Development of the ASTEC model for the UNDP/GEF Danube Regional ProgramUploaded: 2 of January, 2008

The management of the UNDP/GEF funded research project on municipal water and wastewater tariffs and effluent charges in seven countries of the Danube River Basin belongs to the professional experience of our colleagues at their previous job (MAKK). They coordinated the work of national experts, ensuring that common methodology is used in all study countries and practically useful results are achieved.

During the project a microeconomic model called ASTEC was developed. The acronym stands for Accounts Simulation for Tariffs and Effluent Charges (ASTEC). ASTEC is an Excel-based model capable of broadly examining the interaction of a water system's tariffs and effluent charges with investment strategies, cost structures, customer behaviour and physical conditions. ASTEC has been successfully used in many cases as a decision support tool to test reforms related to new tariffs designs, investment strategies and corporate changes.

ASTEC was used and furter developed and we used it for several subsequent water utility analyses.

Short description of the ASTEC model:

The base software can be dowloaded from the ICPDR website:

A few words about the Danube Regional Project itself.

One of the results of the project is a comprehensive overview of the status of municipal drinking water supply and wastewater treatment in seven Danube countries: Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Romania and Slovakia. The paper assesses the theory and practice of water and wastewater service pricing, and effluent charge designs, as well as proposals for reforming water utility bookkeeping, financing, management and institutions. This is a valuable handbook for policy-makers, utility managers, and municipal decision-makers. Or anyone interested in the efficient provision of public water-related services and future utility challenges for reaching full-scale effluent reduction.

Another result of the project is a volume of papers consisting of three documents for each of the above seven countries (21 documents total) covering water and wastewater systems. The first are national profiles discussing the legal, regulatory, economic and institutional setting of the sector, data about water and wastewater services and service providers, and key policy issues and challenges facing the water and wastewater service sectors of each country. The second document presents a case study covering one particular water utility in each country, including the results of modelling reform proposals appropriate to that utility with the ASTEC model. The third document is a summary focusing on the most important issues discussed in the national profile and the case study.