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Methodological uncertainties
In the EU, the Water Framework Directive requires that the costs of water services provided to households are sufficiently recovered through water tariffs. Notably though, both water tariffs and their contribution to financial cost recovery are subject to a combination of intrinsic factors that often vary across, or even within, countries. Among others, such factors may range from disparities in the quality of the service itself to conceptual inconsistencies in the calculation of cost recovery levels, and from differences among management models and institutional frameworks to varying levels of dependency on public and EU funding. Thus, direct comparisons between countries are deemed unfeasible, and comparisons between national subdivisions (e.g. municipalities, RBDs) should carefully account for intrinsic differences (e.g. what services and other items, like asset depreciation, are included in the price and considered in the cost recovery calculations). Further, it should be noted that a higher rate of recovery of financial costs does not necessarily hold correlation with a higher average price for the water service. This responds to the fact that the weight of water tariffs in the mix of the service providers’ total revenue, and/or in the calculation of financial cost recovery levels, varies. For instance, reported average prices between 0.58 and 4.18 Euros per cubic metre all result in more than 100% recovery of financial cost in different RBDs.
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The text above gives a couple of potential explanations for differences in price levels within countries. Unfortunately, the most important one (at least in the Netherlands) is missing here: The cost structure may be different in various regions. With that I mean that in some regions in the Netherlands we use surface water as source for drinkingwater, which requires much more efforts (and costs) than when groundwater is used as primary source. This is the most important explaination why the price/m3 for drinkingwater varies between certain regions. Another reason why costs differ between regions is the housing intensity and need for infrastucture. In less densely populated areas, the costs for infrastruture has to be paid by less people, and thus higher costs per person.
Many thanks for this feedback, we will take into account in the final version of the indicator.