its own budget. the siss has the right to impose fines on the service providers in case of violation of norms, which directly flow in the regulator's budget. furthermore, it receives user complaints, assesses their validity and acts on them. the agency has databases of all 53 urban service providers. the water and sanitation regulatory system in chile is considered by the who to be a model not only for latin america, but also for europe. one of its innovative features is the use of a hypothetical efficient model enterprise to assist in determining if tariff increases requested by service providers are justified. rural areas in the chilean rural areas, the ministry of health and the ministry of economy are responsible for supervising water cooperatives and water committees. in rural areas there is no independent regulator, such as the siss in urban areas. since 1994, the direction for water works (doh) is in charge of executing the national program of rural potable water (apr). unlike urban service providers, rural water supply and sanitation sector has not been subject of regulation like urban services. currently, the government of president bachelet has submitted before the chilean congress a bill to give this sector a new institutional framework. according to law 19,549 of 1998, urban concessionaires have to provide technical and administrative assistance to water committees and cooperatives in their respective region. service provision the responsibility for service provision is different in urban and rural areas. urban areas water supply and sanitation services in chile's urban areas is provided by 53 entities. to prevent monopolization, the providers were classified into three categories according to the percentage of the population served by them. no person or society is allowed to possess more than 49% of the companies within one category: category criterion number of companies total category share of population bigger companies serve more than 15% of total population 2 50.5% medium-sized companies serve between 4 and 15% of total population 6 34.3% smaller companies serve less than 4% of total population 45 15.2% the three largest companies are aguas andinas, serving the capital santiago, majority-owned by the spanish company aguas de barcelona, the empresa de servicios sanitarios del bio-bío essbio in the sixth region and eighth region around concepción, majority-owned by the latin american investment fund southern cross, and the empresa sanitaria de valparaíso esval in the valparaíso region owned by various institutional investors. together, the three companies serve 63% of urban water customers in chile. until 2011, the chilean state held 36% of water and sanitation companies through its production development corporation (corfo). today, this share has substantially decreased. as shown in the following table which shows the situation of 2006, the majority of the sector was still owned by chilean actors. organization percentage country of origin corfo 35.7% chile aguas de barcelona 17.0% spain southern cross group 10.7% argentina grupo hurtado vicuña/fernández león 8.8% chile grupo luksic 5.3% chile grupo solari 5.0% chile municipality of maipú 2.3% chile iberdrola 2.0% spain others 13.2% the ontario teachers' pension plan from canada is a major shareholder of the private water utilities essbio and esval. rural areas in rural areas, local water cooperatives and water committees provide water supply services. in concentrated rural areas (i.e. rural communities with 150 to 3,000 inhabitants with a concentration of not less than 15 houses per km of water network), there was a significant development due to the national program of rural potable water (apr). however, most isolated housings in chile still lack adequate water connections. efficiency non-revenue water ("water losses") in chilean water companies was on average 34% in 2006, an unusually high level for a sector that is so modern in so many other aspects. the level of non-revenue water is higher than in germany, france or the united kingdom (see, for example, water losses in germany). indeed, non-revenue water in chile increased from 29% in 1999 to the 34% in 2006. the regulator considers a level of 15% efficient. in 2006, on average one employee of the urban water supply and sanitation providers served 418 clients, resulting in 2.4 employees per 1000 connections, below the latin american average of 5. financial aspects annual investment in the chilean urban water supply and sanitation sector. source of data: siss, cariola/alegria (2004) tariff level water tariffs in chile differ substantially between regions, reflecting differences in the cost of supplying water. tariffs in urban areas varied between us$0.8 (aguas manquehue in chicureo) per cubic meter and us$4.1 (aguas patagonia in coyhaique) per cubic meter in 2006. in rural areas, tariffs only cover operation and maintenance costs affordability on average, the water and sanitation bill accounted for 1.14% of household income according to a 1998 survey by the national statistical institute. they varied between 0.77% for the highest (wealthiest) quintile and 2.35% for the lowest (poorest) quintile. financing and subsidies urban water and sanitation systems do not receive direct subsidies and are financed through the capital market, and ultimately through user fees. however, chile has an innovative system of means-tested subsidies that allows qualifying poor households to receive a subsidy administered by the municipalities to pay parts of their water and sanitation bills. rural water systems receive a partial investment subsidy that is defined in the ley del subsidio al agua potable y saneamiento. by law, the subsidy can cover 25-85 percent of a household's water and sewer bill up to 15 m³ per month. the client pays the rest of the bill. beyond 15 m³, households are charged full price. the subsidy is meant to target only those households that are unable to buy water at a subsistence level and is based on willingness to pay. in 1998, about 13% of households benefited at a level of ~$10 per month. the total cost of the program in 1998 was us $36 million. opponents argue this subsidy program can act as a regressive policy and actually hurt the poor because a false assumption is made that high consumption is positively correlated to high income. on the contrary, poor families do not have access to efficient methods of using water in cooking, cleaning, and washing. investment since the sector was prepared for self-sufficiency, investment increased significantly from an annual average of about us$ 100m in the period 1965 to 1989 to an annual average of us$ 242m in the period 1990 to 1998, when the first company was privatized. according to siss, since 1998 the annual investment ranges between us$ 151m (1999) and us$ 443m (2002). total investment in 2006 was us$ 325m. external support interamerican development bank the idb supports the water and sanitation sector in chile through two technical assistance grants: tc0207000 : local development access to basic water and sanitation services ch-t1004 : water services for disperse rural communities world bank chile infrastructure for territorial development the world bank supports the water and sanitation sector through a us$90m project approved in 2005, of which about 30% will be used for rural water supply and sanitation. the project is being executed by the vice-ministry of regional development in the ministry of interior. investments are being undertaken in coquimbo, maule region, bio-bio region, araucania region, and los lagos region. chile - ministry of public works dpl approved june 14, 2007, 20% of a us$30 million loan was appropriated and spent in the general water, sanitation, and flood protection sectors.