Research on the financial mechanisms in water management

Water Governance and Climate

Institutional assessment of the financial sustainability of water management

The Ministry of Infrastructure and the Environment, The Netherlands

The Ministry of Infrastructure and the Environment asked Twynstra to elaborate on the findings of the Organisation for Economic Cooperation and Development (OECD) regarding the financial sustainability of water management in the Netherlands. In their report ‘Water governance: Fit for the future?’, the OECD complimented the Netherlands on its current organisation of water management. However, the OECD suggested a more consistent use of the financial principle ‘the polluter pays’. A more consistent application of this principle as an underlying financial mechanism would help to create more a balanced situation in the Dutch financial system for water management.


Stakeholder engagement

Although the feasibility study bears the characteristics of a technical exercise, stakeholder engagement was seen as a crucial aspect. The support and cooperation of stakeholders was key for a successful implementation. As such, recognising their interests was made part of the study. This was done through quantitative and qualitative surveys, as well as interviews and stakeholder meetings.


Assessing financial sustainability

Twynstra was asked to perform a more in-depth study of the financial sustainability of the water sector based on the OECD’s recommendations. The results of our report were used during a political debate in spring/summer 2015. Twynstra performed extensive desk research, in collaboration with an engineering firm. We identified the costs, benefits, charges and underlying financial mechanisms for all water-related tasks. This included water safety, water treatment, production water, drinking water, waterways, water distribution and water quality. Using a trend analysis, we provided projected findings for these water-related tasks until 2050. Important trends that influence the development of costs in water management are climate change and demographic changes, and also future replacement costs.

We organised a workshop during which we presented our first findings to experts. The representatives of various stakeholder groups were also invited to provide input. We constantly engaged all relevant parties during this process to ensure that our results were based on agreed assumptions and fact finding.

Results and achievements

We translated the results into a thorough report on the financial sustainability of water management in the Netherlands, now and in the future, resulting in:

  • A complete and coherent overview of the current financial arrangements of water management in the Netherlands
  • A projection of trends until 2050 to provide an overview of the most important challenges the Dutch water management is facing
  • A thorough and much talked about report, written in a relatively short time period
  • A contribution to the fundamental discussion at the decision-making level.