Advancing Water Regulation: Interview with Szilvia Szalóki, Vice-President of WAREG

“Advancing Water Regulation”, our interview with Szilvia Szalóki, WAREG’s Vice-President and Vice-President of the Hungarian Regulatory Authority.

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“Advancing Water Regulation”, our interview with Szilvia Szalóki, WAREG’s Vice-President and Vice-President of the Hungarian Regulatory Authority.

Ms Szalóki, congratulations on your reconfirmation as Vice-President of WAREG. As you enter your third term, we would be grateful to hear your reflections on this noteworthy accomplishment. Furthermore, could you kindly enlighten us on the top priorities you have set for your upcoming tenure as Vice-President of WAREG?

I have been re-elected as Vice-President of WAREG, and I am genuinely pleased to have the opportunity to continue serving in this capacity. It was my strong desire to contribute to the further development and advancement of the association, and I am grateful to my fellow Members for entrusting me with this responsibility once again.

Looking ahead, my top priorities for this new term centre around strengthening capacity-building projects, particularly in the Western Balkans. These projects have proven to be instrumental in enhancing regulatory frameworks and fostering sustainable water management practices in the region. Building on the successes we have achieved thus far, I am committed to expanding our reach and extending these capacity-building initiatives to other regions as well.

By focusing on capacity building, we can empower our Members to address the challenges they face in the water sector effectively. This empowerment comes through providing them with the necessary knowledge, tools, and resources to develop and implement robust regulatory frameworks that ensure the sustainability, affordability, and accessibility of water services.

Moreover, capacity-building projects facilitate collaboration and knowledge exchange among water regulators. Through these initiatives, we can create a network of expertise and foster a culture of learning and innovation. By working together, we can collectively overcome the challenges that transcend national boundaries and develop practical solutions that benefit us all.

Expanding our reach beyond the Western Balkans is also a key objective. By engaging with regulators in other regions, both in the European Union and beyond, we can extend the positive impact of our capacity-building efforts and contribute to the advancement of the sector.

Can you tell us more about WAREG’s project on capacity building?

WAREG’s capacity-building projects are a crucial aspect of our work, aiming to enhance the capabilities and knowledge of water regulators in various regions. These projects play a vital role in strengthening regulatory frameworks, promoting sustainable water management practices, and fostering collaboration among our Members.

One of the significant projects that WAREG carries on is financed through the Technical Assistance and Information Exchange Instrument (TAIEX) of the European Commission. This TAIEX project focuses on providing support to the Balkan region, including countries such as Montenegro, North Macedonia, Albania, and Kosovo. Through the project, we engage in knowledge exchange, technical assistance, and training programs to enhance the regulatory capacity of these countries. The project aims to address specific challenges faced by each country, such as improving tariff methodologies, enhancing regulatory governance, and promoting efficiency in the water sector.

Another important project is developed through the Knowledge Exchange Program (KEP) financed by the Central European Initiative – CEI and the Italian Ministry of Foreign Affairs and International Cooperation, which also targets the Balkan region. KEP facilitates the exchange of experiences, best practices, and expertise among water regulators in the region. Through workshops, seminars, and study visits, we create a platform for sharing knowledge and fostering collaboration. This project strengthens the regulatory expertise within the Balkans and enables regulators to learn from each other’s successes and challenges.

In addition to the Balkan-focused projects, we also have a capacity-building project financed by TAIEX with Turkey. This project aims to support the Turkish water regulator in strengthening its regulatory frameworks and implementing best practices. It provides a platform for knowledge sharing, technical assistance, and capacity-building activities, allowing for an exchange of experiences and expertise between WAREG and Turkish regulators.

Moreover, I would like to highlight the WAREG Peer Review of the Georgian Tariff Methodology. This initiative demonstrates our commitment to extending our efforts beyond the Balkans and Turkey. Through the peer review process, we, as WAREG, assess and provide recommendations on the tariff methodology employed by the Georgian Water Regulator. This collaboration fosters learning and improvement, benefiting the Georgian regulator and contributing to the overall advancement of the water sector in the region.

The WAREG Peer Review of the Georgian Tariff Methodology is a groundbreaking project that exemplifies our organization’s dedication to knowledge sharing and collaboration among water regulators. As the first project of its kind managed entirely by WAREG, it showcases our ability to mobilize resources and bring together regulatory expertise from our member countries. The primary objective of the Peer Review is to support the Georgian water regulator in developing a new tariff methodology that is robust, transparent, and aligned with international best practices.

To achieve this goal, WAREG has engaged top-tier experts from our member countries, leveraging their extensive regulatory knowledge and experience. These experts are actively working alongside the Georgian regulator, providing guidance and recommendations throughout the process.

Looking ahead, what do you see as the biggest opportunities for WAREG in the coming years, and how do you plan to help the Association capitalize on these opportunities?

Looking ahead, I see a multitude of exciting opportunities for WAREG in the coming years. As an organization dedicated to promoting excellence in water regulation, we have the potential to make a significant impact on the water sector at both the European and global levels.

One of the biggest opportunities lies in expanding our projects. These initiatives have already proven to be highly successful, particularly in the Western Balkans, where we have been actively involved in enhancing regulatory frameworks and promoting sustainable water management practices. Building on this success, we have plans to extend our capacity building efforts to other regions, such as Turkey, where there is a growing need for regulatory support and knowledge exchange. By leveraging the expertise of our members and collaborating with local regulators, we can help countries develop robust regulatory frameworks and enhance their water sector performance.

Another significant opportunity lies in strengthening our partnerships and collaborations with other international organizations and stakeholders. The water sector is complex and interconnected, and addressing its challenges requires a coordinated and collaborative approach. By forging strategic alliances, sharing best practices, and aligning our efforts with other organizations, we can amplify our impact and drive positive change on a broader scale. This includes working closely with the EU Commission and participating actively in reviewing and developing water-related policies and directives, such as the ongoing revision of the Urban Wastewater Treatment Directive.

In order to capitalize on these opportunities, my goal as Vice-President of WAREG is to foster a culture of collaboration, innovation, and continuous learning within the Association. I will work closely with fellow members to identify emerging trends, prioritize key areas of focus, and develop strategic initiatives that address the evolving needs of the water sector. By encouraging active participation, knowledge sharing, and the exchange of ideas, we can tap into our members’ collective wisdom and experience to drive innovation and advance regulatory practices.

Furthermore, I believe that effective communication and advocacy will be crucial in ensuring that the voice of WAREG is heard and respected in water-related discussions and policy-making processes. I will actively engage with stakeholders, policymakers, and industry leaders to promote the value of effective water regulation, advocate for the interests of our members, and raise awareness about the importance of sustainable water management.

What do you think are the most important qualities for successful collaboration among WAREG members, and how can these qualities be fostered within the Association?

Successful collaboration among WAREG members relies on several important qualities that contribute to our collective achievements and effectiveness as an association. Firstly, open communication and information sharing are paramount. By fostering a culture of transparency and exchanging relevant information, we can ensure that all members are well-informed and able to contribute meaningfully to discussions and initiatives.

Secondly, trust and mutual respect are essential in building strong relationships among WAREG members. Trust enables us to work collaboratively, share knowledge, and rely on each other’s expertise. Creating an environment where diverse perspectives are valued and constructive dialogue is encouraged is crucial.

Another crucial quality is a commitment to common goals and a shared vision. WAREG members should align their efforts towards advancing water regulation, promoting best practices, and addressing common challenges. This requires a sense of shared purpose and a willingness to collaborate for the greater good of the water sector.

Additionally, flexibility and adaptability are key qualities for successful collaboration. The water sector is dynamic, with evolving challenges and emerging issues. WAREG members need to be receptive to change, embrace innovation, and adapt their approaches as needed. This flexibility enables us to respond effectively to new regulatory developments, technological advancements, and changing circumstances.

To foster these qualities within the Association, WAREG emphasizes the importance of regular interactions and engagement among members. This includes organizing General Assemblies, workshops, and working group meetings where members can exchange experiences, share best practices, and develop joint initiatives. These platforms provide opportunities for networking, learning, and building relationships that strengthen collaboration.

WAREG represents a significant opportunity for its members to come together and leverage their collective resources, effectively innovating their regulatory tools and expanding their knowledge base. As regulators, we often face similar challenges and opportunities in our respective countries. Through WAREG, we can create a united front, pool our expertise, and duplicate our efforts to achieve greater impact.

By collaborating within WAREG, members can learn from each other’s experiences, exchange best practices, and explore innovative approaches to regulatory issues. This collaborative platform allows us to tap into a wealth of regulatory knowledge and insights from various jurisdictions, enabling us to enhance our own regulatory frameworks and processes.

Moreover, WAREG offers a space for joint research and development initiatives. By joining forces, members can undertake projects that may be otherwise unfeasible individually, such as conducting in-depth studies, sharing data and analysis, or piloting new regulatory models. This collaborative approach allows us to push the boundaries of regulatory innovation and develop more effective and efficient solutions for the benefit of our respective countries.

As a representative of Hungary, what unique challenges and opportunities do you believe your country faces in the water sector, and how can WAREG help to address these challenges and capitalize on these opportunities?

As a representative of Hungary, I believe that our country faces both unique challenges and exciting opportunities in the water sector. One of the significant challenges we encounter is ensuring the sustainable management of our water resources, particularly in the face of climate change and increasing water scarcity. Hungary relies heavily on its water bodies for various purposes, including agriculture, industry, and domestic use. Therefore, it is crucial for us to strike a balance between meeting these diverse needs while preserving the quality and quantity of our water sources.

After the years and diverse effects of the pandemic, the water sector in Europe faced new challenges in the form of energy crises and rising inflation. Like other countries’ practices, the Hungarian regulator had an important role by collecting data and signalling forecasts to policy makers to mitigate the effects of these challenges.

Another challenge we face is the modernization and optimization of our water infrastructure. Many of our water systems and treatment plants are ageing and require significant investment and upgrades to meet the evolving regulatory and environmental standards. This calls for effective planning, financing, and implementation of infrastructure projects to ensure our water services’ long-term viability and resilience.

In the last few years the Hungarian regulator was a key player in reforming the water sector. 10 years ago, we started an aggregation process and managed to reduce the number of service providers from almost 400 to 40 by promoting the scale of economics. Recently, the aggregation and re-structuring the market is still in progress, and the regulator plays a key role with its licensing power.

However, amidst these challenges, Hungary also possesses great opportunities in the water sector. We have a rich cultural heritage and a long-standing water management tradition, providing us with a strong foundation to build upon. We can leverage our expertise, knowledge, and experience to develop innovative solutions and best practices that can benefit Hungary and other countries facing similar challenges.

This is where WAREG plays a vital role in addressing these challenges and capitalizing on the opportunities. As an association of European water regulators, WAREG serves as a platform for collaboration, knowledge sharing, and capacity building. Through our collective efforts, we can exchange experiences, learn from each other’s successes and failures, and develop effective regulatory frameworks and policies that are tailored to the specific needs of Hungary.

WAREG provides us with access to a wealth of regulatory expertise and international best practices, which can be instrumental in enhancing our water management practices. By actively participating in WAREG’s activities, sharing our own experiences, and learning from the experiences of other members, we can strengthen our regulatory framework, improve our governance, and enhance the efficiency and effectiveness of our water sector.

Furthermore, WAREG offers opportunities for dialogue and collaboration with other European regulators, policymakers, and stakeholders. By engaging in meaningful discussions and partnerships, we can influence the development of water-related policies and directives at the European level, ensuring that our interests and challenges are taken into account.

The EU Commission is currently reviewing the Urban Wastewater Treatment Directive. How do you believe this review will impact the work of water regulators and the overall management of wastewater treatment in Europe?

The review of the Urban Wastewater Treatment Directive by the EU Commission is an important development that will significantly impact the work of water regulators and the overall management of wastewater treatment in Europe. This review presents challenges and opportunities for regulators as they strive to achieve the objectives in the proposal.

First and foremost, the proposed changes in the directive represent an ambitious but necessary step towards improving water sanitation and environmental protection in Europe. The uniform implementation of the proposed objectives will require substantial investments in upgrading and expanding wastewater treatment infrastructure across the continent. As water regulators, we will play a crucial role in ensuring that these investments are effectively prioritized and allocated to achieve the desired outcomes.

In addition to the financial aspects, the review also emphasizes the need to improve the efficiency of the sector. Water regulators will be tasked with fostering the adoption of innovative technologies and practices that enhance the performance of wastewater treatment plants, reduce energy consumption, and minimize the environmental footprint of the sector. This will require close collaboration with operators, stakeholders, and other regulatory bodies to develop and enforce appropriate standards and regulations.

Transparency and reliable information will be key factors in the successful implementation of the review. Water regulators will need to continue improving the collection, analysis, and dissemination of data related to wastewater treatment processes and performance. By enhancing transparency, regulators can provide stakeholders and the public with accurate and up-to-date information on the state of wastewater treatment, enabling informed decision-making and fostering trust in the regulatory process.

One of the key challenges for water regulators will be managing potentially conflicting objectives. Balancing the environmental objectives of wastewater treatment with the affordability of the service for consumers and the financial sustainability of utilities is a delicate task. Regulatory authorities will need to navigate these complexities and work closely with stakeholders to find the right balance, ensuring that the objectives of the review are met without placing an excessive burden on consumers or impeding the financial viability of utilities.

Thank you very much, Vice-President Szalóki, for sharing your insights and experiences with us.

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