Tariffs and Cost Recovery
On average cost recovery is too low to recover operating costs, not to speak of providing adequate maintenance of facilities. Recurrent expenditures – estimated at US$29 million in 2001–02 – were financed primarily through user charges (64%), as well as by subsidies from the regional governments (31%) and the federal government (5%). Despite this overall bleak picture, a few service providers recover all operating costs and generate a modest cash surplus.
The National Water Resources Management Policy aims at full cost recovery for urban systems and recovery of operation and maintenance costs for rural systems. It is not clear if progress has been made to achieve this ambitious objective since the policy was adopted.
Read more about this topic: Water Supply And Sanitation In Ethiopia
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