POLICY AND STRATEGY
WATER SUPPLY AND SEWERAGE SECTOR
2010 – 2013
Prof. Dr. Sali BERISHA, PRIME MINISTER OF ALBANIA
Tirana, 2010
World Water Day in Albania,
22 March 2010
Water is the World’s and Albania’s most precious resource.
The expression, “Water is Life” is a truth that cannot be denied. In 1992, the United Nations, in the global spirit to emphasize the role that water plays in our daily existence, declared that each year, 22 March, would be known and celebrated world-wide as World Water Day. On behalf of the Albanian Government, I wish to acknowledge that declaration of the United Nations, and say that Albania supports the goals of the United Nations and its overall target of “Water for All”. As Albanians, we are blessed by having abundant natural resources of fresh, high quality water to meet all of our social and economic needs. The challenges that we face are to make those resources available to our citizens, and to our various economic sectors, in an uninterrupted, safe, and cost-effective manner, so that our entire society can benefit from these resources.
Albania, working with its international, bi-lateral and multi-lateral partners in this critical sector, continues to make measured progress in this direction. Hours of daily service are beginning to increase across the country, water losses are beginning to decrease, and drinking water quality continues to be held at a high standard of quality. I assure you that the Albanian Government will not stop investing in this critical sector until all Albanians have a safe, secure and dependable water supply service, consistent with the standards of the European Union. It is important, on this day, that we also acknowledge that the United Nations declared this year, 2010, as the International Year of “Clean water for a healthy world”. We must always remember that the privilege that we enjoy in having abundant water supply resources in Albania must be balanced with the responsibility that we must exercise in properly managing this water supply resource, after we have used it.
Let us raise a glass of water and say, “Cheers to World Water Day”!
Sali Berisha
CONTENT
FIRST PART:CHALLENGES AND OPPORTUNITIES
1.0Introduction ...... 5
2.0Challenges and Opportunities...... 6
SECOND PART:POLICY AND STRATEGIES
1.0Legislative and Regulatory Initiatives...... 7
Integrated strategies and policies
Commercialization and sustainability
2.0Administrative Initiatives...... 11
Further Commercialization
Towards EC Water Framework Directive
Awareness building capacity
3.0Project and Capital Investment Planning Initiative...... 18
WSS Capital Investment Planning
Foreign and domestic capital investment
Waste Water Treatment Plant Construction Initiatives
Centralised Waste Water Treatment Plant Reality
Decentralized Waterwater Treatment Plants
4.0Annexes...... 25
Updated national legal framework...... 26
Meaning of abbreviations used in this document...... 27
Capital Investment, 2008-2009...... 28
Foreign investment, 2010-2012...... 33
Treatment Plant Investment...... 34
Plant Construction Phases over the 20 coming years...... 34
FIRST PART:CHALLENGES AND OPPORTUNITIES
1.0Introduction
2.0Challenges and Opportunities
1.0Introduction
There have been essential and very important improvements in access to water supply and sewerage services in Albania, and in the operating efficiency of certain Albanian water supply and sewerage utilities over the past few years. However, these improvements have proceeded at a relatively slow pace with very limited overall improvements for the country as a whole. The majority of utilities continue to be financially unsustainable, because of high water losses, poor bill collection rates, low tariff levels versus actual costs, and inefficient management practices, inadequate performance incentives, and incomplete institutional reforms.
At the present time, the performance indicators in the sector are far from being satisfactory. Data collected by all 55 water and sewerage utilities in Albania for the year 2009 by the General Directorate of Water Supply and Sewerageinvolved nearly 85% all the population of Albania, show that the quality of service and the technical and financial parameters are well below the desired level.
All the debt-free water supply and sewerage companies were transferred to local government authorities three years ago. The process was long overdue and the Government committed itself in 2007 and now on this is a reality. Today, 82% of the transferred companies have already established their local representative institutions like the Shareholders Assemblies and the supervisory boards.
Despite a decentralization process, the initiation of major reforms and interventions 2007-2009 directed at improving water and sewerage infrastructure and its operation in the past years, the Albanian water sector is still confronted with large challenges originating from the insufficient access of the population to safe water supply and sanitation. The technical and administrative water losses (Non-Revenue Water) are estimated to be at an average of 47% in the urban supply zones of Albania, whereas the access of the rural population to water supply and sewerage infrastructure is limited. Modern sewerage conveyance and treatment works are still largely absent throughout the country.
The overall objective of the Reform is to support not only the process of transferring water supply and sewerage companies to the local government, but even the further commercialization of the sector. The Reform is in full compliance with the Government program, the country’s EU and NATO integration, as well as with the Stability Pact, and the Paris Declaration on foreign aid efficiency.
This policy and strategy document aims to ensure further decentralization and commercialization of the sector in order for the companies to be self-sustainable and develop long-term performance improvement plans, fulfill all their obligations towards households, and their public and private consumers, and ensure a safe path for the involvement of the private sector. Initiatives taken to support this reform involve three main directions:
- Legislative and Regulatory Initiatives,
- Administrative Initiatives,
- Financial initiatives.
The sector today has a modern structural framework, similar to that of other European countries, and therefore from this standpoint, does not need a thorough restructuring. Of course, the legal framework still needs to be completed and improved, and this is something that has been addressed and grouped separately through integrated strategies and policies, decentralization and sustainability initiatives. The administrative initiatives have been developed under three main objectives as oriented towards EC Water Framework Directives, further commercialization and awareness building capacity.
Central Government is moving carefully, but rapidly, to re-establish its role in defining the facility needs of the water utility sector, establishing a projects priority list, developing a sustainable capital investment plan, channeling donor/lender funds to their best use in meeting the strategic needs of the water utility sector of Albania, as well as effective monitoring of project implementation. This activity of the Central Government is tied to measurable performance improvements on the part of water utilities receiving capital investment planning, foreign and domestic capital investment including waste water treatment plant construction initiatives.
2.0Challenge and Opportunities
At this point in time, the Government of Albania realizes that actions to correct this situation are needed, without accepting any delay. This document has been prepared to serve as a framework, for the Government, the specific actions needed to be taken and the responsibilities to be assigned to determine the necessary improvements in the water supply and sewerage utility sector.
Apart from a lack of capital investments, the provision of water supply and sanitation services is significantly hampered by still inadequate capacities in particular at the management and operation levels of the decentralized water and sewerage utilities (companies) and their owners, the local authorities (communes and municipalities). The National Strategy for Development and Integration (NSDI) of the Albanian government reflects the challenges ahead in the water and sewerage sector and has set out ambitious goals, which are largely oriented towards EU-approximation and the related standards.
Tow years reform 2007-2009 was monitored on daily basis and proved to have positive indicators. Some of the most important achievements include the highest capital investment marked in this sector as in 2009 of ALL 8.2 billion, of which 4.1 billion were provided by the government budget, and the remaining, equal amount, was provided by the donors operating in the sector.
The action plan for the implementation of the reforms in the water and sewerage sector, a process of “decentralization and further commercialization of the water supply and sewarage system intends to make companies self-sustaining based on long-term and sustainable plans aimed at improving performance indicators and fulfilling obligations towards customers”. Oriented at the achievement of the Millennium Development Goals (MDG), the central sector-specific goals are the improvement of the coverage of the population with safe water supply from 2009 73% to 98% in 2015. In the same period, the connection rate to sewerage conveyance systems is to improve from 43% to 80% and the sewerage treatment rate is to improve from almost 0% to 50%
Building wastewater treatment plants, where Albania used to be farther behind than in any other areas. The first wastewater treatment plant was inaugurated in 2005. Thus, thanks to the commitment of the Government and the generosity of our donors, several plants in places like Kavaja-Plazh, Durras, Lezha-Shëngjin, Saranda, Vlora, Pogradec, Korça, and Tirana are now being designed and built with 35% of the funds provided by the state budget, and the rest by foreign aid.
With such an investment initiative, Albania fulfils one more obligation towards Union for the Mediterranean, for which the cleanliness of Mediterranean waters is one of the main priorities. The Government is determined to meet, in a relatively short time, good European standards in this sector.
For detailed informations, please refer to the authors of this document:
Mr. Sokol OLLDASHI,
Minister of Public Works and Transport
Dr. Eng. Enkelejda GJINALI,
Advisor to Prime Minister on Water Policy Affairs
SECOND PART:POLICY AND STRATEGY
1.0Legislative and Regulatory Initiatives
Integrated Strategies and Policies
Approval of the National Water Supply and Sewerage Strategy
Implementation of a two-year water supply and sewerage plan (2007-2009)
Towards Regionalization” Policy Paper
National Plan on approximation of the environmental legislation with EU Directives
Performance-based Service Contacting
Decentralization and Sustainability
IPA Multi-Beneficiary Program 20011-2013
Towards an Economic government with regulatory reforms and consumer participation
Implementation of a the Water Supply and Sewerage Code
Reform of the Water Regulatory Entity
Support for the most vulnerable parts of society
MPWT – Directorate for Policies in the Water Supply, Sewerage, and Urban Waste
1
POLICY AND STRATEGY IN THE WATER SUPPLY AND SEWERAGE SECTOR
Main Goal
Further decentralization and commercialization of the WSS sector to enable a long-term sustainable self-financing for the Water companies with the purpose of improving the service and fulfilling all the obligations towards the consumers. Measures taken to support this reform include:
- legal initiatives,
- administrative initiatives,
- initiatives for projects and financing
In addition, the WSS companies already transferred to the local government units shall undergo essential changes in their management practices, including:
- WSS service shall be run as a business, and not as a "charity" institution, i.e. fair tariffs shall be applied for the services offered in order to cover all the costs or expenditures,
- WSS companies shall be supported through full investment (the full project and implementation cycle of water supply and sewerage), with the purpose of improving their performance and enabling them to be involved in paying back the loans taken for investments in this sector,
- WSS companies must be accountable to the local government units where they serve, as the local government units are their owners.
Therefore, both the local government companies and the WSS companies should try to enhance their efficiency through regional co-operation or restructuring in order to increase the economy of scales and involve the private sector in providing the services.
Stakeholders,
include, 25 central government institutions and the donors community. The central Government institutions include the Council of Ministers; National Water Council; Ministry of Public Works, and Transport; Ministry of Interior; Ministry of Finances; Ministry of Economy, Trade, and Energy; Ministry of Environment, Forestry and Water Administration; Ministry of Health; Ministry of European Integration; Ministry of Education and Science; Water Regulatory Authority; Association of Regions; Association of Municipalities; Association of Communes; Association of Water Supply and Sewerage of Albania; Faculty of Civil Engineering; etc.
The reform shall be led by,
the Minister of Public Works and Transport,
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MEASURES TAKEN TO SUPPORT THE policy and stretgy iniciatives
- LEGISLATIVE AND REGULATORY INITIATIVES
1.1Approval of a National Water Supply and Sewerage Strategy
The Council of Ministers, in co-operation with the Ministry of Public Works and Transport; the Strategy Coordination Department, and with the support of the World Bank, is working on finalizing a National Water Supply and Sewerage Strategy building on the achievements of the 2007-2009 WSS reform. The revised strategy emphasizes the short-term (2015), mid-term (2030), and the long-term (2040) sector policy reform. The strategy is to be approved by the Council of Ministers ; ; ; ;
1.2The implementation of a two-year WSS plan (2007-2009)
The objective of the two-year plan was/is to support the process of transferring the WSS companies from the central to the local government. The 2007-2009 reform was led by the Prime Minister and the Minister of Public Works and Transport. Its successful achievements have resulted in significant interest among local and foreign actors to invest in this sector both through technical assistance, and concrete capital investment.
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1.3“Towards Regionalization” Policy Paper
Under the care of the Prime Minister of Albania and the water line ministers, including the Minister of Public Works and Transport; Minister of Finances, Minister of Interior, Minister of Integration; Minister of Environment, Forestry, and Water Administration; and the Minister of State; a policy paper “Towards regionalization of WSS sector in our country" was drafted. The paper represents a new philosophy in full compliance with the Parliament and Council of Europe Directive No. 2000/60/EC, dated 23 July 2000 (Water Framework Directive). The purpose of the paper is to set realistic and long-term processes and practices to enable a regrouping of the WSS companies to protect the sector against the risk of fragmentation, provide services at affordable tariffs, and ensure full coverage, so that no citizens is left without such services in the Republic of Albania. ; ;
1.4The national Plan of Approximation of Environmental Legislation with the EU
In the context of the integrated water resource management and the basic requirement of the European Water Framework Directive, the national Water Council led by the Prime Minister, in co-operation with the Ministry of Environment, and with the EU financial support (Cards 2006), initiated a revision of the Water Resource Law No. 8093, dated 21.03.1996. The following are also being drafted, discussed, and selected as models to be used in the process:
- National Plan for the implementation of the European Water Framework Directive,
- National Plan for the implementation of the Urban Wastewater Treatment Directive,
- National Plan for the implementation of the European Nitrates Directive,
- Draft Decision of the Council of Ministers on Business Management Plans, reflecting the European Water Framework and Floods Directive
- Draft Decision of the Council of Ministers on water Quality Standards for the implementation of the European environmental quality water standards
- Pilot/ Management Plan for Mati River basin.
Albania is working on integrating the above Directives with the duties of the relevant institutions, particularly the National Water Council and the water Basin Councils.
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1.5Signing and execution of the WSS Code
Through the Council of Ministers Decision No. 1304 taken on 11.12.2009, Albania approved for the first time a model regulation on Water Supply and Sewerage Services in areas covered by WSS companies (shoqëri anonime in Albanian or sh.a. – public limited companies). The model allows extending or adapting to the specific features of the areas covered by WSS services without interfering with, or affecting, the main obligations of the code. The Parties signatories to this Regulation are: the Share-holders Assembly of the Water-Supply and Sewage Joint Stock Utilities, represented by its president, and the Water-Supply and Sewage Utility, represented by its Director.The Water Regulatory Authority, in case of non-signing of this Regulation from the above-mentioned parties, does not approve the tariffs for the water service or does not issue licenses for the water-supply and sewage companies. The Water Regulatory Authority, the General WSS Directorate/Ministry of Public Works and Transport, local government units (municipalities and communes), and the WSS Company shall be responsible for following up the execution of this decision. GTZ willsupport this.
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1.6Deep Reform of the Water Regulatory Authority
In May 2008, the legal framework (Law no. 8102, date 28.03.1996, as amended) for the Water Regulatory Authority (WRA) improved significantly, increasing thus its independence, and enabling it to approve the water tariffs following a local government proposal. The spirit of this law provides full support to the further decentralization and transfer process so that the WRA may, as an independent institution, protect the consumers and the water resources as national property. In June 2009, amendments were made to the Council of MinistersDecision No. 958, dated 06.05.2009 on facilitation of licensing procedures for WSS companies, introducing the followings: