The Hows and Whys of Water Connection Charges

Abstract

Water connection charges often act as a major barrier to connecting the poor. So why charge for a connection? Mobile companies provide free phones to attract subscribers. Supermarkets do not charge entrance fees to potential shoppers. Why can this not be applied to water services?

There are several answers - from tradition to requiring proof of creditworthiness and willingness to pay, availing of a cheap funding source, and creating artificial bottlenecks to cater to vested interests. Whatever the utilities' reasons are, one thing is clear - connections should be paid since installing them involves legitimate costs that need to be covered.

This paper discusses the water utilities' need to charge for new connections, why such charges are often high, and why the prevailing practice of upfront payment of full connection charges should be reexamined.