Economic management of the water companies
Based on the audit results from the Bratislava Water Company (BWS) and the Turčianská vodárenská spoločnosť, the SAO SR stated that the regulation of the ownership and operation in the water infrastructure is insufficient from the point of ensuring the public interest. The State is unable to control ownership and investment in water infrastructure sufficiently.
Nor do municipalities and cities, as shareholders of these companies, have control over the management of water companies. The real protection of waterworks property, water supply depends only on the prudence of elected local government representatives. Profitable activities related to water infrastructure are provided by subsidiaries, and therefore a large part of the profit ends up in the accounts of these companies´ shareholders. In addition to several system deficiencies identified mainly by audits in BVS, the disadvantage of contracts with subsidiaries is also documented by the cost-effectiveness of companies in the BVS Group, shown in the following chart.
A major problem is also the investment debt of more than EUR 574 mil, which will be needed for the renewal, modernisation and completion of water and sewerage infrastructure. As soon as possible, it will be necessary to adopt such changes to the laws that would set clearly and comprehensively the conditions for the performance of activities in the public interest. Due to the seriousness of the findings, the SAO SR will submit information about the conclusions from the audit in the management of water companies also to the Government of the Slovak Republic.
The full text of the press release about this audit in Slovak language is available here. Use the Google icon in the top bar for automatic translation into the desired language.