Water supply and sewerage sector in Bulgaria

IndustrySouth-East European INDUSTRIAL Мarket - issue 3/2009

How many steps and billions separate Bulgaria from the European standards in water supply and sewerage?

The water supply and sewerage (WSS) sector is often in the epicenter of public attention. And this is no coincidence. The reason is trivial - every citizen uses its services. Moreover, the public need for the existence and development of the WSS system is coupled by its importance for business. In certain sectors (like tourism, for example) an effectively functioning WSS system is a definitive factor for product quality. As the near past shows, however, the investment activity in the resorts, the less and more populated places was not synchronized with corresponding development of the WSS system. The result is obvious and it affects us all. On the other hand, Bulgaria has taken serious engagement before its European partners. In view of its already more than two years practice as EU member, if is doesn’t fulfill the negotiated and do not live up to the rules, the chance for sanctions is big. To understand what the State does and has planned to do about WSS to meet European standards we turned to Eng.Plamen Nikiforov, Director of WSS Department at the Bulgarian Ministry of   Regional Development and Public Works (MRDPW).

EU funding up to two billion euro for WSS
The plain truth is, that to reach European standards and to fulfill the accepted engagements before the European Union many and serious investments in the WSS sector are necessary. In a strategy set up a few years ago by the World Bank the necessary funding is estimated at around nine billion euro. "This is a staggering amount for a country of the scale of Bulgaria. It could not come from EU funding alone," Engineer Plamen Nikiforov commented. "The funds from the EU programmes amount to 1.5 billion euro. Under operative programme "Environment", financed by the Cohesion Fund of the European Union, for the period 2007-2013 can be ensured around one billion and 200 million euro. Funds-gathering under this programme continues. A big number of municipalities have expressed interest to participate in it. An evaluating commission under the Ministry of Environment and Waters has been set up," he adds.
A temporary suspension of contract signing, undertook to spur us to adopt European legislature, has been cancelled. "After the law is taken into parliament, contract signing by the European Commission for approval of projects under operative programme "Environment" starts anew. Therefore, within this mandate of the Government, the greater part of these projects will be negotiated. I expect that they will be realized in the next 4-5 years," Mr. Nikiforov assured. "Around 250-300 million euro is earmarked under the operative programme for development of rural regions, which is with the fund "Agriculture". Together with the money under ISPA program and part of the money under PHARE, the total sum of the investments that we can get from the European Union amounts to around two billion euro," he added.

Financing from lines of the European Bank for Reconstruction and Development
"Programmes, financed by international financial institutions, are being realized collaterally. Several years ago were negotiated a few loans with the European Bank for Reconstruction and Development (EBRD). The money from these loans is regarded as co-financing of the Bulgarian state under European programmes," the chief of Water Supply and Sewerage Department declared.
At the moment a few projects under ISPA are executed, which are co-financed by the Bulgarian side with money from the European Bank. They should be completed next year. They include the construction of waste water treatment plants in Stara Zagora, Dimitrovgrad and Haskovo. The financing of a waste water treatment plant in Rousse is also planned, as on other sites, for the improving of the state of the water supply system in the Danube town, the Ministry of Regional Development and Public Works announces.

Projects with World Bank money
An agreement with the World Bank is in preparation, which is envisaged as a major source of investment in the following few years. According to the clauses in it, the completion of the construction of three dams for potable water and three water treatment plants for them are planned. "The construction of the dams started ten years ago, but due to lack of resources was not completed. The dams in question are Plovdivtsi dam - for water supply to the towns Madan and Rudozem, Neykovtsi dam - for water supply to the town of Tryavna and Luda Yana dam - for water supply to the town of Panagyurishte," Mr. Nikiforov explained and added: "The necessary investment for completion of these sites was negotiated with the World Bank. By means of the loan will be financed the reconstruction of the wall of Studena dam, which provides water supply to the town of Pernik. The wall is in exploitation more than 60 years and needs rehabilitation in order to improve its resistance and operational condition."

The EC requires general plans preparation
A precondition of the World Bank loan is the preparation of general plans for water supplies and sewerage in all regions of the country, which are serviced by WSS operators. "These are regional plans, which are required by the European Commission (EC) in order to change the way of planning. Priority sites are selected, which should be realized. In this way are created preconditions for achieving economy of scale," the director of the WSS department commented. The preparation of regional plans allows more effective decision making, for example, one water treatment plant to service a group of municipalities, in the cases when this is possible, which is not possible to be taken into account in individual planning by each municipality, the Ministry of Regional Development and Public Works (MRDPW) comments.
"The European Commission requested that we urgently prepare such general plans. Namely, based on them the projects will be planned. Around 20 million euro has been earmarked for their financing, and the term for their preparation is one year," Engineer Plamen Nikiforov added.
At the moment, a procedure for selection of contractors who will prepare the general plans, is under way. They have introduced as mandatory into the legislature. The main goal is the restructuring of the water sector in the coming years. "We expect by the middle of next year the first general plans to be ready, which will be reviewed and approved by the municipalities together with the State, in accordance with the amendments in the law about the waters. Based on them will be determined the way of planning and selection of the projects, which will be implemented," Plamen Nikiforov declared.

Financing of projects from the budget
The necessary funds for co-financing of large-scale projects under the operative programmes will come from the State budget. Money from it will be used also in construction of important and urgent water supply and sewerage sites on the territory of the country, the MRDPB announces. 
"This year, around 40 million leva for similar projects has been earmarked. The necessary investment, however, is much bigger. Around 75% of this 40 million is already realized in the first three months of the year. That is why our expectations are this money to be increased within the year. Similar projects are financed by the ministry itself as well. An investment programme has been developed for water supply sites. Funding is provided through "PUDOS" at the Ministry of Environment and Waters," Plamen Nikiforov added in his declaration.
 Realisation of projects through public-private partnerships
Projects in the WSS sector will be financed also by public-private partnerships in the sector, MRDPW declares.
"The new legislature envisages texts, which allow the realization of such projects. The goal is to attract the private sector in order to secure the necessary investments for realization of projects, which will raise the level of WSS services," Mr. Nikiforov commented.

It will be hard to fulfill our engagements, MRDPW claims
In response to the question what Bulgaria should do to make use of the possible sources of financing, the director of the WSS department at MRDPW declared: "It is necessary that Bulgaria create the needed organization, as well as ensure possibilities for effective planning in the sector and all necessary mechanisms, in order that all potential projects be realized."
Mr. Nikiforov expressed his serious apprehensions with regard to the fulfillment of the engagements of the state on time. "At the moment we witness the following paradox. Bulgaria has accepted the engagement until 2010 to construct waste water treatment plants in all places with the equivalent of more than 10 thousand population. However, a legal mechanism does not exist to oblige the municipalities, which are beneficiaries in these projects, to fulfill the engagement of the State. It is each municipality’s right to bid for a concrete project. If a municipality does not bid, this project cannot be realized," he commented.

Some municipalities do not have an interest in construction of water treatment plants
The not fulfilling of accepted engagements will bring the levying of corresponding sanctions. According to Mr. Nikiforov there is a real risk by the end of 2010 not to be constructed waste water treatment plants in all the places with the equivalent of more than 10 thousand population. At the same time, it is likely that there will be constructed other treatment plants - in less populated places, for which the term is 2014. "This is good, but does not satisfy the taken engagements. It is necessary that the State create the necessary mechanisms, which to oblige the municipalities that fall into that group to realize such projects. This issue has urgently to be resolved because the end of 2010 is not far. Even if the implementation of the projects begin now, their timely completion is doubtful," he explained.
The Ministry of Regional Development and Public Works assured that a big part of the projects have been started. Among the reasons why there are still municipalities not having applied for financing is that the construction of waste water treatment plants, as well as leading and treatment of waters, is but rather an ecological problem. It is related to the cleanness of rivers and water basins, but is not directly related to improving the wellbeing of the concerned population. On the other hand, the construction and exploitation of a modern treatment plant requires lots of expense, which raises the prices of services in that populated area, and this causes certain resistance in the population.

The adoption of the law for WSS is expected
It has been several successive years now that the legislature concerning the WSS sector has been harmonized in accordance with the European directives. The greater part of the legal and normative base has already taken effect. What is left is the Law for Water Supply and Sewerage, on which it has been worked already several years. Last year it was taken to the Council of Ministers, but was not endorsed. "Yes, the law is ready, but because of the running-out mandate of this government, it was decided on a political level to make an amendment in the existing legislature but not to endorse a new law. The clauses of the new law were almost entirely included as amendments and supplements to the Law for the Waters. A small part of the texts entered the Law for Regional Development - this concerns issues related to approval of the general plans for water supply and sewerage, as well as a few changes in the Concession Law," Mr. Nikiforov commented.
The law for WSS has already passed first reading in Parliament. MRDPW hopes that within this mandate of this parliament, the law will be endorsed and the restructuring of the sector will begin, in accordance with the requirements. The infrastructure of water supply and sewerage, which is on the territory of commercial entities, is envisaged to get public ownership. By certain criteria, in its bigger part, it will be owned by municipalities and a lesser part - by the State. In public ownership will remain the dams for potable water and some of the bigger water supply systems, which service several municipalities or more than one area. All other sites and facilities will have public municipality ownership.

Regional WSS associations will be established
"The law envisages the establishment of regional WSS associations, which will be authorized to take major decisions for development of the sector, including about assigning activities to the WSS operator and control over the execution of its functions. These regional associations will have the authority also to change the WSS operator, if that is imperative. They will also open procedures for selection of new WSS operator, in accordance with the Concession Law or the Public Order Law, depending on what functions will be assigned to this WSS operator," Plamen Nikiforov declared. "The law assigns the authorities of the Minister for Regional Development and Public Works, as the State organ which sets the policy for development in this sector. The functions of the municipalities, mayors, municipality councils for the development of the WSS infrastructure on their territory are also defined. The law for regulating WSS services is preserved, in which prices for water supply and sewerage services are set. I hope that this next step of the synchronization of legislature will bring a certain order and precise rules for construction, maintenance and exploitation of water supply and sewerage systems, as well as the control over the activities of the WSS operators," Mr. Nikiforov added.

The problem with sewerage in resorts
One of the major problems before the WSS sector in the last years is the rapid development of the resorts and the necessity for urgent construction and development of the sewerage network in them. "The sewerage in the resorts  has in actuality been a serious problem. Moreover, apart from it, there are problems with water supply. In the last years the resorts in Bulgaria have seen considerable progress, but only in terms of construction of hotel complexes. The necessary infrastructure in terms of water supply, sewerage, roads, etc. was not developed as it was required. As we all know, this creates serious problems in their exploitation," Mr. Nikiforov claims. He announced that measures are taken to overcome this problem. For example, he pointed the constructed in Bansko of a water storage facility, which is soon to be opened for explatation. It is expected to deal with the irregularity in the consumption during, characterized with concentration of water consumption in peak hours, in order to avoid regime of water delivery. 

A new dam for South Black Sea region
In addition to development of infrastructure, new water sources are needed in the region of the Black Sea. The available ones at the moment cannot cover the consumption in the summer season, when the tourist flow increases tens of time the number of consumers. At the moment, the main water source for the South Black Sea region is Yasna Polyana dam and the connected to it smaller dam, Novo Pancharevo, which operate as interconnected vessels. The populated areas up to Sozopol are fed from Kamchiya dam. In the words of the director of WSS department, a new dam needs to be constructed.
"A number of options are discussed, but we have not reached a final decision yet. This issue has to be resolved in the coming few years. Otherwise a water regime will need to be introduced due to shortage of water. The financial and economic crisis, weighing down on the whole world now, in a certain sense has a favourable impact on infrastructure. The reason is that there is a certain slowing in the growth of the resorts, which allows us some time to take our breath in order to undertake some actions in the coming years to improve the state of water supply and sewerage in these resorts," he said.

Water treatment plants in the big resorts
Dealing with the sewerage problem along the Black Sea includes the construction of new treatment plants in the biggest resort complexes, since the capacity of the old ones is insufficient in meeting the needs during the summer season. "It is necessary that treatment plant projects be implemented urgently in the biggest resorts, Golden Sands and Sunny Beach. The existing treatment plant in Golden Sands was built many years ago and has a capacity of 17,000 beds. Now the resort has grown multiple times and the consumers are over 60,000," Plamen Nikiforov commented. "There are prepared projects, we are in contact with the managers of Golden Sands resort. Together we are looking for an urgent solution, including in relation to the funding of such a project," he assured. 
With regards to Sunny Beach resort, Mr. Nikiforov declared: "The situation in it is similar to that in Golden Sands. The existing treatment plant in the village of Ravda is of times smaller capacity than needed, and it serves not only Sunny Beach but also Nessebar and Sveti Vlas. Taking into account the fact that Nessebar municipality, in terms of population, is larger than Bourgas municipality, it is obvious that a new treatment plant is needed. It will have to serve Sunny Beach resort." "In addition to treatment of waste water, which will improve the state of the waters in the Black Sea, supplementary facilities are needed to be constructed to ensure the supply of bigger quantities of water, Mr. Nikiforov added.

The absence of a sewerage network is often overlooked
The theme of the sewerage in Bulgaria should not be overlooked - as it is absent in a big part of the populated areas, even in the Capital. "Unfortunately, we speak all the time about construction of treatment plants, without accounting that a corresponding sewerage network is needed for their functioning. We have seen the realization of several projects of treatment plants, which work at capacity between 30 and 50 percent, since the areas that they service do not possess the necessary sewerage systems," Mr. Nikiforov said. "Usually the funds under the operative programmes are used to finance the treatment plant and the collector that brings the water to the plant. But the sewerage system in the towns, meant to gather the waste water from consumers and take it to the collector, not always is in place. There is not an all-encompassing sewerage system in Sofia as well. This is a very serious problem, which requires a lot of time and very considerable investments. It is often forgotten that the necessary investment for construction of sewerage systems, taking the waste waters to and from the treatment plant, is bigger than that for the treatment plant itself," he clarified.

Our water supply system - over 70,000 km
At this time Bulgaria has at its disposal a water supply system of around 72-73,000 km. total length, together with the distribution network in the populated areas. The sewerage system is of a length smaller than 10,000 km., the bigger part of which is in the bigger cities.
"At the start, the programme for construction of waste water treatment plants is divided in two stages. First the problem in more populated areas with the equivalent of more than 10,000 population needs to be addressed. The second stage encompasses populated areas with equivalent of 2,000 to 10,000 population, because the more populated the place is, the more considerable is the effect of the treatment, in terms of ecology and improving the state of the surface waters in the country," Plamen Nikiforov declared. "The topographic and geographic situation of our country is such that 95% of the rivers that form the river flow in the country spring in Bulgaria and within hours leave the country - to neighbouring countries or the Black Sea and the Danube. Therefore, improving the quality of the waters, which from populated areas go to the rivers, is not only a national problem. It has a trans border significance. Sending dirty waters to neighbouring countries or river basins creates a number of problems with those countries," he added.

Work is being done at over 60 sites in the field of water supply
Currently MRDPW is in the process of realization of over 60 sites, aimed at improving the state of water supply of some populated areas, the ministry assures. A considerable part of these projects is related to rehabilitation of existing water supply systems. A big part of the over 70,000 km water supply system in Bulgaria was built more than 30 or even 50 years from now, and is much worn out. The losses of water are great. "This creates problems, especially in the summer months, because considerable amounts of water are lost, and therefore the areas switch to water regime. This issue has to be solved, and in the coming years investment will be looked for not only for new sources of water but also for rehabilitation of the water supply network," the director of WSS department at the MRDPW assured. 

A high-level UN meeting in May in Bulgaria
In May Bulgaria hosted the annual meeting of the Board of the Counselors of the General Secretary of the UN on the issues about water supply and sewerage. At the moment its chairman is the Dutch prince William-Alexander, and among the board members is Michel Camdessus, former executive director of the International Monetary Fund," Mr. Nikiforov announced. "This meeting was accompanied by a ministerial conference of the Black Sea region countries. Twelve countries plus Bulgaria participated. The discussed topic was improving the accreditation and solving the problems with potable water in the Black Sea region. This is a serious problem, which requires global decisions on global level, not only in our country," Plamen Nikiforov commented.  
In the words of Mr. Nikiforov, a political declaration is expected to be forged, which will give the necessary preconditions for more investment in the region aiming at solving this problem. "Usually a number of financial institutions are present in such meetings, as well as other world financial international organizations. That is why we hope the forum will not only reflect the importance and functions of Bulgaria in the development of the region, but also provide opportunities for future investments. Such a meeting of the counselors of the General Secretary was organised for the first time in Southeast Europe. The previous one was in Saudi Arabia. Bulgaria sent its candidature last year together with several other countries. Fortunately our candidature was approved," he added.