A note on water services cost recovery in the Gallego river basin

Abstract

Up to date, water management in Spain has  been focused on supply approaches, with the result of providing  consumers with this resource at a low price. Developments in the  institutional framework regulating water management in the European  context (mainly the implementation of the Water Framework  Directive) have shifted this approach in order to promote  sustainable water use. To achieve this objective, tariff policy  must now take into account the water services cost-recovery  principle for its different uses. Within this context, this paper  estimates the public capital stock related to water supply and  assesses the existing level of cost-recovery related to that stock.  The methodology used, compares the tax level needed for full-cost  recovery with actual revenues from different water-related taxes.  The case study area is Gallego River basin in Aragon, and results  show the low cost- recovery level for most  water services.