The aim of this paperis to analyze the efficiency of water supply and sewerage sector in Albania.Thestudyfocuseson the current situationofwatersupplyandseweragecompaniesfor the entire year 2011,as well an analysis offactors creatingpremisesforachievingefficiency benefits.For the purposes ofthis studyan analysis ofthree performance indicatorsthat have a serious impact on the financial sustainability of a typical waterand sewerage company is carried outusing the data from the Performance Monitoring and Benchmarking Program for all water companies in Albania. The data are calculated based on weighted average basis for groupings of water companies/utilities using the “population served” by the company as the basis of “scale”. The main resultof the analysisis that the potential for economies of scale can exist in the case of Albania since74% of watersupplyandseweragecompaniesservea number ofpopulations ofless than50,000inhabitants. The result of the analysis shows that an increase in served population will normally be related to an increased population density, which also direclty contributes to achieving economies of scale and getting above a servedpopulation of 100,000 people are where economies of scale can start to make a real difference.In order to achieve this efficiency,the aggregation of companies and creation of regions may be the solution for this efficiency to be realized.
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