The Palestinian Water Law 2014 calls for the amalgamation of the current water service providers into large regional utilities that are financially independent and have separate legal entities. This research, evaluates whether there are significant differences in the performance of the Palestinian water service providers based on their institutional structure and ownership. Thereafter, calculating the efficiency scores, in which the water providers may maximize the output for given level of input consumption. The multivariate analysis shows significant differences in non-revenue water, average price, and water consumption based on the structure. The water utilities perform better than municipalities when examining working ratio, gross profit, and collection efficiency. Wherein the Joint Service Councils have high sales price than utilities and municipalities; therefore, they are more profitable, more efficient in non-revenue water, and better in staff productivity. The results show more efficiency can be achieved during aggregation current water service providers into regional utilities. Amalgamating the providers into only four main water regional utilities – one in the north, middle, south, and Gaza will deliver less than current efficiency; and will double the cost or diminish half of overall output. Therefore, changing the current large and medium providers into regional utilities, and merging the current small providers into medium or large regional utilities will have more efficiency and capacity for improvement. Implications of these findings case by case through conducting further studies will add value for better merging efficiency and reforming process.
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