A state of the sector: looking at water and wastewater in the Danube Basin

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Image text: DANUB WATC 3-4/2015

A state of the sector: looking at water and wastewater in the Danube Basin

A new report from the World Bank highlights the double challenge and opportunities for the water sector in the Danube region.

a sign on the side of a building

Access to water and sanitation services in the region is high compared to the rest of the world. The collection and treatment of wastewater, however, generally lags behind the high level of access to piped water and private flush toilets, especially with regard to EU standards.

In May of this year, the World Bank launched a comprehensive regional study, financed under the Danube Water Programme, called on ‘Water and Wastewater Services in the Danube Region: A State of the Sector’. The report, which is complemented by 16 country notes, is the first of its kind in analysing the progress and double challenge of 16 countries in the Danube watershed in delivering sustainable water and wastewater services to all, while meeting the high standards of the EU environmental legislation.

The report analyses the capacity of the countries to deliver these services to their populations across four main dimensions: access to, quality, efficiency and financing of services. There are sizeable investments needed in the region to bring the water sector up to EU standards, and the report delivers a sound analysis of the status quo as a basis for informed policy making and sustainable investments.

Context and organisation. Most of the Danube Basin has shared a common trajectory over the past 30 years and the development of water and wastewater services has broadly followed a similar path of transformation – driven mainly by two major politico-economic processes: the fall of communism and EU integration. While in the post-socialist period there has been strong decentralisation and significant involvement of the private sector in most countries, EU integration has led to a need for increased regulation of municipal services, the introduction of the cost recovery principle, a drive towards structural change and increased efficiency and sustainability in service provision.

Some of the trends include the aggregation and corporatisation of service providers and the establishment of independent regulatory authorities. About three-quarters of the population receive public services from one of the more than 10,000 formal utility providers in the region, leaving onequarter to rely on informal providers or self-provision, mostly in rural areas. Sector policy formulation remains the responsibility of central governments, whereby the EU agenda and transposition of EU water directives, such as the Urban Waste Water Treatment Directive and the Drinking Water Directive, are key drivers of change in the sector.

Access and performance. Access to water and sanitation services in the region is high compared with the rest of the world. The collection and treatment of wastewater, however, generally lags behind the high level of access to piped water and private flush toilets, especially with regard to EU standards: 83% of the region’s population have piped water in their dwellings, leaving 17%, or almost 22.5 million, without this service. Almost 80% of the population in the Danube watershed report having a flush toilet in their home, leaving around 28 million without, yet only 66% are connected to public sewer networks.

The overall performance of water and wastewater services varies widely in quality and efficiency and is generally below international good practice standards. However, there have been positive trends in a number of dimensions. In many countries, water service is generally continuous and drinking water reaches national quality standards. The level of customer metering has steadily increased to nearly universal coverage in many countries, bringing down individual consumption of water to 100 l/cap/day from 120 l/cap/day in most countries, which is in line with EU standards. Despite overall improvements, the efficiency of utilities in most countries is below international standards and nonrevenue water and overstaffing continue to present significant challenges.

The report uses a proposed Water Utility Performance Index (WUPI) to evaluate the overall performance of utilities and it shows that performance varies widely within the region and each country. Overall, the performance of utilities has improved over the past ten years, with the high performers generally also charging higher tariffs.

Financing services. Increasing costs have driven increases in tariffs throughout the region, to a point where services might become unaffordable for low-income households in some countries. Yet the region is far from implementing the Water Framework Directive’s principle of cost recovery. Overall, the level of sector financing from tariffs, taxes and transfers varies widely, with EU countries showing the highest rate of per capita financing. On average, the sector directs about half of overall expenditure toward operating and maintaining infrastructure and half toward renewing and expanding it. Water and wastewater investments are around €3.5 billion per year, significantly below the €5.5 billion needed to achieve EU and national targets.

Conclusions and future steps. Despite the above mentioned challenges, the EU accession process serves as a motivator to improve access, quality and efficiency of water services and the status of countries applying for EU accession is positively related to the level of development of wastewater services. The region can also build on some important opportunities. The sector has proven to be open to change and those governments considering reforms in around a third of the countries can continue to build positive momentum by basing their efforts on solid analyses. EU integration continues to present a tremendous policy and financing opportunity for many countries. Formal regulatory frameworks and utility corporatisation can help greater accountability, and despite managerial shortcomings, the sector can count on a strong technical workforce.

Based on the outcomes of the report, the Danube Water Programme plans – under its recently started phase II – to provide policy support to countries at national level, conduct more research into non-formal service providers and release a second study on the state of the sector in 2018.

Danube Water Programme


The Vienna-based Danube Water Programme supports policy dialogue and capacity development to achieve smart policies, strong utilities and sustainable services in the water supply and wastewater sector in 11 target countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, the Former Yugoslav Republic of Macedonia, Moldova, Montenegro, Romania, Serbia and Ukraine. Five other countries of the Danube region – Austria, the Czech Republic, Hungary, Slovakia and Slovenia – also participate but do not benefit directly from Programme funding. The Programme is a partnership between the World Bank and the International Association of Water Supply Companies in the Danube River Catchment Area (IAWD), with seed financing from the government of Austria.

For more information on the Programme visit: www.danube-waterprogram. org. For copies of the report (including translations of the report and country notes in several regional languages), see: http://sos.danubis.org/.

Angelika Heider is a programme analyst at the World Bank.