Water Tariff and Cost Recovery
No bulk water fees are charged for the use of water for irrigation. An inconsistent system of water tariffs for O&M in public irrigation projects is presently in use. These tariffs are allocated to the sponsoring agency and distributed to the irrigation districts. In 1997 the cost of water tariffs in public irrigation projects ranged from US$3.51 to US$24.58 per 1,000 m3.
Water fees in public irrigation projects are regulated by the Irrigation Law (1984 Law 89.496). This legislation states that water tariffs in public irrigation projects are estimated by the sum of two coefficients, Kl and K2. Coefficient K1, calculated annually, corresponds to the payment of public capital investment in a project's infrastructure. It assumes a 50-year repayment period and subsidized interest rates, and its value is a function of the irrigated area. In 1998, the K1 value for public irrigation projects was R$4.41/ha/month. Coefficient K2 is meant to cover the total O&M cost of a project, and is estimated as a function of the volume of water used (R$/1,000 in3). In practice, the K1 tariff is paid to the sponsoring federal agency, while the K2 component is usually paid directly to the water user district.
Read more about this topic: Irrigation In Brazil
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