Water Crisis and Agricultural Development in Palestine Palestine Technical University-Kadoorie Tulkarem, West Bank, Palestine 21-22 May, 2012
Role of Private Sector in wastewater reuse projects
Global Wastewater Reuse There is a global trend in increasing dependence on the reuse of wastewater as sustainable non-conventional water resource for solving the rising global water stress especially in arid countries
Drivers for Wastewater Re use in Palestine â€˘ It converts wastewater that potentially damages the environment into a resources that can improve the environment, â€˘ It is a sustainable and reliable resource regardless of weather patterns, â€˘ It is available where the population is, and grows with the population increase, or long distance water transport,
Drivers for Wastewater Re use in Palestine • It reduces pressure on other raw water sources for potable uses, • It is a local solution to water scarcity where it is difficult to find additional resources from elsewhere cost of • The associated wastewater treatment and reuse has proven to be feasible in many countries worldwide
Principle of re use strategy in Palestine
The reuse of treated wastewater must be established in all treatment projects. - Co-operation and coordination must be established with all relevant stakeholders. - Flexible reuse plans should be developed to enable the reuse and storage in winter season and when the effluent quality drops below the standards. - Establish planning tools (Regulations, Standards, Guidelines, etc.) for reuse and recharge
Discharge to the surface water may be considered as an interim action, or if reuse is not feasible. - Irrigation of crops eaten raw is prohibited, enforcement means should be applied. - For better water quality and reuse efficiency, consider (i) mixing of treated effluent with urban and surface runoff, (ii) artificial recharge of groundwater with treated effluent wherever possible, and (iii) establish surface storage of treated effluent with or without harvested runoff.
Allow private sector and/or public to manage or share the management of wastewater reuse projects.
- Develop a program for modifying use habits to include reuse of treated effluent in urban centers (greening, fountains, urban parks and landscape irrigation forestation, and other areas).
current institutional bottlenecks in WW reuse
Lack of adequately trained human resources;
Unclear designation of responsibilities between stakeholders with a tendency of insufficient delegation;
Low level of enforcement - due in particular to the insufficient number of inspectors, the lack of monitoring data and equipment, and conflicts in allocation of regulatory responsibilities, plus a culture of producing data without analysis Legislative change will not have any effect if enforcement is not improved;
Insufficient awareness of issues related to wastewater; and
â€˘ Lack of a separation of governance functions from service delivery.
Main Institutions Involved in the WWT and Reuse Palestinian Water Authority (PWA):
planning, licensing and currently implementation of water related projects and infrastructure.
Ministry of Agriculture (MoA):
Environment Quality Authority (EQA):
protection of all elements of the environment
Ministry of Local Government (MoLG):
physical planning for the expansion of the built-up areas.
Ministry of Health (MoH):
control and monitoring of potable water quality, food quality, wastewater related diseases,
Palestinian Standards Institute (PSI):
accreditation to standard measures and specifications for wastewater qualities and re use
Palestinian Central Bureau of Statistics (PCPS):
main source of information
primary objectives of the public sector with respect to private sector participation
expand the sewage systems in order to increase population coverage, to expand sewage treatment in order to reduce water pollution and public health, and to provide better quality of service. to ensure higher operating efficiency and to finance the system without public subsidies or guarantees
contractual relationship possibilities
service and management contracts, in which the government retains ownership and full responsibility for financing, commercial risks and other vital functions. On the other end of the spectrum the government delegates some responsibility to the private developers through a lease, a concession, Build-Own Operate Transfer (BOOT)/BOOS arrangements, or complete transfers of ownership through divestiture.
Problems with PPP Projects Many PPPs fail or never achieve financial close -why? • Change of policy or personnel by Governments • Commitments required from Governments prove to be more than can be accepted • Long delays mean that projects become irrevocably stalled • Change in circumstances or appetite for bidders
Problems with PPP Projects • Many PPPs fail after achieving financial close • Cost of construction exceeds expectations • Revenues fall short of expectations • Economic factors (example: currency devaluation)Problems with PPP
Problems with PPP Projects • Bidding for PPPs and financial closure of projects (BOT) invariably time-consuming and expensive • Costs of preparing bids • Opportunity costs for senior managers • Advisers fees and related expenses • Low success rate / high risk of failure • Often enabling legislation is not in place • Few real operators (contractor dominated) • Lack of discipline or commitment by Governments
Problems with PPP Projects Bidders/investors often frustrated by: • Indecision from Governments • Poor documentation • Changes in the timetable or process • Slow decision-making or inflexibility • Lack of support at senior levels • PPP projects compete for investors time and money
How should Government be involved? • Select proper and experienced advisers to the Government • Perform the feasibility study, • Fund, and actively participate in the preparation of the project documents • Ensure truly commitment to the project, and understands what will be required of it
How should Government be involved? • Close monitoring and follow-up is probably best during the negotiation of the project agreements • Encourage Investors to make prompt decisions • Close involvement in the review and evaluation of bids, negotiation of agreements, closing the financing • Participate as needed on high levels
How and How much should Government contribute? Two methods can be used: A discounted cash flow analysis shall be performed to assess the projectsâ€™ ability to generate revenue to cover costs without a grant and specifically what percentage of capital costs can be covered. The grant represents the â€˜financing gapâ€™ between forecasted revenue generation and required revenue generation.
â€˘ Calculation of the Internal Rate of Return if this is below an acceptable level, then the grant contribution should represent that amount required to raise the IRR to an acceptable level