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EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013

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Page 1: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

EU accession the process:

before, during, after

Gheorghe Constantin

Bucharest, 24 September 2013

Page 2: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 3: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 4: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related
Page 5: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related
Page 6: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related
Page 7: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 8: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 9: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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.

Page 10: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 11: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 12: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 13: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

Approach for Definition of

Agglomerations

• Definition in the Implementation Plan

• Definition in the Master Plan

• Detailed boundaries in the Feasibility

Study

13

Page 14: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

Principles

• Sound technical and economic

assessment of boundaries and options

• Intensive stakeholder involvement

• Quality assurance by MECC

14

Page 15: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 16: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 17: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 18: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

Scenarios “Definitions of

UWWTD”

18

Page 19: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

Analysis of an agglomeration

19

Page 20: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

Border Line

Cluster Line

Agglomeration

WWTP Interconnection

Defining of a agglomeration

20

Page 21: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

Example Roman

page 21

Example for Agglomerations – Detailed Definition of Boundaries

Page 22: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 23: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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)

Page 24: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 25: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 26: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 27: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 28: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related
Page 29: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 30: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 31: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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:

Page 32: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

ITAL SA IASI

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

E

SB APA

CAN

AL SA SIB

IU

SV AC

ET SA SU

CEA

VA

TM AQ

UATIM

SA TIM

ISOAR

A

VL APAVIL SA

VILCEA

VN C

OM

P DE U

TILIT PUBLIC

E FOCSAN

I

APA CANAL

Page 33: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related
Page 34: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related
Page 35: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 36: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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%

Page 37: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 38: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 39: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 40: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 41: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 42: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 43: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 44: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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

Page 45: EU accession the process: before, during, after - … · EU accession the process: before, during, after Gheorghe Constantin Bucharest, 24 September 2013 . Problems of Romania related

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