Implementation of waste and water infrastructure projects financed by EU in Lithuania

Dainius KazlauskasENVIRONMENTAL PROJECTS MANAGEMENT AGENCYUNDER THE MINISTRY OF ENVIRONMENT OF THE REPUBLIC OF LITHUANIA

1 December 2011, Vilnius

ADMINISTRATION SCHEME OF EU 2007-2013 PERIOD STRUCTURAL FUNDS IN LITHUANIA

Government of the Republic of LithuaniaConfirms legislations, composes monitoring committee

Government of the Republic of LithuaniaConfirms legislations, composes monitoring committee European CommissionEuropean Commission

MINISTRY OF ENVIROONMENT

Preparation of regulations, plans and implements

tools, charts list of environmental projects, financed from Cohesion

fund

MINISTRY OF ENVIROONMENT

Preparation of regulations, plans and implements

tools, charts list of environmental projects, financed from Cohesion

fund

Monitoring Committee for Operational ProgrammsAnalyses progress and submits

proposals

Monitoring Committee for Operational ProgrammsAnalyses progress and submits

proposals

Managing Committee for Operational Programmes

Analyses problems of planning and implementation

Managing Committee for Operational Programmes

Analyses problems of planning and implementation

MINISTRY OF FINANCES Coordinating Institution (coordinate EU

support planning and usage, strategy, implementation of management strategy)

Managing Authority (administrates operational program, response for it’s

implementation) Certifying Authority (confirms and send

expenditure report to EC) Paying Authority (manages finance

accounting)

MINISTRY OF FINANCES Coordinating Institution (coordinate EU

support planning and usage, strategy, implementation of management strategy)

Managing Authority (administrates operational program, response for it’s

implementation) Certifying Authority (confirms and send

expenditure report to EC) Paying Authority (manages finance

accounting)

Audit Authority

State Control

REGIONAL DEVELOPMENT

COUNCILS

REGIONAL DEVELOPMENT

COUNCILSPublic procurement office Public procurement office

Implementing agency

Environmental projects management agency:

• Established in February 2002 by the Ministry of Environment of the Republic of Lithuania;

• Staff – 82 Employees;• Implementing environmental projects, financed by: ISPA fund; Single Programming Document for 2004-2006; Cohesion fund for period 2004-2006; Structural assistance2007-2013 period; LIFE +.

Responsibilities

• Organization of invitation to submit applications for EU finansation;

• Evaluation of applications;

• Signature of administrational and finansation agreement;

• Preservation of public procurement procedures;

• Physical and financial administration of project implementation;

• Un-spot checks;

• Audit after project implementation.

Support from EU in Environment sector

• Instrument for Structural Policies for Pre-Accession (ISPA) (now part of IPA)/Cohesion fund;

Lithuania implements / implemented 11 projects in waste and 16 in water sectors financed by the Cohesion Fund and ISPA.

• EU 2007-2013 Cohesion Promotion Operational Program;

Lithuania implements 29 projects in waste and 143 in water sectors (including sludge management projects) financed by EU 2007-2013 Cohesion fund.

EU 2007-2013 cohesion promotion operational program. Environment and sustainable development

I. Renovation and development of water supply and waste water treatment

Modernization and development of water supply and waste water treatment infrastructure according to EU environmental requirements. Development of sludge treatment infrastructure.

II. Establishment and development of waste treatment system

• No land filling will take place in non-complying landfills after 16 July 2009; • Landfill Directive (1999/31/EC) (for Lithuania) requires phased reduction in the total quantity of biodegradable municipal waste sent to landfills (a reduction to 75% of 2000 levels by 2010, to 50% by 2013, and to 35% by 2020).

7

Wastewater treatment changes in 2000-2009 period,mln of m3 (discharge to surface waters)

0

20

40

60

80

100

120

140

160

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

in complience with standarts Treated but not in complience with standarts Not treated

8

Water sector investments, mln. EU

2000-2006:-planed financing sources:Cohesion fund - 85 %; LT budget-15 %,

beneficiary-0 %;-real financing sources:Cohesion fund-64,9 %; LT budget-30,1

%, beneficiary-5 %;2007-2013:-planning financing sources:Cohesion fund-85 %; LT budget-10 %,

beneficiary-5 % (plus net income).

0

100

200

300

400

500

600

700

800

EU funds LT budget Beneficiary Total

2000-2006 2007-2013

9

Drinking water supply and waste-water treatment strategy on 2008-2015

Criterion of strategic objective in 2015:

•Availability to get public drinking water and discharge waste water to collecting systems 95 % in 2015.

0 20 40 60 80 100

2007

2015

Waste-water discharge to collecting systems availabilityPublic supplied drinking water availability

10

Financing directions, mln. EU

0

100

200

300

400

500

600

W&WWnetworks

WWT plants WT plants SST plants Total

2000-20062007-2013

11

What we have done or will do?

Period WW networks, km WS networks, km UWWTP Ren./rec.

units

WTP (Ren./rec.

units

SST plants

new Ren./rec. new Ren./rec.

2000-2006 795 89 601 140 47 17 0

2007-2013 871 23 595 25 37 6 23

Total 1666 112 1196 165 84 23 23

211 mln EUR

9 mln EUR37 mln EUR

EU funds

LTU Budget

Beneficiary

Waste sector investments

• Total investment 2000-2006 financing period – 190 mln EUR;

• Total investment 2007-2013 financing period – 257 mln EUR;

Waste management till 2004

• 790 dumpsites;

• 60 municipal landfills;

Waste management 2011• 11 landfills;

• 69 bulky waste sites;

• 13 composting sites;

• 11 MBT plants.

Lithuanian perspective 2013

Regional waste management system

• Geographically waste management systems

covers county area;

• In the year 2002-2004 10 regional waste

management centers (RWMC) were

established;

• RWMC acts on status of JSC or Public

organization;

• The percent of finances part in RWMC is

proportional to municipalities size;

• RWMC is managed by managing board, that consist of representatives from municipalities (1 member from 1 municipality).

2000-2006 2007-2013

Projects grouping

Procurements Centralized (Agency) Decentralized (Beneficiaries ormunicipalities staff, but under

control of Agency)

Financingagreementsigned

European commission-Agency-

Beneficiaries

Agency-Beneficiary

Number of projects

27 172

2000-2004 Project’s timetable

Total – 7 years

Submission of

application to EC

Signature of financing agreement

Design phase

Procurement phase

Execution of works

Finalization

2001 2002 2004 2005 2008

Main challenges in EU 2000-2006 financing periodDesign stage:

•In the very beginning of a project no concrete places for project component was foreseen, long territorial planning, future environmental damage prevention procedures;

•Local designers had no experience in landfill and WWP design procedures, international designers – no experience and understanding in local low and rules;

•Confrontation from local inhabitants;

•Long procurement procedures regarding PRAG requirements;

•Lac of experience in all levels (municipal staff, beneficiaries).

Due to all these reasons design face took more the 3 years, and it was high risk do not fulfill N+2 rule.

Construction stage:

•Long procurement procedures regarding National procurement low requirements;

•Lak of money due to the high construction work costs (period 2006-2007);

•Construction contracts were based on FIDIC rules, that was new for all Contract sides;

•Contracts were sign from 3 sides (Final Beneficieries, Contractor and Contracting Authority). It programmed some disagreements in contract management;

•Lac of experience in technical supervisor and Final Beneficieries staff;

•Mistakes in design project that caused a lot off changes during execution of construction works.

Main challenges in EU 2000-2006 financing period

Finalization stage:

•Bad quality of feasibility studies, applications;

• Too detail specification of physical indicators;

• Implementation of projects indicators (connection rates, increase waste collection level and etc.);

• Mistakes in technical projects;

• Suggested Financial corrections from state control: EU visibility requirements; Variation orders; Public procurement procedures.

•Different interpretation of the same situation, changes of human resources in all levels;

•Preparation and approval of final report.

Main challenges in EU 2000-2006 financing period

Main challenges in EU 2007-2013 financing periodProject preparation stage:

• Late approval of legal acts regarding EU 2007-2013 funds management;

• Low quality of applications;

• Low quality of technical projects;

• In the very beginning of a project implementation, no concrete places for project component was foreseen, long territorial planning, future environmental damage prevention procedures;

• Confrontation from local inhabitants;

• Procurement procedures were not provided till submission of application.

Main challenges in EU 2007-2013 financing periodProject implementation stage:

• Low quality of tender documentation:Agency had prepared the typical tender documentation for works, supplies and services procedures; Recommendations for preparation of tender documentation for MBT facilities;Involvement of international experts;

• Long procurement procedures: Agency is using selection methodology for procurement procedures control;The methodology of adopting financial corrections was approved by Ministry of Environment;

Main challenges in EU 2007-2013 financing periodProject implementation stage:

• To high or to low construction costs:The methodology of additional financing scemes was approved by the Ministry of Environment;

•Court cases regarding public procurement procedures.

•Complicated and slow implementation of projects: Agency is using selection methodology for payment application control;The methodology of adopting financial corrections was approved by the order of the Ministry of Environment;Usage of IT systems for submitting and confirmation of payments applications.

Lessons learned

2004-2006 period planning weakness:

Long time to make decisions in any changes of project;Lack of responsibility of beneficiary and local authority;Large-scale project cause high qualification requirements (less suppliers);Lack of urban planning documents and property deeds;Overloaded design companies;Lack of money to finish projects due to increased mconstruction works cost.

2007-2013 period planning :

Projects managing become more flexible;Shorten project implementation;Direct responsibility for beneficiaries;Grow up the number of qualified suppliers;Unfortunately, grow up litigation on procurement stage;But, the cost of construction works stabilized.

Lessons learned

Thank You for attention!

E-mail: dainius.kazlauskas@apva.lt