PERCEPTIONS OF FAIRNESS AND CAPABILITY AS CHALLENGES TO IMPLEMENTING FULL COST RECOVERY ON DRINKING WATER TARIFFS

Abstract

Implementation of the full cost recovery policy in determining drinking water tariffs still faces challenges due to perceptions of fairness and capabilities in society. This study examines how these two perceptions become challenges and how to overcome them. Through qualitative analysis of secondary data, this study found that the water tariffs were perceived as unfair when compared with the services received because water continuity and quality problems had not been resolved. The perception of capability drove tariffs to be determined only based on consumers’ economic capacity without considering operational cost requirements. These two perceptions challenge the achievement of an independent and sustainable supply of safe drinking water. Full cost recovery should be applied so that tariffs can cover funding needs for improving services, including maintaining facilities and water quality, but consumers demand improved services first and insist on the lowest prices. A change in behavior mindset is needed for tariffs to be seen as an investment rather than an economic burden. Therefore, the importance of quality drinking water for human life needs to be understood before anything else.