Wasting Tunisia’s most precious resource: Debunking the false arguments behind dirt cheap water

|

This page in:

In my third Summer in Tunisia, there was an unusual number of major demonstrations across the country; unusual as activism usually declines in the hot summer months. The majority of these social movements were about water shortages: Residents of Beja, Sfax, and Jendouba governorates took to the streets and blocked main roads linking major cities to demand that the National Company for the Exploitation and Distribution of Water (SONEDE) address the issue.

SONEDE has argued that potable water shortages stem from a lack of water in the reservoirs and overconsumption. This seems an odd statement given that Tunisia had record levels of rainfall in the last winter and reservoirs were at their highest level in five years, with the Minister of Agriculture stating that reservoirs were at over 80% of their capacity. So while this summer was not the first time Tunisians faced significant water shortages, it was the first time it happened in a year of abundant rainfall.

What was behind water shortages? First, water demand spiked. This was primarily driven by the wealthiest quintiles (Q4 and Q5 represent jointly 57% of the total water consumption), which use drinking water for car washing and garden watering. In my neighborhood I repeatedly saw people washing their cars daily, wasting huge amounts of precious water, with clearly little care about this gaspillage. Better management of water demand of Q4 and Q5 (at 98 and 135 liters/per capita/per day) could help alleviate the pressure, for instance, by significantly increasing water prices once consumption exceeds a certain volume (as per the example of the electricity sector). Second, a significant increase in tourist numbers puts additional pressure on water needs, as hotels do not seem to care or do much to reduce water use. Profit margins are low given Tunisia’s reliance on the outdated model of ‘all in’ beach holidays, and when visiting a few resorts this summer I saw no efforts to contain water usage (not even the proverbial notes on re-using towels).

Behind both these factor lie systemic issues in the water supply sector, which require political leadership to be addressed. We hope that once elections are over, and a new government is in place, the authorities will take decisive action on what we see as one of the highest risks for the future of Tunisia’s children: the absurdly low cost of water. Being one of Tunisia’s scarcest and most precious resources, water is sold for a pittance. While the prices of electricity and sewerage services have increased, water is the one commodity that remains dirt cheap. Citizens, therefore, have little incentives to economize (or, to be honest, take responsibility for their usage). In addition, large consumers are charged the same as small consumers.

Since 2003, tariff increases have been irregular and insufficient. Water prices have not kept up with inflation, let alone increasing costs of treatment (including expensive desalination) and distribution. It is a sad fact that water today is much cheaper than it was in 2003 in relative terms. Even when the Tunisian government decided in principle to increase water rates in October 2018, no increase was ever implemented.

Often, tariff adjustments are not made under the argument that they will impact the poor disproportionately. But a 2018 World Bank study demonstrated that adjusting the tariff-to-cost recovery levels will have a negligible impact on the poor. Furthermore, the study showed that given that the wealthiest 20% of households consume four times more water than do the poorest 20%, they capture far more of the government subsidy. Therefore, keeping water cheap increases inequality and robs Tunisia of non-renewable supplies. Finally, water consumption is being measured and differentiating tariffs between large and small consumers is an option.

Insufficient tariff adjustments also explain SONEDE’s financing fragility, which leads to even more water wastage, as pipes and other infrastructure are left unmaintained. SONEDE has been structurally loss-making since 2008. Its operating ratio – defined as operating revenues over operating costs – is below one, which means that SONEDE's operating revenue is insufficient to cover its operational cost and therefore the utility has been unable to contribute towards rehabilitation or new capital investment, service its debts, or make provision for depreciation. This situation tends to aggravate significantly over time, with increasing indebtedness, hampering investments that are increasingly imperative to maintain the quality and sustainability of the service and control costs (notably of energy). Also, SONEDE is constrained by limited administrative and financial autonomy, which has restricted its ability to raise revenues or control costs. The outdated legal framework within which SOEs operate accounts for much of this dysfunction: The utility is not able to make strategic decisions about its investment plan, scheduling process, preventive renewal and rehabilitation of networks, optimization of energy costs and managing impacts of increasing desalination.

Based on this vicious cycle, SONEDE’s operational performance and investment plans have suffered. Insufficient revenues have led to significant cuts in the operation and maintenance budget and delays in major investment projects. The non-revenue water level increased from 22.3% to 25.9% between 2012 to 2017. The recovery of real losses, according to SONEDE's assessment, could save about 86 million m3 per year, which would allow it to approach the energy efficiency level calculated at 88.9% (on distribution networks). Water quality is also an increasing concern. There’s unusually high salinity in the South and, increasingly, there are more service cuts in this part of the country, which had been exacerbated by rising demand and climate change.

When looking at the political debates ahead of the parliamentary and presidential elections, a discussion on water rates, and the exorbitant consumption levels of water, are sadly absent. Yet the low cost of water poses an existential challenge to Tunisia. We call on the next set of elected leaders of Tunisia to take their responsibility and address what has become one of the most visible anomalies in the country: wasting the country's most important resource by making it available at virtually no cost.

 

 

Authors

Antonius Verheijen

World Bank Country Manager for Tunisia

Carolina Dominguez Torres

Senior Water Supply and Sanitation Specialist, SMNWA

Join the Conversation