Using a new incentive mechanism to improve wastewater sector performance: the case study of Italy

The system of "Service Objectives", introduced by the Italian National Strategic Framework 2007-2013, is an innovative results-oriented programme concerning 4 thematic areas (education, care for the elderly and children, management of municipal solid wastes and integrated water service) in which the Ministry of Economic Development and eight Southern Italy districts are involved. The system was initially associated to an incentive mechanism which provided subsidies for a total amount of EUR 3 billion from the national Underdeveloped Areas Fund, according to the achievement of specific targets set for 11 service indicators in 2013. The indicators used for the integrated water service refer to the efficiency in water supply service as well as the coverage of wastewater treatment service. The aim of the study is to describe the activities carried out in Italy by the ENEA Agency in order to define a new performance indicator for wastewater treatment service taking into account the appropriateness and efficiency of existing plants equipment and, consequently, evaluating economic incentives. The proposed procedure takes into account both wastewater treatment demand and quality of wastewater treatment service offered to citizens. Input data, provided by the National Institute of Statistics (ISTAT), were elaborated in order to define appropriate parameters, with a multi-criteria analysis being used to define the new performance indicator. The applicability of the proposed procedure was verified considering all the 8 Southern Italy and Island districts (Abruzzo, Molise, Campania, Apulia, Basilicata, Calabria, Sicily and Sardinia) involved in the programme. The obtained results show that the quality of municipal wastewater may influence the calculation of the incentive amount. The performance indicators defined in this work might be conveniently extended to other contexts similar to the assessed geographical area (Southern Italy and Islands).