The Union of Municipalities of Montenegro (UoMM) once again wishes to draw the attention of the public and all relevant institutions to the serious challenges that municipal water utility companies have been facing in recent years, which could ultimately jeopardize the reliable supply of water to citizens.
Of the 24 water utility companies owned by Montenegrin municipalities, 11 operated at a loss in 2023, with total losses exceeding €6 million. According to the first reports for 2024, this trend is continuing. For example, the net loss of Podgorica’s Water Supply and Sewerage Company alone exceeded €1.2 million last year.
The costs of maintaining and modernizing water supply systems have increased significantly as a result of both local and global economic trends and inflation. At the same time, the revenues generated from current water tariffs—and even from the tariffs that will apply in 2026 under the existing methodology—are insufficient to cover the full operating costs of utility companies. This leads to the accumulation of debt and limits the ability to invest in essential infrastructure projects.
With this in mind, ensuring the conditions necessary for a continuous and high-quality water supply can only be achieved by finding an optimal solution for the sustainable adjustment of water tariffs. Such an approach should be accompanied by an appropriate regulatory framework that would enable subsidies and thereby prevent negative impacts on socially vulnerable groups of the population.
In an effort to prevent the further financial destabilization of water utility companies, the Union of Municipalities established a working group last year that adopted proposals for amendments to the methodology for determining water prices within the existing legal framework, as well as proposed amendments to the Law on Utility Services that would allow for a more comprehensive revision of the methodology. Unfortunately, the competent Regulatory Agency rejected almost all of these proposals, while, at the same time, work on the amendments to the Law on Utility Services has been continuously delayed for several years.
We believe that this is the last opportunity to take more decisive action to address this issue, in order to eliminate the risk of jeopardizing the country’s water supply system and to create the conditions necessary for improving wastewater collection and treatment services. According to the latest available data, coverage of public water supply services stands at 87.42 percent, while coverage by the sewerage network remains very low at just 49.70 percent. In addition, the share of the population covered by municipal wastewater treatment services is an alarming 36.26 percent.
