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how the costs of redevelopment and of future operation and maintenance, should be determined, recovered or shared to assure agreed service levels.

4.2 Financial issues

Operation of water resource systems requires an agency capable of managing surface and groundwater flows and levels. If the system is to be financially sustainable the costs of developing and managing water resources will need to be recovered from the beneficiaries or from the community.

To link all the financial aspects involved in water resource systems, a conceptual framework is needed, based on the “user pays” principle (van Hofwegen, 1997). This entails identifying beneficiaries or clients for the services provided. The clients need to be clearly identified so as to establish with whom to enter into a service agreement, who to charge and where to send the bill.

Levels of service are based on operational standards and quality criteria.

Operational standards regulate system management and serve two purposes:

to establish criteria for operational performance measurement;

to establish criteria for service delivery.

The quality of service provision can be defined as a combination of parameters relating to the adequacy, flexibility, convenience, cost and security of the services provided.

To assure service delivery requires the design, construction, operation, maintenance and eventual replacement of a hydraulic infrastructure. The costs of managing this infrastructure can be broken down as follows:

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