The Impact of Water Price on the Financial Sustainability of the Palestinian Water Service Providers
Date
2017-11-27
Authors
Murrar, Abdullah
Awad, Ibrahim
Hasan, Abdel Fattah
Yaqob, Eyad
Barghothi, Ihab
Sadaqa, Ahmad
Samhan, Subhi
Tamimi, Abdelrahman
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Abstract
The impactof water sales price on the performance of water service providers
is typically something of a mystery. High prices mean more revenue and
profit; but it may lead to less bills collection and encourage the illegal connections.
Yet, this argument has not been fully addressed in the Palestinian water
sector; this research evaluates the effect of average water prices on the financial
sustainability key indicators as collection efficiency, profit or loss percentage,
non-revenue water, staff productivity, daily consumption, operating,
and maintenance cost. The average price of cubic meter sold is segmented
into low, medium, and high categories. Multivariate analysis shows that there
are significant differences in profit or working ratio, daily consumption, and
operating cost based on the different price categories. Further significant differences
have been found in non-revenue water, collection efficiency, and water
production based on low and high price categories. On the other hand, no
significant difference has been found in staff productivity. The results show
high price set by Palestinian water providers, leads to an increase in the bill
collection rate and profit margin. However, negative relationship has been
found between the price on one hand, and non-revenue water, average daily
consumption, and water production on the other hand. The implication of
these findings reveal that the Palestinian water providers should increase water
prices gradually to cover operating and maintenance cost for better financial
performance and sustainability.
Description
Keywords
Collection Efficiency , Financial Sustainability , Palestinian Water Service Providers , Water Price , Working Ratio
Citation
Murrar, A., Awad, I., Hasan, A.F., Yaqob, E., Barghothi, I., Sadaqa, A., Samhan, S. and Tamimi, A. (2017) The Impact of Water Price on the Financial Sustainability of the Palestinian Water Service Providers. Journal of Environmental Protection, 8, 1490-1508. https://doi.org/10.4236/jep.2017.812092