Author(s)

Abdullah Murrar^1,2*, Ibrahim Awad³, Abdel Fattah Hasan⁴, Eyad Yaqob⁵, Ihab Barghothi⁵, Ahmad Sadaqa⁵, Subhi Samhan⁶, Abdelrahman Tamimi^5,7

¹Faculty of Graduate Studies, Strategic Planning & Fundraising, Arab American University Jenin, Jenin, Palestine.
²Tariff & Licensing Directorate, Water Sector Regulatory Council, Ramallah, Palestine.
³Faculty of Economics and Business Administration, Al-Quds University of Jerusalem, Jerusalem, Palestine.
⁴Water and Environmental Studies Institute, An-Najah National University, Nablus, Palestine.
⁵Graduate Studies Teaching Committee, Arab American University Jenin, Jenin, Palestine.
⁶Research and Development Directorate, Palestinian Water Authority, Ramallah, Palestine.
⁷General Directorate, Palestinian Hydrology Group, Jerusalem, Palestine.

The impactof water sales price on the performance of water service providers is typically something of a mystery. High prices mean more revenue and profit; but it may lead to less bills collection and encourage the illegal connections. Yet, this argument has not been fully addressed in the Palestinian water sector; this research evaluates the effect of average water prices on the financial sustainability key indicators as collection efficiency, profit or loss percentage, non-revenue water, staff productivity, daily consumption, operating, and maintenance cost. The average price of cubic meter sold is segmented into low, medium, and high categories. Multivariate analysis shows that there are significant differences in profit or working ratio, daily consumption, and operating cost based on the different price categories. Further significant differences have been found in non-revenue water, collection efficiency, and water production based on low and high price categories. On the other hand, no significant difference has been found in staff productivity. The results show high price set by Palestinian water providers, leads to an increase in the bill collection rate and profit margin. However, negative relationship has been found between the price on one hand, and non-revenue water, average daily consumption, and water production on the other hand. The implication of these findings reveal that the Palestinian water providers should increase water prices gradually to cover operating and maintenance cost for better financial performance and sustainability.

Collection Efficiency, Financial Sustainability, Palestinian Water Service Providers, Water Price, Working Ratio

Murrar, A. , Awad, I. , Hasan, A. , Yaqob, E. , Barghothi, I. , Sadaqa, A. , Samhan, S. and Tamimi, A. (2017) The Impact of Water Price on the Financial Sustainability of the Palestinian Water Service Providers. Journal of Environmental Protection, 8, 1490-1508. doi: 10.4236/jep.2017.812092.