Experts warn water prices need adjustment in Finland for fair access

Water is too cheap in Finland, according to experts visiting a morning program on Wednesday. Riku Vahala, CEO of the Finnish Water Utilities Association, noted that the price of water is roughly the same for consumers across the country, regardless of the number of users relative to the size of the network. For the price level to be appropriate, it should decrease in larger cities while increasing in smaller ones.

Vahala explained that larger cities currently use the revenue from water services to fund other operations, while smaller municipalities need to subsidize water utilities due to artificially low prices for water. This issue has gained attention recently following a new legislative proposal that states, “a municipality must maintain control over its local water utility and wholesale water system.”

Critics argue that the proposal permits up to 49 percent ownership of water utilities by foreign investors, while supporters contend that existing regulations do not impose any restrictions on private ownership. Vahala emphasized the diversity within the sector, stating that some water utilities are owned by energy companies, which may have various stakeholders.

He added that the foundation of the water utility law is that fees collected from customers are allocated to maintaining and repairing services, ensuring that charges are fair and reasonable. Only when these conditions are met should capital be entitled to a reasonable return.

Vahala hopes to see an increase in water prices, especially in small utilities, as the current rates are insufficient for necessary renovations. He believes any raise should not benefit private investors but instead be utilized for water management, ideally benefiting municipal owners. Olli-Matti Verta from the Ministry of Agriculture and Forestry pointed out that the law reform aims to address the growing repair backlog in water infrastructure, indicating that fees will rise but moderately to maintain Finland’s high-quality water services. He suggested that collaboration among water utilities could lead to larger, more efficient operations over time.