Assessment of cost recovery and evaluation on water tariff for sustainable management of urban water supply and sewerage

Water gives life to Tanzanian people and is essential to the country’s social, economic, and environmental security. In the phase of increasing demand and rising costs, water has become a commodity of strategic important in Tanzania. Cost recovery is a technical terms used to describe the process of charging the water services for the authority costs of providing water services to the people. Cost recovery is considered to be an option that could provide adequate financing for the authority. This study examines, from an economic perspective, agreement for introducing cost recovery in Urban Water Supply and Sewerage Authorities for selected towns and the type of charges that would be appropriate. It considers their likely implications for the Authorities as well as their impact on the economic efficiency of both the consumers and the water management. A well-designed cost recovery system offers the opportunity for a proper financing of operational and maintenance of water system. The study investigates the ability and willingness to pay by consumers to recovers sufficient funds for financing the full cost of maintenance and operational. The study has a positive hypothesis that willingness to pay (WTP) and affordability to pay (ATP) by water consumers have better opportunity for sustainable management of urban water supply.