water treatment and distribution services ppi in hungary warsaw, poland
DESCRIPTION
Water Treatment and Distribution services PPI in Hungary Warsaw, Poland. Ildikó Hamvainé Holocsy October 4, 2012. Content. INTRODUCTION DEFINICION OF THE SERVICE PRICING UNIT OF MEASURE MARKET CONDITIONS CLASSIFICATION STRUCTURE AND DETAILS - PowerPoint PPT PresentationTRANSCRIPT
Water Treatment and Distribution servicesPPI in Hungary
Warsaw, Poland
Ildikó Hamvainé Holocsy
October 4, 2012
Water Treatment and Distribution services in Hungary 2
Content
1. INTRODUCTION
2. DEFINICION OF THE SERVICE
3. PRICING UNIT OF MEASURE
4. MARKET CONDITIONS
5. CLASSIFICATION STRUCTURE AND DETAILS
6. EVALUATION OF STANDARD VS. DEFINITION AND MARKET CONDITIONS
7. DISCUSSION OF PRICING METHODS
8. QUALITY ADJUSTMENT
9. EVALUATION OF COMPARABILITY REGARDING TURNOVER/OUTPUT MEASURES
10. SUMMARY
Water Treatment and Distribution services in Hungary 3
Introduction
Responsibility for water supply and sanitation provision : municipalities
Regulation: National water strategies and rules Water Supply and Sanitation (WSS), policy of EU Local policies, may contain special approaches and
solutions concerning details on the practices (tradition, diversity and quality of available water sources, natural, environmental and financial conditions).
Water Treatment and Distribution services in Hungary 4
Introduction Water sources
Hungary is rich in freshwater; groundwater; thermal water sources.
The main freshwater sources are: Lake Balaton; river Danube (417 km in Hungary); river Tisza (597 km in Hungary); their watershed area; further freshwater sources.
Water Treatment and Distribution services in Hungary 5
DEFINICION OF THE SERVICE Size of the industry
GDP in Hungary, 2009
Services (beyond STS);
54,5%;
Agriculture; 3,4% Industry;
23,4%
Services (STS); 12,5%;
13%
Water, waste ; 1,2%
Construction; 4,9%
Water Treatment and Distribution services in Hungary 6
Arsenic (As) content of drinking waterin Hungary
Arsenic (As)
• Contested
▲ Not contested
Source: Hungarian Medical Institute
Water Treatment and Distribution services in Hungary 7
DEFINICION OF THE SERVICEMacroeconomic indicators
Macroeconomic indicators in Hungary at the level of the national economy, section E, 2009
0,3
1,0
1,2
0,50,4
0,10,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
GDP Gross output Number of enterprises
%
E Water, waste E 36 Water
Water Treatment and Distribution services in Hungary 8
DEFINICION OF THE SERVICEMacroeconomic indicators
GDP in Hungary, section E, 2009
4
11
41
44
0 10 20 30 40 50
39 Remediation …
37 Sew erage
38 Waste collection …
36 Water collection …
%
NACE Rev. 2
Net Turnover in Hungary, section E, 2009
10
9
36
45
0 20 40 60
39 Remediation …
37 Sew erage
36 Water collection …
38 Waste collection …
%
NACE Rev. 2
Water Treatment and Distribution services in Hungary 9
Market conditions
Market structure in Hungary
Different type of ownership Municipalities; Community (state) owned waterworks; Regional operators; Private water companies, mainly
multinational (French, German and Austrian) companies.
Water Treatment and Distribution services in Hungary 10
Market conditions (2)
Partial privatization of public services combined with long term management rights given to private companies
Effect of privatization
The most important question:
Relationship between company ownership and water prices
Do privatised companies set higher prices than the community-owned waterworks?
Water Treatment and Distribution services in Hungary 11
Market conditions (3)
Water prices are subsidised in Hungary Household water prices are lower than industrial
prices Water tariffs hardly cover the operation costs. Central subsidies help to keep prices below a
threshold Outsourced activities are typical, generally provided
under a fixed term contract by suppliers (providing a degree of power by increasing switching costs).
Water Treatment and Distribution services in Hungary 12
Market conditions (4)
WSS services are provided
often by the same company; there are a number of waterworks dealing only with
water; there are a few dealing only with wastewater.
For example:
Budapest Water Works provides water supply; Budapest Sewage Works is responsible for the
wastewater management.
Water Treatment and Distribution services in Hungary 13
Market conditions (5)
Source of the data:
The annual structural survey
(Enterprises classified in division E 36) The annual survey for statistics on industrial
production (enterprises classified to industry (sections B,C,D), as well as non-industrial enterprises)
Water Treatment and Distribution services in Hungary 14
Annual structural indicators by size classEnterprises classified in division E 36
(2009. year)
Size class
Number of employees
TurnoverValue-added at factor cost
capita %(Million HUF)
%(Million HUF)
%
Total Size class 19.863 100,0 216.124 100 105.822 100
1-9 employees 422 2,1 6.598 3,1 1.611 1,5
10 to 19 employees 386 1,9 3.985 1,8 1.625 1,5
20 to 49 employees 1.142 5,7 12.316 5,7 4.170 3,9
50 to 249 employees 5.058 25,5 44.706 20,7 19.782 18,7
250 and more employees 12.855 64,7 148.520 68,7 78.634 74,3
Water Treatment and Distribution services in Hungary 15
The annual production of industrial products and servicesThe frame of observation is all enterprises classified
to industry (sections B,C,D), as well as non-industrial enterprises
Period of time: 2010. year
Accounts
Published data of annual industry statistics
Number of production enterprise
s
Number of productio
n enterprise
s
Total sales value
Total sales value
pieces %Million
HUF%
36== Water collection, treatment and supply 187 100,0 123.632.903 100,00
360010 00 0 702 - Natural water (1000 m3) 164 87,7 118.352.136 95,7
360011 00 0 702 - - Drinking water (1000 m3) 150 80,2 114.994.199 93,0
360012 00 0 702 - - Non-drinking water (1000 m3) 33 17,6 3.357.937 2,7
360020 00 0 706 - Treatment and distribution services of water through mains (1000 HUF)
35 18,7 4.319.131 3,5
360030 00 0 706 - Trade services of water through mains (1000 HUF)
7 3,7 961.636 0,8
Water Treatment and Distribution services in Hungary 16
CLASSIFICATION
In Hungary the harmonized national versions of the following economic classification systems are applied:
NACE Rev 2 / TEÁOR’08 (the statistical classification of economic activities in the European Communities / in Hungary).
CPA’08 / TESZOR’08 (the European/ Hungarian classification of products by activity).
PRODCOM / ITO is the classification of goods used for statistics on industrial production in the EU / in Hungary).
Water Treatment and Distribution services in Hungary 17
EVALUATION OF STANDARD
PRODCOM / (ITO in Hungarian) code:
XXXX.XX.XX
NACE Rev. 2 CPA’08 PRODCOM
For activities classified to the section 36:
Code of the service: (3600.XX. 00)
Water Treatment and Distribution services in Hungary 18
PRICING UNIT OF MEASURE
Classification
Name of the service
Code CPA/group
Unit of measure
Household charges 3600.11/1901 m3
Institutional charges 3600.11/1902 m3
Affiliate fee 3600.11/1903 1000 m3
Basic fee (water meter) 3600.11/1904 HUF/piece/month
Industrial 3600.12/1905 1000 m3
18
Water Treatment and Distribution services in Hungary 19
PRICING METHODS
The main used pricing methods Using prices of repeated services Component pricing
Water Treatment and Distribution services in Hungary 20
Prices
The main price determining factors: Type of supplier / consumer; Amount of the water consumed; Region.
Price = Basic fee (depending on the type of the water meter)
+
price for the water (depending on the amount consumed)
+
sewerage charges
Water Treatment and Distribution services in Hungary 21
Weighting structure
Weights 2 years prior to the actual year are used
The other type of indices are chain linked.Long time series are chain linked with annually up-dated weights.
For aggregation of PPIs (previous month = 100)
Source of weights
Indices of CPA 4 digit PRODCOM 6 digit
Indices of higher level SBS data
21Water Treatment and Distribution services in Hungary
Water Treatment and Distribution services in Hungary 22
Index calculation
Price relativesof representative items
Indices of commodity groups (CPA / PRODCOM 6. digit)
(unweighted mean of price relatives)
Indices of higher level(weighted mean of CPA 4 digit indices, Laspeyres)
Indices of the CPA 4 digit level (weighted mean of commodity groups, Laspeyres)
Water Treatment and Distribution services in Hungary 23
Consumer Price index (CPI)
The Harmonized Index of Consumer Prices (HICP)Category „Water supply (04.4.1)” Includes water supply and associated expenditureExcludes drinking water sold in bottles or containers and hot water
This category is a subcategory of the Housing, Water, Electricity, Gas, and Other Fuels and
Of Water Supply and Miscellaneous Services Relating to the Dwelling categories.
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RESULTS(2005 = 100)
PPI and HICP, 2007-2011
100
120
140
160
180
2006 2007 2008 2009 2010 2011
%
Hungary Total PPI Hungary 36-PPI
Hungary Total HICP Hungary Water s. HICP
Water Treatment and Distribution services in Hungary 25
OU
TL
OO
K in
th
e E
U
PPI, Water collection, treatment and supply, 2011
101
105
109
110
118
118
121
124
124
130
135
137
142
142
145
145
147
153
171
191
213
115
123
100 150 200 250
Netherlands
Austria
Slovenia
Germany
Belgium
Sw eden
Lithuania
Italy
Greece
Spain
Finland
Czech Republic
Slovakia
Cyprus
Poland
Hungary
Luxembourg
Estonia
Bulgaria
Latvia
Malta
Romania
Euro area (17)
EU (27)
%
2005 = 100
Water Treatment and Distribution services in Hungary 26
QUALITY ADJUSTMENT
The main used methods are: overlapping method; imputation of averages of similar categories
or higher level aggregates; comparable adjustment;
Water Treatment and Distribution services in Hungary 27
COMPARABILITY
Inconsistency regarding Classification of services related to the section 36 (Industry
vs. Service sector ?) Coverage of the total industrial macroeconomic indicators
(labour, output, indices)
PPIs In Hungary
for some combination of groups of branches are available: Industry excluding division 36 (B+C+D) Industry including division 36 (B+C+D+E36) Industry including section E (B+C+D+E)
Water Treatment and Distribution services in Hungary 28
COMPARABILITY of the PPIs
PPI’sare harmonized with the European short
term regulation (STS)
Source of data: monthly statistical surveyenterprises classified in the industry
Water Treatment and Distribution services in Hungary 29
SUMMARY
To produce comparable macro-economic indicators regarding WSS services at the word level is needed
Consistency of main classification systems (Industry vs. Service sector ?);
Consistency concerning coverage of the statistical indicators (total industrial output; total PPI);
Validation process to ensure completeness of quantity and value data;
Cooperation between all players: data suppliers,
statisticians at national as well as at international level; Handle the effect of globalization.
Water Treatment and Distribution services in Hungary 30
Thank you for attention!