Hidrológiai Közlöny, 2018 (98. évfolyam)
2018 / 4. szám - FÓRUM - Szabó Iván: Integration, a key to sustainable development in water utility services
55 Iván Szabó: Integration, a key to sustainable development in water utility services labour shortage which is getting more and more serious and the parallel increase of wages, have obviously made the situation of service providers difficult^30'. The lack of funds postpone infrastructural reconstruction projects in the first place. We must, however, consider that non-reconstruction used to be already an issue decades before the entry into force of the Water Utility Services Act. Moreover, one can say that the situation was much worse due to the segmented market of service providers. Better efficiency and the optimal, or more optimal scale of plant — which were made possible through the integration - make the allocation of larger funds for reconstruction possible. The continuous postponement of reconstruction projects must be contained in the future, but it would be physically and economically impossible if one expected that all the previously postponed reconstruction projects could be done immediately or at least for the most part. Even now, there are several concepts in this regard. The most likely one of them is that the State will create a Reconstruction Fund, and the different service providers will have the chance to apply for its funding with proper technical reasoning. Mr. János Ede Szilágyi, who is perfectly familiar with this topic and has already published a great number of authoritative articles expresses the following thoughts on the relationship between the Water Utility Services Act and integration: “In our view, the process of integration might contribute to the implementation of the necessary developments and the top urgent maintenance works. What could be the price of this? Well, the details of this are a topic of another study. We can, however, definitely state that, if more funds are not allocated for the reconstruction of the infrastructure, then even the integration will be a step which will have been taken to the right direction, but it incapable of reaching the goal on its own ”*31f I cannot agree with this finding of this author, whom I otherwise hold in high regard. As I have already mentioned it several times above, we could never expect the integration of water utility service providers to solve the issue of reconstruction having been postponed for forty years on its own. On the contrary, I do state that the integration implemented by the Water Utility Services Act is not a unique, but an indispensable element to the renewal of the Hungarian water utility system. If we only look at the future plans, it is easy to see that the players of the sequences operating structure could submit applications for calls (for this, see the technical criteria) that are aimed at the investments of this water utility construction fund. If we put an equation sign between reconstruction and sustainability expectations, and if we accept that water utility integration is an indispensable element of reconstruction, then we can clearly answer the question providing the topic of this article: the connection between the integration of water utilities and sustainable development. Securing the interests of sustainable development is a central objective of the Water Utility Services Act. It is obvious that the Water Utility Services Act must ensure the attainment of this objective on the medium and long run as well. If integration is a key to sustainable development, then one must mention the future of integration as well. If we follow the Hungarian water utility market, then one can see that the integration has slowed down since 2014. There are several reasons for this. The primary reason is that most service providers have reached their optimal scale of plant, they have the required user equivalent. The deceleration of integration is also explained by the fact that integration means quite high initial costs for the service providers. There were municipalities, with which the responsibility of supply rested that asked for a consideration for the service agreement, the rationalisation of previous services also implied significant costs. One must separately mention the costs implied by the termination of the employment of non-technical, white collar staff and the direct costs caused by the increasing wages of technical staff. Integrator service providers often encounter the situation that the areas of operation they have taken over often were not in an appropriate technical condition, therefore they must often effect major developments on them. This otherwise also proves that the integration process contributed to the expectations of sustainable development. (It is easy to see what would have happened with these areas of operation if the Water Utility Services Act does not force integration.) We can therefore state that, after the large wave of integration, the integrators require some time to “get over” the initial direct effects of the integration process. HAS THE INTEGRATION STOPPED AND CAN WE REGARD THE CURRENT OPERATIONAL STRUCTURE AS FINAL? We can certainly say: no. We can prove this with several arguments. There are still integration processes going on, these are, however, only indirectly subject to the act: such integration processes are forced primarily by economic processes. Above, I have already mentioned that the service providers are subject to a considerable tax burden, while the fundamental principle of cost recovery has not applied in this sector since 2011. We expect integrations in the medium term that are forced by this situation. Finally, one should not forget that government efforts themselves generate integration. It was the establishment of the construction fund to provide financial coverage for reconstruction projects when the opinion became stronger. The goal should be ultimate integration, full state ownership. I must add, however, that these are only opinions, amendments to the act in process at the time of preparing this paper did not contain any such aspirations.
