Waters of Montenegro No. 3 by eutopia.pro

BOLJE SESTRE WATER SOURCE

WATERS OF MONTENEGRO

WATERS OF MONTENEGRO VOLUME 3

IMPRESSUM

THE EDITORIAL BOARD WOULD LIKE TO THANK NUMEROUS ASSOCIATES AND FRIENDS WHO PARTICIPATED IN THE CONCEPT DESIGN AND PREPARATION OF THIS PUBLICATION.

CIP - Каталогизација у публикацији Национална библиотека Црне Горе, Цетиње ISSN 2337-0084 = Vode Crne Gore COBISS.CG-ID 35241488 CONTACT: www.regionalnivodovod.me

CONTENTS: volume 3

Professional journal VODE CRNE GORE Volume 3 I 29 septembar 2018 PUBLISHERS: JP “Regionalni vodovod Crnogorsko primorje” JP "Za upravljanje morskim dobrom Crne Gore" FOR THE PUBLISHERS: Goran Jevrić Predrag Jelušić CO-EDITORS OF VOLUME 3: Vladimir Taušanović, Predrag Bjelobrković, Aleksandar Krstić EDITORIAL BOARD: 1. Goran Jevrić, Director, Public Enterprise for Regional Water Supply of the Montenegrin Coast, Budva 2. Predrag Jelušić, Director, Public Enterprise for Coastal Zone Management of Montenegro, Budva 3. Prof. Dr. Mićko Radulović, Full Professor, Faculty of Civil Engineering, University of Montenegro, Podgorica 4. Vladimir Taušanović, 1st Vice President, Board of Directors, IAWD 5. Prof. Dr. Zoran Stevanović, Full Professor, Faculty of Mining and Geology, University of Belgrade 6. Stjepan Gabrić, Senior Environmental Infrastructure Specialist, the World Bank, Zagreb 7. Philip Weller, Head of Technical Secretariat, IAWD 8. Academician Petar Vukoslavčević, Montenegrin Academy of Sciences and Arts, Podgorica 9. Prof. Dr. Zoran Veljović, Dean, Faculty of Electrical Engineering, University of Montenegro, Podgorica 10. Prof. Dr. Mira Vukčević, Dean, Faculty of Metallurgy and Technology, University of Montenegro, Podgorica 11. Prof. Dr. Igor Vušanović, Dean, Faculty of Mechanical Engineering, University of Montenegro, Podgorica 12. Prof. Dr. Srđa Aleksić, Dean, Faculty of Civil Engineering, University of Montenegro, Podgorica 13. Prof. Dr. Goran Sekulić, Full Professor, Faculty of Civil Engineering, University of Montenegro, Podgorica 14. Dragana Bjelobrković, Head, Utility Services Regulation Department, Regulatory Agency for Energy, Podgorica 15. Damir Gutić, Acting Director, Water Directorate, Podgorica 16. Dr. Boban Mugoša, Director, Institute for Public Health, Podgorica 17. Vladimir Šimić, Member, Council for Water Services of the Republic of Croatia, Zagreb 18. Aleksandar Krstić, Danube Utility Benchmarking HUB Coordinator, Danube Water Program/IAWD 19. Predrag Bjelobrković, Public Enterprise for Regional Water Supply of the Montenegrin Coast, Budva 20. Marijana Zenović, Public Enterprise for Regional Water Supply of the Montenegrin Coast, Budva 21. Ivan Špadijer, Public Enterprise for Regional Water Supply of the Montenegrin Coast, Budva LANGUAGE EDITORS: Snježana Avramović , Vesna Radunović (English) PHOTOGRAPHY: ARHIVA NTO, JP "Preduzeće za upravljanje morskim dobrom Crne Gore", Dejan Kalezić, Freepic DESIGN: Ana Đurković PRINTED BY: Obod d.o.o. COPIES: 1000

PAVLE RADULOVIĆ, Minister of Sustainable Development and Tourism: Reforms towards higher eﬃciency of utility sector management

page 6

Milutin Simovic, Deputy Prime Minister of Montenegro and China’s Minister Ganjie Li opened the Water Fair in Budva: A Chinese delegation visits Montenegro

page 12

China’s Minister Ganjie Li visited Bolje Sestre water source

page 14

VLADIMIR TAUŠANOVIĆ, co-editor of Volume 3, 1st Vicepresident of International Association of Water Supply Companies in the Danube River Catchment Area: Instead of the editorial

page 16

SAŠA RADULOVIĆ, State Secretary, Ministry of Sustainable Development and Tourism, Negotiator for Chapter 27, Montenegro: Water as a strategic resource of Montenegro page 20 PREDRAG JELUŠIĆ, director of the Coastal Zone Management Company: page 24 - The program for monitoring the sanitary quality of seawater at public beaches during the 2018 season page 28 - Prestigious eco-label – Blue Flag page 32 GORAN JEVRIĆ, Director of Public Utility Regional Waterworks for the Montenegrin Coast Vision of the Sustainable Water Resources Management in the 21st Century page 36 Water Resources - The Futureof Montenegro and the Planet

page 38

PHILIP WELLER, Danube Water Program Coordinator of the International Association of Water Supply Companies for Danube River Basin (IAWD) Montenegro springs have a significant positions in the region page 40 PETER DANE, Managing Director of the European Benchmarking Co-operation Good Organizational Capability for Safe, Drinking Tap Water page 44 PATRICIA LOPEZ, World Bank Danube Water Program Leader Aggregation of Water Companies Improves Their Eﬃciency

page 48

ALEKSANDAR KRSTIĆ, co-editor of Volume 3; Danube Utility Benchmarking HUB Coordinator, Danube Water Program/IAWD - Smart Management of Water Resources is of a Vital Importance - Benchmarking is a Chance for Company Improvement

page 52 page 54

MILO FIASCONARO, Executive Director of the Aqua Publica Europea

page 56

vode.crnegore@regionalnivodovod.me

tel: +382(0) 33 451 921; +382(0) 33 451 460 I fax: +382(0) 33 451 937

HELMUT BLOCH, Consultant for Chapter 27 and Expert in the Field of Water Management and Protection

page 57

VESELIN VUKIĆEVIĆ, Mayor of the Municipality Žabljak

page 60

JOINING FORCES FOR BETTER SERVICES? CHAPTERS 2, 5 AND 6 Introduction Aggregation: Chapter 2- Aggregations, Basic Concepts Chapter 5 - Why Do They Work? Chapter 6 - How Do They Work?

page 70 page 72 page 82 page 96

IRISH WATER COMPANY: Water Services Strategic Plan

page 122

PROF. DR RADOMIR RADOVANOVIĆ, rretired full professor at the University of Belgrade: The importance of modern water safety management systems

page 140

PROF. DR MIĆKO RADULOVIĆ, PROF. DR ZORAN STEVANOVIĆ, MILAN M. RADULOVIĆ, MAKSIM MATOVIĆ, MOMČILO BLAGOJEVIĆ: Setting up ground water monitoring in Montenegrin karst

page 148

PROF. DR MIĆKO RADULOVIĆ, MILAN M. RADULOVIĆ: Water potentials of Malo Blato basin along the northwestern edge of Skadar Lake

page 160

MR. NEŠKO ŠĆEKIĆ DIPL.ING.: Water-related standardization and standards

page 168

DR IVANA JOKSIMOVIĆ, DOC DR DIJANA ĐUROVIĆ, Institute of Public Health of Montenegro: Rapid assessment of drinking water quality risks

page 178

DR SANDA NASTIĆ I ALEKSANDAR KRSTIĆ: Controlling in public utilities

page 186

ACTIVITIES OF THE REGIONAL WATERWORKS: - Meeting of the EBRD Vice President Alain Pilloux and Goran Jevrić - UNESCO science camp at the Bolje Sestre water source - PEW selected as a member of Aqua Publica Europea - Supervisory review of the HACCP certificate - Regional Water Supply Company delivers water to all coastal municipalities - A delegation of the Ministry of Sustainable Development and Tourism and the Regional Water Supply Company met with the World Bank representatives in Vienna - 黑山海岸区域供水公司公共企业一个深刻改变黑山的项目是如何诞生的

page 194 page 196 page 198 page 200 page 202 page 204 page 206

6 Water is a unique and irreplaceable natural resource limited in quantity and unevenly distributed in space and time. PAVLE RADULOVIĆ

Minister of Sustainable Development and Tourism

Reforms towards higher eﬃciency of utility sector management

he United Nations recently announced that of 6 billion people estimated to be currently living on Earth, as many as 1.2 billion people do not have suﬃcient drinking water on a daily basis. Estimates are getting worse as we move towards the middle of the 21st century, so it is estimated that in 2050 between two and seven billion people could face a lack of drinking water, which makes up as much as two-thirds of the world's population. The real problem is the fact that water consumption grows twice as fast as the number of inhabitants, which means that the consumption of all available drinking water (only 2.5% of the total amount of water on Earth) will occur before the time in which 10 billion people will live on Earth (projected to happen around 2050). The intensive development of tourism on the Montenegrin coast began in the 1960s and, with interruptions caused by the catastrophic earthquake of April 1979 and the United Nations Security Council sanctions imposed on the then FR

Yugoslavia in 1992, occurred in different social arrangements, different national frameworks and in different conditions which stemmed from regional and broader, international relations. Nevertheless, tourism has become an increasingly important branch of industry from year to year and, thanks to its exceptional multiplicative effects, has decisively influenced the rapid urban development of municipalities on the Montenegrin coast and through the so-called "invisible exports" gave a strong contribution to the overall development of Montenegro's economy. Nevertheless, the possibilities for the enormous potential for tourism development to be adequately valorised were in doubt as early as the 1970s due to inadequate water supply that deteriorated from year to year depending on the hydrological conditions. This was also the main reason for the coastal municipalities to establish a Work Organization for Regional Water Supply "Montenegrin Coast" - headquartered in Tivat in 1976. The hydrological and geological characteristics of the Montenegrin coast, with a rainfall

WATERS F MONTENEGRO of 1,500-2,000 mm per m2, concentrated in the winter period (50% of total annual rainfall happens during the period October-January), provided that the maximum available water quantity from local sources in coastal municipalities in the winter period reach as much as 4,000 l/s. However, the 2006 feasibility study, which was financed by the World Bank in the process of approving a loan for the construction of a regional water supply system, found that the total yield of water sources on the Montenegrin coast in the hydrological minimum was only 903 l/s, which was dramatically less than the water requirement. The estimated deficit for 2015 was over 800 l/s, and the planned deficit for 2028 was 1,260 l/s, and about 1,450 l/s for 2033. The calculated water deficits thus did not allow for proper water supply of the population or for the growth of sustainable tourism. High quality tourism requires constant and reliable high quality water supply. To that end, the Montenegrin Coast must be viewed as a whole because tourist destinations are promoted as part of the wider area, and therefore inadequate conditions for holiday (such as lack of sewage or inadequate water supply) at one location aﬀects the image of the entire area. Therefore, it is evident that the intensive development of tourism and, consequently, the growth of the number of permanent residents in coastal municipalities that happened as a result of migration processes, i.e. mechanical growth (from the northern and central regions of Montenegro to the southern, coastal part) in all these years has been in direct correlation with the ever-growing problems in the water supply of the area. Therefore, the issue of introducing additional quantities of water from a safe and long-lasting reliable source, over which Montenegro has full control (including the catchment area of the

spring), imposed itself as an essential prerequisite for the proper supply of the population with quality drinking water as well as for the use of existing tourist capacities - which in all forms of accommodation in the coastal municipalities were estimated at over 270,000 beds and it was estimated that together with approximately 40,000 beds in the northern and central part of the country this would generate revenues of about EUR 1 billion in 2017. However, this issue was at least equally important for the construction of new capacities, i.e., large tourist resorts – and numerous accompanying infrastructure facilities that will be built for the needs of those resorts - which will all together, in the long run, form a new quality of the tourist product that Montenegro oﬀers on increasingly demanding tourist markets, but also significantly increase domestic GDP and a share of tourism sector in it. The resolution of the state of Montenegro to eliminate the crucial obstacle for the development of the coastal region and the country as a whole by building a regional water supply system is best illustrated by the extremely diﬃcult conditions and the politically and economically turbulent times in which the Project was prepared. To this end, let me mention the key events that determined the model and the course of the Project: - On February 15, 2007, the Government of Montenegro made a strategic decision to build the regional water supply system by using the Bolje Sestre water source, and to fund the Project from the World Bank and EBRD loans and the domestic participation to be provided from the budget of Montenegro and the contributions paid by investors related to their investments in the coastal municipalities; - During 2007, loan agreements were made

8 with the World Bank – for SDR 6.6 million (of which the equivalent of EUR 6 million for the construction of the regional water supply system), EBRD – for EUR 15 million (in 2008, the EBRD approved additional EUR 3 million) and, in early 2010, with the Abu Dhabi Development Fund for AED 38,888,145.06, or EUR 8 million. The commitment of these funds, together with the non-repayable budgetary resources that the Government of Montenegro committed to the Project, enabled the preparation of international tenders by the rules of these financial institutions and FIDIC. During the year, along with other activities, the general design was prepared and finalized; - In January 2008, the Commission for Technical Control of the Project from the Faculty of Civil Engineering in Podgorica approved the project as a reviewer, and in parallel with the activities on the technical control of the general design, the staﬀ of the Public Enterprise was preparing the tender documentation. In the same time, the documentation required for the issuance of a building permit was prepared and the Ministry of Spatial Planning and Environmental Protection issued it April 2008. Having in mind the mandatory length of time for submission of bids and EBRD procedures, then the eﬃciency of project works is best illustrated by the fact that the first in the series of construction contracts - a contract for the construction of the northern branch, was signed at the end of July 2008. During 2008, more contracts are signed: for the construction of water intakes and facilities on the system and for the construction of the continental part and the southern branch (to Bar) and contracts for the reconstruction of the hydro-technical tunnel "Sozina", the electricity supply, and the construction of water intakes and facilities on the continental part of the system; - In October 2009, contracts were signed for the

reconstruction of the Budva-Tivat pipeline and the reconstruction of the Budva pumping station; in 2012, the construction of the Bar-Ulcinj section was also finalized; -In parallel with very intensive works on the construction of the system in the first half of 2010, the Public Enterprise prepared itself for transformation of its internal organization from an investment company into an operating company. On 28 July 2010, the regional water supply system started to deliver water to Kotor, Tivat and Budva in the quantities requested by these municipalities; This year, it will be 43 years of the institutional functioning of this company, which best reflects the aspirations, eﬀorts and, above all, the real need of generations on the Montenegrin coast to build such a system that will contribute to the improvement of the elementary living conditions in this area. The regional water supply system for the Montenegrin coast is the second most valuable and significant project that has been implemented in Montenegro so far thanking to the strategic and bold decision of the Government of Montenegro to take a certain financial risk in the period of the major economic crisis and invest more than 80 million Euros in this system. Its construction has not only solved the multiannual problem of water supply in the Montenegrin coast, but finally laid the foundations for the development of tourism as the most important branch of economy in Montenegro. In 2018, it has been eight years since the start of the operation of the regional water supply system for the Montenegrin Coast. The results achieved in this, as well as in all previous years, proved how much the vision of the Government of Montenegro was justified, because records visits to the coast have been reported year a#er year, which would not be pos-

WATERS F MONTENEGRO

10 sible without the contribution that the regional water supply system provides for regular water supply of the highest quality. The increase in delivered quantities that grew by 70-80% in the last three years in comparison with the previous period suďŹ&#x192;ces to support the fact that without this system it would be impossible to provide a quality life for the population and the overall normal functioning of the Montenegrin coast, and that the regional water supply system has become the backbone of the development of tourism industry in this area. At the end of the road, which lasted from the formalization of the ancient idea of building a regional water supply system to its realization, or 34 years, Montenegro was given a grandiose and â&#x20AC;&#x201C; for its further development - an essential infrastructure facility that provided the continuous and long-term supply of the Montenegrin Coast with the highest quality drinking water from, for now, the only regional water source in Montenegro - the Bolje Sestre source. Why not mention that, a#er a five-year work on mapping the most important karst points in the world, under the auspices of UNESCO and the International Association of Hydrogeologists (IAH), a group of experts on the global level ranked the Bolje Sestre sourse, at the end of 2017, among the 150 most important caustic sources in the world. We are proud to point out that the Bolje Sestre abstraction is the largest water abstraction facility built in the Mediterranean in the last 25 years. The importance of the regional water supply system, which has been living for 43 years, has been recognized by professional organizations from the European Union, such as APE and IAWD, and the Government of Montenegro wants to further

strengthen the institutional significance of this system through the reform of the water supply sector on the Montenegrin coast, which started in cooperation with the EBRD. Despite the fact that the project was carried out in the peak of the global economic crisis, despite the termination of the contract with a contractor of works on the most diďŹ&#x192;cult part of the system, i.e., on the periodically flooded and underwater pipeline on the continental arm and in spite of the floods that took away precious days, the hard work of contractors and investors who had full and sustained support from the Government and practically all ministries, as well as understanding and valuable advice, which, in addition to proper funding under the approved loans was obtained from colleagues from the World Bank and the EBRD - all these together - through the strong synergy of all the parties involved in the Project, made it possible for us to say with great pleasure that Montenegro has used its drinking water resources, which are today becoming smaller and more precious at the global scale. The development of Montenegrin tourism and a better life of citizens in the coastal municipalities have been ensured in the long term. However, there is still a lot of work ahead of everyone. Therefore, having in mind the significance of the water supply sector of the Montenegrin coast as a region that is a key generator of overall development of the country, I would especially like to point out the following: With regard to the water sector at the level of Montenegro, the previous analyses made clearly point to the huge economic potentials of the water sector on the Montenegrin coast, which can be socially and economically valued only if

WATERS F MONTENEGRO PHOTO CREDIT: PUBLIC ENTERPRISE FOR COASTAL ZONE MANAGEMENT OF MONTENEGRO

the entire water resources and built capacities are managed as an integrated system, all for the needs of improving the quality of services provided to citizens through a higher degree of eďŹ&#x192;ciency and overall sustainability of the water supply system and better conditions for the development of the economy and for attracting new investments. The current situation in the water supply sector makes it clear that the optimal model for solving the problems is the gradual integration of local water utilities and the inclusion and linking of all their capacities, all water sources and consumers, into several basic and comprehensive water supply structures in the entire country to replace the current 23 water utilities, the vast majority of which are dysfunctional and technically and economically unsustainable. It is vitally important for the sustainability of the entire water sector to manage the entire production and distribution of water through an adequate control and regulation function that involves the management of all production, regulation and transport capacities. In their water balances, almost all municipalities have a large number of water sources of low yield, many of which are located at extremely low elevations,

which resulted in very high investment costs for putting them into operation, but also extremely high operating costs associated with high energy costs, a large number of employees at these installations, increased maintenance costs, high amortization, which, together, makes the average production price of water from these sources very high and represents the main problem and burden in the business terms for the water utilities. We are witnesses that the "island-wise" approach to water utility management resulted in drastic water shortages, which significantly influenced the quality of the tourist oďŹ&#x20AC;er, but also resulted in missed opportunities for tourism development. Unfortunately, we are too o#en prone to forgetting, and so the further steps for the reform and improvement have been unnecessarily delayed. Of course, there is no sector reform without establishing a new legal and institutional framework, including the regulatory framework, which should be based on new European and regional trends regarding the regionalization of the water sector and which should ensure the establishment of a new organizational model by combining and harmonizing the roles and responsibilities of local self-governments and the roles and responsibilities of the state.

Milutin Simovic, Deputy Prime Minister of Montenegro and Chinaâ&#x20AC;&#x2122;s Minister Ganjie Li opened the Water Fair in Budva

A CHINESE DELEGATION visits Montenegro Within the framework of the Mechanism of Cooperation between the People's Republic of China and the countries of Central and Eastern Europe ("16+1"), the Montenegrin Ministry of Sustainable Development and Tourism hosted the Ministerial Conference "Legacy for the Future" from 19-21 September 2018. The conference was opened by President of Montenegro Milo Djukanovic and was attended by countries from the important international initiative "16+1". The Delegation of the People's Republic of China led by Mr. Ganjie Li, the Minister of Ecology and Environment of the People's Republic of China, comprised ten other top oďŹ&#x192;cials in the field of politics and economy. As part of this very important conference, which strengthened the cooperation between the two countries further, three interna-

tional trade fairs were ceremoniously opened on 19 September 2018: the 40th Civil Construction Fair, the 13th Water, Water Supply and Sanitation Technologies Fair and the 6th Energy Fair, all of this happening in the year of the 50th anniversary of the Adriatic Fair. Minister Ganjie Li said that 39 years ago, when China had just started the reform and opening processes, they attended the 2nd Civil Construction Fair in the partner country. "The Chinese reforms are being carried out for over 40 years, and have caused significant changes taking place in socio-economic development, ecology and environmental protection. This Fair has become an important business event for the region. It has a significant role in improving the exchange of technologies and business cooperation in the implementation of infrastructure projects."

WATERS F MONTENEGRO

Minister Ganjie Li congratulated for the 40th anniversary of the Civil Construction Fair and for the great achievements and contributions that the Adriatic Fair has achieved so far, and added that this visit contributed to improving communication and the exchange of ideas and learning from one another related to very important issues such as sustainable infrastructure, green economy, clean energy, environmental technology and the like. Milutin Simovic, Deputy Prime Minister of Montenegro, thanked Minister Ganjie Li for the support provided by the Government of the People's Republic of China in presenting China at this Fair as a partner country and a traditional friend to Montenegro and pointed out: "This event is held in the year in which the Adriatic Fair marks 50 years since the founding and of successful business. I sincerely congratulate all those who incorporated their eﬀorts and knowledge in this worthy jubilee during a half of the century. The participation of exhibitors from 18 countries is a confirmation of the attractiveness of the Montenegrin construction sector, overall economy and investment oppotunities. We are pleased to see that the chief presenter of

the People's Republic of China at this year's Construction Fair is the Chinese company CRBC, our partner and main contractor for the construction of the first section of the Bar-Boljare highway. The highway project has significantly contributed to the growth of the Montenegrin economy, which was one of the largest growth rates in Europe last year. Certainly, the most significant positive economic eﬀects of the highway are expected upon its completion and connection with key European transport corridors, markets and tourism source markets. Today we witness the construction of grandiose structures in the entire first section; the local labor is employed, and thus acquires new skills and knowledge on the project as well as stable income, while the Bridge on Moracica River, thanks to regional and foreign media reports, although still under construction, is already becoming a unique attraction and a hallmark of the entire project. "

DRAGAN KRAPOVIĆ The Mayor of the town of Budva The Mayor of the town of Budva Dragan Krapović congratulated the Adriatic Fair at this remarkable jubilee and emphasized that in the past five decades the Adriatic Fair had the lead role for connecting the business profession of Montenegro, the region and abroad. He said that during the past 50 years a large number of exhibitors, businessmen, guests and the media heard about the Budva municipality thanks to the extremely numerous manifestations of the Adriatic Fair and that in the

future it will help transform it into a modern fair and congress center. He expressed hope that numerous and diverse manufacturers will find new business ideas here, convinced that Budva will be a good host for them.

China’s Minister Ganjie Li visited Bolje Sestre water source Increasing the regional water supply system capacity by constructing a parallel pipeline, connecting the Herceg Novi municipality to the regional water system, exporting water by tankers, generating solar energy, building a water production plant – are the projects that the Regional Water Supply Company presented to the delegation of the People's Republic of China led by Ganjie Li, Minister of Ecology and Environment of the People's Republic of China. The Chinese delegation consists of ten high-level oﬃcials in the field of politics and economy, who arrived in Montenegro to attend, from 19-

21 September 2018, the Ministerial Conference titled "Legacy for the Future", organized by the Montenegrin Ministry of Sustainable Development and Tourism within the framework of the Cooperation Mechanism between the People's Republic of China and the CEE countries (16+1). The conference, attended by representatives of the countries of the 16+1 initiative, will be opened by Montenegrin President Milo Djukanovic. Goran Jevric, Director of the Regional Water Supply Company, informed the Chinese delegation of the projects implemented by this company, its future plans and respectable financial perfor-

WATERS F MONTENEGRO

mance that made it successful and competitive in the market, and presented development projects pipeline that may be attractive to foreign investors like Chinese. Expressing satisfaction with the visit to Skadar Lake and the Bolje Sestre water source, Minister Li said that the experience of the Regional Water Supply Company might be applicable in China, since one of the most important issues that the Government of the People's Republic of China is intensively involved in is the sustainable management of water and the protection of water resources. He also pointed out that there is a lot of room for cooperation between the two countries, and that he, as a representative of the Chinese Government, would like to continue this partnership through the implementation of projects such as those presented by the Regional Water

Supply Company. Sasa Radulovic, State Secretary in the Ministry of Sustainable Development and Tourism, speaking on behalf of the Government of Montenegro and the Regional Water Supply Company, expressed his gratitude for the attention that Minister Li gave to the state of Montenegro and a state-owned company such as the Regional Water Supply Company, whose Bolje Sestre water source is on the UNESCO's map of the 150 most important sources. The Chinese delegation was shown a short video on the Regional Water Supply Company as well as a presentation with an overview of the financial and operational performance of the company, as well as the projects that are part of the vision for the company development.

UMJESTO UVODNIKA

VLADIMIR TAUŠANOVIĆ

1st Vicepresident of International Association of Water Supply Companies in the Danube River Catchment Area coeditor of the Volume 3 of the professional journal "Vode Crne Gore"

Instead of the editorial

ater is one of the basic elements necessary for the survival of life on the planet. In 2010, the UN General Assembly proclaimed water and sanitation for human rights and obliged all countries to respect the right to access to safe drinking water to all its citizens. For each country, a public water and wastewater service is a basic necessity and the most important function that provides hygienic and health prerequisites for a normal life, as well as for the development of other economic activities. Adequately managing water and water resources is the key to successful performance of this activity, facing numerous challenges. It is necessary to expand systems and increase coverage especially in rural areas, as well as to better maintain the existing ones, to respect the principles of environmental protection and to reduce pollution, to find solutions to reduce the risk of climate change and other possible disasters, to respond to the economic crisis and financing problems, etc. The use of water resources must be planned in the long term with a time horizon of 20 to 30 years in advance. The assets owned and managed by the utilities are enormous, and require a par-

ticular care. Water business is an investment-intensive industry that involves permanent investment and stable funds to enable it. In such an environment, new organizational forms are needed to enhance effectiveness and provide more rational use of existing infrastructure. It is necessary to strengthen institutions and regulatory mechanisms that will enable better coordination within the sector and create conditions for the active participation of all stakeholders in this process. In many countries in the region, extensive water sector reform is underway. The aggregation of water supply and sewerage companies is a model that uses the effects of the economies of scale where by increasing the market (customers), costs can be reduced and a lower price of services can be offered. In addition, larger systems enable the introduction of new technologies and standards, better business efficiency, better staff coverage and higher quality of services. In some EU countries, the total number of companies for these purposes is single digit (England, the Netherlands). On the other hand, in other countries, this activity is traditionally done within local self-governments, where the number of utilities is measured in thousands (Germany, Austria).

WATERS F MONTENEGRO

There is no recipe or recommendation in which direction to go. Each country should find its own model adapted to its circumstances, while respecting the sustainability postulates of these systems. The term "sustainability" is generally accepted and is o#en used in the narrative, but the question arises whether we all understand and apply it in practice in the same way. By definition, "Sustainability is the principle by which the exploitation of resources, investment courses, the orientation of technological development and institutional change are in harmony and improve both the current and the future potential for satisfying human needs". In other words, this means that we must provide suďŹ&#x192;cient quantities of water of adequate quality to meet today's needs in a way that is economically sustainable, environmentally friendly and socially just, while at the same time preserving the same systems and resources for future generations. The existing water infrastructure has been built by many generations before us and signifi-

cant financial resources have been invested in it. That capital must be preserved in the form of proper exploitation and regular investment in its renewal, which is o#en not the case. Today, we are already paying the price of insuďŹ&#x192;cient investment in maintaining water systems in the past, and if we do not reverse this course today, tomorrow may be too late. Proper reforms must be aimed at changing organizational and business culture, introducing new standards and tools in management, raising the eďŹ&#x192;ciency and quality of services in general. There are no quick and easy solutions. This is a process that needs to be carefully planned and analysed, and finally implemented within a reasonable period of time. VODE CRNE GORE (Waters of Montenegro) will lead us through all these issues, while exercising its role to promote all aspects of the use of water resources, their importance and importance for the overall economy of the country, as well as to bring it all closer to the wider audience. I hope that this edition will also contribute to a better understanding of this issue and attract your attention.

SAĹ A RADULOVIÄ&#x2020;, State Secretary, Ministry of Sustainable Development and Tourism, Negotiator for Chapter 27, Montenegro

Water - as a strategic resource of Montenegro

WATERS OF MONTENEGRO VOLUME 3

20 SAŠA RADULOVIĆ

State Secretary, Ministry of Sustainable Development and Tourism, Negotiator for Chapter 27, Montenegro

"Who does not care about water, does not care for a better tomorrow" The ancient Irish folk proverb

Water

as a strategic resource of Montenegro

he United Nations announced 22 March the World Water Day, by the UN resolution in December 1993, with a clear intention to remind us of the importance of water, as well as of the worrying lack of clean drinking water in many parts of the world. There is no need to talk about the importance of water for mankind, I believe that all of us present here are quite aware of its value for maintaining the whole life on Earth. However, it is important to note the importance of a responsible attitude towards water resources, as well as to continuously appeal to its rational and conscientious use, and protection and improvement of water quality, in order to achieve the Sustainable Development Goals of

the United Nations, and especially SDG 6, which is dedicated to ensuring sanitation and access to drinking water for all. The forecast is that we are approaching the time when the demand for water will exceed the supply and that in the future (by 2025 or 2030) two thirds of mankind will suﬀer a serious lack of water due to pollution, climate change and population growth. Therefore, our common focus must be on achieving targets in Goal 6, which is primarily to reduce pollution and wastewater, then to try to minimize the share of untreated wastewater, to increase the eﬃciency of water use in order to reduce the number of people who

WATERS F MONTENEGRO face water shortages, to apply integrated water resource management at all levels, and to protect and restore ecosystems associated with water, including mountains, forests, landscapes, rivers and lakes. Since we live in the era of globalization, driven by the slogan "Think globally, act locally", I am particularly pleased to applaud all the eďŹ&#x20AC;orts that are being intensively made in Montenegro to ensure sustainable water resource management. With an average outflow of 40 l/s/km2, Montenegro falls into 4% of the world's territory with the highest average outflow. Bearing in mind the fact that 95.3% of the watercourses are formed in Montenegro, with their springs and basins in the territory of Montenegro, it is right to say that water is our biggest natural resource. Water is not only our biggest natural resource, but our strategic resource, and therefore we must treat it very cautiously. From the perspective of Montenegro, if we analyse the achievements in the field of water in the previous period (I mean, primarily the last 10 years), we can say that: - about 400 km of water supply and sewerage network were built and rehabilitated, - the construction of the Regional Water Supply System has provided water supply safety for the Montenegrin coast, in the length of about 135 km, - wastewater treatment plants were built and put into operation in: Mojkovac (2008), Zabljak (2013), Budva (2015), Niksic, Herceg Novi (2017), Kotor and Tivat (2016), Savnik (2017), - wastewater treatment plants in Pljevlja and Berane are under construction, and the construction of new wastewater treatment plants in Podgorica and Danilovgrad is under preparation, - in 2017, funds were also provided for the rehabilitation of the wastewater discharges in Cetinje, - sewage networks in Berane, Herceg Novi, Bar and Bijelo Polje are under construction,

- projects for the improvement of water supply systems of Cetinje and Zabljak are on-going. The activities carried out are an important step forward for Montenegro, and the results achieved in a short period of 10 years are visible and measurable. It should be noted that the funds so far invested in the implementation of these projects amount to around EUR 350 million, and significant funds are currently in the implementation phase. In order to improve strategic planning and legislation, the following results have been achieved: - in the field of water supply, the Projection of Long-Term Water Supply of Montenegro by 2040 was adopted in 2017, - strategic master plans for wastewater for the period 2018-2035 were revised, and the first dra# of the Plan for the implementation of Directive 91/271/EEC was prepared, - the Law on Municipal Wastewater Management was adopted (OďŹ&#x192;cial Gazette of Montenegro 02/17). In accordance with the relevant documents, the deadlines related to the construction of the sewerage network, wastewater treatment plants, reduction of water losses and the like have been clearly defined, which clearly indicates strong commitment of the country to approach the water management in a holistic way. It has also been recognized that improving the performance of water and wastewater companies is very important in the reform process in the water sector. Therefore, in accordance with the Law on Local Utility Activities (OďŹ&#x192;cial Gazette of Montenegro 055/16), with the aim of establishing water and wastewater regulation, a regulatory body for these activities was established (2017). Special mention should be made of the role of and support should be given to Mr. Goran Jevric,

22 Director of the Public Enterprise for Regional Water Supply of the Montenegrin Coast and its overall management, with compliments for their outstanding results in the previous period. They should be commended as the true example of how a public enterprise - state property should be managed, and in particular for their ability to constantly think "out of the box", although they are sometimes slow down by problems from "boxes of the past" in finding adequate answers to the challenges from the "box of the future". On the path to improvements in water and wastewater sector, Montenegro has a number of partners (KfW, EIB, WB, EBRD0, as well as IAWD (The Technical Secretariat of the International Association of Water Supply Companies in the Danube River Catchment Area). Always present and very indicative symbolism can be found in the fact that 27 years a#er the adoption of the Declaration on the Ecological State of Montenegro, we are talking about 2018 as the year of potential opening of Chapter 27. The process of European integration, regardless of its transparency, is very complex and quite sensitive both to the mutual relations of European partners and their interests, as well as to the overall political atmosphere. Also, it should be noted that the Montenegrin negotiating structure, which includes representatives of NGOs, completed the Negotiating Position very successfully, according to the EC assessment. Such a harmonized document is currently in the phase of political assessment and approval of each Member State individually. As the negotiator for Chapter 27 - Environment and Climate Change, appointed by the Government of Montenegro, where water quality is one of the 10 areas covered by the acquis in this segment, I consider it necessary to point out that the current economic and financial analysis has shown that the total cost of harmonization with and implementation of European standards un-

der Chapter 27 in Montenegro will be around EUR 1.429 billion by 2035 and possibly more, given the constant amendment of EU directives in line with innovative technologies that appear on the market. Based on the current assessment, the largest financial burden of EUR 841 million concerns the water quality areas, the construction of treatment plants for municipal sewage and the construction of infrastructure in the field of drinking water and flood protection. The Ministry of Sustainable Development and Tourism is making constant eďŹ&#x20AC;orts in the environmental sector, together with European and international partners, to respond in the best possible way to the challenges set for one goal only, to be better prepared when joining the family of European countries. The EU IPA mechanism, which gives us great support on this path, is extremely valuable. Numerous UN agencies and UN programs help us train personnel in the system and we also use favourable financial arrangements from the European Investment Bank, KfW and the World Bank to improve the situation in the subject area. This year, the Ministry of Sustainable Development and Tourism plans to initiate a water sector reform project by applying agglomeration as one of the recommended economical approaches for better water supply throughout the country. We believe that our approach will be fully aligned with the existing EU legislation, based on analyses of previous experiences and expert recommendations, but elaborated in a thorough and cautious way as it concerns a strategic resource for Montenegro. I certainly want to point out that in addition to systemic solutions related to water, each individual has an important role in terms of protection and conservation of water as a resource. Whether we will use this resource economically and reasonably or we will waste it, can determine the future of our children tomorrow.

WATERS F MONTENEGRO

Å½ABLJAK, 22.03.2018

PREDRAG JELUĹ IÄ&#x2020;, director of the Public Enterprise for Coastal Zone Management of Montenegro

-The program for monitoring the sanitary quality of seawater at public beaches during the 2018 season - Prestigious Eco-label Blue Flag

WATERS OF MONTENEGRO VOLUME 3

PREDRAG JELUĹ IÄ&#x2020;

Director of Montenegrin Coastal Zone Management Company

he public enterprise for the coastal zone management of Montenegro monitors the seawater quality since 1996. The obtained data show, from year to year, that there is a noticeable continuous improvement of seawater quality along the entire Montenegrin coast, which was largely the result of improvements of the sewerage system in the hinterland and the construction of modern wastewater treatment systems. To ensure better presentation and availability of data on the seawater quality to citizens and tourists, the Coastal Zone Management Company has been using, for three consecutive years, a special application on its website www.morskodobro.com

During the 2018 season, the application had a large number of views, which speaks of great interest of citizens and tourists in the seawater quality during the season, and the growing popularity of the application. The largest number of views came from Montenegro and Russia, but also from Croatia, Bosnia and Herzegovina, USA, Serbia, Ukraine, Italy, UK and Belarus. This year, out of total number of views, as many as 62% were new, while 38% were those who regularly monitor the published data on the quality of seawater for swimming and recreation.

WATERS F MONTENEGRO

The "Blue Flag in Montenegro" program has been implemented since 2003 with the support of the Coastal Zone Management Company. This prestigious ecological recognition requires the fulfilment of as many as 28 mandatory criteria that include the seawater quality, as the dominant one, then the quality of services and safety on beaches, high environmental protection standards, and education and information on environmental values. Today, 29 Blue Flag are flying on Montenegrin beaches, including the Bar Marina, since 2017. Taking into account the length of the Montenegrin coast (just over 300 km) and about 400 bathing areas that can be found along the coastline, Montenegro has the highest percentage of Blue Flags in comparison to other Mediterranean countries.

THE PROGRAM FOR MONITORING

the sanitary quality of seawater at public beaches during the 2018 season

WATERS F MONTENEGRO

he program for 2018 foresees the monitoring of the quality of seawater at 100 locations along the Montenegrin coast, namely: 16 in the municipality of Ulcinj, 13 in the municipality of Bar, 25 in Budva, 10 in Tivat, 15 in Kotor and 21 in the territory of the municipality of Herceg Novi. It is anticipated that the analyses will be carried out in fi#een-day intervals in the period from May to October. In accordance with the Montenegrin legislation, as well as the EU Bathing Water Directive, the Program covers the monitoring of the presence of 2 mandatory microbiological parameters (Escherichia coli and Intestinal enterococci bacteria), and also includes the recording of physical and chemical parameters such as air temperature, water temperature, salinity, data on weather conditions during sampling, as well as sources of pollution and other elements that may have an impact on the quality of seawater during sampling. Pursuant to Article 13 of the Decree on classification and categorization of surface and groundwater, the seawater used for bathing and recreation is classified, based on binding microbiological parameters, into two classes:

class K1-excellent, class K2-satisfactory, while the samples with the values exceeding the prescribed limits for these two classes are placed in out of category group. Up-to-date information on the seawater quality at bathing sites is available to interested pub-

PRESENTATION OF THE DATA VIA THE INTERNET- APPLICATION ON THE WEBSITE:

www.monitoring.morskodobro.com/monitoring

lic, in particular to tourist organizations, hotels, travel agencies, and to all fans of recreation in the sea. For the better presentation and availability of data on the seawater quality for citizens and tourists, Coastal Zone Management Company has developed a so#ware application system for data processing and presentation, which can be accessed via the Internet. This application, which is located on the website www.morskodobro.com, presents data by means of symbols on the map giving a simpler and faster picture of the seawater quality at the bathing sites in Montenegro. The application is available in Montenegrin and English. Also, the application has been made according to the latest standards, and is adapted for displaying data on all models of computers, laptops, tablets and mobile phones.

ACTION IN CASES WHERE THE WATER QUALITY DOES NOT MEET THE PRESCRIBED PARAMETERS

The Coastal Zone Management Company keeps the municipal inspection oďŹ&#x192;ces, republican water management inspection oďŹ&#x192;ce, other competent institutions and the public regularly informed on the results of the analyses. If the sample result exceeds the permitted limits (outside the category), another sampling is performed to determine whether it is a transient occurrence or a short-term pollution. If the results of the repeated sampling show that the trend of sanitary quality exceeding the allowed limits has continued, the tenant of the bathing site is notified and has to post the red flag on the bathing site. The Republic Water Inspector then issues a temporary ban on the use of the bathing site until positive results of the analyses performed every day on the given bathing site are obtained. During this year's swimming season, in the period from 23 May to September, 7 seawater quality tests were carried out in total. The obtained results show that the seawater quality was K1 class at 94% of the bathing areas along the Montenegrin coast, while the K2 class was found at 6% of the bathing sites. There was not a single

WATERS F MONTENEGRO case of a bathing site exceeding the permitted limits for the sanitary quality of seawater prescribed by the Decree on the classification and categorization of bathing water. These results confirm that the seawater in the Montenegrin bathing areas is of excellent quality, i.e. that it is comliant with sanitary requirements, and safe for bathing and recreation.

RESULTS OF THE SEAWATER QUALITY ANALYSIS CONDUCTED IN THE PERIOD FROM MAY TO SEPTEMBER 2018:

The obtained data point to a visible improvement in the seawater quality along the entire coastline, which was largely the result of improved sanitation system in the hinterland and the construction of modern wastewater treatment systems.

Prestigious Eco-label

BLUE FLAG T

he Blue Flag international recognition is an exclusive environmental label that is awarded annually to beaches and marinas whose users want to join this program, and which meet 32 prescribed criteria, of which 28 are mandatory, while the rest are recommended. The program promotes high standards in four areas: seawater quality, services and safety on beaches, environmental standards, and education and information on environmental values. Blue Flags are awarded and raised every 5 June, symbolically on the World Environment Day. In the season 2018, 30 Blue Flags are flying on Montenegrin beaches. Since 2003, this international label was given to 15 to 20 beaches in Montenegro, and interest and readiness to raise standards on beaches has been reflected through an increasing number of beach tenants partici-

pating in the two-year pilot stage of the program. In Montenegro, this label has been awarded since 2003, when the non-governmental organization "ECOM" became a member of the Foundation for Environmental Education (FEE) and thus acquired the right to be the National Operator for the Blue Flag in Montenegro Program. From the very beginning, the Montenegrin Coastal Zone Management Company provided financial and organizational support for the implementation of this Program. A Blue Flag is awarded to a beach or marina for the current season, based on a decision of the international jury consisting of representatives of UNEP (UN Environment Program), UNWTO, ILS (International Life Saving Federation), EEA (European Environmental Agency), IUCN (Inter-

WATERS F MONTENEGRO

national Union for Conservation of Nature), an international expert in environmental education, representatives of the ICOMIA (International Council of Marine Industry Associations), an independent environmental education expert and representative of the FEE (Foundation for Environmental Education), which is implementing the Blue Flag Program. The international jury reviews the candidatures submitted by the National Commission established in Montenegro by the Ministry in charge of tourism aďŹ&#x20AC;airs, consisting of representatives of the Public Enterprise for the Coastal Zone Management, the ministries responsible for tourism and environmental protection, the Port Authority, the Red Cross of Montenegro and two representatives of the non-governmental sector.

34 THESE ARE THE BLUE FLAG BEACHES IN MONTENEGRO FOR 2018: HERCEG NOVI MUNICIPALITY (1 BEACH) Stevuzo, Dobrec Bay

Ponta, Petrovac

(beneficiary: “Northstar” doo)

(beneficiary: "Ponta Petrovac“ doo)

TIVAT MUNICIPALITY (3 BEACHES) Almara beach, Oblatno (beneficiary: "Mont Voyage“ doo)

Lučice, Petrovac ( beneficiary: "Pester Co“ doo)

OPŠTINA BAR (3 PLAŽE)

Plavi Horizont, Plavi horizont

Centar, Sutomore

(beneficiary: "Primorje hotels & restaurants“ ad Tivat)

(beneficiary: "Plaža Centar“ doo)

Kalardovo, Kalardovo (beneficiary: "Kalardovo plus“ doo)

OPŠTINA BUDVA (ČAK 13 PLAŽA) Escallera, Jaz (beneficiary: "Escallera“ doo)

Korali, Sutomore (beneficiary: HTP “Trend Korali” ad)

Paradiso, Utjeha (beneficiary: "Alexander & Una“ doo)

OPŠTINA ULCINJ (9 PLAŽA)

Blue Beach, Jaz

Toni gril, Velika plaža

(beneficiary: Mikijelj Dragan i Ivanović Slobodan)

(beneficiary: "Toni gril“ doo)

S and I beach life, Jaz

Miami, Velika plaža

(beneficiary: "S & I company“ doo)

( beneficiary: "Miami“ doo)

Poseidon, Jaz

Evropa beach, Velika plaža

(beneficiary: "Poseidon“ doo)

(beneficiary: "Evropa beach“ doo)

San Trope, Slovenska plaža

Mojito, Velika plaža

(beneficiary: "Pinokio“ doo)

(beneficiary: "Stefandro“ doo)

Time out, Slovenska plaža

Pearl beach, Velika plaža

(beneficiary: "Amon Express“ doo)

(beneficiary: "Hilti hill“ doo)

Dolcevita, Bečići

Safari, Velika plaža

(beneficiary: "Dolce Vita Lux„ doo)

(beneficiary: "Dely tours“ doo)

Sveti Toma, Bečići

MCM beach, Velika plaža

(beneficiary: "ProAqua Montenegro“ doo)

(beneficiary: "MCM Rental Service“ doo)

Kamenovo 17A, Kamenovo

Mar Buena, Velika plaža

(beneficiary: "Kamenovo beach“ doo)

(beneficiary: "C&A company“ doo)

Kamenovo 17B, Kamenovo

Copacabana, Velika plaža

(beneficiary: "La Suerte“ doo)

(beneficiary: "Copacabana Montenegro“ doo)

Drobni pijesak, Reževići (beneficiary: "Cinema plus“ doo)

WATERS F MONTENEGRO

IN THE PILOT STAGE: HERCEG NOVI MUNICIPALITY: Jedinica, Baošići (beneficiary: “Jedinica Damjanović“ doo) BUDVA MUNICIPALITY: Svetionik, Jaz (beneficiary: “Svetionik“ doo); Sirena, Jaz (beneficiary: “Svetionik“ doo); Samsara Deluxe, Bečići (beneficiary: “Aquario“ doo); Bella Vista, Bečići (beneficiary: “Mikro - international“ doo); Galija, Crvena glavica (beneficiary: “Beach"doo); Hotel Maestral, Pržno (beneficiary: “Hit Montenegro" doo) BAR MUNICIPALITY: Vela beach, Čanj (beneficiary: “Babović Keramika” doo) ULCINJ MUNICIPALITY: White beach, Velika plaža (beneficiary: “Natural beach“ doo); Cabo beach, Velika plaža (beneficiary: “ Cabo“ doo).

GOVERNMENT OF MONTENEGRO MINISTRY OF SUSTAINABLE DEVELOPMENT AND TURISM

Å½abljak, March 22, 2018

Vision of the Sustainable Water Resources Management in the 21st Century FIRST DANUBE REGION BENCHMARKING WORKSHOP Tivat, March 24, 2018

WATERS F MONTENEGRO Goran JEVRIĆ

Director of Public Utility Regional Waterworks for the Montenegrin Coast

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY

ontenegro is a country with valuable water resources and manages it in a sustainable and highly precise and responsible manner. There are many events and decisions that confirm the thesis that Montenegro was acting visionary, when adopted the Declaration on the proclamation of Montenegro as the first ecological state in the world, 1991 in Žabljak. That is why we have decided, with our respected international partners, to organize in Žabljak first international conference on sustainable water resources management in the 21st century for the South East European countries, on the World Water Day, in order to confirm that Montenegro and the water sector are adopting the European system values. Water is the most valuable natural resource that we need to manage sustainably, because it is our most important “debt” to the future. We remember the times in Montenegro when the lack of drinking water on our coast was a major problem for the quality of life for local population, and we could not even think about the development of tourism. Therefore, it is important to emphasize on this occasion the vision of the Government of Montenegro to create preconditions for investing in infrastructure projects to improve the overall economic environment as a prerequisite for social development. That is precisely why our company

rightly took the epitome of the PROJECT THAT HAS CHANGED THE MONTENGRO. The regional water supply system is the largest and most important infrastructure project that was implemented in Montenegro after the restoration of independence in 2006 and in which a total of 107 million € was invested. Such an important investment that has been successfully implemented, after 2010, has contributed to improving the quality of life of citizens on the coast, but also that the inflow from tourism annually increases from 322 million € in 2007 to nearly a billion € in 2017, with foreign direct investments in just three prestigious tourist projects, such as Porto Montenegro, Luštica Bay and Portonovi being over two billion €. The question is whether in Montenegro we would have such economic progress on the Montenegrin coast if we still had a lack of drinking water? Our next commitment is to create a vision of sustainable management and further development of the water supply system, not only on the Montenegrin coast. That is why we are extremely grateful to our friends from the international organizations that have accepted us, the Regional Waterworks for the Montenegrin Coast because we cannot adopt new value standards without having the most successful and most developed for our role models. International Association of Wa-

ter supply Companies in the Danube River with its headquarters in Vienna, the World Bank, the European Bank for Reconstruction and Development and others are to thank mostly for this important gathering that held in Montenegro. Our common goal is that this conference becomes traditional and I hope that we will be good host for our dear business partners from other countries and a good example for the next thematic conferences. It is precisely the Benchmarking program that guarantees the improvement of the capacities of our companies, and in the Regional Waterworks for the Montenegrin Coast we aim to adopt the European system of values in the water sector and therefore we prefer cooperation with the most important water utilities from the EU countries. Nothing less important is our cooperation in the Western Balkans region because we are best understood and our common past should be our greatest strength to create our joint and fruitful future. It is up to the current generation of decision-makers to recognize the responsibility for a greater level of cooperation and mutual support in terms of adopting the European value system in the water sector. The Regional Waterworks for the Montenegrin Coast is sincerely committed to this goal and we are strongly developing our clearly defined vision of further development of the PROJECT THAT HAS CHANGED MONTENEGRO.

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY Conference and Benchmarking Workshop in Žabljak and Tivat

Water Resources - The Future of Montenegro and the Planet

ontenegro was a host of a great international meeting regarding the World Water Day this March. This summit gathered more than 80 representatives from of water management sector from the region and Europe, was organized by the Public Utility Regional Waterworks for the Montenegrin Coast, with the the the International Association of Water Supply Companies for Danube River Basin (IAWD) and European Benchmarking Cooperation (EBC), also with the support of the World Bank and the municipalities of Žabljak, Nikšić and Tivat Within this exceptional event, two programs were held: a conference „Vision of the Sustainable Water Resources Management in the 21st Century“, and the First Danube Region Benchmarking Workshop. For two days, on March 22 and 23 in Žabljak and Tivat, world reknown experts, representatives from of water supply compani-

es, regulators, institutions and international organizations from 12 countries from the region and EU member states, triggered discussions about very important topics not only in regional, but also at the global level. The association began on March 21 in the snowy city of Durmitor, where director of Regional Waterworks Goran Jevrić hosted a conference and workshop participants in a pleasant ambience of the Hotel “Žabljak”, with informal gathering with local specialties and music. The most significant group of experts in the field of water management of the Danube River basin, started on March 22 in Žabljak with benchmarking workshop. The participants firstly heard Aleksandar Krstić, head of Danube Hub at the IAWD and one of the key persons responsible for organizing this event. The workshop was officially opened by the General Manager of the Directorate for Waste Management and Development of the Ministry of Su-

WATERS F MONTENEGRO

JEVRIĆ AND ZENOVI

JEVRIĆ AND ZENOVIĆ AWARDED By issuing a certificate to the uties” and “the vision to pr

TIVAT, 24.03.2018, DURING THE AWARD CEREMONY: PHILIP WELLER, ALEKSANDRAR KRSTIĆ, GORAN JEVRIĆ, VLADIMIR TAUŠANOVIĆ, PETER DANE

stainable Development and Tourism Dragan Asanović and IAWD leader Philip Weller. After presenting the possibility of linking water companies through the new information system and exchange of experiences, the conference was officially opened by a negotiator for Chapter 27 – Environment and Secretary in the Ministry of Sustainable Development and Tourism Saša Radulović. He pointed onto the “obligatory character of the vision of sustainable water resources management in the 21st century”. Weller considers benchmarking as extremely important, so the price efficiency of water utilities, greater participation of women and youth, and communal infrastructure in rural areas will be focus in the future. The executive director of the association of public water companies Aqua Publica Europea, Milo Fiasconaro announced that Regional Waterworks “due to its extraordinary results and importance” will become its full member. Patricia Lopez of the World Bank speaks of the importance of providing

good quality water in areas that have a growing population in a certain part of the year. Jevrić thanked international partners who decided to organize the gathering in Montenegro, and presented to the participants and guests a “project that changed Montenegro” through a short documentary about the emerging, past achievements and plans of the company. Expert for Chapter 27 Helmut Bloech said that “water legislation is crucial for the upcoming EU negotiations with Montenegro” and that “Montenegro must find a way to preserve its watercourses in the next 30 to 40 years”. Ivana Vojinović, Director-General of the Directorate-General for Environment in the Ministry of Sustainable Development and Tourism visited a meeting to hear the views of experts and the sector as an indispensable part of Chapter 27 in EU negotiations. Extremely dynamic agenda was continued with separate programs for representatives of water companies, regulatory agencies and ministries, where their knowledge and

By issuing a certificate to the and uties” and “the vision promote benchmarking workshop dialogue andtocooperation a benchmarking workshop and dialogue and cooperation among water companies in the r conference participants, the conference participants, the water companies in the region and beyond”. The secon eventwas was completed at the event completed at the and beyond”. The second prihotel in Tivat. In zeInwentze to Marijana theZenov went to Zenović, Marijana hotel“Magnolia” “Magnolia” in Tivat. chief engineer of the water addition, IAWD gavegave special chief engineer ofprothe wate addition, IAWD special acknowledgments to Jevrić “for “for ductionduction in Regional Waterworks acknowledgments to Jevrić in Regional Water the passion he has invested to for the quality coordination of the the passion he has invested to for the quality coordination show Montenegro and all its bea- benchmarking workshop.

show Montenegro and all its bea-

experience were transferred by Nemanja Branisavljević from the Faculty of Civil Engineering from Belgrade, Maltae Martin from Barthauer Software, Jurica Kovač, secretary of the Loss Water Specialist Group from International Water Associations, Tomica Blažek from Koprivnica Water Supply, Anvi Dervishi from Benchmarking Platform for Kosovo and Albania, Xhelal Selmani on behalf of Kosovo regulators, Darius Bor from the Romanian Water Utility in Satu Mare and his colleague from Tirana Evis Gjebrea, as well as Sanda Nastić from Novi Sad, Petar Doroslovac from Subotica, and Valeria Godo Tot from Segedin. In the middle of the day, the participants of the workshop and the conference got out of snow-bound Žabljak to the sea, more precisely - in Tivat. Experiences and social exchanges continued on board, which led them through Verige to look at the part of the Kotor Bay, visiting the Perast Islands.

benchmarking workshop

WATERS F MONTENEGRO

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY

Peter Dane, Managing Director of the European Benchmarking Co-operation

GoodOrganizational Capability for Safe, Drinking Tap Water

omparison with similar water companies in other countries has the advantage that one can identify obvious performance gaps, find explanations and learn from good practices and innovations from colleague utilities. Water is essential to life; this does not only concern the local population, but also the many visitors and tourists who pass by and rely on the tap water. â&#x2014;? What are a critical data

for water supply systems regarding benchmarking their capacities with others? Dane: Benchmarking is a management tool to improve water services. The type of data you need for it, fully depends on what you would like to improve. Is it about costs, then cost data will be critical. And is it about water quality, then it is about water quality data â&#x20AC;&#x201C; samples and compliance with stan-

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

dards. But in all cases, most important is the data quality, to be sure that what you measure and compare with others, also makes sense and people can trust the results and

conclusions. ● How helpful could be collecting qualitative and quantitative data on water management in one system that is used by water supply systems?

Dane: In the case of a bulk water supplier – delivering water to municipalities who further distribute and sell the water – one can think of two approaches.

IN A TIME WHERE WE SPEAK ABOUT WATER SCARCITY, CLIMATE CHANGES AND NOT TO FORGET THE EFFORTS TO REDUCE THE PLASTIC SOUP IN THE SEA AND THE OCEANS, IT REQUIRES STRONG ORGANISATIONS TO PROVIDE SAFE, TASTY WATER THAT PEOPLE PREFER TO DRINK INSTEAD OF BOTTLED WATER

In the first approach, the bulk water supplier collects data about its operations and makes a comparison with other bulk water suppliers. This can be helpful to get a better insight in how you are performing, but a practical problem is that not many bulk water suppliers to compare with exists in Europe. Despite of this, EBC could assist in bringing these utilities together to learn from each other. Another approach could be to not just consider the operations of the bulk water supplier, but the whole chain â&#x20AC;&#x201C; so including the municipal water distribution systems. This would be quite an extra dataand co-ordination challenge, but it would enable to compare with many other integrated systems. â&#x2014;? Comparing data through years also lead to the better understanding of use of different water sources. Could comparison of data from different countries help managers to make their companies more efficient â&#x20AC;&#x201C; in terms of financial and water management? Dane: Indeed, it is helpful to monitor your own performance over time, to be able to compare with standards, to follow trends in performance and to decide if action needs

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

APPROACHES EXIST FOR BULK WATER SUPPLIER – DELIVERING WATER TO MUNICIPALITIES WHO FURTHER DISTRIBUTE AND SELL THE WATER

to be undertaken in a specific area. An additional comparison with similar organisations in other countries has the advantage that one can identify obvious performance gaps, find explanations and learn from good practices and innovations from colleague utilities. This cannot simply be done by sitting behind your desk or a computer screen: it requires an intense interaction with colleagues, through workshops and exchanges, to better understand each other’s operating environment and to judge if interesting solutions at other companies can be succe-

ssfully implemented in your own situation. ● What are the main comparative advantages of Regional Water-supply Montenegrin Coast? Dane: Well, I think there are many ways that lead to Rome, and many ways to organise things, but it certainly has advantages to organise the specific task of managing water resources and treating them to safe, tasty drinking water through a specialised organisation of a nottoo-small scale. Water is essential to life; this does not only concern the local population, but also the many visitors and tourists who pass by and rely on the tap water, so there is a major interest. In a time where we speak about water scarcity, climate changes and not to forget the efforts to reduce the plastic soup in the sea and the oceans, it requires strong organisations to provide safe, tasty water that people prefer to drink instead of bottled water. I think that a company like the Regional Water Supply Company for the Montenegrin Coast is better capable of managing this task than several small sized local companies could do on their own.

s well as ensuring that tariffs are set at cost recovery levels, the aggregation or clustering of utilities is options to explore, as a means of improving utility operational performance and efficiency and reducing costs by clustering utilities in economically viable areas, to ensure future sustainability of required investments Ninety-five percent of Montenegrin watercourses are formed within the country which minimizes cross-border impacts on Montenegrin waters, but also engenders responsibility for the quality and distribution of water, which then flows into neighbouring countries. To reach EU standards and directive requirements, Montenegro will have to invest over â&#x201A;Ź640 million in the upgrade of water and wastewater infrastructure, while the revenues generated from water tariffs on average are not sufficient to cover operation and maintenance costs (operating cost coverage of 76% on average). As a result, operating costs are largely covered by national and municipal subsidies, and investments are funded by international loans and grants, complemented by subsi-

PATRICIA LOPEZ, World Bank Danube Water Program Leader

AGGREGATION OF WATER COMPANIES IMPROVES THEIR EFFICIENCY

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

PERCENT OF MONTENEGRIN WATERCOURSES ARE FORMED WITHIN THE COUNTRY

dies from both national and local budgets. But the performance and efficiency of public utilities performance is also below desired level. As an example, the average collection rate at only 72% (State of the Sector Report 2015, World Bank), indicates that utilities have significant difficulty recovering bills, and non-revenue water at 59% which is higher than the regional average. ● What are the main recommendations from World Bank regarding sustainable water supply systems, especially in Montenegro? Lopez: A financially sustainable service provider is one whose revenues and other reliable resources cover full cost of service, including the future cost of replacing the existing infrastructure. Financial performance and operational efficiency are linked and stepping up in the ladder to financial sustainability creates a “virtuous cycle of performance” for service providers, by which ope-

640

rating, and maintenance costs start to be covered, and hence the provider can invest in operational improvements, as well as in expansion of the system and better services, and increasing revenues as a result. From a situation of low tariffs and low collections, to upgrade and expand water and waste water infrastructure in the coming period, Montenegro will need to: (i) secure additional financial sources to invest in upgrading the water and wastewater sector infrastructure; (ii) improve the efficiency and cost-effectiveness of water utilities (addressing issues such as high non-revenue water levels and collection efficiency); and (iii) implement sound cost recovery principles, as currently water utilities do not generate sufficient revenues to ensure proper maintenance and sustainability of even existing infrastructure. ● What are options to improve water supply in regions that have low possibility of finan-

MILLION EUROS IS GOING TO BE INVESTED IN THE UPGRADE OF WATER AND WASTEWATER INFRASTRUCTURE

cing the infrastructure given low revenues? Lopez: Whilst a part of the financing required for new investments could come from national budget and donor grants, service providers will need to secure the financing of operation and maintenance.

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY

As well as ensuring that tariffs are set at cost recovery levels, the aggregation or clustering of utilities is options to explore, as a means of improving utility operational performance and efficiency and reducing costs by clustering utilities in economically viable areas, to ensure future sustainability of required investments. A recent global study by the (World Bank Joining Forces for Better Services? World Bank) on utility aggregation processes at the global level, found that countries with smaller utilities on average (measured by population per utility) pursue aggregation processes (and frequently on a voluntary basis), to maintain or attain sustainability of service provision through improved economic efficiency. The study also found that most aggre-

gation processes with a policy framework (“mandated” from policy making institutions) have happened in countries where coverage is already high with the purpose of lowering the costs for services and aiming to achieve an improvement of operational performance (in which case they aggregation process was typically financially supported). Another finding of the study is that aggregation of utilities is also more predominant in countries where local governments are responsible for water supply system service delivery. ● We are aware that there is less water on the planet every day. How can we assure drinkable water for future generations – especially in Montenegro? Lopez: At the global level, groundwater is being depleted at a rate faster than it is being replenished. By 2025, about 1.8 billion people will be living in regions or countries with absolute water scarcity. A World Bank report (High and Dry: Climate Change, Water, and the Economy, World Bank) published in May 2016 suggests that water scarcity, exacerbated by climate change, could cost some regions up to 6% of their GDP, spur migration, and spark conflict. Montenegro has sufficient water resources, but they are unevenly distributed across the country. Ninety-five percent

of Montenegrin watercourses are formed within the country which minimizes cross-border impacts on Montenegrin waters, but also engenders responsibility for the quality and distribution of water, which then flows into neighbouring countries. The enforcement of integrated water resources management is essential to: (i) ensure the well-being of the Montenegrin population and improve further living standards, (ii) protect the strong natural heritage that is the foundation for environmental sustainability and tourism growth while taking advantage of its rela-

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

ted economic development and managing risk of flooding and extreme weather events; (iii) help Montenegro achieve the EU acquis on environment and climate change and move toward EU accession. Montenegro has made positive strides in improving water resource management, notably in improving the environmental legal framework and in starting investments in sanitary waste disposal. But further improvements and enforcements are required, in relation to the management of water quality, wastewater and protection of water bodies that can SAŠA RADULOVIĆ, OPENING SPEECH DURING THE FIRST DANUBE REGION BENCHMARKING WORKSHOP

i MONTENEGRO WILL NEED TO SECURE ADDITIONAL FINANCIAL SOURCES TO INVEST IN UPGRADING THE WATER AND WASTEWATER SECTOR INFRASTRUCTURE, IMPROVE THE EFFICIENCY AND COST-EFFECTIVENESS OF WATER UTILITIES AND IMPLEMENT SOUND COST RECOVERY PRINCIPLES

positively impact public health, living standards and tourism potential. Better water quality and waste and wastewater management will require sustained investment in new and modern infrastructure. ● Having water is a basic right. Why is it so important for water supply systems to invest all their profit back in own business? Lopez: Despite access to water being considered a basic human right, over 663 million people in the world still lack access to improved drinking water sources. In addition, increasing just access is not enough. The Sustainable Development Goals (SDGs) on Water and Sanitation proposes a broader agenda and higher standards that by 2030, by which access will be equitable, safe and affordable, with attention to women and vulnerable groups. Additional targets that go beyond access are also being considered, such as improving water quality by reducing pollution, and substantially increasing water-use efficiency. Reaching these standards will require financing of significant investments, and sustainable service providers. Water is at the centre of economic and social development; it is vital for human health, produce food, sustain the environment, and create jobs.

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY Aleksandar Krstić, Danube Utility Benchmarking HUB Coordinator, Program/IAWD AleksandarDanube Krstić,Water Danube HUB Coordinator

Smart Management of Water Resources is of a Vital Importance U nder the direction of the Ministry of Sustainable Development and Tourism, the Regional Waterworks for the Montenegrin Coast already achieves impressive results - despite the system is still being under construction. It is important that such successful companies take on a leading role, both in the promotion of the profession, and in the promotion of cooperation for improving the sector and the whole society.

Montenegro could be hosting soon a gathering of the most successful water and sewage companies from all over the Europe.

● How important is the connection of the countries within the Danube region through the cooperation of public water utilities? Krstić: Since we are witnessing strong economic, social, and even natural changes, when it is difficult to predict new challenges from any of these three areas of sustainable development, smart management of water resources is of a vital importance. The knowledge, skills and the experience needed to respond to all these challenges in a right time are beyond the boundaries of the states. These are particularly the case for relatively small countries, where the number of domestic organizations sharing their knowledge is limited, so international connections are the only

possible way of continuous modernization of companies in these countries. ● What are the main advantages of the Danube Learning Partnership (D-LeaP) educational platform? Krstić: Within the Danube Water Program, it has been noted that water companies and their national associations within the region are trying to solve the same problems by developing their own training systems. Inadequate coordination has led to substantial expenditure of national resources, mostly without achieving the desired results. D-LeaP has transferred the training process to an international level, in a way that training coordinates future deve-

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

Under the direction of the Ministry of Sustainable Development and Tourism, the Regional Waterworks for the Montenegrin Coast already achieves impressive results despite the system is still being under construction. It is important that such successful companies take on a leading role

lopment within the national associations and even individual companies. Training and examples of best practices once developed are transmitted to the entire region, which speeds up the learning process. ● What are the main messages of the workshops for water supply companies and conference on Water Day, held in Žabljak and Tivat? Krstić: Under the direction of the Ministry of Sustainable Development and Tourism, the Regional Waterworks for the Montenegrin Coast already achieves impressive

results - despite the system is still being under construction. It is important that such successful companies take on a leading role, both in the promotion of the profession, and in the promotion of cooperation for improving the sector and the whole society. It can be said that the main message of the conference is that the future of our children depends on the way we use water today. The main message of the workshop is to invite leading companies to join us at the front of future protection.

● What are the next steps in co-operation with the Regional Waterworks for the Montenegrin Coast? Krstić: In 2016, the IAWD with Regional Waterworks for the Montenegrin Coast organized in Budva a benchmarking workshop for companies from the countries of former Yugoslavia. This year we have been organizing workshops for companies from all over the Danube Basin in Žabljak and Tivat. During both events, an exceptionally high level of quality has been achieved both in a professional and in an organizational sense. Thus, brought Montenegro together with hosts of similar meetings organized for the companies from Western Europe. Everything suggests that Montenegro could be hosting soon a gathering of the most successful water and sewage companies from all over the Europe.

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY

Aleksandar Krstić, Danube Utility Benchmarking HUB Aleksandar Krstić,Water Danube HUB Coordinator Coordinator, Danube Program/IAWD

Benchmarking is a Chance for Company Improvement

would shortly point out the difference between the benchmarking initiatives in the water and sewer sector that are being launched by different organizations.

In countries where the profession and work of the professionals are highly valued, it is often the case that the profession itself initiates benchmarking activities voluntarily, or that the companies themselves support and conduct benchmar-

king activities, most often with the support of their associations. This is benchmarking in the narrow sense, or “voluntary benchmarking”, which can span on several companies or almost all businesses if it has also the national character. Voluntary

WATERS F MONTENEGRO

First Danube Region Benchmarking Workshop

benchmarking aims to raise the level of performance of the involved enterprises. The second type of benchmarking is the one launched by the state institutions, especially those states that, having to fulfil the targeted standards, must quickly and organically improve the operation in the sector, especially the operation of those companies having the worst impact. This can be called “regional benchmarking”, and its goal is, first, to speed up the performance of companies that show the worst performance, without affecting the citizens. Consequently, in the process of European Union accession, almost all countries in the region, including Montenegro, have already established regulatory bodies that carry out economic and other types of supervision over companies. Finally, when the leading companies in one country are interested in reaching the highest international standards for the sector, such companies and their associations organize the so-called “international benchmarking”. The Danube benchmarking platform launched by the IAWD is exactly such an initiative, and the platform itself aims to bring together leading companies from 17 countries in the Danube Basin. I would especially like to mention that, thanks to the cooperation with the European benchmarking cooperation (EBC) which brings to-

gether the leading water and sewage companies from Western Europe, through the Danube platform companies could have the opportunity to compare their performance with the effect of companies from West European countries. This possibility is also somewhat available through national platforms, such as the platform for Bulgaria and the platform for Ukraine, but also through sub-regional platforms such as the platform for Albania & Kosovo and the platform for the countries of the former Yugoslavia. The advantage of national and sub-regional platforms is that companies can participate in benchmarking exercises in their mother tongue, or local language. The advantage of the Danube platform is that it enables the direct exchange of knowledge with companies from West European countries, such as Austria and Germany, as well as from other EU countries affected by the Danube basin, but also wider than that. In short, joining the Danube

Platform for International Benchmarking of Water Supply and Sewerage Systems, launched by the IAWD within the Danube Water Program, in cooperation with the European Benchmarking Cooperation (EBC), gives to the participants access to a network of leading water and sewage companies in the Danube Region, which helps further and faster improving the performance of the involved enterprises, especially through mutual learning and support. Furthermore, all companies from the region interested in demonstrating, discussing, exchanging and promoting good and best practices are welcome to join us and, in their own voice - coming from the sector itself, to contribute to the identification and development of strong, reliable and sustainable water utility companies within and outside the Danube basin. Anyone who is interested can search for all information about the platform and about the terms of connection to the platform via email: thedanubehub@d-leap.org, and information is also available on the Danube Learning Partnership website: www.d-leap.org Finally, I would like to point out that the leading companies are defined by the motivation to constantly improve their own services, as well as to support other related companies through the exchange of knowledge.

56 VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY MILO FIASCONARO Executive Director of the Aqua Publica Europea In addition to the warm welcome I’ve received - and I’m grateful to the friends of the Regional Waterworks for their extraordinary hospitality my stay in Žabljak was a great opportunity to learn more about water management in Montenegro and, more generally, in the Danube area. I had the chance to learn about some of the challenges that you will have to tackle in water resources management in the coming years. I’m persuaded that Montenegro will have no problem in addressing them, because I met so many people from Regional Waterworks for the Montenegrin Coast, with a strong passion about their job, but also a clear vision on the future about the things to be done and a commitment to realise them. And I think this is true for many other utilities I met in Žabljak. The high participation of utilities from the Danube area – despite unfriendly weather condition – in conference on results of a transnational benchmarking exercise demonstrates the willingness of these utilities to constantly improve their performance – by comparing and learning from their peers – to offer the best service to the most affordable price to citizens. This is also the commitment of all members of Aqua Publica and I look forward to our future collaboration with other public utilities from all over Europe.

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

HELMUT BLOCH Consultant for Chapter 27 and Expert in the Field of Water Management and Protection I believe that the organizers of conferences and workshops wanted neighbours to get closer to each other - Montenegro with Croatia, Bosnia and Herzegovina, Serbia, Kosovo, as well as with representatives of companies from countries such as Hungary and Romania. The whole event was successful. Presentations that could be seen at the workshop were of high quality - including the one from Montenegro - and the enthusiasm of all the participants was impressive. Most importantly, people felt as if they were at home, appreciated their arrival, but also what they wanted to publicly make their views and learn from each other. I am closely cooperating with the Regional Waterworks for the Montenegrin Coast and the Ministry of Sustainable Development and Tourism, so there will be another chance for me to return to Montenegro this year. Just before the end of June is expected to open Chapter 27 in negotiations with the European Union, which is an extremely important event for Montenegro.

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY PHILIP WELLER Danube Water Program Coordinator of the IAWD Montenegro is truly a wonderful country when it comes to its natural landscapes. During our stay at the workshop and at the conference, we witnessed some of its extremes. Since childhood I do not remember seeing this snow, as was the case with Žabljak. This has given rise to some problems but, on the other hand, most of us who have not been in this area were wonderful to have this winter landscape. As far as the workshop is concerned, I am very pleased with the conclusions we have brought from it. For me it is most important that people from the water supply companies of the Danube river basin are constantly in contact. This was a good opportunity for everyone to gather and share experiences. Water supply companies could, through presentations, see what their colleagues are doing and find out how some things can work better. I am also delighted that the state secretary of the Ministry of Sustainable Development and Tourism, Saša Radulović, then the President of Žabljak Municipality Veselin Vukićević and other representatives of the regulatory agencies and ministries participated in the conference. All of them are very important when talking about water supply and should be in constant contact. To sum up, there was a lot work to be completed, and there was little time. I bear great impression on the workshop and conference in Montenegro.

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

PETER DANE Managing Director of the European Benchmarking Cooperation (EBC)

When it comes to the content itself, the workshop was extremely interesting. A few years ago, during the first such events in Priština and Belgrade, I was able to see how people started with benchmarking. Now I notice that people have progressed, in just a few years. In the presentations of their work, they are truly dedicated to improving the quality of services, which is very important. Changing the water supply system’s services is very difficult and even years are needed, so planning activities can not only be for a short period of time. People are very motivated to improve the system and at the workshop I’ve seen it harder to achieve that goal. Also, this was an exciting way for me. I missed a flight to Montenegro, and after that I arrived in the beautiful, inaccessible mountain ranges under the snow. On the other hand, the day later we were in the Boka Kotorska Bay, in Tivat, which says that this little country is full of great contradictions. That’s unbelievable!

60 VESELIN VUKIĆEVIĆ MAYOR OF THE MUNICIPALITY ŽABLJAK

"Thanking to the support of the Government of Montenegro, the Ministry of Agriculture and the Regional Water Supply Company in the implementation of emergency measures for solving the water supply problem in two phases, the Municipality of Zabljak successfully welcomed the tourist season in 2017, and it was the first time that it did not have problems with water supply during the summer season. The importance of the support provided by the Regional Water Supply Company is well indicated by the fact that we had a record tourist season in the summer of 2017. Had the issue not been resolved, the consequences for our municipality would have been serious and far-reaching. A#er all, the Regional Water Supply Company and the Ministry of Sustainable De-

velopment and Tourism organized the first international conference in Zabljak on the World Water Day, which is of particular importance to us, since Zabljak has the chance to become a new congress tourism centre in Montenegro. This event, which gathered over 80 participants from 15 countries, was quite successful, so I take this opportunity to invite participants to be our guests again, and also to invite interested investors, because we need larger hotel capacities here, and the Government of Montenegro and the Municipality of Zabljak managed, in the past decade, to ensure almost all infrastructure required for accelerated development of this area, by providing transport infrastructure, wastewater treatment collector, solid waste selection system, and hopefully a long-term solution of water supply. "

WATERS F MONTENEGRO

MARIJANA ZENOVIÄ&#x2020; Leading Engineer for Water Production of the Public Utility Regional Waterworks for the Montenegrin Coast Public Utility Regional Waterworks for the Montenegrin Coast have been a participant of the Danube Water Program from IAWD since 2014, through the Benchmarking Project, which collects measurable data on the results of all activities in the organization. They are then compared with the data of other companies, which gives us the possibility of knowing where we are in relation to others. In the past four years, we have been trying to answer all the requirements set out by the project. That

is why we are very much able to continue our participation through the more demanding advanced level of the project. Apart from participating in the Danube Benchmarking Platform, where representatives of water utilities from South East Europe, Regional Waterworks for the Montenegrin Coast will probably also be included in the West European platform. This will also give the opportunity to compare their results and work with companies from that part of Europe.

WATERS F MONTENEGRO SAŠA RADULOVIĆ State Secretary at the Ministry of Sustainable Development and Tourism

For me, the regional water supply system means reviving a sustainable idea, which results in creation of exceptional opportunities for development on the Montenegrin coast, apart from securing the essential prerequisite for life water. Regional Waterworks for the Montenegrin Coast in our country is a very good example that substantiates the theory of rarity, that is the

high quality of the management in the state-owned company. The Regional Waterworks is a vivid proof that the state may manage the resources that are assigned to it in a very responsible, professional way, that is in a good host manner. Additionally, the Regional Waterworks for the Montenegrin Coast represents an exceptional example of a socially responsible enterprise.

IVANA VOJINOVIĆ Director-General of the Directorate-General for Environment in the Ministry of Sustainable Development and Tourism It was obvious in the moment of the decision to construct the regional water supply system was made - and especially today - that this project is an investment of a crucial importance for Montenegro. The construction of a 100

km long water supply network gave particular impetus for development of tourism in the Montenegrin Coastal Region, securing the stable water supply and influencing the overall economic development of our country.

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY JURICA KOVAČ Secretary of the Water Loss Specialist Group of International Water Association (IWA) Continuous multi-year implementation of benchmarking programs is an excellent example of how progress can be made in improving water supply companies in developing countries, as well as elsewhere where we have a po-

or water management quality management system. The workshop in Montenegro was one of the many well-organized meetings of people from the region and represents an important step in the efforts to improve the operations of our utilities.

SANJA HORVAT Manager of Wastewater Treatment Plant in KcVode Koprivnica, Croatia For us, the experiences of countries that are not in the European Union are very useful, because it shows us how neighbours are doing and what the problem which they are dealing with. We are in some way in favour of the fact that we have already passed the process of accession to the European Uni-

TÓTH GODÓ VALÉRIA Project Manager of the Water Supply Program of Segedin, Hungary We carry a good experience of such workshops and meetings with representatives of other waterworks. Also, we are extremely pleased with the benchmarking program, especially because we participated in this kind of

work for the very first time. Our company can now take advantage of all the quality data that colleagues have provided, as well as the knowledge of the lectures. We return home with very good experiences.

on, meeting certain standards. This also means that we have completed what is now present in Montenegro - opening a chapter on water resource related topics. On the other hand, the operational issues of water utilities are essentially the same and therefore it is useful to exchange experiences in this way.

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

DARIUS BOR Financial Director of Apaserv of Satu Mare, Romania The key principle of benchmarking is to find the right approach, and to better understand the results that companies present, it is best to compare them in as many ways as possible. To have the opportunity

to do it with the results emerged through benchmarking companies from Western Europe, is an additional advantage that water supply companies should take. Benchmarking in which several companies are involved is good, but if a lot of them are involved it is excellent. The national level of comparison is also good, but regional or European is - extraordinary. So, â&#x20AC;&#x153;accept the benchmarking and you will be rewardedâ&#x20AC;?.

EMILIJAN MICEVSKI Engineer in the Loss Detection Department of the Bitola Water Plant, Macedonia This workshop has helped our company to see how others are doing their business. I notice that it is like us, but the conference indi-

the items of water losses, the geoinformation system - GIS, as well as the management of the water systems we have heard about the experiences of our, Head of the Director General regional and other foreign systems, Cabinet of Water Supply and as well as international experts. Also, Sewerage in Skopje, Macedonia we have been connecting with new water utilities, such as the Regional Waterworks for the Montenegrin The experience of my colleagues Coast and the Water Supply System and mine is great, because this was a from Novi Sad. We already plan some workshop that was of great importan- common activities related to the topics ce to our company. I want to highlight we discussed during the workshop.

KATERINA KATARINAPEJOVSKA PEJKOVA

cated that we will continue to make a special calculation of water resource losses in our system in the future. At the same time, we have introduced SCADA and GIS monitoring and control systems, and through them we can also register certain quantities of water losses. Anyway, this was a special event, and all that we learned at the workshop can be applied to our company.

VISION OF THE SUSTAINABLE WATER RESOURCES MANAGEMENT IN THE 21ST CENTURY from the region of the Danube Basin. For me, this is the tenth participation in such regional event, which is divided into workshops for regulators and those for water company representatives. I have presented how we can increase the efficiency of our company, so that they are in accordance with European benchmarking indicators. As for the whole event in Montenegro, this was certainly the best organization of the workshop so far.

SANDA NASTIĆ Head of Business and International Cooperation in Water and Wastewater of Novi Sad, Serbia I have participated in benchmarking workshops since the very beginning, since they are organized for members from countries of former Yugoslavia and

ČABA ŠANTA Deputy Director of Water Supply and Sewerage in Subotica, Serbia The benchmarking database that has been developed so far contains data that is comparable, and we can use everything that appears in them. You should carefully

DARKO MITRIĆ Executive Director in Bijeljina Water Supply and Sewerage, BiH The workshop is organized at an extremely high level. I am glad to have gathered so many people from our industry so that we could exchange our attitudes. For the Bijeljina water supply company, this

means a lot, because we recently got a water treatment plant. The benefits of such events are to gather information from other companies, to compare business with larger and smaller enterprises, and to develop new processes within our company. This means that what we have heard at workshops will be soon applied in our company. From good and bad practices, we will opt the best for us that lead towards improving our business operation.

follow these data and analyse them - not just look at the numbers but to know what’s behind them. Employees who are working on entering this data have at the workshops an opportunity to share experiences of their coverage. Our example is that we had investments of only 0.2 percent for reconstruction and this is a bad position compared to mandatory 1 or 2 percent, as we have heard from colleagues.

NEDELJKO ILIĆ

WATERS F MONTENEGRO First Danube Region Benchmarking Workshop

Benchmarking Coordinator of Water Supply and Sewerage Tuzla, BiH

Deputy Director of Water Supply and Sewerage Tirana, Albania

Coordinator for Albania and Kosovo benchmarking HUB

Representatives of Albania in Montenegro for the first time participated in workshops. We just became members of the Danube Water Program. This is just the beginning of cooperation and I am happy that many projects we are going to work together are ahead of us. Of course, we also expect future cooperation between our two countries Montenegro and Albania. The Regional Waterworks for the Montenegrin Coast has an advanced system compared to those in our country.

Comparison between utilities from two countries enables continuous improvement of services. Participation of leading utilities from Albania and Kosovo in the Danube HUB for benchmarking provides a new and useful perspective on the performance of our utilities and expands the knowledge base from which we can consider and plan further improvements.

I’m happy with the whole workshop and I’d like to thank its organizers. We have been participating in benchmarking workshops since 2016 and I hope that we will remain in it. Everything was great, and we carry the positive experiences that we will convey to our colleagues from our company.

SRĐAN KEVAC

Water and Wastewater Administrator of Vlora, Albania I learned more about the benchmarking of water supply systems and companies on the workshops. I’m glad I had the opportunity to participate in this event. The knowledge I have acquired will share with my colleagues in the company, but also with those in the water supply companies of other cities in Albania, specifically Fire and Saranda.

Technical Director of the Pristina Water District, Kosovo The presentation of the Regional Waterworks for the Montenegrin Coast was excellent they presented everything they have done so far, the way of doing business, investments and how to solve the problems of water supply in the country. I can say that this is one of the most significant projects we have been listening to lately. In addition, Montenegro is a beautiful tourist country and we have seen many wonderful sceneries at Žabljak and Tivat.

SOKOL XHAFA

We are at this annual closing workshop for benchmarking for the fourth time. We are happy to take part in this project because it shows our year-round work and we get results here. This year we must commend an exceptional organization with a variety of programs, many good presentations and exposures. From colleagues we have managed to gather different experiences and good practices we hope that we will be able to implement in our companies and at the same time continue to expand our cooperation.

DORIAN XHELILI

SOKOL XHAFA

DORIAN XHELILI

Main Controller of the Water Supply and Sewerage System of Banja Luka, BiH

SRĐAN KEVAC

NADIRE VITIA

EVIS GJEBREA

NEDELJKO ILIĆ

Joining forces for better services? Chapters 2, 5 i 6

WATERS OF MONTENEGRO VOLUME 3

Dear readers, in the previous issue of the journal VODE CRNE GORE (WATERS OF MONTENEGRO) (No. 2, Year II, 22 March 2018, pages 46-53), we presented summary of the World Bank's report: "Joining forces for better services ?: When, why, and how water and sanitation utilities can benefit from working together." The summary given in number 2 is especially intended for decision-makers to quickly get acquainted with the concept of aggregation. We are pleased to present you in this issue of the journal (number 3) the chapters from the World Bank report which describe in more detail the basic concepts of aggregations (Chapter 2), and then, through numerous case studies, why (Chapter 5) and how (Chapter 6) aggregations work. Also, this issue provides case study summary tables (Appendix A). In this way, we will directly look at the experience of others related to the aggregation of water and sanitation companies, and as a special case we highlight the aggregation case in Ireland with the concept of "one country, one operator". At the same time, we would like to announce that the next issue (number 4) will present professionally more demanding chapters explaining how to use the World Bank report and related toolkit (Chapter 1), the basic global aggregation trends (Chapter 3), quantitative evidence when aggregations work (Chapter 4), as well as a guidance for a successful aggregation (Chapter 7) and the conclusions of the report (Chapter 8). Finally, a statistical analysis methodology (Appendix B) and references will also be published. In this way, we want to make the complete World Bank report available to you in Montenegrin, and make it possible for all stakeholders to be fully familiar with aggregation processes through the report analysis, and with what needs to be taken into account when considering and possibly implementing aggregations in Montenegro and the region. Enjoy the reading.

WATERS F MONTENEGRO When, Why, and How Water and Sanitation Utilities Can Benefit from Working Together

JOINING FORCES FOR BETTER SERVICES?

This work is a product of the staﬀ of the World Bank, with external contributions. This report was prepared by a team led by David Michaud and comprised of Maria Salvetti, Carlos Diaz, Gustavo Ferro, Michael Klien, Berenice Flores, and Stjepan Gabric. David Michaud is the Practice Manager for Water in Europe, Central America and Haiti at the World Bank’s Water Global Practice. In his current position, he oversees the World Bank’s water portfolio and staﬀ in those regions.

72 Chapter 2

AGGREGATIONS Basic Concepts

This chapter provides de nitions of the basic concepts used in the rest of the report. It also outlines the typology used to understand and characterize aggregation processes, as well as evaluate their outcomes. DEFINITION OF AGGREGATION Definition In the context of this study, aggregation is de ned as the process by which two or more WSS service providers consolidate some or all their activities under a shared organizational structure, whether it implies physical infrastructure interconnection or not, and whether the original service providers continue to exist or not ( gures 2.1, 2.2, and 2.3). Aggregation,asde nedinthisreport,canencompassalargevarietyofsituations.A classic example is the full merger of several service providers into a new entity ( gure 2.1). Aggregation also covers a number of other circumstances. For instance, several service provid-

ers can aggregate to build a common treatment plant facility or create a common WSS system ( gure 2.2). Service providers can also choose to aggregate only speci c functions, for example, operation and maintenance of their vehicles and heavy equipment machinery ( gure 2.3). For this study, service providers that cooperate on an ad hoc basis and do not share or set up a common organizational structure are not considered as aggregating. Likewise, this study de nes aggregation as a process rather than a situation, meaning that service providers that were established at a speci c level from the beginning (for example, the national utility companies established in some Western African countries) are also not considered aggregated.

WATERS F MONTENEGRO Fragmentation of Service Provision and Aggregation Index To measure the degree of fragmentation of service provision of the water sector in a country, we take into account the fact that WSS services are usually considered as local services and propose a simple normalized index based on the number of local governments and the number of service providers.

Where U is the number of service providers in the country M is the number of local governments in the country A is a normalized aggregation index ranging from 0 to 100, with a value of 0 indicating a fully atomized sector with many more utility companies than local governments, a value of 50 indicating the same number of utilities and local governments, and a value of 100 indicating a single national utility. The purpose of the aggregation index is to estimate whether a country has predominantly disaggregated or aggregated utilities.

CONTEXT AND PURPOSE OF AGGREGATIONS Context of Aggregation The context in which aggregations take place is characterized by the enabling environment in the country and in the sector. This enabling environment comprises factors such as the level of development and of income, the water-related

FIGURE 2.1. AGGREGATION EXAMPLE —AGGREGATION OF ALL FUNCTIONS AND STAGES

Typology Policy makers usually pursue a speci c purpose or set of purposes when they decide to promote aggregation. When they conduct the aggregation process, they consider the enabling and physical environments in which it is being conducted. Therefore, this report postulates that the purpose and context both in uence the design of theaggregationprocessandthat the design of the aggregation can be characterized by its scope, scale, process, and governance ( gure 2.4). The typology is used consistently throughout the report.

FIGURE 2.2. AGGREGATION EXAMPLE —AGGREGATION OF ALL FUNCTIONS AND SOME STAGES

FIGURE 2.3. AGGREGATION EXAMPLE —AGGREGATION OF SOME FUNCTIONS FOR ALL STAGES

FIGURE 2.4. CONTEXT, PURPOSE, AND DESIGN OF AGGREGATIONS

environmental standards in force, the political will and leadership at both national and local levels, the institutional setup of the water sector with regard to WSS provision, policy-making responsibilities, regulation, and so on. The context of aggregation is also characterized by the physical environment in which utilities operate. This physical environment encompasses the size of utilities, their level of performance, the population they serve, the number of towns in their operatingarea,thequalityandquantity of waterresources, and other factors. As discussed in subsequent chapters, policymakersshouldcarefully considercontextbecauseit in uencesthedesignof reforms.

Purpose of Aggregation Aggregations can be distinguished by their purpose (see gure 2.2). Not all aggregations are pursued for the same purpose; in fact, the study shows that the purposes that decision makers pursue di er signi cantly from one case to anoth-

er. The main ones include the following: • Economic e ciency, which seeks lower unit costs, through economies of scale or economies of scope or more e ective investment strategies • Performance1 improvement, which covers technical and managerial aspects of service quality and considers customer satisfaction • Professionalization, which targets technical capacity enhancement and addresses bottlenecks caused by scarcity of human capital • Environmental bene ts, seeking integrated water resources management by sharing sources or reducing pollution • Solidarity, to cross-subsidize investments between regions or social groups so as to extend coverage and/or recover operation and maintenance costs Aggregation is thus sometimes motivated by (mostly local) stakeholders seeking to generate positive internalities and sometimes by external or national stakeholders seeking to generate positive externalities. • Economic e ciency is likely to generate positive internalities for a utility as reducing operating expenditures (OPEX) can allow the reallocation of some resources to investments to improve asset management and sustainability. • Performance improvement and professionalization are likely to generate internalities but also externalities. For instance, improved water service continuity, reduced sewerage blockages, improved drinking-water quality, and improved wastewater treatment quality generate in customers a higher willingness to pay, thus improv-

WATERS F MONTENEGRO ing the invoice collection ratio. The utility is able to collect more revenues, improving its sustainability. Performance improvement also generates economic and social externalities, as it improves health conditions for the connected population, reduces pollution discharged in the environment, and increases water availability for economic activities. • Aggregation aiming at environmental bene ts or solidarity generates economic, social, and environmental externalities. Extension of coverage brings better health conditions and greater water availability for economic activities. O#en, decision makers pursue more than one purpose; however, the combination of di erent purposes may not always be possible. Aggregation that targets quality and technical capacity improvement o#en induces large investment programs, which tend to increase OPEX. Thus, enhancing economic e ciency and performance at the same time may sometimes be contradictory, especially when a utility is trapped in a low-level equilibrium (box 2.1). As will be discussed in subsequent chapters, the design of the aggregation with regard to scope, scale, process, and governance should depend closely on the purpose sought ( gure 2.5). As described by Savedo and Spiller (1999), the WSS water sector in many developing countries is stuck in a low-level equilibrium. In such situations, low tari s are associated with low quality, low service expansion, and general operational ine - ciency. The term “equilibrium” indicates that without a reform of the sector’s setup, there is no movement toward improved water services. This phenomenon originates in incentives for governments to behave opportunisti- cally. By lowering

tari s or resisting tari increases, they can reap short-term political bene ts such as electoral gains, so they will support the status quo over costly political actions that might involve higher water rates in the short run and yield di use bene ts in the longer term. Moreover, in such circumstances consumers are relatively dispersed and too disorganized to assume an active role in holding the water authority accountable. They also are unwilling to spend more on bad-quality services that they see as wastefully managed. In turn, this creates incentives for water companies to operate ine ciently regardless of whether they are public or private companies ( gure B2.1.1). To get out of the low-level equilibrium, policy makers can implement various strategies, such as improving the regulatory environment or limiting government opportunism. Following the low-level equilibrium trap theory developed by Nelson (1956), large investment programs can act as a “Big Push” that enables underdevel- oped sectors to get out of the trap and embark on a development path.

FIGURE B2.1.1. LOW-LEVEL EQUILIBRIUM

76 DESIGN OF AGGREGATIONS Expanding on the work done in World Bank (2005), this report characterizes the design of an aggregation in function of its scope, scale, process, and governance (see gure 2.4), as discussed in the following paragraphs.

Scope of Aggregation Aggregation of WSS utilities can cover various scopes ( gure 2.6). • They can execute few or all functions associated with these services; that is, operational, administrative and commercial, and investment and nance ( gure 2.7). • Aggregated utilities can provide various services: water only, wastewater only, or water and wastewater. They can also provide water and/ or wastewater services as well as other local public services. • Aggregated utilities can supply only stages of water and wastewater services; that is, pro-

FIGURE 2.5. PURPOSE OF AGGREGATION

FIGURE 2.6. SCOPE OF AGGREGATION

duc- tion, distribution, collection, or treatment (FIgure 2.8).

Scale of Aggregation The scale of WSS aggregation can vary widely, covering several municipalities or up to the whole national territory ( gure 2.9). • Aggregation can cover a group of local jurisdictions following administrative boundaries. These jurisdictions may or may not be contiguous. If they are, this can imply physical interconnection of networks, and administrative and commercial consolidation. • Aggregation can cover a whole region or the entire national territory where a single utility is providing services following administrative boundaries. • Aggregation can be implemented at the watershed level, following water catchment boundaries, thus putting the emphasis on integrated water resources management as well as wastewater discharge control.

WATERS F MONTENEGRO Process of aggregation Aggregation can be distinguished according to the type of process followed (Figure 2.10). • The process can be mandated— and thus top-down driven—and initiated by national authorities, which design a legally binding legal framework for aggregation. • It can be mandated and supported nancially by national or supranational entities, when those entities consider the provision of additional support as relevant. • It can be voluntary and incentivized by public subsidies, external funding, or technical assistance stemming from national or supranational stakeholders. • It can be voluntary, deriving only from a bottom-up initiative, stemming from utilities or local actors without a national framework to encourage it. These processes form a continuum from bottom-up to top-down processes. Moreover, supranational and national incentives can be aligned to generate better results. For example, national actors can produce national policy guidance stating that aggregation is an eligibility criterion for external or national funding. The rst three categories represent cases in which the national government is actively promoting aggregation processes, while the fourth is characteristic of environments where the national government has no speci c policy views on aggregation processes, which then happen from the bottom up, driven by

FIGURE 2.11. GOVERNANCE OF AGGREGATION

utility companies or local actors’ own interests.

Governance of Aggregation When aggregating utilities, various governance aspects have to be dealt with. The main ones relate to institutional elements; nancing, assets, and liabilities; and harmonization of processes and practices.

Institutional elements • Legal form and organization: Service providers have to de ne and agree on the legal and institutional structure of the aggregated utility. Three broad categories of aggregation arrangements have been identi ed ( gure 2.11): • A special-purpose vehicle—that is, a speci c cooperation agreement between service providers who remain separate entities, with a well-de ned scope (for example, managing a speci c facility) • A delegated contract signed between the jurisdiction level in charge of service delivery and a private or public operator, transferring all or most of the operational responsibilities, but maintaining the original entities • A merger, by which original service providers consolidate into a single entity and disappear • Shareholder rights and power distribution: Depending on the legal form and organization cho-

sen for the aggregation, shares and powers are allocated among aggregating entities to allow decision making. • Oversight and coordination of tari and performance: Tari and performance are generally overseen by a board of directors or the general assembly of the utility, which o#en includes representatives of municipalities in which the utility operates, or by a national regulator. • Role of citizens and customers: Communication and information ows between the aggregated utility and customers can be materialized in formal accountability measures and mechanisms. • Exit and entry clauses: Clear entry and exit rules on joining or leaving the aggregation have to be set. They commonly include an asset inventory as most exit clauses anticipate the repayment of depreciation costs when investments have been made.

Financing, Assets, and Liabilities • Cost- and revenue-sharing agreements: Rules on sharing costs and revenues must be clearly established among aggregating entities. They vary according to the degree of integration of service providers. • Asset ownership, transfer, development, and management (royalties, investment decisions,

WATERS F MONTENEGRO and so on): Assets transferred to the aggregated entity should be inventoried. This transfer may be remunerated. Rules regarding investment allocation and priorities must be clearly set out. • Liabilities: Service providers that are aggregating may hold debts to suppliers and nanciers or claims on customers. These liabilities can be taken on by the aggregated utility or local government budgets, or not at all.

Harmonization of Processes and Practices • Staﬃng and human resources management: Transfer of sta from municipal structures into the aggregated utility must be planned and documented in quantitative and nancial terms, including possible pension liabilities. • Information technology (IT) systems (customer database, asset inventory, billing and collection system): The aggregation agreement should include clear costing information as well as the strategy for harmonizing and integrating IT systems and managing databases. • Administrative practices, quality standards, procurement, and the like: A harmonization strategy for administrative practices, such as procurement, accounting, and quality control must be set up ahead of the aggregation implementation.

DEFINING AND UNDERSTANDING A SUCCESSFUL AGGREGATION What does Success Look Like? To analyze the evidence, it is important to rst de ne a successful aggregation process. The degree of success should be assessed and measured against the main purpose(s) of the aggregation. This report defines a successful aggregation as

one in which the aggregated service provider performs signi cantly better than the previously disaggregated entities with regard to the intended purpose, without unreasonable deterioration of other performance dimensions. For example, if the aggregation purpose is to improve economic e ciency by achieving economies of scale (and/or scope), the aggregation process will be successful if the new, aggregated structure achieves signi cantly lower unit costs without unreasonable2 deterioration in other dimensions such as solidarity or service quality.

Why Does Success Not Always Materialize? There can be many reasons why an aggregation is not successful. Despite the purely technical arguments for economies of scale, aggregation does have possible drawbacks, such as loss in accountability and political reluctance that may hamper the process of aggregation, blocking it before it takes o or damaging it a#er it is launched. Clustering service areas increases the distance between the service provider and the end user. Salaries of the agglomerated unit might be adjusted to re ect those of the highest-paying utility, which increases operating costs without necessarily creating equivalent e ciency gains. Lack of political will in aggregation reforms can arise if local authorities perceive such reforms as a threat to their sovereignty. Aggregations also make utility organizations more complex because the numbers of systems, employees, and processes can increase substantially. In addition, utility ownership—in the sense of the allocation of decision and control rights—tends to become more complex. Instead of a single owner, several municipalities or regional entities share ownership or sign a lease agreement with a utility. Such fragmentation of control and decision

FIGURE ES.2. TRADE-OFF BETWEEN PRODUCTION AND TRANSACTION COSTS

rights can entail signi cant transaction costs. In summary, although serving a larger number of customers has organizational advantages in the production process for utilities—which can materialize as economies of scale in lower unit costs or improved performance—greater size also implies higher transaction costs (Coase 1993) (Williamson 1975). Moreover, the concept of transaction cost implies that utilities of di erent size represent trade-o s between production and transaction costs. Whereas production costs typically fall with size, transaction costs tend to increase. The optimal degree of aggregation is then the point where the sum of production and transaction costs is minimized ( gure 2.12). The optimal size, however, depends on the context and therefore varies across a country and over time. Indeed the context will in uence the level of production (through the quality and quantity of water resources, for instance) and transaction costs (through the size and performance of aggregating utilities, for instance) and, as such, will have to be taken into account to ensure aggregation success..

One-Oﬀ Transaction Costs (Linked with the Aggregation Process) In the framework of an aggregation, one-oﬀtransaction costs encompass the following three broad categories (Dahlman 1979):

•Before aggregation, research and information costs incurred to nd and gather information on the service providers to aggregate with. In the context of this study, the entire design phase of the aggregation would fall in this category. • During aggregation, bargaining costs corresponding to the negotiations necessary to reach an agreement among aggregating utilities and translate it into legal provisions and binding documents, as described in the list about governance earlier. This might lead, in concrete terms, to sub- optimal solutions, such as the commitment to take over unnecessary sta or liabilities to make the bargain more palatable to the various parties. • A#er aggregation, enforcement costs corresponding to the costs necessary to implement aggregation and make sure that all aggregating parties comply with their commitment and duties. They could, for example, entail the harmonization of salaries to a higher level or the costs of setting up new systems and procedures.

Long-Term Transaction Costs (Consequences of the Aggregation) Several long-term transaction costs can be distinguished (Canback 2003) and applied to aggregation situations: • Bureaucratic insularity: As utilities grow, senior managers are less accountable to the lower ranks of the organization and to shareholders. Particularly in large utilities with well- established procedures and rules, individual rent seeking is possible. This relates also to the frequent nding that managers in large organizations tend to emphasize size over pro tability. • Motivational aspects ("atmospheric consequences"): Increasing size brings increasing spe- cialization, which in turn leads to reduced commitment from employees. Employees in

WATERS F MONTENEGRO large organizations o#en have a hard time understanding the purpose of corporate activities, as well as their individual contribution. • Communication distortion due to bounded rationality3: As utilities grow, complexity increases. Hierarchical layers are added to manage the increasing complexity. Inevitably, these layers distort the ow of information. This limits the information available to exec- utives, which Williamson (1975) called a loss of control. In addition to such “classic” diseconomies of scale, which can arise as a single utility grows, aggregations add complexity to the organizational structure, thereby adding to transaction costs. Among the most important characteristics that change through consolidation: • Dealing with fragmentation of ownership: The fact that an aggregated utility serves several municipalities requires the formulation of decision rules for the shareholders and the allocation of voting power. Various schemes for the distribution of voting rights are possible, but in all cases the distribution requires additional bureaucratic procedures and mechanisms to deal with multiple instead of single owners. • Heterogeneous initial conditions and heterogeneous preferences: Municipalities for which service is bundled through an aggregation might have widely varying initial performance, service quality, and states of infrastructure. This raises questions about whether to apply the same policies to all utilities and how to prioritize investments and service improvements. To some extent, local preferences with respect to service provision may di er. How the management of the aggregated utility responds to these challenges might vary from case to case, but the utility needs con ict resolution mechanisms to align interests and arbitrate between those that diverge. This adds again to organizational complexity and decision-making costs.

• Complicated cost- and revenue-sharing mechanisms: As more municipalities are involved in an aggregation, possibly complicated cost- and revenue-sharing systems must be set up and adapted over time. Apart from the administrative burden, such a system also reduces transparency between service delivery and the price paid for the service, particularly if cross-subsidization between municipalities is pursued. Cost-sharing mechanisms give each municipality an incentive to attract as much investment and expenditure (public work contracts) as possible, regardless of whether or not the investment is sensible. These so-called common pool problems become more pronounced, the larger and more complicated the cost-sharing mechanisms are. All in all, it is important to measure the outcome of a given aggregation primarily against its original purpose, which may or may not involve economic e ciency. In some cases, it might be necessary to accept a permanent transaction cost in return for an important externality; for example, a cross-subsidy between low- and high-cost service areas or an environmental benefit.

NOTES 1. For the purpose of this study, the performance of a WSS utility is de ned as its ability to provide cost-e ective, good-quality service to the population in its service area. It is measured through an aggregate Water Utility Performance Index (WUPI) measuring three distinct dimensions—the coverage, quality, and e ciency of services provided. For more details, refer to box 4.1. 2. As discussed further in later sections, some level of deterioration might be unavoidable when externalities are involved; for example, the improvement of service quality might involve increases in costs. 3. Bounded rationality conveys the idea that individuals have a limited rationality when making choices.

Chapter 5

WHY DO THEY WORK? The Qualitative Evidence This chapter focuses on the lessons learned from 14 concrete aggregation case studies in seven countries. It describes why these aggregations have worked well by highlighting success factors as well as risk factors that were successfully managed. The 14 case studies present a variety of contexts, purposes, and designs of aggregation. In a majority of them, aggregations happened in a mixed context of urban and rural areas, except in Brazil where rural providers consolidated, and in Mozambique and Indonesia, where aggregation happened in urban and dense areas. Case studies exhibit a diversity of performance level from low for Brazil, Colombia, Indonesia, and Mozambique to medium for Romania and Portugal, and high for Hungary. The level of development of these countries also shows signi cant diversity: low-income for Mozambique; lower- middle-income for Indonesia; upper-middle-income for Brazil, Colombia, and Romania; and high-income for Portugal and Hungary. Processes and scopes of aggregation also contrast, whereas scale almost always follows administrative boundaries (except in Brazil). In the Hungary case study, the reform targeted mainly internalities and was done

through a mandated process, whereas in other case studies externalities were sought, mainly through voluntary processes. Figure 5.1 re ects the diversity of context among case studies, taking into account GDP per capita and performance. The size of each utility is also shown through the size of the dot representing the population served. The performance of each utility has been assessed qualitatively and ranked from low to medium to high. Appendix A contains a complete overview of the case studies, presenting the context and purpose of each aggregation as well as the design and outcomes. In addition, a brief report on each of the case studies is available on the online toolkit.

KEY SUCCESS FACTORS FOR AGGREGATION In some case studies, aggregation has proven successful because of the presence of a local stakeholder acting as a champion among the aggregating service providers. This is especially true where this champion helped overcome political resistance.

WATERS F MONTENEGRO • In Colombia, the structuring of the regional a regation “Mercado Regional del Atlántico,” providing services in a large city as well as in small surrounding municipalities, was eased by the involvement of a political leader who facilitated the negotiation with mayors and other political actors. He also encouraged them to fully comply with their responsibilities, such as transferring all resources agreed upon in due time. As a result, the operator—Triple A—has received strong political support from the successive governors of the Atlántico region during the past 12 years, leading to a successful a regation. • In Romania, the Constanta County Council and the city of Constanta supported the operator, Raja Constanta, throughout the whole regionalization process. Moreover, the general manager of Raja Constanta is an important local and national leader in the water sector who has extensive experience in public administration and in business entrepreneur- ship in the private sector. He used to be the deputy mayor of Constanta and, as such, he directly took part in the institutional reforms in the water sector. In 2013, he became the president of the Romanian Water Association. Having such a leader proved crucial to overcoming political resistance when a municipality opposed a water tari increase by unilater- ally halving the price. Raja Constanta continued to charge

fees according to the delegation contract provision and received support from the utility shareholders. Moreover, the stability of the executive management, which has remained unchanged since 2003, gave great credibility to the operator and enhanced its leadership. • In Portugal, a mix of two actors was central to improve modernization of WSS: the new state holding company—Águas de Portugal—working with each region s municipalities, which allowed several new regional or “multimunici-

FIGURE 5.1. DIVERSITY OF CONTEXT AMONG CASE STUDIES

84 pal” utilities; and the structural and economic regulator (IRAR, later ERSAR, Entidade Reguladora dos Serviços de Águas e Resíduos), overlooking the activity of “multimunicipal” entities, private concessions and, since 2013 when it became independent from the Government, services with municipal public management (whether direct or delegated). ERSAR had an important role in the shaping of the WSS sector, using its statutory power to implement a ne-tuning of the sector, exercising its regulatory powers over the utilities, and installing a comprehensive data collection and benchmarking system, as well as a national complaint treatment system binding on all utilities.

BETWEEN NATIONAL AND LOCAL STAKEHOLDERS When mandated, aggregation is generally designed at the national level. Nevertheless, systematic consultations with local stakeholders should still be organized early in the process to ensure they can inform the process and to con rm alignment of interests between the national and local levels. Such an early engagement helps build stakeholder ownership of the reform. It allows implementers to tackle potential problems or resistance, and di use their potential impacts, thus improving conditions for success. • In Indonesia, in the case of PDAM Tirtanadi, national and local stakeholders worked together to come up with the option best suited for a regation, thus successfully aligning their interests. On April 20, 1998, the Ministry of Home A airs provided a guideline to PDAM Tirtanadi on the establishment of a holding company as one of the options to a regate and improve WSS in North Sumatra. However, on April 30, 1998,

following a review of the guideline by the PDAM Association of North Sumatra, PDAM Tirtanadi decided that its preferred a regation option was to arrange speci c cooperation agreements with other local PDAMs. This a regation option was then presented to governors and heads of districts for approval. Two years later, the cooperation agreement between PDAM Tirtanadi and PDAM Tirta Deli was signed. • In Romania, the alignment of national and local interests was an important issue during the regionalization process. Since 2005, Romanian local authorities, whether at county or municipality levels, have been questioning the regionalization reform designed by the central government. Owing to the pressure to absorb EU funding, the reform was passed quickly, which did not allow for proper information and engagement with local authorities and citizens. The government prepared master plans for each county and did not have time to complete them with more comprehensive technical and economic data, informed by local governments. As a result, the whole process was perceived as a top-down takeover of water services, with hostility from local authorities and citizens escalating when tari increases were applied.

AMONG LOCAL AUTHORITIES A balanced institutional arrangement in which consensus reaching is embedded is key to aligning local interests and easing decision making in aggregated utilities. Local authorities may o#en perceive aggregation as a loss of control over a local public service that they are used to managing, especially when small municipalities aggregate with large ones. Moreover, di erent local authorities may pursue di erent objectives

WATERS F MONTENEGRO BETWEEN LOCAL AUTHORITIES AND UTILITY EXECUTIVE MANAGEMENT

FIGURE 5.2. COMPARISON OF THE EXPANSION STRATEGIES PURSUED BY TWO ROMANIAN UTILITIES

when aggregating. As aresult,toensureasuccessfulaggregation,itisimportanttobuildownershipandalign the interests of all local authorities joining the aggregation, leaving ample space for local authorities to adjust the overall aggregation model to their speci c circumstances. In addition, alignment of interests is generally done through balanced decision-making arrangements and voting rights allocation. These governance issues are discussed and developed further in chapter 6.

Strengthening the working relationship between local authorities and utility executive management is a key to good governance of aggregated utilities. When services consolidate into a shared organizational structure, they gain autonomy from local authorities. As a result, the executive management of the aggregated utility becomes the body responsible for nancial planning and tari policy, investment program implementation, service operation, administration, and commercial activities, as well as customer relationships—functions that used to be under the direct control of local authorities. Nevertheless, some decisions, especially regarding tari policy, still must be approved by utility shareholders during general assembly meetings. Establishing a close and stable working relationship between local authorities and the utility board of directors and management can help align stakeholders’ interests • In Romania, the president of the Brasov Intercommunal Development Association (IDA), which includes some municipalities served by Brasov Water Company, is invited to all BWC Board of Directors meetings to ensure that the company’s management takes into account the views of the IDA. Moreover, the executive ma-

86 nagers must meet a set of objectives and performance that are monitored by directors and reported on during meetings with shareholders and IDA members. • In Brazil, the executive structure of SISAR Ceará includes a board of directors with presidents and chairpersons a liated with member associations, which hold a vote in the general assembly. • In Portugal, a regated municipalities have their own representatives at the Board of Directors. In most case studies, aggregation reform was implemented as a top-down process led by national stakeholders. This nding is consistent with the global aggregation trends observed at the international level, as discussed in chapter 3. However, national reforms are more likely to be successful when they follow the principle of subsidiarity and allow exibility for local stakeholders to own the aggregation process and adapt it to their local context. • In Romania, the regionalization established by

the 2006 law on public water services con- sisted of the reorganization of public services through two entities: the intercommunal development association (IDA), representing local governments as asset holders, and the regional operating company (ROC), operating those assets, both of them linked by a delegation contract. However, utilities had the choice to a regate following their own pace and according to their preferred scale. Brasov Water Company expanded slowly and progressively in the nearby municipalities, whereas Raja Constanta expanded over seven counties at a fast pace ( gure 5.2). • In Hungary, the Water Utility Services Act, passed in 2011, states that water licenses will be issued to providers that reach a certain level of a regation, expressed in consumer equivalent. But no administrative limits, such as watershed or regional boundaries, were set. The utility of Kiskun-Víz opted for a quick implementation of a regation and reached its nal a regated size by 2013, four years ahead of the legal deadline. The utility of Alföldvíz increased

FIGURE 5.3. INSTITUTIONAL ARRANGEMENTS FOR BULK AND RETAIL SYSTEMS MANAGEMENT IN PORTUGAL

WATERS F MONTENEGRO TABLE 5.1. OVERVIEW OF AGGREGATION DESIGN AND IMPLEMENTATION DURATION YEARS

introduced a new management model for bulk and retail services, called state/municipalities partnership, to facilitate further the potential for a regation in the WSS sector ( gure 5.3). Both the design and implementation of aggregations take time; in particular, implementation is a continuous process that can spread over decades. Among the case studies, design periods lasted between 1 and 9 years, and implementation periods between 1 and 22 years (table 5.1). Consequently, aggregation bene ts also take time to materialize. A strategy of A. IMPLEMENTATION OF REGIONAL LA LÍNEA (COLOMBIA) WAS gradual improvement in the main TERMINATED PREMATURELY, BUT GESCOL OPERATED FOR SIX YEARS. purpose of the aggregation proved successful in many case studies, its operating area by 70 percent in three years, as it spread the e orts and changes to be made reaching a consumer-equivalent market four over time, thus not burdening utilities with hatimes higher than the regulatory threshold. ving to do too much too quickly. It also allowed for a greater focus on tracking and achieving • In Colombia, the various National Develop- concrete results (box 5.1). ment Plans designed and implemented by the central government have all included references In some countries, the water sector aggregation to a regation, encouraging it through guideline reform itself was designed to be gradual so as to documents, through the opportunity to establi- sequence e orts and changes at the local level. sh regional markets or through the promotion of • In Hungary, the Water Utility Services Act association schemes for municipalities. states that water licenses will be issued to providers that reach 50,000 consumer equivalents • In Portugal, the central government created in in 2013–2014. This requirement increases to 1993 a “multimunicipal management” model to 100,000 consumer equivalents for 2015– 2016 improve WSS “bulk” systems through regional and to 150,000 in 2017. entities, owned by Águas de Portugal, a state-owned holding, as a majority shareholder. However, • In Romania, BWC adopted a pro- gressive approseveral municipalities resisted the implementa- ach to the expansion of service area. The number tion of this model for fear of losing their WSS of water connections doubled in 10 years, while responsibility. In 2009, the central government the population served grew by one-third. The uti-

88 BOX 5.1. AGGREGATIONS INTRODUCED PERFORMANCE MONITORING IN MOST CASE STUDY UTILITIES: Collecting data on the economic e ciency and technical e ectiveness of utilities is essential to assessing and improving their performance and sustainability. In 12 of the 14 case studies, the utilities were not used to collecting such data before aggregation. However, following the implementation of the aggregation, they started to routinely monitor performance indicators either as part of a benchmarking scheme (Portugal, Mozambique, Indonesia) or to be able to demonstrate progress within the framework of aggregation (Brazil, Romania, Colombia). As such, aggregation introduced better knowledge about utilities’ operation with a view to improving it over time. lity chose to a regate in nearby localities where investments were to be implemented and where service quality and tari s could be increased at the same time ( gure 5.4). For example, BWC took over the Codlea water service operation a#er the new water line providing 24/7 good-quality water was completed. In such a way, BWC thought it would be able to provide good water service quality, thus increasing customers’ willingness to pay and securinge invoice collection. The pace of a regation was therefore calibrated toward gradual expansion of services with functional WSS systems. Gradual improvement strategies o#en use perfor-

mance-based targets. This allows sequenc- ing e orts in a step-by-step approach. Regular monitoring also facilitates accountability toward shareholdersandcustomersasimprovementcanbesteadilydemonstratedovertime. • In Colombia, the operator Triple A was assigned gradual improvement targets in terms of micro-metering level, water quality, and billing collection ratio (table 5.2). When operation started in 2004, billing collection levels were very low, but a#er quality and continuity improvements, the operator was able to increase invoice collection to 90 percent. • In the state of Ceará in Brazil, some performance indicators were selected and targets were set to monitor the gradual achievements of the a regated utility, SISAR. The target for the water quality index was set at 95 percent; best performance presently uctuates between 65 percent and 91 percent. The continuity of service provision target is 24 hours; present values range from 6 to 15 hours. • In Mozambique, all FIPAG operating utilities report on performance indicators yearly. The IQS is an index based on eight indicators: coverage, continuity of service, percentage of invoicing based on actual readings, number of complaints per connection, average response in time and total percentage of complaints answered, number of water quality parameters controlled, and compliance with standards ( gure 5.5).

KEY RISKS OF AGGREGATION The ip side of having a champion as a success factor is that relying on the leadership of a sin-

WATERS F MONTENEGRO FIGURE 5.4. EVOLUTION OF BRASOV WATER COMPANY KEY PERFORMANCE INDICATORS AFTER AGGREGATION

FIGURE 5.5. STRUCTURE AND EVOLUTION OF IQS FOR FIPAG NORTHERN UNIT

90 gle champion can sometimes be hazardous. Policy makers and aggregation promoters would do well to not design the aggregation around speci c people and circumstances. Owing to political cycles, local representatives may not be re-elected. As a result, leadership stemming from a single local stakeholder may disappear over time, thus potentially jeopar- dizing the aggregation design and implementation. • In Portugal, the creation of Águas do Ribatejo took quite some time, as agreement on a management model was not immediate. In 2001, there were talks with Águas de Portugal to create a “multimunicipal” system, but this solution was dismissed. A second option was to create a common utility and allocate 49 percent of the shares to a private investor. A call for tenders was developed. At that time, the scale of the aggregation had reached nine municipalities. But a#er a change of political majority and mayor, Santarém, the capital and most populated city of the region, decided to withdraw from the process, considering that it would be subject to an excessive contribution to the common investment and operational costs and that it was not prepared to indirectly subsidize other municipal systems incorporated in Águas do Ribatejo. The municipality of Cartaxo also decided to leave. At the time, this decision was very contentious and strongly changed the premises of the aggregation. The tender was annulled, generating the need for a new consensus and new economic studies to support the feasibility of a common utility. The process resumed in 2007. When the scope of aggregation includes consolidation of functions, a harmonization of administrative practices across the aggregating service providers is necessary. In the best- case scenario, this harmonization leads to bringing standards up to those of best practices. However, under less

favorable circumstances, harmonization may lead to bringing costs up, thus hampering the success of aggregation. • In Hungary, the three merging companies, Halasvíz, Kalocsavíz, and Kőrösvíz, brought di erent operational practices into the merged company, Kiskun-Víz. These practices were harmonized by selecting the “best practice” and introducing them in the operation of the Kiskun-Víz utility. For example, Kalocsavíz had an e cient system for the management of unpaid invoices, which was adopted throughout the a regated utility. As a result, the overall level of unpaid bills was cut in half. • In Brazil, COPANOR is a rural subsidiary of the state company COPASA. Most COPANOR employees earn the national minimum wage. However, there is signi cant pressure from the labor union to increase wages to levels equivalent to COPASA’s. If COPANOR were to pay its workers the same wages as its “parent company” (COPASA) and continue to charge the same water tari (capped at 60 percent of its parent company’s tari s, in 2015), the company’s long-term nancial sustainability would be jeopardized. As described in chapter 2, transaction costs occurring before, during, and a#er aggregation can hamper aggregation success, or limit and delay the materialization of its bene ts.

LABOR COSTS Aggregation also brings along the issue of sta transfer from former municipal structures into the newly aggregated utility. This generally creates large transaction costs, which translate into labor cost increases (see chapter 4) and can hamper to some extent the nancial sustainability of

WATERS F MONTENEGRO

aggregated entities. • In Romania, the model delegation contract for the regionalization reform prepared by the Environment Ministry advocates for transferring all sta to the incumbent. Raja Constanta took on all employees from the former operators and committed to make no redundancy during the rst two to three years of operation. But the services taken over were oversta ed and the number of employees at the a regated utility increased by nearly 50 percent while salaries almost doubled ( gure 5.6). The OPEX structure evolution for Raja Constanta shows the increasing share of labor costs throughout the a regation process, rising from 30 percent to 36 percent. In 2013, the company launched a restructuring plan to adjust the number of employees, using a human resources consulting rm. Some 626 employees were dismissed (25 percent of total sta ). Social protests were avoided, and only eight legal actions—all unsuccessful—were led by former employees. • In Hungary, following a regation, human resources policies have focused on training programs and wage increases to attract and retain skilled sta . In the Kiskun-Víz utility, the salary

FIGURE 5.6. EVOLUTION OF LABOR COSTS AND NUMBER OF STAFF IN RAJA CONSTANTA UTILITY

BOX 5.2. THE IMPORTANCE OF UNDERSTANDING CONTEXT: THE CROATIAN EXPERIENCE Since 2012, the Croatian government has been initiating a series of utility sector reforms which, in addition to establishing a proper water sector regulatory framework and benchmarking system, have included a proposed merger of utility service providers into about 20 regional utilities. The main drivers of this aggregation e ort were the need to e ciently absorb EU funds and to cross-subsidize the operation of water and wastewater systems in smaller settlements, which would nd compliance with the new EU standards prohibitively expensive and una ordable. The process was also seen as an important opportunity for the sector to develop modern, e cient service providers and to move away from the previous way of managing municipal water utilities. The water utility aggregation process was initiated as a central government–driven, top-down activity, with the country divided into water service areas, mostly de ned by county boundaries, using the principle of one service area, one service provider, one tari . It was planned as a twostage process, where in the rst stage WSS services were, where necessary, extracted from municipal utility companies, while in the second stage they were to be aggregated into new WSS utilities (e ectively trading scale for scope). A large-scale, ex ante study had demonstrated the likelihood of important economies of scale. After completion of the rst phase, in early 2015, aggregation design was completed along with the required legislative framework. However, owing to the sensitivity of the political situation at that moment (2015 was an election year) and potential backlash from local authorities, it rst was delayed and then lost political support following the change of the central government. The reform had been driven largely by technocrats within the line ministry, who failed to acknowledge that they lacked the political champion and national government power to impose the reform process over the concerns of local stakeholders.

92 gap between original and transferred sta was gradually closed by raising lower salaries to the highest level for similar jobs, with an average increase representing 8.5 percent over three and a half years. Other labor-related costs also increased, most notably the travel costs of specialized personnel in serving a larger service area and the cost of the daily commute (free minibus service to employees) to the headquarters for the larger number of personnel.

IT SYSTEMS Transaction costs related to the merger of IT systems between aggregating entities occur during aggregation implementation. • In Hungary, the a regated utility of Kiskun-Víz selected the customer databases and invoicing systems from Halasvíz, one of the aggregating providers for continued use, and data were migrated from the othera regating companies. This created a one-oﬀ cost for 2012–2013. Customer service operations were suspended for one day for the transition. A#er the merger in September 2013, Kiskun-Víz issued its rst invoice in November 2013. The consolidated system for the management of outstanding invoices was ready in 2015. As stated in chapter 2, context should be taken into account and purpose has to be clari ed when designing aggregation. Disconnecting the former from the latter can lead to failure (box 5.2). • In Colombia, the regional scheme La Línea, formed to build and operate an aqueduct, failed for various reasons linked with overlooking the context. During the structuring of the regional scheme, investment needs were underevaluated. Technical studies failed to capture demand needs because

BOX 5.3. INVESTMENT COSTS AND INCREASED OPERATIONAL EXPENDITURES: EVIDENCE FROM CASE STUDIES When aggregation aims to expand coverage or environmental bene ts, it often implies important parallel investment costs, which increase depreciation costs and operational expenditures (World Bank 2015). Thus, cost savings from economies of scale might be masked by the higher overall operating expenditures resulting from better services. In Romania, both Brasov Water Company (BWC) and Raja Constanta implemented large investment projects, amounting respectively to €200 million and €278 million, to improve WSS coverage and quality. Following these investments, BWC total OPEX increased by 120 percent for water and 144 percent for wastewater, and OPEX per population served increased by 63 percent for water and 80 percent for wastewater over nine years. In the meantime, depreciation costs increased by 58.5 percent for water. For Raja Constanta, the increase in total OPEX represents 84 percent for water and 79 percent for wastewater over nine years whereas the OPEX per population served increased by 26 percent for water and 30 percent for wastewater over the same period. In the meantime, depreciation costs raised by 1,260 percent for water, and 118 percent for wastewater.

WATERS F MONTENEGRO the population data were obsolete. Moreover, the a regation did not bene t from the support of a local political leader. Because of this lack of local political empower- ment, mayors transferred only 86 percent of the nancial resources committed to the project. As most of the investment was to be subsidized, the operator failed to implement the investment and ensure service provision was enhanced as required. In addition, the a regation su ered from the absence of a large populated city to act as a nucleus and allow the implementation of cross-subsidies among settlements to balance di erences between urban and rural water systems, which do not have the same production costs. In designing and implementing an aggregation, a risk of cherry-picking (Franceys and Gerlach 2008) practices can arise. Service providers naturally prefer to extend services to wealthy populations for cost recovery reasons, and to easy-to-reach areas where infrastructure already exists. By doing so, they select solvent customers for good revenue collection and seek to avoid sunk investment costs and associated OPEX increases (box 5.3). • This situation occurred in Mozambique where cherry-picking practices were motivated by the low commercial attractiveness of urban water services. The initial plan of the Mozambique government, launched in 1998 and called the Delegated Management Framework, was to di erentiate investment and operation functions for urban water services. The investment function for all urban water services was to be a regated into an autonomous public entity, the “Fund for Investment Ownership and Water Supply Assets” (FIPAG in its Portuguese acronym), and the operation function delegated to private operators through bidding processes. The rst call for tenders, issued in 1999, was concluded in 2004 for Maputo and four other major cities. But the contract was prematurely terminated in 2010

for commercial reasons. FIPAG launched several other bids, which remained unsuccessful as urban water services su er from low revenue collection and signi cant political interference in tari policy. The lack of private sector interest in managing urban water services prompted FIPAG to become the operator of urban utilities across the country. • In Romania, the a#ermath of the regionalization reform revealed cherry-picking practices, as some a regated utilities have extended their operating areas in towns where nancial incentives were granted (box 5.4). When aggregation is not only aiming at economic e ciency but also at externalities such as cross-subsidies, binding rules must be put in place to safeguard the principle of solidarity and overcome cherry-picking practices. • In Hungary, when a regation reform was passed in 2011, the Alföldvíz utility decided to actively pursue the enlargement of its operating area and carefully selected the municipalities where it would take over service provision. A dedicated “merger project team” developed a methodology to discriminate between potential merging municipalities. It used a checklist to evaluate and assign a grade to each municipality. Despite this selection process, discussions were held to learn whether an operating contract should be signed with small, unpro table municipalities. Ultimately, a “principle of solidarity” was applied, aided by the fact that if these small, unpro table municipalities were le# unsupplied, the regulator might assign a provider of last resort, thus appointing a water utility to provide services in these locations.

BOX 5.4. FROM CHERRY-PICKING TO WITHDRAWAL PRACTICES IN ROMANIA Over the regionalization process, IDAs have generally accepted all municipalities that wanted to join the existing ROC by signing the delegation contract. But some of them experienced di culties in expanding their activity as quickly as needed to provide necessary and adequate services in the small settlements that they took over, often because of the lack of quali ed personnel or nancing. As such, IDAs were not â&#x20AC;&#x153;excludingâ&#x20AC;? municipalities; however, they were to some extent cherry-picking municipalities that would bring along a source of nancing. As a result, some municipalities now react by either rejecting or withdrawing from the aggregation, moves that may also derive from local political issues or other vested interests. The municipalities that do not wish to join regional IDA and its ROC have applied for the renewal of their water operating licenses. Although these municipalities have hardly any access to funding for water supply improvements, they prefer to remain independent than join the ROC and see their tari s go up without any perceived bene t. There are even cases where municipalities have joined the IDA and ROC, and are presently withdrawing. For instance, in Neamt County, six communes left the IDA in 2015. The main reasons for withdrawal are much higher water fees for households and delayed extension or rehabilitation of water supply network/sewage systems. To prevent such issues, withdrawal procedures must be thoroughly justi ed and approved by the IDA General Assembly. In addition, withdrawing municipalities must repay investments made by the ROC in their territory and/or WSS systems.

WATERS F MONTENEGRO

Chapter 6

HOW DO THEY WORK? Concrete Insights This chapter describes, for the 14 case studies and in the light of the international overview, how aggregations have been concretely designed, following the reportâ&#x20AC;&#x2122;s original typology. It discusses, in particular, the nuts and bolts of setting up a successful aggregated service provider, ranging from deciding on scale and scope, to allocating power, to managing assets and liabilities, and harmonizing IT systems. The chapter builds on the proposed four design dimensions of scope, scale, process, and governance (for more details, refer to chapter 2 and gure 2.1). Rather than providing recommendations, the review seeks to highlight the trade-o s and potential challenges associated with each of those design decisions. For a more complete discussion of the actual range of design option for each of the dimension, refer to chapter 2.

SCOPE Although the scope of aggregation varies among case studies, the unbundling of functions, sta-

ges, and services is relatively uncommon as it might generate complexities of its own. Furthermore, all functions have been aggregated in all case studies, except in SISAR as the investment function remains at the state level while operations are carried out by SISAR and its members (see table 6.1). This nding is in line with the global trends observed at the international level, where all functions have been aggregated in 92 percent of aggregations (see chapter 3). All stages have been aggregated in all case studies except in Ă guas de Alentejo (Portugal), which supplies bulk water and is in charge of wastewater treatment only. Water and wastewater services have been aggregated in eight case studies. For four case studies, aggregation was limited to water service only, and for one case study the operator is in charge of WSS as well as waste collection. As observed at the international level, the scope of 86 percent of aggregations covers all functions and services (see chapter 3). Hence, the countries where case studies encompass water services only are the ones where wastewater services are

WATERS F MONTENEGRO compara- tively less developed (Brazil, Indonesia, and Mozambique). As a result, unbundling of water and wastewater services seems a consequence of the limited development of wastewater collection and treatment rather than a result of a clear unbundling decision. In addition, the scope of aggregations also re ects the national

organizational structure of the WSS sector. For instance, in Mozambique, despite the limited development of sanitation, water supply and sanitation services are being managed separately (figure 6.1).

98 Inmostcases,theaggregatedproviderprovidesallstagesofwater orwastewaterservices.This nding matches the global trends observed at the international level where the scope of 8 percent of aggregations encompasses stages or activities (see chapter 3). However, it should be noted that unbundling of stages is more prevalent in countries that have highly decentralized institutional organizations, such as Central European countries (box 6.3). • In Portugal, a regation of WSS services can be done either by a regating bulk stages or by a regating bulk and retail stages. Data from the regulator ERSAR (2016) indicate that bulk a regated water services represent 73 percent of the market while bulk a regated wastewater services represent 77.4 percent of the market. Some aggregation reforms have tried to unbundle investment and operation functions of WSS. These reforms planned to aggregate the investment functions for many utilities into a single entity while leaving the operation function disaggregated at the municipal level. By doing so, they sought to mutualize the funding of sunk costs and depreciation costs associated with large WSS investment programs. • In Mozambique,the initial plan of the government wast to aggregate some functions of water services by setting up an entity in charge of urban water asset management and investment across the country, namely Fundo de Investimento do Patrimônio da Água [Fund for Investment Ownership and Water Supply Assets] (FIPAG). The operation and maintenance of water systems was to be handed out to private operators through calls for tenders ( gure 53). Water utilities regionalization was sup- posed to create

an appealing market for private sector. However, despite several attempts to attract private operators, FIPAG had to take over operations in 15 cities in the Northern and Central regions. In utilities a regated under FIPAG, consolidated procurement practices have been set up, which led to important savings when purchasing bulk chemicals. • In Brazil, SISAR is in charge of the operation of rural water services either through its own employees or through the volunteers from its member associations, while the investment function has remained a regated at the state level and is being funded by the state budget.

SCALE The scale of aggregation follows administrative boundaries for 12 case studies, whereas in Brazil, aggregation happened within watershed limits (as in Kosovo; box 6.1), and concerns only rural areas (see table 6.2). This nding corresponds to the generic situation of aggregations at the international level, where 56 percent of aggregations follows administrative boundaries (see chapter 3). However, it should be noted that in Romania, the original regionalization reform was aimed at aggregation within river basin limits but was achieved only at the county level. In Hungary, the provisions of the reform led to aggregation between towns that were not contiguous or even in the same administrative region, each provider being allowed to self-optimize its operating area (map 6.1). Among case studies, the population covered by an aggregation varies in a ratio of 1 to 69, ranging from 32,000 inhabitants in the regional market

WATERS F MONTENEGRO BOX 6.1. AGGREGATION AT WATERSHED LEVEL IN KOSOVO

La Línea (Colombia) to 2.1 million inhabitants in the regional market of Atlántico (Colombia). • In Brazil, where a regations happened in rural areas, they cover 89,500 inhabitants in 153 settlements for SISAR and 303,843 inhabitants in 239 localities for COPANOR, thus showing a low population density. In such a rural context, a regations tend to add few customers and decrease density (see chapter 4 and box 4.3), thus preventing the service from lowering its operation costs. • In contrast, in Indonesia or Mozambique, where a regations happened in urban areas, they exhibit high density (respectively 2,084,063 in-

The main purpose of the Kosovo utility regionalization e ort was to transform small and fragmented municipal companies into self-sustaining business organizations with a clear customer orientation and to create an environment conducive to attaining socioeconomic goals for the Kosovar population. The reform of the utility sector took place in the context of the authorities’ EU integration agenda, which implied transposition of the relevant EC framework and adoption of prudent management principles and practices such as river basin management, integrated water resources management, and the like. Before the sector reform, 35 municipal companies o ered water supply and wastewater collection together with other municipal services. The initiators of the reform, which was carried out in three phases, decided to follow watershed boundaries rather than administrative boundaries in a bid to be better prepared for the signi cant ramp-up in wastewater collection and treatment expected to be a consequence of the country’s e ort to join the EU (World Bank 2015).

100

WATERS F MONTENEGRO

habitants in seven cities for PDAM Tirtanadi; 396,665 inhabitants in three cities for FIPAG Northern Unit; and 263,101 inhabitants in three cities for FIPAG Central Unit). The number of towns in an aggregation varies widely among case studies, ranging from 2 cities for PDAM Intan Banjar (Indonesia) to 239 localities for COPANOR (Brazil). As stated in chapter 4, aggregations that add only a small number of towns are likely to achieve greater cost savings than aggregations that involve a large number

of towns, such as large-scale regionalization schemes. Moreover, utilities serving several towns exhibit more complicated cost-output relationships. As a result, the possible cost savings of increasing the number of customers in these aggregated utilities are uncertain and limited. As described in appendix A, most case studies display aggregation examples grouping urban and rural settlements. In such con gurations, larger urban utilities act as the nuclei around which less populated, less pro table, and less well-performing service providers aggregate. The nuclei

101

102 help surrounding service providers to improve. • In Colombia, the presence of a large city in the Regional Scheme of Atlántico, which is a development hub, allows for horizontal cooperation and economies of scale. It also allows the implementation of cross-subsidies among settlements and thus the balancing of di erences among water systems that do not have the same production costs. In small and economically depressed towns, most users have low incomes and purchasing power that would not allow them to access public services otherwise. • In Indonesia, one of the rationales for aggregation was to have PDAM Tirtanadi— which alreadyhadgoodtechnical,financial,andmanagerialskills—helpother,smaller, surrounding PDAMs to build and develop those competences. • In Brazil, the a regation concerns only rural areas; however, while independent, the a regated service provider was initially set up by and receives support from the respective large state utility, namely CAGECE for SISAR and COPASA for COPANOR. Although this heterogeneity of contexts between large and small utilities proved successful in some aggregations (see chapter 4), it also raises questions about whether to apply the same policies to all aggregating services and how to prioritize investments and service improvements. To some extent, there local preferences for service provision may di er. How the utility management responds to these challenges may vary from case to case, but it will need con ict resolution mechanisms to align interests and arbitrate between those that diverge . Alternative successful aggregation models exist when service providers with

BOX 6.2. ALTERNATIVES TO LARGE UTILITIES AS NUCLEI: THE EXAMPLE OF AUSTRIA’S RURAL ASSOCIATIONS Founded in 1946, Upper Austria Water is an autonomous nonpro t association of more than 1,700 rural service providers located in the Federal State of Upper Austria (map B6.2.1). Chaired by a board of seven directors, it is in charge of operations and maintenance of smallscale water supply and sewerage systems in rural areas through technical assistance (emergency supply, mobile technical equipment), pooling programs (for water meter purchase and water analyses, for example), and measurement services (such as leak detection, pipe and valve location, ow rates and pressure, and aquifer tests). It aims to supply su cient high-quality and cost-e cient drinking water through the construction and operation of autonomous installations. It also provides capacity building and sta training, and supports service providers on legal and nancial issues. Similar models exist in other states of Austria.

similar characteristics group together. The Hungarian utility Kiskun-Víz was created out of the merger of three water companies of more or less the same size; this aggregation was successful

WATERS F MONTENEGRO

in terms of economic e ciency. In Austria, Upper Austria Water, an association of more than 1,700 cooperatives, also groups providers that have the same size and characteristics (box 6.2). Similar models exist in Paraguay and Honduras.

PROCESS The process of aggregation was mandated by the

national government in 4 case studies, all located in the EU and having the status of new Member States, in order to ensure that the reform would proceed rapidly and consistently throughout the country (see table 6.3). This is in line with the global trend identi ed at the international level showing that most aggregation happened in countries in Eastern Europe and Central Asia (see chapter 3). However, in Romania the process was

103

104 heavily incentivized by EU Cohesion funds, whereas in Hungary no nancial support was provided to aggregating utilities. For the other 10 case studies, the aggregation process was voluntary, and o#en supported and incentivized through external funds. To boost the success of aggregation reforms, national and external stakeholders can provide nancial support to aggregating utilities to help them achieve the aggregation purpose. In most cases, these subsidies are used to fund investment programs thus acting as a Big Push (box 2.1), which helps WSS service providers get out of the low-level equilibrium: • In Colombia, the operator Triple A bene ted from investment programs to expand supply capacity that were funded by central and regional governments, representing up to US$50 million. On top of this funding, the nancial incentives also took the form of a tax alleviation that was granted to public services companies during the period in which the law was in force. This tax discount could represent up to 40 percent of the investment amount. • In Ceará state in Brazil, the investments implemented by the a regated utility SISAR were funded for 18 percent by Federal credits and for 82 percent by the central government through loans from international nance institutions. SISAR investments were targeted toward initial setup of WSS infrastructure, as most localities covered by the a regated utility had no water supply. In the state of Minas Gerais, the a regated utility, COPANOR, was clearly established by policy decision makers to set up an investment program with funds originating from the state health sector budget.

• In Mozambique, FIPAG received funding from the Dutch government to improve the water intake, production, and transfers, as well as the distribution systems in Manica, Gondola, and Chimoio. The infrastructure of Manica and Gondola utilities was completely renewed and nanced as part of the process of their integration. Long-term nancial support can also be brought by external partners. Moreover, linking the allocation of external funds to the implementation of aggregation at the local level is a powerful incentive tool to align interests at the national and local levels: • In Romania, the Ministry of Environment took the opportunity of having EU funding to establish coercive eligibility criteria that helped tri er and speed up the a regation reform, laid out in a Guide to Regionalization and Guidelines for Applicants for SOP Funds. The scale of a regation of Raja Constanta was shaped by the SOP funds, as the utility chose to expand in municipalities that bene ted from those funds, whether they belonged to Constanta County or not. As a result, Raja Constanta accessed an overall amount of €278 million in investment subsidies. • In Portugal, to be eligible for EU Cohesion funds, utilities had to operate with a regional or at least supramunicipal scope, thus implying an a regation trend (Decreto-Lei 191/2000, article 12). The utility Águas do Alentejo bene ted from a €70 million investment in the form of EU subsidies, covering up to 58% of its investmentprograms for the period 2009–2015. The utility Águas do Ribatejo received EU funds that covered 60 percent of its investment program for the same period. In contrast, when the main purpose intended is economic e ciency, no such incentives are necessary, as the example of Hungary shows.

WATERS F MONTENEGRO

GOVERNANCE Institutional Elements Among the 14 case studies, 8 have used a delegated contract for aggregation (57 percent), 5

a merger (36 percent), and 1 a special-purpose vehicle (7 percent) (see table 6.4). This overview contrasts somewhat with the ndings of chapter 3 on international aggregation trends, where mergers are the prevalent governance arrangement (64 percent). The duration of delegated

105

106 contracts observed among the eight case studies varies, with shorter lengthforPPPs(startingfrom16 years)andlongercontractsforpublicoperators(upto50 years) (table 6.5). Some 63 percent of delegated arrangements are found in EU countrieswhere contracts have been signed with public operators, whereas in Colombia contracts have been signed with private operators. Among the ve case studies that used a merger, four are located outside of the EU. As box 6.3 indicates, Europe harbors a wide variety of governance arrangements, in particular in federal countries such as Austria, Germany, and Switzerland, where local governments have been le# broad latitude to optimize their operation as they see t and have resorted to customized institutional arrangements suiting their particular scope and scale needs, o#en using special-purpose vehicles. Irrespective of the governance model chosen, in most cases, local governments are the main shareholders of the aggregated service provider, but regional governments sometimes play a role as well. Aggregation involves the creation of a new, separate organizational entity that is accountable to more than one stakeholder. Therefore, aggregations present an opportunity to adopt sound corporate governance principles of autonomy and accountability, as described in Characteristics of Well-Performing Public Water Utilities. (World Bank 2006) and box 6.4. This corporate structure provides a series of advantages to the newly aggregated utility. Corporatization gives nancial autonomy to water utilities, as they have their own budget, duly separated from municipal budgets. Moreover, water companies make their own economic and nancial decisions, especially regarding tari poli-

BOX 6.3. DIVERSITY OF GOVERNANCE ARRANGEMENTS IN SWISS WATER SECTOR In Switzerland, WSS services are strongly decentralized as they fall within the competences of cantons, which normally delegate the mandate to municipalities. For drinking-water supply, municipalities are autonomous when it comes to the choice of the structure and organization of the service. Given the very small average size of municipalities, the technical and nancial capacity to manage complex tasks often do not exist. Therefore, municipalities often aggregate tasks such as bulk water treatment or wastewater treatment under specialpurpose vehicles (Zweckverband). For instance, Seewasserverk Hirsacker-Appital is an intermunicipal association created to produce drinking water from water from Lake Zurichâ&#x20AC;&#x201D;a complex and costly task, given the countryâ&#x20AC;&#x2122;s high standards for water quality. The governance arrangement for the special- purpose vehicle clearly states that each member of the association is entitled to a share of the water produced corresponding to the distribution of capital costs and xed operating costs. Each member pays variable OPEX, in accordance with the real quantity of water consumed. Regionale Wasserversorgung St. Gallen (RWSG),

WATERS F MONTENEGRO created in 1993, is a regional association of 12 eastern Swiss partners. Its main task is to ensure the operation of the lake water treatment plant in Frasnacht, and to produce, transport, and distribute drinking water to its members. Individual distribution to households, billing and accounting, and overall wastewater collection and treatment remain the responsibility of individual municipalities. Beyond the common special-purpose

vehicle arrangements, Viteos poses a unique example of a merger. This public company was created by municipalities to produce and distribute drinking water in NeuchĂ˘tel District. Swiss municipalities sometimes also resort to concession contracts with public operators: Lausanneâ&#x20AC;&#x2122;s water service has signed concession contracts with 17 surrounding municipalities where it distributes bulk water, or sometimes retail water, on behalf of local governments.

107

108

WATERS F MONTENEGRO cies, thus aiming at nancial sustainability and resisting political interference. • In Portugal, Águas do Ribatejo, a public limited company created to provide bulk and retail water services, was able to set up a higher uniform water tari in the seven municipalities in its service area. This new tari represented a 7 to 8 percent increase in the two municipalities where tari s were highest before a regation and a 600 percent increase in the municipality that previously had the lowest tari s. This tari policy was viewed as a positive management improvement toward sustainability, as the price before a regation was heavily subsidized by municipal budgets and did not re ect cost-re ective. Corporatization also brings managerial independence to utilities that can make their own decisions regarding sta recruitment or wage policy, thus lowering or preventing political interference and patronage. • In Portugal, when the public limited company Águas do Ribatejo was created, about 50 percent of its initial sta were transferred employees. The remaining 50 percent were selected by the utility during the implementation. Corporatization brings e ciency improvements as utility managers and sta behave in a more business-like fashion. Indeed corporatization is a way to modify the incentives of the WSS utility and make it act in a more customer-oriented way. • In Romania, both the Constanta and the Brasov water operators have been turned into commercial companies as a result of the regionalization reform. In both utilities, the executive management sta must meet a number of obje-

ctives and performance indicators which are monitored continuously by the Board of Directors, the General Assembly of shareholders, and the intermunicipal body. As mentioned in chapter 5, a balanced institutional arrangement in which reaching consensus is embedded as a practice is key to align local interests and ease decision making in aggregated utilities. This alignment is generally done through decision-making arrangements and voting rights allocation. In most cases, the power-sharing arrangement is done in such a way that it does not provide exclusive power to the largest city as a single shareholder, so as to ensure a balance of power and create incentives for consensus building. • In Portugal, the capital of Águas do Ribatejo is the infrastructure of the utility, and shares are allocated to municipalities according to the value of the asset they transferred: Almeirim, 15.45 percent; Alpiarça, 5.40 percent; Benavente, 16.44 percent; Chamusca, 8.15 percent; Coruche, 15.03 percent; Salvaterra de Magos, 14.19 percent; Torres Novas, 25.34 percent. In the Águas Públicas do Alentejo Partnership, the decision-making arrangements derive from the conditions of the state-municipalities partnership. Municipalities instituted a speci c association—Associação de Municípios para a Gestão da Água Pública do Alentejo (AMGAP)—to represent them to the management of Águas Públicas do Alentejo. The utility capital is shared by Águas de Portugal (51 percent) and AMGAP (49 percent). However, even if Águas de Portugal is the majority shareholder, both partners have equal decision rights in the Partnership Commission, which is in charge of approving investment plans, budgets, tari

109

110 BOX 6.4. CHARACTERISTICS OF WELL-PERFORMING PUBLIC UTILITIES EXTERNAL AUTONOMY • Although utilities do not have complete authority to set their tari s, they are able to put forward proposals that are consistent with their overall revenue requirements. • Although utilities do not have complete authority to set their tari s, they are able to put forward proposals that are consistent with their overall revenue requirements. • Public procurement rules, though considered intrusive, were followed without a signi cant impact on performance. • Although most utility managers do not have total control of setting sta salary scales, they are able to hire and retain quali ed sta . • Most public utilities rely on government to source investment nancing. • Board members are generally appointed by the government to represent the interests of owners. EXTERNAL ACCOUNTABILITY • All utilities are subject to well-de ned performance targets. • Performance contracts are useful tools for sharing information but have limitations for enforcing performance. • The use of external auditors to enhance duciary responsibilities is almost universal. • Most public utilities require authorization to secure external nancing. • External groups can be represented in utility advisory or management oversight bodies. • Independent regulatory arrangements are the exception rather than the norm, because most utilities are regulated by their owners. Internal Accountability for Results • Senior management systematically reports to their boards on performance. • Incentive-based systems for top management are common. • State members are also subject to rewards and penalties to achieve well-de ned performance targets. • Most public utilities have focused on training for improving sta skills.

WATERS F MONTENEGRO MARKET ORIENTATION • Utilities outsource mostly noncore functions and retain core functions. • Although benchmarking exercises are becoming common, there are no clear-cut paradigms for using data collected for improving performance. • Most utilities are not involved in market testing. CUSTOMER ORIENTATION • Public water utilities have developed billing and collection systems that best overcome speci c constraints faced by various groups of customers. • Public utilities actively survey their customers to learn their opinions and views. • Customers have the opportunity to express their preferences regarding service options. • Customers are informed about service changes or interruptions. • Utilities have developed e ective complaint mechanisms. CORPORATE CULTURE • Well-de ned mission statements provide an internal indicator of good corporate culture. • Performance is the basis for salary increases in most utilities. • Utilities provide ample career opportunities to their sta and experience low turnover. • Water utilities have training programs for their sta as part of their annual performance agreements. • Sta members are informed of management decisions on a need-to-know basis.

Source: World Bank 2006

111

112 sensus compulsory. For Raja Constanta, the County Council holds 97 percent of the shares while the 33 municipalities1 served by Raja Constanta hold the remaining 3 percent, allocated in accordance with the water volume distributed in each settlement.

s, annual reports and accounts. The balance of power between the state and municipalities in the Partnership Commission and the existence of only two shareholders creates a need for a permanent search for consensus. In addition, municipalities also have to agree on common positions. • In Romania, for Brasov Water Company, shares were allocated between Brasov Municipality and Brasov County Council, each receiving 42 percent. The remaining 16 percent weredivided among six other localities, in accordance with the proportion of their inhabitants. Allocating equal participation to Brasov County Council and Brasov Municipality was aimed at balancing powers and reaching consensus to avoid unilateral decisions. In addition, under Romanian law, strategic decisions must be adopted by a vote of two-thirds, which in Brasov made con-

• In Brazil, COPANOR was set up speci cally for the a regation as a public company, having as sole shareholder the state government of Minas Gerais and being a full subsidiary of a state-owned company. SISAR Ceará is a nongovernmental private organization based on rural community associations and governed by a general assembly, in which each a liated association has one vote. • In Colombia, both case studies relied on public-private partnership (PPP) contracts. For the regional market of Atlántico, the PPP contract was signed between each municipality and the private operator Triple A. For the regional market La Línea, the PPP contract was signed between the private operator Giscol and the intermunicipal company of public services held by four municipalities. The rst PPP was an operation contract and the latter a build- operate-transfer (BOT) contract. • In Mozambique, FIPAG is a public autonomous entity, created by the government, that is under the guardianship of the Ministry of Public Services, Housing, and Water Resources. It was created to own, manage, and invest in urban water assets. Despite the initial plan of the government

WATERS F MONTENEGRO

to attract private operators, FIPAG had to take over operation and maintenance of utilities. In this context, the role of local authorities was signi cantly reduced, though some form of coordination remains, mainly for planning purposes. All other decisions are vested in FIPAG, which also appoints utilities managers from its own staﬀ. Accountability mechanisms, embedded in the aggregation and in routine processes, help reduce distance from customers and overcome political resistance. Although there are potential bene ts from utility aggregation, providing services to a larger customer base increases the distance between the utility management and the end customer, making the utility less demand-responsive. Moreover, increasing the size of operations can cause mis- governance and accountability2 issues (World Bank 2003). In the water sector, which is characterized by local natural monopolies and low client power, aggregation may reduce both the short and long routes of accountability. A “short route” of accountability is identi ed between citizen clients and service providers, and a “long route” between the state as representative of citizens’ interests and service providers ( gure 6.2). To address those potential accountability issues,

it is possible to strengthen the short route of accountability between customers and service providers by enhancing customer engagement mechanisms. To do so, newly aggregated utilities may internalize accountability mechanisms in their routine processes. These internalized mechanisms are helpful for depoliticizing the provision of services, as they can create a “counterweight to the power of the owner” and help prevent political capture (Van Ginneken and Kingdom 2008). • In Brazil, the creation of SISAR Ceará, an organization based on community associations, required an intense participatory process, as every family in a community had to agree before the association could join SISAR. The São José investment project routinely involves rural workers' unions and producer cooperatives in its work. Along with the SISAR a regation process, the social participation of communities and their associations has intensi- ed, as several meetings and training sessions take place yearly. • In Colombia, the water operator Triple A built a strong social and communication policy with communities before and during the a regation. Awareness campaigns were organized before starting service provision and before installing metering. These campaigns focused on water-saving behaviors, appropriate water uses, timely payment of utility bills, and so on. Triple A also carried out annual health brigades and supported training for social control committees. Meetings with social leaders were also organized to explain how the company operates, how the service provision systems work, what the company contractual obligations are, how utility bills are calculated, and so on. Meetings were also held with mayors, council- ors, and active members

113

114 of the administration. • In Mozambique, conducting surveys regarding customers’ satisfaction is not common practice yet. The rst assessment of customer satisfaction was conducted for eight systems in three regions, among them Nampula and Pemba in the Northern Region. In these cities, more than half of the population surveyed does not consider the service provided to be of good quality ( gure 6.3). • In Romania, as a consequence of agreements signed with the European Bank for Reconstruction and Development and the EU Commission, the Brasov Water Company implemented a range of measures to improve accountability. Information programs on investment projects were carried out in schools. Reaching out to students and teachers also proved a good way to reach out to parents. To respond to complaints related to tari s, the introduction of metering, or discomfort caused by the works, villages could le water petitions. They were then transmitted to the company and dealt with through individual responses or through the organization of meetings at the request of residents. In addition to an interactive website, BWC set up a call center that features access to the company database, to quickly answer customers’ requests. The oversight and coordination of tari s is generally done by the shareholders of the public companies in charge of service provision (most o#en local government representatives), in general assemblies. In countries where there is an independent economic regulator for the water sector, tari s are either proposed to the regulator by utilities a#er shareholders’ approval or proposed by the regulator and approved by utility shareholders. Box 6.5 o ers a brief overview of the impact on tari s of the aggregation process.

• In Romania, tariﬀs are voted on by the IDA General Assembly representing all local governments. However, in 2016, one of the local governments opposed the tari increase passed by the Assembly. Raja Constanta continued to charge fees according to the tari adjustment scheme stipulated in the delegation contract. The operator’s determination to stick to the contract provisions was decisive in overcoming this resistance. • In Colombia, tari s are set and revised on the basis of formulas established by the economic regulator (the Water Regulatory Council), which are agreed upon in PPP contracts. Aggregations are sometimes used to establish cross-subsidies between high-cost and low-cost service areas; in such cases, a uniform tari across the entire service area is the norm. However, in cases where aggregations focus on cost savings or performance improvement, the aggregated utilities sometimes maintain separate tari s based on the cost structure in each service area. • In Portugal, Romania and Brazil, tari s have been harmonized over entire operating areas. The same situation applies in Indonesia for PDAM Intan Banjar. • In Mozambique, the tari is di erent in each municipality although FIPAG is the sole entity responsible for setting tariﬀs. • In Indonesia, PDAM Tirtanadi is using, for the rst time, its price-setting formula to determine tari s in other PDAMs where it operates; this price will be subject to PDAMs’ agreement. This formula has been enacted by the head of the provincial government. • In Hungary, both Alföldvíz and Kiskun-Víz are

WATERS F MONTENEGRO BOX 6.5. AGGREGATIONS AND TARIFF INCREASES About half of the case study utilities experienced tari increases after aggregation. In Portugal, this increase was thoroughly anticipated as a consequence of the large investment programs planned within the aggregation framework. The utility adopted a uniform cost-re ective tari following a principle of solidarity across the operating area. In Brazil, SISAR gradually raised its uniform tari to achieve operational cost recovery, as reaching nancial sustainability was a major target of the utility. Throughout the aggregation process, all tari increases were approved by SISAR’s member associations. In Romania, however, it was more di cult to pass tari increases and some municipalities opposed them. To raise tari s more easily, utilities chose to upgrade service quality through important investments, thus increasing customers’ willingness to pay. They also showed a strong determination in charging fees according to the delegated contract provisions and successfully overcame municipalities’ resistance. In other case studies, such as those of COPANOR, Alföldvíz, and Kiskun-Víz, the regulatory authority caps water tari s. This prevents utilities from raising fees although they feel they would need to in order to ensure operational cost recovery and nancial sustainability.

applying di erent tari s in the municipalities of their operating areas, depending on the category of customer and the metering diameter. Exit and entry rules set out the technical and nancial conditions under which a service can join or withdraw from the aggregation; those conditions mainly refer to the value of the assets being transferred. In addition, these rules also include governance arrangements that apply to newcomers. Among the various case studies, nine had clear entry and exit rules. • In Brazil, entry conditions into SISAR changed over time. From 1996 to 2010, water associations could join on a voluntary basis. But since then, a community must sign a services concession contract (contrato de programa) as a mandatory condition for securing state investments. The selection of targeted locations follows the state planning criterion exclu- sively. There is no public call for proposals to be answered by communities interested in participating. • In Portugal, in Águas do Ribatejo, there was no speci c provision about entry or exit of municipalities. When the municipality Torres Novas joined two years a#er the setup of the a regated utility, a speci c negotiation took place but no formal rules were established. In Águas do Alentejo, the initial partnership agreement did not provide any entry rules but a recent amendment (December 22, 2015) allows entry, with approval of the Partnership Commission and if it does not result in an increase in tari s of 5 percent or more. Regarding exit rules, the initial agreement speci ed that if a municipality decides to leave, it will com- pensate the utility with the remaining depreciation costs of infrastructure and with incurred damages, including lost pro ts.

115

116 • In Romania, during the a regation reform, little emphasis was put on the de nition of entry and exit rules. The exit rule boils down to the reimbursement of all amounts invested by the operator minus the depreciation costs already paid. In Raja Constanta, only one town got out of the project because of tari policy disagreements. When leaving, the town of Borcea paid nancial compensation to Raja for the investments made. In the meantime, exit clauses have been reinforced to make political decision makers more accountable for such decisions.

FINANCING, ASSETS AND LIABILITIES Fundamentally, the cost- and revenue-sharing approaches arrangements depend on the legal form of the aggregated entities. Whereas in the case of special-purpose vehicles and, to some extent, concessions, individual operation and investment costs can be separated, in the case of fully merged entities those are consolidated for the utility as a whole. • In Portugal, Romania, Brazil, and Indonesia (PDAM Intan Banjar), where a corporatized entity has been created that merges all of the previous operations, costs and revenues are being consolidated and decisions on budget and investments are made for the overall utility through the shareholder assembly. • In Mozambique, costs and revenues are processed separately for each municipality, and investments are nanced by external funding. This situation re ects the fact that tari s are also set individually for each municipality. • In Colombia, cost- and revenue-sharing agree-

ments are set according to the provisions of the PPP concession contracts. For the Atlántico regional scheme, 10 PPP contracts have been signed with various municipalities, for di erent durations and services provision (water and/ or wastewater, and sometimes waste collection). Each contract has its own economic balance, and costs and revenues are contract speci c. However, since 2014, the Atlántico operating area has been granted the status of regional market by the Regulation Commission. This enables the private operator to set up a regional user fee and thus implement cross-subsidies between municipalities. The case studies exhibit a diversity of asset ownership situations. In most cases, assets remained under the ownership of local jurisdictions and their operation was handed over to an intermunicipal structure or directly to the aggregated utility through some form of concession contract. Inventories were then carried out to value the infrastructure, and compensation was granted in the form of lease payments or allocation of shares. In other cases, assets are owned by provincial or state governments, or by the aggregated utility. • In Hungary, Romania, and Portugal, WSS assets remain the property of local jurisdictions and are handed over for operation to the a regated utility under a concessions contract (in Romania, through IDA, an intermunicipal agency). In Portugal, municipalities received compensation in the form of allocated shares. • In Romania and Hungary (for Kiskun-Víz), the a regated operator pays a lease fees to the WSS asset owners; in Romania, the lease payment is set aside into an asset management fund.

WATERS F MONTENEGRO • In Colombia, the La Línea case exhibits a PPP arrangement in the form of a BOT contract. As such, it encompasses the construction and the operation of water works. At the end of the contract, all assets are to be handed over to local jurisdictions. • In Brazil, WSS assets are owned by state governments, which generally nanced them, whereas o ces, workshops, vehicles, and maintenance tools belong to operators. For COPANOR, investment decisions are made by the state, whereas for SISAR they are decided by shareholders of the utility. • In Indonesia, WSS assets belong to either the provincial governments or the local government, depending on the status of the PDAMs. Investments are funded through public funds coming from provinces, municipalities, and international aid. • In Mozambique, FIPAG is the national fund that owns urban water assets. As such, it is in charge of infrastructure development and management. It is also responsible for investment programs. Liabilities for sta , suppliers, and nanciers can represent transaction costs for aggregating utilities. As such, they must be covered, either during the aggregation by the aggregated utility or separately from the aggregation by the local government budget. In most case studies, the second option was favored. • In Portugal, Romania, and Brazil, the newly a regated operator taking over services did not take on any liability from the previous operators. No debts or claims were undertaken. In Romania, in some cases, local authorities had to extinguish

former debts using their own budgets before the a regation was completed. • In Indonesia, the situation of PDAM Tirtanadi is similar. However, it is presently responsible for all liabilities undertaken on behalf of other PDAMs during the 25-year cooperation agreement. • In Colombia, PPP contracts did not encompass liabilities from previous operators. • In Hungary, the Kiskun-Víz utility took on all contractual obligations from the three merging companies. These liabilities usually did not extend to more than 1.5 to 2 years a#er the merger. The supplier contracts that were not advantageous for Kiskun-Víz were simply not renewed a#er they expired. The Alföldvíz utility signed management and operating contracts with municipalities and thus did not take any liability from previous operators.

HARMONIZATION OF PROCESSES AND PRACTICES As shown in chapter 4, labor cost is generally among the top budget items for a utility and the one where the most potential for optimization exists through aggregation. However, careful management of the process is needed to allow for the economies of scale to materialize. Among the case studies, six did not transfer any sta (PDAM Intan Banjar in Indonesia, BWC in Romania, COPANOR and SISAR in Brazil, La Línea and La Merca in Colombia), and seven did, either all sta or just a share (PDAM Tirtanadi in Indonesia, FIPAG Northern Unit in Mozambique, Raja Constanta in Romania, Kiskun-Víz and Alföldvíz

117

118 in Hungary, Águas do Alentejo and Águas do Ribatejo in Portugal). • In Indonesia, PDAM Tirtanadi took on 40 employees from PDAM Tirta Deli. These employees were subject to a selection process to determine their rank and job assignment. Sta from other local water utilities were also taken on when cooperation agreements were signed. • In Mozambique, FIPAG Northern Unit took on all sta from previous operators and implemented a comprehensive on-the-job training program that improved employees’ operational and management skills. • In Romania, Raja Constanta took over all employees from the former operators and committed to make no redundancy during the rst two to three years of operation. As a result, the number of employees increased by nearly 50 percent while salaries almost doubled. • In Hungary, all sta from previous companies were transferred to Alföldvíz and Kiskun-Víz. The salary gap between transferred sta was gradually closed by raising lower salaries to the highest level for similar jobs. • In Portugal, both Águas do Alentejo and Águas do Ribatejo took on a share of the sta from former operators, representing 30 percent of Águas do Alentejo sta and 50 percent for Águas do Ribatejo, and also hired additional staﬀ. As stated in chapter 2, the harmonization of IT systems and administrative practices can generate transaction costs that can limit or delay the materialization of aggregation bene ts. Four case studies display some concrete examples of IT or

administrative harmonization practices. • In Hungary, the a regated utility of Kiskun-Víz selected the IT customer databases and invoicing systems from Halasvíz, one of the a regating providers, for use, and data were migrated from the other a regating companies. This created a one-o cost for 2012–2013. Customer service operations were suspended for one day for the transition. A#er the merger in September 2013, Kiskun-Víz issued its rst invoice in November 2013. The consolidated system for the management of outstanding invoices was ready in 2015. A central customer service o ce was supplemented by two new local o ces open three days a week, and a number of small “customer service points” are available once a week in some of the smallest settlements. The three merging companies— Halasvíz, Kalocsavíz, and Kőrösvíz—also brought di erent operational practices into the merged company of Kiskun-Víz. These practices were harmonized by selecting the “best practice” and introducing it in the operation of the Kiskun- Víz utility. For example, Kalocsavíz had an e cient system for the management of unpaid invoices, which was adopted throughout the a regated utility. The frequency for meter reading was also lowered, and electronic payments have been made available for all customers, whereas cash payment is no longer possible. • In Indonesia, PDAM Tirtanadi opened branch o ces to manage customer relationships in all PDAMs with which it signed cooperation agreements. • In Romania, the BWC operating area was reorganized around Brasov and Rupea, two main areas that have their own water systems supplying surrounding rural settlements. They became the

WATERS F MONTENEGRO main headquarters, where administrative and commercial functions have been consolidated; local technical centers have been set up in many rural locations for day-to-day maintenance. â&#x20AC;˘ In Mozambique, when FIPAG Northern Unit took over service provision in Nampula, Nacala, and Pemba/Metuge, it nominated new executive management and introduced new working methods and new business-driven approaches.

NOTES 1. Only some of the localities served by Raja Constanta are shareholders of the company; these localities are the ones served by the utility before the aggregation process. 2. For the purpose of this particular study, accountability is de ned as being answerable to other parties for policy decisions, for the use of resources, and for performance.

119

IRISH WATER

Water Services Strategic Plan

WATERS OF MONTENEGRO VOLUME 3

122

WATER SERVICES STRATEGIC PLAN

A Plan for the Future of Water Services IRISH WATER AT A GLANCE: Irish Water was created in

2013. and serves 3,3 million people producing over 1,6 billion litres of drinking water every day and taking

wastewater away for treatment before it is returned to our rivers and seas. Thousands of assets are operated and maintained to provide these services, including around:

900 water treatment plants which deliver water through an estimated 60.000 kilometres of pipelines. We treat wastewater in more than

1000 wastewater treatment plants

and it is collected through an estimated

25.000 kilometres

of pipelines plus numerous pumping stations and sludge treatment centres.

WATERS F MONTENEGRO EXECUTIVE SUMMARY Our vision Eﬀective water services, including the delivery of a sustainable and reliable clean water supply and safe disposal of wastewater, are essential for a modern country. This document presents the Water Services Strategic Plan prepared by Irish Water which provides, for the first time, an opportunity to consider, at a national level, the way that water services are delivered in Ireland. The plan takes a 25 year view towards the vision that: “Through responsible stewardship, eﬃcient management and strong partnerships, Ireland has a world-class water infrastructure that ensures secure and sustainable water services, essential for our health, our communities, the economy and the environment”. The plan has been prepared to comply with our statutory obligation and as a basis for broad public and stakeholder engagement. A glossary of technical terms used is included at the end of the document.

Overview of Irish Water Irish Water was established as a subsidiary of the Ervia Group (formerly Bord Gáis Éireann). Ervia now has responsibility for the delivery of gas and water infrastructure and services in Ireland. Establishing Irish Water involved the creation of the required organisation, management systems and processes to manage the water services assets estimated to have a value of €11 Billion, drawing on the experience and expertise of Bord Gáis Éireann, as a modern eﬃcient and customer

focused energy utility. Incorporated in July, 2013, Irish Water brings the water and wastewater services of the 34 local authorities together under one national service provider. From the 1st January, 2014, Irish Water became responsible for all public water services, involving the supply of drinking water and the collection, treatment and disposal of wastewater. Irish Water took on the operation of the assets through Service Level Agreements (SLAs) with all 31 local authorities (a#er amalgamation of the previous 34), who continue to provide day to day operations. We also took over all of the capital investment decisions and implementation of the capital programme delivery across the country. In discharging its role as the national water services utility, responsible for water services operations and investment, Irish Water is regulated by: a) The economic regulator, the Commission for Energy Regulation (CER), which is charged with protecting the interests of the customer, while approving an appropriate funding requirement suﬃcient to enable the utility to deliver the required services to specified standards in an efficient manner; and b) The environmental regulator, the Environmental Protection Agency (EPA), which sets standards and enforces compliance with EU and National Regulations for drinking water supply and wastewater discharge to water bodies. The EPA liaises with the Health Services Executive in matters of public health.

Our legal Context Irish Water will plan, develop and operate our water service functions in line with the requi-

123

124 rements of prevailing relevant national and European legislation. Relevant legislation includes multiple statutes, regulations and European directives. Some of the most pertinent legislation in the context of the operations covered by this plan include the Urban Waste Water Treatment Directive, the Drinking Water Directive, the Water Framework Directive, the Birds and Habitats Directives and our obligations under the Aarhus Convention in terms of European legislation and the Water Services Acts, 2007-2014, Water Supplies Act, 1942, the Planning and Development Act, 2000, European Union (Drinking Water) Regulations 2014 and Wastewater Discharge (Authorisation) Regulations 2007 in terms of national legislation.

Our challenges Irish Water is responsible for the delivery of water services to approximately 80% of the population. Whilst many customers receive a good quality water supply and wastewater provision, a significant proportion are dissatisfied with these services; based on quality, capacity and reliability issues. Despite the good work of local authorities over many decades, under-investment combined with a lack of planned asset management and maintenance programmes has led to a legacy of deficiencies in our treatment plants and networks. In many areas, limitations on treatment and/or network capacity urgently need to be addressed to accommodate new housing, commercial and industrial developments. In our two largest cities of Dublin and Cork, we continue to rely for part of the daily drinking water requirement on 19th century systems which are no longer fit for purpose in their current condition. This exposes these supplies to an unacceptable risk of failure. Outside of our major urban centres, our water supply network is fra-

gmented with many small and vulnerable water sources. Water quality does not meet European and Irish drinking water standards in many of our schemes and up to 30% of water treatment plants are considered to be â&#x20AC;&#x153;at riskâ&#x20AC;? of failure in terms of quality parameters. In 2014, an estimated 23,000 customers had a Boil Water Notice, indicating that their water was not fit for drinking due to the risk of microbiological contamination. One hundred and twenty six (126) water supply zones are on the EPAâ&#x20AC;&#x2122;s Remedial Action List (see Appendix 1 for a list of water supply zones on the EPA RAL in Q3 2014), requiring investment and/or significant improvement in operation to reduce the risk of failure to accepted levels. We are also losing almost half of the water we produce due to leakage within our water mains and within customer properties. Wastewater must be collected and treated before it is returned to the environment. The most recent EPA assessment of urban wastewater1 identifies that wastewater treatment is not at the required standard in 38 of our larger urban areas and that 44 areas discharge raw sewage (sewage that is untreated or has had preliminary treatment only) (see Appendix 2 for list of the-

WATERS F MONTENEGRO se areas). As a result of Ireland’s failure to meet the requirements of the EU Urban Waste Water Treatment Directive in respect of 71 agglomerations/areas in 2011 (see Appendix 3 for the list of the 71 non¬compliant agglomerations) the European Commission has initiated an Infringement Case against the state. Many of our sewers in urban areas receive rainfall run-oﬀ from roads and hard surfaces in addition to wastewater. These combined sewers are frequently overloaded during periods of heavy rain resulting in the flooding of some properties and giving rise to overflows which can cause pollution within our rivers and streams. Apart from these compliance challenges, the welcome return of economic growth brings a requirement for additional capacity to support housing development, together with oﬃces, factories and commercial buildings supporting jobs. There are areas zoned for development which are currently constrained by limitations in system capacity for water and wastewater. This additional demand must be met without risk to existing customer service standards. Key national policy objectives for employment and increasing housing output (Construction 20202) must be provided for. The Housing Supply Co-ordination Task Force for Dublin (established by the DECLG as an action under Construction 2020) identifies water services infrastructure deficit among the constraints to be overcome if housing needs are to be met in the Greater Dublin Area. Substantial improvements to water supply capacity, quality and reliability are required in addition to upgrading of our wastewater infrastructure, both treatment plants and collection networks, in order to protect the environment. This will require significant capital investment over many years. Even with additional funding,

the timescale to address all of the issues is likely to extend through a number of investment cycles so that we must prioritise projects which should proceed in order of criticality.

What is the Water Services Strategic Plan? This Water Services Strategic Plan (WSSP) sets out strategic objectives for the delivery of water services over the next 25 years up to 2040. It details current and future challenges which aﬀect the provision of water services and identifies the priorities to be tackled in the short and medium term. In developing the plan, we have considered its interaction with other national and regional strategic plans such as the National Spatial Strategy and River Basin Management Plans. This plan (Tier 1) also provides the context for subsequent detailed implementation plans (Tier 2) which will document the approach to be used for key water service areas such as water resource management, wastewater compliance and sludge management. 1 - Focus on urban wastewater treatment in 2013. Published by the EPA, December 2014. 2 - Construction 2020, A strategy for a renewed construction sector; May 2014; Government Publication; 2014 The WSSP will be reviewed on at least a five yearly basis to ensure that it continues to be up to date with current and future needs. An interim review is also planned to ensure consistency with the new National Planning Framework, the new Regional Spatial and Economic Strategies and River Basin Management Plans which will be developed in the next few years. In addition, Irish Water will prepare Business Plans during the period setting out targets for delivery of eﬃciencies in operational and capital

125

126

expenditure and performance targets consistent with the delivery of the objectives in this WSSP. In accordance with the Service Level Agreements with the now 31 Local Authorities, a series of transformation initiatives are being implemented in partnership with the local authorities. The most important of these will be the development of the Water Industry Operating Framework to facilitate the delivery of water services under the single utility model.

Ministerial Direction on the form and content of this WSSP and the Minister has set out the requirement for the plan to address the delivery of six strategic objectives as follows: • Meet Customer Expectations; • Ensure a Safe and Reliable Water Supply; • Provide Eﬀective Management of Wastewater; • Protect and Enhance the Environment; • Support Social and Economic Growth; and • Invest in Our Future.

The Water Services (No. 2) Act, 2013 provides for

These are not in a particular order of priority.

WATERS F MONTENEGRO For each strategic objective within the plan, we outline the current situation, identify the key challenges and propose a number of aims and strategies to address the objective. We have suggested targets within the plan in order that our performance against the objectives can be monitored and assessed by our regulators, other stakeholders and our customers. It should be noted that a number of strategies are cross cutting between strategic objectives. For example, strategies for achieving eﬀective wastewater management will also result in protecting the water environment. An initial public consultation on the issues to be included in the plan was completed in the summer of 2014 and has informed this document. The plan has been subjected to Strategic Environmental Assessment and Appropriate Assessment and these documents are also published and are available at www.water.ie.

Our Current Priorities In this first strategic plan, we need to address urgent issues in the quality of our water services and in the integrity of our infrastructure, subject to adequate funding being available to us, while ensuring that water services that currently meet required standards continue to do so. We have therefore prioritised the following six areas: • Demonstrating our commitment to the delivery of an improved quality water and wastewater service through the appropriate management of our assets in an economic and eﬃcient manner ensuring least cost for our customers. • Remediating the drinking water quality problems where customers have a Boil Water Notice or water supplies fail other mandatory requirements of the Drinking Water Regulations. We are

also prioritising high risk plants identified in the EPA Remedial Action List. • Complying with the Urban Waste Water Treatment Directive and, in particular, addressing the lack of wastewater treatment at 44 urban centres and improving treatment at the 38 larger urban areas which do not currently meet the required treatment standards. We are also prioritising upgrades at sites of serious pollution including sites resulting in adverse impacts on Bathing Waters. • Reducing the excessive leakage from our water mains through our water conservation programmes. Completion of the domestic metering programme in line with Government policy will create customer awareness of their water usage and support behavioural changes in water consumption. It will identify the location of customer side leaks which can be addressed through our “first fix policy”. In addition, the programme is adding to our knowledge of where lead service connection and supply pipes are located. • Capturing accurate information on the nature, condition and performance of all of our assets (infrastructure and equipment) into quality assured databases, especially critical assets whose failure would have significant customer impacts, in order that we can better target investment in asset maintenance/upgrades. • Catering for future growth.

OUR STRATEGIC OBJECTIVES Our six strategic objectives are highlighted in the following sections.

Objective: Meet Customer Expectations Our aim under this objective is to establish both

127

128

customer trust and a reputation for excellent service through delivering our set of defined strategies; thereby, building the trust and confidence of our customers. We recognise the need for the provision of high quality, reliable water services, delivered through resilient systems in an eﬃcient and economic manner. Our first response to ensuring delivery in an eﬃcient and economic manner has been to review all proposed capital investment in the water services assets to more accurately define the scope required and confirm value for money. However, even with savings identified by re-scoping and introduction of new technologies, the level of investment required remains significant and we must prioritise the required projects against the available funding. Our economic regulator, the CER, has set out the levels of service which we are required to meet in the Customer Handbook and this is supplemented by a number of Codes of Practice which we have published. These relate to how we will correspond with our customers, deal with requirements for billing, complaints and other matters. We will communicate with our customers, particularly when we must temporarily interrupt services, giving advance notice in accordance with our regulatory requirements. When we have unplanned interruptions, for example as a result of

burst mains or other emergency works, we will use the appropriate national, regional and local media as well as social media and mobile notifications and have a commitment to directly contact vulnerable customers. We will fully support the work of the Public Water Forum to be established under the Water Services Act, 2014, with respect to their comments and suggestion in relation to the performance by Irish Water of its functions. Key targets in relation to meeting customer expectations by the end of 2021, 2027 and 2040 include; Customer Contact Handling – maintain the number of customer calls answered within 20 seconds at the current baseline of 80% and less than 5% of calls abandoned in line best practice in utilities in Ireland and the UK. Customer Complaint Handling – increase the percentage of customer complaints resolved (or steps taken towards resolving the complaint) within 5 working days of receiving the complaint from current baseline of 90% to 100% by the end of 2021 and maintain this rate. Note; for all targets identified in relation to this objective – see Indicators and Targets under this Objective in the main body of the document.

Objective: Ensure a Safe and Reliable Water Supply Our aims under this objective are to: • Manage the sustainability and quality of drinking water from source to tap to protect human health. • Manage the availability, sustainability and re-

WATERS F MONTENEGRO liability of water supply now and into the future. • Manage water supplies in an eﬃcient and economic manner.

Safe and reliable water supplies are essential to public health, social and economic growth. Irish Water currently operates around 900 water treatment plants. Water quality from some of these water treatment plants does not meet the current Drinking Water Quality Regulations due to microbiological contamination or exceedances of other water quality parameters. Many of these treatment plants take their water from small water sources which are vulnerable to contamination and the impacts of climate change. The water supply distribution networks operate as isolated systems which are not interconnected. We also estimate that, nationally, we are losing approximately 49% of the water we treat due to leakage from our water mains and within customers’ properties. Some of our older water mains and our customers’ service pipes are made from lead which can in itself contribute to contamination of water by dissolving into the water, particularly at times of no or low flow. We have identified a set of actions to address the above challenges which include to: • Prepare and implement a National Water Resources Plan for the strategic development of

water supplies that comply with the water quality standards and build in security of supply through the interconnection, where practicable, of our current water supply networks and the development of new, larger and more secure water sources serving regional schemes. • Prepare and implement Drinking Water Safety Plans to protect our water supplies in accordance with international best practice, eliminating Boil Water Notices other than from short term extreme events. • Implement a Lead in Drinking Water Mitigation Plan to reduce the potential for water to dissolve lead from pipework and to replace our public lead water mains over a ten year period. • Implement a national set of Standard Operating Procedures in our water treatment plants and networks to ensure their correct, eﬃcient and safe operation. • Manage all our water abstractions to minimise their impact on the environment. • Implement regional water conservation strategies to reduce leakage from our water mains by over 50% in the period of the WSSP. • Adopt an asset management approach to maintenance and investment in our infrastructure and equipment so that we maximise the lifespan of our assets for consistent levels of service at least cost, utilising the capabilities and systems established in Irish Water. Key targets in relation to ensuring a safe and reliable water supply by the end of 2021, 2027 and 2040 include; Drinking Water Microbiological Standards – increase the percentage of samples complying with water quality standards from the current baseline of 99.82% to 99.99% by the end of 2021 and maintain that compliance rate.

129

130 Leakage of Treated Water – reduce the current leakage rate of approximately 49% to less than 38% by the end of 2021, to 30% by 2027 and to an economic level of leakage by 2040. Note; for all targets identified in relation to this objective – see Indicators and Targets under this Objective in the main body of the document.

Objective: Provide Effective Management of Wastewater Our aims under this objective are to: • Manage the operation of wastewater facilities in a manner that protects environmental quality. • Manage the availability and resilience of wastewater services now and into the future. • Manage wastewater in an efficient and economic manner. Wastewater must be collected and treated to an acceptable standard before it is discharged back into the environment. As a minimum, discharges from our wastewater networks must comply with the standards set by the EU Urban Waste Water Treatment Directive (UWWTD). A number of our treatment plants do not meet this requirement. Some of our combined sewers (pipes which receive both wastewater and the rainfall run-off from our roads and other hard surface areas) do not have the capacity to cope with heavy rainfall

and this can result in flooding of properties. During intense rainfall, combined sewer overflows (CSOs) discharge effluent into our watercourses with limited or no treatment and this can result in unacceptable levels of pollution. We have identified a number of actions to tackle these issues including to: • Prepare and implement a Wastewater Compliance Strategy to improve the management of the wastewater systems. This will seek to address unacceptable discharge quality through improvements to treatment and remediate problems associated with combined sewers, where feasible. • Prepare and implement national Standard Operating Procedures to ensure that all of our wastewater treatment plants and networks are operated correctly, safely and efficiently. • Progressively meet the requirements of the UWWTD and the EPA Discharge Licences and Certificates. • Identify and record properties at risk of flooding from combined sewers and implement measures to reduce and mitigate this risk. • Plan and deliver measures to reduce the pollution impact from combined sewer overflows. • Adopt an asset management approach to maintenance and capital investment, as for our water supply services, utilising the capabilities and systems established in Irish Water. Key targets in relation to providing effective management of wastewater by the end of 2021, 2027 and 2040 include; Compliance with UWWTD – increase the percentage of the population equivalent served by wastewater treatment plants that are compliant with the requirements of the UWWTD from the current baseline of approximately 39% to 90%

WATERS F MONTENEGRO by the end of 2021, to 99% by 2027 and to 100% by 2040. Pollution Incidents caused by Irish Water’s Waste Water Treatment Plants – deliver a reduction in the number of Class 2 pollution incidents (localised pollution) from a current baseline of 168 incidents to 75 incidents by the end of 2021, to 20 incidents by 2027 and maintain this level. Note; for all targets identified in relation to this objective – see Indicators and Targets under this Objective in the main body of the document.

Objective: Protect and Enhance the Environment Our aims to protect and enhance the environment are to: • Ensure that Irish Water services are delivered in a sustainable manner which contributes to the protection of the environment. • Operate our infrastructure to support the achievement of objectives under the Birds, Habitats and Water Framework Directives. • Manage all our residual waste in a sustainable manner. Protecting and improving the long term quality of the water environment enables safe, aﬀordable water services as well as protecting human health and biodiversity. Many sectors have activities which impact on the water environment including emissions from industry, polluted run-oﬀ from agriculture, private household septic tanks as well as our water and wastewater services. A balance needs to be struck between our activities that impact on the water environment and the ability of the environment to sustain these impacts over both the short and longer term.

Climate Climate change in Ireland is predicted to cause a greater frequency of extreme weather events which could result both in increased flooding risk and periods of drought. It is important to ensure that water services are adapted to the impacts of climate change in terms of; • Adapting our assets to be resilient to climate change impacts; • Mitigating our climate impact by reducing our carbon footprint; and • Supporting the objectives of the National Energy Eﬃciency Action Plan through targeted investments and adapting asset operations. There are a number of European Directives that give special protection to identified areas which are important for drinking water supply, nature conservation, bathing and fisheries. The Birds and Habitats Directives designate specific habitats and species for special protection and set up a network of protected sites (Natura 2000). The Water Framework Directive, which is the over-arching Directive covering management of water resources in the EU, establishes a catchment based approach to the protection, improvement and sustainable use of inland and coastal waters including groundwater. It adopts the ‘polluter pays’ principle and seeks to develop holistic approaches to sustainable water use. Monitoring by the EPA indicates that many of our water bodies are not at ‘Good Status’ and discharges from wastewater treatment plants are one of the causes of this. Water and wastewater treatment generates sludge products which require disposal or re-use where feasible. Wastewater sludge can be treated for re-use as a fertilizer and soil conditioner and also to generate renewable energy. We aim to retain and develop these outlets with full regard to all food safety and environmental con-

131

132 siderations through quality management of all stages of the process. We have identified a number of actions to achieve our environmental and sustainability aims including to: • Implement a Sustainability Policy and Framework. • Prepare and implement a Sustainable Energy Strategy. • Prepare and implement a Climate Change Adaptation and Mitigation Strategy. • Adopt a green procurement approach and review our current use of resources. • Contribute to the delivery of the Water Framework Directive programmes of measures and our obligations under the Birds and Habitats Directives. • Develop and implement waste and sludge management plans. Key targets in relation to protecting and enhancing the environment to the end of 2021, 2027 and 2040 respectively include; Energy Efficiency – improve the energy efficiency at Irish Water facilities over the 2009 baseline by 33% by 2020 (national policy target) and meet the targets that will be established by national energy policy to 2040. Facilitate the achievement of water body objectives under the Water Framework Directive and our obligations under the Birds and Habitats Directives – achieve the key targets identified under the Provide Effective Management of Wastewater objective with respect to wastewater treatment and effluent discharges from Irish Water’s facilities and under Ensure a Safe and Reliable Water Supply with respect to ensuring our abstractions for drinking water are environmentally sustainable.

Note; for all targets identified in relation to this objective – see Indicators and Targets under this Objective in the main body of the document

Objective: Support Social and Economic Growth Our aims under this objective are to: • Support national, regional and local economic and spatial planning policy. • Facilitate growth in line with national and regional economic and spatial planning policy. • Ensure that water services are provided in a timely and cost eﬀective manner. The Central Statistics Oﬃce has published population growth forecasts at a national scale to 2046 and at a regional scale to 2031 based on the results of the 2011 census. These projections indicate that the national population will grow from 4.5 million in 2011 to between 5 million and 6.7 million by 2046, depending on the growth scenario used. Growth will vary across regions, with the Dublin/Mid East region likely to experience the greatest growth and the Western and Border Regions likely to experience the least growth. The delivery of appropriate infrastructure to meet the required demand, where and when it is needed, supports the social and economic growth of the country. Reliable, high quality water supplies are increasingly important to attract foreign direct investment into Ireland. To achieve these objectives we must assess the demands for water services, based on national and regional spatial planning policies and plans, together with population and economic growth predictions. Our plans must ensure continuous service to all Irish Water’s existing customers, whilst providing additional capacity to meet future population growth and industrial development. The

WATERS F MONTENEGRO objectives of the Government’s strategic approach to housing identified in Construction 2020 must be provided for in terms of both treatment and network capacity. However, there are a number of challenges in meeting this objective including the accurate prediction of the growth of the domestic population and changing demography. The demand from businesses and industry is uncertain and industrial development can have significant “one-oﬀ” demands for large water and/or wastewater capacity. This requires that our plans and implementation programmes are versatile and capable of being phased as far as possible to meet emerging needs. To meet this strategic objective we will, in summary: • Work with national, regional and local planning bodies to ensure that we understand and plan for future development consistent with national, regional and local planning policy. • Maximise the capacity of our existing assets through eﬀective management. • Invest in interconnection of networks and additional capacity and ensure that we maintain appropriate headroom (spare capacity above demand) to cater for production risk and provide flexibility in capacity to meet new demands. • Balance investment for growth in demand with other priorities to ensure best outcome for customers. • Operate an equitable new connections charging policy for new customers. A key target in relation to supporting social and economic growth to the end of 2021, 2027 and 2040 respectively includes; The availability of capacity, “Headroom”, at water and wastewater treatment plants to meet “core strategies” identified in development plans. The

percentage of treatment plants meeting the target capacity headroom to increase from a current baseline of “unknown” to 60% of plants meeting their target by the end of 2021, 75% by 2027 and 100% of plants meeting their target by 2040. Note; for all targets identified in relation to this objective – see Indicators and Targets under this Objective in the main body of the document.

Objective: Invest in Our Future Our aims under this objective are to: • Manage our assets and investments in accordance with best practice asset management principles to deliver a high quality, secure and sustainable service at lowest cost. • Invest in our assets while maintaining a sustainable balance between meeting customer standards, protecting the environment and supporting the economic development and growth of the country. • Establish a sustainable funding model to ensure that Irish Water can deliver the required capital investment in order to achieve the required outcomes. • Promote research and utilise proven, innovative technical solutions to meet standards set by our regulators including our objectives for cost and energy eﬃciency. The historic under-investment in our water and wastewater networks and treatment facilities means that we now need to secure significantly increased levels of funding (approximately €600M capital investment each year) in order to achieve adequate standards of drinking water and wastewater compliance and to support the growth of the country. Because of the very high levels of investment required and also the significant constraints on Government borrowing, the

133

134 Summary of Strategic Objectives and Aims A table summarising our strategic objectives and aims is presented below.

Meet Customer Expectations

CE1

Establish both Customer Trust and a Reputation for Excellent Service.

Ensure a Safe and Reliable Water Supply

WS1

Manage the sustainability and quality of drinking water from source to tap to protect human health.

WS2

Manage the availability, sustainability and reliability of water supply now and into the future.

WS3

Manage water supplies in an eﬃcient and economic manner.

Provide Eﬀective Management of Wastewater

WW1

Manage the operation of wastewater facilities in a manner that protects environmental quality.

WW2

Manage the availability and resilience of wastewater services now and into the future.

WW3

Manage wastewater services in an eﬃcient and economic manner.

Protect and Enhance the Environment

EN1

Ensure that Irish Water services are delivered in a sustainable manner which contributes to the protection of the environment.

EN2

Operate our water services infrastructure to support the achievement of water body objectives under the Water Framework Directive and our obligations under the Birds and Habitats Directives.

EN3

Manage all our residual waste in a sustainable manner.

Support Social and Economic Growth

SG1

Support national, regional and local economic and spatial planning policy.

SG2

Facilitate growth in line with national and regional economic and spatial planning policy.

SG3

Ensure that water services are provided in a timely and cost eﬀective manner.

WATERS F MONTENEGRO IF

Invest in Our Future

IF1

Asset Management. Manage our assets and investments in accordance with best practice asset management principles to deliver a high quality secure and sustainable service at lowest cost.

IF2

Balanced Sustainable Investment. Invest in our assets while maintaining a sustainable balance between meeting customer standards, protecting the environment and supporting the economic development and growth of the country.

IF3

Sustainable Funding Model. Establish a sustainable funding model to ensure that Irish Water can deliver the required capital investment in order to achieve the required outcomes.

IF4

Research and Innovation. Promote research and develop proven, innovative technical solutions to meet standards set by our regulators including our objectives for cost and energy eﬃciency.

Irish Water funding model must enable us to raise finance from other sources. In order for Irish Water to be able to raise significant finance at favourable interest rates, it will be necessary for it to demonstrate that it is an eﬃcient water utility company, operating within a stable regulatory framework, with secure revenue streams. We need to achieve a sustainable balance between the level of investment meeting customer standard, protecting the environment and supporting the social and economic development of the country through working with our regulators and stakeholders. This will require that we operate eﬃcient systems and processes in both operations and capital delivery. Our actions for achieving this strategic objective are to: • Overcome the deficit in knowledge of our current asset base through the development of accurate databases linked to Geographical Information Systems and installing modern asset monitoring and reporting systems to support au-

tomation and process control. • Maintain our infrastructure and plan for its replacement through adopting an asset management approach in line with international best practice. • Develop a sustainable funding model. Irish Water is taking a 25 year perspective in relation to investment in water services. • Engage collaboratively with our customers, stakeholders and regulators to deliver optimum investment outcomes at least cost using clear and transparent investment criteria. • Raise public and stakeholder awareness of the value of water services and the requirements to deliver them to the required standards. • Engage with organisations conducting research and development in water services, including Irish third level colleges and institutes, and use proven innovation to maximise benefits for our customers and the environment. A key target in relation to investing in our future to the end of 2021, 2027 and 2040 respectively includes;

135

136 Operational and capital eﬃciency – meet 100% of the requirements identified by the CER with respect to operational and capital eﬃciency by end of 2021 and maintain this percentage. Note; for all targets identified in relation to this objective – see Indicators and Targets under this Objective in the main body of the document.

ENVIRONMENTAL ASSESSMENT, CONSULTATION AND ADOPTION OF THIS PLAN A Strategic Environmental Assessment (SEA) and Appropriate Assessment (AA) were undertaken by Irish Water during the preparation of this Water Services Strategic Plan. A dra# Plan, SEA Environmental Report and Natura Impact Statement (NIS) were published for consultation with statutory and non-statutory consultees and the general public from the 19th February to the 17th April 2015. We have taken on board the feedback we have received through the consultation process in the preparation of this final Plan. The changes made to the dra# Plan due to this feedback are identified in the SEA Statement for the Plan. The Water Services Strategic Plan was adopted by the Irish Water and Ervia Boards in June 2015 and was brought to the Minister for the Environment, Community and Local Government for approval in July 2015.

This document, the SEA Statement and AA Determination are available for download online at: www.water.ie

WATERS F MONTENEGRO MAP 1 & 2 IRISH WATER WATER TREATMENT PLANTS & WASTEWATER TREATMENT PLANTS

137

PROF. DR. RADOMIR RADOVANOVIC, retired full professor at the University of Belgrade; The founder of the study group and Head of the Food Safety and Quality Management Division, within the Food Technology Department, Faculty of Agriculture, University of Belgrade

The importance of modern water safety management systems

WATERS OF MONTENEGRO VOLUME 3

140 DR RADOMIR RADOVANOVIĆ

retired full professor at the University of Belgrade

THE IMPORTANCE of modern water safety management systems I

It is generally known that drinking water, in addition to air and food, is the third condition of life. So, what can be more important than microbiologically, chemically and physically – to the full extent – correct and, for the health of consumers, safe water. Even more so considering the fact that, in addition to households (drink, food preparation, personal hygiene, sanitation), water is also used on spontaneous natural springs (for example, in tourist areas and on excursion sites), in primary agricultural production (irrigation, cattle watering etc.), especially in industrial food production - during the preparation and processing of plant and animal raw materials, or during the process of making diﬀerent groups and types of products of plant, animal and/or mixed origin. Therefore, it is almost unnecessary to emphasize the importance of availability and accessibility of suﬃcient quantities of safe water, especially

in a situation where mankind is facing increasing challenges in terms of water scarcity. According to the United Nations (UNEP, 2009; WWAP, 2009; FAO 2007), global water resources can be presented as follows: the total amount of water on the planet is about 1.4 billion km3; the amount of fresh water is about 35 million km3 (about 2.5% of the total quantity), of which about 24 million km3 (about 70%) is found in glaciers, in the form of snow and ice, while the remaining 30% of fresh water is found in the form of underground and surface waters (97% is below the ground surface, sometimes up to a depth of 2000 meters, while about 3% is located in rivers and lakes); the oceans contain about 97.5% of the total water on the planet; the Earth's atmosphere has about 13,000 km3

WATERS F MONTENEGRO of water. It is estimated that today, as a result of environmental pollution, there is about 1.8 billion people without hygienically safe water, 2.5 billion people do not have the basic hygiene conditions for life, and by 2025 two thirds of mankind will be endangered due to water scarcity. The worrying data on water pollution contributed to a view that water would be a limiting factor of socio-economic development on the one hand, as well as the survival of people in the poorest parts of the world on the other. Since the right to drinking water derives from several forms of human rights (right to life, right to medical treatment and health care, right to food/nutrition, right to development and right to a healthy environment), four basic human rights in relation to water are defined based on that necessity, namely: the availability of sufficient quantities of water (the average daily need of a man ranges up to 50 litres, from a minimum of about 20 litres) water safety (water must be safe for drinking and hygienically safe for all other needs), water accessibility (water must be physically accessible, not more than 200 meters away), water affordability (price must not affect the human right to all other needs). Regardless of the significant drinking water needs, the largest amount of water in the world is spent on agricultural production. Depending on the diet, especially the habits and structures characteristic of regions and areas in individual parts of the world, it takes between 2 and 5 thousand litres of water to produce daily food needs for one person. More than 200 million hectares (ha) of arable land is irrigated, for which about 2,500 billion m3 is used annually or about 75% of the total available freshwater resources (FAO, 2007). However, the available data indicate that irrigation of arable land is modest and insufficient in the world, and also very uneven between individual regions, due to which there are great differences in rational use of available quantities

of water. For example, only 42% of arable land is irrigated in Asia, 31% in the Middle East and North Africa, about 14% in Latin America and the Caribbean, and only 4% in the Sahara region. In many developed countries, the use of irrigation water within well-developed irrigation systems is very rational, and the exploitation of this natural resource is carefully planned, since a drastic increase in demand is expected in the future when it comes to water intended for agriculture, above all primary plant production (GES, 2008). Moreover so, having in mind that irrigation can increase the yield of cereals by 400%, and in the next 30 years it is necessary to ensure that at least 70% of total cereal production comes from irrigated areas. To this end, the FAO plans to increase irrigation of agricultural land and crops in vulnerable areas of the world by about 27% by 2030, but also to ensure the improved eﬃciency of irrigation systems, or their reasonable utilization, in order to allow for more eﬃcient production, with a water consumption increase of only 12% (FAO, 2008d).

141

142 Bearing in mind the above facts, it is clear that the availability and accessibility of sufficient quantities of safe water is one of the greatest global problems of the modern world. Already modest and insufficiently available natural resources, with estimates by the UN and FAO that the planet's population will increase to over 9.5 billion by 2050, thereby also increasing the requirements for safe drinking water, and that the amounts of water for land irrigation will increase by 55%, and for the needs of industrial food production by about 2/3, only indicate that in time ahead of us the global water problem will only escalate. That is why one of the key Millennium Development Goals (MDG 2000) - UN/FAO, 2000 and Sustainable Development Goals by 2030 - UN, 2015; UN/FAO, 2018, is the obligation to ensure that all people on the planet have sufficient availability of safe water, especially sustainable water resources management. Among the most frequently contaminated foods on the global level, immediately a#er meat and meat products (20.1%), and chopped meat and corresponding products (19.0%), therefore, in the worrisome third place, there is drinking water (including bottled water) - with a high share of 18.3% (EFSA-ECDC, 2016). In order to efficiently and effectively achieve these objectives, modern management systems are increasingly used in the world, both in terms of water safety and quality, as well as in terms of overall operations regarding the optimal use of water sources, water production and distribution systems. In the case of water safety and quality, the requirements of a modern concept of risk analysis and critical control points - the HACCP concept, or the requirements of the international standard ISO 22000: 2005 and the latest version of June 2018 (adapted to the requirements of Annex SL) are used, while in the case of management of total business in the processes of water production and distribution, the requirements of the international standard ISO 9001: 2015 apply. In both cases, these are preventative, proactive

and well-documented systems with precisely defined responsibilities for all process activities. Generally speaking, Montenegro is a country rich in high quality waters that can be used for drinking, by inhabitants within larger and smaller urban areas, as well as numerous guests using a variety of tourist services. In an eﬀort to ensure stable water supply, the Law on the Construction of Regional Water Supply System for the Montenegrin Coast was adopted in 1986. The construction of a part of the infrastructure in Herceg Novi, Tivat, Kotor and Budva began first, but more concrete works continued a#er the decision was made to continue the construction of the Regional Water Supply System in February 2007 and with the phased financial support from the World Bank. Thus, the key activities in the implementation of this large state-led project, worth 107 million euros, were performed in the period from 2007 to 2010. Today, the Public Enterprise for the Regional Water Supply of the Montenegrin Coast (PEW) consists primarily of 56 competent and highly dedicated employees, then a central intake facility at the Bolje Sestre water source and one main distribution station in Djurmani, 20 distribution extensions, of which 11 are in operation, over 400 smaller structures, 135 km of pipelines (Ø 500 - 1100 mm), 25,000 m3 of reservoirs, 4 pumping stations with a total power of 7 MW, 5 high voltage transformers, 2 chlorine stations and 90 km of optical cable, while the water supply capacity is 1,200 l/s. In addition to the above, PEW has a central system with 400 positions for "on-line" monitoring and measurement of delivered water - through flow control, pump, valve, lighting and alarm control, as well as control of water preparation. In addition to ongoing external control, carried out by the Institute for Public Health from Podgorica, the water supply system in the Bolje Sestre location also has its own well-equipped laboratory for continuous internal control of water safety and quality; the most important quality parameters are measured every 2 h, reaching about

WATERS F MONTENEGRO 15,000 measured indicators, i.e. objective evidence of the state of safety and quality of the supplied water at the annual level. From the first half of 2017, PEW has introduced and consistently implemented all the requirements of the modern HACCP concept for water safety management, which was confirmed by the oďŹ&#x192;cial certification in July 2017. In my capacity as the leading assessor of the English certification authority - DAS Certification Ltd, authorized by the United Kingdom Accreditation Service (UKAS), I had the opportunity, during the initial assessment in 2017, but also during the first monitoring and evaluation visit in July 2018, to assure myself directly that this is a well-established and consistently applied system of water safety and water quality management. Based on the sampling review, or the collected objective evidence, the impression was that the top management, especially members of the safety and quality team, but also all employees, are very dedicated to the water safety system. Also, it seemed that this is a system that is correctly applied and maintained, but also visibly improved, primarily through the improvement of the avail-

able documented information and the already routine application of the system by employees. I was particularly impressed by the very proper handling and archiving of documented information at the place of application (for example, within the internal laboratory). During the year of application, the so-called internal audit was conducted, revealing one minor nonconformity that was corrected and successfully closed by an appropriate corrective measure. Also, the socalled system revalidation was carried out by the top management, during which five inputs were considered, and in the conclusion, seven outcomes and realistic tasks were defined. It is thus defined that the number of external and internal samplings and controls should increase, that a comparator for the determination of residual chlorine in the chlorine station should be procured - with internal memory and transferability to the computer, that the introduction of environmental management standards (ISO 14000: 2014) should be introduced and others. Twelve diďŹ&#x20AC;erent outsourcing relationships are very well contracted, monitoring responsibilities, locations and implementation periods are defined, all shown by the appropriate records. It is important to note that during the assessment there were no major and minor nonconformities (NCRs), no observations/ recommendations for improvement (OFIs), and during the period from the last audit (2017) to the first monitoring visit (2018), there were no incidents or remarks regarding the safety and quality of delivered water. Therefore, it is indisputable that the total operation, especially the introduced water safety and quality management system, is at an enviable level. Nevertheless, the assessor gained the impression that the activities, and therefore the responsibility for the delivered water, ended at the distribution station in Djurmani. In other words, the jurisdiction of PEW ends a#er the separation of the southern branch - towards Bar and Ulcinj, and the northern branch - towards Budva, Tivat, Kotor and Herceg Novi. That is where the

143

144 authorities and responsibilities of other, smaller local water utilities begin, and, besides the water received from PEW, they also use their own water sources to supply water to their consumers, that is, they independently perform the preparation and distribution of water. Therefore, each of these local utilities, within the scope of their own and specific activities, would have to have its own system for managing the water safety and quality. This is being talked about, but not worked on with suﬃcient eﬃciency. There is no justification for waiting for such a long time, while thousands of locals and tens of thousands of tourists use water that is not under the proper (and lawfully required) management system. And about the waiting, the wise writer Ivo Andric said:

"To infect someone by waiting, that is the safest way of ruling over him. It means making him immovable and harmless, completely and forever. And this delusion of waiting is harder than any prison and stronger than the strongest chains, because with much luck and skill, you can escape from prison and you can free yourself from chains, but you cannot free yourself from the delusion of waiting - never ever!"

LITERATURA EFSA-ECDC (2016): The EU summary report on trends and sources of zoonoses, zoonotic agents and food-borne outbreaks in 2015. EFSA Journal 2016;14(12):4634. EFSA (2010): The Community Summary Report on Trends and Sources of Zoonoses, Zoonotic Agents and food-borne outbreaks in the European Union in 2008, The EFSA Journal (2010), 1496. FAO (2009): Statistical Databases. Rome, January, 2010. FAO (2007): Water and Food Security. FAO Aquastatistics. Rome. GEO - Global Environment Outlook (2007): United Nations Environment Programme. GES - Global Economic Symposium (2008): The crisis of water management. GES 2008 session handout. Schleswig, Holstein, Germany.

(available on: http://www.global-economic-symposium. org/ges-2008/downloads) UN - Department of Economic and Social Aﬀairs (2006): The Millennium Development Goals Report. Goal 1: Eradicate extreme poverty and hunger. New York, 2006. UN - Water, Statistics: Graphs and maps (web document http://www.unwater.org/statistics.html) UNEP - United Nations Environment Programme (2009): Year Book 2009: New science and development in our changing environment. WSFS - World Summit on Food Security (2009): Final Agenda. Rome, November, 16-18. WWC - World Water Council (2006): The Right to Water, from Concept to Implementation. (available on: www.worldwatercouncil.org

WATERS F MONTENEGRO Contact: Prof. Dr. Radomir Radovanovic, retired full professor at the University of Belgrade; The founder of the study group and Head of the Food Safety and Quality Management Division, within the Food Technology Department, Faculty of Agriculture, University of Belgrade (+381 63 81 81 363; +382 69 490 559; e-mail: laler948@gmail.com) Rođen u Užicu (Srbija) 23.juna 1948. Osnovnu i srednju školu (gimnaziju) završio u Beogradu. Poljoprivredni fakultet Univerziteta u Beogradu - Odsek za prehrambenu tehnologu, Grupa za tehnologiju animalnih proizvoda - završio 1971. Na istom Fakultetu magistrirao 1974. (Naučna oblast: Nauka o mesu) i doktorirao 1983. (Naučna oblast: Biotehnologija). Prošao sva Univerzitetska zvanja, a za redovnog profesora izabran 1994. Šef Katedre za tehnologiju animalnih proizvoda (20002005). Osnivač nove studijske grupe za Upravljanje bezbednošću i kvalitetom hrane i šef istoimene katedre (2005-2013, do odlaska u penziju). Gostujuči profesor na Faculty of Bio-science Engineering, Univeristu of Gent (Belgium). Gostujući profesor na Tehnološkim fakultetima Univerziteta u Banjoj Luci i Istočnim Sarajevu. Gostujući profesor na privatnm univerzitetu UDG u Podgorici. U međunarodnim i domaćim časopisima objavio preko 250 naučnih i stručnih radova. Na međunarodnim i domaćim skupovima saopštio reko 150 radova (Brisbane, 1988; Copenhagen, 1989; Havana, 1990; Kulmbach, 1991; Clemon Ferrand, 1992; Calgary, 1993; Lillehammer, 1996; Barselona, 1998; Campinas/Sao Paolo, 2003; Bangkok, 2008; Cairo, 2010; Gent, 2012). Objavio 8 (osam) univerzitetskih i 3 (tri) srednjoškolska udžbenika, kao i priloge u dve međunarodne monografije. Od 1994. član AMSA (American Meat Science association). Dobitnik Zlatne medalje i povelje "Brusseles Eureka", Komore za invetntivnost iz Brisela, za rezultate ostvarene na zaštiti 14 oznaka porekla autohtonih prehrambenih proizvoda iz Srbije. Akreditovani vodeći ocenjivač (IRCA; DAS) za sisteme

upravljanja bezbednošću hrane (HACCP; ISO 22000) i sistem upravljanja kvalitetom (ISO 9001). Akreditovan za obuke u oblasti upravljanja bezbednošću hrane (Bussines Edge, Ireland) U svojstvu vodećeg ocenjivača, ostvario preko 150 ocenjivanja raznih menadžment sistema u zemli i inostranstvu za više akreditovanih sertifikacionih tela (JUQS, Srbija; TÜV Cert, Hanover; Lloyd’s, London; DAS, London; SIQ, Ljubljana/ Slovenija; SETI-Me, Podgorica/Crna Gora). Održao preko 120 obuka u zemlji i inostranstvu u oblasti upravljanja bezbednošću i kvalitetom hrane, tehnologije mesa i senzorne analize. Ostvario preko 120 konsaltinga u zemlji i inostranstvu u oblasti upravljanja bezbednošću i kvalitetom hrane, u oblasti procesa industrije mesa, te senzorne analize prehrambenih proizvoda. Aktivnosti u Crnoj Gori: Po pozivu Rektora UDG - učesnik u formiranju Fakulteta za prehrambene tehnologijhe, bezbednost hrane i ekologiju, Univerziteta UDG u Podgorici i profesor na ovom Fakultetu na tri predmeta u okviru poslediplomskih studija. Kao angažovani konsultant kompanije "STADION" iz Podgorice, realizovao - uvođenje sistema upravljanja bezbednođću hrane u kompaniji "VOLI", pogonu za proizvodnju i preradu mleka "MONTE-GOAT" iz Nikšića i Odmaralištu Crvenog krsta u Sutomoru. - obuke u oblasti upravljanja bezbednošću i kvalitetom hrane za "VOLI" - Podgorica, MEGA MARKET - Budva, Ulcinjska rivijera - Ulcinj, Studentski dom - Nikšić, Studentski centar Podgorica, Opštra bolnica - Nikšić, HDL Laković - Podgorica i Maximes - Podgorica. U svojstvu vodećeg ocenjivača, angažovan od strane sertifikaciongog tela SETI-ME, Podgorica, izvršio ocenjivanje sistema upravljanja bezbednošću hrane u više objekata u Crnoj Gori.

145

PROF. DR MIĆKO RADULOVIĆ, PROF. DR ZORAN STEVANOVIĆ, MILAN M. RADULOVIĆ, M. MATOVIĆ, M. BLAGOJEVIĆ

Setting up ground water monitoring in Montenegrin karst

WATERS OF MONTENEGRO VOLUME 3

148

PROF. DR MIĆKO RADULOVIĆ, PROF. DR ZORAN STEVANOVIĆ, MILAN M. RADULOVIĆ, MAKSIM MATOVIĆ, MOMČILO BLAGOJEVIĆ

SETTING UP GROUND WATER MONITORING in Montenegrin karst INTRODUCTION Water has become 21st century most important natural resource. The conclusions of the most recent study Science advances prepared by a team of experts from Twente University in the Netherlands argues that: • Four billion people face the shortage of water, which hardly satisfies their most elementary needs; • Water consumption by 2025 will have been increased by over 50%. Despite the fact that Montenegro, in terms of its surface area and population count, belongs to the areas abundant with high quality drinking water, it is necessary to get down to timely setting up of ground water monitoring, a resource which water supply of Montenegrin settlements is mainly based upon. The goal of the monitoring is to become cognizant of the quantitative and chem-

ical composition of ground waters, i.e. individual water bodies pursuant to the Framework Water Directive (Directive 2000/60/EC). In this way, conditions will be created for studying, rational use and protection of ground waters, within the framework of the catchment areas in the territory of Montenegro. This paper gives an overview of hydrogeological specificities of Montenegro, directions and courses of movements of ground waters, programme for setting up ground water monitoring for the territory of Montenegro and its importance

HYDROGEOLOGICAL SPECIFICITIES OF MONTENEGRIN KARST More than 60% of Montenegrin territory is composed of carbonate rocks (limestone and dolomites), which are characterized by considerable

WATERS F MONTENEGRO

FIGURE 1. HYDROGEOLOGICAL MAP OF MONTENEGRO

149

150

FIGURE 2. BIJELI NERINI SPRING IN THE MRTVICA RIVER VALLEY (MORAČA RIVER CATCHMENT AREA)

reserves of ground waters of very high quality. Ground waters from the karst water-bearing environment, drain through numerous springs, which most o#en appear along the canyons of the water courses, along the edges of karst valley and depressions, along the seashore, as well as on elevated points in the terrain, at the places of contact between permeable and impermeable rocks (Figure 1). Overall minimum yield of the karst springs in the territory of Montenegro is around 50 m3/s, the average one being around 600 m3/s. The most abundant springs are located in Skadar Lake catchment area, with the minimum yield of around 21 m3/s (Figure 2), followed by the catchments of the rivers Piva, Tara and Ćehotina, around 17,0 m3/s. Minimum yield of the catchment area of the Montenegrin littoral is around 5 m3/s, while the one of the catchment areas of the rivers of Lim and Ibar is in the area of 8 m3/s. Main features and specificities of karst spring

waters in the territory of Montenegro are: • Karst yield regime, i.e. high amplitude of variations and yields of karst springs, where Qmin:Qmax ration is o#en greater than 1:400 (for instance, the Crnojevića River Qmin being 0.383 m3/s, and Qmax 188 m3/s; Figure 3); • High amplitude of variations in water levels in karst terrains especially in karst valleys (in Cetinje Plain from 80 – 100 m, in Nikšić Plain from 4 m in the northern part of the Plain to up to over 90 m in the southern part of the Plain); • Great flow rate of the spring waters, which according to the paint-data varies from 0.10 – 13.8 cm/s, which impacts occasional bacteriological pollution of karst springs; • Discharging of considerable quantities of spring waters in the coastal karst below the sea level (Qmin > 4 m3/s) which limits the possibility of utilizing the same;

FIGURE 3. PLACE OF DISCHARGE OF OBOD SPRING (CRNOJEVIĆA RIVER)

WATERS F MONTENEGRO • Discharging of considerable quantities of spring waters in the form of sublacustric springs, below Skadar Lake water level. Thus, for example, the yield of the wellsprings (”eyes“) of Sinjac and Karuč is Qmin > 8 m3/s; • Numerous karst springs being submerged by the Piva River reservoir, with the overall minimum yield being Qmin > 4 m3/s; • Certain number of submerged springs for the creation of Otilović reservoir (Qmin = 0.1 – 0.2 m3/s); • Large number of springs being submerged for Krupac and Slano reservoirs (Qmin > 1.5 m3/s). • Overall yield of the submerged springs in the sea and the lakes amounts to Qmin > 20 m3/s. (Radulović M., 2000, 2016). The specificities listed above, in terms of the yield regime and spatial distribution of the springs, have considerably limited the possibility of capturing the necessary water quantities from the local water springs in the littoral area. For these reasons, the majority of settlements in the Montenegrin littoral had not been able to find high quality solution for their water supply. That problem was resolved thanks to the regional water supply system, by capturing waters from karst springs at Bolje Sestre in the area of Skadar Lake, minimum yield of which being around 2 m3/s. Within the framework of Quaternary water-bearing environment of intergranular permeability significant quantities of ground waters are present in: • glaciofluvial sediments of Zeta Plain (covering more than 200 km2 and average aquifer thickness of 35 m) which constitutes the most abundant accumulation of aquifer waters in Montenegro, with the dynamic reserves in the hydrological minimum being Qmin > 15 m3/s;

• glaciofluvial sediments of Nikšić Plain (Qmin > 1 m3/s); • alluvial sediments of Grbalj, Sutorina, Budva, Bar and Anomalsko plains, with the total reserves being Qmin > 1.5 m3/s; • terraced sediments in the catchment areas of the Tara and Lim rivers and of their tributaries (Qmi > 1.0 m3/s). Zeta Plain aquifer waters are used in great quantities for: • supplying water to Podgorica and Tuzi (watersources: Zagorič, Q=390 l/s; Stari Aerodrom, Q=400 l/s; Mileš, Q=60 l/s, Dinoši, Q=50 l/s); • supplying water to the settlements in Zeta Plain, as well as for irrigation (over 2000 l/s); • Aluminium Plant water-wells, yielding over 1000 l/s; • “Plantation“ water-wells (more than 20 water-wells), yielding over 2000 l/s. • Utilization of ground waters for heating and cooling the structures using heat pumps (“Atlas Centar”, “Eco Building” etc.). The uncontrolled use of high quality ground waters of Zeta Plain for various needs, has led to the overall drop in the level of ground waters within the framework of this very significant aquifer, which is particularly pronounced during dry periods of the year. This drop is also reflected on the neighbouring watersources. In order to be able to control and monitor the regime of oscillations of ground water levels in the future, in order to prevent excessive use and worsening of the water quality in this and other significant aquifers within the framework of Quaternary and karst water-bearing environment in a timely manner it is necessary to start setting up ground water monitoring system.

151

152 HYDROGEOLOGICAL WATERSHEDS AND GROUND WATER MOVEMENT DIRECTIONS Definition of hydrogeological watersheds, i.e. catchment areas and aquifer waters flow directions, constitutes one of the most complex problems in the holokarst of the south-eastern Dinarides. Despite a series of performed paint-using actions, the watersheds between individual catchment areas in the Montenegrin karst are still very much hypothetical. This is particularly true of the underground watersheds, i.e. parts of the terrain where watersheds are presented by wide changeable spatial zone, which moves during a year depending on the hydrological conditions. The results of the paint-using actions performed in Montenegrin karst indicate how specific watersheds in karst areas are. Below, there is a list of some recorded cases: • Sinkholes constitute a watershed between hydrogeological units of the First order, i.e. Adriatic Sea and Black Sea catchments. By marking the sinking waters at Čarađe, a#er 30 days the connection could be established with the Piva River source of Sinjac (Black Sea catchment), and a#er 42 days with the occasional sources of Baba and Jama in Fatničko Plain (Trebišnjica River catchment, i.e. Adriatic Sea catchment); • River bed represents a watershed among smaller catchment sections. (By marking the sinking waters in the Cijevna River bed, the connection was established with the sources of Mileš, Krvenica and Vitoja: Skadar Lake, i.e. with Vrela Ribnička – a Morača River tributary); • Lake is a watershed in between river catchments. (By marking Crno Lake water, connection was established with Bijela Vrela in the Tara River Canyon, and with Dubrovska Vrela in the Komarnica River Canyon);

• Coloured waters flow beneath deep river canyons (Tara and Cijevna) and appear in the sources on the other side of the water course; • Coloured ground waters flow beneath artificial reservoirs or bypass them. (By marking the sinkhole at Trepče, connection was established with Drenovštica springs in Bjelopavlići Plain, although it seemed logical for the coloured waters to appear in the sources along the edges of Slano reservoir in Nikšić Plain); • Coloured waters flow deep below or through anticlinal structures in the core of which there are water impermeable sediments. (By marking the sinkhole at Bojovića Bare and Liverovići, connection was established with the springs in Bjelopavlići Plain (Glava Zete etc.); • Coloured waters appear concurrently or in certain intervals at several mutually distant sources or springs in Skadar Lake, which speaks about the branching of karst channels, i.e. water permeability of limestone masses; • Coloured waters of a whole series of sinkholes, along the edges of karst plains, stretching in the area more than 14 km long, flow towards one karst spring. (By marking numerous sinkholes along the southern edge of Nikšić Plain, connection was established with the powerful karst spring of Glava Zete in Bjelopavlići Plain). On the basis of numerous experiments related to the marking of ground waters, geological composition and hydrogeological functions of rocks, certain conclusions can be drawn as to the directions and speed of ground waters. Tectonic structures along which there is intensive karstification process play a particularly important role in relation to the flow direction of aquifers in karst. There are numerous examples where imposing faults constitute principal drains of aquifer waters. Hence, for example:

WATERS F MONTENEGRO FIGURE 4. BOREHOLE TESTING IN RIJEÄ&#x152;ANI (BANJANI)

153

154

FIGURE 4. BOREHOLE TESTING IN RIJEČANI (BANJANI)

• Cetinje Fault predisposed the development of the system of Cetinje caves, and/or directs aquifer waters from the catchment of the Plain to the Crnojevića River. • Gornjopoljski Fault, extending in the northwest – southeast direction, generally directs aquifer waters from the area of Srijeda towards the estavelle of Gornjopoljski Vir. • Faults in the hinterland of Boka Kotorska Bay, generally extending in the northwest – southeast direction, direct the ground waters from Grahovo area along the disintegrated courses of the Grahovska and Bokeljska rivers, towards

Risan cave (parallel with this there is a fault which directs the aquifer waters from Trešnjevo sinkhole towards the Orahovačka Ljuta. J. Cvijić (1924) emphasizes that the permeability of the Bokeljska River occurred following the sinking of the terrain during the Quaternary along Orahovac-Kotor Bay, in Morinj-Kotor depression and the rising of Mount Orjen and Krivošije). Besides spatial disposition of impermeable rocks, lines of carbonate rock layers play a significant part in flow directions of aquifer waters in typical karst. Generally speaking, it can be said that a characteristic feature of the Adriatic Sea catchment area is the flowing of aquifer waters mainly from the north towards the south, from the northwest towards the southeast and from the northeast towards the southwest. Northern slopes of Mount Rumija and Gluhi Do constitute an exception by draining the springs along the edge of Skadar Lake, and/or karst springs along the edge of Crmnica Plain, where aquifer waters flow direction generally follows south-north direction. The situation with the Black Sea catchment area is completely opposite, with most frequent flow direction of aquifer waters being from the south to the north (M.Radulović.,2000).

SETTING UP GROUND WATER MONITORING The initial steps towards the setting up of ground water monitoring were made by the development of the Project of Hydrogeological Research of Montenegrin Karst as a Contribution to the Strengthening of the Capacities for the Implementation of the Framework Water Directive in Montenegro (Geoprojekt, 2018). According to this project, the activities of the Stage One involve exploratory – piezometric boreholes intended for long-term monitoring of the oscillation regime and quality

WATERS F MONTENEGRO of ground waters. Due to ever increasing global shortage of high quality drinking water, in karst terrains in particular, the need is imposed for the preservation and expansion of water resources in the Community pursuant to the Framework Water Directive. For the purpose of identifying and better knowledge of water bodies, as well as for the implementation of ground water monitoring, there is ongoing activity involving exploratory-piezometric and exploratory-exploitation boreholes, and/or water objects which will serve for the implementation of the monitoring of chemical and quantitative sta-

tus of karst aquifer waters (Figure 4). When selecting the sites to perform exploratory-piezometric boreholes, intended for monitoring, attention was being paid for these to be representative sites, which fairly reflect the features of karst and intergranular water-bearing environment within the framework of one entity, i.e. given catchment area. At the same time, eﬀorts were being invested in planning certain amount of exploratory activities even in arid areas of karst, where thus far no detailed hydrological research

FIGURE 5. SOUNDING DEVICE WITH DATA LOGGER (“DIVER“) TO MEASURE LEVELS, TEMPERATURE AND ELECTRICAL CONDUCTIVITY OF GROUND WATERS FIGURE 6. OVERVIEW OF DATA LOGGER DATA (LEVEL, TEMPERATURE AND ELECTRICAL CONDUCTIVITY OF GROUND WATERS)

155

156 activities had been done and where there were no appropriate water objects intended for monitoring, as well as for supplying water to settlements. These are mostly karst plateaus located between Nikšić Plain, Bjelopavlići Plain and Boka Kotorska Bay, arid permeable valleys along the northern edge of Skadar Lake, glacial sediments on higher elevations in the terrain, on the edges of karst plains, coastal areas of Skadar Lake, seashore karst, including the areas with the occurrence of mineral and thermo-mineral waters, river terraces of the rivers of Tara and Lim. Exploratory boreholes for the needs of monitoring were planned both in the Adriatic Sea catchment area (the zone of the Bojana River, Cijevna River, Risan, Jaz, Budva Plain, edge of Lješkopoljski Lug – Vučji Studenci, arid permeable valley of the Sinjačka River, karst valley of Čevo, glacial sediments of Radovča, Banjani – Riječani), and in the Black Sea catchment area (Žabljak, Bukovica, Šavnik, Lim River terraces near Bijelo Polje and Berane, Neogene basins of Pljevlja, Tara River terraces near Mojkovac and Mateševo). Spatial disposition of so far performed exploratory piezometric boreholes of the Stage One and of those planned for the Stage Two (1500 m) can be seen on the overview map of Montenegro. All the existing boreholes have the depth between 10 and 173m and the diameter between 143 and 160 mm, with installed piezometre having the diameter between 75-125 mm. The boreholes are aerated, tested and prepared for long-term observations and measurements, i.e. equipped for the setting up of ground water monitoring. Except that they will serve for the setting up of ground water monitoring, some of the deep boreholes pointed out to the existence of the highyield aquifer courses in arid karst areas of Banjani and Lješanska Nahija and they can contribute to resolving the problem of supplying water to these waterless areas. Such boreholes exist in Goljema-

di, 100 m deep, and in Riječani, 173 m deep. The problem of supplying water to these karst areas can be resolved by performing a series of exploratory-exploitation wells with appropriate depth, in the vicinity of the existing observation boreholes. For the purpose of establishing the regime of ground waters, a#er equipping the water objects, observations will be made as well as the measurements of level changes in the existing boreholes. For this purpose, it is of particular importance to determine the depth to the level of ground waters during the hydrological minimum – dry period of the year, and during the hydrogeological maximum – rainy period of the year, as well as water quality in the given period. The setting up of monitoring network is carried out gradually, through the following stages: • Drilling exploratory-piezometric (observation) boreholes, for the purpose of measuring and sampling ground waters (these works are ongoing); • Prior manual measuring of the depth to the level of ground waters (by using “whistle“ or electric level metre); • Cleaning and testing boreholes by aeration and using a pump of appropriate capacity for the purpose of obtaining the data on the yield of a water-bearing environment; • Measuring ground water level using level metre and defining a depth for installing automatic digital ground water level gauge; • Mounting measuring stations with the devices for the collection and transfer of data, and/ or placing automatic digital ground water level gauge “diver“ below the known minimum level of ground waters, in order for the device (“diver“) not to remain above the water during the dry period of the year (Figures 5-7). It was planned for the observations to be carried out on permanent basis in the piezometers with the diameters between 75 and 125 mm during the

WATERS F MONTENEGRO boreholes testing period, and/or on long-term basis, during the duration of the monitoring activity. Once the samples are taken, it is necessary to do the field measurement of water temperature, Oxygen content, electrical conductivity and pH values, while basic composition of anions and cations would be determined in the appropriate stationary laboratory.

CONCLUSION

boreholes were drilled and equipped for longterm monitoring of the regime of oscillations, yield and quality of ground waters (the activities are ongoing). Monitoring of the quantities and qualities of ground waters, especially those intended for drinking, is of particular importance when it comes to rational use and protection of ground waters and environment protection in general.

Ground waters, which according to the Law on Geological Research Activities (“OG RMNE“, no. 28/11) are treated as mineral raw material, belong to the most important natural resources of Montenegro. For the purpose of better understanding of the quantitative and chemical status, rational use and protection of ground waters it is indispensable to set up ground water monitoring system. Within the Stage One of hydrogeological explorations of Montenegrin karst, numerous

FIGURE 7. OVERVIEW MAP WITH THE LOCATIONS OF THE EXISTING AND PLANNED BOREHOLES

REFERENCE Radulović M. (2000) Hidrogeologija karsta Crne Gore. Zavod za geološka istraživanja Crne Gore, Podgorica Radulović M., Radulović M.M., Popović M., Matović M., i dr. (2018) Projekat hidrogeoloških istraživanja karstnih terena Crne Gore kao doprinos jačanju kapaciteta za implmentaciju Okvirne direktive o vodama u Crnoj Gori. Geoprojekt, Podgorica Radulović M., Ivanović Z., Radulović M.M., Blagojević M., Jovanović M. (2016): Mjesto i uloga podzemih voda u strategiji upravljanja vodnm resursima Crne Gore.XV srpski simpozijum o hidrogeologiji sa međunarodnim učešćem.

Kopaonik Stevanović Z., Radulović M.M. (2017) Report – Revision of existing monitoring sites, the current status of the so#ware and hardware solutions for groundwater monitoring and proposals for its upgrade and new sites for groundwater monitoring. SUEZ & Ministry of Agriculture and Rural Development, Podgorica Stevanović Z., Radulović M.M. (2017) Assessment of Pressures on Groundwater Quantity Methodology Applied and Actual Status. SUEZ & Ministry of Agriculture and Rural Development, Podgorica

157

prof. dr Mićko Radulović, Milan M. Radulović

Water Potentials Of Malo Blato Basin Along The Northwestern Edge Of Skadar Lake

WATERS OF MONTENEGRO VOLUME 3

160 PROF. DR MIĆKO RADULOVIĆ MILAN M. RADULOVIĆ

WATER POTENTIALS of Malo Blato basin along the Northwestern edge of Skadar Lake INTRODUCTION This paper gives an overview of hydrogeological features of Malo Blato basin, popularly known as “eyes”, with its numerous sublacustric sources-springs. It constitutes a large reservoir of high quality drinking water, which is capable of providing long-term solution for the problem of supplying water to Montenegrin littoral and to the settlements in the region of Lješanska Nahija. The waters of individual springs, in view of their quality, can also be used as bottled. Bolje Sestre watersource is the only one which is currently in use. In 2010 it was connected to the regional water supply system of the Montenegrin littoral. Total measured minimum yield of all springs at Malo Blato, which are drained via the Biševina River, exceeds 5m3/s, the average one being around 12 m3/s.

DATA ON FORMER RESEARCH ACTIVITIES

The first detailed hydrogeological explorations of Malo Blato basin were performed within the framework of complex hydrogeological explorations for the needs of the creation of Basic hydrogeological map for the journal “Titograd“ 1 : 100 000 (M. Radulović et al., 1978/79). Within the framework of these explorations, spatial distribution was registered of 10 springs – “eyes” at Malo Blato, their depth and water temperature were measured, their yield was assessed and complete chemical analyses of water were made. This concerns the following “eyes”: Velja Šujica, Mala Šujca, Krakala, Bivo, Crno oko, Bolje Sestre, Brodić, Biotsko oko, Bobovine and Krstato oko. Also, the necessary data were collected for three “eyes“ along the northern edge of Malo Blato (Kaluđerovo oko, Perino oko, Raško oko). With the purpose of acquiring the data on the overall yield of the springs, besides measuring the “eyes”, the flow was also measured of the Biševina River-distributary of Malo Blato, which on 23rd August 1979, with the elevation of Malo

WATERS F MONTENEGRO

FIGURE 1. DIGITAL ELEVATION MODEL OF THE WIDER AREA OF MALO BLATO

Blato being 5.70 m above the sea level, was 8.84 m3/s (National Hydro-Meteorological Institute of Montenegro). Synthetized data on Malo Blato springs were presented in the published paper: Prilog poznavanju hidrogeoloških odlika basena Malog blata (Supplement to the Knowledge of Hydrogeological Features of Malo Blato Basin), Geološki glasnik, knj. IX, pages 361-374 Titograd (Radulović M., Nešović Ž., 1980). The data on Malo Blato springs are also found in the published works by Đ. Drecun (1964), M. Burić, M. Radulović (1983); V. Radulović 1983; 1989). In the period from 2005-2007, in the organization of the Regional Water Supply Company, complex hydrogeological explorations were performed of Bolje Sestre watersource, one of

Malo Blato “eyes”, the results of which were synthetized in the studies of the “Geoprojekt” (M. Radulović., M.M. Radulović., 2005) and “IK Konsalting i projektovanje”, Beograd (Z. Stevanović et al., 2007).

SPATIAL DISPOSITION AND CATCHMENT AREA OF “MALO BLATO” Malo Blato basin is situated in the extreme north-western edge of Skadar Lake. The area of Malo Blato is surrounded by the slopes of Bobija (433 above sea level) and V. Vezca (447 above sea level) from the West, by the territory of the village of Sinjac and the slopes of Velji Vrh (418

161

162 above sea level) from the North, and by the limestone beam of Kolozub – Lepina Ploča (Figure 1). The largest portion of Malo Blato catchment area belongs to typical karst terrains, with very pronounced problem of determining hydrogeological watersheds (Radulović M et al. 2007; Stevanović et al. 2007). Pursuant to earlier hydrogeological explorations (Zogović D et al. 1992) it was concluded that the catchment of Malo Blato covers around 80 km2. However, due to the high measured average flow rate of the Biševina (Qsr = 11,75 m3/s) and the yield of Bolje Sestre watersource (Qmin = 2,3 m3/s) it is assumed that the sublacustric sources – “eyes” at Malo Blato, acquire part of the waters through underground inflows from other catchments. Towards the North, the catchment of Sinjačke Vrulje, i.e. Malo Blato encompasses a part of the karst area of Velji Vrh (418 above sea level), Goljemadi, Brežine, Podstrane, Staniseljići, Papratnica, Paraci, Buronji, Draževina, up to Busovnik and Releza (627 above sea level).

GEOMORPHFOLOGICAL FEATURES OF MALO BLATO CATCHMENT AREA In the wider area the following two geomorphological sections can be identified, as follows (Figure 1): highlands and Skadar Lake basin. Malo Blato catchment area belongs to a karst plateau, which is characterized by intensive development of karst forms, which appear in limestone and dolomites (standard holokarst). As regards surface karst forms, which are numerous, the one that stands out in particular is the permeable valley of the Sinjačka River (Radulović V. 1989), then karren and sinkholes; when it comes to the underground forms, particularly present are the pits found along the bottom of the abovementioned permeable dry river valley. As it is known, Skadar Lake basin represents a cryptodepression since its bottom in places de-

SKETCHED PROFILE OF KALUĐEROVO EYE (LEFT) AND SKETCHED PLAN AND PROFILE OF BIOTSKO EYE (SZERSZEN 2008)

scends below the sea level. The most typical underwater karst forms at Malo Blato are karst “eyes” (springs) which most o#en represent underwater sinkholes, with the depth of several tens of meters, which karst aquifer waters are discharged from. The Figure 2 shows the sketches of the profiles of two such “eyes”: Kaluđerovo and Biotsko.

RECHARGING OF AQUIFERS AND FLOW DIRECTIONS OF UNDERGROUND WATERS The karst aquifer developed within the framework of quite impermeable limestones and dolomites of Malo Blato catchment area is largely recharged thanks to the infiltration of atmospheric waters. The recharging mostly happens thanks to diﬀuse infiltration during rainy periods, and there are rare locations where there is long lasting concentrated sinking of waters. Malo Blato springs receive pert of their waters by means of underground inflow from other catchment areas, primarily from the limestone paleo-relief of Grbavci, which is covered in glaciofluvial sediments and partly, probably, from the paleo-canyon of the Cijevna River, which cuts deep into the limestones of the paleo-relief of Zeta Plain and conglomerates. That certain springs at Malo Blato receive waters from the distant areas, circulating through the limestone-dolomite paleo-relief is best proved by

WATERS F MONTENEGRO ments. The paleo-relief beneath the Quaternary sediments, in the area of Grbavci, is composed of permeable dolomite limestones, through which karst aquifer waters flow towards the coastal sources at Malo Blato. This was confirmed by the results of using paint in the borehole made in limestones, on the western edge of Grbavci, in between which hydraulic connection was determined with Čkanjak source, located to the north of Bolje sestre watersource (Stevanović et al. 2007. By colouring the sinking waters at Brežine connection was established with Kaluđerovo spring on the northern edge of Malo Blato (Radulović M et al. 1979). On the basis of the result of

FIGURE 3. MAP OF ESTABLISHED HYDRAULIC CONNECTIONS USING THE EXPERIMENTS OF MARKING GROUND WATERS

their emerging under pressure in the form of “eyes”, from elevations and below the sea level, then by low temperature and good water quality, as well as by the chemical composition of sedi-

using paint it can be concluded that ground waters flow along the dry permeable valley of the Sinjačka River, in the direction northwest-southeast, which coincides with the direction of the layers extending in this part of the terrain. Figure 3 shows the established hydraulic connection among ground waters in the wider area, which served as the base for drawing watersheds in between catchment areas..

GROUND WATER DISCHARGE CONDITIONS Broken karst aquifer is discharged via strong occasional and permanent karst springs along the edge of the lake and springs – “eyes” in the very lake (Figure 4). In Malo Blato basin there is a considerable number of karst “eyes” the most important ones of which are the following: Kaludjerovo Oko (Figure 5), Velja Šujica, Mala Šujica, Oko Krakala, Oko Bivo, Crno oko, Bolje Sestre, Oko Brodić, Biotsko Oko, Oko Pod Bobovine, Krstato Oko. The waters of all “eyes” at Malo FIGURE 4. SECTION OF THE HYDROLOGICAL MAP OF THE WIDER AREA OF MALO BLATO (RADULOVIĆ ET AL. 2007)

163

164 Blato are discharged via Biševina watercourse, minimum flow rate of which, according to the data of the short-term measurements of the National Hydro-Meteorological Institute exceed 5 m3/s. Bolje Sestre spring is the best yielding karst watersource at Malo Blato (around 2000l/s), situated at the foot of the western slopes of Kolozub (221 m above sea level) in the vicinity of Kosmač island. It emerges from layered dolomite limestones, which descend towards the northeast at the angle of 28o (Radulović M., et al. 2005). Water temperature of Bolje Sestre watersource, in the period from November 2005-March 2007, (CETI-Montenegro) fluctuated between 11.5 - 14.60C. FIGURE 5. VIEW OF KALUĐEROVO OKO

NAME OF SPRING

DEPTH (m)

HYDROCHEMICAL PROPERTIES WATER TEMPERATURE (°C)

MALO BLATO WATER TEMPERATURE (°C)

TABLE 1. TABULAR VIEW OF THE RESULTS OF MEASUREMENTS (DEPTH AND TEMPERATURE) PERFORMED AT MALO BLATO SPRINGS ON 15TH SEPTEMBER 1978 AT THE LEVEL OF WATER OF 5.70 M (RADULOVIĆ M ., NEŠOVIĆ Ž.,1980).

WATERS F MONTENEGRO The quality of ground waters which are discharged through the springs at Malo Blato is mostly good. According to chemical composition, these are typical karst waters, with prevailing hydro-carbonate (175 mg/l) and calcium ion (45 mg/l) content. These are low-mineralized waters with mineralization in the range of 245 mg/l. pH values of these waters is around 7.5. (Table 4). Water temperature at the springs during the dry period of the year ranges from 13°C (springs of Krakala and Brodić) to 18°C (Krstato Oko). At certain springs there are possible cases of turbidity of short duration, which is typical of the majority of typical karst springs. The temperature measured at the bottom of Kaluđerovo Oko is 9-100 C, just as it is the case with underground waters in the boreholes made in the permeable valley of the Sinjačka River.

DYNAMIC AND STATIC RESERVES OF GROUND WATERS OF MALO BLATO CATCHMENT AREA AND ITS BASIN Previous chapters lead to conclusion that the quantities of waters which are discharged via the Biševina River represent total quantities of waters, which emerge at Malo Blato via karst springs, and/or represent total dynamic reserves of the complex karst aquifer extending in the explored area. These are dynamic reserves of ground waters which in the driest period of the

year exceed 5 m3/s (Qmin). According to the results of short-term hydrometric measurements performed at the River Biševina, it was assessed that the average annual dynamic reserves amounted to around 12 m3/s (Qavr).

CONCLUSION Having in mind great yield and good water quality at Malo Blato springs –“eyes”, it is necessary to pay special attention to these specific hydrogeological phenomena in terms of further studying, rational use and protection of aquifer waters. Accelerated development of settlements and of tourist industry along the Montenegrin littoral, imposes the need for extended capacities of the Regional water supply system from the watersource of Bolje Sestre. There are favourable hydrogelogical conditions for this in the very basin of Malo Blato, along the edge of which numerous high-yield underwater sources – “eyes” are discharged, discharging high quality drinking water, which can be stored, should the need arise, and be released into the water supply system in stages. In the immediate vicinity of Bolje Sestre watersource there are the “eyes” called Brodić and Biotsko, as well as the source called Čkanjak, which should be timely planned for new detailed hydrogeological explorations in terms of defining the yield, quality and the possibility for capturing the same and including them into the existing water supply system.

TABLE 2. THE MOST IMPORTANT INDICATORS OF THE CHEMICAL COMPOSITION OF THE WATERS AT MALO BLATO SPRINGS (MEDIAN VALUES; RADULOVIĆ ET AL. 1979)

165

Neško Šćekić, M. Sc.

Water-Related Standardisation And Standards

WATERS OF MONTENEGRO VOLUME 3

168 Author:

NEŠKO ŠĆEKIĆ, M. SC.

WATER-RELATED STANDARDISATION and standard

Employed with the Standardisation Institute of Montenegro as its Chief Standardisation Engineer. My decades long work experience in the field of standardisation, along with water as an important factor for the life of people and the planet as a whole, have inspired me to write an article describing the close relationship between water and standardisation.

tandardisation by means of standards offers solutions for a better quality of water, through common terminology, water sampling methods and instructions on how to report and monitor the presence of bacteria, purity and other characteristics. Standards apply to everything, from water purification agents in factories to natural mineral waters. Standards represent a global consensus on global solutions. Their best practice examples and technological solutions are powerful tools for taking action to address global challenges and achieve the goals of a policy. Water standards build trust through global solutions based on consensus for good

business practices, resource management, risk assessment, measuring and infrastructure. Such standards oﬀer a complete water-related package, from pipes, through irrigation and testing procedures, all the way to water supply management. They facilitate a sustainable water management process and increase the water potential, help mitigate the consequences of water scarcity and contribute to achieving the UN Millennium Development Goals. There are numerous examples of standardisation in the history of mankind: language, writing, many forms of tools and accessories, as well as ceremonies and social rituals. Through countless iterations and experi-

WATERS F MONTENEGRO

ROLE OF NATIONAL STANDARDISATION IS, AMONG OTHER

ence, these aspects of life have been standardised and gradually expanded, moving from one person to another across huge geographic areas. Therefore, it can be said that standardisation, being of the same age as the mankind, is not a novelty. To better understand the concept of standardisation we should start from its definition (ISO/IEC Guide 2) “Standardisation is an activity of establishing, with regard to actual or potential problems, provisions for common and repeated use, aimed at the achievement of the optimum degree of order in a given context”. Concerning the standardisation levels, they could be categorised as follows: • international (ISO, IEC, ITU) • regional (CEN, CENELEC, ETSI) • national (ISME, BSI, DIN, ISS, etc.) • local (APL, GSM, etc.) The goal of standardisation is to provide technical solutions which are completely defined. Important benefits of standardization are improvement of the suitability of products, processes and services for their intended purposes, prevention of barriers to trade and facilitation of technolog-

ical cooperation. Standardisation is a set of activities that primarily consists of formulating, issuing, distributing and implementing standards and related documents. All contemporary standardisation activities are primarily focused on the standardisation documents. Of the standardisation documents, standards come first. According to the definition (ISO/IEC Guide 2), standard is a document, established by consensus and approved by a recognised body, that provides, for common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of of the optimum degree of order in a given context. It is known that standards represent up-to-date, comprehensive knowledge of those who act in certain technical fields that such standards are applied in, so that the users of standards can apply the tested solutions, proven in theory and practice. Standards can be categorised according to their type: • Basic standard (standard, that has a wide-ranging coverage or contains general provisions for one particular field) • Terminology standard (standard that is concerned with terms, usually accompanied by their definitions, and sometimes by explanatory notes, illustrations, examples, etc) • Testing standard (standard that is concerned with test methods, sometimes supplemented with other provisions related to testing, such as sampling, use of statistical methods, sequence of tests) • Product standard (standard that specifies requirements to be fulfilled by a product or a group of products, to establish its fitness for purpose) • Process standard (standard that specifies requirements to be fulfilled by a process, to establish its fitness for purpose) • Service standard (standard that specifies re-

169

170

WATERS F MONTENEGRO quirements to be fulfilled by a service, to establish its fitness for purpose) • Interface standard (standard that specifies requirements concerned with the compatibility of products or systems at their points of interconnection) • Standard on data to be provided (standard that contains a list of characteristics for which values or other data are to be stated for specifying the product, process or service). Water, being an environmental factor, is of great importance to people, ecosystems, the planet taken as a whole. It is the foundation of life and an environment in which life is born. According to Thales of Miletus, mathematician, Greek philosopher, physicist and astronomer, water is the originating principle, the archê, and everything derives from and returns to it. It is endless, eternal matter that keeps moving, gets thick and thin and that is how all phenomena are created. Without water there is no life. It is the first need of a human that must be permanently satisfied, before such human starts building his habitat. Water covers the surface of the earth and exists in the earth’s crust. It is present in the atmosphere, lithosphere, hydrosphere, cryosphere (ice on both poles and higher mountains), biosphere. Water covers approximately 71% of the planet surface. Around 2,5% of the total amount of water on the planet is fresh water. In the nature, water can be found in all three states of aggregation: • In the atmosphere in gaseous state • On the surface of the planet in liquid state • In glaciers and ice in solid state. The quality of water depends on the way it is used. Every day two million tons of wastewater is released into global waters. In developing countries, 70% of industrial waste is disposed without treatment, thus polluting the usable water reserves.

ACTIVITIES OF THE INTERNATIONAL ORGANISATION FOR STANDARDISATION (ISO) IN THE WATER SECTOR It should be noted that the standardisation activity takes place through relevant expert bodies, i.e. technical committees, tasked with monitoring specific areas or fields. Such expert bodies involve highest-ranking experts in the given area, along with other relevant stakeholders. Their work, knowledge, experience contribute to the development of standards in the area concerned. Those and similar standards oﬀer solutions to achieve the optimal degree of order in a given context. When it comes to quality and preservation of water resources, International Organisation for Standardisation (ISO), i.e. its Technical Committee ISO/TC 147 – Water quality, has prepared solutions through standards. This expert body ISO/TC 147 – Water quality, deals with standardisation in the field of water quality, including definition of terms, sampling of waters, measurement and reporting of water characteristics. ISO/TC 147 – Water quality, has developed and published 306 standards, oﬀering solutions in respect of water quality, along with 48 standards, currently being developed. The standards in this field are related to • terminology, • physical, chemical and biochemical methods • radioactivity measurements • microbiological methods • biological methods • sampling (general methods). Some of the characteristic examples of the total of 306 standards published by this technical body are the following : • ISO 6107-1 – Water quality - Vocabulary

171

172 • ISО 5814 – Water quality – Determination of dissolved oxygen – Electrochemical probe method • ISO 8199 – Water quality – General guidance on the enumeration of micro-organisms by culture. Another expert body (Technical Committee) of the International Organisation for Standardisation (ISO), relevant to the field of water, is ISO/ TC 113 – Hydrometry. This expert body (Technical Committee) ISO/TC 113 – Hydrometry, deals with standardisation of methods, procedures, instruments and equipment relating to techniques for hydrometric determination of water levels, velocity, discharge and sediment transport in open channels, precipitation and evapotranspiration, availability and movement of ground water, structure of flows, including: • Terminology and symbols; • Collection, evaluation, analysis, interpretation and presentation of data; • Evaluation of uncertainties. This Technical Committee ISO/TC 113 – Hydrometry, has developed and published 66 standards, oﬀering solutions in this field, while 16 standards are under development. Some of the standards in this field: • ISO 15769 - Hydrometry – Guidelines for the application of acoustic velocity meters using the Doppler and echo correlation methods • ISO 748 – Hydrometry – Measurement of liquid flow in open channels using current-meters or floats, etc. The expert body (Technical Committee) of the International Organisation for Standardisation (ISO) relevant to the field of water, is ISO/TC 224 – Service activities relating to drinking water supply wastewater and stormwater systems. The function of this Technical Committee is to standardise the management concepts for ser-

vice activities relating to drinking water supply, wastewater and stormwater systems, including the activities necessary to fulfil the objectives of water supply, wastewater and stormwater systems. Water supply for purposes other than drinking water. This Technical Committee ISO/TC 224, has developed and published 10 standards, oﬀering solutions in this field, while 11 standards are currently under development. Three standards (ISO 24510, ISO 24511 i ISO 24512) give guidelines for the assessment and for the improvement and management of service activities relating to drinking water and wastewater services. They can help water management authorities and operators satisfy the expectations of consumers while adhering to the principles of sustainable development. Another standard, one relating to crisis management of water utilities, is currently being developed. In addition to this, subcommittees have also been formed as additional expert bodies dealing with irrigation and reuse of treated wastewater for irrigation purposes. Concerning the infrastructure which is a necessary factor and an integral part of this area, the following Technical Committees have prominent roles: ISO/TC 30 – Measurement of fluid flow in closed conduits. The task of this Technical Committee is to standardise the rules and methods for the measurement of fluid flow in closed conduits, including: • terminology and definitions; • rules for inspection, installation, operation; • construction of instruments and equipment required; • conditions under which measurements are to be made; • rules for collection, evaluation and interpretation of measurement data, including errors.

WATERS F MONTENEGRO This Technical Committee oﬀers solutions through standards relating to measuring water flows and meter reading, which could help preserve water. A total of 43 standards have been published, while 5 standards are under development. Apart from these, there are also other water infrastructure technical committees, such as ISO/ TC 138 – Plastic pipes, fitting and valves for the transport of fluids, ISO/TC 5 – Ferrous metal pipes and ISO/TC 153 - Valves.

ACTIVITIES OF THE EUROPEAN ORGANISATION FOR STANDARDISATION (CEN) IN THE WATER SECTOR International Organisation for Standardisation has its European counterpart - European Organisation for Standardisation (CEN). Its standardisation work also takes place through its expert bodies, i.e. Technical Committees, resulting in European standards. The standardisation expert body (Technical Committee) entrusted, among other things, with developing standards relating to water, is CEN/TC 164 – Water supply. The purpose of CEN/TC 164 – Water supply is to establish standards for the installation and performance requirements of systems, constructions of components used for the water supply from the production facility, including the treatment of the water, to the taps attached or unattached to a sanitary appliance with a view of maintaining the quality of water as stated in Directive 80/778. This Technical Committee is also involved in a broad range of subjects, dealing with all the drinking water supply chain, from systems to accessories, including chemical products for treatment of water intended for human consumption and for swimming pools and

addressing both public installations and inside building equipment. It should be noted that the Technical Committee CEN/TC 164 – Water supply, has published 228 standards, while 12 standards are under development. Some of the characteristic standards are the following: EN 1018 – Chemicals used for treatment of water intended for human consumption - Calcium carbonate EN 14898 – Water conditioning equipment inside buildings – Active media filters – Requirements for performance, safety and testing EN 14944-1 – Influence of cementitious products on water intended for human consumption – Test methods – Part 1: Influence of factory made cementitious products on organoleptic parameters, etc. Another Technical Committee dealing with the water sector is CEN/TC 230 – Water analysis. This Technical Committee develops acceptable solutions in the field of water, including definition of terms, sampling of water and measurement. Technical Committee CEN/TC 230 – Water analysis has published 185 standards, while 33 standards are currently being developed. Some of the published standards are the following: EN 14407 – Water quality- Guidance for the identification and enumeration of benthic diatom samples from rivers and lakes. EN 16101 – Water quality – Guidance for interlaboratory comparisons for environmental assessment. EN 16691 – Water quality – Determination of selected polycyclic aromatic hydrocarbons (PAH) in whole water samples – Method using solid phase extraction (SPE) with SPE discs combined with gas chromatography mass spectrometry (GC-MS) EN 16479 – Water quality – Performance requirements and conformity test procedures for

173

174 water monitoring equipment – Automated sampling devices for water and waste water. Concerning the treatment of waste water, quite specific is the CEN Technical Committee CEN/TC 165 – Waste water engineering. This Technical Committee develops functional standards and standards for performance and installations for systems and components in the field of wastewater engineering, standards for design, calculation, construction, commissioning, operation and maintenance in the field of wastewater engineering. Standards developed by this Technical Committee CEN/TC 165 – Waste water engineering, determine general requirements for drain and sewer systems, products for the wastewater engineering, the design, laying and structural design of sewers and wastewater treatment plants. They are used in design, calculation, and performance of processing and plant engineering, as well as in construction, operation and maintenance of wastewater plants. For communicative purposes standards to terms and definitions have been elaborated. Standards dra#ed in CEN / TC 165 include the whole field of wastewater engineering from the point where the wastewater arises, including surface water run-oﬀ, to the discharge into rivers or lakes. This Technical Committee CEN/TC 165 – Waste water engineering has published 95 standards, while 8 standards are under development. Some of the characteristic waste water engineering standards are the following: EN 12255-1 – Wastewater treatment plants – Part 1: General construction principles, EN 13508-1 – Investigation and assessment of drain and sewer systems outside buildings – Part 1: General requirements, EN 12566-1 – Small wastewater treatment systems for up to 50 ES – Part 1: Prefabricated septic

tanks, etc. Concerning hydrometry standards, an important role in the standardisation sphere is played by the Technical Committee CEN/TC 318 – Hydrometry. This Technical Committee is dealing with standardisation of methods, procedures and instrumentation relating to techniques for hydrometric determinations of water cycle, including: • velocity, stream flow, level, load transport, erosion, sedimentation and ice phenomena in rivers, reservoirs, open channels, lakes and seas; • precipitation, equivalent to snow and snow cover; • infiltration, evapotranspiration, soil moisture and soil frost; • groundwater level, flow and temperature; • description and use of instruments, structures and equipment used for measurement, as well as uncertainties associated with them; • standards for data collection, processing, evaluation and analysis, data exchange and presentation. Rivers and other water bodies know no national

WATERS F MONTENEGRO borders. Therefore, management of river basins and ground waters cannot be achieved at the level of one basin or nation. Cooperation between organisations at sub-national and supra-national level is an imperative. Standardisation uses standards to ensure that they all produce hydrometric data based on agreed procedures and the required quality. This Technical Committee has published 12 and currently prepares 6 standards. Some of them are the following: EN 14968 – Semantics for groundwater data interchange, EN 13798 - Hydrometry – Specification for a reference raingauge pit, etc. When it comes to European standardisation, there are also technical bodies – Technical Committees (CEN/TC 334 – Irrigation techniques); in the field of infrastructure, i.e. pipelines (CEN/TC 203 – Cast iron pipes, CEN/ TC 155 – Plastics piping systems, CEN/TC 267- Industrial piping and pipelines). These expert bodies have published a total of 250 standards, and are currently developing 51 standards.

ROLE OF NATIONAL STANDARDISATION (ISME) The Institute for Standardisation of Montenegro (ISME) is a recognised national standardisation body of Montenegro. The role of national standardisation is, among other things, to enable relevant stakeholders (subject-matter experts) to take part in the standardisation activities at the regional (CEN, CENELEC) and international (ISO, IEC) level, thus representing their relevant views, so that they can be implemented through standards. To carry out this process, standardisation bodies of a country establish eﬀective

expert bodies (technical committees). Through technical committees, national standardisation bodies monitor and take part in the work of corresponding technical bodies of international and/or European organisations for standardisation with respect to planning, dra#ing, adoption, testing and review of international and/or European standards and related documents. National standardisation technical bodies (technical committees) also have the task of developing original national standards MEST in the areas where there is no interest of the stakeholders. The role of the Institute for Standardisation of Montenegro (ISME) also includes transposition of the standards published by regional organisations for standardisation (CEN, CENELEC) and international organisations for standardisation (ISO, IEC) to the national level, in the forma of MEST EN XXXX, MEST EN ISO XXXX and MEST ISO XXXX, MEST IEC XXXX; as such they are available to various stakeholders. Apart from that, all stakeholders can become acquainted through national standardisation with the up-to-date, comprehensive knowledge of those who are active in specific technical fields in which the standards apply and use the tested solutions proven in theory and practice.

PICTURE 2 – CORRELATION OF STANDARDISATION

175

IVANA JOKSIMOVIC, PHD, DOCENT DIJANA DJUROVIC, PHD Institute of Public Health of Montenegro

Rapid assessment of drinking water quality risks

WATERS OF MONTENEGRO VOLUME 3

178

Authors:

IVANA JOKSIMOVIC, PHD DOCENT DIJANA DJUROVIC, PHD

Institute of Public Health of Montenegro

Rapid assessment of drinking water quality risks

WATERS F MONTENEGRO QUALITY OF WATER FOR DRINKING AND HEALTH The risk of getting infected with water is increased with the level of contamination with pathogenic microorganisms. The risk of getting infected depends on factors such as the infectious dose and the susceptibility of the host. Drinking water is just one way of transmitting these pathogens; some agents are transferred from one person to another, or are transmitted by consuming contaminated food. In many cases, poor personal hygiene can lead to the transmission of pathogenic organisms through contamination of water stored in the household or during the preparation of food. Poor hygiene practices may result from the use of inadequate amounts of water, and therefore the amount of water is also significant in the control of infectious diseases. Chemical contaminants in water rarely present an acute health hazard, although nitrates in water may present a serious health risk for young children (up to 6 months old). Some other naturally-occurring chemicals can cause chronic health problems when administered over a longer period of time. Some elements, such as iron or manganese, that may be present in water, aďŹ&#x20AC;ect the acceptability of drinking water, but their direct impact on health is limited. These elements can aďŹ&#x20AC;ect the taste of water, and can cause the appearance of a stain on food (during cooking) or clothes (when washing). As a result of a visual experience, they may cause consumers to refuse to use such water and search for other, alternative, sources that do not have such characteristics, but can sometimes present a greater health risk. Polluting substances that result from human activity, e.g. from agriculture and industry, contaminate water and pose a health risk (e.g. pesticides and heavy metals): such phenomena

Water has an impact on people's health because it is necessary for life, and also as a medium that can transmit various causes of disease. The impact of water on health comes primarily from the use of water that can contain pathogenic microorganisms or toxic chemicals as well as the use of inadequate amounts of water that results in poor personal hygiene and aďŹ&#x20AC;ects hygiene in the household. are typically characteristic of certain locations and need to be identified through sanitation and environment risk assessments. In order to protect and preserve health, all drinking water should be of good quality, from the point of supply to the point of consumption. Quality is usually assessed on the basis of microbiological indicators and chemical parameters, whereby microbiological quality is the most significant aspect of public health, due to the possible very rapid development of the disease (and possible outbreaks of epidemics) caused by certain pathogenic microorganisms. Water quality assessment can be done using widely available analytical techniques with a variety of risk assessment tools.

179

180 2. WORLD HEALTH ORGANIZATION (WHO) FOR SAFE DRINKING WATER The continuous delivery of safe drinking water requires effective management and operation throughout the drinking water supply chain from the catchment and source to the point of consumption. The WHO guidelines for drinking water quality suggest that safety is most effectively achieved by establishing of a preventative management framework for safe drinking water that encompasses the following elements (WHO, 2011a): establishment of health-based targets, including water quality targets, for drinking water as a "benchmark" for evaluation of the adequacy of existing installations and policies; in order to meet these targets, development and implementation of water safety plans (WSP). The WSP provide a quality management system for water suppliers at different scales, which is based on principles of risk assessment and risk management, and which aims at continuous management and control of water sources, treatment, distribution, handling and storage together with documented management, actions and communication plans; establishment of a system of independent surveillance that verifies that WSP are working effectively and that health-based targets are met.

3. RAPID ASSESSMENT OF DRINKING WATER QUALITY Routine (regular and frequent) assessment of drinking water quality is undertaken to provide data and information, including: determination of the overall background and trends in quality; monitoring compliance with regulations, gui-

delines, targets and/or standards; identification of water quality or pollution problems and issues; planning and development of remedial actions; and informing policy decisions on issues such as water source and technology development, revision of regulations for drinking water quality or effluent discharge consents. In addition, specific (non-routine) assessments may be instigated in response to issues such as the need to identify the source of an outbreak of a water-related disease, management of an acute agricultural/industrial pollution incident or concerns relating to a particular parameter. Rapid Assessment of Drinking Water Quality (RADWQ) is an example of a specific assessment. The assessment of RADWQ relies on intensive field work to collect one-off water quality and sanitary inspection data focused on the category of "improved" water sources as defined by JMP-Joint Monitoring Program, applying a sampling approach that results in a nationally representative dataset. The RADWQ assessment methods and procedures may also be used by national regulators or surveillance agencies for a variety of targeted water quality assessments and as the basis for developing an effective approach to routine water quality surveillance; as such, it can be used to: obtain baseline information through the systematic "snapshot" of drinking water quality in a given country or at any sub-national level (e.g. rural areas); assess the prevalence of a specific parameter (e.g. arsenic or fluoride); check compliance for a particular type of water

WATERS F MONTENEGRO supply (e.g. point sources) or in households; investigate seasonal changes in drinking water quality; investigate an emergency recovery phase. Some of the key reported benefits of rapid assessments include: thorough compilation (from various institutions) and review of already existing data on drinking water quality and water supply coverage in a country, as well as identification of data or information gaps; creation of a national database on drinking water quality and sanitary conditions, which

provides solid baseline information for the establishment (or stepwise improvement) of routine water quality monitoring and surveillance programs, and/or for targeting resources and eﬀorts in surveillance and/or remediation programs; capacity building in water quality monitoring and assessment, including policy formulation, strengthening institutions, facilitating networking between national, regional and local institutions and development of the human resource base; and raised public awareness of the importance of drinking water quality and health issues in populations visited during the assessment.

TABLE 1: CATEGORIES OF "IMPROVED" AND "UNIMPROVED" WATER SOURCES (UNICEF AND WHO, 2012)

JMP CATEGORY

SUPPLY TECHNOLOGY

“IMPROVED”

Piped water into dwelling, yard or plot Public tap or standpipe Tubewell or borehole Protected spring Protected dug well Rainwater collector

“UNIMPROVED”

Unprotected dug well Unprotected spring Cart with small tank or drum Tanker truck Surface water (river, dam, lake, pond, stream, canal, irrigation channel) Bottled water *

* Bottled water is considered to be "improved" only when the household uses drinking water from an "improved" source for cooking and personal hygiene.

181

182

FIGURE 3. SECURED AND UNSECURED SANITARY PROTECTION ZONE

4. CONTROL OF HEALTH SAFETY OF DRINKING WATER The management of health safety of drinking water in our country is regulated by legislation based on the recommendations of the World Health Organization, European Union directives and international quality standards. Pursuant to the valid regulations in Montenegro, control of health safety and quality of drinking water as well as the sanitary and hygienic conditions of the water supply facilities are carried out by the healthcare institutions. The testing of drinking water from the water supply system is carried out in laboratories in: • The Institute for Public Health in Podgorica • Hygiene and Epidemiology Department of the Bar Health Centre • Water Supply and Sanitation Company of Podgorica The Montenegrin Institute for Public Health collects, analyses, displays the results of the health safety of drinking water from the water supply systems in the territory of Montenegro, and provides appropriate recommendations (Figure 2). During 2018, the Institute for Public Health, when visiting city water supply systems in Mon-

tenegro, used the applicable forms for the Rapid Assessment of Drinking Water Quality (RADWQ) with the aim of gaining new knowledge and better understanding of the level of water supply safety, which is defined as water supply from "improved" sources. Based on data collected so far and upon the use of the forms for Rapid Assessment of Pollution Risks (RADWQ-WHO), it has been concluded that the pollution risk of water intakes is mainly medium, but high risk water intakes were registered as well. The risk level is significantly aﬀected by unsecured sanitary protection zones of the water source, as well as inadequate capture facilities (Figure 3). Provision of safe drinking water means the prevention of secondary pollution of the water source, sanitary protection zone and purified drinking water from the distribution network or from the local source of water supply. All participants, that is, producer, distributor and consumer, have responsibility in the use chain. The fight against water pollution requires a multidisciplinary expert approach, with the participation of public organizations, industrial and other enterprises, as well as individuals.

WATERS F MONTENEGRO

FIGURE 3. SECURED AND UNSECURED SANITARY PROTECTION ZONE

FIGURE 2. LABORATORY FOR WATER QUALITY CONTROL IN THE INSTITUTE FOR PUBLIC HEALTH

183

PHD SANDA NASTIĆ, ALEKSANDAR KRSTIĆ

Controlling in public utility companies

WATERS OF MONTENEGRO VOLUME 3

186 PHD SANDA NASTIĆ ALEKSANDAR KRSTIĆ

Danube Utility Benchmarking HUB Coordinator, Danube Water Program/IAWD

CONTROLLING

in public utility companies

ompanies from developed countries of the Europe and the World use controlling as one of the most important management tools over a long period of time. In order to achieve continuous survey over the work results, controlling is extensively used in highly efficient private companies, but also in numerous successful public companies. One of numerous examples is also water and sanitation utility of the Hamburg city (Hamburg Wasser), which is globally known for extremely low water losses. Public utilities from the Western Balkans do not utilize controlling suﬃciently, while the concept of controlling is still not well known among the utilities. Nevertheless, leading water and sanitation utilities from the region, joined in the Danube Benchmarking Hub, increasingly recognize and use controlling as indispensable segment of operation of any successful company. The changing situation in the region is confirmed during

WATERS F MONTENEGRO the international conference and workshop of the Danube Benchmarking Hub, taking place on March 22-23, 2018, in Žabljak, when two topics were dominant: 1) non-revenue water reduction and 2) controlling. Companies which work on continuous performance improvement inevitably come to conclusion that a management, in order to be successful, must have at its disposal actual information which is needed for good business decision-making, but also in order to correct previously made decisions, in timely manner, which are not leading to desired results. In practice it is not such a big problem in occasionally making wrong decisions, which are anyway unavoidable during the intense operation of the company, it is far greater problem when it takes too long to find out which decisions were not good enough, thus delaying the necessary corrective measures.

“There is nothing so useless as doing eﬃciently that which should not be done at all” - Peter Drucker Plan

Act

The Deming Cycle of continuous improvement

Check

According to German definitions, controlling may be defined as follows: 1) as comparing actual performance with the planned one; 2) as business area involving planning, control, information sharing and reporting; 3) as approach according to which controlling is considered as influencing the behavior of others to secure successful business. In order to apply planned decisions and determine whether performance is in line with the plans, controlling function must be used in addition to the planning function. Therefore, item related to checking, i.e. controlling, is indispensable in the Deming cycle of continuous improvement. If, during the controlling process, pubic company manager finds that business activities are not being carried out in accordance with the plan, corrective actions must be taken. It is important to note that control and controlling are not identical processes. Control is only a sub-system of the controlling process and constitutes its important part. Controlling is the managerial function that encompasses: 1) planning of performance and compliance; 2) assessment and measurements of achieved results; 3) pinpointing deviations from the planned results and performance eﬃciency; 4) analyzing causes and consequences of deviations, and 5) regular information sharing and reporting within the company, to all competent authorities, as well as the citizens. Thus, it is obvious that controlling and management are interdependent functions having common responsibility, that is, achievement of defined and predetermined objectives through analyses and corrections of all sectors in accordance with key business elements. Management consists of planning, organizing, human resources management and management control. On the other hand, all mentioned processes refer to

187

Manger - Responsible for results - Dicision on alternatives

- What to plan?

Controlling

188

Controller - Responsible for transparency of results - Report structure

- How to plan?

Joint responsability for the results

the management of financial, physical, material and human resources and are aimed at achieving the defined objectives. The practice shows that these elements are o#en used separately or in diﬀerent order in the public utility sector, hence, controlling is very important in order to connect all these stages with the aim to maintain their compliance and attain enhanced overall performance. Controlling should ensure that information are market-oriented, and, for that reason, controlling in business processes must be carried out in several phases depending on the needs and information requirements of various departments. Controlling process in the public utility sector may be explained as follows: 1) controlling involves collection of data from all segments of a public utility company; 2) selection of required data and their analysis in order to detect achieved or unachieved results; 3) data are then transformed into information and reported to management to be used as the basis for decision-making; 4) regular reporting and information sharing are of utmost importance, in order to take timely action against the factors that caused deviations from anticipated results

and achieve the progress toward the objectives planned to be achieved. Hence, controlling is an instrument which can simultaneously increase eﬀectiveness of decision making and eﬃciency in the operation of any system, and consequently, it increases capability of a company to adapt to all internal, local, national and international improvements demands, and even more importantly, all such demands for longtime maintenance of achieved improvements. Moreover, development banks, such as German development bank KfW demands from the client utilities which receive grants or/ and favorable loans to implement controlling in its operation, as a condition to receive the funds.

KPI CONTROLLING Three are several types of controlling, in both theory and practice: ABC analysis, break-even diagram, EBITDA, KPI CONTROLLING, etc. However, there is a number of reasons why KPI controlling, i.e. controlling by Key Performance Indicators is considered as the most appropriate one for better eﬃciency in achieving objectives and targets in public utilities: 1. Performance indicators are specifically defined indicators used to track and monitor the desired results of the organization; 2. KPIs are set for each level of organizational hierarchy and they are a prerequisite for timely decision making. Practice has shown that 90% of successful companies apply KPI model through an integral concept of strategic maps and list of harmonized goals; 3. Defining of performance indicators is preceded by the setting of the system of planning and reporting. Result of performance measurement are reports of specific form and frequency, based on which the success of organization management

WATERS F MONTENEGRO

at reaching targets is evaluated; 4. Key performance indicators can be defined at all levels of the organization: from the job function level, level of smaller organizational units (services and departments), to the divisions, top management and organization as a whole; 5. KPI’s can be defined for processes being performed through several organizational units (e.g. procurement department, production department, sales department, finance department), thus reducing the so called “silos” eﬀect, i.e. when diﬀerent parts of the organization fail to work together, pursuing only their own objectives and activities; 6. In addition to financial performance indicators, KPIs include non-financial performance in-

dicators, that is, indicators that have impact on financial results; 7. KPI monitoring shows trends- what results can be achieved in future.

RELATIONSHIP BETWEEN KPI CONTROLLING AND BENCHMARKING KPI controlling is a kind of internal benchmarking, involving tracking and measuring of actual performance on a monthly basis, and comparing it against a plan and previous performance. Continuous tracking and monitoring of indicators throughout the year may be advantageous if the annual results are recorded into any type of benchmarking:

189

190

1. Tracking of indicators on a monthly basis enables quick detection of deviations from plans and previous periods, and reduces time required for corrective actions; 2. Management may quickly respond to resolve deviations and remove errors; 3. Annual results entered into benchmarking tables are refined and corrected during the year; 4. Data and indicators are already available to be entered into benchmarking tables and there is no need to look and wait for them; 5. If needed, list of indicators used in KPI controlling can be extended in relation to the benchmarking requirements.

IMPORTANCE OF CONTROLLING AND BENCHMARKING The importance of controlling and benchmarking can be well illustrated by the structure of the Danube Learning Partnership (D-LeaP). D-LeaP is designed as a regional, integrated and sustainable capacity building initiative of national water utility associations and IAWD, the International Association of Water Supply Companies in the Danube River Catchment Area, and aims to provide a comprehensive curriculum to the staďŹ&#x20AC; of water supply and sanitation utilities located in the Danube region. Legally, D-LeaP is established as a committee of IAWD, which is governed by

WATERS F MONTENEGRO the national associations of water and sanitation utilities and IAWD. In the structure of D-LeaP, the foundation programs are exactly Utility Benchmarking Program (UPB) and Management training (MT), of which the latter is in development, but it is expected that KPI controlling will be the backbone of the training. In addition to allowing continuous tracking of company performance, as well as performance improvement planning, benchmarking and controlling systems themselves must be learned and improved. Even companies that apply these

practices more than 10 years continue to discover new ways of looking at and tracking the results of their work, which suggests that working on monitoring of achieved and setting of targeted indicators is a continuous process that never ends. Therefore, on the way of performance improvement the most important question is: when will your water and sanitation company really start to work on benchmarking and controlling

â&#x20AC;&#x153;If you can't measure it, you can't improve itâ&#x20AC;? - Peter Drucker

UBP Foundation Programs

Utility Benchmarking Program

MT Management Training

EE Energy Efficiency

Technical Programs

CE Commercial Efficiency

NRW Non-Revenue Water

Access to Financing

Water Safety Planning

AM Asset Management

AF Implementation Programs

WSP

PBC Performance Based Contracting

U2U Utility to Utility

191

BOLJE SESTRE WATER SOURCE

10.

Activities of the Regional Water Supply Company:

WATERS OF MONTENEGRO VOLUME 3

194

THE MEETING OF THE EBRD VICE PRESIDENT ALAIN PILLOUX AND GORAN JEVRIC, THE DIRECTOR OF THE PUBLIC ENTERPRISE FOR THE REGIONAL WATER SUPPLY OF THE MONTENEGRIN COAST

Expressed satisfaction with the financial stability On 15 June 2018, a meeting was held in the oďŹ&#x192;ces of the European Bank for Reconstruction and Development (EBRD) in Podgorica between EBRD high representatives, Alain Pilloux, Vice President for Banking, Zsuzsanna Hargitai, Director for the Western Balkans, and Jaap Sprey, Head of the EBRD OďŹ&#x192;ce in Podgorica, and Goran Jevric, Director of the Public Enterprise for Regional Water Supply of the Montenegrin Coast (PEW) and his associates. This is the third meeting held in the past few months between representatives of this renowned international financial institution and PEW. The participants in the meeting discussed the outstanding financial performance

of PEW over the past few years and expressed satisfaction with the financial stability achieved through the successful and sustainable management of major challenges that PEW has been continuously faced with. As a result, the Bank's high representatives expressed their readiness to support, directly and through the Government of Montenegro, as a priority, the implementation of projects of this company that will improve the overall economic environment at the Montenegrin coast. Alain Pilloux emphasized that the EBRD has a long and successful cooperation with the PEW

WATERS F MONTENEGRO

and Goran Jevric and that they share the same goal, which is to provide high quality water for the Montenegrin coast, which is essential for a country that is an important tourist destination. So far, the relationship with PEW has been very productive and resulted in the improvement of water supply on the Montenegrin coast. In addition, Alain Pilloux expressed confidence that further joint work on the implementation of development projects planned by PEW, in preparation for which PEW performed institutional and financial strengthening in the last few years, will ensure a continuing improvement of the water supply sector in Montenegro. PEW Director Goran Jevric expressed satisfaction with the results of the meeting and stressed that EBRD has been supporting this company for more than a decade and was a partner and support to the Government of Montenegro during the construction of the largest infrastructure project since the restoration of independence. "At the meeting, I presented projects for which

we received the support of the Government, a#er meeting with the finance minister and the minister of sustainable development and tourism, and now the European Bank for Reconstruction and Development. The EBRD is ready to continue its cooperation with our company, as the financial result and stability show that PEW can withstand new credit indebtedness for the implementation of new projects." Goran Jevric pointed out that PEW proposed several projects: the connection of the municipality of Herceg Novi to the Regional Water Supply System (if the pending third tendering procedure is not successfully finalized), then the start of the second phase of development of the Regional Water Supply System by placing 11 km long pipeline from Budva to Tivat, to increase the capacity of water supply for the Kotor Bay municipalities from now available 330 l/s to 750 l/s, and construction of water supply networks in the coastal places that do not have them, such as Dobre Vode and Utjeha.

195

196

UNESCO science camp at the Bolje Sestre water source The three-day international science camp "Characterization and Engineering of Karst Aquifers" was held under the auspices of UNESCO at the Bolje Sestre water source from 29 to 31 May. It gathered experts in the karst and hydrology of karst from various parts of the world, professors and students of the Faculty of Civil Engineering at the University of Montenegro, Faculty of Mining and Geology at the University of Belgrade,

and representatives of the Institute for Geological Surveys of Montenegro and the Regional Water Supply Company for the Montenegrin Coast. "This project is a wonderful story about the cooperation between the economy and the scientific and research institutions." Cooperation between the economy and education sectors is necessary." This area is developing rapidly and this water source needs to be protected, because investments will be large and it should be taken into account in terms of sustainable development promotion measures. The regional water supply system has been built to promote progress" says Professor Richard Parizek, from the University of Pennsylvania. Bolje Sestre is listed on the map of 150 most im-

WATERS F MONTENEGRO

portant karst sites in the world, by decision of 30 eminent international experts. Their explanation is that this water source supplies the entire Montenegrin coast with high quality drinking water. Professor Micko Radulovic, PhD, says that this source is, with a good reason, mandatory address for international excursions of master and doctoral students from the region and the whole world, and that these are "the grounds for the study of karst hydrology" and that "water from this source can also be used for bottling". Head of the Centre for Karst Hydrogeology at the Hydrogeology Department of the Faculty of Mining and Geology, University of Belgrade, Professor

Zoran Stevanovic, PhD, points out that the camp has become a tradition. The main task of the meeting is to provide younger generation of engineers and experts with additional information, to exchange experiences, acquire new knowledge and knowledge relevant to future professional work. He recalls that Montenegro is among the world leaders in the area of karst. "Montenegro is rich in groundwater. More than 90% of the population use this water here, and more than 60% of the territory of Montenegro is covered by this type of rock. Therefore, there is no better reason than starting this course partly on the territory of Montenegro" - says Stevanovic, a consultant to the FAO and UNESCO organizations.

197

198

AS THE ONLY WATER COMPANY OUTSIDE THE EU ZONE

PEW selected as a member of Aqua Publica Europea At the annual session of the Management Board of Aqua Publica Europea (APE), the European Association of Public Water Operators, in Budapest, the Public Enterprise for Regional Water Supply Company of the Montenegrin Coast (PEW) became a member of this prestigious European association. Apart from PEW, only the water companies from Switzerland have the status of EPA members outside the EU - says a member of the PEW Board, Djordjije Vukcevic, who attended the session together with Predrag Bjelobrkovic, PEW advisor for cooperation with international financial institutions. APE is the European Association of Public Water Operators based in Brussels, whose main goal is to integrate public services dealing with water

supply and waste water treatment and disposal at European and international level, he explains. APE members are public companies from all EU Member States, providing water supply to more than 70 million inhabitants in those countries (including a significant number of major European cities), which highlights the large importance and involvement of public sector in the provision of these services, as PEW states. In this context, APE is an organization whose goal is to promote sustainable solutions in this sector that serve primarily the public rather than corporate interests. Therefore, APE activities focus on the following three priorities: public water service management and sustainable financing of this sector, transparent and accountable water and wastewater management services,

WATERS F MONTENEGRO ĐORDJIJE ĐOKO VUKČEVIĆ

ensuring water security and quality, and eﬃcient management for environmental sustainability. - This important event for the water supply sector in Montenegro and especially for PEW, which has been engaged in intensive communication with decision makers in European water supply associations over the last years, occurred during the First International Conference of Water Supply Companies in Zabljak in March 2018 - reminds Vukcevic. The World Water Day, 22 March, was marked on that occasion, with the presence of representatives of 14 countries and the most important experts in this field from EU countries. APE Executive Director Milo Fiasconaro then oﬃcially announced that PEW was invited to become a full member of this prestigious association in the EU, as the first water utility from the Balkans and outside the EU zone. This was announced a#er the presentation of human resource capacities and successful sustainable management, faced with not small challenges in the functioning of such a complex technical and technological system, which is to be proud of in all EU countries as well, says Vukcevic.

He emphasized that colleagues from APE expressed high opinion and respect for the prestigious vision of development of the regional water supply system for the Montenegrin coast, which was presented in Zabljak and in Budapest. - As a member of APE, PEW can now absolutely take advantage of exceptional benefits through cooperation with other members of this European association in Brussels, and especially through the APE Water Erasmus Program, which raises the capacities of public water operators through various platforms and direct staﬀ exchange and develops and shares among the members the business management culture in the field of water supply and wastewater disposal - he explains. Due to their reputation and available expertise, this Association plays an important role in the decision-making process of the European Commission on the directives concerning water, water supply and wastewater management. With gratitude and satisfaction due to the fact that PEW, as the first public water operator from non-EU countries, was admitted to this respectable association, member of the Board of Directors Djordjije Vukcevic and advisor Predrag Bjelobrkovic talked with the Executive Director of APE Milo Fiasconaro and pointed out the importance of the PEW membership. It actually exceeds the interests of PEW itself, since the entire water sector in Montenegro will also have very significant benefits from cooperation with this Association, which brings together the experiences of the most important European cities in the field of water supply and aﬃrms the importance of public management of water resources, which are the resources of strategic interest for Montenegro, as stated in the conclusion of the press release.

199

200

Supervisory review of the HACCP certificate In order to ensure the product of as high quality as possible - drinking water, in accordance with the legislation, the HACCP system was certified in July 2017, and implemented in the operations of the Regional Water Supply Company during the course of 2017. In July 2018, a supervisory review of the issued certificate was carried out during which it was noted that the implementation of the adopted procedures and guidelines in the Regional Water Supply Company was in compliance with requirements of Codex Alimentarius CAC/RCP 1-1969, rev 4-2003. The team of experts who conducted

a supervisory verification of the issued certificate stated that there was no a single non-compliance, which is an exception for the verifications of this type, confirming that the quality control of drinking water and prevention of risks that can aďŹ&#x20AC;ect the water quality have been placed under control. This is another evidence that preserving the high quality of water distributed from the regional water supply system is a priority in the operation and that the Regional Water Supply Company takes all necessary measures to create the conditions for delivering drinking water compliant with health safety requirements.

WATERS F MONTENEGRO

201

202

Regional Water Supply Company delivers water to all coastal municipalities Upon the signing of a contract between the Regional Water Supply Company for the Montenegrin Coast and the Water Utility of Ulcinj on 29 June 2018, the southernmost Montenegrin municipality started to receive water from the regional system. Regional Water Supply Company for the Montenegrin Coast has undertaken to continuously supply Ulcinj with high quality water during the tourist season. The contract was signed by the director of the Regional Water Supply Company Goran Jevric, the mayor of Ulcinj Ljoro Nrekic and the director of the Water Utility of Ulcinj Fuad Hadzibeti. "Ten days ago we signed the same kind of contract with the director of the Herceg Novi Water Utility Olivera Doklesic.

"By signing the contract with the Municipality of Ulcinj, we have now covered the entire Montenegrin coast and we, all together, created the conditions to stay ready in anticipation of the peak tourist season" said Jevric. He recalled that Ulcinj had been connected to the Regional Water Supply System in 2012, with the Government of Montenegro investing about 18 million euros in the project, but there had been certain problems and doubts with the local water utility that were overcome, so that the citizens will have water of high quality 24 hours a day. "I am pleased that Mr. Nrekic, as the new mayor, has set this project as a business priority, as well as Mr. Hadzibeti, who was elected as director of Ulcinj Water Utility only two days ago" he said.

WATERS F MONTENEGRO Nrekic pointed out that this is "the beginning of cooperation between the Municipality of Ulcinj and the Water Utility of Ulcinj with the Regional Water Supply Company, who will act like partners in the coming period." "The Municipality of Ulcinj is a partner to the Government of Montenegro, so we work for the wellbeing of citizens. The contract has been signed for six months, with the intention to be extended to a year, which we will have the opportunity to do for sure in some 10-15 days. We have created the conditions to welcome guests properly, but also foreign investors. Ulcinj started with big investments. We will return the glow to Ulcinj" said Nrekic

Acting director of the Water Utility of Ulcinj said that the contract is of great importance for the stability of the water supply system, especially during the tourist season. "In July, we will take 25 l/s, while in August we will take additional 40 l. I am looking forward to a good relationship with the Regional Water Supply Company" said Hadzibeti.

Scanned with CamScanner

SIGNING OF THE CONTRACT WITH ULCINJ WATERWORKS: JEVRIÄ&#x2020; AND HADĹ˝IBETI

203

204

A delegation of the Ministry of Sustainable Development and Tourism and the Regional Water Supply Company met with the World Bank representatives in Vienna Vienna, 2 and 3 May 2018 - State Secretary for Environment and Sustainable Development, Mr. Sasa Radulovic, participated at the Danube Water Conference, entitled "Achieving Sustainable Water and Sanitation for All: Progress, Challenges and Future Actions in the Danube Region" organized by the International Association of Water Supply Companies in the Danube River Catchment Area (IAWD) and World Bank, within the Danube Water Program (DWP), with the financial support of the Government of Austria. Within the session on smart water management policies, State Secretary Radulovic spoke on "Optimization of national water management", particularly emphasizing the position of Montenegro regarding reforms in the framework of EU integration process, i.e., the requirements of Chapter 27, as well as the key challenges in water supply and wastewater management, stating

that water is the largest natural and strategic resource for Montenegro, and that we must treat it in a very dedicated and cautious way. "The basic assumptions on which the forthcoming water sector reform in Montenegro will be based will rely on three fundamental principles: that water supply and water sources must be owned by the community, that democratic governance should be promoted and that social needs should be met. We plan to achieve this in the following way: by improving the existing public water supply infrastructure, by promoting transparent reporting on the operation of water utilities supervised by local communities and central authorities, and as a result by improving quality of service " We will facilitate public-public partnerships on a non-profit basis with participatory management of water companies. At the same time, we will

WATERS F MONTENEGRO direct investment, management and distribution of water towards satisfying the needs of the population, and not profit making. Our intention is to regulate water as a public and social good and the right of every citizen of Montenegro. We also intend to implement a wide range of educational programs in order to reduce water consumption. State Secretary Radulovic also presented his strategy for development of water companies in the future, with a focus on cautious approach to reforms and absolute dedication to water as a natural asset that must be accessible to every citizen. "Montenegro, as you know, is a country in transition, and, like with other natural assets, status of water has passed the path from being a general national property and social property, a good of general interest, to being the public good, and today we want to aďŹ&#x192;rm the concept of commons. We want to be very careful in the future steps, not to repeat some of the mistakes that have been made by some of our European partners, because today they are paying high economic cost of their wrong estimates and as a result they have very expensive drinking water of questionable quality. Consequently, we will make our decisions based on detailed comparative analyses, assisted by the necessary expertise of our partners in the reform. I will remind you that even in Justinian's code, which is considered to be a collection of the entire Roman law, the ownership of water is treated as the property of mankind, and it is said: "By the law of nature, these things are common to mankind: the air, running water, the sea, and consequently the shores of the sea." In addition, State Secretary Radulovic participated in a panel discussion with representatives of the countries of the region, with the aim of exchange of experience. On the margins of the meeting, numerous meetings were held with

representatives of regional and international organizations, including a meeting with Ms. Patricia Lopez, leader of the Danube Water Program in front of the World Bank, on the topic of cooperation between the World Bank and Montenegro in the framework of the upcoming water sector reform. One of the key challenges for governments and experts in this area is to meet citizens' needs for quality water and economically sustainable price of drinking water distribution and wastewater management, while at the same time keeping pace with the requirements of the EU acquis in terms of environmental protection. That is the reason why the Danube Water Program was created in the total amount of EUR 9.5 million. Since the start of the project in May 2013, in cooperation with ministries, regulators, water utility associations and local self-government representatives from the countries of Southeastern Europe, knowledge has been exchanged between more than 600 experts and policy makers in the region and beyond. The conference gathered more than 150 leading water sector representatives from more than 15 countries, including representatives of the Regional Water Supply Company for the Montenegrin Coast, which are members of the International Water Supply Companies Association in the Danube River Catchment Area, with the goal of discussing the progress achieved as well as challenges or future actions in order to develop smart policies and smart utilities that will enable access to water and sanitation for all citizens of the Danube river basin. Establishment of cooperation with regional, national and local stakeholders, aďŹ&#x192;rmation of dialogue on challenges and policies in the water sector, as well as strengthening the technical and managerial capacities of institutions and water companies are the cornerstones of the Danube Water Program.

205

“黑山海岸区域供水公司” 公共企业

一个深刻改变黑山的项目是如何诞生的

PROJECT THAT CHANGED MONTENEGRO PROJEKAT KOJIHAS JE PROMIJENIO CRNU GORU

一个深刻改变黑山的项目是如何诞生的 “当井干了，我们才知道水的价值” 本杰明·富兰克林

尽管黑山拥有很丰富的水资源，但是控制和管理供水，以及这样为人类造福，在我们国家一直是很大的问题。上个世纪，黑山成为日益吸引人的旅游目的地时，缺水已被证明是旅游经济进一步发展的关键问题之一，同时也是黑山沿岸居民生活质量问题的一个关键因素。当时，黑山社会主义共和国的政治领袖们努力在找解决这个问题的最佳方案，并于1975年签署了《关于为黑山海岸和采蒂涅市建设区域供水系统的社会协议》。不幸的是，1979年4月15日在黑山发生的毁灭性地震几乎完全摧毁了沿海城市，让所有已经开始的解决供水问题的活动暂时停止。早在1986 年，黑山社会主义共和国政府通过了“区域供水法”，并在新海尔采格、蒂瓦特、科托尔和布德瓦建造了部分必要的基础设施。这一项目一直到1991年由市政当局管理，后来世界银行批准继续建造，并建议黑山共和国政府考虑到项目的重要性，接管管理并正式宣布国家利益的项目。由于前南斯拉夫联盟共和国的解体、周边国家的内战，以及对南斯拉夫联盟共和国的国际制裁，区域供水系统的建设项目第二年再次暂停。然而，即使在这些复杂的情况下，黑山政府还是顺利地建造了区域供水系统的一部分，尤其是顺利完成了“Sozina”水工隧道的钻孔和“Ðurmani”水库的建造。必须强调的是，在取消制裁之后，由于区域供水公司现有的人力资源，世界银行在黑山资助的第一个项目 - 建造“Lovanja”卫生填埋场，分配给区域供水公司。此外，从与世界银行的第二次贷款中，实现了科托尔、蒂瓦特、布德瓦、巴尔和乌尔齐尼的公用事业公司的设备采购，而世界银行坚持认为，巴尔的第二个“Možura”区域卫生填埋场应该完全由区域供水公司执行。

区域供水系统是黑山自2006年恢复独立以来实施的最大基础设施项目，同时也是根据迄今在黑山的投资价值和重要性的第二大项目，投资总额为1.07亿欧元。区域供水系统建设最活跃的时期是从2007年至 2010年。2007年2月15日，黑山政府通过了关于区域供水项目第一阶段建设和融资的战略决策。区域供水系统第一阶段的一部分在短短两年内完成，并于2010年7月28日投入试验，当时第一批饮用水被运往布德瓦、科托尔和蒂瓦特市。2010年9月29日，总理米洛·久卡诺维奇正式开展运行该系统的第一阶段，当时他表

在第一次纪区域供水日期签署的新海尔采格市政府、“新海尔采格供水和系统”公共业和“黑山海岸区域供水公司”公共业之的议，是经过 20年的地方政治之后，新海尔采格市次表成为该系统的一部分。实现这一国家工对海岸居民的生活质量和旅游业的发展有重要义。区域供水系统是一个中 “ oj 4

r ”

总

其复杂的

系统，其

水区

为7

瓦的

5 2

设备

15个设施 1 5公米

有25000

在个主要基础设施项目时有大公司成立，而黑山到了其中一个，即“黑山海岸区域供水公司”。 2011年巴尔市接到供水系统，以及2012年乌尔齐尼市也接到供水系统。201 年9月29日

的管道，直从500 米到1100

90公 20

水库

的配水

4.2公

，其中11个

正

的“Sozina”水工隧道

管道上有400 量设备，和

个

的设备管道水孔。

，

来自 “ o j r ” 水的水质量很，于 1 饮用水。实施全管理体系和 S 1400 管理准，证明了“黑山海岸区域供水公司”对于区域供水系统供的水质量和全的关，以及对于公司运准管的关。到目前为止，区域供水系统的运对证实了黑山政府的，即通过投资基础设施项目为黑山经济发展造的。分，

水资源短缺然是我们日生活的一部亿欧元在的旅游项目 or-

o Mon n ro、Lu i a a 、 or o 的投资完全是不议的。

ovi

在过几年中，区域供水公司已经了所有业并明了业，这表了国有业运的新业。年生力利用 80 的、水 100 的、对全融的额贷的当还、总额从 600 到1 400 欧元的、以及工和业所有款和其他的期了年来取的业。2017年5月，区域供水公司成为维也域国际供水公司协会的正式成 2018年6月，成为布尔欧公共供水公司协会的成。了解决业方的供水公司还造了新的发展

战外，区域，其中

1. 新海尔采格市与区域供水系统接来，从而区域供水系统的第一阶段的建立顺利完成。 2. 区域供水系统第二阶段的建设，以及布德瓦 - 蒂瓦特之 11公的新管道的建设，这科托尔、蒂瓦特和新海尔采格的供水系统量从现有的 0 至 750 。根据来的于2025年实现。 . 在巴尔市的 o r 建造管道和下水道 4. 建设

水和生

。工

和

i i ij

的项目。

5. 进一步实现水项目，制项目，用于在巴尔市内建造两新管道，通过巴尔

用8 的用 0 的 6.

水，以及通过 r 水。

va 海

和水的生，以及区域供水公司基础设施的使用。

7. 在“ 实 ”项目内，于 aru 地区区域供水公司拥有的资源进行。

区域供水公司的业基于持续水资源管理的，以公民生活这一重要公共的质量。这发展要对供水部进行，以在政府、欧复开发银行和世界银行的持下，建立黑山沿海水资源最佳管理的持续式。为了进黑山的自然资源，我们于2017年9月29日正式发布了一为《黑山之水》的业，同时发布了黑山和本。对我们来重要的是，在联国科和国际水会的持下，在制世界上最重要的斯特地的年工后，2017年，一世界家 “ o j S r ” 水是世界

上150个最重要的斯特水之一。我们自地，“ o j S r ” 水区是过 25年来地中海地区最大的水区。因此，黑山在然水资源方实是一个幸福的国家。所以，区域供水系统项目被为“ 一个黑山的项目”。

“黑山海岸区域供水公司” 公共企业

一个深刻改变黑山的项目是如何诞生的