Framing

The public consultation period for the Strategic Plan for Water Supply and Wastewater and Rainwater Management 2030 (PENSAARP 2030) has begun and runs until May 12.

As noted in the introduction to the plan, water supply and wastewater and stormwater management services (water services for short) are essential to public health, the environment, the well-being of citizens and economic activities. They fall within the scope of the major priorities of Humanity, within the scope of the United Nations Sustainable Development Goals (SDGs) approved in 2015, and have been included in the services considered human rights since 2010.

After a notable evolution of these services in Portugal, triggered by the structural reform of the sector initiated in 1993, recent years have revealed some stagnation, still with underlying problems, particularly at the level of structuring the management entities responsible for providing the services and ensuring their long-term sustainability. These problems have led to a “two-speed industry,” with entities that are increasingly modernized and sustainable and others that are persistently underperforming. Furthermore, emerging challenges such as water scarcity, degradation of water bodies, the increased risk of flooding, the need to control emerging pollutants and the need for greater circularity and environmental and territorial appreciation of services.

The new plan

In this context, and continuing with previous strategic cycles, the Portuguese Government decided to draw up a new strategic plan for the sector for the next decade, in line with major international goals. PENSAARP 2030 outlines the broad guidelines for the sector for the next decade and calls for the alignment of all its stakeholders, in a convergence of efforts and ambition. It consists of two volumes, the Strategic Plan, with the main guidelines (Volume 1, Parts A and B) and the Action Plan, with details of the recommended measures and the respective metrics and incentives (Volume 2).

The vision for 2030 is to achieve excellent water services for all and with fair accounts. The country needs services that ensure effectiveness, efficiency and sustainability for Portuguese society, and that create economic, environmental, territorial and societal value, within the framework of sustainable development and the growing circularity of the economy and these services. The country needs water services for everyone, without leaving anyone behind, with fair accounts with current and future generations, with the environment and with the economy.

Objectives

The plan’s vision was materialized in four global strategic objectives, which aim to achieve effective, efficient, sustainable services with greater added value for society. These global objectives are broken down into 20 specific objectives. The effectiveness of services involves achieving physical accessibility, continuity and reliability of services, quality of distributed and discarded water, safety, resilience and climate action, as well as equity and economic accessibility for users. Service efficiency involves achieving better governance and structuring of the sector, organization, modernization and digitalization of management entities, efficient management and allocation of financial resources, water efficiency, energy efficiency and decarbonization. The sustainability of services involves achieving economic, financial and infrastructural sustainability, use and recovery of natural resources, adequate human capital, information management, knowledge and innovation. The valorization of services involves achieving business and economic valorization in domestic and foreign markets, circularity and environmental and territorial valorization, societal valorization, transparency, accountability and ethics, and contribution to sustainable development and international political cooperation.

Measures and incentives

With these objectives in mind, 70 measures were defined, which aim to strengthen and consolidate a developing sector. Among other measures, the plan pays special attention to the adoption of incentives to improve the economic and financial performance of the managing entities, namely the updating of tariff regulations, the strengthening of the commitment of the various political bodies, the managing entities under municipal ownership and the regulator, the improvement of the asset management of the infrastructures, which includes improving knowledge of the registry, and its rehabilitation, the reduction of water losses in the systems and undue inflows, as well as the strengthening of the monitoring of the licensing of water intakes and the rejection of waste water.

The measures are distributed across three levels of relative importance: those that are clearly a priority due to their high criticality and their still unsatisfactory performance (priority 1); those that, despite their already high current performance, have to maintain the sector’s attention in terms of future sustainability (priority 2); and those that may seem less relevant, but cannot detract from the sector’s attention (priority 3).

While the investment requirements associated with some measures are significant, there are also simple, low-cost measures that offer quick wins. These must have associated institutional, economic, financial, fiscal, legal and regulatory incentives. They can also benefit from recommended incentives, namely technical, training, reputation, communication, innovation and market incentives.

Investment needs

To define the investment and financing strategy, the current economic and financial situation was quantified and investment needs were estimated for different scenarios, varying the upper (maximalist scenario) and lower (minimalist scenario) thresholds relative to a central scenario. These needs also include the implementation of a wide range of non-infrastructural and incentive measures, which are essential for the successful implementation of the plan.

Subsequently, the impact of the necessary investments and the corresponding increases in operating expenses were quantified, which allowed a quantification of the total costs to be recovered. The strategy that the sector must adopt was then defined, considering, among other aspects, the sustainability principles set out in the Water Law, namely that expenditure on services must tend to be recovered through tariffs for water supply and wastewater (and eventually rainwater) services, with the use of taxes also being provided for only when the established economic accessibility limits are exceeded. Naturally, any transfers via European funds must be deducted.

Plan governance

It is essential to ensure an effective governance mechanism for the plan, with the involvement of sector agents, which includes monitoring, risk management and review/updating. Monitoring will be carried out at three levels: annually for objectives, through performance metrics; continuously for each measure and incentive; and annually for the investment made in relation to the forecast.

Participation in the public consultation

As a contribution to greater participation in the public consultation, LIS-Water intends to regularly make a detailed presentation of the plan on this website, structured in a series of synthetic texts covering each of its twenty objectives. We invite the reader to follow this guided tour over the next month and a half, and if this results in comments or suggestions, to participate at the following addresses:

https://www.consultalex.gov.pt/ConsultaPublica_Detail.aspx?Consulta_Id=239

https://participa.pt/pt/consulta/projeto-de-resolucao-do-conselho-de-ministros-que-aprova-o-pensaarp-2030

Read the next text in this series, available very soon

PENSAARP 2030: How to achieve physical accessibility to water services?