Water Sector and Regulation in ALBANIA

1. Water Sector and Regulation in ALBANIA WATER REGULATORY AUTHORITY Avni DERVISHI Chairman of Albanian WRA November 25,2013, Florence

2. CONTENTS 1 Who we are 2 Tariff regulation 3 Regulatory Instruments of WRA 4 Performance Monitoring & Key Performance Indicators 5 Initiaves and Challenges

3. The WRA is a public independent national institution that regulates the water supply, sewerage and treatment sector established by Law No. 8102, dated 28.03.1996, as amended, “On the Regulatory Framework of Water Supply and Wastewater Disposal and Treatment Sector”, became operational in 1998. • An independent body: • Rule-making powers - decisions are taken by the national commission • Funding resources –it’s composed of the regulatory fees set for the operators activity • We exercise the following functions and powers: • Gives the licenses for all the operators of the sector • Sets tariffs • Prepares/approves uniform service standards • Establishes a transparent, legal and regulatory environment • Protects the interest of the public and the Consumers • Prepares reports and recommendations for the Council of Ministers • Collects relevant information and monitors the sector performance • Professional staff – 5 members of the commission and 13 employees • Operating budget - 44.103.000 ALL / 315.000 € (1 euro = 140 ALL) WHO WE ARE AND WHAT WE DO

4. WRA decides on the tariff setting methodology for calculating the wholesale and retail tariffs of the water, wastewater and treatment • No tariff, or part of it, is subject to change more than once per annum Tariff regulation

5. REGULATORY INSTRUMENTS of WRA • SECTOR DEVELOPMEN • Licensing • Service Standards • TARIFF REGULATION • Tariff Setting Guideline(s) • Cost-Accounting Guideline • INFORMATION & • CONSUMER PROTECTION • Customer-Utility Service Contract • Advices in handling of customer complains • Public Hearings • Transparent Information • PERFORMANCE • MONITORING & BENCHMARKING • Approved KPI-s • Annual Performance Reports • Inspections

6. The results of our performance monitoring and data analysis primarily feed into two key regulatory processes: • tariff regulation • make a correct assessment of each operator’s performance; • set challenging yet realistic performance targets (or ‘benchmarks’) • service providers have to demonstrate satisfactory performance before WRA will approve any request for tariff adjustments • performance reporting • the service providers’ operational, financial and customer service performance is subject to the public every year; • operators can appraise their own performance against that of other service providers operating PERFORMANCE MONITORING

7. O&M cost coverage Collection efficiency KPIs used for performance monitoring and benchmarking Total cost coverage Staff efficiency Non-revenue water Hours of Supply Metering ratio Drinking water quality Regulator’s perception Sewerage Coverage Indicators that impact on the companies’ financial stability and allow insight into current management capacities and the service quality provided THE WRA’S KEY PERFORMANCE INDICATORS

8. Successful initiatives: • New tariff setting methodology (last improvement on September 2011) • Customers service contract • Improved transparency (public hearings, website, publications) • Future Challenges: • Support the implementation of the National Strategy regarding regionalization • Improvement of the licensing process (new licensing rules) • Improvement of the monitoring process (data reliability) INITIATIVES AND CHALLENGES

9. FALEMINDERIT!THANK YOU! WATER REGULATORY AUTHORITY