Банкеръ Weekly

Briefs

FIRES COME TO THE WATER SECTOR

Bulgaria's pursuit of Europe now looks like a competition between wise guys and simpletons. The first group is making laws, concepts, programmes, and is showering promises with the only aim to fill its pockets before it crosses the finish line. The other, on the contrary, keeps repairing its shoes and is counting on prosperity beyond that finish line.One of the most purposeful runners is Valentin Tserovsky, Minister of Regional Development and Public Works, who will be most remembered with two facts: with his compensatory apartment in the centre of Sofia and the chaos in the water and sewage sector. A striking example for the minister's competence is his promise to cancel debtsfor electricity accumulated by three of the water companies in the biggest trouble - those in Dobrich, Kyustendil, and Haskovo. The figure in question is no more than BGN10MN and it will not destroy the state budget, Minister Tserovsky explained on March 8. And he started digging a drain from the treasury to the creditor, the National Electricity Company (NEC). He dug for almost two weeks until the cancellation was written off the ministers' promises. Then came the water strategy. It had already been officially presented last August. After an almost seven-month maturing, the work was even published on the website of the Ministry of Regional Development and Public Works. And now it turns out that a concept, without a more global document, is not enough. Moreover, the one who will bear responsibility for it will not be Mr. Tserovsky, but his colleague - the Minister of Environment and Waters Dolores Arsenova. The Cabinet entitled her to present the document by May 27.Ms. Arsenova has as large-scale manner of thinking as her colleague does, but it's still quite a serious matterSince we made our strategy for three years, I think that another one will hardly be prepared for such a short period of time. And we should not forget that it has to be coordinated with the ministries as well, Plamen Nikiforov, Water and Sewage Director at the Ministry for Regional Development and Public Works, commented for the BANKER weekly. We have an opinion on the matter and now it is time to put it on paper, said an optimist - Assen Lichev, Head of the Water Utilization Department at the Ministry of Environment and Waters. By April 9, we should receive information from the ministries of energy, agriculture, and regional development. We also expect collaboration from the National Statistics Institute (NSI), so that we can have updated information about the condition of the whole water sector.If there is anything positive in the whole mess, it's the fact that some of the most capable water experts in the country still on state service work exactly in the ministries run by Mr. Tserovsky and Ms. Arsenova. And the information that they provide is almost the same. According to them, Bulgaria, along with Poland, the Czech Republic, Belgium, and Cyprus, is among the five most water-poor countries in Europe. Still, the off-hand waste of this precious resource repeats every year more drastically in Bulgaria. While 72.1% of the supplied water has been properly utilized in 1990, the percentage fell down to 38.95 in 2001. The rest has been wasted.Even more tragicis the condition of the sewage system. Only 70.2% of the Bulgarian towns have entirely or partially built sewage network. For the villages this figure is just 2.1 per cent. On the other hand, over 20% of these networks are morally outdated and need to be reconstructed or entirely renovated.In fact, the country rulers have known the deplorable state of the Bulgarian water infrastructure for long. In the summer of 2000, when water was supplied to many towns for up to 2 or 3 hours a day and fires burnt to ashes thousands of decares of land, the government of former premier Ivan Kostov adopted and announced a National Strategy on Environment as well as a National 2000-2006 Action Plan. The then rulers promised that at the end of that period the main problems of the sector would have been solved. Four years later the Cabinet of PM Simeon Saxe-Coburg-Gotha is drafting another water strategy. Probably this document will again stipulate that the solution of the biggest problems in drinking water supply lies in the construction of at least 11 reservoirs (as stipulated by a decree of the Council of Ministers dated January 31, 2001). The construction works will cost some BGN500MN. Four of the reservoirs (Luda Yana, Plovdivtsi, Kyustendil, and Neikovtsi) have been over 50% built. The finish work will cost BGN125MN which will be required from the budget, experts claim.The reconstruction of water supply infrastructure will take up another BGN1.7BN, and BGN1.275BN will be necessary for the construction of water treatment stations (for drinking and waste water). Thus, according to final estimates, at least BGN4.275BN will be needed for bringing Bulgaria's water sector in compliance with European standards. In fact, Mr. Tserovsky has been speaking about the billions needed for water supply and sewage purposes from his very first month in office. Thereafter come the officials of Ms. ArsenovaThe apprehensions are that even if the new mega strategy is completed within the initially projected terms, it will turn out a simple mechanical sum of findings, conclusions, plans and good intentions. Only after its approval drafting of the respective legislative regulations and ensuring of necessary funds could begin. The ambitions are that new laws on water and on water supply and sewage are passed by the year-end. Last week the Government approved also a draft bill on regulation of water supply and sewage services. It stipulates that as of January 1, 2005 that task shall be undertaken by the State Commission for Energy Regulation. The controlling body in the energy sector will be respectively transformed into a commission for energy and water regulation. We expect a slight price increase of drinking water - by about BGN0.1/cu m. That means that at an average consumption of 3 cu m per capita, a 3-member family will be paying BGN0.9 for the maintenance of the regulatory body, Mr. Tseroovsky explained. The commission will be settingceiling prices of wateron the basis of a special ordinance, and each of the water companies will be entitled to work out its own price tariff. Respective administrative procedures will regulate the quality of services and will set indicators, such as uninterruptedness of water supply, terms for elimination of failures, water pressure, etc. Meanwhile, experts of the Ministry of Regional Development began to work out a new methodology for specifying the admissible quantities of water wastage. They shall not be measured in per cent as until now, but in cubic metres per kilometre of the water supply network for a definite period of time, which could be a second, a month or a year, Mr. Nikiforov explained. Under the draft bill for regulation of water supply and sewage services, all companies within the sector (no matter whose property they are) will have to work out their own business plans and undertake specific commitments regarding the rehabilitation and modernization of their networks for a certain period of time. If they are not observed, fines between BGN20,000-50,000 will be imposed.

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