Water Utility Integration in Hungary: impacts and future expectations

In 2011 Hungary's water supply and sanitation sector was characterized by a multitude of utilities, a fragmented market with widely differing tariffs and no centralized regulation, resulting in often inefficient and unsustainable operational and market conditions. In 2011 the Hungarian governme...

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Bibliographic Details
Published in:Society and economy 2019-12, Vol.41 (4), p.509-522
Main Author: Kovacs, Karoly
Format: Article
Language:English
Subjects:
Economic efficiency
Economic theory
Economies of scale
Efficiency
Infrastructure (Economics)
Laws, regulations and rules
National Economy
Public utilities
Qualitative research
Retirement benefits
Sanitation
Socio-Economic Research
Sociology of Politics
Surveys
Tariffs
Water
Water resource management
Water supply
Water utilities
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Summary:In 2011 Hungary's water supply and sanitation sector was characterized by a multitude of utilities, a fragmented market with widely differing tariffs and no centralized regulation, resulting in often inefficient and unsustainable operational and market conditions. In 2011 the Hungarian government introduced the Act CCIX of 2011 on Water Utility Services which resulted in significant market consolidations. In this article we present the results of a qualitative survey carried out in 2015 to examine the opinion of top managers of utilities on the short and midterm effects of the realization of the objectives set by the Act. The interviews focused on examining the efficiency changes experienced by 15 CEOs of different water utility service provider companies since the integration. The paper also examines their expectations for the future across a multitude of technical and economic fields and factors. This qualitative research aimed to study whether the recent changes in policy and market structure led to economies of scale and to the perceptible increase of technical and economic efficiency levels. It was concluded that efficiency benefits of economies of scale prevailed in most cases, however, these were perceived only to a limited extent at the time of the survey, approximately midway through the ongoing integration processes.
ISSN:1588-9726
1588-970X
DOI:10.1556/204.2019.014