News

Nearly a third of drinking water is lost due to leaky pipes, and we all pay for it

Published: 23.08.2024
Bratislava, 23 August 2024 - The water infrastructure's condition is insufficient and reaching critical levels. In the three years under review, only three per cent of the expected resources dedicated to the renewal and development of this infrastructure were spent on the objectives defined in the state's strategic documents. The strategic plan for developing public water supply and sewerage systems for 2021 to 2027 anticipates as much as EUR 5.7 billion needed for their renewal and expansion. Of this, nearly 3.4 billion should go towards renewal alone. According to their plans, the four controlled water companies were supposed to invest EUR 470 million in the renewal, but in the end, they spent only EUR 78 million, less than 17% of the planned investment. Alongside this, their investment debt is increasing, with the rate of infrastructure ageing outpacing the rate of renewal. This follows from the latest audit of the Supreme Audit Office (SAO) of the Slovak Republic, aimed at assessing the management of water companies after the change in legislation, the method of regulating the pricing of water and sewerage charges and the ability of these companies to generate sufficient financial resources for the necessary renewal and expected development of public water supply and sewerage systems. "The renewal of public water supply and sewerage systems should undoubtedly be an investment priority for every water company, which has this strategic responsibility not only by law but also by its core mission," says Ľubomír Andrassy, president of the SAO, adding that the enormous losses of drinking water are also alarming. Annual leakages in Slovakia climb above 51 million cubic meters of drinking water. "If the waterworks actively modernized the outdated leaky water mains and returned the wasted tens of millions of cubic meters of drinking water to the people as good managers, we could supply it to large families, seniors or, for example, to a million households for free or for a symbolic euro," says the chairman of the Slovak auditors, Ľ. Andrassy.

The SAO has been dealing with the issue of water companies for a long time and keeps government representatives, and the Parliament informed about its findings. With its recommendations, it models the modification of legislation and describes the risks that can fundamentally affect the functioning of companies responsible for the country's critical infrastructure. Most recently, the auditors examined The Regulatory Office for Network Industries (URSO) and four water companies in the audited years 2021 to 2023, namely the Bratislava Waterworks Company (BVS), the Western Slovak Waterworks Company (ZsVS), the Eastern Slovak Waterworks Company (VVS), and the Podtatran Waterworks Company (PVS). Following a recent change in legislation initiated by the national authority for external audit, only municipalities and towns can be shareholders of the companies, and the companies' shares are not publicly traded. As shareholders of water public corporations, municipalities have a legal obligation to ensure the development of water or sewerage infrastructure and guarantee citizens' access to drinking water.

The most pressing problem for water utilities is the mounting modernization debt for renewing and developing existing infrastructure. The wear and tear of fixed assets of the audited water utilities, except BVS, accounted for more than half of the value of the assets. The water company in Eastern Slovakia has the highest wear and tear rate, almost 54%. The lowest rate, over 42%, was achieved by the Bratislava company, despite the volume of assets of EUR 515 million. If the rate of infrastructure ageing continues to exceed the rate of renewal, there is a real possibility that the entire water network will require a renewal scope in excess of ten billion, which will be practically impossible in terms of the sustainability of public finances and the financial capacity of municipalities.

Read the full text of the press release about this issue in Slovak language.

 

Share: