The underlying assumption here is that there are sufficient households wasting water to pay for the additional overhead of metering and administering whatever charge we come up with. What’s not established is that a charging model will produce changes in behavior in this group, sufficient to fund the development.
Additionally we have to consider the social cost of other unintended changes in behavior brought about by the new charges. For example the presence of parsimonious but smelly people on public transport, and the public health considerations of reducing water use in Schools, Restaurants, and hospitals.
To my mind, intensive water conservation should be an issue for arid climates, not ours, and the current water crisis reflects more a lack of infrastructure maintenance, than a true shortage. The challenge here is to come up with a financial model which will reward authorities for high water quality and low