Lisbon, July 20, 2025 (Lusa) - Private companies in the environmental sector have said that it is time to “change the paradigm of the water sector”, phase out subsidies and update tariffs, for the sake of future generations.
At a time when the Water and Waste Services Regulatory Authority (ERSAR) is preparing new Water Services Tariff Regulations, the Association of Portuguese Companies for the Environment Sector (AEPSA) considers this to be the ideal moment to begin enhancing the water sector, “to boost efficiency and service quality”.
In an interview with Lusa, the president of AEPSA warns of the need for profound changes, starting with compliance with the “user pays” principle.
Eduardo Marques considers it essential to update tariffs, because the prices charged in some municipalities require revision.
It is “a subsidy-dependent sector” and when this is the case “it lacks capacity for innovation or new technologies” and the sector becomes stagnant.
ERSAR was responsible for publishing the tariff regulations for water and waste, but in 2021 the PS government withdrew this power and gave it to the municipalities.
In October, the previous government, led by the Democratic Alliance, restored the tariff-setting power to ERSAR, a move that the PS and some municipalities welcomed with constructive feedback.
From next year (following the local elections), ERSAR will once again set tariffs for public systems, while also being able to make proposals and recommendations for private systems. The process is now in the preliminary market consultation phase.
Eduardo Marques says it is “an excellent opportunity” to bring about change in the sector.
Last year’s Annual Report on Water and Waste Services in Portugal (RASARP), for example, shows the sector’s stagnation and reinforces the urgency of modernisation, he says, adding that the last decade presents an opportunity for positive changes.
‘In our view, the key driver of this stagnation is the need for enhanced financial sustainability in most entities in the sector,’ essentially those ‘in decline’ (entities that deliver water to people’s homes).
“About two-thirds of the entities in decline need additional resources to cover operating costs and investments.”
In other words, according to AEPSA, these entities receive support from municipal budgets (the taxpayer pays instead of the user), the state and European funds, or they pass losses to future generations.
For all these reasons, he says that the price of water needs to rise by around 50%, because “tariffs must have technical and social support rather than political influence”.
However, he advocates a social tariff for those who can afford only limited charges.
For Eduardo Marques, we must consider one fact: having quality water and sanitation in sufficient quantities, water for drinking, bathing and all other needs, costs 30 cents per person per day: “A third of a cup of coffee”.
He cites the Strategic Plan for Water Supply and Wastewater and Rainwater Management 2030 (PENSAARP2030) to say that this already recommends and provides for average tariff increases of 50 percent, while some entities will maintain their current tariffs.
This is the case for private management entities (approximately 20% of the total), which already have tariffs set by public tender and are subject to a planned tariff review.
Public entities, which receive operating subsidies, will have to increase tariffs in order to comply with the “user pays” principle.
He acknowledges that the water increase is unpopular, but says that the law must be complied with and that new tariff regulations must “manage to combine the need for a financially and environmentally sustainable sector with municipal autonomy”.
“Because it is not ERSAR that will say that that municipality will have a two euro increase per cubic metre. It has to be combined with municipal autonomy”.
According to the president of AEPSA, the most effective way to achieve fair, sustainable, socially responsible, and efficient tariffs is through competition.
He gives an example: “I have these workers, I have these facilities, I need to make 20 million euros of investments. And the market will say: to do this, the tariff is this. This is the most correct way to have a tariff”.
But what we see, he adds, is that most management entities rely on subsidies and tend to modernise only when they receive public subsidies.
Eduardo Marques emphasises the need to gradually increase the cost of water, allowing for sufficient capacity to invest and innovate, which will enable entities to address emergencies proactively.
‘We, as agents in the sector, whether private, public, regulators, the State, and above all municipalities, must be able to tell the population that water is an essential good and that it has a cost, that they are paying for an essential good and a good for the future, for their children and grandchildren,’ he said.
He regretted that authorities cannot increase a water bill by five or ten euros, even though no one complains about what they pay for a sports channel.
Water and sanitation services in Portugal account for 10% of all costs for different services, such as electricity or television, he said, warning: “When something is very cheap, there is waste, there is no efficiency”.
FP/ADB // ADB.
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