Case Study—Aguas Publicas Do Alentejo, Portugal

AGUAS PUBLICAS DO ALENTEJO, PORTUGAL Context • High-income country • Aggregation covering urban and rural areas • Medium level of WSS performance Purpose Performance, professionalization, environmental benefits, solidarity (cross-subsidies among municipalities) Scope Water production and transport; Wastewater treatment Scale • Administrative boundaries • Localities covered: 20 • Population covered: 235,192 inhabitants for water and wastewater • Coverage: 100 percent for water and 100 percent for wastewater • Network length: 1,008 km for water and 128 km for wastewater Process Voluntary and Incentivized (EU funds) Governance • Delegated (50 years) • Public company • Decision making: Equality of partners in the Partnership Commission although Águas de Portugal is the majority shareholder at the utility level • Asset transfer: Asset transferred from municipalities to the aggregated utility through lease agreements, with a rent representing the remaining depreciation cost minus allocated subsidies. These transferred assets remain the property of municipalities. • Liability: No liability undertaken • Staff transfer: Partial staff transfer from municipal departments to the aggregated utility • Clear entry and exit rules Outcome • Positive, but with OPEX increase Findings • Resistance of municipalities was overcome by partnership agreement showing a balance between State & Municipalities (need to search for consensus), necessary alignment of municipalities interests, staff transfer (30%), Bulk price harmonized but retail prices vary in each municipality Key Characteristics of Aggregation Case Study P ub lic D is cl os ur e A ut ho riz ed