Issues Paper
The Hows and Whys of Water Connection Charges
 High and upfront water connection charges often act as a major barrier to connecting the poor. So why charge for a connection? Mobile companies provide free phones to attract subscribers. Supermarkets do not charge entrance fees to potential shoppers. Why can this not be applied to water services?
There are several answers—from tradition to requiring proof of creditworthiness and willingness to pay, availing of a cheap funding source, and creating artificial bottlenecks to cater to vested interests. Whatever the utilities’ reasons are, one thing is clear—connections should be paid since installing them involves legitimate costs that need to be covered.
Fortunately, the prevailing practice of collecting fees upfront is now being challenged by innovative solutions that reach out to the poor while simultaneously giving utilities good business. Governments, municipalities, water utilities, and donors, including ADB, should explore these alternatives when designing water supply and sanitation projects, and pursue the elimination of upfront payment of full connection fees through other options, including an all-inclusive water tariff.
Read the full paper.
Download the PDF.
CONTACT
Rudolf Frauendorfer
Senior Urban Development Specialist, ADB
E-mail: rfrauendorfer@adb.org
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