NATURAL MONOPOLY REGULATION: THE CASE OF WATER SUPPLY IN CROATIA

The Natural Monopoly in the water supply in Croatia, its organization and water management are been analyzed in this paper because water is the basis of life. The Natural Monopoly is a market structure created by the subadditivity of costs. Due to the negotiation process, the Croatian legal regulations were harmonized with the EU Directives. Croatia is a water wealthy country and is responsible for the efficient use of its good. Water financing, which components define the price that consumers pay for the service, applicable acts in the sector of water supply, are analyzed in this paper. Regulation in water supply is needed, and the best option is an independent regulator, who will be most focused on controlling prices, and efficiency in the water supply in general. In the Strategy of Croatian Waters there is an idea of passing the ownership of Water supply and noneconomic price in the future from public to municipalities and cities.