Water Utility Integration in Hungary: impacts and future expectations

Károly Kovács ()
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Károly Kovács: Faculty of Business Administration, Corvinus University of Budapest, Hungary

Society and Economy, 2019, vol. 41, issue 4, 509-522

Abstract: In 2011 Hungary’s water supply and sanitation sector was characterized by a multitude of utilities, a fragmented market with widely differing tariffs and no centralized regulation, resulting in often inefficient and unsustainable operational and market conditions. In 2011 the Hungarian government introduced the Act CCIX of 2011 on Water Utility Services which resulted in significant market consolidations. In this article we present the results of a qualitative survey carried out in 2015 to examine the opinion of top managers of utilities on the short and midterm effects of the realization of the objectives set by the Act. The interviews focused on examining the efficiency changes experienced by 15 CEOs of different water utility service provider companies since the integration. The paper also examines their expectations for the future across a multitude of technical and economic fields and factors. This qualitative research aimed to study whether the recent changes in policy and market structure led to economies of scale and to the perceptible increase of technical and economic efficiency levels. It was concluded that efficiency benefits of economies of scale prevailed in most cases, however, these were perceived only to a limited extent at the time of the survey, approximately midway through the ongoing integration processes.

Keywords: water utility management; market integration; water infrastructure; water supply and sanitation; utility law; economies of scale (search for similar items in EconPapers)
JEL-codes: H83 K23 O11 (search for similar items in EconPapers)
Date: 2019
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