Economic Development Advisory Councils – Engaging the Private Sector to Improve Municipal Policies
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Local Governments’ Own Source Revenues for More and Better Local Services
August 14, 2018

The USAID Project’s materials prepared to assist its partner municipalities are further developed and used by the Ministry of Infrastructure and Energy for all water utilities across the country.

The Government of Albania has identified improvement of water supply and sewerage services as one of the five crucial pillars and priorities under its current mandate. The GoA aims to expand access to and enhance the quality of water supply and sewerage services for the entire population of Albania.

The ultimate aim is to provide uninterrupted piped water supply and wastewater service to protect human health and minimize negative environmental impacts. In late 2017, the Prime Minister of Albania launched the Water Sector Reform and Action Plan, aiming to improve the delivery of water supply and sewerage services by reducing non-revenue water, improving financial sustainability of municipal water providers, and enhancing transparency and accountability.

The Water Sector Reform and Action Plan are complex and outline several components and areas that need direct intervention, ranging from legislation improvements, institutional restructuring, asset management, enhancement of human resource capacities, building financial sustainability mechanisms, and ensuring efficient and productive investment.

The Ministry of Infrastructure and Energy has defined all steps and issues that need to be analyzed or addressed in the short and long term in order for the sector to reach sustainable development. In addition to the long-term aspects of achieving financial sustainability, one of the main problems identified as critically important is the high degree of informality. To this end, the Water Action Plan placed focus on the fight against informality by:

  • Expanding customer base
  • Formalizing illegal connections
  • Reducing technical and commercial losses; and
  • Improving collection efficiency and debt recovery

The USAID Project has been the pioneer project to support its partner municipalities and their water utilities develop and implement procedures that seek to reduce the level of non-revenue water, improve collection efficiency, and recover/collect old debts. The USAID Project Water Team assisted the municipalities of Lushnja, Fier, Patos and Elbasan develop a Customer Verification Form Template that have guided the verification teams on site. This template and a user manual to identify illegal connections developed by the USAID Project water experts were used as a guidance to develop national templates that were disseminated by the Ministry of Infrastructure and Energy for use by all water utilities.

These concrete actions undertaken by the GoA against informality will have positive impact by increasing the financial revenue and will ultimately lead to a more efficient and sustainable sector and improved customer service. The national figure on new water service connections up to February 2018 is around 20,000 new contracts.

Illegal connections mean that water used is not paid for. This causes a domino effect on the water supply service: the service provider will generate less revenues and will run short of funds to improve water supply and sewage service. On the other hand, increased access to water in the commercial sector creates more business opportunities and can lead to the creation of valuable jobs.

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