part i: water price around the globe
TRANSCRIPT
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1JWWA workshop , Tokyo, 2015, March 19th
PART I: WATER PRICE
AROUND THE GLOBE
Jan Hammenecker
commercial director of De Watergroep, Belgium
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2JWWA workshop , Tokyo, 2015, March 19th
BIANNUAL IWA LEAFLET
Charges
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LEAFLET 2014: CONTENT
34 countries, 160 cities
Drinking water, sewerage and wastewater
Content
Abstraction (2012)
Delivered (2012)
Consumption (2012)
Charges for 100 m³ and 200 m³ (2013)
Regulation (2013)
www.dewatergroep.be/leaflet2014
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LEAFLET: CHALLENGES
Questionnaire: easy to complete
Validation / quality checks
Stability of parameters and time series
Country and city level
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HOW TO READ THE LEAFLET
Statistics Group provides data
Consumption
Tarification
Regulation
Data knowledge
Graphs and tables trends
Graphs can serve as templates
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TARIFF STRUCTURE
0.00 200.00 400.00 600.00 800.00 1000.00 1200.00
DenmarkNetherlands
CanadaFinland
England & WalesSwitzerland
SwedenBelgiumAustriaCyprus
NorwayFrance
MexicoUnited States of America
SpainPortugalHungary
PolandIsrael
RomaniaJapan
BulgariaItaly
Chinese TaiwanChina
South KoreaHong Kong, China
Macao, ChinaIran
Average annual water cycle charges in 2013 for a consumption of 100 m³in US$/100 m³
Fixed charge Variable charge Other charges drinking water Sewerage and waste water charge Other charges VAT
$ 208.24 = ¥ 24,942
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CONSUMPTION GAP
"FROM 49 LITRES TO 340 LITRES PCPD"
0
50
100
150
200
250
300
350
400
Lou
res
Jeru
sale
m
Po
rto
Faro
Mis
kolc
Satu
Mar
e
Star
a Za
gora
Me
dia
s
Vra
nce
a
Bia
lyst
ok
Seve
rin
Bis
trit
a
Tarn
ow
De
bre
cen
Clu
j
Ple
ven
Co
pe
nh
age
n
Aar
hu
s
Iasi
Mar
amu
res
Co
nst
anta
Wro
claw
Tim
iso
ara
Sofi
a
Be
ijin
g
Züri
ch
Osl
o
Bra
zil A
vera
ge
Win
nip
eg
Mau
riti
us
Be
rn
Hel
sin
ki
Tab
riz
Lau
san
ne
Mac
ao, C
hin
a A
vera
ge
Sto
ckh
olm
Shan
ghai
Turk
u
Du
rham
Ho
ng
Ko
ng
Sen
dai
Shir
az
Mal
mö
Gö
teb
org
Ban
dar
Ab
bas
Gu
angz
ho
u
Bu
san
Kao
hsi
un
g
Dae
gu
Seo
ul
Dae
jeo
n
She
nzh
en
Specific water consumption for households and small business 2012in litres/capita/day
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PRICE GAP
"FROM ¥ 1,500 TO ¥ 72,000 FOR 100 M³"
Shir
az
Ban
dar
Ab
bas
Mau
riti
us
Ho
ng
Ko
ng
She
nzh
en
Dae
jeo
n
Seo
ul
Gye
ou
ngg
i
Turi
n
Nag
oya
Sofi
a
Sib
iu
Ara
d
Tg M
ure
s
Satu
Mar
e
Ora
dea
Tarn
ow
Bra
sov
Bia
lyst
ok
Rad
om
Mis
kolc
Sto
ckh
olm
Mal
mö
Bu
dap
est
Utr
ech
t
Po
rto
Sin
tra
Raz
grad
Esp
oo
Be
rge
n
Inn
sbru
ck
Jeru
sale
m
Sen
dai
Am
ste
rdam
Du
rham
Vie
nn
a
Leó
n, G
uan
aju
ato
Gra
z
Od
ense
Gen
eva
Aal
bo
rg
Fixed charge Variable charge Other charges drinking water
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AVERAGE WATER BILL: 42,000 JPY
¥0.00
¥10,000.00
¥20,000.00
¥30,000.00
¥40,000.00
¥50,000.00
¥60,000.00
De Watergroep - average integrated bill
VAT
sewer usage charge
purification charge
variable charge
fixed charge
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DOMESTIC WATER USE IN BELGIUM
Toilet25%
Bath/shower40%
Laundry17%
Dishes8%
Cooking3%
Cleaning 4%
Garden3%
85 l per capita per day
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TARIFF STRUCTURE:
WATER PRICING MEETS ETHICS
Economic aspect
Fixed >< variable charge
Total cost recovery
Ecologic aspect
Progressive >< decreasing blocks
Social aspect
Target group
Affordability
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SPECIALIST GROUP STATISTICS AND
ECONOMICS
Platform to discuss
Pricing policies
Tariff structures
Price elasticity
Regulation
Total cost recovery
Please visit
www.dewatergroep.be/leaflet2014
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13JWWA workshop , Tokyo, 2015, March 19th
PART II: UNCOVERING THE
BELGIAN WATER SECTOR
Jan Hammenecker
commercial director of De Watergroep, Belgium
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15JWWA workshop , Tokyo, 2015, March 19th
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# connections # inhabitantsProduction
source Disitribution
1,000 m³ / year
De Watergroep 1,200,000 3,000,00080% GW 20% SW
150,000
Farys 700,000 1,500,000No production
Buy & Sell70,000
water-link 200,000 500,000 100% SW 92,000
Pidpa 500,000 1,200,000 100% GW 64,000
Vivaqua 600,000 1,500,000 GW + SW 80,000
5 LARGE PLAYERS
IN FLANDERS + BRUSSELS
ALL PUBLIC AND FULLY INTEGRATED
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RECENT ACQUISITIONS OF DE WATERGROEP
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RECENT ACQUISITIONS OF DE WATERGROEP
2008
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2008
2010
RECENT ACQUISITIONS OF DE WATERGROEP
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2008
2010
2012
RECENT ACQUISITIONS OF DE WATERGROEP
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2008
2010
2012
2014
RECENT ACQUISITIONS OF DE WATERGROEP
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2008
2010
2012
2014
2015
RECENT ACQUISITIONS OF DE WATERGROEP
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DE WATERGROEP TODAY
# Connections 1,200,000
# Customers 3,000,000
Turnover 55,550 million ¥
# Employees 1,500
Mains 31,000 km
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GROWTH BY ACQUISITION
1,000,000
1,050,000
1,100,000
1,150,000
1,200,000
1,250,000
1,300,000
1,350,000
2001 2003 2005 2007 2009 2011 2013 2015
# connections
# connections
Average natural growth:12,000 connections / year
2008
2010
2012
2014
2015
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25JWWA workshop , Tokyo, 2015, March 19th
DRIVERS FOR ACQUISITIONWHY MUNICIPALITIES LOOK FOR INTEGRATION?
Shortage of cash
for investments, maintenance
for renewal of assets
for software
Lack of technical knowledge (high-tech, rapid evolution)
Lack of knowledge concerning challenges
legislation, tarification, environmental
Disadvantage of scale
One shot at making money
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ADVANTAGES OF CONSOLIDATION
WHY DO WE INTEGRATE MUNICIPALITIES?
Economies of scale
Efficiency gain
Optimizing costs
most costs are fixed costs (independent of volume)
- income is variable (dependent of volume)
Knowledge centre
valorisation of knowhow (technical, juridical, environmental …)
asset management
combination water + wastewater
quality control
Financial capacity
Best value for money for the (water)customer
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CONSTRUCTION RYTHM OF MAINS
1945-2015
2015: 300KM/YEAR
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RENEWAL OF ASSETS: 27,000 MILLION JPY
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REGULATION IN FLANDERS
“Regulation is like a pizza
There is not one single recipe, but common ingredients.“
1. Rate-of-return regulation
2. Revenue-cap regulation
3. Price-cap regulation
4. Performance-based regulation
5. Benchmarking-based regulation
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KEY INGREDIENTS OF THE PIZZA
Long-term strategy
Efficient water companies
Ability to invest
Total cost recovery
Transparancy
Affordability
Uniform tariff structure
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CHALLENGES FOR THE WATER SECTORRE-INVENTING OUR BUSINESS
Financial………………………....investments
Environment…………………….water safety plans
Technical challenges…………...state of the art
Customer needs………………..soft water, re-use rainwater
Industry needs…………………..re-use waste water
Re-invent your business model
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32JWWA workshop , Tokyo, 2015, March 19th