Contents

Executive Summary

I.    Introduction

II.    An Overview o the Island of Phuket

A.    The Geographic and Socio-economic Setting
B.    Institutional Setting: Governance on Phuket

1.    The Central Government
2.    The Provincial Administration
3.    The Local Government

C.    The Hydrologic and Hydrogeologic Setting

1.    The Major Aquifers
2.    Ground Water Production
3.    The Phuket Water Supply

III.    Water Supply and Demand

A.    Demand for Water
B.    Souces of Water of Phuket

1.    Piped-Water Supply: the Provincial Waterworks Authority and Phuket Municipal Waterworks
2.    Well Water Supply: Shallow Wells
3.    Vended Water
4.    An Overview of Water Sources

C.    Demand for Water by the Residential Sector

1.    Primary and Secondary Water Sources for Households
2.    A Household's Differentiated Demand Function for Water
3.    Households' Evaluation of Their Water Sources
4.    Supply Constraints and Household Choice
5.    The Demand for Drinking Water
6.    The Quantity of Water Demanded: Piped Water

D.    Forecast of Residential Demand for Water on Phuket by Amphoe from 1995 to 2015

1.     The Parameters Underlying the Forecasts

E.    Demand for Water by Hotels and Tourists

1.    Primary Water Sources for Hotels
2.    Differentiated Demand for Water By Hotels
3.    Hotels' Evaluation of Their Water Sources
4.    Hotels' Willingness to Connect to Piped Service and Willingness to Pay

F.    Future Water Demand by Hotels

1.    The Parameters Underlying the Water Forecast
2.    The Projections for Tourist-Related Water Demand from 1995 to 2015

IV.    Matching the Demand and Supply

A.    Demand for Water, 1995-2015
B.    Additional Supply of Water

V.    Willingness to Pay for Improved Service and Wastewater Treatment

A.    Description of Sampling Methods and Survey Description
B.    Multivariate Analysis of Willingness to Pay for Improved Water Service
C.    Multivariate Analysis of Willingness to Pay for Wastewater Treatment
D.    Analysis of Results

VI.    Full-Cost Resource Pricing: Concepts and Estimates

A.    Water Pricing to Induce Efficient Use and to Expand Water Supply
B.    Efficiency Rule: Marginal Cost Pricing
C.    Short-Run and Long-Run Marginal Cost
D.    Marginal Cost Pricing Across Space and Time
E.    Amendments to the Marginal Pricing Rule
F.    Full-Cost Water Pricing for Phuket
G.    Water Price and Water Conservation
H.    Water Charges and Local Public Finance

VII.    Conclusion

Appendix A:    Piped Water Production Cost - PWA and PMW

Appendix B:    Economic Benefits and Costs of Water Recycling - A Case Study of the Shangri-La Hotel

Appendix C:    Patong Wastewater Treatment Plant

Wastewater treatment charges
Capital and investment cost of the treatment system
Government agencies for wastewater management in Patong
Existing problems in wastewater management in Patong
Phuket Municipality Wastewater Treatment Plant

Appendix D:    Water Use and WTP Questionnaire

Appendix E:    Estimated Production Cost of Well Water

Appendix F:    Phuket Potential Water Supply Estimation

Appendix G:    List of Maps

References