Harmonize the prices of utility services

One of the Grey Book recommendations that was the quickest to find itself among the top 10 priorities is the appeal made by businesses towards local governments to harmonize the prices of utility services for different categories of users. Even though there is a relatively small number of recommendations directed at cities and municipalities (four out of 100), which well portrays the (dis)balance of jurisdictions for economic development between the national and local levels, the matter of financial burden to businesses is essential for the quality of business environment.

Local governments calculate higher costs of utility fees to businesses compared to private households, and the difference goes up to 300% depending on the service and the city/municipality. The example of water supply best shows the unjustified practice, given that a cubic meter of water costs the same regardless of whether it is used by a household for their daily needs, or a hair salon for servicing the customers.

The Law on Utilities obliges the local authorities not to differentiate various categories of users, unless the variation is based on different costs of providing the service. Regardless of the reasons for this situation, it is a fact that entrepreneurs and businesses are burdened with unnecessary expenses, which makes them resort to the shadow zone, and a part of the problem is that the price lists are often not publicly available or they are relatively frequently changed. Such practice diminishes the chances for the development of entrepreneurship and new tax revenues, which would compensate, if not even surpass, the losses arising from the harmonized prices.

Predictability of business expenses and reliable utility services are an international standard the investors are expecting in the environments they are considering as their investment destination. This year, the Municipality of Ćuprija has joined the Business Friendly Certification in South East Europe (BFC SEE) program, with the aim to improve the work of our administration and the services for our citizens and businesses. Without reaching the mentioned standards, we or any other municipality desiring to be considered business friendly, cannot testify that we developed the right environment for the potential investors.

I invite fellow mayors and the line ministry to jointly reach the best solution which would enable what all of us want – the creation of new jobs, improved living standards for our citizens, the development of businesses and consequently our local governments.