Water supply and sanitation in Iran is overseen by the Ministry of Energy, which sets policy and supervises the provision of services.

[2] The sector is characterized by a wide discrepancy in coverage of water and sewerage services, as well as between urban and rural areas.

In numerous localities, there may be no precipitation until sudden storms, accompanied by heavy rains, dump almost the entire year's rainfall in a few days.

[14] In March 2016 President Hassan Rouhani said at a conference that the "water consumption pattern" in Iran had to be changed, without making any specific recommendations on how this could best be achieved.

[15] The Iranian government envisages massive investments in seawater desalination and in pipelines to bring water from the Southern shores to the interior of the country.

The plants and pipelines are expected to be financed by the private sector under Build-Own-Operate (BOO) Contracts where the government pays annual fees for the water produced.

Concerning municipal wastewater, the bulk of collected sewage is discharged untreated and constitutes a major source of pollution to groundwater and a risk to public health.

[18] Most drinking water in Iran is supplied through modern infrastructure, such as dams, reservoirs, long-distance transmission pipelines - some of which are more than 300 km long - and deep wells.

[12] An estimated 60,000 traditional Karez (کاریز) systems in the plateau regions of Iran in Yazd, Khorasan and Kerman - are still in use today for irrigation and drinking water supply in rural areas and small towns.

[3] The oldest and largest known Karez is in the Iranian city of Gonabad which after 2700 years still provides drinking and agricultural water to nearly 40,000 people.

This was changed through a fundamental sector reform in 1990 with the ratification of the Provincial Water and Wastewater Companies Law of September 1990.

[22] In September 2003 the Government of Iran and the World Bank agreed on a sector strategy with the targets for improved cost recovery and collection and increased efficiency.

[10] According to the World Bank, the sector is affected by "low water use efficiency in urban and rural uses; limited participation by stakeholders in development planning and management; large needs for rehabilitation and development of hydraulic infrastructure for sustainable water usage; problems of pollution caused by the discharge of untreated wastewater into public waterways and aquifers; and weak institutions involved in the sector and limited coordination among stakeholders.

"[18] Still according to the World Bank it is also characterized by "poor performance of water supply and on-site wastewater disposal facilities, causing increasing risk for ground and surface water pollution and health and environmental risks resulting from the discharge and re-use of untreated effluent for irrigation; limited technical, institutional and financial capacity of water and wastewater companies; a lack of clarity of institutional responsibilities of sector entities; and non transparent and inadequate tariff structures and levels."

The Ministry of Health and Medical Education is responsible for setting drinking water quality standards, as well as monitoring and enforcing them.

For example, the Provincial Water and Sewerage Companies for Ahwaz and Shiraz have been incurring significant net losses at least prior to 2004.

[33] The main external partner of the Iranian water and sanitation sector during the first decade of the 21st century was the World Bank.

In addition, 20 study tours to European water and wastewater companies for senior managerial, financial and technical staff will be organized.

[29] Unlike other lower and middle-income countries, Iran hosts few private international non-governmental organizations that pursue environmental or social aims.

Despite the difficult operating environment and friction with ruling bodies, the Iranian Government has moved to encourage an increased participation by foreign NGOs.

It aimed to do so by improving the operational efficiency and financial sustainability of the two Provincial Water and Wastewater Companies (WWCs).

[18] The project did not succeed in improving the financial situation of the two water and wastewater companies, since tariff increases were delayed.

[39] The Ahvaz and Shiraz Water Supply and Sanitation Project, supported by a US$279m loan approved in 2004 and closed in 2009, aimed to improve access to satisfactory water supply and significantly increasing coverage of sanitation services; and improve environmental, hygiene and health conditions, as well as promoting reuse of treated effluents.

It also aimed to strengthen and develop the capacity of Ahvaz and Shiraz Water and Wastewater Companies, and assist the latter in improving their efficiency, sustainability and financial autonomy.

It also aimed to initiate sector reforms, particularly with respect to institutional arrangements, the regulatory framework, demand management, as well as prepare a sanitation strategy.

Chlorination would disinfect effluents treated at the secondary level for suitable irrigation purposes, and a further tertiary treatment was to be extended if required.

[41] The project allowed to connect more than 1.3 million people to the sewer system and to build a wastewater treatment plant that was completed in June 2009.

In April 2014, Iranian Finance and Economic Affairs Minister Ali Tayyebnia asked the World Bank to provide Iran with financial assistance to implement development projects.