Water supply and sewerage services are of public interest and multiple aspects are affecting the tariff setting, namely:

• Economic aspect;
• Social aspect;
• Political aspect.

In Bosnia and Herzegovina, the political aspect sometimes plays a dominant role, although disguised by public emphasis of the social aspect. The low price for services is publicly justified by poverty of local population (social aspect), without any differentiation of the poverty level so, in fact, even the richest get subsidized.

The Methodology suggests that primary focus should be on the economic aspect, with consistent and full compliance with the affordability principle, which would actually incorporate the social aspect as well.

If there is a specific local political aspect, e.g. wish to attract investments and create new jobs, it can and should be considered, but also additional source of funding added for its achievement, which does not come from the tariff, i.e. revenue based on delivered services.

Sources of funding for provision of water supply and sewerage services, according to the Law on Utility can be multifold and in any case include the funds:

• From the tariff charged for utility service,
• From utility fees,
• From the local community’s budget,
• From other sources.

This opens space for the local community, which in any case, pursuant to applicable regulatory acts, adopts the price of these services, to provide the missing funds for efficient and effective operation of a utility, if it fails to adopt the required tariff level for self-sustainable management.