The government pays $200 million annually in hidden subsidies to water subscribers nationwide, managing director of the state-owned Water and Wastewater Engineering Company of Iran (Abfa) said.
“Of the total subsidy, $120 million are paid to subscribers in urban areas and the rest to households in rural regions,” Hamid Reza Janbaz was also quoted as saying by IRNA.
Water is a heavily subsidized commodity in Iran and while urban consumers pay less than 50% of its real price, only 25% of the production cost are paid by consumers in rural regions, which shows that Abfa is deprived of $200 million in revenues per annum, thanks to the controversial policy, he added.
Janbaz noted that as long as the subsidy policy is not revised, the company can neither carry out development projects, nor meet its financial needs.
Regarding the gap between the current bills and what it costs to produce and supply water, the Abfa chief said a small increase in prices will simply not plug the deep holes in the water industry but will only partly pay for establishing infrastructure, modernizing dilapidated networks and buying new technology and equipment.
“The cost of water is a miniscule 0.6% in household expenses,” he added.
Iran is facing serious water scarcity due to the overuse of water resources, drought and low precipitation.
Located in one of the world’s most water-stressed regions, Iran’s average precipitation has been lower than the global average for at least 10 years.
Janbaz said the widening gap between what consumers pay and the final cost of water treatment and supply has pushed the firm to the brink.
Treating and supplying one cubic meter of water cost 10 cents, but subscribers are charged less than 5 cents.
“The national water network in Tehran Province, for instance, stretches over 10,000 kilometers, of which 40% (or 4,000 km) are decrepit and must be replaced,” he said.
“Due to financial constraints, the company can only lay 300 km of new pipelines a year. In short, rehabilitating the entire aging and dilapidated network will take more than a decade.”
Population Density
According to Janbaz, unlike other provinces where 6% of water resources are used by households, the volume in Tehran is above 40% because of population density (973 people per square kilometer).
Drawing parallels between Tehran and Isfahan, he said between June and August, daily water consumption in Tehran increased by 700,000 cubic meters and reached 4 million cubic meters, whereas consumption in Isfahan (with 2.1 million people) was 600,000 cm/d.
Experts, including the Abfa chief, believe that low water prices have made people oblivious to the fact that they must consume water wisely and help mitigate the effects of water shortage.
According to Janbaz, average water consumption has decreased to less than 200 liters per day per person, but as Iran is in one of the world’s most water-stressed regions, this is “a considerable volume” and plans should be devised to curb consumption.
“Providing people with potable water is the ministry’s top priority,” he added, noting that a major challenge that could hamper steady water supply to urban areas is the wave of migrations from small towns and villages to mega cities, which gives rise to urban sprawl that is characterized by increased energy use and stressed infrastructure to meet rising water demand.
The same is true for other utilities, namely gas, electricity and public transportation.
Officials say that despite the significance of expanding water infrastructure, people play a key role in water management.
According to official reports, almost 5,000 villages across the country are struggling with varying degrees of water paucity and thousands of villages have been abandoned due to the severe water crisis and years of drought.
Environmentalists have for years appealed to the people to cut water consumption and urged officials to undertake meaningful reforms. But as the worsening water situation and rising consumption demonstrate, their appeals have fallen on deaf ears.
There is serious concern that if water consumption patterns do not change dramatically, many parts of the country will turn into barren land and trigger migration.
