methodology for tariff setting for water … · · 2015-02-25these tariffs can be used by...

METHODOLOGY FOR TARIFF SETTING

FOR WATER SUPPLY AND SANITATION SERVICES

FOR WATER AND SEWERAGE ENTERPRISES IN

TAJIKISTAN

20 June 2013

through close collaboration with

the members of Thematic Working Group for improving and

implementation of tariff policy in the sphere of drinking water supply

in the framework of the project

«Tajikistan Water Supply and Sanitation» (TajWSS),

through financial support of

Swiss Agency for Development and Cooperation (SDC)

2

1. BACKGROUND

This methodology for tariff calculation on water supply and effluent discharge services is

designed for defining tariffs on water supply and effluent discharge for water-and sewage

enterprises. These tariffs can be used by production units, committees, water users’

associations and other economic agent market participants involved in lifting, purification and

transportation of water, as well as transportation and treatment of waste water, regardless of

their form of property and organizational legal forms.

The methodology for tariff calculation on water supply and effluent discharge services

(hereinafter, Methodology) is developed in pursuance of the Law of the Republic of

Tajikistan “On drinking water and drinking water supply”, 29.12.2010, #670 and the Law of

the Republic of Tajikistan “On natural monopolies”, and in accordance with para 2 of the

Resolution of the Government of the Republic of Tajikistan dated 12 May 1999, #210 on the

endorsement of the order of calculation of production cost (works and services) at enterprises

and organizations in the Republic of Tajikistan.

While developing this Methodology, the authors were guided by the sector rules on

calculation of production costs (works and services) at municipal housing enterprises and

organizations in the Republic of Tajikistan concerted with the Ministry of Economic

Development and Trade, the State Agency on Anti-monopoly Policy and Support to

Entrepreneurship under the Government of RT, the Order of the State Unitary Enterprise

under the Municipal Housing Facility #43/7 issued on 12 February 2004, the Rules of using

the communal water supply and sewage systems in the Republic of Tajikistan endorsed by the

Resolution of the Government of RT #234, 30.04.2011, and other regulatory enactments,

taking into consideration peculiarities and specifics of services provided by water-and-sewage

enterprises.

The main goals for introducing this Methodology are:

Introduction of a unified tariff setting mechanism for water supply and sanitation

services in Tajikistan;

Prevention of establishing monopoly and high tariffs for water supply and sanitation

services;

Ensuring the most feasible combination of economic interests of producers and

consumers of water supply and sanitation services;

Fostering economic incentives for economic agents providing services of water supply

and sanitation services targeted to improvement of efficiency and proper use of

resources, and reduction of costs for services.

For the purpose of proper implementation of the efficient tariff (pricing) policy, it is needed to

create a system of normative-methodological documents, including this particular

Methodology for tariff calculation for the water supply and sanitation services.

3

2. FRAMEWORK

2.1. This Methodology is designed for water supply and sanitation enterprises

(hereinafter, “Operators”), entities providing water supply services, units and public

organizations involved in drinking water supply services for calculating tariffs on water

supply and sanitation.

2.2. This Methodology is applied for economic assessment of demands among water and

sanitation operators regarding funds needed for performing their industrial and investment

programs for the purpose of supplying water to consumers and waste water disposal. It is also

applied for calculation and introduction of tariffs for water supply and waste water disposal.

2.3. The main concepts used in this Methodology are the following:

Water supply – a set of activities ensuring provision of water to localities and certain

units (facilities) in needed quantities and of appropriate quality; the water is extracted from a

source, from a waterworks facility or from water conduits.

Water discharge – a technological process ensuring receipt of waste water with further

purification, derivation of waste water to water treatment facilities and water waste

management;

Water supply system (water pipe-line) – a set of engineering constructions for

extraction, cleaning, transportation and delivery of water to consumers in localities and to

certain units (facilities) in needed quantities and of appropriate quality.

Sewage system – a set of engineering constructions for collection and derivation of

waste water beyond the boundaries of localities or certain units, as well as cleaning and

disinfection of waste water and sediments in compliance with established sanitary

requirements, prior to utilization or discharge into water objects, i.e. receiving water.

Water-and-sewage enterprise (operators) – an enterprise (organization) performing

discharge of water from the water supply system and/or receipt of waste water into the sewage

system, and maintaining these systems.

Consumer – an individual or a legal entity that consumes services of water supply and

waste water derivation;

Profit – difference between the operating revenue (works, services) and production

expenses included in prime cost;

Regulated activities – activities in the area of water supply and water discharge services

subject to state regulation in accordance with the legislation only after its inclusion in the

Register of natural monopoly subjects on the basis of a resolution endorsed by the

Antimonopoly Service under the Government of the Republic of Tajikistan or its territorial

bodies;

Tariff (price) – monetary value of a product or a service;

Production cost – cost estimate of raw materials, fuel, energy, main assets, labor

resources, and other expenditures (in the course of works and services) to produce and sell

one unit of product;

Level of profitability – standardized profit margin implying a system of procedures and

elements defining total cost of water to be covered by consumer;

Economic agents – legal entities, including their affiliates, involved in provision of

services in the area of water-and-sewage.

Economically feasible tariff – reflects the full cost of a service; established within the

limits according to standards and norms.

Drinking water – the water in natural condition or after treatment (purification,

disinfection, after adding previously missing substances), in terms of its quality is in

compliance with established normative requirements, and meant for drinking and household

needs, as well as for manufacturing of food and medicines;

4

Quality standards for drinking water (quality requirements) – a set of indicators for

chemical and micro-biological composition and organoleptic qualities of drinking water

established through scientific-research methodologies and regulated by sanitary rules (taste,

color, smell, temperature), which guarantee its safety and harmlessness for human health;

Drinking water supply – activities targeted to satisfying needs in water for individuals

and legal entities;

Source of drinking water – natural waters (surface and ground), which are being used

or can be used for drinking water supply after relevant treatment or without treatment;

Centralized system of drinking water (public water pipe-line) – a complex of widgets

and facilities for extraction, preparation, storage and delivery of drinking water to sites of

consumption, open for public use by individuals and/or legal entities;

Reliability of the water supply system – the quality of the system ensuring a proper

mode (uninterrupted, scheduled, hourly) of delivery of drinking water to consumers in

accordance with established standards of drinking water provision and normative

requirements to the quality of drinking water;

Customer – an individual or a legal entity that has the right to use services provided by

the water-and-sewage enterprise according to a concluded agreement, and has widgets and

facilities directly connected to external water supply or sewage networks in their locality.

Water supply (sewage) network – a set of underground, surface and over-ground

distribution pipelines in localities, except water supply and sewage networks located in

dwelling blocks, in-site lines, interplant, within backyards, and within buildings.

Street water intake structure (standpipe, booth, etc.) – a facility for water withdrawal

directly from the street water intake network.

Period of tariff validity – time interval (one year, as a rule) within which the tariff value

remains unchanged (payment for one unit of service).

Depreciation – (amortization, Latin – i.e. discharge) – estimated wear and tear in the

process of exploitation and industrial use expressed in monetary units. Depreciation is a

means, a way and a process of transformation of the value of exhausted instruments of labor

into a product manufactured with their help. The instrument for compensation of exhausted

main assets are depreciation payments in the form of money allocated for repair, construction

and manufacturing of new assets. The amount of depreciation payment is included in the cost

of production (manufacturing cost) of the product, and thus, it turns into the price.

2.4. Technical peculiarities defining the composition of expenses and their justification

should be taken into consideration while planning the cost of services in the area of water

supply and sewage with the purpose of forming tariffs for water supply and sewage:

Continuity of industrial processes, transmission and consumption of material elements

of the service, which defines a clear interrelation between indicators of the volume of

cleaning (purification), transportation and selling, leakage and losses;

Critical rise of accident risk resulting from chronic lack of main assets, relevant increase

of funds needed for ensuring proper reliability and ecological safety (hence,

requirements to justification of depreciation payments and repair stock based on the

volume and cost of replacement of main assets);

The water-and-sewage infrastructure is a big consumer of natural and energy resources;

at the same time, it should perform nature protection functions, which requires

additional justification for expenses on resource-saving and ecological safety;

Stringent requirements to life-supporting infrastructure guaranteeing access to minimal

volumes of services in water supply and sewage for every citizen, and sewage treatment

in every locality, regardless of the level of incomes; inadequacy in certain regions in

terms of real paying capacity and the cost of services.

5

2.5. For regulation of prices on water supply and sewage, the water and sewage operator

should present proposals consisting of justified materials (forms), developed on the basis of

this Methodology, to the regulating body; these proposals should be based upon industrial and

investment programs.

In the process of developing and confirming the water supply and sewage tariffs, the

water supply and sewage operator should prepare the following documents to justify the tariff

or to present them for consideration to the regulating body:

economic justification of needs in financial means and profit;

developed industrial and investment program;

suggested value of the water supply and sewage tariff, etc. (the list of all documents is in

Annex #)

3. PLANNING OF THE SERVICE PRODUCTION COSTS

3.1. Production cost, as an economic category is the expenses of water supply and sewage

operator’s per a unit of service expressed in monetary form (1 cubic meter of water or sewage

liquors).

Being the main form of tariff, the self cost characterizes the total need of the operator in

financial resources to recover the cost of current functioning.

3.2. Planning of cost production is a system for estimates and definition of economically

justified costs and water supply and sewage tariffs along with ensuring observation of

established standards, quality and ecological safety in services.

Planning of cost production is performed on the basis of data characterizing efficient use

of assets, material, energy and labor costs.

3.3. The water supply and sewage production costs include expenses in the set of

realistically performed works, for which the operator is in charge of according to the contract.

The production costs also include expenses, which the operator covers according to sub-

contracts with outside organizations.

3.4. The water supply and sewage production costs are formed from expenses related to

the maintenance of main assets, managing of technological processes of water lifting,

purification and transportation to the consumer; as for water discharge – the costs are formed

from pumping of sewage liquor, cleaning, transportation and disposal, as well as the use of

material, fuel-energy, labor and other resources. Expenses on reproduction of main assets

include production costs in the form of depreciation in percentage from the balance cost of the

main assets, depending on their operating life; and expenses on the repair of the main assets,

which have long operating life, long-term periods between repairs and high repair costs, are

covered from the repair fund. The repair fund is created as a reserve for future repairs of main

assets to ensure equal distribution of expenses for repair works during two or more years.

Allocations to reserve are estimated on the basis of aggregate value of main assets and

standards of deductions.

3.5. Planning of production costs is one of the main stages of formation of economically

justified expenses and tariffs allowing to avoid replication of factual expenses (which are

frequently irrational).

Restructuring through reduction of irrational expenses in factual production costs

characterizing the growth of efficient production should be the basis for planning of cost

production.

Planned estimation of production costs is performed by the operator who presents a draft

economically sound tariff to the regulating body along with all relevant calculations and

justifications.

6

3.6. Expenses related to production and selling of operator’s services are grouped by

costing items:

chemicals;

electricity;

labor of workers in the main industry;

fringe benefit expenses (social taxes);

depreciation;

repair and technical maintenance;

accident recovery works;

purchased water;

repair fund;

other direct costs;

shop costs;

total operating costs.

3.7. For convenience of analysis and comparison with expenses at other enterprises, it is

feasible to conduct cost estimates by technological stages.

It is recommended to plan and estimate separately water supply by:

water lifting

water cleaning

water transportation.

The water discharge production costs should reflect separately:

transportation of sewerage liquors;

cleaning of sewerage liquors and sludge utilization.

Taking into consideration costs on the stages mentioned above, it is possible to estimate

tariffs on water supply and sewage services, e.g. on water purification and transportation

(supply) to consumers.

7

COSTING ITEMS, THEIR CHARACTERISTICS AND CONTENTS

№ ITEM CHARACTERISTICS AND CONTENTS

I. DIRECT COSTS

1. Chemicals (materials)

This included costs of chemicals needed for purification, disinfection

of water (sewage water), based on the volume of cleaned water

(sewage water) and standard consumption of chemicals per 1 cubic

meter of water (sewage water). Main chemicals are considered

depending on technological cycle. Costs on chemicals also include

transport and storage components – while using transport, which does

not belong to the operator.

2. Electricity

Electricity costs – electricity needed for water lifting to the sites of

purification, storage, consumption (transportation of sewage water),

proper pressure in the system, payment for connection to relevant

equipment (transformers, electric engines, pumps, etc.). Cost estimates

for electricity: presently valid tariffs on water supply (water discharge)

are multiplied by the factually utilized volume of electricity.

Electricity utilized for illumination, heating, etc. refers to relevant

items of shop costs.

3. Labor costs

This item includes labor costs on main workers in charge of water

receipt from natural sources, water lifting to purification sites, storage,

consumption, cleaning of water, transportation of water to sites of

consumption, receipt of sewage water, transportation of sewage water,

transportation of purified water, and utilization of sewage water,

discharge of cleaned water into reservoirs in actual volumes, as well as

payment reserve for main workers’ vocations.

4. Fringe benefit expenses

(social fees)

Fees to the social protection fund, employment fund, compulsory

medical insurance from workers’ salaries, included in production costs

of water supply and water discharge.

5. Depreciation

This item includes depreciation payments for full rehabilitation of main

assets taking into consideration their incoming and outgoing, as well as

results of revaluation (industrial buildings, installations, transfer

devices, technical and energy equipment, measuring and regulating

devices, tools and industrial inventories used in the technological cycle

of water supply and sewage services.

6. Repair and technical

maintenance

This item reflects costs of all types of repair and technical maintenance

of main assets of water supply and sewage, water discharge, buildings

and installations.

7. Purchased water This includes the cost of drinking water received from other economic

agents according to agreements.

8. Services on sewage

purification

This includes costs on services of purification and disinfection of

sewage water, provided by other economic agents, according to

agreements.

9. Emergency dispatcher

service

This item defines costs on accident recovery works given that an

emergency dispatcher service (EDS) is created at the enterprise, and

the costs in this item are calculated separately. This production costs

item is complex; it includes the following elements:

salaries for the emergency dispatcher service workers (accident

recovery mechanics, etc.);

social protection fees of these workers;

logistical expenses and spare parts used in accident recovery works;

depreciation of main assets at the accident dispatcher service

(breakdown vehicles and EDS premises);

petroleum, oil, lubricants used by breakdown vehicles in the

process of accident elimination;

payments to own units and external organizations, unified

dispatcher service involved in emergency response works.

10. Repair fund

Costs on all types of repair works within the water supply (and sewage)

enterprise, which – in view of the volume and technical characteristics

– cannot be repaired during one calendar year, with the purpose of even

inclusion of further expenses for repair of main assets in production

costs of water supply (water discharge) services.

8

Calculation of standard deductions in the repair fund is performed on

every type of main assets, according to their value, the timeframe of

capital repair works, as well as standards for material, energy, labor

and financial costs, which should be approved by the owner of main

assets.

II. SHOP COSTS

1. Shop personnel

This item includes expenses on salaries for engineers and technical

staff of all water supply and sewage workshops and structural units.

Among them are:

main water purification shops of the water supply and sewage

facility;

pumping stations of the water supply and sewage facility.

Besides that, this item includes payment to engineers, technical and

other personnel not belonging to managerial staff, as well as to workers

of the automated technological management system of water supply

and sewage, energy units, repair and mechanical workshops, etc.


(social fees)

Fees to the social protection fund for compulsory medical insurance of

employees included in production costs of water supply and sewage.

This item includes deductions from salaries of engineers and technical

staff of all shops and technical units.

3. Maintenance of buildings,

equipment and inventory

This includes expenses on maintenance of buildings, installations,

equipment and inventory of shops and units; cost of materials for

infrastructural needs of shops, cleaning of premises; cost of electricity

for illumination, steam, water, fuel, heating and payment to other

servicing organizations.

4. Labor protection and

accident prevention

This includes current expenses ensuring normal working conditions

and accident prevention: construction and maintenance of fencing for

machinery and mechanisms, moving parts, hatches, apertures, wells,

alarm systems and other installations of non-capital character ensuring

accident prevention; construction and maintenance of wash stands and

showers, special equipment in the work area (non-capital character),

specialized clothing, shoes, personal protection devices, special food,

maintenance and repair of dressing rooms, wardrobes, drying rooms,

recreation rooms, and creation of other conditions according to special

requirements.

5. Repair and technical

maintenance

This item includes costs for repair and technical maintenance of main

assets, buildings and installations at the level of factual expenses. If

there are no expenses during the regulated period, the expenses based

on cost sheets developed by the economic agent are included.

6. Depreciation

This item includes depreciation payments for full rehabilitation of main

assets of general shops, apart from the main assets, which depreciation

refers to direct costs

III. TOTAL OPERATING COSTS

1. Total operating and

administrative staff

This includes costs on salaries of administrative and management

personnel:

- customer service unit;

- dispatcher service;

- laboratories;

- store keepers and workers of central warehouses;

- workers cleaning territories, office and staff facilities;

- guards


(social fees)

Fees to the social protection fund, employment fund, compulsory

medical insurance from salaries of workers included in production

costs of water supply and sewage. This also includes fees deducted

from salaries of the general maintenance personnel.

6. Transport expenses

This includes costs on car fleet and mechanisms, including all types of

repairs, procurement and storage of petroleum, oil and lubricants,

payment for work and social fees, as well as payments for work and

transport.

3. Depreciation This item includes depreciation payments for full recovery of main

infrastructural assets

4. Training of staff This includes payment for training of personnel, if it is compulsory,

9

according to the legislation

5. Banking services

This includes payment of interests to banks on loans and credit

agreements, as well as payment of interests on procurement of material

resources (works, services provided by external economic agents) on

trust, provided material resources (by service providers), within the

limits established in accordance with the legislation of the Republic of

Tajikistan. This also includes payment to banks for services on

contracts on sales commissions (factoring) operations, on giving

salaries to employees through banks.

6. Ecological fees

This includes costs on pollutants discharge, industrial effluents into the

environment within the limit of the established maximum permissible

harmful impacts (MPHI) from pollutants.

7. Repair of fire-protection

equipment

This includes costs on procurement and maintenance of fire prevention

devices and materials (fire hydrants, fire extinguishers, hooks, shovels,

sand, etc.)

8. Advisory and

methodological services

This includes costs on consultancy and methodological contracts with

economic agents and individual consultants

9. Travel expenses

Costs on all types of business trips of managers, including unit

managers, according to standards established in the legislation (round-

trip costs and other business trip expenses).

Additional payments on discretion of the head of the enterprise or

organization as an exception and related to business trips above the

norm of compensation, are processed according to the legislation at the

expense of the profit remaining at disposal of the operator.

10. Fees and contributions

This includes costs on paying taxes and fees established in the

legislation of the Republic of Tajikistan (national and local), included

in production costs.

11. Miscellaneous costs

Printing, postal, telegraph expenses of the enterprise or organization in

general (including expenses of units, sites, etc.); stationery,

stenographic and binding of books, procurement of letterheads and

paper for reporting for the enterprise or organization in general;

expenses on maintenance and repair of management engineering tools,

commutators, communication centers and the dispatcher centers the

enterprise or organization in general for computer bureaus; payment for

services of external computer centers conducting calculations for

internal production purposes (e.g. payroll accounting, etc.),

maintenance of buildings and premises belonging to the enterprise or

organization (heating, illumination, water supply and sewage), cleaning

of premises, repair of the inventory and buildings; expenses on services

provided by external organizations in the area of management in cases

where the enterprise or organization itself does not perform certain

functional duties, logistical technical and transport services for the

administrative and management personnel of the organization,

including expenses on maintenance of the car fleet and compensations

(within the limit established in the legislation) for business trips,

including business trips performed in private vehicles. Additional

payments performed by decision of the head of the organization as

exceptions, as compensations for the use of private cars in business

trips, above the norms of compensation established in the legislation at

the expense of the profit remaining at disposal of the operator.

12. Non-operating expenses

Costs on advertisement, technical maintenance of illuminated

advertisement, participation in exhibitions, fairs, etc. Expenses not

related to activities of the operator.

13. Profitability

Ultimate level of feasibility taken into consideration in establishing

water supply and sewage tariffs is 15% of production costs in service

provision, i.e. service provision production costs without taking into

account the cost of procured water. According to the Resolution of the

Government of the Republic of Tajikistan #357 dated 31 July 2001, for

subsidiary enterprises of the State Unitary Enterprise under the

Municipal Housing Facility, the feasibility level is established as up to

10 %.

10

4. PROCEDURE FOR ESTIMATING ECONOMICALLY FEASIBLE TARIFFS

FOR WATER SUPPLY AND SEWAGE OPERATORS

4.1. Production costs of water supply and water discharge is estimated by stages of

technological processes and by costing items presented to water supply and sewage operators

in this Methodology.

4.2. Production cost estimates are performed on the basis of main indicators of the water

supply and discharge system.

4.3. Recording of delivered drinking water and discharged sewage water is maintained

according to metering equipment. In case of absence of such measuring equipment among

customers, volumes of consumed water and discharged sewage water is estimated according

to established normative standards1.

Basic indexes in the water supply system

№ Indexes measurem

ent unit

Reporting period Accounting

period Comments plann

ed factually

1.

Lifted water (pumping stations of the first

lifting)

thousand

cubic

meters

including ground water

thousand

cubic

meters

2. through water purification facilities

thousand

cubic

meters

3. water received from aside

thousand

cubic

meters

4.

water delivered to the network, including

thousand

cubic

meters

the water supplied through operator’s

own pumps

thousand

cubic

meters

by gravity

thousand

cubic

meters

water received from aside

thousand

cubic

meters

5. Consumption for own needs (not more

than 4% СНиП 2-04-02-84)

thousand

cubic

meters

%

6.

Total volume of sold water

thousand

cubic

meters

Including water for residents

thousand

cubic

meters

Including water that went through water

meters

thousand

cubic

meters

To budget organizations thousand

1 Приложения № 1,2,3 к Правилам пользования системами коммунального водоснабжения и канализации в РТ утвержденного

постановлением Правительства РТ от 30 апрели 2011 года, № 234

11

cubic

meters


meters

thousand

cubic

meters

To other consumers

thousand

cubic

meters


meters

thousand

cubic

meters

7. Production capacity of the first lifting

level pumping stations

thousand

cubic

meters в

сутки

8. Number of accidents per year number

9. Leakage and unaccounted discharge of

water

thousand

cubic

meters

10.

Annual average balance cost of water

facilities and networks’ production

capacity

thousand

Somoni

11.

Number of all employees involved in

water supply and maintenance of these

installations

persons

12. Number of residents having access to

drinking water supply

thousand

persons

Cost pool on main production stages and estimate items allows to define production

costs and main trends of their decrease at each stage of technological process (cycle).

4.4. Production cost is estimated separately on water supply and water discharge by main

stages of the water production technological process (discharge of sewage water):

lifting of water (pumping of sewage water);

purification of water (cleaning of sewage water, sludge treatment and burial ground

disposal);

transportation of water (transportation and utilization of sewage water).

Operators are obliged to conduct separate bookkeeping of revenues (including revenues

from residents, budget organizations, enterprises, organizations and commercial structures)

and costs (according to qualification of costs) on water supply and sewage (discharge of

sewage liquids), and reflect these in financial and economic reports according to the

legislation2.

4.5. While estimating the cost of services provided by water and sewage enterprises,

items must be broken down into production stages, as it is shown in the following table:

Water supply Effluent discharge

I. Water lifting I. Pumping and discharge of sewage

- electricity - electricity

- depreciation - depreciation

- repair and technical maintenance - repair and technical maintenance

- salaries - salaries

- social fees - social fees

- shop costs - shop costs

II. Water purification II. Waste water treatment

- chemicals - chemicals


2 The Law of the Republic of Tajikistan “On bookkeeping”, 14 May 1999, #750

12






III. Transportation of water III. Transportation and waste management







4.6. The full production cost of sold water in monetary value is defined as a total sum of

all expenses by stages of technological processes and expenses on procurement of water,

repair and rehabilitation works, repair fund, other direct, general maintenance and non-

operating costs.

4.7. The full production cost of water discharge in monetary value is defined as a total

sum of all expenses by stages of technological processes, expenses on repair and

rehabilitation works, repair fund, other direct, general maintenance and non-operating costs.

4.8. The basis for full cost estimate of sold water (effluent disposal) are estimates on

each cost item.

4.9. The planned production cost per unit of service in water supply (effluent disposal)

for a meter relevant to this service (cubic meters of sold water and cubic meters of disposed

water) is estimated by division of the total production cost by the planned volume of service

provided in natural expression.

13

5. COST ESTIMATION ON PRODUCTION STAGES IN WATER SUPPLY

5.1. COST ESTIMATES IN WATER LIFTING

5.1.1. Costs in water lifting consist of costs in the use of the following:

intake facilities, among which are facilities for ground water intake or water intake

structures (water-supply wells, dug wells, horizontal water intakes, combined

water intakes, radial wells, water-catchment constructions, etc.), as well as

facilities for ground water intake.

buildings, installations and pumping equipment at all levels of water lifting.

The costs of water lifting include the costs for electricity consumed by all pumping

stations; depreciation of buildings, installations mentioned above, equipment and other main

assets; salaries for workers directly involved in maintenance of pumping stations at all levels

of water lifting and other water lifting installations; social fees of these workers, and shop

costs at all stages of water lifting.

5.1.2. The item “Electricity” defines costs on current tariffs3 on electricity consumed for

water lifting and ensuring proper pressure in the network, taking into account the capacity of

electric equipment (electric engines, transformers, pumps, etc.)

Operator’s electricity costs are estimated with taking into account the current electricity

tariffs while developing water supply tariffs.

The total consumption of electricity (kWatt/hour) for water lifting and ensuring proper

pressure in the system can be established by passport data of the equipment (results of tests),

as well as by summing multiplied volumes of water delivered to the system in thousands of

cubic meters by specific consumption rate of electricity in kWatt/hour per 1000 cubic meters

of water at each pumping station (pumping installation).

Electricity consumed for illumination refers to relevant items of shop expenses.

3 Endorsed by the Resolution of the Government of the Republic of Tajikistan for the items: electricity tariffs for

water supply pumps and pumping stations

14

ESTIMATES OF ELECTRICITY COSTS

___________________ 201 ____ by enterprise ________________________

____________________________________________________

(type of service)

№ Stage of production

process

Reporting period Period under review

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tity

, p

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tt

Wo

rk

of

pu

mp

per

da

y,

per

ho

ur

Co

nsu

mp

tio

n o

f el

ectr

icit

y

kW

att

/ho

ur

Tarif

f, d

ira

m k

Wa

tt/h

ou

r

To

tal

cost

s, t

ho

usa

nd

So

mo

ni

kW

att

/h/c

ub

ic m

ete

rs

of

wa

ter

So

mo

ni/

cu

bic

mete

rs

of

wa

ter

1.

Lifting of water

(pumping of

sewage water)

2.

Water purification

(sewage water

treatment)

3.

Transportation of

water

(transportation and

disposal of sewage

water)

4. Shop costs

5. General

maintenance costs

...

...

TOTAL:

Chief engineer _______________________ ________________ (name) signature

Chief electrician _______________________ ________________ (name) signature

Chief accountant _______________________ ________________ (name) signature

4.1.3. The item “Salaries” defines a normative salary fund for workers of pumping

stations of the water supply system, pumping installations, ground water intake facilities and

surface water intake facilities of the following professions:

- operator of pumping installations;

- operator of water intake facilities;

- electrician in charge of repair and maintenance of electric equipment;

- mechanic on instrumentation and automated control systems;

- and other workers directly involved in water lifting facilities.

Transport workers (drivers, etc.), auxiliary workers, and other maintenance personnel at

pumping stations refer to shop staff, and their salaries are reflected in the item “Shop costs”.

To estimate salaries for workers, it is initially necessary to define their optimal number,

which is recommended to establish applying industry regulatory documents (standards of the

number of workers, standards of servicing, time norms)4.

4 Norms of number of workers involved in maintenance of networks, purification facilities, pumping stations, water supply and

sewage systems. The Central Bureau for Labor Norms, Moscow, 1977.

15

The salary fund consists of the size of workers’ salaries estimated in accordance with

monthly tariffs and in accordance with Recommendations on the labor payment system based

on the unified tariff net (UTN) approved by the Ministry of Labor and Social Protection of the

Republic of Tajikistan on 25.09.2003, #8/3694 (Annex #).

The size of salary for the first grade workers, depending on availability of funds and

operator’s opportunities, is established in the Labor Contract, according to the minimal

consumption basket defined by the Ministry of Labor and Social Protection of the Republic of

Tajikistan.

If the operator does not have additional financial opportunities, salaries of workers are

defined in accordance with the minimal size of salaries described in the Order of the President

of the Republic of Tajikistan: the size of the salary in the first line of the tariff table cannot be

lower than the level of the minimal salary established in the country.

The fund of additional salaries consists of additional payments and bonuses paid at the

expense of production costs:

- additional payment for night shifts, hard, harmful, severe and especially harmful labor

conditions5;

- remunerations on current bonuses, quarterly rewards, annual rewards;

- district regulations remunerations and other payments and costs described in the

legislation and normative-methodological documents, labor contracts and other local

normative documents of the enterprise6.

Reserve for vacations of workers is also estimated according to this item for workers

directly involved in maintenance of water lifting installations.

A superior body (if such one does not exist, the local administrative body) shall agree

upon a personnel list and the total salary fund included in production costs (according to

operator’s justifications) for every water supply and sewage operator (if it is a monopolist in

the communal service market).

With the purpose of rational distribution of labor, facilitating the creation of a feasible

mechanism of delimitation of functions, authorities and responsibilities, clear regulation of

labor activities among specialists, engineers and technical staff at water supply and sewage

enterprises in modern market environment, water supply and sewage operators are guided by

the National Classifier of professions and wage grades.7

Taking into consideration the lack of workers of relevant qualification to serve water

supply and sewage installations, operators have the right to accept combination of different

sets of professional duties to be performed by one worker or specialist with obligatory

observation of the Labor Code of the Republic of Tajikistan8.

5 Articles 12;18;24 of the Law “On Labor Protection” of the republic of Tajikistan, 19 May 2009, #517.

6 Resolution of the Government of the Republic of Tajikistan, 3 July 2003, #302 “On establishing district coefficients and

coefficients for work in deserts, arid areas and highland territories”. 7 The National Classifier of professions and wage grades approved at the meeting of the Academic Council, Ministry of Labor

and Social Protection of the Republic of Tajikistan, 4 March 2004. 8 Article 105(1) of the Labor Code of the Republic of Tajikistan.

16

ESTIMATES OF LABOR SALARIES

___________________ 200 ______

____________________________________________________

(type of service)

№ Position, profession of the

worker


no

tice

sta

ff

gra

de

tari

ff l

evel

fa

cto

r

bo

nu

s

ad

dit

ion

al

pa

ym

ents

,

bo

nu

ses

am

ou

nt

sta

ff

gra

de

tari

ff l

evel

fa

cto

r

bo

nu

s

ad

dit

ion

al

pa

ym

ents

,

bo

nu

ses

am

ou

nt

1. Lifting of water (pumping of

sewage water)

TOTAL:

2. Water purification (sewage

water treatment)

TOTAL:

3.

Transportation of water

(transportation and disposal of

sewage water)

TOTAL:

4. General maintenance and repair

TOTAL:

5. Shop costs

... ...

TOTAL:


Chief economist _______________________ ________________ (name) signature

4.1.4. The item “Social fees” defines the fees according to legal standards to the state

non-budget social funds from the costs on remuneration for workers (25%)9 described in the

Article “Salary costs”.

4.1.5. The item “Depreciation” defines depreciation payments for rehabilitation of main

assets at pumping stations and other water lifting installations: water intake facilities,

buildings of pumping stations at all levels, pumping and electric equipment, gravity flowing

systems.

The operator is obliged to accumulate depreciation payments from the revenues of sold

products. The accumulated depreciation payments form the depreciation fund of cash assets

for rehabilitation and re-creation of main assets. The size of annual depreciation payments of

the enterprise or organization is estimated as a share of initial value of main assets. The

standard value of this share is called the rate of depreciation. The services’ production cost reflects depreciation payments for full rehabilitation of

main assets belonging to the water supply and sewage operator, or it is under its operational

management (which implies that it is on its balance).

9 статья 216 Налогового Кодекса РТ

17

While developing tariffs of a water supply and sewage enterprise, the production costs

also include the full amount of depreciation, regardless of the ownership of main assets, i.e.

they can belong to the operator, or be under its economic control or operational service.

In such a way, the main difference between the service production costs and the costs of a

certain organization is that the organization charges depreciation costs and allocates amounts

for the repair fund only from the share of main assets, which are given to it for economic

control, and which are on its balance, and which are used in the technological processes.

Depreciated assets are the property (main assets and non-material assets) in the balance of

the organization on the right of possession, in operative management or under economic

control to ensure the performance of its charter activities; this particular property is

considered in the estimation of depreciation and tariffs.

The following items do not refer to depreciated assets:

- main assets transferred to conservation for more than three months by decision of

managers;

- main assets under reconstruction or capital repair for more than 12 months by decision

of managers.

While planning and documenting production costs according to the initial value of main

assets acquired by paying, the amount of factual cost of acquisition, construction and

production should be considered, except for the valued added cost and other compensated

taxes. Taking the main assets to accounting, it should be considered that in bookkeeping, the

amount differences and interest rates on borrowed assets increase the assets’ value, and this

should be taken into account while including the depreciation costs in production costs and

tariffs.

There are differences in the order of defining the reinstatement cost and the depreciated

cost of the main assets under depreciation. The reinstated cost of such property is defined as

its original cost taking into account revaluations conducted in accordance with the Resolution

of the Government of the Republic of Tajikistan (the form of revaluation is attached)

Revaluations to be conducted by the organization in the future shall not be considered in

defining the reinstatement cost of main assets in fiscal accounting; but they should be

considered in the designing of tariffs, since depreciation is one of the main elements of

investment.

EXAMPLE #1:

On the assumption that on 1 January 2011, the operator had a centrifugal pump 1-Д315-

50/75 kWatt on its balance with reinstated cost of 80 00 Somoni.

The pump was revaluated, which is reflected in documents dated 1 January 2012. The

reinstated value of the pump is 110 00. Somoni.

According to requirements to revaluation, the reflected value dated 1 January 2012, is

adopted in the amount of 30% of the cost reflected in the operator’s book records as of 1

January 2011. In such a way, the reinstated value of the pump for the purpose of taxation is

104 00 Somoni. (80 00. + 80 00. * 30 %).

Accordingly, the reinstated value of the pump in the book records, that is adopted while

calculating depreciation, included in the tariff, as of 1 January 2012 is 110 00 Somoni; and for

the purpose of taxation, it is 104 00 Somoni. The difference in the evaluation of the item is

600 Somoni. It should be considered that no records are to be done in book records regarding

the difference indicated above.

Besides that, while accepting the pump, which was revaluated, revaluation of the

depreciation amount should be performed in the same proportion as it is done with the

revaluated main assets with the purpose of taxation.

EXAMPLE #2:

18

Let’s use the assumption in the first showcase, and let’s assume that the amount of

depreciation for the period from the beginning of exploitation of the pump before 1

January 2011 was 40 00 Somoni.

According to requirements, it is needed to revaluate the amount of depreciation

following the rules described above..

The revaluated amount of depreciation in this case will be 52 00 Somoni. (40 00 + 40

00 * 30 %).

In such a way, the depreciated value of the item as of 1 January 2012 is 52 00. (104

00. – 52 00).

This particular value must be applied as depreciable value to estimate depreciation fee

for this pump for the purpose of fiscal accounting (taxation).

It should be taken into consideration that the positive difference, which resulted from

revaluation of the depreciation amount, is not considered as profit for the purpose of

taxation.

The depreciation amount is calculated in accordance with depreciation rates described in

Article 118 of the Tax Code of the Republic of Tajikistan10

.

The main assets subject to depreciation are divided into two groups with the following

depreciation rates.

group Type of property Depreciation rate (in %)

1.

Car-and-tractor road machinery; special tools, inventory and

accessories; computers; peripheral devices and handling

techniques

20

2.

Trucks, buses, special vehicles and trailers; vehicles and

equipment for all sectors of industry and foundry production;

press-forging equipment; civil engineering equipment; agricultural

vehicles and equipment; light vehicles; office furniture

15

3.

Heavy machinery and equipment; technical equipment, turbine

equipment, electric motors and diesel generators; power

transmission devices; electronic devices and communications

facilities; pipelines

8

4. Buildings, constructions and installations, railway, sea, river and

air transportation vehicles 7

5. Assets subject to depreciation, which do not belong to other

categories 10

Depreciation payments on each group of main assets (hereinafter, “the group”) are

calculated through application of depreciation rates to the group’s transaction table at the end

of the calendar year. Depreciation payments on main assets and non-material assets, which

have arrived (or have been withdrawn) during the calendar year are performed (or terminated)

starting from the next calendar month, after the factual use (factual retirement of assets) from

the total amount of gross fixed assets (production buildings, installations, pavilions,

transmission devices, working and energy facilities, measuring and regulating devices, tools

and manufacturing inventory) used on the stage of water lifting, taking into account their

arrival and withdrawal.

If the group’s transaction table is lower than 50 indexes for calculation by the end of the

year, the amount of transaction table is subject to deduction.

If all group’s main assets have been sold, transferred or liquidated, the group’s transaction

table by the end of the calendar year is subject to deduction according to the requirement

described above.

10 Налоговый Кодекс РТ от 17 сентября 2012, №901

19

According to the Law of the Republic of Tajikistan “On bookkeeping in the Republic of

Tajikistan”, operators must annually conduct inventory of main assets. Upon the

accomplishment of the inventory, operators estimate the current condition of main assets.

ESTIMATES OF DEPRECIATION PAYMENTS at the enterprise ____________

_________________ 201__

____________________________________________________

(type of service)

№

The list of main assets,

stages of industrial

processes and items of

calculation of services


Remarks Balance cost

in thousand

Somoni

Norm of

depreciation

payments

%

Amount of

depreciation

payments in

thousand

Somoni

Balance cost

in thousand

Somoni

Norm of

depreciation

payments

%

Amount of

depreciation

payments in

thousand

Somoni

1.

Lifting of water

(pumping of sewage

water)

TOTAL:

2.

Water purification

(sewage water

treatment)

TOTAL:

3.

Transportation of

water (transportation

and disposal of

sewage water)

TOTAL:

... .....

TOTAL:



4.1.6. In the item Repair and technical maintenance”, costs are estimated when the

operator itself performs the works using its own resources, based on estimate cost according

to normative documents on each type of repair works during the planned period to repair

constructions and equipment used in water lifting.

20

ESTIMATES OF REPAIR AND TECHNICAL MAINTENANCE at the enterprise

_________________ 201_

____________________________________________________

(type of service)

# Type of work

(main funds)

Balance

sheet

value

(Somoni)

Amount for repair,

thousand Somoni

Estimated amount

for repair,

thousand Somoni Remarks


planned factual

1.

Lifting of water

(pumping of sewage

water)

TOTAL: 2. Water purification

(sewage water treatment)

TOTAL: 3. Transportation of water

(transportation and

disposal of sewage

water)

TOTAL: .... TOTAL:


Electrical supervisor _______________________ ________________ (name) signature


4.1.7. In the item “Shop costs” complex expenses are estimated, which include the

following:

- expenses on engineers and technical personnel; - expenses on other shop staff;

- social fees;

- depreciation;

- wear and tear of little value and non-durable inventory;

- repair and technical maintenance of main assets;

- maintenance of buildings, installations and inventory;

- labor protection;

- other costs.

4.1.7.1. The costs of “Engineers and technical personnel” include payment for labor and

reserve for leave allowance of managers, specialists and other personnel involved in operative

management and maintenance of water supply lifting facilities (supervisors of operating

facilities, workshops, shifts, pumping stations, engineers, technicians and foremen).

The order of cost estimates on engineers and technical personnel is similar to the cost

estimates “On salaries and payment for work” while estimating costs on water lifting

(п.4.1.3.).

4.1.7.2. The costs of “Engineers and technical personnel” include payment for labor and

reserve for leave allowance of workers involved in water lifting (water supply), but not

directly involved in the maintenance of installations (drivers, mechanics, maintenance

workers, etc.). The order of cost estimate for other shop personnel is similar to the cost

21

estimates on the item “On salaries and payment for work” while estimating costs on water

lifting. (п.4.1.3.).

4.1.7.3. “Social fees” are estimated from expenses on labor payment to shop managers

and other shop personnel. The order of cost estimate on this item is similar to estimates of

social fees (п.4.1.4.).

4.1.7.4. The “Depreciation” costs include depreciation payments for full rehabilitation of

main shop assets (separate shop buildings, installations, inventory, etc.), which can be referred

directly to a production process of this industrial cycle, apart from the main assets, which

depreciation payments refer to direct costs and thus, not applicable. The order of cost estimate

on this item is similar to estimates of depreciation payment of main assets п.4.1.5.

4.1.7.5. The item “Wear and tear of little value and non-durable inventory” includes the

amount of wear and tear of tools, industrial inventory, appliances, special clothing and shoes

not referring to enterprise’s main assets.

4.1.7.6. The item “Repair and technical maintenance of main assets” includes costs on

current repair of industrial equipment, installations and appliances in every shop separately,

which are not included in the process of cost estimates п.4.1.4. The order of cost estimate on

this item is similar to estimates on п.4.1.6.

4.1.7.7. The item “Maintenance of buildings, installations and inventory” includes the

following:

- costs on salaries with deductions on social insurance of workers involved in

maintenance and cleaning of industrial premises, cleaning of chimneys and roofs from snow,

disposition of garbage, cleaning of passages leading to shops, pavements, etc.;

- costs on materials and inventory consumed for shop needs (electric bulbs, brooms,

dusters, soap and other materials and inventory needed for cleaning of premises, and the need

of which is not described in normative guidelines);

- costs on illumination of premises, water supply and sewage, fuel, water supply for

heating and hot water in shop premises.

The order of cost estimate on maintenance of buildings, installations and inventory is

similar to estimates on items described above.

4.1.7.8. The “Labor protection” item includes costs on ensuring normal conditions of

labor and accident prevention:

- arrangement and maintenance of fencing, hatches, apertures, equipping workplaces

with special devices of non-capital character;

- provision of special clothing, shoes and food to workers, as it is defined in relevant

legislation *(6);

- arrangement and maintenance of disinfection chambers, wash stands and other

equipment ensuring proper sanitary-hygienic conditions for workers;

- other activities ensuring labor protection described in the legislation, in labor contract

and local regulations and acts of the operator.

4.1.7.9. The “Other shop costs” include costs on testing, rationalization and other shop

expenses, which are not included in previous items, including property insurance costs taken

into account in the list of shop production facilities.

22

COST ESTIMATE OF SHOP EXPENSES

_________________ 200_

____________________________________________________

(type of service)

№ Item


Remarks Planned costs,

thousand

Somoni

Factual costs,

thousand Somoni

Planned costs, thousand

Somoni

1. expenses on engineers and

technical personnel

2. expenses on other shop staff

3. social fees

4. depreciation

5. wear and tear of little value and

non-durable inventory

6. repair and technical maintenance

of main assets

7. maintenance of buildings,

installations and inventory

8. labor protection

9. other costs

TOTAL:


Chief energy supervisor _______________________ ________________ (name) signature


4.2. ESTIMATES ON WATER PURIFICATION

Water purification costs include expenses on chemicals, purification of water, electricity

consumed by water purification facilities, depreciation payments for main water purification

assets, repair and technical maintenance, including capital repair of purification facilities,

social fees of this category of workers, and shop costs.

Water purification costs consist of expenses on maintenance of water purification

stations and water treatment installations:

- clearing and discoloration of water: netted drum filters, chemical plants (reaction and

charging tanks, mixing machines, pipelines, etc.), mixing machines (devices for batching and

mixers), air-purge drums, coagulation tanks, vertical and horizontal clarification tanks,

brightening agents with measured residuum, installations for clearing of highly opaque water,

filters and contact flocculator;

- decontamination of water: chlorination plants (expendable materials, chlorine

warehouses, chlorine evaporimeters and cholring batcher premises), auxiliary premises for

water chlorination (compressors, ventilation chambers, etc.), chlorine pipes, pipelines for

chlorinated water, bubbling washers, reaction tanks, electrolyzers, installations for

ammoniation, equipment for ammoniation facilities, antibacterial installations;

4.2.1. The item “Chemicals” defines cost estimates on chemicals: coagulants, liquid

chlorine, hydrogen nitride, acrylamide polymer, lime carbonate and other types of chemicals

applied in certain conditions for water purification.

Norms of discharge of chemicals are estimated on the basis of СНиП 2.04.02-84 “Water

supply. External networks and installations”11

taking into account local conditions.

23

ESTIMATES ON CONSUMPTION OF CHEMICALS USED IN THE

TECHNOLOGICAL PROCESS OF PURIFICATION

_________________ 201_

____________________________________________________

(type of service)

Table 3.2.

Name of material

(chemical)

Unit

of

measu

rement

Bill of

materials

(chemical) per 1 thousand

cubic meters of

water

Reporting period Accounting period

Volume of

purified

water, thousand

cubic meters

Total demand

of materials

(chemicals), thousand cubic

meters

Cost per

ton, in Somoni

Total cost of materials,

thousand

Somoni

Volume of

purified

water, thousand

cubic meters

Total

demand of materials

(chemicals),

thousand tons

Cost per ton,

in Somoni

Total cost of materials,

thousand

Somoni

Coagulant kg

Aluminium sulphate kg

Chlorine kg

Acrylamide polymer kg

Other

Total


Chief economist _______________________ ________________ (name) signature


4.2.2. The item “Electricity” estimates consumption of electricity on existing electricity

tariffs needed for water purification, as well as payment for associated capacity of electric

equipment:

Procedure of estimates is similar to the one in estimating water lifting costs (п.4.1.2.)

4.2.3. The item “Payment for labor” defines the labor salary fund for workers involved in

water purification at the facility (operators of filters, chlorination installation, coagulant

workers, operators of compressor installations, ozone devices, and other professions directly

involved in water purification facilities.

Wages of laboratory technicians, samplers, mechanics, electricians, maintenance

workers and other employees not working at water purification installations, but participating

in the process of water purification refer to the item “Shop costs”.

The salary fund for workers at a water purification facility is estimated in the same way

as it is done for water lifting (п.4.1.3.).

4.2.4. Cost estimates in the item “Social fees” is done in a similar way as it is done for

the item “Social fees” for water lifting (п.4.1.4.).

4.2.5. The item “Depreciation” defines depreciation payments for full rehabilitation of the

purification facility’s main assets (compressors, ventilation chambers, chlorine pipelines,

11 СНиП 2.04.02-84 “Water supply. External networks and installations”, endorsed by the Resolution of the State

Committee of the USSR on Construction on 27 July 1984, #123.

24

ропроводы, трубопроводы для хлорной воды, sprinkling scrubbers, reaction tanks,

electrolyzers, installations for ammonization, ammonization facility equipment,

microbiological installations);

Cost estimates in this item is performed similarly to cost estimates on the item

“Depreciation” while estimating water lifting expenses (п.4.1.5.).

4.2.6. The item “Repair and technical maintenance” defines costs for repair and technical

maintenance of a water purification facility.

Costs under this item are estimated in a similar way as those under the item “Repair and

technical maintenance” while estimating costs on waster lifting (п.4.1.6.).

4.2.7. The item “Shop costs” defines costs related to management and maintenance of

the “water cleaning” technological stage. This item is a complex one; the elements and the

order of cost estimation is similar to the order of cost estimation of shop costs at the state of

“water lifting”.

At that, the item “Salaries of engineers and technical personnel” includes payment for

labor and reserve for vocation pay of managers, specialists and workers performing the

following tasks:

- operational management of maintenance at water conditioning stations (managers of

water conditioning station, shop, site, shift, engineers, technicians, foremen);

- water quality control (head of laboratory, engineer, technician, assistant chemist of

chemical and bacteriological tests, assistant on chemical tests).

“Salaries to other shop personnel” includes expenses on salaries for labor and social fees

of instrumentation and automated control systems mechanics, electricians in charge of repair

and maintenance of electric equipment, assistants chemists of chemical and bacteriological

tests, assistants on chemical tests, samplers, maintenance workers, drivers of cars and other

professions not directly involved at water purification facilities, but participating in the

process of water purification.

“Other shop costs” include water consumed for own technological needs (washing

filters and contact flocculators, cleaning of clarifiers, blowing-off of flocculators with wighted

sediments and other industrial needs). At that, the volume of water used for own needs should

be justified by calculations based on an adopted water purification technology and designed

data.

4.3. COST ESTIMATES ON WATER RECEIVED FROM EXTERNAL SOURCES

The item “Payment for water received from external sources” estimates expenses on

water bought from external sources according to established tariffs.

Estimates on water from external sources are made on the basis of total sales, availability

of own capacities ensuring this amount, and the price of one cubic meter of water bought on

the contract with supplier.

25

COST ESTIMATES ON WATER RECEIVED FROM EXTERNAL SOURCES

__________________________________

Name of organization

_________________ 200_____

____________________________________________________

(type of service)

№ Suppliers


Примечания

Volume

in

thousand

cubic

meters

Tariff

for 1 m3

Cost in

thousand

Somoni

Volume

in

thousand

cubic

meters

Tariff

for 1 m3

Cost in

thousand

Somoni

Interpretation on

suppliers

TOTAL;:



4.4. COST ESTIMATES ON TRANSPORTATION OF WATER

Cost estimates on transportation of water include estimates on maintenance and repair of

water pipelines.

Expenses on maintenance and repair of the network include electricity costs,

depreciation, repair and technical maintenance of the network, consumers’ measuring devices,

payment to workers, social fees and shop costs.

4.4.1. The item “Electricity” defines expenditures on existing tariffs of electricity

consumed for transportation of water, and for relevant electric equipment.

Estimates on this item are similar to estimates on water lifting (п.4.1.2.)

4.4.2. The item “Salaries for labor” defines the salary fund for workers involved in

maintenance and repair of the network equipment: walking inspectors of water supply

networks, controllers of measuring devices, etc.

The salary fund for workers in charge of maintenance of water supply networks is

estimated in the same way as the water lifting one (п.4.1.3.).

4.4.3.The item “Social fees” is estimated in the same way as the “social fees” in defining

expenses on water lifting (п.4.1.4.).

4.4.4. The item “Depreciation” defines depreciation payments for full rehabilitation of

the network’s main assets: water conduits, distribution water line, fire hydrants, wells, water

posts and other equipment within the network.

Estimates on this item are performed similarly to estimates on the item “Depreciation”

on water lifting (п.4.1.5.).

4.4.5. The item “Repair and technical maintenance” defines expenses on repair and

technical maintenance of the water supply network and water measuring devices.

Estimates on this item are performed similarly to estimates on the item “Repair and

technical maintenance” while estimating water lifting costs (п.4.1.6.).

4.4.6. The item “Shop costs” defines expenses related to management and maintenance

of the “transportation of water” technological stage. This item is a complex one; its elements

and the order of estimation of each of them is similar to estimation of shop costs on the “water

lifting” stage.

26

At that, the item “Salaries for engineers and technical personnel” include expenses on

labor and leave allowance for specialists and workers involved in operational maintenance of

water supply networks (head of service, site, engineer, technician, mechanic, foreman). The

item “Salaries for other shop personnel” include salaries for electric and gas welders, drivers

of cars, maintenance workers, and other professions involved in the process of water

transportation.

V. COST ESTIMATES BY STATES OF PRODUCTION PROCESS WITHIN THE

WATER DISCHARGE SYSTEM

5.1. COST ESTIMATES ON WASTE WATER DISCHARGE

Cost estimates on water discharge include expenses on electricity, depreciation, repair

and technical maintenance, payment of salaries to workers, social fees and shop costs.

The waste water discharge costs include expenses on all lift stations (machine rooms,

lifting-transport equipment, receiver reservoirs, pumping units, drag and delivery pipes,

manual cleaning grates and screening grits). If production premises are equipped with waste

water pumps, they should be identified as a separate item for cost estimate in this

technological cycle.

5.1.1. The item “Electricity” defines expenses on electricity consumed for pumping of

waste water according to existing tariffs, and associated costs on electric equipment:

Estimates on this item are similar to the item “water lifting” (п.4.1.2.).

5.1.2. The item “Salaries for labor” define normative salary fund for workers serving

installations and equipment at lift stations: pumping stations’ machinery operators, grate

operators (waste water pumping stations), maintenance workers of controlling and measuring

devices, electricians, etc.

Estimates on this item, as well as for the item “Social fees” are similar to the item

“Salaries for labor” and “Social fees” on water lifting (п. 4.1.3. и п.4.1.4.).

5.1.3. The item “Depreciation” defines depreciation payments for full rehabilitation of

main assets at left stations: premises of grates and grinders, receiving reservoirs, machinery

hall, pumping and electric equipment, and other installations and sewage water discharge

devices.

Estimates on this item are similar to estimates in the relevant item of defining costs on

water lifting (п.4.1.5.).

5.1.4. The item “Repair and technical maintenance” defines costs similarly to the

estimates on water lifting (п.4.1.6.).

5.1.5. The item “Shop costs” defines costs related to management and technological

maintenance of the stage “Waste water discharge”; elements of this item and the order of cost

estimates on each of them are similar to estimates of shop costs at the “water lifting” stage.

At that, the item “Salaries for technical personnel” include labor costs and leave

allowance reserve for managers, specialists and workers involved in operational management

and exploitation of water sewage pumping stations (shop manager, site manager, manager of

waste water pumping station, engineer, technician and foreman).

5.2. DEFINING EXPENSES FOR WASTEWATER TREATMENT

Wastewater treatment expenditures will include the cost of materials (chemical agents),

electricity, depreciation, repairs and maintenance, calculated similarly to the expenditure

items on pumping wastewater, as well as on wages, social allocations, departmental costs:

Wastewater expenditures comprise operation of sewage treatment facilities costs:

27

for mechanical wastewater treatment (bars, sand traps, sewage regulators, double check

and primary dirt collectors, humus tanks, septic tanks, hydrocyclons, spinners, flotation

machines, degasifiers;

for biological wastewater treatment (preaerator tanks, biocoagulators, biofilters,

aerotanks, aeration machines for complete oxidation, oxidation ditches, disposal fields,

sand-gravel filters, filtrating trenches and pits, biological ponds);

for saturation of treated wastewater with oxygen (multilevel spillway-aerators, chutes or

airlifts);

for wastewater disinfection: (chlorinators and electrolysis plants, electrical facilities,

control cabinet, mixing systems of any type, contact reservoirs);

for deep wastewater treatment (filters with granular and polymeric input of different

constructions, drum strainers, biological ponds, biosorbents);

for physical-chemical treatment of wastewater (neutralizing wastewater: dirt collectors,

slime beds, vacuum-filters or press-filters, reservoirs, pipe lines; reagent plants:

hydraulic, mechanical and aerated mixers, aerated sand traps or preaerators, coagulation

tanks; disinfection of cyano-containing wastewater: batch plants comprising reactions

cells, etc.);

for adsorption wastewater treatment (absorbers, pumps, hydroelevators, etc.);

for electrochemical wastewater treatment (electorlysers, electrocoagulators);

for the wastewater sedimentation treatment (concentrating and thickening agents,

methane tanks, aerobic stabilizers, installations for mechanical sludge dewatering,

sludge beds, installations for disinfection, composting, thermal drying and burning or

sludge, sludge storage and stockpiling);

ultraviolet (bactericide) facilities in sewage systems;

storage of treatment materials, sludge lines.

5.2.1. The cost of chemical agents used for wastewater treatment is defined in the

“Chemical Agents” line:

The need in chemical agents is defined through multiplying the volume of wastewater

to be treated by the consumption rate of chemical agents depending on the wastewater

treatment stage.

Chemical agents consumption rate is defined based on the current standard technical

documents (to define costs for this expenditure line, it is recommended to use the current

Construction Norms and Rules 2.04.03-85 «Sewage. Outdoor Networks and Structures”12

with regard to local environment.

5.2.2. The «Electric Energy» item defines costs based on current tariffs on electricity

consumed for physical-mechanical, chemical treatment of wastewater, as well as payment for

connected capacity of electric equipment:

Procedure of calculation for this line is similar to the calculation procedure of the

similar line in defining expenditures for lifting water (para.4.1.2.).

5.2.3. On the «Labor Costs» and «Social Expenditures», standard wages and social

expenditures for the staff maintaining equipment and installations for wastewater treatment:

bar operators, sand trap operators, dirt collector operations, methane tank operators, biofilter

operators, filter operators, aerotank operators, sludge disposal plant operators, sludge bed

operators, irrigation and filtration field operators, sludge dewatering plant operators, sludge

drying plant operators, chlorination plant operators, pump operators, compressor operators,

etc.

The procedure of calculating expenditures on these items is similar to the procedure of

defining costs for “Labor Costs” and “Social Expenditures” for water lifting (para.4.1.3. and

para. 4.1.4.).

5.2.4. For the «Depreciation» line, depreciation expenses are defined for the full

restoration of fixed assets of the treatment plant; dirt collectors, slime beds, vacuum filters or

filter presses, reservoirs, pipelines; reagent plants: hydraulic, mechanical and aerating mixers,

12 Construction Norms and Rules 2.04. 03-85 «e. Outdoor Networks and Constructions» the USSR State Construction Committee.

28

aerating sand traps or pre-aerators, coagulation tank; disinfection of cyano containing waste

water. Procedure of calculation for this item is similar to the procedure of calculating for a

similar item in defining water lifting expenditures (п.4.1.5.).

5.2.5. On the «Repairs and Maintenance», the costs are defined similarly to the

procedure of water lifting cost calculation (п.4.1.6.).

5.2.6. On the “Departmental Costs”, the expenditures on management and maintenance

of the technological “Waste Water Treatment” phase are defined. Composition of elements of

this item, as well as the procedure of defining the cost of each element is similar to the

procedure of calculating department costs at the “Waste Water Pumping” phase.

At that, labor cost and vacation reserves costs for the management, specialists and

servants implementing:

- operational management of sewage treatment facilities (head of the sewage

treatment facilities, engineer, process engineer, industrial engineer, technician,

master);

- control over receiving (discharge) of wastewater of consumers (engineer,

technician, laboratory assistant).

5.3. DEFINING COSTS ON TRANSPORTATION AND UTILIZATION OF

WASTEWATER

Costs on transportation and utilization of waste water include the cost of operation

(repairs and maintenance) of network facilities of the sewage network (street, submain,

outdoor), collectors, canals, inspection pit and drop manholes, compartments, washers,

railway and automobile bed crossings, platforms, bottom pipes, sewage pressure pipelines,

discharge outlets, ventilation vaults, outlet stations, and other constructions.

Costs on maintenance and repairs of the network facilities include electricity,

depreciation, repairs and maintenance, wages, social expenditures, department costs:

These expenditure items are defined based on the same methodology used for the

technology cycle “waste water treatment”.

At that, wages of employees responsible for the maintenance and current repairs of

network facilities: linemen of plumbing systems, etc.

For the “Upkeep of Engineering Staff” item, department costs comprise wages and

reserves for vacation of managers, specialists and staff in charge of operating sewage systems

(head of the service, district, plot, engineer, technician, supervisor).

For the «Upkeep of Other Department Personnel» item, wages of electrical/gas welders,

drivers, maintenance workers and other professions of workers involved in the process of

transportation and utilization of wastewater.

5.4. DEFINING THE COST OF RESCUE AND RECOVERY WORKS

In the “Rescue and Recovery Works” item, the cost of rescue and recovery works is

defined provided establishment of an emergency dispatch service and maintenance of separate

accounting for this item. This cost item is complex and comprises the following elements:

- wages of the emergency dispatch service (engineer of rescue and recovery works, etc.);

- social expenditures for these workers;

- supplies and spare parts used for liquidation of emergencies;

- depreciation of assets belonging to the emergency dispatch service (recovery vehicles

and emergency dispatch service’s premises);

- lubricants used for the recovery vehicles during emergency liquidation process;

- payment for emergency liquidation services of departments and subcontracted

organizations, the single dispatch service.

29

The procedure of defining costs for payment of wages to the emergency dispatch service

personnel, social expenditures, supplies and spare parts, depreciation of fixed assets belonging

to the emergency dispatch service, is similar to the procedure of calculation for relevant

expenditure items of main technology cycles.

Based on the calculated demand in recovery vehicles consumption of lubricants at

current norms is defined.

The current normative documents* should be used to identify the cost of lubricants for

recovery vehicles.

For the “Payment of Services of Departments and Organizations Engaged in the

Emergency Liquidation Process” item, remuneration for work executed by subcontractors

during emergency liquidation in accordance with the contracts signed for the provision of

such services will be defined.

5.5. REPAIR STOCK FOR REHABILITATION AND CAPITAL REPAIRS

«Repair Stock» item expenditures are defined for carrying out all types of repairs at

plumbing system facilities, which by capacity and technical characteristics cannot be repaired

within one calendar year, in order to ensure equal inclusion of forthcoming fixed assets repair

expenses in the cost of water supply services (water discharge).

Taking into account that current cost of fixed assets of plumbing system facilities is too

low due to significant depreciation, or that these facilities have been included in the balance

sheets of entities with no cost. Accrued depreciation on such fixed assets is so low that they

are not enough to cover operation costs leave alone capital repairs or upgrading.

At that, calculation of normative contributions to the repairs fund is made for each type

of fixed assets based on their cost, time of repairs, as well as standard material, energy, labor,

and financial costs.

Method of developing the cost and tariff for water supply and water discharge stipulates

that the cost of service comprises expenses on repairing fixed assets, and, primarily,

replacement of worn-out networks. Expenses for repairing fixed assets recorded under the

“Repairs and Maintenance” can not be accumulated, hence, required volume of works to

replace worn-out stocks cannot be ensured.

The right of the plumbing utility to develop repair fund or reserves for the forthcoming

repair expenses to ensure equal allocation of these expenses within two and more years is

stipulated in the Article 16 of the Regulations “On Calculation of the Cost of Products

(Works, Services) in Enterprises and Organizations of the Republic of Tajikistan”13

«Enterprises and organizations developing repairs funds to ensure equal inclusion of expenses for

especially complex types of repairs of fixed assets in the cost of product (works, services) within a

number of years, shall also reflect allocations to the repairs fund defined based on the balance cost of

fixed productive assets and standard allocations approved by the enterprises and organizations

according to the established procedure. The difference between the total cost of repairs and the

amount allocated based on the standard for the cost of product (works, services) shall be reflected in

the cost of forthcoming periods or forthcoming expenses and payments”.

Allocations to the repairs fund are defined based on the aggregate value of fixed assets and

allocations rate for rehabilitation of networks, constructions and equipment.

The operators upon coordination approve rates of allocations to the repairs fund pursuant to the

established procedure with the owner of the water and waste water services (controlling entity or local

governance body). At that, the following should be taken into account:

13 Approved by the Resolution of the Government of the Republic of Tajikistan No. 210 from May 12, 1999.

30

a) when fixed assets of the engineering infrastructure facilities are transferred to the

operator for operating control, repairs fund shall be accrued both to the indicated fixed assets,

and the fixed assets used for the repairs and maintenance of engineering infrastructure

facilities (repair facilities, warehouses, workshops) with account for the peculiarities and

complexity of repair works, and also were transferred to it for operating control;

б) when fixed assets of engineering infrastructure facilities have been transferred to the

to the Water Supply and Wastewater Treatment Plant only for maintenance, then it accrues

repairs fund only for the part that is transferred to it directly for operating control, is recorded

in its balance sheet and used for maintenance and repairs of engineering infrastructure

facilities;

в) when fixed assets are transferred to the Water Supply and Wastewater Treatment Plant

on a rental basis, then, depending on the terms of agreement, repair fund can be accrued with

the lessor and included in the rent payment, and transferred to the lessor for improvements.

In the process of developing tariffs for water supply and water discharge services, the

cost shall comprise repair fund contributions regardless of whether fixed assets of the

engineering infrastructure facilities are the property of the enterprise, are under its operating

control, or maintenance.

Contributions to the repair fund shall be calculated based on each type of fixed assets

according to their cost, term of repair works, as well as material, labor, and financial cost

standards.

The starting basis for defining contributions rate to the repairs fund comprises the

following:

- life of assets;

- duration of inter-repair time;

- regulation of repair works for each type of asset, as well as their elements and

constructions;

- cost estimates for repair works (analysis of actual costs and adjustments based on

the current input norms), etc.

As terms of repair works (change in composition, organization or technology, composition of

fixed assets, etc.), terms of remuneration, cost of materials, energy, contribution rates to the

repair fund change, rates of contribution to the repair fund can be revised upon coordination

with the owner of fixed assets.

For defining the rate of contribution to the repair fund, it is important to take into account that

works that do not cause changes in functional characteristics and appropriate increase in the

book value of fixed assets are referred to the capital repairs of the engineering infrastructure

systems (networks, equipment, water supply and water discharge system facilities). Such

costs include, for instance, full disassembly of generators, equipment and devices, repairs of

basic and external parts and blocks, separate parts of external and underground pipelines,

energy networks, etc.

For the correct allocation of costs for repair works, the operator, based on the

developed production and investment programs, should arrange budgeted planning with

clear distinction of works by types (cost estimates for repair works, estimates for technical

upgrade, reconstruction, modernization, estimates for new construction).

The repair fund established in such a way is quite a reliable source of financing

rehabilitation and replacement of outdated fixed assets. These can be used practically during

the whole life of assets.

When enterprises of water and waste water service fail to create repair fund or create it

only for fixed assets of the engineering infrastructure facilities, costs of repair works (current,

capital) are planned under the “Repairs and Maintenance” item.

31

5.6. DEFINING GENERAL MAINTENANCE COSTS

5.6.1. “General Maintenance Costs” is a complex item, based on which management,

general administrative costs, fees and deductibles are defined.

5.6.2. Organization management costs comprise the following:

- remuneration to the office and management staff;

- social expenditures;

- cost of travel and movement;

- consulting and information services;

- other.

5.6.2. 1. Under “Wages”, salaries and vacation reserves for the managers, specialists and

staff involved in general management functions in the water and waste water service are

defined: general management, accounting and finance, recruitment and personnel inventory,

supply of materials and machinery, supervision and control over the capital repairs, central

file and upkeep, arrangement of maintenance of water supply systems, environment

protection, labor protection, legal services, maintenance and computerization, technical-

economic planning, labor organization and salaries, software and system administration, etc.

The cost of collecting fees for water supply services (water discharge services) is defined

based on the contracts signed with relevant organizations implementing indicated functions

(banks, telecommunication services, etc.).

When operators collect fees from the population for water supply services, the following

is defined on this element: wages of personnel in charge of collection of fees (controllers),

social expenditures, depreciation and maintenance of cash registers, and other costs related to

the collection of fees from population for water supply (water discharge) services.

Remuneration of controllers collecting fees is paid only within the amounts envisaged in

the operator’s staffing table approved by the controlling agency or owners of water and

sewage line facilities.

Remuneration of these categories of workers is defined similarly to the calculation

procedure under “Labor Costs” while defining costs for lifting water (para.4.1.3.).

5.6.2. 2. Under the “Social Expenditures” item, mandatory contributions are defined

based on the norms for “Labor Costs” set in the legislation for the employees carrying out

general functions of managing the water and waste water services.

5.6.2. 3. Under the “Travel and Movement Costs”, the cost of all types of business trips

of the staff engaged in enterprise management is defined based on the norms set by the

legislation for inclusion to the cost, as well as round trip travel expenses14

.

5.6.2. 4. Under the “Cost of Consulting and Information Services”, appropriate costs are

defined based on signed agreements directly linked to the financial-economic activities and

production (works, services) determined by the technology and organization of production or

aimed at functioning of the operator overall (general production goals).

5.6.2. 5. Under the “Other Expenses” item, overall organization costs are defined

(including departments, stations, services costs): printing, postal-telegraph and telephone,

stationery and bookbinding, purchase of reporting forms and documentation, maintenance of

calculation and organization equipment, dispatch communication, maintenance of

administrative buildings and premises of the operator (heating, lighting, water supply,

sewage), keeping premises clean, repairs of stocks, buildings, material-technical and transport

provision for the administrative managerial staff of the organization, including maintenance

of passenger vehicles and compensation (within the established legislative norms) for the use

of personal vehicles for business travel, and other costs15

.

5.6.3. The following costs are defined under the “General Running Costs”:

14 Resolution of the Government of RT No. 531 from October 31, 2008 “On the Payment of Expenses on Business Trips of the Civil Servants in Government Agencies and Institutions Abroad and within the Republic of Tajikistan”. 15

Resolution of the Government of RT No. 437 from September 7, 2001 “On Monthly Standards (Limits) of Lubricant Consumption per

One Passenger Vehicle, and the Size of Compensations for the Use of Personal Vehicles for Business Travel”

32

- upkeep of general operation personnel;

- maintenance of buildings, constructions, and stocks;

- depreciation of fixed assets;

- repairs and maintenance of fixed assets;

- labor protection;

- transport costs;

- staff training and retraining;

- tests, experiments, rationalization and invention;

- maintenance and operation of nature protection funds;

- maintenance of fire fighting, paramilitary security, and watchman services;

- payment of interest on credits, loans, services of banks;

- other costs;

- fees and contributions.

5.6.3.1. Under the “Upkeep of General Operational Staff”, remuneration, reserves for

vacations, and social expenditures for the general operational staff of the water and waste

water services by functions: organization of sale and accounting of water consumption by

consumers, organization of equipment operation and maintenance services, testing equipment,

including water meters, automatic devices, organization of repair and maintenance of

buildings and constructions, as well as warehouse staff, workers carrying out repairs of

buildings and premises. The procedure of defining costs under this item is similar to the

procedure of calculating costs for similar items of all technology cycles.

5.6.3.2. Under the “Maintenance, Constructions, and Inventory”, we define the cost of

maintenance of all fixed assets and inventory for general operation purposes: buildings,

constructions, transfer devices, adjacent territories, warehouses (without warehouses of the

operator’s department), including lifting equipment, loading-and-unloading machines and

equipment to service warehouses, etc. The following shall be accounted under this item:

- materials, stocks, and equipment for cleaning premises, water supply, sewage, waste

treatment, electricity for lighting in premises and territory of the operator, as well as materials,

equipment and devices for lighting, fire protection and alarm systems;

- heating and ventilation (air conditioning) of rooms;

- compensation for depreciation and repairs of high-wearing stocks and other items of

little value not related to fixed assets.

The procedure of defining costs under this item is similar to the calculation of costs on

relevant elements in other items.

5.6.3.3. Under the “Fixed Assets Depreciation”, we define the cost of full recovery of

fixed assets used for general economic purposes. The Procedure of defining costs under this

item is similar to the calculation of costs for similar items in all technology cycles.

5.6.3.4. Under the “Repairs and Maintenance of Fixed Assets Used for General

Economic Purposes” we define costs of all types of repairs of fixed assets used for general

economic purposes listed in the “Maintenance of buildings, constructions, and inventory”.

Under this item, we define costs when the operator fails to create repair fund. Methodology to

define costs under this item is similar to the calculation of cost of “Repairs and Maintenance

of Fixed Assets” under the departmental costs.

5.6.3.5. Under the “Labor Protection” we define labor protection costs (non-capital

expenses) for general production purposes. These include accident prevention costs (for

instance, alarm systems, posters in the premises of the enterprise), production sanitary, etc.

Calculation of costs under this item is similar to the procedure of calculation under the “Labor

Protection” element under the departmental costs.

5.6.3.6. Under the “Staff Training” item, we define costs for training and retraining of

staff: training and upgrading qualification of managerial and operational staff of the operator

of water and waste water services based on the legally established norms to be included in the

cost.

33

5.6.3.7. Under the “Tests, Experiments, Rationalization and Invention” we define costs

associated to invention and rationalization, including costs for experimental works,

production and testing models and samples of inventions and rationalization proposals,

arrangement of fairs and shows, competition, and other events on invention and

rationalization, payment of author rewards (royalty) and other expenses.

5.6.3.8. Under the “Maintenance and Operation of Nature Protection Funds” we define

current costs related to maintenance and operation of nature protection funds, as well as

payment for the services of subcontracted organizations in accordance with the signed

agreements.

5.6.3.9. Under the “Maintenance of Fire Fighting, Paramilitary and Security Guard” we

define wages and social expenditures for watchmen, guards, when such works are carried out

by the security guard of the operator, as well as depreciation of low value and high-wearing

items, payment for work wear and shoes to these categories of workers. When functions of

fire fighting, paramilitary and security guards are performed by subcontractor organizations,

costs on this item are defined based on signed agreements.

Also, wages are defined under this item for maintenance of security and fire alarms:

wages of workers engaged in maintenance of security, fire alarms, and fire fighting, as well as

social expenditures, when such works are performed by the staff of the water and waste water

service operator.

When such works are performed by subcontracted organizations such costs are defined

in accordance with the signed agreements.

5.6.3.10. Under the “Payment of Interest on Credits, Loans, Services of Banks” we

define appropriate costs based on agreements signed with financial-credit institutions in

accordance with the procedure set in the normative legal acts of the Republic of Tajikistan.

5.6.3.11. Under the “Other Expenses”, we define insurance of general economic purpose

property, accrual of depreciation on intangible assets, maintenance of production-technical

transport, as well as other general economic costs not envisaged in previous cost items

included in the general operation expenses. The Tax Committee will define the roll following

the issue of Recommendations.

5.6.5. Allocation of costs under the «General Operation Expenses» between water supply

and water discharge is carried out proportional to the wage fund for the water and waste water

services.

Breakdown of General Operational Expenses

№ Expenditure Items

Reporting Period Period under

Consideration

Notes Planned

expenditures

Thousand

Somoni

Actual

expenditures

Thousand

Somoni

Planned

expenditures

Thousand Somoni

1.

Upkeep of general operations

personnel, including office and

management staff

1.1.

Wages of workers engaged in

collection, accounting, calculation of

payments for water supply and waste

water discharge services.

3. Social expenditures

4. Business travel and movements

5. Representation expenses

6. Consulting, information, audit services

7. Other expenditures, including transport

services

8. General economic expenditures

9. Fees and contributions

34

TOTAL:

5.7. DEFINING OUTSIDE MAINTENANCE COSTS

Under the «Outside Maintenance Costs» item, we define the cost of advertising activities

within the standards16

set in the legislation for inclusion in the cost, as well as other expenses

related to the increasing consumer service conditions, and not related to the activities of the

enterprise, subject to inclusion in the cost in accordance with the procedure set in the

normative legal acts of the Republic of Tajikistan.

VI. ASSESSMENT OF PROFIT

6.1. The size of profit in identifying water supply and water flow tariffs should be defined

based on the estimated profit of a specific operator of water and waste water service through

defining by components recorded in the profit or established profitability.

6.2. Profit assessment is based on the principle that water and waste water services in

charge of water supply and waste water treatment require development and upgrading.

Investment program agreed upon with the owner of the enterprise's assets is the basis for

profit assessment.

6.3. Profit is assessed based on the following main components:

6.3.1. Taxes paid out of profits – in accordance with the Tax Code of the Republic of

Tajikistan17

;

6.3.2. Earnings retained by the operator after payment of established taxes, pursuant to

the Decree of the Ministry of Finance of the Republic of Tajikistan No. 107 from July 20,

2001, shall be used as follows:

45% - production development fund, including capital investments, based on the

production development fund (investment program) agreed upon according to the established

order;

15% - social development fund;

20% - incentive fund;

20% - expenses for other purposes, including payments for exceeding maximum

permissible emissions of pollutants, payment of interest on loans in terms of the part

attributable to profit, deductions from income in the reserve and other funds, working capital

financing, as well as contributions from the profits of other target - in accordance with the

regulations of the Republic of Tajikistan.

VII. REQUIRED PROFITABILITY.

7.1. Economically justified calculated tariffs include profitability defined by the amount

of funds required for the development of water supply and water discharge systems, in

addition to taxes included in the cost.

7.2. Profit margin limit taken into account in setting tariffs for water supply and water

discharge services makes 15% to the cost of own production for provision of services, i.e., to

the cost of services provided less the cost of purchased water. 7.3. For subsidiaries of water and sewage lines of the State Unitary Enterprise under the

Municipal Housing Facility, in accordance with the Charter of the State Unitary Enterprise under the Municipal Housing Facility approved by the Resolution of the Government of the

16 Decree of the Ministry of Finance of the Republic of Tajikistan NO. 10 from January 15, 2001 «On Advertisement Expenditure Rate” 17 Article 109, Tax Code of RT, beginning from January 1, 2013 – 25%, however no less than 1 percent of gross profit; beginning from January 1, 2015 – 24%, however no less than 1 percent of gross profit; beginning from January 1, 2017 – 23%, however, no less than 1

percent of gross profit; beginning from January 1, 2013 – 25%, however no less than 1 percent of gross profit;

35

Republic of Tajikistan No. 35 from July 31, 2001, including the 8% cost for joint activities with the State Unitary Enterprise under the Municipal Housing Facility, 10% profitability level is set.

VIII. EXPENSES NOT INCLUDED IN THE COST OF SERVICES.

Pursuant to the Regulations «On Calculation of Product (Works, Services) Cost in

enterprises and organizations of the Republic of Tajikistan» approved by the Resolution of the

Government of the Republic of Tajikistan No. 210 from May 12, 1999, the following is not

included in the cost of water supply and sewage: The following is not referred to the cost of developing new organizations, production,

workshops and generators (starting consumption) and is not included in the cost of products

(works, services):

- the cost of individual testing of some types of machines and mechanisms, complex testing

(idle) of all types of equipment and technical installations to check installation quality;

- the cost of supervised installation carried out by the equipment supplying organizations

or, at their instruction, by specialized organizations;

- the cost of upkeep of directorate of the enterprise under construction, and in its absence –

the technical supervision group (the cost of upkeep for which is stipulated in the summary

cost estimates), as well as costs associated with the take-up of new enterprises and

facilities for operation;

- the cost of training personnel to work at the newly commissioned enterprise;

- the cost of completing outstanding works in projects and installation construction works,

eliminating defects caused by producing organizations, as well as damages and distortion

caused during transportation to the facility, the cost of examination (disassembly) of

equipment caused by the corrosion protection defects, and other similar costs at the

expense of organizations, which violated supply and performance of works;

The cost of creating new and improving current technologies, as well as improving quality of products

related to the performance of research, experimental development works, creating new types of inputs

and materials, retooling are not included in the product (works, services) cost;

Upgrading equipment, as well as reconstruction of fixed assets is made out of the funds used for

development and upgrading production, and relevant expenses are not included in the cost of product

(works, services);

The cost of events on health protection and leisure arrangement not directly related to the

participation of workers in the production process is not included in the cost of product (works,

services), and may be paid out of social expenditures:

Payments for the maximum permissible emissions (discharges) of waste (contaminants) in

environment are made out of the cost of product (works, services), and payments for excess emissions

is made out of retained earnings of nature users;

Allocations to upkeep controlling entities are provided out of the retained earnings of enterprises and

organizations;

- it is not allowed to assign representation and such other expenses (for entertainment,

accommodation of guests), apart from enterprises, organizations engaged in entertainment and if

expenses are made for such activities under the regulations approved by the Republic of Tajikistan;

- payment for the services of freelance interpreters/translators.

For the taxation purposes, the cost of company vehicles maintenance, compensation for the use of

personal vehicles for business travel, business trips, representation expenses, are accepted within the

limits set in the legislative acts and other normative acts of the Republic of Tajikistan.

36

The cost of revision or audit inspection of financial-economic activities of the organization

(enterprise) carried out at the initiative of one of the founders (participants) of this organization

(enterprise), is not included in the cost of product (works, services).

The cost of establishment and improvement of the system and tools to manage capital (investments) is

not included in the cost of product (works, services):

(n) cost of delivering employees to work and back to/from directions not covered by public passenger

transport services; additional costs for engagement of specialists on contractual basis with local

governance bodies or transport entities, funds of organizations to cover the cost of transportation of

employees by overland, public passenger (apart from taxis) transport exceeding amounts set based on

current tariffs for appropriate types of transport. Amounts defined based on the current tariffs for

appropriate types of transport. Amounts identified based on the current tariffs for transport services,

are reimbursed to the employees (in the form of payment for travel vouchers) or are assigned to the

retained earnings of the organization;

ш) depreciation cost for full recovery of fixed assets based on the approved norms.

For the taxation of accelerated depreciation accrual in accordance with the procedure established in

the legislation and other acts of the Republic of Tajikistan the following is not included in the cost of

product (works, services) in the case of improper use.

10. The following works (services) are not included in the cost of product and are not calculated:

- expenses for the performance of works (services) not related to the production (development of

cities and settlements, support to agriculture and other types of work);

- the cost of construction works, equipment and maintenance (including depreciation and all types of

amenities and other facilities included in the balance sheets of enterprises, as well as works performed

under assistance and involvement of other enterprises and organizations in the activities.

The cost of product (works, services), hence, calculation of full cost do not include the following

payments to the enterprise employees in monetary or natural forms, and upkeep costs:

- bonuses paid out of the special funds and earmarked revenues;

- financial support (including grant financial support to the employees for initial contribution for

cooperative residential construction, partial repayment of loans extended for cooperative and

individual residential construction), non-interest loans for housing improvement, household

establishment and other social needs;

- supplement pensions, lump-sum allowances for retiring labor veterans, income (dividends,

interest) paid on shares and deposits of the enterprise employees, compensation payments due to price

increases above indexation of income upon the decision of authorized agencies of the parties,

compensation for increased cost of food in canteens, snack-bars, or provision of food at preferential

prices or free of charge (apart from special food for some categories of employees in cases envisaged

in the normative acts of the Republic of Tajikistan);

- payment for transportation to the work place by public transport via special routes, office transport

(apart from amounts subject to assignment to the cost of product (works, services);

- price difference by products (works, services) provided to the enterprise employees or delivered by

subsidiary farms for public catering needs of the enterprise;

- payment for vouchers for treatment and recreation, excursions and travel, sports, clubs, visits to

cultural and physical culture (sports) events, subscriptions and personal consumption items for the

employees, and other similar payments and costs covered out of retained earnings of the enterprise;

- other types of payments not related to wage payments.

IX. DEFINING THE COSTS BY PRODUCTION PROCESS PHASES OF THE RURAL

WATER SUPPLY SYSTEMS

To ensure effective and profitable operation of water supply and water discharge systems

in rural settlements, taking into consideration the fact that the majority of rural settlements

lack staff qualified in operation, development of financial-economic indicators, the issue of a

simplified tariff development system is raised.

37

In this connection, this methodology section was drafted to define tariffs for water supply

in small water utility facilities in rural areas and may be used by jamoats, unitary enterprises,

dekhkan farms, and water user associations in charge of lifting, cleaning and transportation of

water regardless of the form of property and organizational-legal form.

Let’s consider how the cost of tariff is developed based on the example of water supply in

rural areas under the name title “Obi Sof”.

9.1. Accounting of the generated and discharged water in rural water supply is similar to the

procedure of accounting the quantity of supplied drinking water, according to the para. 3.3..

№

INDICATORS

Measurement

Unit

Reporting Period

Period under

Consideration

Plan Actual

1 Lifted water Thousand m3 1825

2 Water transmitted through Thousand m3 1825

purification plants

3 Water supplied to the network, of which Thousand m3 1825

by own pumps Thousand m3

4 Water received from outside 0

5 Water consumed for internal needs Thousand m3 18,25

6 Sold water, total, Thousand m3 574,4

6.1 of which, to the population Thousand m3 515,7

6.2 to budget organizations Thousand m3 58,6

6.3 to other consumers Thousand m3 0

7 Installed production capacity Thousand m3 12,1

of pump stations Per day

8 Established leakage up to 20% Thousand m3 365,0

9 Leakage and unaccounted water

consumption Thousand m3 1232,4

10 Average annual book value of

production facilities of Thousand

waterworks and networks Somoni

11 Numbers of all employees engaged in

supply and operation of Persons 17

these facilities

9.2. To identify planned water needs, it is important to define estimated water

consumption in accordance with the standards, agreements signed with the budget institutions,

commercial structures, as well as with the population, taking into account overall water

consumption for life activities and households, based on which the following register will be

developed:

REGISTER OF CONSUMERS FOR THE ACCOUNTING PERIOD

№ CONSUMERS

Consumption

Rate

м3

Reporting Period Perio

d

under

consid

eratio

n

м3

Estimated

consumption

per 1 year

м3

Actual

м3

1. POPULATION, TOTAL: 5000 persons 500622

of which, residents

households 1200

1.3. 420/1750 person (water pipe inside households) 3,6m3/month 75600

1.4. 780/3250 persons (water pipes outside households) 1,8m3/month 70200

38

1.5. 1200/142000 m2 land plots

0,36m3/m.Х4

m. 204480

1.6. Cattle 327 heads 3m3/m.Х12 m. 11772

1.7. Mechanical transport 200 pieces.

1,8 m 3/m.Х12

m. 4320

2. Budget Organizations 58680

2.1. Rural jamoat 1,3m3/hour 4680

2.2. Rural district hospital 2,6 m3/hour 9360

2.3. Kindergarden 2,6 m3/hour 9360

2.4. School № 6 3,6 m3/hour 12960

2.5. School № 20 1,3 m3/hour 4680

2.6. Gymnasium 1,3 m3/hour 4680

2.7. SMM Kolkhozchiyon 3,6 m3/hour 12960

3. Commercial structures

TOTAL : 559302

9.3. Calculation of costs by calculation items in rural water supply enterprises is carried

out similarly, as in the case of water and sewage system operators, however, costs are not

grouped by technological stages, i.e.: lifting, cleaning, and transportation of water are

accounted in total costs.

9.4. Composition of calculation items, their characteristics and content

9.4.1. Direct costs

9.4.1.1. Electric energy

The cost of electric energy required for lifting water to cleaning, storage, consumption

areas (transportation of waste water), creation of required water pressure, payment for

connected capacity of electric equipment (transformers, electric engines, pumps, etc.). For the

calculation of electricity costs: electric energy tariffs, current at the time of setting prices on

water supply services, are multiplied by the actually consumed electric energy.

№ Production Process Stage

Reporting Period Period under consideration

Qu

an

tity

, p

iece

s

Desi

gn

ed

ca

pa

city

, k

W

Pu

mp

per

form

an

ce

day

/ho

ur

Co

nsu

med

en

ergy

kW

h

Tarif

f, D

ira

m k

Wh

To

tal

exp

en

dit

ure

s

th

ou

san

d S

om

on

i

kW

h/m

3 o

f w

ate

r

So

mo

ni/

m3 o

f w

ate

r

Qu

an

tity

, p

iece

s

Desi

gn

Ca

pa

city

, k

W

Pu

mp

per

form

an

ce

a d

ay

/ho

ur

Vo

lum

e o

f co

nsu

med

en

erg

y,

kW

h

Tarif

f/D

ira

m k

Wh

To

tal

Ex

pen

dit

ure

s,

tho

usa

nd

So

mo

ni

kW

h/m

3 o

f w

ate

r

So

mo

ni/

m3 o

f w

ate

r

1. Pump ЭЦВ 10 63/100 1 32 6 70080 0,12 8409,6

1 32 12 140160 0,12 16819,2

2. Pump ЭЦВ 12 160/100 2 32 12 280320 0,12 33638,4

2 32 12 280320 0,12 33638,4

3. Pump ЭЦВ 10 120/100 1 32 8 93440 0,12 11212,8

1 32 12 140160 0,12 16819,2

TOTAL:

443840 0,12 53260,8 0,74 0,09

560640 0,12 67276,8 0,93 0,11

Electric energy consumed for lighting, heating, is assigned to relevant department expenditure items.

9.4.1.2. Depreciation of Fixed Assets

Depreciation costs are included for full recovery of fixed assets with regard to their

receipt and retirement, as well as revaluation results (production facilities, constructions,

39

transmission devices, operating and energy equipment, measuring and regulating devices,

tools and production stocks) used in the overall technological cycle of water supply.

№ List of Fixed Assets

Reporting Period Period under Consideration

Mea

sure

men

t U

nit

Qu

an

tity

Bo

ok

Va

lue

Th

ou

san

d S

om

on

i

Dep

reci

ati

on

Ch

arg

e %

Am

ou

nt

of

Dep

reci

ati

on

Ex

pen

ses

Th

ou

san

d S

om

on

i

Qu

an

tity

Bo

ok

Va

lue

Th

ou

san

d S

om

on

i

Dep

reci

ati

on

Ch

arg

e %

Am

ou

nt

of

Dep

reci

ati

on

Ex

pen

ses

Th

ou

san

d S

om

on

i

1 Transformer КТП - 400 pc. 1 270,00 10,0% 27,00 1 270,00 10,0% 27,00

2 Pump ЭЦВ 10 63/100 pc. 1 495,00 20,0% 99,00 1 495,00 20,0% 99,00

Pump ЭЦВ 10 63/100 pc. 1 10000,00 20,0% 2000,00

3 Pump ЭЦВ 12 160/100 pc. 2 1080,00 20,0% 216,00 2 1080,00 20,0% 432,00

4 Pump КА 290/30 pc. 2 600,00 20,0% 120,00 1 600,00 20,0% 120,00

5 Well pc. 6 19644,00 4,1% 805,40 6 19644,00 4,1% 4832,42

6 Space pc. 1 5130,00 2,5% 128,25 1 5130,00 2,5% 128,25

7 Waterpipe line Ø 100 r/m 8400 29186,00 5,0% 1459,30 8400 29186,00 5,0% 1459,30

Waterpipe line Ø 150 r/m 500 157000,00 5,0% 7850,00

8 Waterpipe line Ø 150 r/m 13200 27034,00 5,0% 1351,70 13200 27034,00 5,0% 1351,70

9 Tractor Т - 40 pc. 1 738,00 12,5% 92,25 1 738,00 12,5% 92,25

10 Trailer 2 ПТС-887 pc. 1 40,00 10,0% 4,00 1 40,00 10,0% 4,00

11 Welding outfit pc. 1 40,00 12,5% 5,00 1 40,00 12,5% 5,00

TOTAL : 84257,00 4307,90 251257,00 18400,92

9.4.1.3.. Repairs and maintenance

Repairs of fixed assets, the cost of all types of repairs and maintenance of fixed assets

based on estimates prepared by the operator.

№ Type of works (Fixed Assets)

Qu

an

tity

Book Value

(Somoni)

Repairs Amount,

Thousand Somoni

Planned Repairs

Amount

Thousand Somoni


Consideration Plan Actual

1 Pump Station (Repairs of pumps) 1 32000,00 12500,00 6271,00 18000,00

2 Waterpipe lines, 22100 m. 263976,00 25000,00 22300,00 30000,00

3 Replacement of valves in main

pipelines Ø150 12 371,00 292,00 320,00 680,00


pipelines Ø100мм 50 1321,00 1150,00 870,00 1560,00


pipelines Ø50мм 18 620,00 360,00 300,00 420,00

6 Repairs of fire hydrants 6 1800,00 300,00 0,00 500,00

7 Stocks of materials for carrying out

emergency rehabilitation works 6000,00 7200,00 9200,00

TOTAL: 300088,00 45602,00 37261,00 60360,00

9.4.1.4. Wages

40

Wages of main production workers engaged in collecting water from natural sources,

lifting water to clearing areas, storage, consumption, water cleaning, transportation of water to

consumption points based on actual numbers, not exceeding standards, are included.

Staffing Table, Overhead Personnel (Somoni)

№

р/т Professions

Quantit

y

Tariff

Wages Monthly

Wage

Annual

Wage Categor

y

Coefficien

t

1 Director 1 16 8,6 1720,00 1720,00 20640,00

2 Chief Engineer 1 15 6,58 1316,00 1316,00 15792,00

8

Human Resource

Specialist -

Administrator

1 8 3,71 742,00 742,00 8904,00

TOTAL: 3 3778,00 45336,00

Accounting Department

1 Chief Accountant 1 13 6,58 1316,00 1316,00 15792,00

2 Cashier-Accountant 1 8 3,71 742,00 742,00 8904,00

TOTAL: 2 2058,00 24696,00

Economic Department

1 Chief Economist 1 12 5,98 1196,00 1196,00 14352,00

TOTAL: 1 1196,00 14352,00

Subscriber Service Center

1 Chief Controller 1 11 5,44 1088,00 1088,00 13056,00

2 Controller 3 8 3,71 742,00 2226,00 26712,00

TOTAL: 4 2572,00 30864,00

TOTAL on office and

management staff: 10 8862,00 9604,00

115248,0

0

According to the Staffing Table: 10 employees

9604,00 Somoni/month Х 12 months 115248,00 Somoni/year

Holiday bonuses:

9604,00 Somoni 19208,00 Somoni

Allowance for vacation

9604,00 Somoni Х m/w 9604,00 Somoni

Total wage-bill on office and

management staff 144060,00 Somoni

Social Expenditures (25%)

36015 Somoni

Staffing Table for Production Personnel (Somoni)

№

р/т Professions

Quantit

y

Tariff

Wages Monthly

Wage

Annual

Wage Categor

y

Coefficien

t

Production Personnel

1 Internal plumber 3 8 3,71 742,00 2226,00 26712,00

2 Power house engineer 3 10 4,9 980,00 2940,00 35280,00

TOTAL: 6 5166 61992

According to the Staffing Table 6 employees


Holiday bonuses:

5166,00 Somoni 10332,00 Somoni

Vacation allowance

5166,00 Somoni Х m/w 5166,00 Somoni

41

Total wage-bill of the Production personnel

77490,00 Somoni

Social expenditures (25%)

19372,5 Somoni

Staffing Table for Shopfloor Personnel (Somoni)

№

р/т Professions

Quantit

y

Tariff

Wages Monthly

Wage

Annual

Wage Categor

y

Coefficien

t

Shopfloor Personnel

2 Tractor Operator 1 10 4,9 980,00 980,00 11760,00

3 Guards 3 4 1,91 382,00 1146,00 13752,00

TOTAL: 4 2126 25512

According to the Staffing Table: 4 employees


Holiday bonuses:

25512,00 Somoni 51024,00 Somoni

Vacation allowance

25512,00 Somoтi Х m/w 25512,00 Somoni

Total wage-bill of shopfloor personnel 82680,00 Somoni


95670 Somoni

9.4.1.5.. Social expenditures

include allocations out of wages of the main production personnel in the amounts

stipulated in the Tax Code

Total wage-bill of the office and

management staff 144060,00 Somoni


36015 Somoni

Total wage-bill of Production Personnel

77490,00 Somoni


19372,5 Somoni

Total wage bill of the Shopfloor Personnel 82680,00 Somoni


95670 Somoni

Total wage-bill 304230 Somoni

Social expenditures (25%) 76057 Somoni

9.4.1.6. Materials (chemical agents).

The cost of chemical agents used for cleaning, disinfection, decontamination of water,

based on the volumes of cleaned water and chemical agents consumption rate per 1m3 of

water. Main chemical agents are accounted depending on the technology cycle. The cost of

chemical agents also comprises transport-procurement costs, transportation by vehicles that

do not belong to the economic entity.

Chemical

Agents Measurement

Unit

Bil

l o

f m

ater

ials

(ag

ents

) per

g/m

3 o

f w

ater

Reporting Period Accounting Period

Vo

lum

e o

f cl

ean

ed w

ater

,

tho

usa

nd

m3

To

tal

dem

and

in

mat

eri

als

(ag

ents

), k

g

Pri

ce p

er t

on

, S

om

oni

To

tal

cost

of

mat

eria

ls,

Som

oni

Vo

lum

e o

f cl

ean

ed w

ater

,

tho

usa

nd

m3

To

tal

dem

and

in

mat

eri

als

(ag

ents

), k

g

Pri

ce p

er t

on

, S

om

oni

To

tal

cost

of

mat

eria

ls,

thousa

nd

So

mo

ni

42

Calcium

hypochlorite

(lime

chloride)

kg 1,5 1540 2310 5000,00 11550,00 1680 2520,00 5500,00 13860,00

Total 11550,00 13860,00

9.4.1.7. Shop Costs

№ Materials Measuremen

t Unit

Per

iod

icit

y

Reporting Period

Period under

Consideratio

n

(amount)

Calculation

Actual

Amount

per

son

s

nu

mb

er

Pri

ce p

er

un

it

AMOUNT

(Somoni)

1. LABOR PROTECTION

1.1. First aid kit pc. 1 9 2 20 40

1.2. Work gloves pairs 4 6 4 3 12

1.3. Work wear set 1 9 5 36 180

1.5. Special shoes pairs 1 9 5 29 145

1.7. Instruments set 1 4 4 45 180

1.9. Soap pc. 12 9 264 2 528

TOTAL :

1085

2

MAINTENANCE OF

BUILDINGS AND

CONSTRUCTIONS

2.1. Light bulbs 100 watt pc. 2 27 12 18 216

2.2. DRL lamps pc. 1 5 2 25 50

2.3. Pickers, scoops pc. 1 4 2 12,5 25

2.5. Maintenance of buildings

1

1 1200 1200

TOTAL:

1491

Maintenance and

current repairs of

transport

2 Tractor Т - 40

2.1. Diesel fuel liter 5 120 600 1,2 720

2.2. Diesel oil liter

120 30 6 180

2.6. Fuel pump set 1

1 600 600

2.7. Agricultural vehicle tyres

13Х38 pc. 2

2 1100 2200

TOTAL :

3700

TOTAL for

maintenance and

repairs of machinery:

6276

In addition, this item comprises the cost of wages of engineering and other staff not related to managerial

staff, staff working with the automated system of managing technology process of water supply and water

discharge, energy facility, repair workshops, etc.

№ Expenditure Items


Consideration Notes

Planned

Expenditures

Actual

Expenditures

Planned expenditures

Thousand Somoni

43

Thousand

Somoni

Thousand Somoni

1. Maintenance of office and

management staff

2. Upkeep of other shopfloor

personnel

3. Social expenditures

4. Depreciation

5. Depreciation of low-value and

high-wear stocks

6. Repairs and maintenance of

fixed assets

7. Maintenance of buildings,

constructions, stocks

8. Labor protection

9. Other expenditures

TOTAL:

5. Repairs fund

When an economic entity fails to create a reserve for repairs of fixed assets, current repairs costs,

maintenance of buildings and constructions under fixed assets at the level of actual costs will be included. In the

absence of costs in the regulated period, costs based on the estimates prepared by the economic entity will be

included. Expenditures of economic entities based on the cost estimates for capital repairs of buildings and

constructions will be included.

Approved

CAPITAL INVESTMETNS FUND

Capital Repairs Fund and Purchase of New Equipment

№ Fixed Assets

Res

idu

al

Boo

k V

alu

e

Req

uir

ed f

or

cap

ita

l

rep

air

s,

TO

TA

L (

Som

on

i)

BREAKDOWN BY YEARS

2013 2014 2015 2016 2017

1. Pump station, including 32000 329000,00 63800,00 78800,00 83800,00 63800,00 38800,00

1.1. Purchase and installation of

pumping equipment (pc.) 6 75000 25000,00 25000,00 25000,00

1.2. Reservoir construction (pc.) 2 194000 38800,00 38800,00 38800,00 38800,00 38800,00

1.3. Capital repairs of buildings and

constructions 2 60000 15000,00 20000,00 25000,00

2. Waterpipe networks (Somoni) 264000 1050000,00 160000,00 180000,00 210000,00 240000,00 260000,00

2.1. Capital repairs of networks and

valves and piping (meters) 2000 300000 60000,00 60000,00 60000,00 60000,00 60000,00

2.2. Introducing new water utilities 5000 750000 100000,00 120000,00 150000,00 180000,00 200000,00

3 Purchase and installation of

individual water meters. 1500 150000 50000,00 50000,00 50000,00

4 Capital repairs of administrative

buildings 1 65000 40000,00 25000,00

TOTAL: 296000 1594000,00 497600,00 567600,00 637600,00 607600,00 597600,00

6% annual inflation 34056,00 76512,00 109368,00 143424,00

TOTAL: 100% 3271360,00 497600,00 601656,00 714112,00 716968,00 741024,00

Including out of

1 REPAIRS FUND 12,8% 420000,00 50000,00 70000,00 90000,00 100000,00 110000,00

44

2 PROFIT 1,4% 45000,00 5000,00 7000,00 9000,00 11000,00 13000,00

3 Local executive authorities 10,0% 328000,00 50000,00 60000,00 72000,00 72000,00 74000,00

4 STATE CAPITAL

INVESTMENTS

5 GRANTS, INVESTMENTS,

CREDITS 72,5% 2373360,00 376600,00 446656,00 522112,00 509968,00 518024,00

6 Population contributions 3,2% 105000,00 16000 18000 21000 24000 26000

BREAKDOWN OF GENERAL OPERATING COSTS

№ EXPENDITURES


Consideratio

n Plan Actual

1. Cost of enterprise management

1.1

. Wages for office and management staff 115248,00

1.2

. Social expenditures 28812,00

1.3

. Business travel expenditures 1000,00

1.4

. Consulting,

information and audit services

1.5

. Representation

1.6

. Other costs, of which 7221,00

Communication services, printing, postal 480,00

stationary, purchase of 700,00

accounting forms and documentation, 150,00

maintenance and servicing of equipment,

utilities, material-technical provision

for the performance of managerial staff

Maintenance of passenger vehicles or compensation. 5891,00

TOTAL: 152281,00

3. Fees and Contributions

3.1

. Tax on automobile road users 2900,00

3.2

. Tax on subsoil users 450,00

royalty

3.3

. Real estate tax 396,00

TOTAL: 3350,00

TOTAL: 155631,00

X. INVESTMENT ACTIVITIES AND PARTICIPATION OF LOCAL AUTHORITIES

IN THE ACTIVITIES OF THE WATER SUPPLY AND WATER DISCHARGE

SERVICE OPERATORS Investment needs of the operators of water supply and water discharge utilities can be

reduced given more quality management of demand for water and water loss control. This, in

45

turn, will save capital expenses and optimize the use of financial resources for operation and

current repairs.

Appropriate methods and means for implementation of these objectives comprise

application of such instruments as water balance and water audit, reduction of physical and

commercial water losses and wasteful use of water, improvement of the water consumption

accounting procedures.

Application of proposed tools to manage demand will help reducing the volume of water

taken from various sources, as well as volume of waste water collected in waste plants. With

time, improved control of water intake and consumption will ensure accessibility of reliable

data for the assessment of required capacity of constructions while planning upgrade or

construction of water supply and water discharge facilities.

Availability of such information is also a prerequisite of reliable financial planning and

calculation of tariffs.

Local authorities and governance bodies of settlements and villages in charge of

controlling safety of services to consumers, and territorial bodies for control and supervision

have the right to clarify parameters of consumer characteristics, service provision regime, and

set a guaranteed level of quality with account of the capacity and depreciation of fixed assets

for utilities, climate and other local conditions. Decisions made and corrections in the service

fee must be published in mass media in one month prior to the implementation of the

decision.

Tariff regulation procedures must ensure public process of developing tariffs on water

supply and water discharge services. This is important to achieve confidence of consumers, as

well as the balance of interests in the tariff regulation process. Publicity of the system should

provide necessary methodology and information interaction between separate elements of the

system: procedures of monitoring of the operators, preparation and consideration of

applications for revision of tariffs for approval and enactment.

In investment programs of water supply and water discharge facility operators on

development of water infrastructure systems, local authorities and governance bodies approve

terms of references for the development of investment programs, as well as review and

approve investment programs of local operators on development of water infrastructure

systems.

While approving investment programs, local authorities and local governance bodies

should take into account:

- justification of the projected volume and services provided with account of the service

consumers needs in compliance with the mandatory requirements of norms and standards,

sanitary rules and norms in water supply and sanitation;

- developing financial needs required for implementation of investment programs.

Approved by the

Resolution of the State Statistical

Committee of the

Republic of Tajikistan

_____________________

Form 6-B (Quarterly)

WATER SUPPLY

Organization _______________________________________

REPORTING CALCULATION OF THE COST OF WATER RELEASED

for _____________________ 201__

46

INDICATORS Line

Code

Reporting Period Accounting

Period Plan Actual

I. NATURAL INDICATORS (thousand m3)

1.1. Water lifted (by pump stations 1 stage)

including underground water

1.2. Water transmitted through treatment plants

1.3. Water received from outside

1.4. Water supplied to the network, of which

by own pumps

by natural flow

water received from outside

1.5. Internal consumption (no more than 4% Standard

Norms and Procedures 2-04-02-84)

1.6. Water released, total

of which to population

of which, through water meters

To budget organizations


To other consumers


1.7 Installed production capacity of pump stations, 1st

stage

1.8 Number of accidents a year

1.9 Loss and unaccounted use of water

1.10 Capacity of water supply constructions

(thousand m3/day)

II. FULL COST OF RELEASED WATER (Somoni)

1 Water lifted – total

Of which:

1.1 Electricity

1.2 Chemical agents

1.3 Depreciation

1.4 Repairs and maintenance

1.5 Wages

1.6 Social expenditures

1.7 Workshop expenses

2 Fees for water collected from outside

3 Water transportation – total

Of which:

3.1 Electricity

3.2 Depreciation

3.3 Repairs and maintenance

3.4 Wages

3.5 Social expenditures

3.6 Workshop expenses

4. Emergency and rehabilitation

5. Repairs fund

6. General operation expenses

6.1 Including upkeep of office and management staff

TOTAL operating expenses

Non-operating expenses

TOTAL expenses at full cost

Profitability

Cost per 1 m3 of released water, Somoni

Current tariff 1 m3 of released water, Somoni

TOTAL REVENUE

Of which:

From population

Budget institutions, organizations

Other consumers

47

Head of the enterprise ________________________ ________________ (name) signature

Chief Accountant ________________________ ________________ (name) signature

Approved

By the Resolution of the

State Statistical Committee of

The Republic of Tajikistan

_____________________

Form 6-B (quarterly)

WATER DISCHARGE

Organization_______________________________________

REPORTING CALCULATION FOR THE COST OF WASTE WATER TREATMENT

for_____________________ 201__

Indicators

Line Code

Reporting Period

Accounting

Period Plan Fact

I. NATURAL INDICATORS (thousand m3)

Transmitted waste water – total

Of which:

From population

Collected from other communications

Transmitted through treatment plants – total

Of which, for biological treatment

Transmitted waste water for treatment to other sewage

systems

II. FULL COST OF WASTE LIQUID DISCHARGE (.......

Rub.)

Transportation of sludge liquor - total

Of which:

Electricity

Depreciation

Repairs and maintenance

Wages

Social expenditures

Workshop expenses

48

Clearing sludge liquor - total

Of which, electricity

materials

Depreciation


Wages

Social expenditures

Workshop expenses

Transportation and Utilization of sludge liquor - total

Of which, electricity

depreciation


wages

Social expenditures

Workshop expenses

Emergency rehabilitation works

Repairs Fund

Other direct expenses - total

General operation costs

TOTAL operating costs

Non-operating costs

TOTAL expenditures at full cost

Cost of 1 m3 of transferred sludge liquor, rub.

TOTAL expenditures

Of which, from population

Ref: Economically feasible tariff

Tariffs for population

Head of the Organization_____________________________

Chief Accountant _________________________________________

49

Indicative List of Documents Submitted by the Operators of Water Sewage

Facilities of any Ownership Forms for Approval of Tariffs for Cold Water

Supply, Water Discharge, and Waste Water Treatment

1. Copies of documents confirming ownership rights or other legal justification for

operation of water and sewage systems and treatment plants of the enterprise.

2. Production program of the utilities organization on provision of water supply (water

discharge).

3. Production program for organization of communal complex for provision of water

supply services (water discharge).

4. Table containing indicators describing implementation of the production program, as

well as the indicators of implementing production program calculated through indicator

processing:

for the regulation period;

for the relevant reporting period.

5. Monitoring of water supply (discharge) services, (general characteristics of the

system):

Planned water supply (discharge) volumes for the regulation period;

Actual volumes of water supply (discharge) for the reporting period and the last

reporting period of the current year.

Copy of a permit for special water use.

6. Copy of the document that approves current water supply (discharge) tariffs.

7. Calculation of payments and taxes.

8. Calculation of water volume used by the enterprise for internal needs.

9. Calculation of water losses.

10. Justifications are provided in the event of reduced volume of services provided.

11. Copy of the certificate on drinking water quality compliance.

12. Quantity of water supply (discharge) services provided in each territorial formation

that receives services of the operator in natural terms, as well as in percentage terms in respect

of the total volume of services provided by the operator.

13. Register of agreements signed with the outside contractors for provision of water

supply (discharge) services (indicating the name of the consumer, number and term of the

agreement, water supply (discharge) needs)).

14. Copies of water supply (discharge) agreements from the organization for further

transportation and sale to consumers (provided given an outside source of water supply

(discharge)) in addition to their own, as well as for the approval of the cost of water supply

(discharge) services provided through the pump stations and water (sewage) networks of the

operator.

15. Copy of the accounting balance with the record of the tax agency for the reporting

year and the last reporting period of the current year.

16. Copy of the form No. 2 «Income Statement» for the reporting period and the last

reporting period of the current year with decoding of each type of activity (water supply and

water discharge).

17. Confirmed copies of accounts from the General Ledger, i.e.: 20, 23 (and

subaccounts), 25, 26, 29, 69, 70, 90, and 97.

18. Planned calculation of the cost of water supply (discharge) service for the period

under regulation.

19. Actual calculation of the cost of water supply (discharge) services for the reporting

period.

20. Actual calculation of the cost of water supply (discharge) services for the reporting

period of the current year.

50

21. Copy of the power supply agreement with all annexes (including energy

consumption limits).

22. Copies of invoices for consumed electricity for the reporting period and the last


23. List of installed equipment indicating capacity, capacity operating ratio and

equipment operation mode.

24. Calculation of the electricity consumed by the equipment (with the detailed

clarification on tariffs):

planned calculation for the period under regulation;

actual calculation for the relevant reporting period.

25. Calculation of demand in materials for water treatment (waste water treatment)

(chemical agents) prepared based on the technology parameters of the installed equipment.

26. Copies of invoices for purchase of chemical agents, etc.

27. Copies of primary accounting cards for materials used to treat water (waste water

treatment) indicating balances as on the beginning of the year, receipt and expenditures within

the reporting period in natural and money terms.

28. Decoding other supplementary materials assigned to the cost of water supply

(discharge) services under the «Other Materials» item.:


actual calculation for the relevant reporting period;

29. Copy of the planned-prevention repairs.

30. Consolidated estimates for repairs of equipment in water intakes, pump stations of

water treatment facilities (sewage treatment plants) and waterpipe (sewage) networks.

31. Copies of discrepancy lists.

32. Copies of estimates for repairs: current and capital, performed on their own and by

subcontractors.

33. Copies of agreements signed for repairs signed with subcontractors.

34. Copies of certificates of provided services for the reporting period and the last


35. Calculation of the wage-bill for the main production workers:


actual calculation for the relevant reporting period.

36. Copies of collective agreements, regulations on payment of bonuses (if available).

37. Copy of the staffing table approved by the head of the enterprise or the controlling

entity.

38. Copy of the enterprise's regulations on bonuses.

39. Calculation of the depreciation for equipment installed in water intakes, pump

stations at treatment plants (sewage) and water pipe (sewage) networks that belong (are at

disposal of) to the operator.

40. Copies of the decree on carrying out revaluation of fixed assets of the enterprise;

(indicated documents are provided if revaluation was performed in the enterprise for the

period prior to the regulation).

41. List of costs assigned to the cost of water supply (discharge) services under the

«General Production Costs» item (with the details of each operation):

on planned calculation for the period under regulation;

on actual calculation for the relevant reporting period.

list of costs assigned to the «General Costs» (with details and justification of each

transaction):

on planned calculation for the period under regulation (providing agreements for

payment of non-productive works and services, when assets are owned based on lease –

property lease contracts and the list of assets leased);

51

on the actual calculation for the relevant reporting period.

42. Operational and unrealized revenues and expenditures of the organization (with the

details and justifications).

43. Calculation of profit estimated in the period under regulation (with details and

justifications).

44. Copy of the decree on carrying out inventory as on the end of the year during

provisioning. Inventory lists of amounts included in the provisions for accounting purposes.

52

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