Updating water costs (TPAT)
Formula for Updating of Water Costs
Under the Protocol Relating to Water Supply agreed to by the Israeli-Palestinian Joint Water Committee a Formula for the Updating of Water Costs was agreed to. This formula was included in the Protocol as Annex III – refer copy of Annex III attached. In addition two agreed Water Cost Tables were included in the Protocol as Annex II(A) and Annex II(B) – refer copy of Annexes II(A) and II(B) attached. The Water Cost Tables set out the costs that the formulas are to be applied to. Note that Annex II(A) shows costs adjusted to 12/96 while Annex II(B) shows costs adjusted to 5/98.
As may be seen in Annex III, Formula for the Updating of Water Costs, the formula for the “rate of change of the dominant basket” is derived from the following three indices:
- Consumer Price Index (“C.P.I.”) indicated as the change in the known official C.P.I. published in Israel on the 15th of each month by the Central Bureau of Statistics;
- Electricity rates indicated as the average rate of change in the electricity rates published by the Public Services Authority; and
- Wage index indicated as the change in the official known wage index published in Israel each month by the Central Bureau of Statistics.
Task 1 is to construct historical series of the three indices (Consumer Price Index; changes in electricity rates; and wage index) for the period from 1995 to date;
Task 2 is to calculate the “rate of change of the dominant basket” i.e. the cumulative rate of change of the three indices as set out in Annex III, Formula for the Updating of Water Costs; and
Task 3 is to apply the “rate of change of the dominant basket” to the initial costs set out in the Water Cost Tables.