Severočeská vodárenská společnost has announced the new price of water rate and sewage charge for the year 2008

The executive board of Severočeská vodárenská společnost a.s. has approved the water price proposal (water rate and sewage charge) for the year 2008 in the operating area. The water price will be 55,34 CZK/sq.m.; water rate for 29,56 CZK/sq.m. and sewage charge for 25,78CZK/sq.m. (exclusive of VAT). That is 5,4% increase in comparison with the price in 2007.

The water price is calculated according to water rate and sewage charge calculation made up by operating company Severočeské vodovody a kanalizace and it also depends on the needs of Severočeská vodárenská společnost defined in company plan until the year 2010. The water price rising is caused (due to the high part of fixed costs) by marked increase of energy prices, increase of raw materials, stuff and equipment prices. The increase of raw water charges can be mentioned as example. Otherwise the water price is influenced by the increase of legislatively set fees, e.g. for wastewater disposal.

Another factor which influences the water price is the volume of sale of drinking and sewarage water. We assume another water sale decrease. In the calculation of water rate and sewage charge for the year 2008 we consider the sale of drinking water in an amount of 59,5 million square meters., i.e. 0,5 million square meters decrease against the plan from the year 2007. In the calculation of sewarage water we consider the realization in an amount of 52 million square meters, i.e. the decrease of 1 million square meters against the business plan of the year 2007.

The water price increase is also caused by the legislative demands for investment in infrastructure property because the Czech Republic has to fulfill the requirements for sewerage water quality which were set by the European Union and this has to be realized by 2010. With regard to this fact the company plan until the year 2010 sets the top barrier limit of interim water price increase 10,2%. The summary of all above mentioned factors enabled to determine the rate of water price increase in the operating area of SVS for the year 2008 to 5,4%. The resulting water price for consumers will be influenced by a VAT increase from 5% to 9%.