Urban water management in Italy: An innovative model for the selection of water service infrastructures

Climate change affects the water cycle, in particular drought and flood risks are increasing, so there are intensifying impacts on water security and freshwater availability. According to the assessment of global risks provided by the World Economic Forum in 2015, water crises are at the top of the ranking due to their potential in causing negative impacts on the economy and welfare across countries. It is widely acknowledged that efficient water resource management plays a key role in reducing the vulnerabilities of communities and economies and the provision of drinking water and its preservation are keystone worldwide in the implementation of adaptation strategies. Mismanagement of water resources and competition for their use have worsened the consequences of water scarcity in countries which traditionally suffered from water scarcity and indeed started to cause water shortage in those countries in which traditionally water resources availability was consistent. In this respect the drought that occurred in Italy in summer 2017, proved the vulnerability of the Country and challenged water service providers in supplying high quality water and matching water demand with resource availability. This issue is particularly crucial in Italy, where there is a lack of investments in infrastructures and water facilities and an efficient management of water services is still far from being implemented. In recent years, the reports by the National Authority (ARERA) highlighted the urgent need for investments in new infrastructures and in maintenance of the existing ones and pushed towards the optimization of service operation. Due to ever stringent budget constraints and lack of financial resources, it is of primary importance to identify top priorities in ranking investments which accounts for service cost minimization, service quality maximization and environmental cost minimization. In this paper we propose an innovative theoretical valuation framework and implement a multi-criteria approach to support investment decisions in the water service sector. In detail we provide an AHP model to rank investments and select optimal investments in water infrastructure