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Water resources can be managed efficiently by using cost-reflective pricing. This book focused on the pipe-borne water sector in Sri Lanka and evaluated alternative pricing structures in terms of economic efficiency, equity and financial viability. This required an understanding of consumer behaviour and the cost structures of the NWSDB. The analyses reviewed the relevant theoretical and applied basis for water pricing and then empirically analysed the cost, demand and welfare implications of pipeborne water in Sri Lanka. Very few studies have explored the efficient pricing policies and other related welfare aspects for developing countries. This is the only study to examine different pricing structures for water in a comprehensive framework involving demands, costs and welfare aspects for Sri Lanka. The findings presented here are important for policy makers and relevant authorities who are increasingly paying attention to efficiency and expansion of the pipe-borne water coverage.

This concluding chapter provides some concluding remarks of the book and the achievements of the book in section 8.1. Under this section, conclusions of the book are reported using various headings, which may relate to conclusions from more than one chapter. Policy implications are discussed in section 8.2 and the topics for future research are outlined in the final section, section 8.3.

The water supply decisions for Sri Lanka in the past have been implemented with little regard for the links between demand, cost and pricing; therefore, this book links these components of optimal pricing problems. Most importantly, the approach undertaken here allows the measurement of parameters of water production and consumption including economies of scale, cost-output elasticities and price and income elasticities of demand. The results are of interest to scholars in applied research as well as those involved in public utilities and regulation.

Document Type: Research Article


Publication date: January 1, 2011

More about this publication?
  • Demand, Supply and Welfare Aspects of Pipe-borne Water in Sri Lanka
    This book identifies under-pricing as the major problem faced by the Sri Lankan pipe-borne water sector. Recently, the water authority in Sri Lanka restructured its pricing strategy for pipe-borne water with the objectives of reducing water consumption and expanding the network. However, the success of the current pricing structure in achieving these objectives is uncertain. Therefore, to overcome the problems, this study examines the use of cost-reflective alternative pricing strategies for pipe-borne water distribution services. The book evaluates current and alternative pricing strategies for water against the criteria of efficiency and equity while maintaining the financial viability of the national water utility.
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