In fact, at €3.20 per m3 (less than half a cent per litre), the typical household water bill there is higher than in Paris, at €2.35/m3. Some water authorities charge less than €2/m3, but others charge higher. As value-added tax is just 5.5% of the water price, the authors wonder if such charges simply reflect profits flowing back to private operators. As the survey then shows, the answer is not that simple.
Consider the costs that most users do not see. First, there is capturing water from sources and then treating it. This is on the cheaper side of the ledger, at some €0.14-0.23/m3. Likewise, standards testing is estimated at some €0.03/m3, while storage in reservoirs, water towers and the like might cost just €0.04/m3.
Distribution network costs are higher, at as much as €1.20/m3. While pipelines may have a life span of 140 years, investment and replacement costs can nonetheless reach €300,000 per km. Moreover, replacing lead joints in pipes, as is legally required by 2013, costs about €1,000 per job, with some communes, including the Paris suburbs, seeing that bill rise to €2,500. Meanwhile, it costs some €50 to install a new water meter, which is being encouraged to improve accuracy. Sanitation is another easily overlooked cost; the sewage network can account for the equivalent of €1.80/m3, the survey finds, with sewage treatment plants at some €0.45/m3.
Against this background, France’s water charges might not seem too high. For low-income families, strict measures are in place to help with affordability and to prevent vulnerable households from being cut off. But otherwise, some experts argue that most users could pay even more, for instance, for sanitation.
Making water safe is a constant battle, not least in rural communities facing run-off from agriculture. Official test results are often issued with household water bills. One for 2004 in a village in Picardy stated that while the water standards were met for nitrates, they were near alert levels for toxic contaminants, such as pesticides. Cleaning this up will demand new investment, the local authority says.
Most households would probably agree that if the outcome of that investment was a reliable supply of safe drinking water, a reasonable water bill would be a small price to pay. “Château de la pompe” seems set to remain an excellent bargain for some time to come.
Rory J. Clarke
©OECD Observer No 254, March 2006