The water service rate in the Buenos Aires Metropolitan area will increase by roughly 50 percent next year.
The rise is reported to come in two installments: the initial one, of 17 percent, will take effect on January 1, 2019 and is set to compensate for inflation of 2018. The second increase of 27 percent will happen in May, in line with the market’s inflationary expectations for next year which stand at that rate, according to the Monthly Survey of the Central Bank (REM). The news was confirmed at a public hearing held by the company yesterday, a necessary step to implement the increases.
Since the beginning of the Macri administration, water prices increased by 297 percent in 2016, 23 percent in 2017, and 26 percent in 2018. By May 2019, the cost of water utilities will have multiplied by eight times since late 2015 – without taking inflation into account.
According to the Advocate of the User of the Regulatory Entity of Water and Sanitation (ERAS), Ana Carolina Herrero, the average, by-monthly price will go from AR $951 to AR $1,113 in January 2019 and AR $1,413 in May.
Spokesperson from the Consumers and Users Union Fernanda Lacey was critical of the increase, claiming it “exceeds what is projected by the government in terms of inflation and far exceeds workers’ wage increases.” “And what’s worse: before mid-year the increase would be being applied, as if it were a prediction for inflation,” she added.
The predicted fee increases proposed by AySA will generate an additional turnover of AR $7.018 billion, an increase of 42 percent. With this improvement, the coverage of the company’s expenditure with tariff resources would be 86.8 percent, a significantly larger amount than at the end of 2015 where the company’s tariff resources were sat at 40 percent. The rest is subsidized by the government.