Ministry of Regional Development and Public Works ensuring inclusive services Prospects of implementing social tariff in Bulgaria 3 May 2018

Ministry of Regional Development and Public Works What does the WSS sector provide? Basic human right Economic growth Safe environment Work places Education and innovation

Ministry of Regional Development and Public Works Limitations to universally inclusive services: Significant investments No investments – no universal access to safe water and sanitation services Inefficiency of some technical solutions – need to balance of social and economic considerations Tariffs – capped by social affordability issues Taxes – unpredictable and scarce Transfers – limited and conditioned on to many requirements Highly qualified and experienced staff In company: Capacity building, attractive remuneration, motivation and professional growth; Across companies: standardization, guidance, cooperation; Consumer orientation Water as obligation, as well as right; Participation;

Ministry of Regional Development and Public Works The solution proposed with the new WSS Act: Ensure sustainable and predictable funding – implementing the Sector financing strategy; Promote investment efficiency – individual solutions, better planning, integrated approaches; Support to vulnerable groups to “free” cap on tariffs and improve the financing mix; Regulation – consultative approach; Creating mechanisms to ensure the development of human resources in the WSS sector; Capacity building, including international cooperation and exchange of experience; Consumer oriented, participatory approach to service provision.

Ministry of Regional Development and Public Works Tariff affordability for WSS services:

Ministry of Regional Development and Public Works Water Supply and Sanitation Sector Financing Strategy: Increase the cash-flow of the WSS utilities by improving their operational efficiency; Maximizing revenues from tariffs while ensuring affordability for the vulnerable consumers; Minimum water consumption guaranteed; Support for installation and maintenance of metering devices; Optimizing the capex cost through optimizing the compliance cost and prioritizing (postpone) investments and PPPs;

Министерство на регионалното развитие и благоустройството Inclusive approach to financing the sector: Tariffs Taxes Transfers Investment needs Full cost recovery, incl. depreciation and adequate renewal; Predictable financial flows (fixed component); increased ability to draw on commercial capital. Redistribution of revenue – “solidarity fee” accumulating a fund on national level; synergies; integrated planning; Motivate specific changes in the sector – innovation, efficiency; Social needs Protection of vulnerable groups; Flexibility – efficiency without sacrificing access: individual solutions, price discounts, etc. The “solidarity fee” (+ other sources) accumulate predictable financial flow, mobilizing additional concessional or private funding to support struggling utilities Financing of the funding gap, to avoid unaffordability of compliance; mobilization of private capital

Ministry of Regional Development and Public Works Consumer oriented service provision: Information – empowers and increases Participation – informs, improves and legitimizes policy and investment decisions Responsible citizenship – leads to continuous improvement Monitoring and Control – improves data, enforces rules

Ministry of Regional Development and Public Works Thank you for your attention! Malina Kroumova Deputy Minister of Regional Policy and Public Works mkroumova@mrrb.government.bg