Aging infrastructure is one of Japan’s serious challenges. Japan’s water infrastructure, once considered a water-rich country and said to be in good condition compared to the rest of the world, is now in jeopardy. One solution to these issues is to expand the water supply business to a wider area. In order to maintain the health of social infrastructure, not just water supplies, wide area coverage and sharing are essential.

The Water Security Strategy Institute, a general incorporated association, jointly with Ernst & Young ShinNihon LLC released the latest research results on estimating water charges nationwide.
The Water Security Strategic Organization was launched in 2009. He makes policy recommendations to make Japan a sustainable and healthy land from a water perspective. Water rate estimation began about 10 years ago. Following the 2015, 2018, and 2021 editions, the 2024 edition will be the fourth edition.
　　
Water infrastructure is facing issues such as aging equipment and a shortage of workers due to a declining population.
Due to the recent rise in prices, the cost of operating water infrastructure has also increased, and the water infrastructure business is in jeopardy. There are concerns about the serious impact it will have on people’s lives and the economy, including soaring rates and water outages due to accidents and troubles.
Kiyoko Kuwabara of the organization said, ”If we continue to postpone this issue, there is no guarantee that there will be people and regions in Japan who will lose access to water.Water supply issues are a very important social issue”.
Against this background, the Water Supply Act was revised in 2019, changing the purpose of water supply projects from new development to infrastructure reinforcement.
Additionally, in April of this year, jurisdiction over water supply administration was integrated from the Ministry of Health, Labor and Welfare to the Ministry of Land, Infrastructure, Transport and Tourism, which is in charge of water infrastructure, and the Ministry of the Environment, which is in charge of environmental conservation.
　　
According to the latest research, the number of utilities that will be required to raise water rates by fiscal 2046 will be 1,199, or 96% of the total analyzed (1,243 utilities).
Additionally, the overall average rate of increase in water rates is estimated to be 48%. This is higher than the estimated 43% when the survey was conducted in 2021.
By comparison, in 2015 it was 34% and in 2018 it was 36%. The rate of increase increases each time the estimates are revised.
The national average water charge is 3,317 yen per month in fiscal 2021, but it is estimated to rise to 4,895 yen per month in 2046. The disparity in water rates between individual utilities will widen from the current 8.0 times to 20.4 times in 2046.
It is estimated that 60% of small water utilities serving less than 50,000 people, which accounts for two-thirds of all water utilities, will need to raise rates by 30% or more. The number of businesses that will need to revise their rates at a high rate of increase of 50% or more increases as the size of the business gets smaller.
There are many businesses in Hokkaido, Chugoku, and Shikoku that have particularly high rates of rate increases, and approximately half of the businesses in these regions are expected to have rate increases of 50% or more.
The 2021 study results listed Hokkaido, Tohoku, and Hokuriku as regions with the highest rates of rate increases, but in the 2024 edition, Chugoku and Shikoku had higher rates than Tohoku and Hokuriku.
　　
The latest research also reports on the regional expansion of water utilities.
Regional expansion in the water supply business means business integration by multiple business entities and business collaboration that integrates some functions.
In the case of widening the area, it will be possible to strengthen the foundation of the water supply business by reducing construction and improvement costs and maintenance costs through the consolidation and relocation of facilities, securing human resources, and reducing costs by integrating operations.
When they estimated the water charges assuming that each prefecture was integrated into one water utility, the average rate increase rate would be 38% in fiscal 2046. The highest value was 61% in Iwate Prefecture.
The average future estimate for each business entity mentioned earlier is 48%, so it would be better to keep the rate hike rate low by prefecture.
On the other hand, the impact of regional expansion on water charges is that water charges will improve for some businesses and worsen for others. This phenomenon occurs because there are disparities in water rates among individual utilities.
Yukito Ishibashi of the same auditing firm said, ”For example, there are two utilities in Yamaguchi Prefecture, and if nothing is done, the water charges for one in fiscal 2046 will be 9,024 yen a month, and the other will be 2,116 yen a month. If they are integrated and operated as one entity, the monthly fee will be 4,310 yen.From one entity’s perspective, there will be no fee increase, but from the other entity’s perspective, it will be an increase on a prefecture-by-prefecture basis. “If we aim to integrate, price differences within the region will be a major hurdle”.
　　
The research report also highlights the lack of skilled workers as an issue that needs to be resolved.
The aging of water pipes is progressing year by year, and the percentage of water pipes that have exceeded their legal service life is also on the rise. On the other hand, the speed of investment in water pipe renewal is slowing down, and the water pipe renewal rate is also on the decline.
The number of engineers working in water supply is decreasing year by year, so even if it were possible to secure the necessary funds to invest in updating water supply facilities, delays due to a lack of personnel remain a serious problem.