With regard to irrigation water pricing, up to 1970 water was granted to farmers free of charge, with the aim to encourage agricultural activities and increase the value of agricultural land. Since 1970, public irrigation perimeters are managed by the National Agricultural Development Utilities, established at the governorate level or at the river basin level. At present, the real cost of water comprises operation and maintenance costs and the costs for the rehabilitation/renewal of infrastructure. The current governmental policy with regard to irrigation water pricing aims primarily at the recovery of operation and maintenance costs. The aim is to ensure the financial sustainability of water utilities, while at the same time provide better services to farmers. In 1996, the recovery of operation and maintenance costs reached a global equilibrium at the national level, due to the regular increase of 15% in irrigation water tariffs since 1991. However, the recovery of operation, maintenance and renewal costs did not exceed 60%.
It is expected that future pricing policies for irrigation water will lead to the intensification of agricultural activities in the irrigated perimeters and orient farmers towards the application of water conservation measures.
Before 1968, water pricing was uniform for all users. After the establishment of SONEDE, a distinction was made between households, tourist facilities and the sugar, textile and steel industry. This approach prevailed up to 1974, when an IBT pricing system, distinguishing between consumption blocks and user types was established.
Future pricing systems should maintain the concepts of social equity and access to basic water services, such as sanitation and health. At the same time they should not hinder economic development but also ensure financial sustainability of water service providers. The application of appropriate pricing policies may be beneficial in the exploitation of water in the agricultural, industrial and tourism sectors agriculture, industry and tourism.
There is need for the reorganisation of SONEDE and ONAS in order to ensure their financial autonomy, allowing also for the privatisation of (some) of their responsibilities. Such a reorganisation may be realised through the creation of large hydraulic regions.