Банкеръ Weekly

Briefs

BULGARIA'S EU FUTURE STINKS

OUTDOOR TOILETS AND SEPTIC PITS ARE AMONG THE BIGGEST ATTRACTIONS TO NUMEROUS FOREIGN VACATIONERSPreoccupied with the country's cherished EU membership, the incumbent Government did not find time during its mandate to solve quite a serious problem, which long ago became history for the true Europeans. The issue in question is the construction of a centralized water and sewage network, which is a criterion for the hygiene and culture of a nation, as well as for its economic state. It seems somewhat strange for a country that will sign the treaty for joining the EU in a matter of days and claiming to become a centre of winter and seaside tourism, to be full of septic pits. And here is what statistics show: only 277 population centres (167 of them towns) in Bulgaria have fully or partly built water and sewage networks. According to the information the BANKER got from the Ministry of Regional Development and Public Works, the situation is best in Varna where 94.03% of the buildings are linked with the centralized water and sewage network. Next comes Pleven, where this percentage is 92.8%, in Bourgas it is 91.14%, in Plovdiv - 91%, and in Stara Zagora - 87 per cent. Sofia follows with 85 per cent. The remaining 15% include the neighbourhoods and ... the posh quarters of the capital city: Boyana, Dragalevtsi, Knyazhevo, Simeonovo, Pancharevo, Bankya, where expensive houses and villas pour their waste water in septic pits. And when the groundwater is not deep enough (which is often the case in the outskirts of the Vitosha mountain) the posh residence stinks. The situation in resorts is desperate, tooWhen building most of them the infrastructure was not intended for the leisure industry boom of recent years. The case of Golden Sands is indicative of that situation. None of the hotels that are currently under construction has got a permission from the local water and sewage authorities to be connected with the central network. The capacity of the local water treatment station is not sufficient as it has been intended for some 19,000 beds, and their number has already exceeded 21,000, Valentin Vulkanov, head of the local water and sewage company said recently. And the example of Bansko is about to become emblematic. Some ten years ago the winter resort was quite a modest town with several thousands citizens living in it and a partial central water and sewage network, mainly in the central part of the town. Now, the servicing personnel alone is dozens of times more. And outdoor WCs and cesspits are becoming one of the biggest 'attractions' to the numerous foreign tourists in the ski resort. The problem. in fact is not a new one. There is a serious disbalance in the water and sewage sector, experts of the Ministry of Regional Development and Public Works confess. Construction of public convenience pipes and water treatment stations in our country lags behind the development of water supply systems, ministry insiders commented in front of the BANKER. Central water supply covers 98% of Bulgaria's territory, and the 70,000 km of water pipes rate this country among the first six in Europe according that indicator. Regretfully, the situation is just the opposite concerning the available centralized water and sewage networks. The total length of sewage pipes and external collectors is about 9,000 km. At that, only one third of them have been built over the last 20 years and have a cross section over 400 mm. The remaining part of the network was built before the year 1973, and the pipes' cross section is 200 mm and 300 mm. Therefore, heavy rains often cause floods.Doubtlessly,vagueness regarding ownershipis quite a serious hindrance. Nobody would invest money in a company without knowing who its owners are, especially having in mind that investments for the construction of sewage pipes are three-fold bigger than those necessary for water supply. Otherwise, the obligation for building the infrastructure is a priority of the State or of the municipality. Even after concessioning the network in the capital city, the Sofia Water company has not in fact acquired the canals and water-mains and they remained municipal property. It's another question that the local authorities' budgets find it difficult to earmark money for the waste waters. That is why another model is used in the bigger towns. When a construction company is interested in building a housing complex or an office building, it is being given a hint that it would be good to establish the necessary infrastructure as well (its price is of course calculated in the end price of the building). In Germany this question is solved somewhat differently - the investor gets the construction site with electricity, water, natural gas, and sewerage brought to it. But in order to reach that model Bulgaria will need more time than for joining the EU. According to the commitments under the Ecology chapter of the pre-accession negotiations with the EU, all Bulgarian towns with population up to 10,000 should have sewerage and water treatment stations by the year 2010, and settlements where more than 2,000 live will have to accept EU standards by the end of 2014. Practically, this means that some 430 water treatment stations plus sewerage should be constructed within ten years, which is pre-estimated at about BGN2.2BN by the Ministry of Regional Development and Public Works. The money will come from the EU's ISPA, and SAPARD programmes and the national budget. However, undertaken commitments are one thing, and accomplished work is another thing. The number of facilities which are being built is modestFive new water treatment stations are under construction now, and building of another six is planned, but they are still at the consideration of projects stage. Thirteen stations are to be reconstructed. Ten water treatment stations are being built with money of the municipalities and the Finance Ministry, the Ministry of Environment and Waters, the Ministry of Regional Development and Public Works. If we assume that about three years are necessary for the construction of a new stations, considering the current pace, Bulgaria will fulfil its commitments under the Ecology chapter somewhere about the year 2050.The main problem causing the delay is that we do not have ready projects. In addition to these 430 stations we we will also have to build 1,000 collectors. We should have projects for at least 100 stations by now, Mr. Grechenliev commented. But how can we have it, considering the lack of sufficient information on the matter and the typically Bulgarian controversies between two or more settlements about where exactly the treatment station should be located? In addition, most of the experts within the branch believe that serious gaps appear when holding tenders for an executor. A proof is the first tender for the construction of water treatment stations in Stara Zagora and Dimitrovgrad, which was annulled in July 2003 on the insistence of the EC Delegation, after the EU commissioners had established that the confidentiality principle was violated when assessing the offers. The other possible solution of the question regarding financing is to thing about the restructuring of the water sector, Ivan Grechenliev, Director of the Infragroup company and representative of the Bulgarian Association of Water Supply and Sewage Networks, said. But the exact way - concessioning, management contracts, leasing, etc. - has not been picked up yet. Things are connected with enterprising. If restructuring begins, new players will appear and they will find the necessary money, Infragroups' boss is adamant. For the time being experts are unanimous that the British scheme should be used - i.e. pure privatisation and attraction of the bank sector by all means. Putting money in sewerage and water treatment stations is a serious but risk-free investment because people always need water in any form. Return on investments is in the range of 12 years. The state of the centralized sewage in Bulgaria is also to a large extent due to the lack of political will.

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