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Arbeitsgemeinschaft
Trinkwassertalsperren e.V.
TT
Profile of the
German Water Sector
2015
Edited by
Association of Drinking Water from Reservoirs (ATT)
German Association of Energy and Water Industries (BDEW)
German Alliance of Water Management Associations (DBVW)
German Technical and Scientific Association for Gas and Water (DVGW)
German Association for Water, Wastewater and Waste (DWA)
German Association of Local Utilities (VKU)
Publisher
wvgw Wirtschafts- und Verlagsgesellschaft
Gas und Wasser mbH
02 Josef-Wirmer-Straße 3 · 53123 Bonn
phone: +49 228 9191-40 · fax: +49 228 9191-499
info@wvgw.de · www.wvgw.de
© wvgw Wirtschafts- und Verlagsgesellschaft Gas und Wasser mbH, 2015
Photos
Andreas Schulz (title, pp. 30, 67), DBVW (title, p. 61), Fotolia (pp. 17, 35), iStockphoto (title, p. 11), Jürgen Lowis (title, p. 6),
Konzept und Bild/C. Bach (title, pp. 46, 50, 53), wvgw (title, p. 14)
Production
Warlich Druck Meckenheim GmbH
The work including any part thereof is protected by copyright and may not be exploited without the prior consent of the Publisher
unless expressly authorised by the Copyright Act. This shall in particular apply to any reproduction, editing, translation, microfilming
as well as storing and processing in electronic systems.
Bibliographic information of the German National Library
The German version of this publication is recorded in the German National Bibliography; detailed bibliographic data are available on
http://dnb.d-nb.de.
ISBN 978-3-89554-211-4
Profile of the German Water Sector 2015
Profile of the
German Water Sector
2015
03
Profile of the German Water Sector 2015
CONTENTS
Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07
Summary and core statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08
PART A – FRAMEWORK CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1 The water sector’s framework conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.1 Water availability in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.2 Water management duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2 Structural and technical framework conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
3 Legal, economic, political framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1 Role of the municipalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.2 Requirements for the protection, management and use of the water bodies . . . . . . . . . . .19
04 3.3 Requirements for drinking water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.4 Requirements for treatment of the wastewater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.5 Technical self-administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.6 Prices and charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.6.1 Legal framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.6.2 Control of charges and prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.6.3 Cost and tariff structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.7 Special charges (water abstraction levies, compensation payments, wastewater tax) . . 28
3.8 Fiscal law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4 Forms of business organisation and size structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5 Current developments and challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.1 Decline in drinking water consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2 Recruitment of skilled staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.3 Demographic change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.4 Climate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
5.5 Micro pollutants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.6 Changed conflicts of use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Profile of the German Water Sector 2015
CONTENTS
PART B - PERFORMANCE OF THE GERMAN WATER SECTOR . . . . . . . . . . . . . . . . . . . . . 45
1 Benchmarking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2 Safety 50
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1 Safety of water supply and disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.2 Organisational safety within the utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.3 Advanced training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3 Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.1 Connection degree and network length . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.2 Quality of the mains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
3.3 Drinking water quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
3.4 Performance of wastewater disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
05
4 Customer satisfaction and customer service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
4.1 Drinking water supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.2 Wastewater disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5 Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.1 Availability of resources and their utilisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.2 Network renewal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.3 Sewage sludge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.4 Energy consumption and efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6 Economic efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.1 Water fees and wastewater charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.2 Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Statewide benchmarking projects in water supply and wastewater disposal . . . . . . . . . . . . . . . . 78
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Presentation of the Associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Statement of the Associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Profile of the German Water Sector 2015
06 Profile of the German Water Sector 2015
FOREWORD
Foreword
With the “Profile of the German Water Sector 2015” nomic efficiency and customer satisfaction. It is
the ATT, BDEW, DVGW, DBVW, DWA and VKU in essential to maintain the high level of performance
agreement with the German Association of Cities achieved to date and to bring about improvements
(Deutscher Städtetag – DST) and the German As- wherever possible and required.
sociation of Towns and Municipalities (Deutscher
Städte- und Gemeindebund – DStGB) provide an The associations promote the continuous im-
up-to-date picture of water supply and waste- provement process in the companies through
water disposal in Germany. It gives the interested benchmarking and recommend their members
public and decision makers extensive, detailed in- participate in benchmarking projects (Associa-
formation about the water sector’s performance, tions’ Declarations 2003 and 2005). Benchmarking
the great variety of its tasks and the current chal- means to compare oneself and improve by learning
07
lenges it faces. Like the previous three editions from the other participants in a comparison group.
since 2005, the fully up-dated Profile 2015 dem-
onstrates that the modernisation strategy pursued Benchmarking, the transparent documentation of
equally by the government and by the water sector performance through the water sector’s Profile,
itself is also taking effect in an increasingly difficult and continuous development are the pillars of the
environment. sector’s permanent improvement which it imple-
ments in its own responsibility. This concept was
The Profile documents the high performance of the acknowledged and supported by the German Fed-
German water sector in European and international eral Government in its 2006 report on the moderni-
comparison with regard to safety, quality and sus- sation strategy for the German water sector.
tainability of the supply and disposal services, eco-
Profile of the German Water Sector 2015
SUMMARY AND CORE STATEMENTS
Summary and core statements
Performance
In Germany the citizens always have drinking water quality, high wastewater disposal standards, high
available in excellent quality and sufficient quan- customer satisfaction and careful management of
tity. In addition to the comfortable resource situ- water resources under consideration of economic
ation in Germany as a water-rich country, the high efficiency. These aspects are considered in the
technical standards and a range of voluntary meas- 5-pillar benchmarking concept. Through the na-
ures by the water sector contribute to the protec- tionwide application of benchmarking, the utilities
tion of natural resources. Wastewater treatment have significantly improved in all areas.
in Germany is also at a very high level. In contrast
to many EU countries, almost 100 percent of the To remain sustainable, the water sector needs to
wastewater is treated to the highest EU purifica- be efficient, to cover costs and be transparent for
tion standard. Through their work, drinking water the customers. Benchmarking projects are a key
suppliers and wastewater utilities thus contribute instrument here. The main prerequisites for the
significantly to preventive and comprehensive wa- success of the benchmarking and performance
08 ter protection. indicator projects are confidentiality and volun-
tariness, but also the consistency and compat-
Performance characteristics of the water supply ibility of data. For this purpose, the performance
and wastewater disposal in Germany are long-term indicator systems of the sector are continually
safety of supply and disposal, high drinking water developed.
Approved technical standards and adherence to strict legal requirements lead to the high quality and
the long-term safety of the German drinking water supply and wastewater disposal.
Profile of the German Water Sector 2015
SUMMARY AND CORE STATEMENTS
Organisation and economic efficiency
In Germany, water supply and wastewater disposal Fees, drinking water quality, environmental re-
are core duties of public services in the general in- quirements as well as water abstraction rights and
terest within the competence of the municipalities discharge rights are subject to strict state control;
or other public corporations. Their democratically cost coverage is anchored in law. The increases in
legitimised bodies take the strategic decisions with fees for drinking water and wastewater have main-
regard to the forms of organisation, participations ly been below the inflation index for many years.
and cooperation. Germany has a varied supply and Safety of supply and drinking water quality are of
disposal structure comprising public and private utmost importance for the customers and almost
sector companies. all consider the fees paid for this to be appropriate.
The German water sector is one of the largest cus- The specific regional and local parameters deter-
tomers for the private sector, as planning and con- mine the supply and disposal conditions on site.
struction contracts are awarded to a large extent Water supply and wastewater disposal therefore
to outside companies. The water utilities have re- always require locally adapted solutions. This,
09
alised that it is optimally qualified employees with combined with the different legal requirements of
their sector-specific knowledge and skills that the federal states, results in different efforts and
keeps the utilities viable in the long-term. There- costs. Taking into account the respective water
fore, they have continually invested in the educa- consumption and performance standards, custom-
tion of young people for many years, often beyond ers in Germany spend less on their drinking water
their own needs. than customers in comparable European countries.
In Germany, water supply and wastewater disposal are core duties of public services in the general in-
terest within the competence of the municipalities or other public corporations. Their democratically
legitimised bodies take the strategic decisions with regard to the forms of organisation, participations
and cooperation. Germany has a varied supply and disposal structure comprising public and private
sector companies.
Fees, drinking water quality, environmental requirements as well as water abstraction rights and dis-
charge rights are subject to strict state control; cost coverage is anchored in law. The charges and
prices are largely determined by the specific regional and local context. They have mainly developed
below the inflation index for many years.
Profile of the German Water Sector 2015
SUMMARY AND CORE STATEMENTS
Tasks and challenges
The requirements put on modern, sustainable wa- vironment. This challenge cannot be dealt with
ter management are increasing steadily. It’s no solely by the water sector. When dealing with mi-
longer just a matter of providing drinking water and cro pollutants, the focus needs to be on preventing
treating wastewater. The comprehensive approach their input at the immediate source. Where this is
is increasingly gaining in importance, with the aim not possible, the polluter pays principle needs to
of achieving a sustainable, integrated water man- be applied.
agement. Thus, in addition to drinking water sup-
ply and wastewater disposal, among other things, Water consumption has been decreasing signifi-
the maintenance and protection of water bodies, cantly for decades. Nevertheless, the utilities have
the landscape water regime and coastal protec- to provide appropriate capacity for peak demand
tion and flood control are among the tasks of a and an infrastructure which is able to cope with
functioning water sector. In addition, the changes this. Therefore, political demands for further re-
in social priorities influence the work of the water ductions in water consumption are not reasonable,
10 sector. Thus, energy consumption and efficiency, especially in water-rich Germany.
and resource protection are becoming increasingly
high profile. Concomitant conflicts of use with the Demographic and climate change together with
water sector need to be solved through social con- continuously decreasing water consumption pose
sensus. great challenges for the German water sector.
The German water sector meets these challenges
As a result of our modern industrial society and by developing solutions that are adapted to the
sophisticated analytics, anthropogenic micro pol- respective conditions. It proves that it can meet
lutants can be detected better in groundwater these challenges thanks to its comprehensive
and surface water. There is considerable need for technical, economic and scientific expertise and its
research on their effects on humans and the en- practical research activities.
Demographic change, the looming climate change, the sophisticated detection and the minimisation
of the input of anthropogenic micro pollutants, as well as conflicts of use with industry, agriculture
and energy policy objectives are the current challenges faced by the German water sector. Drink-
ing water supply and wastewater disposal face these tasks and work locally to achieve flexible and
adapted solutions that comply with the social consensus.
Profile of the German Water Sector 2015Framework Conditions – PART A
PART A –
Framework Conditions
11
Profile of the German Water Sector 2015PART A – Framework Conditions | 1 The water sector’s framework conditions
1 The water sector’s framework conditions
Germany has a comfortable resource situation. The protection of the valuable resource
water is an existential public task. The water supply and wastewater disposal utilities
support the state considerably in its task of protecting the water bodies in the long term.
1.1 Water availability in Germany 1.2 Water management duties
We live in a water-rich country. The 80.5 million The requirements put on the use of water are in-
inhabitants have 188 billion cubic metres of fresh creasing steadily. It’s no longer just a matter of
water available per year, which is renewed in our providing water. The comprehensive approach is
temperate humid climate through rainfall. increasingly gaining in importance, with the aim
of achieving a sustainable, integrated water sec-
However, the level of precipitation varies region- tor. Thus, in addition to drinking water supply and
ally. It tends to rain more in the West than in the wastewater disposal, among other things, the
East. Whereas Berlin/Brandenburg receives 590 maintenance and protection of water bodies, the
mm per year, in Baden-Württemberg it’s 938 mm landscape water regime and coastal protection and
per year. Regions of high and low precipitation are flood control are among the tasks of a functioning
12 frequently close to one another in geographical water sector.
terms. For instance, the city of Düren with a pre-
cipitation level of about 622 mm per year and the Nationwide protection of water bodies is the re-
city of Wuppertal with about 1,200 mm per year are sponsibility of the state. European targets in the EU
only around 100 km apart (Source: German Weather Water Framework Directive (EC-WFD; 2000/60/EC)
Service, 2009). demand the “good status” of water bodies. Figure
1 shows that the chemical status of groundwater
Not only the precipitation levels vary regionally. needs to be improved even further in Germany. In
Also the availability and quality of the groundwater many areas of Germany, however, prescribed EU
differs. Hydrological, geological and hydro-chem- targets for achieving high quality standards will
ical differences and anthropogenic influences are not be achieved through the second and third gen-
responsible for this. erations of management plans and programmes
of measures in accordance with the EC-WFD un-
In a highly industrialised, intensively farmed and til 2021 or 2027. The biggest challenge is, as ever,
densely populated country like Germany, the wa- the pollution caused by nitrates. This is also clear
ter resources are subject to a variety of utilisation in the 2nd Report on the Implementation of the
requirements and major burdens To nevertheless EC Nitrates Directive (91/676/EEC) in which the EU
ensure the best possible quality of the water bod- Commission establishes that in Germany there are
ies is the responsibility of the state, supported by still areas where there is as yet no improvement in
the utilities of the water sector. the groundwater quality and thus additional meas-
Profile of the German Water Sector 20151 The water sector’s framework conditions | PART A – Framework Conditions
ures are required. In addition to nitrate pollution, rently also confirmed by the Federal Government’s
findings regarding pesticides and their degradation National Action Plan for the sustainable use of
and transformation products in the water bodies plant protection products.
present a problem for water protection. This is cur-
Chemical status of groundwater bodies in Germany 1
groundwater bodies’ status
good
bad
unclear
capital of German Land
German capital
river basin unit
13
Source: Federal Ministry for the Environment, Nature
Conservation, Building and Nuclear Safety/ Federal
Environmental Agency – “Water Framework Directive –
The way towards healthy waters”. Based on the data of
the portal WasserBLICK/BfG, status 03/2010
Furthermore diffuse phosphorus pollution of the operation. Thus, it is necessary that agricultural
flowing, and in particular the standing, water bod- law ensures that the requirements of water law are
ies from agricultural land use contributes to eu- met. In addition, the authorisation procedure for
trophication and increased nutrient enrichment plant protection products needs to be developed
with various adverse consequences. with regard to the interests of water protection.
In many places, farmers and water supply utili- Especially the 18,780 water protection areas, which
ties have recognised this problem and have often occupy about 14 percent of the land area of Ger-
been cooperating successfully for many years in many (Source: WasserBLIcK/Federal Institute of
the interests of preventive drinking water resource Hydrology, 2014), contribute to the precaution-
protection. This is of prime importance, as there is ary protection of drinking water resources. Here,
no alternative to the existing drinking water catch- stricter requirements, that go beyond the normal,
ment areas and the current drinking water supply. comprehensive conservation of water bodies and
Nevertheless, the polluters of the water bodies which are geared towards the precautionary pro-
need to be held more responsible. There is a need tection of drinking water resources, apply to po-
for action that clearly goes beyond voluntary co- tentially hazardous water uses and facilities.
Profile of the German Water Sector 2015PART A – Framework Conditions | 2 Structural and technical framework conditions
2 Structural and technical framework conditions
The specific regional and local framework conditions determine the local conditions of supply
and disposal. Treatment and distribution of water and collection and treatment of wastewater
are directly dependent on climatic, geological, hydrological, topographical and settlement-
geographic conditions which vary considerably in their regional or local forms.
14
Profile of the German Water Sector 20152 Structural and technical framework conditions | PART A – Framework Conditions
The expenditure required for the provision of The VKU expert opinion of Holländer et al. (2009,
drinking water depends on the local availability of 2013) shows how the structural framework condi-
the water sources (spring, ground, surface water) tions affect the drinking water supply. Figure 2 il-
and quality of the raw water. These are influenced, lustrates how external conditions, for example ur-
among other things, by climate, vegetation, land banity, population density, topography and water
use (agriculture, industry, etc.) and by substances availability, impact the respective main processes
occurring naturally in the water (e.g. frequently in the provision of drinking water. While the condi-
iron and manganese) attributable to geological in- tions resulting from factors 1 (bio-geographic con-
fluences. ditions) and 2 (including population demography
and density) directly affect the four main process-
As far as wastewater disposal is concerned, the es of the drinking water supply, factor 3 (invest-
technical design of the sewer system depends ment activities and modalities for average cost of
above all on the local soil and slope conditions. Both capital) has an overall influence on the costs of the
in the water supply and in the disposal of wastewa- water supply utility, without any difference in the
ter, the altitude conditions determine the number effectiveness on the main processes.
and kind of plants required (e.g. high-level tank,
pump stations, pressure reduction and pressure
boosting plants) and their energy consumption.
15
Influence of structural framework conditions 2
on the main processes of drinking water supply
VKU-Gutachten Holländer et al. (2009)
VKU-Gutachten Holländer et al. (2009)
VKU-Gutachten Holländer et al. (2009)
VKU-Gutachten Holländer et al. (2009)
VKU-Gutachten Holländer et al. (2009)
Current
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and
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and
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and
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External
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procurement
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procurement
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procurement
procurement Storage
Storage
Storage
and
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and
pressure
Storage
and
pressure
and
pressure
and
maintenance
pressure
maintenance
pressure
maintenance
maintenance
maintenance
Transport
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andand
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distribution
and
distribution
and
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and
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Urbanity
Urbanity
Urbanity
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Population
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density
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density
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and
structure
Size
and
structure
Size
and
structure
and
of
structure
supply
of
structure
supply
of supply
of
area
supply
area
of supply
area
areaarea
Development
Development
Development
Development
Development
of the
of the
supply
of the
of
supply
the
of
supply
area’s
the
supply
area’s
supply
size,
area’s
area’s
size,area’s
size,
size,size,
Factor
Factor
Factor
1Factor
1 Factor
1 1 1 structure
structure
structure
and
structure
and
structure
population
and
population
and
population
and
population
density
population
density
density
density
density
Bio-geographic
Bio-geographic
Bio-geographic
Bio-geographic
Bio-geographic
conditions
conditions
conditions
conditions
conditions
Topography
Topography
Topography
Topography
within
Topography
within
within
thewithin
the
supply
within
the
supply
the
supply
area
the
supply
area
supply
area
areaarea
SoilSoil
conditions
Soil
conditions
Soil
conditions
Soil
conditions
conditions
Factor
Factor
Factor
2Factor
2Factor
2 2 2
Population
Population
Population
Population
demography
Population
demography
demography
demography
demography
andand
density,
and
density,
and
density,
and
consumer
density,
consumer
density,
consumer
consumer
structure
consumer
structure
structure
structure
structure
Depreciation
Depreciation
Depreciation
Depreciation
Depreciation
modalities
modalities
modalities
modalities
and
modalities
and
rate
and
rate
of
andrate
interest
of
and
rate
interest
ofrate
interest
of interest
of interest
andand
size
and
size
of
andsize
supply
ofand
size
supply
ofsize
supply
of
area
supply
area
of supply
area
areaarea
Building
Building
Building
subsidies
Building
subsidies
Building
subsidies
subsidies
subsidies
Factor
Factor
Factor
3Factor
3Factor
3 3 3 Capitalisation
Capitalisation
Capitalisation
Capitalisation
Capitalisation
practice
practice
practice
inpractice
terms
inpractice
terms
in of
terms
ininvestments
of
terms
ininvestments
of
terms
investments
of investments
of and
investments
andandandand
Investment
Investment
Investment
Investment
activities
Investment
activities
activities
activities
andand
activities
modalities
and
modalities
and
modalities
and
modalities
formodalities
for
average
average
for for
average
cost
average
forcost
of
average
cost
capital
ofcost
capital
ofcost
capital
of capital
of capital maintenance
maintenance
maintenance
maintenance
maintenance
expenditure
expenditure
expenditure
expenditure
expenditure
Source: VKU - expert opinion of Holländer et al., 2009
Profile of the German Water Sector 2015PART A – Framework Conditions | 2 Structural and technical framework conditions
The specific regional conditions exist on site and Demand structures, population (see Chapter A 5.3)
cannot be influenced by the supplier. However, and requirements from industry and commerce
they largely determine the technical complex- may vary considerably over time. For instance,
ity and thus the cost of the provision of drinking water demand has decreased since the 1980s due,
water. Comparisons of pricing and charges that do among other things, to the change in customer
not take these structural differences into account behaviour and the increasing utilisation of water-
are not able to provide any reliable information saving devices and fittings.
about the appropriateness of local water drinking
or wastewater fees. Water supply and wastewater disposal therefore
require locally adapted solutions. This, coupled
Demand forecasts are of great importance in plan- with various legal requirements, leads to different
ning long-lasting and complex infrastructures. expenses and costs (see Figure 3).
Comparison of the range of overall expenditure and different 3
expenditure variables (in Euro per cubic metre)
Results from public benchmarking reports (drinking water)
16
Abstraction and processing expenditure, NRW1 2009 0.32
Expenditure for compensation payments to agricultural
0.05
sector, BY2 2009
Expenditure for concession fees, NRW1 2009 0.29
Expenditure for electricity costs, BY2 2007 0.19
Expenditure for electricity costs, NRW1 2009 0.13
Expenditure for external drinking water procurement,
1.20
BY2 2007
Expenditure for external drinking water procurement, 0.24
NRW1 2009
Reference: range of total expenditure 1.20
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40
Euro/m3 Euro/m3 Euro/m3 Euro/m3 Euro/m3 Euro/m3 Euro/m3 Euro/m3
1
North Rhine-Westphalia 2
Bavaria
Source: IGES/TU Berlin Study on behalf of BDEW, 2010
Profile of the German Water Sector 20153 Legal, economic, political framework | PART A – Framework Conditions
3 Legal, economic, political framework
In Germany, water supply and wastewater disposal are core duties of public services in the
general interest and are the responsibility of the municipalities, or other public corporations.
Their democratically legitimised bodies take the strategic decisions with regard to the forms
of organisation, participations and cooperation.
17
Profile of the German Water Sector 2015PART A – Framework Conditions | 3 Legal, economic, political framework
3.1 Role of the municipalities to a private operator while the performance
of public tasks and sovereign obligations rests
The German Basic Law (Article 28 Para. 2) and most with the municipality.
constitutions of the federal states ensure the local
self-government of municipalities. Self-govern- With a view to effectively realising drinking water
ment comprises all matters concerning the local supply and wastewater disposal, municipalities
community. Local self-government means auton- may join forces, also in associations, for coop-
omy in terms of bylaws, supreme power in terms of eration. Usually, this cooperation takes place on a
organisational, personnel, financing, regional and voluntary basis within the meaning of municipal
planning issues of cities, municipalities, associa- sovereignty through inter-municipal cooperation
tions of municipalities and administrative districts in the form of
in accomplishing the tasks assigned to them. Mu-
nicipal regulations and the water laws of the dif- Special-purpose associations as public
ferent federal states stipulate that drinking water corporations,
supply is usually and wastewater disposal is always Institutions under public law as joint
an obligation of the municipalities. On this basis, enterprises of several municipalities or
municipalities decide on the local implementation Water and soil associations within the
and organisation of water supply and wastewa- meaning of the federal law on water and
ter disposal for the citizens’ benefit. Based on the soil associations (Water Association Act).
18 different constitutional provisions of the federal
states, different forms of business organisation To some extent, municipalities (such as in North
are possible for the implementation of water sup- Rhine-Westphalia) are members of water man-
ply and wastewater disposal on the municipalities’ agement associations subject to special laws.
own responsibility as part of their organisational
sovereignty. The forms of organisation are usually Public-law forms of business are special-purpose
as follows: associations, institutions under public law, water
and soil associations, special-law associations as
Ancillary municipal enterprise: Operation by well as ancillary municipal enterprises and owner-
municipality within the framework of the gen- operated municipal enterprises. Private forms of
eral municipal administration. business organisation comprise autonomous com-
Owner-operated municipal enterprise: Op- panies or cooperation models in the form of GmbH
eration by municipality as special asset with or AG (limited liability companies and stock corpo-
independent accounting (economic autonomy). rations). Here, the majority of shares is mostly held
Institution under public law: Economically and by municipalities. The municipalities or their rep-
legally autonomous public utility. resentatives in the association’s bodies decide on
Autonomous company: Private company with the form of business organisation for supply and
the municipality as shareholder (legal and eco- disposal utilities and on pricing (prices or charges,
nomic autonomy). see Chapter A 3.6). In accordance with the respon-
Operations management model/operator sibilities determined by bylaws, they continue to
model/cooperation model/public-private- establish the utilisation prerequisites for all prop-
partnership model: Transfer of plant operation erty owners in cities and municipalities.
Profile of the German Water Sector 20153 Legal, economic, political framework | PART A – Framework Conditions
In addition to these compulsory tasks, municipali- 3.2 Requirements for the protection,
ties have to fulfil partial tasks regarding the im- management and use of the
plementation of environmental laws issued by the water bodies
government and the federal states. In accordance
with the regulation of competencies of the re- “Water is not a commercial product like any other
spective federal state, the lower water authorities but, rather, a heritage which must be protected,
defended and treated as such.”
or the water management offices implement the
(extract from the recitals of the European Water
water rights within urban districts and cities not Framework Directive)
attached to districts as the lower instance of the
water management administration. Since 2000, the European Water Framework Direc-
tive (EC-WFD; 2000/60EC) has provided the central
Among others things, the lower water authorities regulatory framework for the protection, manage-
approve wastewater systems, wastewater treat- ment and use of water bodies and water resources
ment plants, small sewage works, wastewater and in Europe. It defines far-reaching objectives with
rainwater discharges, use of water bodies, such as regard to the chemico-physical, biological-eco-
abstraction from groundwater and surface water logical and quantitative status of groundwater,
and exceptional approvals for water and medicinal surface water and coastal waters. These objectives
spring protection areas. Furthermore, as super- are to be achieved by a cross-sector management
visory/executive authorities they are responsible, approach comprising a series of basic management
among other things, for sewage treatment plants, and protection principles:
19
water supply facilities, registration of private wells,
flooded areas, water and medicinal spring protection The management and protection of water bod-
areas as well as for the Wastewater Levy Act and the ies must look at the boundaries of natural river
wastewater register. The municipalities and special catchment areas to take the interdependencies
purpose associations, institutions under public law, of the hydrologic cycle into consideration as far
water and soil associations and water management as possible.
associations subject to special laws are responsible Combined approaches consisting of quality
for maintaining water bodies. Municipalities ensure standards for water bodies and limit values for
the provision of water for fire-fighting. emissions into water bodies.
Cost recovery and polluter-pays-principle:
Cities not attached to districts, and urban districts as This means foregoing the subsidisation of
lower-tier public health authorities are furthermore water prices and charges, taking account of
involved in drinking water quality assurance. Within environmental and resource costs for prices and
the scope of planning law, the cities and munici- charges, and assigning costs according to the
palities also contribute to the development of wa- polluter-pays-principle.
ter management matters for their settlement area. Integrated management of groundwater and
In this way, they make an essential contribution to surface waters.
the local development and implementation of wa- Concentrated and diffuse sources of pollutions
ter management matters. This takes account of local of water bodies need to be given equal consid-
and regional requirements. Through the election of eration in management and for the implemen-
municipal councillors and mayors, citizens partici- tation of measures.
pate in these processes in a democratic manner.
Profile of the German Water Sector 2015PART A – Framework Conditions | 3 Legal, economic, political framework
Water supply and wastewater disposal are also in- ciples for careful use of water, priority supply from
corporated in this framework. Water abstraction local water resources and the reduction of water
and wastewater discharges must not affect the losses from distribution systems. Furthermore, the
condition of the water bodies. Water Resources Management Act provides the
basis for the designation of water protection areas.
The EU Water Framework Directive requires Mem- Moreover, it requires that generally acknowledged
ber States to ensure the protection of drinking wa- rules of technology be taken into consideration
ter resources in order to bring about a reduction in for water supply and wastewater disposal, and
the level of purification treatment for the produc- prescribes state-of-the-art purification for direct
tion of drinking water. In addition, the EU Water wastewater discharges.
Framework Directive defines one of its major ob-
jectives as the avoidance of a further deterioration In their water laws, the federal states can issue rules
in the condition of the water bodies. which deviate from German federal law in terms
of water supply and wastewater disposal, unless
The EC-WFD was implemented in German law these are related to certain substances or plants,
through the Water Resources Management Act and in order to respond flexibly to specific supply and
the water laws of the federal states and through disposal situations (“deviation competence”).
additional implementing ordinances.
20 § 47 para. 1 of the German Water Resources Man- 3.3 Requirements for drinking water
agement Act implements the prohibition on de-
terioration in national law and substantiates this While the EC-WFD, the Water Resources Manage-
requirement. Accordingly, the groundwater is to ment Act and the water laws of the federal states
be managed in such a way that deterioration of its regulate the role of water supply and wastewater
quantitative and its chemical state is avoided and disposal as part of the hydrologic cycle, the Infec-
any significant and sustained trends of increasing tion Protection Act forms the legal basis for secur-
concentrations of pollutants due to the impact of ing and monitoring the supply of high-quality and
human activity are reversed. safe drinking water. Its basic requirements are given
by the Drinking Water Ordinance 2001, which, at the
The German Water Resources Management Act same time, transposes the European Drinking Water
governs the further rights and duties of water sup- Directive into German law, for example in terms of
ply and wastewater disposal with regard to the uti-
lisation and protection of water bodies. The afore- the quality of the drinking water (e.g. for
mentioned Act defines in § 50 the public water chemical or microbiological parameters),
supply as a service in the general interest. Waste- water treatment (e.g. with regard to admissible
water disposal, which has always been recognised processes and treatment substances),
as a public service, is defined as a public-law duty. the obligations of the water suppliers and the
Both services therefore entail great social impor- operators of drinking water installations
tance and responsibility. At the same time, the Wa- (e.g. inspection duties and reporting to the
ter Resources Management Act stipulates the prin- responsible authorities)
Profile of the German Water Sector 20153 Legal, economic, political framework | PART A – Framework Conditions
the obligations of the responsible authorities parameters for which samples have to be taken,
(e.g. concerning the surveillance of the drinking the purification results for given parameters.
water),
the mandatory requirement to minimise chemi- The Wastewater Ordinance requires that state-of-
cal substances in drinking water (tightening the-art methods be used for direct discharges, and
of European standards) and the mandatory leads to an excellent technical standard of waste-
requirement to minimise microorganisms. water treatment in Germany.
For the fulfilment of these requirements, the Ger- The determination of analysis methods ensures a
man Drinking Water Ordinance recommends com- uniform level of surveillance. If the treated waste-
plying with the generally acknowledged rules of water is discharged into water bodies with even
technology. Legal requirements and technical rules higher demands on the treated wastewater to be
make drinking water one of the best-analysed and discharged, stricter requirements (based on the
best-tested foods. Water Resources Management Act and the water
laws of the federal states) may be defined for the
treatment results in the public notice issued by the
3.4 Requirements for treatment water authority. The compliance with these re-
of the wastewater quirements is monitored by the authorities of the
federal states.
The European Directive on urban wastewater
21
treatment (91/271/EEC) defines uniform minimum
standards for the EU Member States for the treat- 3.5 Technical self-administration
ment of municipal wastewater. It defines stricter
requirements for so-called “sensitive areas”. Al- In the rapidly changing and increasingly complex
most the whole of Germany is identified as a “sen- technological world, the legislature confines itself
sitive area”. This Directive has been transposed in its legislation to the determination of basic re-
into German law by the Water Resources Manage- quirements and thus defines the legal framework,
ment Act, supplemented by the water laws of the the observation of which is monitored and en-
federal states. forced by the public authorities.
The German Wastewater Ordinance regulates the In the German Technical and Scientific Association
implementation of the EC Urban Waste Water Di- for Gas and Water (DVGW) and the German Asso-
rective and the Water Resources Management Act ciation for Water, Wastewater and Waste (DWA),
in Germany. The Wastewater Ordinance defines over 3,000 volunteer experts from utilities and
waste disposal companies, industry, engineering,
sampling method and site, administration and science develop technical rules.
requirements for analysis and measurement The professional public is included in the develop-
procedures. ment to a large extent through transparent pro-
cedures. In this way, the set of rules receive their
It determines minimum standards for domestic professional legitimacy and acknowledgement as
wastewater and for all industrial and commercial generally recognised rules of technology, referred
sectors in terms of to in the laws and regulations through so-termed
Profile of the German Water Sector 2015PART A – Framework Conditions | 3 Legal, economic, political framework
technology clauses. On a national level, coopera- can be selected independently of the organisation
tion takes place with other standardisation organi- form, that is, a water utility organised under public
sations like DIN and VDI, on a European and inter- law can also charge private sector fees.
national level with CEN, CENELEC and ISO.
Wastewater disposal is a sovereign obligation of
In this way, the state is relieved of tasks, which the the local authorities required to dispose of waste-
sector develops and applies within the scope of water. So far, this has mainly been based on the
technical self-administration with a high level of public statutes approved by the municipal con-
quality and innovation and on the basis of a large stitutions of the states with connection and use
consensus. This cooperation principle is the cor- obligations and the collection of contributions and
nerstone of German technology and environmen- charges as detailed in the Local Rates Acts of the
tal law. The “standardisation policy concept” of the states. In a few exceptional cases, the wastewater
German Federal Government is explicitly commit- disposal is also carried out on a contractual basis
ted to technical self-administration, with respec- with private-sector fees.
tive strengthening seen as an important instru-
ment for reducing bureaucracy. In the following, the word “fees” is used as a ge-
neric term for all public and private law payments
that are claimed and rendered as compensation for
3.6 Prices and charges goods and services.
22
Towns and municipalities may develop the water 3.6.1 Legal framework
supply in private or public-sector forms of organi- In Germany, charges are subject to concrete le-
sation. They can choose either a public legal form gal provisions. The Local Rates Acts and munici-
of organisation, such as an owner-operated mu- pal regulations of the federal states determine the
nicipal enterprise for their water utilities, transfer framework for the calculation of charges. Accord-
the task to an institution under public law or a spe- ingly, the following principles of public financial
cial purpose association or opt for a private organi- conduct are essentially applied:
sational model, such as a public utilities company
as a GmbH. The form of organisation determines Principle of equivalence (proportionality): Charg-
the customer relationship. es must be in due proportion to the service pro-
vided in return (Local Rates Act).
A public-law customer relationship can only be se-
lected by public water utilities. As consideration for Principle of cost recovery: All costs associated
the supply of drinking water, among other things, with water supply and wastewater disposal must
these companies collect user charges and contribu- be covered by the charges or contributions. Long-
tions for the creation and renewal of water supply term insufficiency or surplus cover is not admissi-
facilities. If a water utility carries out delivery to its ble (Local Rates Act).
customers under private law, it can invoice its cus-
tomers in particular for water prices, construction Prohibition of cost overrun: The estimated rev-
grants and house connection costs for the supply enue from charges must not exceed the likely cost
of drinking water. Private-sector delivery relations of the facility (Local Rates Act).
Profile of the German Water Sector 20153 Legal, economic, political framework | PART A – Framework Conditions
Control of prices and charges
public law utilities private law utilities
free choice
charges under public law prices under private law
local administrative civil cartel
supervision court court authority
verification on verification on supervision and
control of
the customer’s the customer’s review on
by-laws
request request suspicion of abuse
CONTROL INSTITUTIONS 23
Source: VKU
Principle of equality or equal treatment: Arbitrary cost of production through the actual replace-
discrimination of consumers is to be excluded (Lo- ment value or the current replacement value
cal Rates Act). and by paying adequate interest on the neces-
sary equity capital.
Economic principles: Charges must be calculated
in accordance with economic principles and meth- or
ods (Local Rates Act).
The principle of real capital preservation: The
These may include calculation must make sure that the supply and
disposal duties are upheld. Value conservation
The principle of preservation of net real- is ensured through depreciation of acquisition
asset values: The calculation must ensure that and production costs and payment of adequate
there is no technical deterioration of supply and interest (including inflation adjustment) on the
disposal in the long term. Value conservation is necessary equity capital.
ensured by indexing the acquisition costs or the
Profile of the German Water Sector 2015PART A – Framework Conditions | 3 Legal, economic, political framework
Interest on equity capital: Most Local Rates Acts nicipal by-laws in general and thus also on the level
of the federal states stipulate an adequate rate on of charges is the responsibility of the elected local
the deployed capital to avoid an inflation-triggered councillors. Thus the citizen also has considerable
decrease in value, thus ensuring economic freedom codetermination rights, which means that charges
of action and maintaining the real-asset values of are democratically legitimised. All municipal regu-
municipal utilities. Interest is paid on the basis of lations give the municipal supervisory authority a
either real capital preservation or the preservation general right to information from the municipali-
of net real-asset values. ties, some municipal regulations even provide for
a legal right of information for the charge-paying
As a rule, there are generally no specific legal re- citizens. Against this background, there is no need
quirements for calculating the water prices. How- for antitrust price abuse control. In the framework
ever, according to the rulings of the German Fed- of the 8th amendment to the German Act against
eral Supreme Court, the principles applied to the Restraints of Competition (GWB) it was therefore
calculation of charges are to be applied in the same established that the rules on antitrust price abuse
way to the calculation of prices. In isolated cases, control do not apply to charges and contributions.
the Local Rates Acts explicitly provide for applica-
tion of the rates of charges to fees under private The pricing decisions for the water supply in pri-
law, for example, § 7, para. 9, clause 2 of the Local vately organised utilities are mostly taken by the
Rates Act for Rhineland-Palatinate. Supervisory Board. In municipal utilities, the elect-
24 ed local councillors ensure the citizens have con-
For the collection of charges or prices a compre- siderable codetermination rights here.
hensible and coherent, and therefore verifiable
calculation of costs is required. The associations The antitrust review of water prices is the re-
provide various aids for this such as guidelines and sponsibility of the cartel authorities of the federal
calculation tools. states or, in case of cross-border activity, the Fed-
eral Cartel Office. Under the German Act Against
3.6.2 Control of charges and prices Restraints of Competition, the methods of the
Fees are subject to extensive regulatory and judicial comparative market concept and cost control are
control. What control mechanisms apply depends on an equal footing. In the context of the com-
on the nature of the contractual relationship. parative market concept, the authorities check
whether price abuse has occurred, because a wa-
Citizens can have their notification of charges ter utility demands less favourable prices or busi-
checked by the administrative courts for legality ness conditions than similar utilities. Here, the wa-
and appropriateness of the level of the charges. ter utility may justify itself by demonstrating that
The municipal supervisory authority checks the le- the difference is based on objective circumstances
gal foundations of the charges. non attributable to it. The cartel authority on the
other hand needs to demonstrate the comparabil-
For the levying of charges, the principles of public ity of the company taken as reference. However,
financial law and the Local Rates Act of the states according to rulings by the Federal Supreme Court,
apply. Charges and contributions may only be lev- the requirements for establishing this similarity are
ied on the basis of a by-law. The resolution on mu- minor (“rough viewing”). For the cost control, the
Profile of the German Water Sector 20153 Legal, economic, political framework | PART A – Framework Conditions
authority checks whether a water utility demands 3.6.3 Cost and tariff structure
fees that unduly exceed the costs. As part of the One main feature of water supply and wastewa-
review of § 31 of the German Act against Restraints ter disposal is the large-scale infrastructure with
of Competition, the costs associated with sound a long service life of up to 80 years for the plants
management are to be recognised. and even longer for reservoirs. Consequently, this
high technical expenditure is reflected in the cost
In the context of antitrust price checks, the car- structure.
tel authorities have to come to an understanding
with the responsible supervisory authority. This re- On the one hand, the construction, extension and
quirement of the Act against Restraints of Compe- renewal of this technical infrastructure cause high
tition serves to prevent one-sided cost considera- capital costs (such as depreciation and interest
tions and take adequate account of the particular on investment). On the other hand, operation and
conditions of the supply of drinking water. In the maintenance of the facilities generate labour costs
same vein, the Federal Ministry of the Environment and cost of materials which also have a consider-
and the Ministry of Health have recently published able share in overall costs.
their “Catalogue of preventive services of the wa-
ter supplier for protection of the water bodies and A further cost position is the concession fee which
health” in the Federal Gazette. may be levied by the municipalities. The conces-
sion fee is paid for the use of public transport
Alongside antitrust supervision there is the fair- routes and land. Here, “use” means the installation
25
ness control in accordance with § 315 German Civil and operation of pipes. For those companies that
Code, which consumers can assert through the civil pay a concession fee, on average, this accounts
courts. Here, the court checks the appropriateness for about 10 percent of the water suppliers’ costs
(fairness) of the agreed price of water in relation to and is determined by the Ordinance on Concession
the performance, the water supply. Here again, the Fees.
test is based on the principles and foundations of
public financial management.
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