News

7 June 2023

Ombudsman Diana Kovacheva objected to the increase in water prices by more than 43% in the regions of Sofia and Pernik during the public discussions of the drafts to approve the prices of the local water and sewerage (W&S) companies for the period 2022 - 2026 at the Energy and Water Regulatory Commission (EWRC).

The Ombudsman’s opinion presented by Tsvetanka Ilieva, an expert at the Rights of Users of Administrative and Public Services Department, states that there is no economic justification for the increase and there are no guarantees that the service quality will be improved.

The current complex price of W&S Sofia is BGN 2.566 (inclusive of VAT) given that the affordability is set at BGN 3.888. According to the draft, the new complex price of W&S Sofia is BGN 3.691 (inclusive of VAT) which is an increase by 43.84%. This is the adjusted price by the EWRC in view of the complete non-compliance with two efficiency indicators in 2021 (rehabilitation of the water transmission system and efficiency in the construction of water measurement facilities). The price is determined at an affordability of BGN 5.768.      

As regards Pernik, the new complex price is BGN 3.56 (inclusive of VAT) which is an increase by 46.50% in comparison to the current one – BGN 2.43 (inclusive of VAT).

The price submitted by W&S Pernik was also adjusted by the EWRC in view of the complete non-compliance with two efficiency indicators in 2021 (collection of receivables and efficiency in the construction of water measurement facilities).

The Ombudsman emphasises that W&S Sofia did not fulfil 14 out of 30 quality indicators in 2021. Complete non-compliance is in place with regard to indicators such as monitoring of the quality of drinking water, water transmission system failure, water supply system pressure, sewerage system failure, efficiency in adjusting water measurement devices up to the requirements.

“Again, I cannot agree with the fact that, in the middle of 2023, when the EWRC adopts the business plan of W&S Sofia and W&S Pernik, a technical and economic analysis of the companies is carried out for 2020. Indeed, according to the instructions from the EWRC, this year is the baseline for the new regulatory period but this is in the cases when the business plan was submitted for review in 2021. However, we find ourselves in different factual circumstances – the application of the same rules is admissible in a situation of equal conditions, which is not the case,” the Ombudsman notes.

She adds that, in 2020, W&S Sofia reported a loss of BGN 1,799,000; in 2021, the loss stands at BGN 3,688,000; in 2022 – BGN 5,870,000.

Prof. Diana Kovacheva points out that the situation with W&S Pernik is similar – in 2021, the company failed to fulfil 19 out of 30 quality indicators. She refers to the complete non-compliance with the indicators – level of coverage of water supply services, continuity of water supply, overall loss in the water supply system, active leak control, efficiency in adjusting water measurement devices up to the requirements, and others.

She emphasises that, in 2020, W&S Pernik also reported a loss of BGN 3,200,000; in 2021 the loss stood at BGN 1,011,000; in 2022 – BGN 1,454,000. This, however, as is also the case with W&S Sofia, is not analysed and is taken into account for a situation of three years ago which does not exist anymore.

The Ombudsman once again asks about the impact of the grants received from the budget and Operational Program Environment 2014-2020 on the quality indicators.