Water supply and sanitation in Portugal

Water supply and sanitation in Portugal is characterized by important advances in access to services, technologies and service quality over past decades (1980s–1990s), partially achieved thanks to important funds from the European Union. Nevertheless, sanitation still remains relatively low in mountain rural areas and some people have their own sources of water controlled by municipalities.

During the 1990s Portugal has put in place a modern institutional framework for the sector, which includes a national regulatory agency and multi-municipal water and sanitation companies. The multi-municipal companies are owned by both the municipalities and a national holding company, Águas de Portugal ("Portugal Waters").

Access

In Portugal 93% of households have access to drinking water through house connections (97% in urban areas, but only 50% in rural areas) [ [http://www.wssinfo.org/pdf/country/PRT_wat.pdf WHO/UNICEF Joint Monitoring Program] ] 76% of households have access to sewer connections. [ [http://www.irar.pt/presentationlayer/artigo_00.aspx?canalid=2&artigoid=52&idioma=1 IRAR] ]

Service quality

Drinking water

Water supply is continuous, except during droughts.

Drinking water quality is not consistently good, especially in smaller systems. Portugal does not comply with a series of drinking water parameters (iron, manganese, total coliforms, faecal coliforms, faecal streptococci and clostridium) laid down in the EU drinking water directive. For example, almost 50% of water supply zones do not comply as regards total coliforms, while 20% of the zones do not comply with the faecal coliforms parameter. [ [http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/393&format=HTML&aged=0&language=EN&guiLanguage=en EU Press Release March 2007] ]

Wastewater

Portugal does not yet fully comply with EU regulations on wastewater discharges. Even where wastewater treatment plants exist they do not always function properly. Especially in cities with combined sewers, treatment plants do not function properly after heavy rains. Sewer overflows during heavy rains are frequent, partly due to unauthorized storm water drain connections to the sewer system.

For example, in Lisbon, the waste water treatment plant of Alcântara was not operational in 2007. In Matosinhos in the region of Porto, only primary (basic) treatment is in place. In Costa de Aveiro (Aveiro), 60% of the polluting load generated is not collected and 65% is not treated. In Póvoa de Varzim/Vila do Conde, 60% of the load is not collected and the level of treatment in place is unknown. [ [http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/393&format=HTML&aged=0&language=EN&guiLanguage=en EU Press Release March 2007] ]

In some beaches bathing is restricted because of pollution.

Responsibility for water supply and sanitation

Policy and regulation

The [http://www.maotdr.gov.pt Ministry of Environment and Regional Development] is in charge of sector policies. As in many other countries, water and sanitation is not a political priority. Political actions at the local level are often oriented at the short-term, following electoral cycles, with limited long-term planning. Nevertheless, there has been remarkable stability of the national policy framework independent of electoral cycles.

In 1997 Portugal created a national regulatory agency [http://www.irar.pt Water and Sanitation Regulatory Agency IRAR] in charge of water supply, sanitation and solid waste management. Its attributions include the economic regulation of service providers, as well as the regulation of their service quality, including water quality. The regulatory agency is directed by a three-member Board, whose members are appointed upon the recommendation of the Minister of Environment. [ [http://www.irar.pt/presentationlayer/artigo_00.aspx?canalid=1&artigoid=7 IRAR] ]

Water resources management is the responsibility of the [http://www.inag.pt/inag2004/port/quem_somos/atribui.html Water Institute INAG] , crated in 1993 under the Ministry of Environment and Regional Development. INAG operates, among others, on the basis of the [http://www.inag.pt/inag2004/port/divulga/legisla/pdf_nac/Lei%2058_2005.pdf 2005 Water Law] , which transposes the EU water framework directive into national law. [ [http://www.mirandalawfirm.com/Docs/Articles/AO_ILO_Portugal.pdf Summary of Water Law by Miranda Law Firm] ] Portugal has drawn up a National Water Plan and 15 River Basin Plans. [ [http://www.un.org/esa/sustdev/csd/csd13/statements/2104_portugal.pdf Speech by the Minister of Environment at the UN in 2005] ]

Service provision

According to the local government law (Lei das autarquias locais) the country’s 308 municipalities are responsible for providing water supply and sanitation services, either directly or indirectly through concessions. Decree-law 379/93 of 1993 establishes the legal basis for concessions to municipal and multi-municipal water and sanitation companies established under private law (typically publicly-owned shareholder companies). These have come into widespread use in Portugal ever since.

In Portugal many municipalities do not control their sources of bulk water supply. Companies established under private law, in particular multi-municipal companies co-owned by Águas de Portugal, thus provide water in bulk (53%) or directly (27%) to about 80% of the population. [ [http://www.portugal.gov.pt/NR/rdonlyres/2E4F1B13-B462-4EE7-927C-0D0F41BF129B/0/PEAASARII.pdf PEAASAR] , p. 17 ]

The picture concerning the direct sale and distribution of water to the customers, however, looks quite different. About 73% of the population in 243 municipalities still receives water directly from municipalities (3.5 million people) or municipal companies established under public law (2.5 million people). Only 27% of the population receives water "directly" from companies established under private law, including 1.7 million from multi-municipal companies majority-owned by Águas de Portugal and 0.9 million from other municipal companies.

All infrastructure is publicly owned. There is only limited private sector participation in the provision of water and sanitation services. Storm water drainage is directly provided by the municipalities.

Águas de Portugal

Águas de Portugal is a public holding company with the following business units, ranked by order of their contribution to sales:

* a unit in charge of bulk water production and wastewater treatment (UNAPD);
* a unit in charge of water supply in the Greater Lisbon area (EPAL);
* a solid waste management unit (UNR);
* a (relatively small) unit charge of drinking water distribution and wastewater collection (UNADR);
* an international unit with activities in Brazil, Mozambique and East-Timor (UNI). [ [http://www.adp.pt/content/index.php?action=detailfo&rec=1773&t=Sumario-Executivo AdP Executive Summary 2006] ]

AdP is a public company that itself is owned by the government directly (34%) and indirectly through the asset holding company Parpública (49%), as well as by a public Bank (Caixa Geral de Depósitos, 20%). [ [http://www.adp.pt/content/index.php?action=detailfo&rec=1767&t=Accionistas AdP] ]

The two first units are described in further detail below.

Multi-municipal water and sewer companies

The first business unit (UNAPD) includes 18 multi-municipal water and/or sewer companies co-owned by AdP, which hold concessions contracts with municipalities. [ [http://www.adp.pt/content/index.php?rec1=&rec2=1760&rec=1760&action=detailfo AdP] ] AdP majority-owns all these companies (owning 51% or more), with the remainder being owned by participating municipalities (owning up to 49%). Out of the 18 companies 11 provide both water and sanitation services, 5 only sanitation services and 2 only water services. If a multi-municipal company does not provide both services, the other service is provided by the municipality.

For example, in the country's two largest cities, Lisbon and Porto, water is provided by a multi-municipal company, but sanitation services are provided directly by the municipality. In some municipalities water services are provided by one multi-municipal company, while sanitation services are provided by another.

The multi-municipal water and sewer companies are:
* [http://www.aguasdoalgarve.pt/ada/index.aspx Águas do Algarve]
* [http://www.aguasdoave.pt/home.php Águas do Ave]
* [http://www.aguasdocentro.pt/ Águas do Centro]
* Águas do Centro Alentejo
* [http://www.aguasdominhoelima.pt/ Águas do Minho e Lima]
* Águas do Mondego
* Águas do Norte Alentejano
* [http://www.aguasdooeste.pt/ Águas do Oeste]
* Águas de Santo André
* [http://www.aguas-tmad.pt/ Águas de Trás-os-Montes e Alto Douro]
* [http://www.adzc.pt/index.asp Águas do Zêzere e Côa]

The pure water companies are:
* [http://www.aguasdocavado.pt/ Águas do Cávado]
* [http://www.addp.pt/ Águas do Douro e Paiva] serving Porto and surrounding municipalities

The pure sanitation companies are:

* Saneamento da Costa do Estoril, S.A. [http://www.sanest.pt/start.htm Sanest]
* Sistema Integrado Multimunicipal de Águas Residuais da Península de Setúbal, S.A [http://www.simarsul.pt/ Simarsul]
* Saneamento Integrado dos Municípios do Lis, S.A. [http://www.simlis.pt/ Simlis]
* Sistema Multimunicipal de Saneamento da Ria de Aveiro, S.A. [http://www.simria.pt/ Simria]
* Saneamento Integrado dos municipios do Tejo e Trancao, S.A (Simtejo)

[http://www.irar.pt/presentationlayer/artigo_00.aspx?canalid=19&artigoid=196 Map of service areas of water and sewer companies]

EPAL - the water company serving Lisbon

[http://www.epal.pt/epal/EN/Modelo1.aspx?src=QuemSomos&area=3276&menu=3278 Empresa Portuguesa das Águas Livres, SA (EPAL)] is a special case. The water company serving Lisbon and surrounding municipalities is a fully-owned subsidiary of Águas de Portugal, in charge of bulk water supply and of water distribution. It provides services directly to 330,000 customers and indirectly to 1.3 million customers in 23 municipalities which buy bulk water from EPAL. [ [http://www.citect.com/documents/case_studies/Case_study_EPAL_Lisbon_Water_Supply.pdf CITECT] ]

History

History and current situation

After the Carnation Revolution's turmoil of the 1970s, the level of access to services, the technologies used and the service quality have improved substantially, in particular since after Portugal's adhesion to the European Community (now the European Union) in 1986. However, until the early 1990s, in particular the situation concerning wastewater was unsatisfactory, with most wastewater being discharged without any treatment.

Portugal's membership of the European Community in 1986 and the EU Urban waste water framework directive of 1991 triggered a series of reforms undertaken by the government of then Prime Minister Cavaco Silva in order to modernize the sector, to improve service quality and to effectively use EU funds destined to the sector. Until then service provision had been the sole responsibility of the municipalities, with the exception of the metropolitan area of Lisbon which was already served by the multi-municipal company EPAL. [ [http://www.adp.pt/content/index.php?action=detailfo&rec=1757&t=Historia AdP] ] Many municipalities were small and did not have the financial or human resources to modernize their water and sanitation services. Furthermore, the need to buy water from sources located in other municipalities and to lower costs by constructing wastewater treatment plants serving several municipalities, provided incentives for municipalities to cooperate.

Therefore, in 1993, the government introduced a policy to actively promote multi-municipal companies throughout the country through Decree-law 379/93. The main vehicle to advance the reform process was the public Holding Company Águas de Portugal created in the same year, which was to be the majority owner of the newly created multi-municipal companies alongside with the participating municipalities. The government provided preferential access to EU structural funds to those municipalities that agreed to participate in the new multi-municipal companies, which were gradually created beginning in 1995.

There was a strong continuity of sector policies, despite a change in government from the Social Democratic Party to the Socialist Party of Primer Minister António Guterres after the elections of 1995.

In 2000 the government published the first strategic plan for water and sanitation, further promoting the modernization of the sector and the consolidation of service provision. In the same year the regulatory agency IRAR began its work, and solid waste management was included in the purview of both AdP and IRAR. [ [http://www.adp.pt/files/26.jpgAdP Timeline] ]

Sector policies continued to be stable after susbequent changes of government in the elections of 2002 won by the Social Democrats and of 2005 won by the Socialists.

A judgment by the European Court of Justice (ECJ) of 29 September 2005 found against Portugal for not complying with a series of drinking water parameters laid down in the EU drinking water directive.

In 2007 the government published its second strategic plan for water and sanitation.

Developments since 2007

In March 2007 the European Commission launched infringement procedures against Portugal for not complying with three Court judgements on the quality of drinking water. It also referred Portugal to the European Court of Justice over its failure to implement the EU wastewater framework directive. Environment Commissioner Stavros Dimas said: "It is important that Portugal comply with these Court judgements, since they have a direct bearing on public health and the conservation of important natural areas. The Commission has no choice but to continue with legal action if we are to achieve the level of environmental protection intended in our legislation." [ [http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/393&format=HTML&aged=0&language=EN&guiLanguage=en EU Press Release March 2007] ]

In 29 of the urban areas concerned by the directive, required collection and/or treatment systems are still not in place. For instance in Lisbon, the waste water treatment plant of Alcântara is not operational. In Matosinhos in the region of Oporto, only primary (basic) treatment is in place. In Costa de Aveiro, 60% of the polluting load generated is not collected and 65% is not treated. In Povoa do Varzim /Vila do Conde, 60% of the load is not collected and the level of treatment in place is unknown.

Concerning drinking water, Portugal still does not comply with some of the parameters of the EU directive. For example, almost 50% of water supply zones do not comply as regards total coliforms, while 20% of the zones do not comply with the faecal coliforms parameter. The situation improved in 2004, the most recent year for which Portugal provided data. [ [http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/393&format=HTML&aged=0&language=EN&guiLanguage=en EU Press Release March 2007] ]

Tariffs and cost recovery

For regional companies water tariffs vary between 0.31 to 0.55 euro per cubic meter and sewer tariffs vary between 0.33 and 0.54 euro per cubic meter. [ [http://www.irar.pt/presentationlayer/artigo_00.aspx?canalid=2&artigoid=53&idioma=1 IRAR] ]

While in water supply systems cost recovery levels are satisfactory, the situation regarding sanitation is clearly unsustainable. The coastal urban regions show greater cost recovery ratios than the inland regions, especially regarding the Northeast region where the costs are higher and revenues are lower. [ [http://mpra.ub.uni-muenchen.de/4237/1/MPRA_paper_4237.pdf Monteiro 2007 full text in Portuguese] and [http://mpra.ub.uni-muenchen.de/4237/ Summary in English] ]

A decree defining the water and sanitation tariff policy is being finalized in 2007. The decree determines the basic rules for tariff setting and aims at achieving full cost recovery, in line with the EU Water Framework Directive.

Investment and finance

Many water systems in Portugal are quite old, so that there is a substantial requirement for infrastructure rehabilitation. From 2000 to 2006 investment needs in the sector were estimated at 4.23 billion euro, including 2.37 billion euro in bulk water supply and wastewater treatment ("vertem "baixa"). [ [http://www.portugal.gov.pt/NR/rdonlyres/2E4F1B13-B462-4EE7-927C-0D0F41BF129B/0/PEAASARII.pdf PEAASA] , p. 11 ] Actual investments were in the same order of magnitude, but with a very different breakdown than expected: 3.4 billion euro, or 77% more than expected, had to be invested in bulk supply and wastewater treatment, mainly because cost estimates had been too low and because environmental standards had been tightened. Concerning investments in water distribution and sewers ("vertem "alta"), they were only 0.9 billion euro and thus much lower than expected. Many of these investments had to be postponed because of lack of funding. [ PEAASA II, p. 16 ]

AdP by itself invested 588 million euro in 2006 alone. [ [http://www.adp.pt/content/index.php?action=detailfo&rec=1755&t=AdP-em-Numeros AdP] ] Grants from the European Regional Development Fund funded about 1.7 million euro, or 40% of total investments in 2000-2006. Loans from the European Investment Bank (EIB) to Águas de Portugal and self-generated capital of the utilities funded the remainder of the investments. In October 2006 the EIB approved a 925 million euro loan for investments in eleven regional water and sanitation utilities in Portugal. [ [http://www.eib.org/projects/press/2006/2006-103-eib-loan-for-water-management-throughout-portugal.htm EIB] ]

Since 2000 two mid-term national investment plans for the sector, PEAASAR I 2000-2006 and PEAASAR II 2007-2013, have been approved. [ [http://www.portugal.gov.pt/NR/rdonlyres/2E4F1B13-B462-4EE7-927C-0D0F41BF129B/0/PEAASARII.pdf PEAASAR II 2007-2013] ] Such national sector investment plans are an interesting feature that is specific to Portugal and are not common in other EU countries.

See also

*EU water policy

External links

* [http://www.maotdr.gov.pt Ministry of Environment MAOTRDR]
* [http://www.irar.pt Water and Sanitation Regulatory Agency IRAR]
* [http://www.adp.pt/ Águas de Portugal (AdP)]
* [http://www.epal.pt/epal/EN/Modelo1.aspx?src=QuemSomos&area=3276&menu=3278 EPAL - The Water Company of Lisbon]
* [http://www.inag.pt/inag2004/port/quem_somos/atribui.html Water Institute INAG]

References