Water services reform in Italy: its impacts on regulation, investment and affordability

Abstract

The water and waste sector is one of the fastest growing Italian utility sectors, currently going through a period of unprecedented change, development and consolidation. The reform, introduced in 1994 with the Galli Law, provides for the organisation of water supply and sewerage through the aggregation of municipal utilities into Optimal Territorial Areas. Vertical and horizontal integration of water and sewerage services allows saving to be made according to economies of scale and scope. Moreover, the Italian legislator intends to achieve the industrialisation of a sector which until then was characterized by economic or municipal management. With the reorganisation forecast by the reform, a programme of investment developing over a period between 20 and 30 years is set out. One of the fundamental aspects of the reform is that, with an adequate long term plan it gives the chance to provide excellent planning for the required works in order to achieve optimum safety and quality in water services. As the restructuring takes its course, a debate is under way on the increase of investment that could cause problems of affordability for the new tariffs.