Adaptation to a Growing Population through the Decline of Per Capita Consumption Triggered by Increasing Block Tariffs — Rabat-Casablanca Costal Areas, Morocco

Level: National
Region: MENA Region
Tags: Economic instrument | Urban water supply
Target audience: Local government/municipalities | National government | NGOs and CSOs | Students/university | Water authorities | Water companies


Projected water-need forecasts, based on then-prevailing consumption patterns, would have required the tripling of water supply capacities in 40 years’ time, which was considered prohibitively expensive. As an alternative, a complex set of measures were applied. The core measure was the introduction of a block tariff system, which involved establishing incremental increases in blocks, with the greater burden falling on consumers using above-average amounts of water. Supplementary measures were also introduced, including: decentralisation of service responsibilities, improvements in service quality and coverage; widespread metering of water use, reducing network loss; and awareness raising.

Baseline situation  

In the case study area, the capacity of the traditional water sources, about 100 million m3 per year, was sufficient to provide only about 20 m3 of water per person per year. To augment the supply, a water transfer infrastructure from the Fourart Water Table was built in the 1930s. The infrastructure has been expanded ever since, in parallel with population growth and increased economic activity. In 2000, transfer capacity was 270 million m3 per year, 100 million m3 of which was lost in the transfer process. 

Water consumption was steadily increasing, and different sources forecasted water use of 890–1,145 million m3 per year by 2020. Increasing supply to meet such demand was deemed prohibitively expensive. There is insufficient information to know if there would be enough water to meet the increased demand even with the delivery infrastructure in place.

Policy makers concluded that, instead of further capacity creation, demand-side solutions were to be applied to ensure that existing supply can meet future demand.

Conflicts arising from the baseline situation  

When the measures were launched, there was no explicit scarcity or shortage within the case study region; consequently, there were no immediate conflicts between different water users or interest groups. A potential conflict started to emerge as a future threat to public finances in terms of providing the necessary financial sources to enlarge the dam system and transfer capacities. The investment costs were estimated to equal the total three-year revenues of the water service of the region, and this was deemed too expensive. An adaptation process, including demand management, seemed a more attractive option.

Description of the applied measure, its introduction and operation  

A package of measures was devised to restrict the continued increase of water consumption: 

  • A progressive block tariff system was introduced to act as an incentive to save water. Four blocks were established as shown in the table below. Importantly, the new prices were introduced after a period of price stagnation, so inflation was not a complicating factor.
  • In 1995, a uniform volumetric sanitation price was also introduced, reinforcing the incentive effect of drinking water tariffs on consumption levels.
  • Water tariffs were also introduced for public bodies, which previously did not have to pay for water consumption. A voucher system was introduced, allowing a certain level of consumption for each public body, above which they had to cover the water bill from their internal budget. Thus, a direct incentive to save water emerged.
  • As a supporting measure, campaigns were launched to raise awareness of the need to save water, with a direct focus on the young generation.
  • Another supporting measure was the involvement of private sector operators in the distribution of water. While ownership is of secondary importance behind the rules of utility regulation, we can still count on some indirectly supportive side-effects: a private service contract defines the price adjustment formula, providing some stability to tariff levels, and a private owner has a primary interest in maintaining the service’s financial integrity.
  • An outreach programme was initiated to facilitate access to drinking water for low-income urban residents that had previously used standpipes in the streets.
  • Lastly, the reduced water loss of the transfer and distribution systems was targeted.

Block tariff structure and the price increase in each segment (See table)

Physical and ecological impacts of the measure  

The physical impacts are summarised in the table below (See table). A 32-percent increase in population resulted in a 10-percent increase in water production. Unit consumption (total consumption divided by population) declined by almost 20 percent, suggesting that the new tariff system triggered real adaptation. This adaptation took place mainly among household consumers, while the consumption of public bodies did not change substantially over the same decade. The overall technical efficiency of water transfer and distribution did not improve—although it did improve later, by 2011, to 72 percent (Source: AbuZeid, 2014). We can conclude that increasing block tariffs worked well to curb household water consumption, but that the supporting measures were not very effective.

Due to a lack of information, the ecological impacts of the case are difficult to assess.  A key question is: what happens to the water that is not transferred for urban consumption? Is it used for agricultural purposes, or used stored for future consumption? This remains unclear.

Financial and other impacts of the measure on different stakeholders  

Water service revenues increased due to the new pricing regime. The increased customer base (due to higher population and a higher share of population directly connected to the network, as opposed to using standpipes) also contributed to higher revenues. Actual figures are, unfortunately, not available. Other important issues are the level of cost recovery and the burden falling on households, but again, information is absent.

Every cubic metre of water that was saved due to the set of measures makes the initially planned supply-side investment (e.g. building new dams) unnecessary. The cost of these avoided investments is a very important saving within the case study.

Many poor and off-the-grid households previously supplied by standpipes were connected to the systems, which improves their social standing, quality of life and health prospects.

Resilience of achievements, sustainability of results  

The sustainability of the results depends on several factors: 

  • An awareness raising campaign that targeted the young generation;
  • Cooperation with private operators to make long-term application of the price formula more probable; and
  • The fact that the increasing block tariffs were not abandoned after few years, which suggests that population accepts the scheme and is open to its continued application.

Results obtained

  • 10 years after the implementation of measures, per capita household consumption declined by over 20%.
  • A 30 percent increase of the population went hand in hand with a production increase of only 10%. Overall productivity (net consumption plus total production) did not change during the observed period, implying that there was no improvement in leakage.

Success factors

  • Tariff increases were introduced as part of a package of supplementary measures, so the increased financial burden was balanced by improvements in service quality.
  • Awareness raising about the importance of water savings separately targeted the young generation.

Indicators used


  • Time series of total and per capita consumption data, population.

Other decentralised catchment agencies and operators were later established in Morocco. Repeated implementation elsewhere requires careful adaptation of the legal and institutional environment before applying the core measures themselves. Volume-related pricing requires accurate metering. Also, price increases should be accompanied by service improvements and credible service providers.

References

  • “Report of Analysis of the Case Study on the Drinking Water Supply in the Rabat-Casablanca Coastal Area,” Final Report Plan Bleu for the Mediterranean Centre of Regional Activities, no. 103 (2002).
  • AbuZeid, K., Elrawady, M., CEDARE, Arab Water Council “2nd Arab State of the Water Report – 2012”. Water Resource Management Program – CEDARE and Arab Water Council, ISBN: 978977 90 3806 3, pp. 3-34 (2014). Accessed on July 4, 2016: http://www.acwua.org/sites/default/files/water_utilities_reform_-_case_studies_from_the_arab_region.pdf