Economy and Sustainable Development Minister Davor Filipovic said on Friday that the decision by the Zagreb city administration to increase water tariffs was illegal and that the decision has been suspended, calling on the municipal authorities to be more responsible and not to try to resolve every problem at residents' expense.

According to Filipovic, the Water Services Council has suspended the decision by the city administration to increase water tariffs by 15% as of 1 March after finding a number of irregularities in the decision making process.

Filipovic said that every month the government subsidises the City of Zagreb with 15.4 million euro for electricity and that the subsidy includes water supply. “This was done to avoid an increase in water tariffs in Zagreb,” he pointed out.

“City of Zagreb officials keep saying they need money to embark on EU projects, but none of the projects concerning the water supply sector has been notified to the Ministry of Economy. I’ve been saying over the past few days that there is no reason for increasing water tariffs in Zagreb,” the minister said.

He said that the government would resolve the gas problem in Zagreb as of 1 April, noting that the price of gas would have gone up from €41 to €106 had it not been for the government.

Filipovic called on the city administration not to try to resolve every municipal problem by raising tariffs and to refrain from increasing water tariffs.

State Secretary Mario Siljeg spoke of the irregularities identified by the Water Services Council, an independent regulator.

He said that the decision by the city administration consisted of two parameters — to increase the actual tariffs and to increase the development fee. At its meeting on Thursday, the regulator found that increasing the fee for the development of the municipal water supply and drainage company would be against the law and repealed the decision.

Mayor Tomislav Tomasevic said last month that 30% of funds for the Zagreb project should be secured by the water supply and drainage company (ViO) in order to be able to apply for EU funding for the extension and modernisation of the water supply network.

Siljeg said that none of the four key requirements for this project have been fulfilled, specifying that property-related issues, environment-related documentation, a feasibility study and building permits have not been resolved and the relationship between the water supply and drainage company and the wastewater company has not been defined.

The project is far from being ready to apply for co-funding, Siljeg said, adding that the co-funding part is more likely 10% than 30% as claimed by the mayor.