Sustainability of economic development and governance patterns in water management - an overview on the reorganisation of public utilities in Campania, Italy, under EU Framework Directive in the field of water policy (2000/60/CE)



Because of the limits imposed by the annual tariff increase, such situation risks
to delay the pace of the process of management privatization or, anyhow, of
the process of management industrialization, thus also delaying the actual start
of investments whose coverage is essentially expected to come from tariffs.

To this, we should add a consideration on the smaller profitability of
investments made in the field sewage-water treatment plants compared to that
of investments made for works of water abduction and distribution, with the
possible implication that the former be more sacrificed in case of incomplete
implementation of the Ambit Plans. Therefore, during the revision of the
Regional Action Plan such considerations have been taken into account and a
greater emphasis has been put on the principle under art. 29 c. 4 of Regulation
(EC) n. 1260/1999, that states that in the co-financing of the actions of each
Ambit Plan, reference must be made to the estimated profitability of the total
amount of investments related to the program period considered in the ATO
investment plans and not to the profitability of the individual actions defined
in the same investment plan.

To address the needs of investment in the sector of water treatment, the Campania
Region has, in addition, foreseen the public funding of the most urgent actions by
means of the Framework Program Agreement.

But, in spite of the enormous public funds allocated, we have to signal the low
amount of private investments in the water sector. Such amount, according to
the Report on Economic Reform (2004) of the Ministry of Economy and
Finance, is even estimated to be on the decrease, above all in the Southern
Regions of Italy.13 This finding gives food for thought in the terms of the
fulfilment of the objectives established by the Reform of the Water Services
envisaged by the Galli Law. Indeed, this reform was intended to support the
overcoming of a structural condition of water services characterized by an
excessive fragmentation of the supply on the territory, and pursued the
objective of encouraging local businesses to reach an optimal dimension by
setting up a single operator, likely to act as a licensee for a long period. In
spite of the changes occurred in terms of both regulation and management of
water services, this sector is still strongly influenced by a poor level of

13 Ministry of Economy and Finance. Treasury Dpt. - Report on Economic Reform - 2004.

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