The paper presents the results of a comprehensive project for the modernization and improvement of water supply systems in Montenegro through the replacement of asbestos-cement (AC) pipes. The analysis covered 23 cities, assessing network conditions, identifying technical and management challenges, and elaborating investment priorities up to 2055. Key challenges include extremely high water losses, obsolete materials, and a lack of hydraulic models and GIS data. Proposed solutions and an investment plan focus on public health and economically sustainable water management.