awaiting implementation.

Importance of investment in water and sewage infrastructure

We usually reflect on the state of our water and sewage infrastructure only when there is a malfunction or a major breakdown. Meanwhile, getting to the point where the effects of outdated and neglected networks are felt by consumers is extremely dangerous. Lack of water or poor water quality threatens public health, especially during hot weather and the occurrence of violent weather events. It is the water supply and sewage systems that are essential to maintain high quality drinking water, prevent groundwater and surface water pollution, and investments in wastewater treatment plants are key to protecting aquatic ecosystems.

Modern technologies make it possible not only to effectively protect water quality, but also to manage water resources more efficiently. Thanks to them, we can systematically and efficiently reduce energy consumption used in water transportation and lower operating costs. They also contribute to increasing the resilience of cities and municipalities to extreme weather events such as floods and droughts, which is important in the context of planned legal changes. According to the legislative work list, the Council of Ministers is expected to adopt a draft amendment to the draft in the third quarter of this year. The Council of Ministers is expected to adopt a draft amendment to the Environmental Protection Law. The current provisions will oblige all cities with more than 20,000. population to develop Municipal Climate Change Adaptation Plans. One of the goals of the MPAs is to adopt a strategy for building a city’s resilience to droughts, flooding, floods and other extreme weather events resulting from the climate crisis.

– The problem of underinvestment in water and sewage networks is beginning to grow. Due to inflation causing increases in the price of materials, energy or labor, investment in water and sewage infrastructure has been virtually non-existent over the past few years. There has been a significant drop in the number of repairs, pipe replacements, not even mentioning the financing of treatment plants that are so important during the climate crisis. Local governments lack the resources to upgrade infrastructure, adapt it to new weather conditions and create a system that guarantees a constant supply of clean water, even during hydrological droughts. It’s high time for us to act and invest in modern water and sewage systems, such as those made of a very durable and safe material, such as GRP composite – says Tomasz Wojtczak of Amiblu Poland.

Financing of water and sewage infrastructure

Although there are numerous programs and funds to assist local governments in maintaining water and sewage networks, most of the funds come precisely from water fees. That’s why the freezing of rates in many municipalities at pre-steep inflation levels has hit the state of water and sewer infrastructure so hard. Expansion and modernization have been kept to a minimum. Now the situation will be able to change. Domestic and EU funds, from sources including. from sources such as the European Funds for Infrastructure, Climate, Environment for (2021-2027) FEnIKS, regional programs in the Cohesion Policy in the 2021-2027 financial perspective, or programs of the National Fund for Environmental Protection and Water Management, will be joined by own funds from water fees.

– Consumer fees for water must be the basis for financing water and sewerage systems. This is in line with the principle of cost recovery for water services and the “polluter pays” principle. Of course, additional sources of funding, such as national and international funds, are necessary, but they must not be the basis, but rather should be in addition to funding infrastructure investments. An independent and objective regulator could ensure proper scrutiny of tariff applications, but unfortunately this has not happened in recent years. Hence the pressure from local governments to restore their role as local regulators. Certainly, increases are not nice for consumers, but then it is worth taking care of those who, due to their individual situation, cannot pay more. Our analysis shows that this is about 5 percent. Consumers – says Dr. Ing. Klara Ramm, Chamber of Commerce “Polish Waterworks.”

Upcoming legal changes

Poland remains the last EU member state not to have transposed the Directive of the European Parliament and of the Council (EU) 2020/2184 of December 16, 2020. On the quality of water intended for human consumption. In order to catch up, the Ministry of Infrastructure has begun work on an amendment to the Law on Collective Water Supply and Collective Sewage Disposal and Certain Other Laws. As announced in June, from the first day the law takes effect, municipalities will be required to identify individuals and groups deprived of access to drinking water and to take measures to rectify the situation.

Nor should we forget the ongoing efforts in Brussels to introduce a comprehensive water strategy. Long-lasting droughts, raging summer fires, and water shortages, as is currently the case in Sicily, pose a direct threat to the functioning not only of the European Union’s economy, but above all to the lives and health of our continent’s inhabitants. It is now, at the EU level, that perhaps the most important personnel decisions for our future are being made. On the understanding of the subject by key decision-makers will depend investments in water and sewage infrastructure in the EU, the scale and pace of which could weigh on the continent’s water resources.

– Investment needs in the broadly defined water infrastructure in Poland are enormous. They include securing absolutely basic needs, such as, for example, access to water supply networks, which is still not available to approx. 8 percent. of our country’s population. A key task is also the modernization of the outdated and inadequate network, where recorded losses reach up to 400 million^{m3 of} water per year. And this is just the beginning of a list of challenges that also includes smart water management systems, improved retention or more efficient recovery of water in industrial processes, among others. as part of closed-loop circuits. On top of that, there are also rising operating costs. Hence the discussion of water infrastructure financing is crucial. There is no doubt that the necessary funds must flow simultaneously from many different sources, and it is necessary to ensure stable and predictable funding streams – Lukasz Kozlowski of the Federation of Polish Entrepreneurs, which runs the Water Committee, assesses. Water.