the environment. The liberalization proposal was not further pursued. However, public-private partnerships continued to become more widespread and the trend towards the creation of private law water utilities (commercialization) continued. In reaction to the liberalization debate the German Federal Parliament (Bundestag) passed a decision sponsored by the Green party and the Social-democrats (SPD) on sustainable water supply and sanitation (nachhaltige Wasserwirtschaft) in 2001. The decision rejected the liberalization of the water sector, but also called for the merging of smaller service providers, higher competitiveness and the general modernization of the sector, including through systematic performance benchmarking. In 2005, the six professional associations signed a declaration promoting benchmarking, based on a methodology developed by the International Water Association. Efficiency Water losses Water losses in the distribution network have been estimated at only 7 percent in 2001, down from 11 percent in 1991. According to a study commissioned by the BGW losses are 19 percent in England/Wales, 26 percent in France and 29 percent in Italy. These would not only be the lowest water losses in the four countries, but also in the world. The study states that its methodology allows for an accurate comparison, including water used to flush pipes and for firefighting. This is consistent with the International Water Association's definition of non-revenue water, which includes authorized non-metered consumption such as for flushing and firefighting. Benchmarking Benchmarking has been undertaken for a long period by German utilities, but not in a comprehensive and systematic manner. In 1998 the Federal Ministry of Education and Research initiated a competition of ideas to reduce the costs of water supply together with the economic research institute RWI and 14 water utilities. It developed a set of criteria to assess strengths and weaknesses in the industry. Participating utilities say that they reduced their operating costs by about 5 percent after two to three years. The professional associations DVGW and DWA have jointly established a voluntary benchmarking system, which keeps individual company data confidential. The associations consider the system as being highly successful. Tariffs and cost recovery Legal framework By law (Kommunalabgabengesetze or Betriebsgesetze der Länder) tariffs must cover the full costs of water supply and sanitation, including capital replacement and the remuneration of equity. The various state laws do not foresee a review of the level of the efficiency of investments and operations as part of the tariff approval procedure. Some states also levy a