Bulk Water Tariffs
In 1999, no water fees were charged for the use of water for irrigation or for water supply in Brazil. In the hydroelectric subsector, a royalty fee (based on a percentage of the revenues collected by power companies) is paid to those states and municipalities where hydroelectric infrastructure and facilities are located. Water users in urban centers pay for the treatment and distribution of water and the collection of sewage, whereas farmers in public irrigation projects pay a tariff for the O&M of the projects.
The establishment of bulk water tariffs is currently one of the most emphasized pricing mechanisms in Brazil. However, the actual implementation of bulk water supply tariffs varies by state. For example in the State of Ceara, prices for industrial users are 60 times higher than those for municipal users, who in turn pay as much as 10 times as that paid by agricultural users.
Bulk water pricing structure in Ceara
| Current prices (US$/1,000 m³) | Estimated annual revenue (US$ million) | Proposed Prices (US$/1,000m3) | Estimated Annual Revenue (US$ million) | |
|---|---|---|---|---|
| Industrial | 545.50 | 100 | 663.60 | 121.65 |
| Municipal | 9.10 | 250 | 11.10 | 304.95 |
| Irrigation, aquaculture, and others | -- | 150 | 12.20 | 185.78 |
| Total | 554.60 | 500 | 686.9 | 619.27 |
Source: World Bank, 1999
Read more about this topic: Water Resources Management In Brazil
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