PMU and Tariff Restructuring

Currently, Jordan is currently fully-using its capacity regarding the relatively low-cost renewable water, which constitutes mainly from ground and underground water. Other sources that will be added to water budget including Al Disi, Hisban, treated water from Al Arab Dam, Al Ghour Channel and Al Wihdah Dam in addition to Zara, Ma'aeen and Zay are highly costly, where a per cubic meter cost of Al Disi water (which will form %23 of the supplied water) will cost more than 1.2 JD. Whereas the per cubic meter cost of Al Arab Dam, Al Ghour Channel and Hisban water (which will form %8 of the supplied water) will cost more than 0.6 JD, which is the same cost of Ma'aeen/Zara water because of the highly required pumping head (resulted from the high difference in elevation which exceeds 1000 m).
Wastewater treatment cost also keeps increasing because of MWI preference which goes toward treating the wastewater to a high quality that will enable using the treated effluent in Irrigation without having side-effects on humans, animals, soil and plants. This will allow reallocating additional volumes of water toward domestic uses. The fact that MWI leaned on the private sector to finance treatment plants projects, and on the loans to finance the networks expansion & rehabilitation projects has also anticipated in increasing the cost.
Moreover, increasing cost of power generation will increase the burden over MWI, specially that the MWI is currently suffering from decrement regarding its operational cost recovery where it reached %65, %69 and %70 for the years 2007, 2008 and 2009 respectively. Budget deficiency will increase because of the Disi project to reach 175 million JD.
The above mentioned factors will make MWI incapable to maintain the provided level of service. It will also be hard for the government of Jordan to keep supporting WAJ.
The pressure applied by the donors asking the ministry to recover its operational costs is added to the above mentioned factors.
Since the ministry is in-charge of enhancing water providing and wastewater treating level of service which requires huge investment in networks and water utilities; the ministry sees that the current tariff should be revised/restructured. 
Recommended Tariff
Water bill is composed of a fixed charge to recover billing, collection & performance monitoring costs, which is related to the slice & is irrelevant to subscriber's consumption. The other component of the water bill varies depending on the consumption, and takes sewage connectivity into consideration.
Bill Value = Fixed Charge + (Volumetric Charge (water + wastewater) * Adjustment Factor)
Bill Value = Fixed Charge + ([water cubic meter price +wastewater cubic meter price according to consumption slice) * Consumed Volume] * Adjustment Factor)
Fixed Charge
 Covers the costs associated with participation but do not depend on the amount of consumption and include:

1. Costs for companies and management as follows:
• The remaining amount is instead of issuing invoices, distribution and money collection on a monthly basis.
2.  Costs for the monitoring party than cover the expenses of performance monitoring and other expenses.
  1. Adjustment factor: this factor has been introduced to give the flexibility of updating the prices to reflect any of the following:

    a.The organization of the land of the housing and construction area

    b.Change in the prices of production inputs such as fuel prices, electricity and chemicals

This factor is proposed to equal 1 for now and its value will be studied to be determined in year 2011.

• Meters change , maintenance cost, and meters reading per month for all the slices.