Publication Code: N31
Full-Cost Water and Wastewater Pricing: A Case Study of Phuket, Thailand
Using the Island of Phuket, we illustrate how economic principles can be used to enhance the provision of water and wastewater services and thus the potential for economic growth. Often called the Pearl of the Indian Ocean, Phuket is a premier tourist destination with great promise and a rapidly growing economy. Like many dynamic urban areas, demand for water and wastewater services exceeds the Government's current supply capacity. We begin by presenting the economic principles that should guide the Government's provision of water and wastewater services and describe low-level equilibrium traps that commonly develop when these principles are ignored. We then present our findings for Phuket which suggest that the Island's economic growth may be retarded if investment and pricing policies are nor reformed. We conclude by recommending several changes in current policies.
August 1995