This chapter deals with a topic that has been publicly debated in the North Macedonia in the last few years. The public utility companies are constantly in debt and with consistently poor quality of services. Hence, the main focus of the public debate is how to identify the causes of the persistent poor situation and how to overcome these problems facing the public utility systems. The primary aim of this chapter is to give an overview of the state in which public utility systems operate. Also, this chapter gives an overview of the importance of the institutional environment and decentralization and their impact on public utilities systems. At the end of the chapter, the sustainability of public utility companies and the financing of utility services and covering costs are presented.
TopIntroduction
In the Republic of Macedonia, in July 2005, the process of decentralization was operationalized, and a large number of responsibilities were transferred from the central to the local level. The transfer of competencies, in addition to privileges, meant a great responsibility for the municipalities. Even before the start of the implementation of decentralization, most of the communal activities were under the jurisdiction of the municipalities. But despite that, the services provided by the public utility companies are still not at the desired level of quality, and there is still a big difference in their performance. Also, in large part of the municipalities, unified procedures and forms for providing the services are missing. In many municipalities, there is a lack of unified acts that they should adopt themselves in order to define and establish procedures for providing quality administrative services for public utilities. (Association of Utilities Providers in Macedonia, 2020)
According to the positive legal regulations in the Republic of Macedonia, municipalities can form public utility companies for the following services (Association of Utilities Providers in Macedonia, 2020):
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Arranging and organizing the public local transportation of passengers;
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Construction, maintenance, reconstruction and protection of local roads and other infrastructure facilities;
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Supply of drinking water, delivery of technological water, drainage and purification of wastewater;
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Collecting, transporting and dealing with municipal solid and technological waste;
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Maintenance of graves, cemeteries, and crematoriums and providing funeral services;
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Public cleanliness.
In this chapter, we will give a general overview of the public utility system and the impact of the institutional environment and decentralization on public sector reforms. Financing utility services and covering the cost and sustainability of public utility companies will be presented at the end of this chapter.
TopBackground
This chapter reviewed the literature on the public utilities systems in Macedonia, the current state and the perspective. The scholarly studies were searched using Academia.edu, Researchgate.net and Google Scholar platform. (Atanasovski (2006), Angelov (2005), Allen, Tommasi (2009), CEA (2010), CEA (2006), Jovanovski (2005), OSCE (2009), Spasov, Arsov (2004), Standard & Poor (2010), Todorovski et al. (2004)). Some keywords used were utility companies, public finances, decentralization, and public services. A big challenge faced while writing the chapter is that no one has researched this issue in Macedonia in the last two decades. Hence, the literature available is literature dating from the period between 2008 and 2013, a period in which decentralization was actual. The last Program for public investments adopted by the Government, which foresees investments in public utilities, is for the period 2011-2013. Since then, there has been almost no document that mentions public utility systems.