Water is no longer a bountiful resource. In fact, many have suggested that it be called an ‘economic resource’. In addition to this, water related facilities are inadequately maintained. As a result many forms of pricing have been introduced. Irrigation is the largest consumer of water. Therefore this report seeks to discuss the basic issues in relation to introducing effective water pricing for irrigation services. This report looks at the rationale for water pricing and discusses how it can lead to recovering the cost of providing the service and encouraging the efficient usage of water. This report also looks into the criterion that has to be met for the pricing of irrigation water to be an effective method of reducing the demand in surface irrigation systems. Therefore, the article discusses the regulatory, operational and the economic requirements. Furthermore it looks at the issue of ‘Saving’ water. This report focuses on a case study based on the Zayandeh Rud Basin in Iran and looks at problems specific to the Zayandeh Rud Basin and alternative approaches to improving productivity. It also provides conclusions based on this case study.