Water Services and Water Policy in Italy

Abstract

Water supply in Italy covers 96% of the population, while the sewage system covers 84% and the wastewater treatment covers 75% of the “equivalent inhabitants”. A radical reform was introduced in 1994, with the goal to exploit the economies of scale and of scope existing in the sector. It prescribed that supply, collection, and treatment are unified in an “integrated water service”, to be managed on a large territorial basis by a unique firm. Consumers must bear all the costs. Because of the relevant investment needed, the average tariff is forecasted to increase in the next fifteen years, but the negative social impact should be avoided through an appropriate tariff discrimination. The reform was strongly opposed by local governments, which were before responsible for water services. Now it covers the majority of the territory but some difficulties remain, since local governments are against the choice of the managing firm by auction and they prefer to directly assign the service to a public firm.