El caracter pro-poor de la estructura tarifaria de Aguas del Tunari

This paper has been complied in response to a draft paper ‘The limitations of water regulation: the failure of the Cochabamba concession in Bolivia’ by Nickson and Vargas (2001). Here we examine their main argument which states that the tariff structure of Aguas de Tunari displayed pro-poor tendencies as a result of ‘a new tariff structure’ which they see as ‘socially progressive’.The analysis finds the following:•The tariff structure is not a new innovation of Aguas de Tunari but, rather, it is the same system that the private company inherited from the municipal company, SEMAPA.•There are key omissions in Nickson and Vargas’s analysis relating to their failure to factor in the costs of sanitation charges, reconnection fees after monthly payment deadlines are missed, costs relating to the indexing of bill payments to the dollar and the regulation tax.•The classification of users is divided into two types, non residential and residential, in the latter there are 4 categories reflecting socio-economic status (1 being poor and 4 being rich). Nickson and Vargas claim those in category 4 pay three times as much for their water than those in category 2 for the consumption of the fixed charge amount - 12 cubic metres. This structure therefore represents a large cross subsidy of the poor by the rich. Our analysis indicates that this is an exaggeration and at best category 4 users only pay twice as much when sanitation costs and the cost of water per meter are taken into consideration.•When SEMAPA (prior to the concession) and Aguas de Tunari are compared in terms of cross subsidies (differential charges by residential type for the minimum consumption of 12 cubic metres) it seems that SEMAPA was more pro-poor than Aguas de Tunari. Under SEMPAPA category 4 users paid 2.13 times the amount paid by those in category 2 and under Aguas de Tunari this figure dropped to between 1.86 and 1.8 times as much. (Author's abstract)