The impact of household connection to public network wastewater systems: regulatory impact assessment

Brazil faces a severe lack of wastewater coverage. Even in urban areas, wastewater is directly disposed of in watercourses without any treatment for a large part of the population. Although the federal, state, and local governments have invested in water and wastewater services (WWS), the expected results have not been achieved. To overcome this problem, the present paper provides an opportunity to observe an ex-ante regulatory impact assessment (RIA) as a policy tool in Brazil. The regulatory policy options will be appraised through the multiple criteria decision analysis (MCDA) according to the following objectives: (i) protect the customers with respect to social aspects; (ii) safeguard the economic, operational and infrastructure sustainability; and (iii) protect the environment. The results show that by making decisions based on evidence, policy makers should reduce the households not connected to wastewater services by 75% and for that they should incur BRL 33 million to the year 2023. Hence, the extra revenues to be obtained with these new connections are capable of making a surplus estimated as BRL 42 million for the same period. This study promotes the use of RIA as a rational, robust and transparent decision framework by the regulatory agencies worldwide.