To improve the water supply situation of Mekelle the old boreholes need rehabilitation, pumps and all the pipelines want replacement; and the construction of additional boreholes is also needed to fulfill the current demand. However, all these activities require high capital outlays. The service beneficiaries are required to pay for the improved water services. Thus, to improve the water supply situation of the city demand side information is highly required. This demand side information enables policy makers to design appropriate water tariff that is consistent with government policy and enhance the long-term viability of the service. Thus to set the appropriate water pricing or tariff structures which is consistent with government policy investigating the ability and willingness to pay of users of the improved water service is important. In this book the demand side of the improved water supply services is analyzed. A contingent valuation method (CVM) is used to analyze determinants of households'' willingness to pay (WTP), estimate total willingness to pay, and derive aggregate demand and aggregate benefit for improved water supply service.