The Profitability of Palestinian Municipal Water Projects

This study aims to discuss the profitability and performance of the water sector in the Palestinian economy. The water utility provided for the Palestinians through two channels, either through special departments within local municipalities and village councils, or through independent specialized public authorities. The study used two research instruments to accomplish the stated purposes including financial analysis for various aspects of cost, revenues, ratio of lost, collection ratio for existing water projects. In addition a special questionnaire to get the perceptions of the related stakeholders including citizens regarding the major issues related to providing water supply, such as the price, quality of services and about the concept of private sector participation of running the water project sector in the Palestinian economy. The study found that water projects provide about one quarter of the total revenues for local governments including municipalities and village councils, In addition almost all water projects which offer water supply to Palestinian citizens in West Banks produced revenues at district level, with profit ratio ranged between 15% up to up to 37% annually. The price of water is varied in the Palestinian municipalities and districts, it ranged from 6.66 NIS in Ramallah district (almost 2 $) to 1.23 NIS (30 cents) in Qalqilia municipality. This is due to various reasons including the cost of production and distribution; administrative cost and the ratio of water lose. Thus, the margin contribution of water m3 is also varied for individual water projects, but the majority has positive return. The output of water projects will be more profitable if the water lost ratio reduced and the collection ratio of account receivable improved