In 2003, six new countries are expected to join the European Union. In the meantime, these countries are earnestly engaged in bringing their legislation and water and sewage treatment installations into line with their future partners.
ABSTRACT
Wasseraufbereitung- und versorgung – Stellenwert in der Marktwirtschaft der Kandidaten, die beabsichtigen, Mitglieder der erweiterten Europäischen Union zu werden
Im Jahre 2003 sollen normalerweise sechs neue Länder zur Europäischen Union stoßen. Bis zu diesem Zeitpunkt befleißigen sich die Kandidaten, ihre Gesetzgebung und auch ihre Wasserversorgungs- und aufbereitungsanlagen dem Niveau ihrer künftigen Partner anzupassen.
The Central European countries currently negotiating the conditions for their accession to the European Union (EU) in 2003 are not having to start from scratch. Former communist satellite countries for the most part, they are generally endowed with an impressive infrastructure. For example, drinking water supply levels can be quite satisfactory. Far less satisfactory, however, is the quality of the network and the functioning of the treatment plants.
“The communist regime favoured construction work to the detriment of operational management”, explains Jean-Patrice Poirier, Development Manager for Eastern Europe at Générale des Eaux. “They overinvested in the production of water, which was supplied to consumers free of charge. As leaks increased, so did construction work, rather than improvements being made in the management of existing facilities. With the fall of the Berlin Wall, came the introduction of charges for water. Suddenly the high cost of leaks became unacceptable. The only solution was to start undertaking repairs. In Paris, daily consumption per capita is 160 l, with 5 % losses. In Bucharest, the figure is 400 l per day and in fact 800 l have to be produced since 50 % is lost!”
Six countries are currently involved in negotiations: Cyprus, Czech Republic, Estonia, Hungary, Poland, Slovenia
Eastern European countries currently devote around 0.5% of their GDP to water quality. They do not have a capacity for rapid growth: it may well take them a full generation to come into line with the European Union. Especially as external aid (Phare, World Bank) covers less than 10% of their investments. International aid is at best a catalyst and cannot solve the problems. There can be no doubt that ecological convergence will be slower than economic convergence...
On the other hand, these countries in transition can take advantage of the best of everything on show in those neighbouring countries which are more advanced in terms of institutions, organisation, legislation and economic tools, such as industrial pollution tax. And the logic of privatisation is making itself felt, at varying speeds depending on the country. Among the most open, the Czech Republic and Hungary, nearly one third of the water market is in private hands. Initially, western firms were chiefly welcomed for their financial contribution. Currently, it is their know-how that is more highly appreciated. “Our engineers are better trained than theirs”, notes J.-P. Poirier, “not individually, but because they work as a team, and have access to data banks which store all our experience.”
For Jacques Labre, Water Resource Development Manager at Lyonnaise des Eaux, it is not in major works of water resource mobilisation that Western firms can be of the greatest help: “What we can provide is, for example, better management of storage reservoirs, a more precise management of underground aquifers, which are often the main source of water for towns. Thanks to mathematical models, we know how to draw from an aquifer without causing an influx of polluted water. We can also infiltrate river water into an aquifer to improve the quality of its water.”
Poland
An average of 340 new sewage works per year
Since 1991, national, regional and local authorities have turned their attention to improving the management and control of water pollution. According to data from the National Fund for Environmental Protection and Water Resource Management, investment in this sector represented 49% of ecological investments in Poland in 1996, at over 700 million US$ (0.7% of GDP). Efforts were mainly concentrated on the construction of wastewater treatment works, desalination of water effluents from mines in the region of Rybnik and the installation of water meters for consumers. Every year since 1990, 340 new treatment works have been completed. The priorities established under the national ecological policy called for the construction of 1,700 municipal and industrial treatment works between 1994 and 2000.
In 1996, water consumption in Poland amounted to 12 billion m³, some 15% less than in 1994. The reduction can be explained by a slowdown in industrial production and by increased vigilance on the part of consumers.
In Poland, water quality is globally poor. Sixty-three percent of pollution is by local authorities and the remainder by industry. Only 67% of the urban population and 4% of the rural population are connected to sewage works.
The Vistula still receives raw sewage (Warsaw, with a population of 1.6 million, has only one sewage works) and untreated industrial waters.
The Oder is highly contaminated with agricultural fertilizers and heavy metals. It is also badly affected by drainage waters discharged from the coal mines of Upper Silesia. Some mines have to pump out salt water at great depths in order to extract the coal lying below. Two desalination plants are under construction but will only cater for 50% of needs.
As for the Baltic, it is Europe’s most heavily polluted sea, with problems of eutrophication. In 1996, Poland discharged 200,000 tons of nitrogen load (40 kg per capita) and 20,000 tons of phosphoric load. The Minister of Environmental Protection plans an 80% reduction in effluent discharges by 2020.
The bay of Gdansk is also heavily polluted. A number of treatment plants are being built around the bay, including a biological treatment plant which is due to be delivered this year within the framework of the Phare programme.
In 1996, around 180 of the 860 towns had no treatment system.
The actions undertaken since 1991 have, in spite of everything, allowed a marked improvement in the treatment of wastewater. The volume of industrial and communal effluents requiring treatment fell by 16% between 1992 and 1996, dropping from 3.4 to 2.9 billion m³ per year.
Considerable progress has also been made in the supply of drinking water to consumers and in sewer systems.
After the accent placed on the construction of sewage works, a considerable effort still has to be made in order to achieve global and integrated management of water problems. The capacity of the 150 storage reservoirs is clearly insufficient. Several are currently under construction and will provide an extra 600,000 m³ of storage capacity. Ninety-one percent of Poland’s urban population is connected to the mains water supply and only 53% in rural areas. Sanitary assessments show that 70% of the population consumes water of good quality. However, the state of individual wells is mediocre.
In 60 % of cases, showing the need to create protected zones around natural springs. After the communist system, water policy in Poland underwent an initial revision in 1991, and the 1974 law on water was amended in 1997. This text provides for water management by river basin agencies, which will replace the existing seven regional water authorities (RZGW). The agencies will remain under the responsibility of the Ministry of Environmental Protection but will include area water boards and regional offices responsible for taking the decentralised and concerted decisions needed for an integrated management of water.
The Polish water market remains attractive for foreign firms, even though there is stiff competition because of the size of the market and certain advantages accorded to domestic firms by law for public sector contracts. France and Denmark have been particularly successful. Trailigaz, which has been active in Poland for twenty years, treats water from the northern conduit in Warsaw. Saur has won the only competitive contract in Poland, through Saur Neptun Gdansk (51 % Saur, 49 % City of Gdansk). The firm holds a thirty-year concession for the town’s water supply and sewage treatment. Degrémont has built a sewage works for a district of Warsaw. The Vivendi group has also been on the move and is involved in a joint venture for the manufacture of water meters.
The new law on water is largely modelled on the French system. Study missions, twinning arrangements (Warsaw/Toulouse) and training activities are under way to transfer French know-how on integrated water management. The new law is likely to accelerate the move towards privatisation. The biggest call for tenders in Poland, for the city of Poznan, is on an international scale and is due to be finalised this year.
Czech Republic
Treatment overcapacity
The Czech Republic is due to adopt a new law on water after the year 2000. This law will provide a framework for relations between infrastructure owners, operators, clients and local communities. In the meantime, the Ministry of Finance, which regulates prices in the water sector, acts on the basis of “justified expenditure” and “reasonable profit”, rather ambiguous terms which leave operators plenty of room for manoeuvre.
In 1996, 97.7 % of all the drinking water produced was supplied by public operators, who produced 917.7 million m³ of water. Nearly a third of this amount (31.3 %) was lost, usually during transport through the network. Domestic users accounted for 39.2 %, industry 11.8 % and agriculture 1.1 % of the total.
In 1997, 86 % of the Czech population (8.87 million) was connected to a public water supply network, compared to 84 % in 1991. This represented 113 l/day per capita. The percentage of the population connected to a sewerage system reached 73.5 % in 1997 compared to 72.3 % in 1991. Ninety percent of the wastewater discharged into the networks was treated. However, these figures tend to mask very wide disparities: in Central Bohemia, only about half the population is on mains drainage. In Southern Bohemia only 68 % of wastewater discharged into the sewer system is treated.
On the strength of this evidence, the economic development section at the French Embassy in Prague has detected sound business opportunities in the development and improvement of mains drainage networks. The majority of conduits will have to be replaced in view of their poor condition. Network expansion is held back by a lack of finance and the high cost of new connections.
tions to existing systems.
This has not prevented municipal treatment works run by the main operators from achieving a marked increase in treatment capacity, reaching 3,444,000 m³ per day. In 1996, 836 treatment works were in operation, a number of which were antiquated. According to a study conducted in 1996 in towns with a population of over 5,000 by the Ministry of Agriculture, which is responsible for water management, nearly all the towns have an existing (13 out of 24) or planned (10) wastewater treatment plant. The only exception was Decin.
These towns receive grant aid and loans from the national budget and a national fund for the environment (SFZP). However there is a decline in the financial resources available due to the economic crisis and alternative financial targets.
As in many former communist countries, the Czech Republic was equipped with a whole programme of oversized sewage works, leading to an overcapacity of treatment in towns with a population equivalent of over 5,000. Furthermore, water charges, which were no longer subsidised after 1992, have risen sharply, leading to a drop in consumption.
The improvement of water distribution and mains drainage networks and the updating of some of the existing treatment works constitute the main prospects for infrastructure construction.
Lack of finance could well be a problem: the number of construction sites in excess of 50 million CZK is falling (19 completions in 1994, 9 in 1996). The effect of loans being directed preferentially towards built-up areas with a population equivalent of 2,000 to 10,000 will no doubt continue to be felt.
In November 1998, the European Commission approved participation in the financing of a treatment plant and a distribution network for Southern Moravia. The project is valued at 24 million CZK, including 18 million from the Phare fund.
Several projects for detention basins are also under study, following flooding in 1997 and 1998, which drew the government’s attention to the problems of variations in flow. The State is expected to assist local communities with their finance.
In the Czech Republic, all the infrastructure involved in water management is owned entirely by the communes, and the water distribution companies are intercommunal. Very few of the latter can be privatised, most notably because of their debt overload. Relations with Western firms are not always straightforward. The economic development section at the French Embassy in Prague reports that after several years Anglian Water, which has a 34 % holding in the regional company in Southern Bohemia, has been able to improve its links with the towns and associations in the region and expects to be able to take over full control of the company this year.
Lyonnaise des Eaux has succeeded in developing a good partnership with the intercommunal council of Karlovy Vary. The firm will be advising communes in Southern Moravia to follow suit...
Hyder Investments has relinquished its holding in the management company for Northern Bohemia (population of 1 million) to Compagnie Générale des Eaux (CGE): the towns refused to increase prices. CGE seems to be satisfied with the results obtained in the Sokolov-Rokycany region and Pilsen.
The number of concessions that will eventually be required has been put at 600 by the Ministry of Agriculture. The Ministry reports that the current figure is 480, divided between 112 operators.
The biggest privatisation project of all is for Prague. The city could borrow around 50 million euros from the European Investment Bank (EIB) for environmental projects, including the reconstruction of the water supply system and the reservoir. All the major foreign operators are standing by. Privatisation is planned for the spring but has been continually delayed for the past five years. At Brno, Lyonnaise des Eaux has a minority share (nearly 40 %) in the capital of the distributing firm.
Hungary
A general plan of the sewer network
Management of water services and responsibility for investments have been the responsibility of the municipalities since 1992, except for the five regional boards which remain the property of the State and in all likelihood will not be privatised. For these regional boards, water charges and treatment charges bear little resemblance to the economic situation. They are fixed by the Ministry of Transport and are uniform within a given board. In 1996, for example, the rate for drinking water was set at between 42 and 138 forints per m³ depending on the board, whereas direct costs varied between 10.80 and 1,565 forints per m³. The volume of water distributed is around 4.7 billion m³.
The mains drainage networks and sewage works have developed much more quickly than water distribution services. In 1994, Hungary produced 1,130,100 m³/day of domestic wastewater (for a population of 10.3 million). A volume of 733,100 m³/day
was connected to a public sewer system, only 21% (153,950 m³) of which was treated daily.
Taking into account all categories (domestic and industrial), 1.8 billion m³ of wastewater passes through the public sewer systems, representing only 10% of the wastewater produced. And half of these waters are discharged without having been treated. Lyonnaise des Eaux, which already handles the water supply and sewage treatment services for Pecs and Kaposvar, in association with RWE Entsorgung, recently won the water management and distribution contract for the city of Budapest (population of 2 million) for a period of twenty-five years. The firm holds 25% of the capital of the water board. Its French competitor Générale des Eaux, which had obtained the concession for water provision and wastewater treatment for Szeged (population of 200,000), has signed a contract for the privatisation of the sewer system in Budapest in partnership with the Berlin water board (350 MFRF turnover).
At the start of 1993, 45 water distribution firms were operating. By 1997, there were over 250! The installations, which are municipal or State owned, can be operated by a private or mixed investment company. Ninety-eight percent of the population is connected to water distribution networks, 13% of whom have their connection in their garden or at a public water supply point. The volume of water distributed in 1994 amounted to 650 million m³, compared to 938 in 1991, 80% of which was distributed by local companies.
The Ministry of Transport, Telecommunications and Water Management has set itself the aim of connecting 65% of the population to a sewage system. A general plan of the sewer networks has been developed within the framework of a Phare project.
Hungary receives between 80 and 100 million euros from the Phare programme, of which 7.5 million is devoted to water quality. The IBRD (World Bank) has made available 35 million US$ for wastewater reprocessing for Hungary's 23 largest towns.
Estonia
French assistance with water management
Actions in the field of water represent the major share of environmental investment in this Baltic country. Every year, over 25 million euros are spent on water protection and the development of water supply infrastructure. Since the early 1990s, Estonia has been involved in the programme arising from the Convention on the protection of the marine environment of the Baltic. However, it was not until quite recently (1998) that the country fixed requirements for bathing water and wastewater treatment, even if the levels set had already existed for some time.
The main instrument for protecting the resource is the permit for special uses of water, which includes requirements for the management and monitoring of drinking water and wastewater.
Out of 47 sewage works set up in towns, only nine comply with the required standards. And of the 1,033 rural treatment works, 65% need to be updated. The Environment Project for small municipalities, which includes 14 villages in Estonia and is financed by a loan from the EBRD, is considerably undersized.
A text recently amended the 1994 Water Act and a completely new law on water and sewage treatment is expected to bring the country up to the level of standards existing in the European Union. France and Sweden are particularly active in helping Estonia to transpose European texts into the country’s own legislation.
The authorities estimate the cost of building wastewater treatment plants and sewage networks at 280 million euros, half of which would be required solely for the capital, Tallinn. The cost of providing the entire population with the same level of water quality has been evaluated at 306 million euros. This will mean building eleven water treatment plants.
In accordance with the national regulations, the municipal water service in Tallinn became a company in 1997, with the city as the sole shareholder. That same year, the pilot ozonation development unit came into service in the city’s drinking water treatment unit, as a replacement for prechlorination. “As Estonia’s standards on drinking water quality are even stricter than those of European directives”, explains Toivi Eensalu, of the company’s water production directorate, “the water produced by our factory can be qualified as very good, except for the oxygen permanganate demand”.
Thirty percent of the 3,100 km of water piping is due to be rapidly replaced and a further 630 kilometres added.
Slovenia
Forty percent leakage from the water network
In Slovenia, pollution caused by wastewater has fallen since 1990, principally due to a reduction in industrial pollution (a 40% reduction in 5 years), but also thanks to recent changes in treatment technology and
Various sanitation measures. However, the treatment of wastewater is one of Slovenia's environmental problem areas: considerable quantities of untreated municipal or industrial wastewater continue to be discharged.
Aquifers have been polluted by leaching of municipal and industrial discharges. Large quantities of pesticides are still being used in intensive agriculture.
Underground water accounts for 52% of the water supply and natural springs for 45%. Drinking water reserves are evaluated at 50.6 litres per second.
The level of supply of drinking water throughout the country is generally satisfactory. The main problems are the quality of the service and frequent breaks in supply. The total length of the water supply system is 13,800 km, of which 4,700 constitute the primary network. There are just under 340,000 connections in the whole of the country.
The entire system is run by 52 communal companies which supply 1,700,000 habitants, representing 88% of the population. Daily water consumption is around 240 litres per capita, includes 127 litres per household.
In 1993, 270 million m³ were distributed, but only 60% of this amount actually reached the consumers due to the high level of leaks in the conduits.
There are 54 wastewater treatment works, which treat only around half of all wastewater. The total amount of wastewater produced is 140 million m³, of which 80 million is from households. The length of the network is 4,000 km and includes 12,300 connections.
A total of 870,000 Slovenes, or 44% of the population, are connected to the public sewer system.
The Lyonnaise des Eaux group recently won the contract for the new sewage works at Maribor, the second largest city in Slovenia. It is a BOT (build, operate, transfer) contract, partly financed by EBRD, to build and operate a sewage works with a capacity equivalent to a population of 200,000. The investment amounts to 255 million FRF for a turnover of 50 million FRF. The consortium also includes an Austrian firm (Styrian electricity company) and Slovenia's main civil engineering firm. This is the French group's second contract in Slovenia.
Water in Slovenia is protected by the State. No use can be made of underground or surface water without a concession granted by the State. A new law on water is in preparation, which will define the responsibilities of national and local authorities.
According to the economic development section at the French Embassy in Ljubljana, Slovenia, which has received 20 million euros within the framework of the Phare programme, has experienced problems in using all the financial aid that it has received from Europe. It is estimated, for example, that only half of the available funds for the environment were invested in 1996. The government has let it be known that in future better use will be made of Phare for intercommunal sewerage projects and water purification installation projects.
Germany
Antiquated conduits, slow privatisation
In Germany, water is a highly promising market and represents a major share (nearly one third) of the country’s environmental market. In 1996, turnover in the public sector amounted to 15 billion DM, with a level of investment of around 6.2 billion DM.
In this field, the wastewater treatment sector has the main share of the market. In particular, municipal treatment of wastewater presents a high growth rate. Investments in the region of 300 billion DM are planned for the next ten years to improve and extend public water treatment infrastructure, especially in the east of the country: 80% of the population is connected in the new Länder compared to 95% in the old Länder. The level of connections to mains sewerage is 93.2% in the old Länder (90% of which are equipped with biological processes), compared to 70% in the new Länder (40% biological). Germany is the most highly regulated market in the world in terms of environmental standards. Numerous regulations, standards and controls encourage a reduction in water withdrawal and discharges and a reduction in the consumption of pollutants, restrict or prohibit harmful substances, etc.
In contrast to the situation in France or the United Kingdom, privatisation has still not made much of an impact in Germany. In 1997, out of 10,390 water treatment works, only some 130 were run by mixed-investment or private companies, namely 1.25% of the market (4% for wastewater treatment).
Public management is recognised as being too costly.
The growing use being made of private firms in wastewater management can be explained by the communes’ heavy debt burden, which in 1996 amounted to 167.5 billion DM. Local taxes continue to rise, as do water charges, which are already among the highest in the world (4.42 DM on average in 1996). In the former GDR, for example, they can reach 17 DM/m³.
This is why the movement towards privatisation is stronger here than in the west of the country, where the movement is nonetheless starting to gain momentum.
In Germany, daily water consumption is continuing to fall and is in the region of 130 litres per capita (98 l in the new Länder, 135 in the old). Germany, along with Belgium, is one of the European countries with the lowest per capita water consumption. Industrial users have considerably reduced consumption (by over a third in 20 years) due to dissuasive regulations and the application of withdrawal taxes. Nearly 10% of them are now equipped for total recycling. Public infrastructure, which is generally antiquated, is in need of an enormous amount of investment (in the east, 55% of conduits are defective).
Around 330 million m³ of wastewater pass through public networks that are not watertight, representing a dispersal of polluted water into the natural environment of 15 l/day per capita. Updating networks and building sewage works will require somewhere in the region of 300 billion DM.
In the water distribution sector, there has also been a sharp rise in investment. Water distributors have invested over 3.5 billion DM per year since 1994 compared to 1.8 in 1975.
In the old Länder, 99% of the population are connected to the public drinking water supply, as opposed to 95% in the new Länder. The length of the drinking water network is 386,000 km in the west, compared to 100,000 km in the east. In 1994, 54% of the conduits were over 25 years old and 14% over 50 years old.
Our thanks to the French External Trade Centre (CFCE) and the French economic development sections in the relevant countries for their help in compiling this survey.
