Portugal's water, sanitation and waste sector is a 'time bomb'

The chairman of the board of directors of Águas de Portugal warned today that the whole sector is a time bomb that could jeopardise water services in the very near future.

"Unfortunately, problems remain in the sector needing urgent resolution at a cost of more than €700 million. The current water tariffs do not cover costs. We have a situation that, unless things are resolved, will cause services to suffer in the near future," according to Afonso Lobato de Faria.

The water boss was answering questions put to him by the Parliamentary Commission for the Environment, Regional Planning and Local Government, concerning a new bill for public water supply, sanitation and solid waste management.

Reaffirming that the sector is "unsustainable" and must be balanced, Alfonso Lobato de Faria argued that it takes "a lot of investment otherwise inefficiencies start to appear, such as water losses," which currently are around 40%.

The president of Águas de Portugal said the country still has a surplus of operators, about 500, when it "should have no more than 50."

Another problem to be resolved relates to fairness, as he considers it unfair that customers who live in the interior of the country have to "pay a much higher price" compared to those who happen to live near the coast.

Summarising the water, sanitation and waste management situation, the water boss said Portugal has taken a "substantial leap in quality and services" over the past 20 years, through investments of over €11 billion. “We have quality, but we do not have revenues that enable us to maintain this quality for much longer," he said, adding that Águas de Portugal’s debts are piling up, mainly due to councils failing to pay Águas de Portugal for their water supply.

Poças Martins, the secretary general of the National Water Council (CNA) was also heard today by the committee, and he agreed that there are too many water suppliers “There are too many systems in Portugal and, given the way the country is organised , it is not possible to have so many small systems."

Martins also commented on the leaky infrastructure "it is not morally acceptable to increase water rates when there is a water loss of 50%."

Águas de Portugal is keen to raise prices for customers in the interior of the country to the levels nearer the coastline where 80% of the population lives. It maybe should be keener to ensure that local councils actually pay for their water supply. This would significantly ease the company's debt position rather than expecting the impotent customer to foot higher bills to pay for inefficient fiscal management.

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