Regionalization of Water Supply and Sewerage Companies as a Solution for the Efficiency of Water Supply and Sewerage Sector: Case of Albania

Abstract

The aim of this paper is to analyze the efficiency of water supply and sewerage sector in Albania. The study focuses on the current situation of water supply and sewerage companies for the entire year 2011, as well an analysis of factors creating premises for achieving efficiency benefits. For the purposes of this study an analysis of three performance indicators that have a serious impact on the financial sustainability of a typical water and sewerage company is carried out using the data from the Performance Monitoring and Benchmarking Program for all water companies in Albania. The data are calculated based on weighted average basis for groupings of water companies/utilities using the “population served” by the company as the basis of “scale”. The main result of the analysis is that the potential for economies of scale can exist in the case of Albania since 74% of water supply and sewerage companies serve a number of populations of less than 50,000 inhabitants. The result of the analysis shows that an increase in served population will normally be related to an increased population density, which also direclty contributes to achieving economies of scale and getting above a served population of 100,000 people are where economies of scale can start to make a real difference. In order to achieve this efficiency, the aggregation of companies and creation of regions may be the solution for this efficiency to be realized.

DOI: 10.5901/mjss.2013.v4n6p37