Hidrológiai Közlöny, 2018 (98. évfolyam)

2018 / 4. szám - FÓRUM - Szabó Iván: Integration, a key to sustainable development in water utility services

Iván Szabó: Integration, a key to sustainable development in water utility services

53- thought that the big winners of integration are the large state-owned regional water utility corporations. Therefore, they identified, negatively, the concept of regionálisadon with the integration implemented by the state-owned corporations.

Point f) of Paragraph (1) of Section I of the Water Utility Services Act, i.e. the 6lh fundamental principle states: point f): principle of regionally: if, considering the interests of users, establishment of contiguous public water services system that covers multiple settlements is a solution more reasonable than having separate public water services systems in technical and economic terms when it comes to establishing or improving public water services, then priority should be given to the establishment of a contiguous public water services system,

One can interpret the provisions quoted that the Water Utility Services Act prefers the establishment of contiguous systems over separated systems, although it sets a limit of “reasonability” to it. It must be mentioned that the Government Decree adopted for the implementation of the Water Utility Services Act provides a much more profane definition when, in case of issuing the licences for providing such services, it prohibits the issuance of operating licences for non-interconnected systems beyond a certain distance115'.

The next fundamental principle related to integration is, in my point of view, the fundamental principle of the cooperation of water utility providers in Point j) of Paragraph (1) of Section 1 of the Water Utility Services Act, which is the 10th fundamental principle: j) principle of cooperation of public water suppliers: if the same entity is responsible for supplying a given area, then they might strive for — without infringing the rules of competition in Treaty on the Functioning of the European Union - having the same public water supplier performing the activities of public water supply when they organise the public water supply^.

It is known that public water operations consist of two sectors: drinking water supplying and wastewater treatment. One can say that these two services are usually provided by the same service provider, but it is not self-evident. In Hungary, it is actually Budapest where the two sectors are separated into two legal entities!171. The fundamental principle of cooperation, strictly considering the prohibition to limit competition, urges that the two kinds of services are provided by the same service provider, if possible.

Many authors ignored this provision in research projects on integration. If we, however, follow the logic that it is more rational if the same service provider deals with these two kinds of services, more rational operations allow for the saving of costs and more efficient services, then it is quite clear that the fundamental principle of cooperation is also a fundamental element of integration; thus, it can promote the goals of sustainable development!181.

After declaring the integration of water utilities with the principles of regionality and cooperation, the Water

Utility Services Act established the body implementing the integration: that is the Chief Water Authority.

Establishment of the Authority was also something legislation should have done for a long time, almost 40 years, actually.

The Authority was first integrated into the Hungary Energy Authority (MEH), then, due to a modification of the relevant Act[191, it was integrated into the Hungarian Energy and Public Utility Regulatory Authority (MEKH), where it is headed by one of the vice presidents of MEKH.

As regards the service providers and entities responsible for the supply, the Authority has constitutive and declarative powers, and has strong supervisory rights over the service providers1201.

If we wanted to analyse the competence, powers of the Authority and its practice so far, then it would go far beyond the limits of this paper. Therefore, I only provide a summary to highlight the powers the Authority exercises in terms of integration.

First of all, the most important element of its competences in this regard is the issuance of the licences to provide water utility services, but the Authority has many other competencies that contribute, directly or indirectly, to the integration efforts. Such competencies are the investigation of ownership, the investigation of outsourcing, the investigation of so-called corporate law events [211, the supervision of mergers, secessions, etc.

The detailed conditions of authorisation and licencing are included in Government Decree No. 58/2013. (II. 27.) and the Implementation Decree to the Water Utility Services Act. Its Section 30 provides a detailed definition of the conditions the Authority checks when issuing an operating licence, and the conditions the application of which it checks in the regular supervision of such licences. On the whole, the Authority checked financial, technical, organisational, logistical and workforce conditions when it issued the permits, and it checks the indicators of such in its revisions1221.

One can see that the Implementing Decree sets extraordinarily strict conditions for issuing a licence. However, the practice shows that the greatest challenge aspirants face is, surprisingly, not the financial or technical conditions, but the provision of the right workforce.

Provisions of the Implementing Decree impose strict requirements for the professionals performing operational responsibilities, and many service providers were unable to meet such requirements. Uniquely, certain water utility providers were forced to integrate for personnel conditions, which draws attention to the fact what a difficult situation the water utility sector faces in terms of qualified personnel.

Among the requirements for issuing the service or operating licence, the, perhaps, most important factor of integration efforts was the user equivalent, which caused a lot of professional (and political) debate but was implemented in the end.