Rate Rebasing is the process of adjusting water rates every five years. The adjustment is based on the performance, expenses, earnings, unrecovered investments and service improvement plans of the water concessionaires.
Rate rebasing enables the gradual increase of water rates despite the massive, accelerated investments of the water concessionaires. This is because the process is based on a cash flow analysis or the examination of money inflows and outflows.
Through cash analysis, the government ensures that the water concessionaires are not over-accumulating profits and losses. It also guarantees that full recovery of the concessionaires' expenses and profits will only be possible when the concession agreement ends in year 2037.
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