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EU accession the process:
before, during, after
Gheorghe Constantin
Bucharest, 24 September 2013
Problems of Romania related to the urban
wastewater collection and treatment(I)
• Less than 50% of population have access to centralized water/wastewater services
• Almost 80% of wastewater discharged in natural receivers untreated or insufficiently treated
• Most of the existing water infrastructure – in poor status due to long term under-investments
• Excessive fragmentation of water sector systems and services
• Inappropriate maintenance and operating services in most small and medium agglomerations
Problems of Romania related to the
drinking waterurban wastewater collection
and treatment(II)
• Lack of capacity to attract substantial funding for investment needs in majority of small and medium agglomerations
• Private sector – not interested to invest in short term
• High specific water consumption –more than 350 l/inhabitant and day
0
50
100
150
200
250
300
Consum specific
Specific water consumption Countries consumption
• High consumption
• Australia, Canada,
• Japonia, SUA
• Average consumption
• Danemarca, Franta,
• Corea, Polonia, Olanda,
UK
• Low consumption
• Cehia, Belgia, Ungaria,
• Germania, Portugalia,
• Romania
l/cap/d
UWWTD in Romania
• Transposed by a Governmental Decision (which
have been changed and modified)
• Responsible authorities
-Ministry of Environment and Climate Changes
-National Administration “Romanian Waters”
-Ministry of Administration and Regional Development
-Local authorities
-Water and Waste Water Operators
Needed wastewater infrastructure in
Romania according with UWWT
Directive
• Building new urban wastewater treatment plants
• Upgrading the existing urban wastewater
treatment plants
• Upgrading the existing local industry wastewater
treatment plants
• Rehabilitation of the existing urban sewerage
• Building and/or extension of the urban
sewerage.
Transition periods • Till 31 December 2013 for collection of
wastewater in 263 agglomerations (61,9 % from biodegradable load)
• Till 31 December 2018 for collection in 2346
agglomerations (38,1 % from biodegradable load)
• Till 31 December 2015, for urban wastewater
treatment in 263 agglomeration with more than
10000 i.e. (including P and N removal)
• • Till 31 December 2018, for urban wastewater
treatment for 2346 aglomerations with less 10000
i.e.
• Estimated cost:9.5 billions Euro
Water sector – top priority
The most demanding environmental sector
• 19 billions Euro – total estimated investment costs
for compliance with EU Water Directives
• App. 8.6 billions Euro needed by 2013 for water
and wastewater, only 4 bil. Available within SOP
framework
• App. 9.5 billions Euro needed for implementation
of Urban Wastewater Treatment Directive
Cost assessment - Romanian
environmental sector
1
54
19
0
2
4
6
8
10
12
14
16
18
20
€ B illio n
Water
Waste
Air
Other sectors
Approach for Definition of
Agglomerations
• Definition in the Implementation Plan
• Definition in the Master Plan
• Detailed boundaries in the Feasibility
Study
13
Principles
• Sound technical and economic
assessment of boundaries and options
• Intensive stakeholder involvement
• Quality assurance by MECC
14
Agglomerations in the
Implementation Plan
• Preliminary definition
• Mainly based on administrative borders
• Rough estimate of investment costs
• Inventory of agglomerations( annexes of
Implementation Plan)
15
Definition of agglomerations in the
Master Plan
• Identification of all settlements at
thecounty level (maps and data base)
• Defining of agglomerations based on
techno-economic assessment
• Option Analysis (central/de-central)
• Discussion with stakeholders
• Preparation of Long-term investment plan
16
Final Definition of Agglomerations
in the Feasibility Study
• More detailed definition of boundaries
for selected agglomerations (priority
investments) based on technical and
economic cost analysis
• Detailed option analysis
• Preparation of final/detailed maps and
data base on agglomerations
17
Scenarios “Definitions of
UWWTD”
18
Analysis of an agglomeration
19
Border Line
Cluster Line
Agglomeration
WWTP Interconnection
Defining of a agglomeration
20
Example Roman
page 21
Example for Agglomerations – Detailed Definition of Boundaries
NEED TO COORDINATE WITH THE
IMPLEMENTATION OF DRINKING WATER
DIRECTIVE AND WFD
• Aplying a river basin approach concerning water supply and waste water treatment
• Investment prioritization according with the pressure and impact on waters and aquatic environment
• Maximizing available funds effectiveness by carying out regional systems for water supply and waste water treatment
• Promoting integrated projects for water and waste water
Constraints
• Limited financial resources high investment need;
• Limited period of time (2007-2018)
Conclusion:
• Need for investment prioritization;
• Optimisation of investment cost at macro level – a must
• Regionalisation – part of the solution (economies of scale)
Regionalisation
• Regionalisation of water services - mainly driven by pre-accession programmes (FOPIP and ISPA)
• Slightly different approach, but the same final objective
• Intend to best use of available resources
Targets of Regionalization
• Limitation of political involvment in the supply of water
and wastewater services
• Regional Operator as the mechanism for provision of
service to small communities
• Availability of more similar companies for benchmarking
comparisons
Overall target – to provide that 2600 localities of more than
2000 p.e. meet 2018 targets
Advantages of regionalization
Improved technical capacity
Improved financial capacity
Improved lending capability
Improved investment planning
Optimization of available resources
Capacity to operate of existing regional systems
Capability to meet EU W & WW Directive
Tariffs leverage around the region
Regional Operators for water and
waste water
• Specialized in integrated services for water
and wastewater
• The establishment of the Regional Operators started in 2005 and finalized in 2010
• There are 123 licensed operators out of which 38 are regional operators
• Most of Regional Operators have implemented ISO 9001 and ISO 14001
Water and Wastewater Operators
Majority WWO recording positive financial
results, the average rate of covering the costs
is about 1,15
Period of payment the bills has decreased
between 2000-2009 from 145 la 73 days
Financial challenges
Evolutia consumului domestic de apa potabila, perioadei de colectare si a tarifelor
2000 - 2004
Studiu de caz: IASI
-
50
100
150
200
250
300
350
2000 2001 2002 2003 2004
Co
nsu
mu
l sp
ecif
ic d
om
esti
c d
e a
pa (l
/pers
/zi)
/
Peri
oad
a m
ed
ie d
e c
ole
cta
re (
in z
ile)
1.0
1.1
1.3
1.4
1.6
1.7
1.9
2.0
Ind
icele
de c
reste
re a
l ta
rifu
lui (A
nu
l 2000 =
1,0
)
Consum rezidential l/pers/zi Perioada de colectare (Zile) Indicele de crestere al tarifului (2000 = 1,0
Tariff and Affordability Analysis: Water Demand Development of Water and Sewerage Tariffs in Romania, 2001 - 2005
weighted average of 25 towns (w/o VAT, 2006 prices)
Sources: UNDP, EBRD
1.05
1.46
0.32
0.52
1.37
1.98
0.00
0.50
1.00
1.50
2.00
2.50
2001 2005
RO
N /
m3
(2
00
6 p
ric
es
)
Water Supply
Wastewater
WS + WWTOTAL: + 45%
(avg.: + 10%)
p.a.)
WATER: + 40%
(avg.: + 9% p.a.)
WASTEWATER: + 65%
(avg.: + 13% p.a.)
Real variation:
Tariffs of sewerage and wastewater treatment operators
Tariffs vary very much
DISTRIBUTIA OPERATORILOR IN FUNCTIE DE TARIFUL PRACTICAT PENTRU ANUL 2009
0,00 lei
0,50 lei
1,00 lei
1,50 lei
2,00 lei
2,50 lei
3,00 lei
AB C
TTA ALBA IU
LIA
AD C
OM
PANIA D
E APA A
RAD
AG AP
A CAN
AL 2000 SA PITES
TI
BC A
PA SER
V BAC
AU
BH C
OM
P DE APA
ORADE
A
BN A
QUAS
IB BISTR
ITA N
ASAUD
BT APA G
RUP BO
TOSA
NI
BR C
OM
PANIA D
E UTILITATI B
RAILA
BV C
OM
PAN
IA DE APA
BRAS
OV
B APA N
OVA
BUCURESTI
BZ CO
MPAN
IA D
E APA BU
ZAU
CL EC
OAQ
UA C
ALARASI
CS A
QUAC
ARAS S
A RES
ITA
CL C
OM
PANIA
DE AP
A SOM
ES SA
CLU
J
CT R
AJA SA C
ONSTAN
TA
DB C
OM
P DE APA
TIRGO
VISTE
DJ CO
MP D
E APA O
LTENIA C
RAIO
VA
GL APA
CAN
AL GALA
TI
GR APA
SERVICE
SA GIU
RG
IU
GJ AP
AREG
IO G
ORJ TG
JIU
HD AP
A PRO
D SA D
EVA
HD AP
A SERV VA
LEA JIULU
I PETR
OSA
NI
IS APAV
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IS DIR
ECTIA
DE AP
A-CAN
AL PASC
ANI
MM
VITAL SA
BAIA M
ARE
MH S
ECOM
SA TN SE
VERIN
MS AQ
UASER
V TG
MURES
NT C
OM
P JU
D A
PASER
V PIATRA N
EAMT
PH A
PA NO
VA PLOIESTI
SM APA
SERV SATU
MAR
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SB APA
CAN
AL SA SIB
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SV AC
ET SA SU
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TM AQ
UATIM
SA TIM
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APA CANAL
Implementing financing strategy
• Ensure EU funds adsorbtion
• Linking the strategy to the budgetary decision making process
• Ensuring that tariff policies are sustainable from economic and social point of view
• Increase the collection rate for water bills
• Rehabilitate and rationalize infrastructure by adjusting its capacity to present and future
• Optimizing capital and operational expenditure
Financing Strategy(1)
• Total amount needed 9.5 billions Euro
• Financing sources:
-EU funds 40%
-National and local budget 30%
-Loans and PPP 20%
-Environmental Fund 3%
-Consumers (Operators) 7%
Financing Strategy(2)
• 2004-2006 ~ 175 millions Euro yearly
• 2007-2009 ~ 400 millions Euro yearly
• 2010-2015 ~ 900 millions Euro yearly
• 2016-2018 ~ 800 millions Euro yearly
National financing
• Foreseen in the implementation plan for
2004-2009 -838 millions Euro
• Provided in the period 2000-2009
-809 millions Euro
out of which:
-local and national budget -346 millions Euro
-loans -275 millions Euro
-operators budget -188 millions Euro
458
214329
3,2661,167
173
Water/w aste w ater Waste management and historically polluted sites
Urban heating Biodiversity
Floods and coastal erosion Technical Assistance
Distribution of total financial contribution per Priority Axes - Community funding + national counterpart - (in million Euro)
Total allocation SOP ENV:
Euro 5.610 million
Specific objectives of the EU investments
– Provide adequate water and sewerage services, at
accessible tariffs
– Provide adequate drinking water quality in all urban
agglomerations
– Improvement in aquatic environment of the
watercourses
– Improvement of the level of WWTP sludge
management
Priority for EU investments
• Investments in order of priority:
– WWTPs in major agglomerations (sludge treatment facilities included)
– Wastewater network in major agglomerations (extensions first, rehabilitation where critically important)
– DWTPs (new or rehabilitation) where justified by insufficient quality and/or quantity)
– Distribution networks (extensions and/or rehabilitation where critically important)
– Stormwater management facilities, where appropriate
Selection of priority investments
Two step approach:
Step 1: Mandatory criteria
– Compliance date
– Association agreement
Step 2: Ranking
– Size of agglomeration (highest weight)
– Health improvement
– Environmental improvement
– Efficiency improvement
42
Existing financing of the water
infrastructure • Total 3.145,958 millions Euro out of which:
2.000,998 mil. Euro (63,61%) from EU funds through: – FEADR - 258,209 mil. Euro
– Coezion Fund - 878,895 mil. Euro;
– ISPA, Banca Mondiala, BERD, BEI, SAPARD - 863,894 mil. Euro
746, 776 mil Euro (23,74%) from the State Budget through:
– Environmental Fund - 146,682 mil. Euro
– State Budget through the MECC - 462,298 mil. Euro
– State Budget through the MARD 137,796 mil. Euro
367,899 mil. Euro (11,69%) from the local budgets
30,286 mil. Euro from Operator / Public-Private Partnership
Lessons learned
• Need to improve planning
• Good project preparation takes time
• Shortcuts in project preparation are paid at the
implementation phase
• Addressing the co-financing is part of project
preparation
• Adequate institutional mechanism in place - key
– Need to define clear roles and responsibilities of various
actors
Conclusions
• Development of the water and wastewater infrastructure requires important financial resources
• Securing the financial resources requires a a mixture of instruments provided by EU, national and local budget, IFIs and operators
• A careful planning could lead to a better ratio cost/benefits
• Tariff policy is a key issue for a sound investment
• Regionalization facilitate the investment
Thank you for attention!
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