EurEau’s second report on Europe’s water sector shows a need for more investment in infrastructure

EurEau’s second report on Europe’s water sector shows a need for more investment in infrastructure

EurEau, the European federation of National Associations of Water Services, has updated its study of the state of drinking and waste water in Europe. Higher connection rates, more pipes, more network, more investment, better recycling and better environmental protection are amongst the headlines. Overall, our customers are seeing better drinking water and waste water services.

Our members pride themselves on providing safe, clean and healthy water to consumers, while returning treated waste water to the environment. Overall, the sector reinvests 53% of its turnover, amounting to €45bn annually, in over seven million kilometres of pipes to deliver and treat 45 billion cubic metres of water.

These figures may look impressive, but the truth is that the sector is under-investing in many countries. Drinking water networks, waste water collection systems and waste water treatment plants are assets that require large investments to be built, maintained and renewed. Under-investing means that we postpone investments that are urgently needed now, leaving these instead to be made by future generations.

Investment drivers

What are the drivers for current and future investments? First of all, substantial amounts of money are needed for simply maintaining the water infrastructure. Networks are ageing. Some of the pipes in our network are close to 100 years old – especially in western Europe – and need to be replaced. The renewal rate for infrastructure is generally around 1% per year, but it can be much lower. The need for more investment is critical for the sector in order to guarantee the same level of water and service quality in the future.

The second key driver for investment is compliance with European and national regulatory requirements. Figures published by the European Commission show that, in particular, certain central and eastern European countries need to invest a very significant amount of money in order to comply with the requirements of the Urban Waste Water Treatment Directive and,1 to a lesser extent, the Drinking Water Directive. EU member states with a lower Gross National Income still benefit from the cohesion funds, but these will come to an end as we know them now. New financing tools will have to be developed to guarantee the right to water and proper sanitation for all.

Another example is the Water Framework Directive (WFD). Its key objective – reaching good water status everywhere by 2015 – was missed and will probably not be met in 2027. The implementation of the WFD must mobilise a large spectrum of stakeholders, but the objective is also dependant on the contribution of water service providers. Fully implementing the WFD requires a significant investment in water services.

The EU is currently reviewing the EU water legislation, and this will possibly be updated soon. EurEau believes that rather than investing to satisfy new targets, investment should be mobilised to comply with the existing requirements. Furthermore, there is a need for a more effective co-ordination between different legal acts relating to water, agriculture, chemicals and others with the full implementation of the cost recovery and the polluter pays principles. It is vital that protecting water resources becomes an overarching principle and that all actors at the river basin level contribute financially. It will leave more investment capacity to the water services.

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