Hidrológiai Közlöny, 2018 (98. évfolyam)
2018 / 4. szám - FÓRUM - Szabó Iván: Integration, a key to sustainable development in water utility services
54 Hidrológiai Közlöny 2018. 98. évf. 4. sz. Over the evolution of the Water Utility Services Act - this value was changed several times during the legislative process, then after the entry into force of the Act as well — the final indicator of 150,000 1231 is, in essence, meant to express the size of the water utility service provider in consideration of the number of users connected to the same water utility service provider1241. Looking back at the integration processes in the recent years, it is visible that the user equivalent was eventually “triumphant” and became one of the most important means of integration. At the time of preparing this speech (September 2017), the question of user equivalent was almost obsolete. The integration had been completed by 2016; it is, however, still going on, very slowly, in case of service providers whose user equivalent is enough. OPERATOR OF PUBLIC INTEREST If we speak about integration efforts, we must mention a new legal institution, the issue of operator of public interest. Section 32 of the Water Utility Services Act and Chapter III of its Implementing Decree provide for the operator of public interest. The point of this legal institution is that - if the service becomes impossible, for reasons either related to the service provider or else, then - the Authority will appoint an operator of public interest from the service providers, which had originally assumed the voluntary obligation to act as such. This means that it establishes temporary service rights for the supply area of another service provider. Thus, it therefore establishes a forced obligation1251. The Act and the Implementing Decree provide, in this regard, an extraordinarily detailed regulation for both the determination of prices, costs and the taking of possession. The fact that the Authority may appoint - if the circumstances (typically in the case where the troubled service area does not share a border with another area that is supplied by a service provider on the list of operators of public interest) justify that - a service provider that originally did not agree to be on the list operator of public interest is a special form of forced obligation. It could be just a question: why should be regarded such a “crisis-managing” legal institution as part of integration, and how could it be related to the requirements of sustainable development? In my view, operation for public interest is also some kind of integration. If a listed (or non-listed) service provider takes the service area from another service provider which cannot render its services any more, then we can see a specific form of integration, enforced by the law, because this reduces the number of service providers, while the operator of public interest is forced to fulfil its obligation to supply on a larger service area. If we return to the introduction of this paper, then the institution of operation for public interest is one of the most striking examples for the Hungarian regulatory framework’s ensuring the conditions of “good water governance Thus, it serves the interests related to sustainable development. If we study the practice of MEKH when it comes to the issue of operators of public interest, then one can see that there have been relatively few cases where the services or the functioning of the service provider would have become completely impossible1261. It was much more typical that the service provider responsible for a given service area did not conclude the service agreement with a service provider holding the necessary licence (or failed to conclude such an agreement in time), therefore the Authority was forced to order an operator of public interest. Although this legal institution was developed primarily for technical or financial force majeure situations, one should not underestimate the significance of the fact that it gave MEKH the possibility and means to maintain the momentum of the integration process, which it did with the appropriate level of courage. It is easy to discover the connection: if the MEKH fails to appoint the operator of public interest, which is a means to enforce integration with the force of law, then the conclusion of service agreements in the affected service areas would have fallen victim to particular interests or administrative incapacity. These areas would have been left out from the process of integration, as a result of which their management would have quickly become impossible, and there would have been a major fallback in maintenance and reconstruction works in comparison to integrated areas, which would have obviously caused trends running counter the interests of sustainable development. ISSUE OF OPTIMAL SCALE OF PLANT The integration process was therefore successful, the only question remaining is that to what extent does it serve the interests of sustainable development? The answer lies in the issue of optimal scale ofplant. As it is simply pointed out by Horváth and Péteri ”In case of networked services, the most important cost driver is the efficient scale ”127]. The optimal scale of plant is the scale at which the long-term cost level is at its minimum128f The optimal scale of plant, as a result of the integration activity, yields better efficiency. Certain authors, accepting the results of the Water Utility Services Act, emphasise that the efficiency improvement and the uniformisation of the service level yielded by integration - which certain authors call monopolisation which is, in my opinion, wrong - contribute less to environmental aspects. They mention, for instance, that, although the Water Utility Services Act sets out the “polluter pays ”1291 principle as a fundamental principle, such fundamental principles remain on the level of declarations only. Honestly, such criticism is not entirely unfounded, because, for instance, the fundamental principle of cost recovery could practically not be enforced in the recent years, but it is not a deficiency of the act. The Act specifies clear mechanisms for pricing water. To what extent does the legislator perform its pricing obligation - that is another question. The public utility tax, separate taxes and the system of reducing residential utility charges - which were subject to a great deal of professional criticism - coupled with the
