Source: Metropolitan Consulting Group: VEWA – Vergleich europaeischer Wasser- und Abwasserpreise, 2006, p. 7 of the executive summary Equalized costs net of subsidies and taking into account differences in service quality show a different picture: England and Wales have the highest tariffs, followed by France and Germany. Tariffs in Italy remain the lowest, even taking subsidies and differences in service quality into account. Comparison of annual water and sanitation bills per capita in four EU countries taking into account subsidies and differences in service quality Costs and affordability In the year 2005 46% of water and sanitation tariffs were linked to water treatment and distribution; 37% were linked to wastewater collection and treatment; 17% corresponded to fees and taxes. Fees are destined to the six water agencies at the basin level mentioned above. Taxes include a water consumption tax and VAT. According to a study by the consulting firm BIPE drawing on national statistics the share of household expenditures devoted to water and sewer bills was 0.8% and the average annual water and sewer bill was 374 Euro per household in 2005. Investment Investments in water supply and sanitation were estimated at 5.6 billion Euro in 2007. In 2003 the Association of French Departments estimated that the renewal of the water supply distribution infrastructure alone would require investments of 53 billion Euro from 2004 to 2015 to replace 535,000 km of pipes (about 65% of the entire network). This corresponds to an average of 4.4 billion Euro per year or 80 Euro/capita/year. Financing Investments are financed from a variety of sources. In 2006 investments were financed by municipalities (58%), Water Agencies (18%), private water companies (13%) and subsidies from the Départements and regions (11%). The contribution by municipalities is fully financed from tariff revenues collected for water and sanitation services, as well as by substantial fees (part collectivité) paid by private operators to the municipalities (Euro 2bn in 2006, or 30% of the amount billed by private operators) for the costs of investments (service budget of the municipality). Only in the case of municipalities with less than 3,000 inhabitants some limited tax revenue (general budget) is used to finance water and sanitation investments. The basin agencies finance themselves through charges for water abstraction and wastewater discharge by utilities and industries. In rural areas, investment subsidies are available from the National Fund for the Development of Water Supply (Fonds National pour