Technical Efficiency in Water and Sanitation Providers in Chile

GUSTAVO FERRO

Lisboa

Conferencia; International Conference on Redrafting Water Governance.; 2015

Instituto Técnico, Universidade de Lisboa

Chile?s water and sanitation sector has made a significant effort to develop institutions and to invest in resources over the last four decades. As a result, the country has achieved universal levels of coverage in water, sewerage and wastewater treatment in urban areas. In addition, the providers show complete cost recovery, universal metering and diminishing consumption. Tariffs do not reflect social considerations. Instead, a direct subsidy funded by fiscal resources focuses on the poor, who are selected for means testing. On the other hand, the current regulatory model has been criticized for not solving the asymmetric information among regulators and providers. Investments in maintenance and loss control have been deemed insufficient and the industry has been consolidated through mergers and acquisitions into only a few groups that have achieved cost synergies without generating lower tariffs for their clients. We explore the sector?s comparative technical efficiency, concentrating on the recent years after the works to expand coverage had finished and the industry?s consolidation process had ended. We will address new challenges related to loss reduction, maintenance expenditures, and lower tariffs.