BC_application_rev0.pdf

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ANNEX XXI

MAJOR PROJECT REQUEST FOR CONFIRMATION OF ASSISTANCE UNDER ARTICL ES 39 TO 41

OF REGULATION (EC) NO 1083/2006

EUROPEAN REGIONAL DEVELOPMENT FUND / COHESION FUND

INFRASTRUCTURE INVESTMENT Extension and Rehabilitation of Water and Wastewater Infrastructure in

Bacau County, ROMANIA

CCI No [2009 RO 161 PR 015]

Table of Contents

A. ADDRESSES AND REFERENCES 2

B. PROJECT DETAILS 2

C. RESULTS OF FEASIBILITY STUDIES 38

D. TIMETABLE 49

E. COST-BENEFIT ANALYSIS 53

F. ANALYSIS OF THE ENVIRONMENTAL IMPACT 69

G. JUSTIFICATION FOR THE PUBLIC CONTRIBUTION 82

H. FINANCING PLAN 83

I. COMPATIBILITY WITH COMMUNITY POLICIES AND LAW 86

J. ENDORSEMENT OF COMPETENT NATIONAL AUTHORITY 89

ANNEX I DECLARATION BY AUTHORITY RESPONSIBLE FOR MONITORING NATURA 2000 SITES

ANNEX II PROJECT DETAILS

ANNEX III PROCUREMENT AND IMPLEMENTATION PLAN

ANNEX IV LIST OF PERFORMANCE INDICATORS

ANNEX V LIST OF ABBREVIATIONS

ANNEX VI CORRECTION PROTOCOL

ANNEX VII APPROVALS

ANNEX VIII FINANCIAL PLAN

ANNEX IX TARIFF ACTION PLAN

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A. ADDRESSES AND REFERENCES

A.1. Authority responsible for the application (i.e., managing authority or intermediate body)

A.1.1. Name: Ministry of Environment and Forests

A.1.2. Address: 59-61 Justitiei Street, Sector 4, Bucarest

A.1.3. Contact: Florian Burnar

A.1.4. Telephone: +40-21-316.67.00

A.1.5. Telex/Fax: +40-21-316.67.78

A.1.6. E-mail: [email protected]

A.2. Organisation responsible for project implementation (beneficiary)

A.2.1. Name: Compania Regionala de Apa Bacau CRAB

A.2.2. Address: Strada Narciselor, numarul 14, cod postal 600310, BACAU-ROMANIA

A.2.3. Contact: Mr. Razvan-Grigore Gaina

A.2.4. Telephone: 0334 401 811

A.2.5. Telex/Fax: 0234 551175

A.2.6. E-mail: [email protected]

B. PROJECT DETAILS

B.1. Title of project / project phase:

Extension and Rehabilitation of Water and Wastewater Infrastructure in Bacau County, ROMANIA

B.2. Categorisation of project activity1

Code Percentage [%]

45 6 B.2.1. Code for the priority theme dimension

46 94

B.2.2. Code for the form of finance dimension 01 100

B.2.3. Code for the territorial dimension 01 05 93 7

B.2.4. Code for the economic activity dimension2 09 21 6 94

B.2.4.1. NACE Code3 E36, E 37

B.2.5. Code for the location dimension (NUTS/LAU)4 RO211

1 Annex II to Regulation (EC) No 1828/2006 unless otherwise specified. 2 Where a project involves more than one economic activity, multiple codes may be indicated. In that case the

percentage share for each code should be indicated with the total not exceeding 100%. 3 NACE-Rev.2, 4 digit code: Regulation (EC) No 1893/2006 of the European Parliament and of the Council

(OJ L 393, 30.12.2006, p.1).

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B.3. Compatibility and coherence with the Operational Programme

B.3.1. Title of the related Operational Programme:

Sectoral Operational Program ENVIRONMENT 2007-2013 SOP-ENV

B.3.2. Common Code for Identification (CCI) No of Operational Programme

2007 RO 161 PO 004

B.3.3. Fund

ERDF Cohesion Fund X

B.3.4. Title of the priority axis

Priority Axis 1 – Extension and modernization of water and wastewater infrastructure

B.4. Project description

B.4.1. Project (or project phase) description:

(a) Provide a description of the project (or project phase).

The present project represents the first step of the Masterplan for development of water infrastructure in Bacau County. The sector addressed by the present project is Environment – Part Water Supply and Wastewater Disposal. Beneficiary County is Bacau County which is situated in the North-Eastern part of Romania, in the Moldova Region.

The following terms are defined as follows:

Locality - Settlement parts of communes, usually clearly separated

Water Supply Zone – Part of a Water Supply Area that is supplied by the same reservoir or group of reservoirs.

Water Supply Area –Water Supply Areas are geographical areas of uniform characteristics like supply from the same main system, the same topographical characteristics and with a size of approx. 5% – 15% of the county

Agglomeration – Sufficiently concentrated area for urban wastewater to be collected and conducted to an urban wastewater treatment plant WWTP

Cluster – Group of agglomerations which shall be served by a specific WWTP

Main deficiencies in water supply are bad quality, old and worn-out facilities, high losses and unsupplied areas, main deficiencies in WW are infiltrations in the sewerage network and the poor condition of both civil structures and electro-mechanical equipment of wastewater treatment plants.

4 Regulation (EC) No 1059/2003 of the European Parliament and of the Council (OJ L 154, 21.6.2003, p. 1). Use the

most detailed and relevant NUTS code. Where a project affect multiple individual NUTS/LAU 2 level areas, consider encoding the NUTS/LAU1 or higher codes.

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The selection of the priority investments took into account the requirements and deadlines imposed by the Accession Treaty and priority has been given to the need to ensure compliance for the agglomerations exceeding 10,000 p.e. or having the status of an urban area. According to the Priority Investment List of the Masterplan, 8 urban agglomerations have most stringent requirements and 6 of them were selected for investments from CF. Finally 5 of participate in the CF Funding program (Bacau, Moinesti, Buhushi, Darmanesti and Targu Ocna).

Total population 2008 2014 2018 2039

Bacau 197,013 195,142 193,993 183,710

Moinesti 23,902 23,641 23,483 22,178

Buhushi 19,644 19,429 19,299 18,227

Darmanesti 11,508 11,382 11,306 10,678

Targu Ocna 12,118 11,985 11,905 11,244

Total 264,184 261,579 259,986 246,036

They represent 37 % of the total county population = 722,000. The locations are shown in the following map:

Bacau

Buhushi

Moinesti

Darmanesti

Targu Ocna

Onesti

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According to the Accession Treaty, Romania has been granted transition periods for compliance with the acquis for urban wastewater collection, treatment and discharge by 2015 for a number of 263 agglomerations of more than 10,000 population equivalent (p.e.) and by 2018 in 2,346 agglomerations of between 2,000 and 10,000 p.e. Transitions periods are also agreed for compliance with the Directive No 98/83/EC on drinking water quality by 2015. All priority agglomerations have more than 10,000 p.e., or have the status of a city. The proposed investments are intended to improve the current situation of the selected agglomerations, both in water and wastewater sectors in order to comply with the environmental acquis. It follows the provisions of the SOP to reduce the environmental infrastructure gap between Romania and the EU. The achievement of the objectives for the water and wastewater sector is realized through a process of regionalization, meaning the implementation of an institutional framework within the Project area, suitable to combine the water supply and wastewater services related to the development areas in that region, within a common operating process. The regionalization is a key element in improving the quality and cost efficiency of local water infrastructure and services in order to fulfil environmental targets, but also to assure sustainability of investments, of operations, of a long term water sector development strategy and of regional balanced growth.

The investments are focused on the following components:

Water Supply: rehabilitation of water treatment plants, extensions of water distribution networks, including metering.

Wastewater: extension of sewage networks, pumping stations and main collectors, rehabilitation and construction of wastewater treatment plants.

The following table shows an overview of the WS measures for each priority WSZ:

Priority WSZ Sources Treatment Main pipes Pumping Stations

Reservoirs Networks

Bacau R

Moinesti E

Buhushi E

Darmanesti No water supply measures for Cohesion Fund

Targu Ocna No water supply measures for Cohesion Fund

E…Extension, R…Rehabilitation

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The following table shows an overview of the WW measures for each agglomeration:

Wastewater agglomeration Main Collectors Pumping Stations WWTP Networks

Bacau -- E R E

Moinesti -- E E, R E

Buhushi -- E E E

Darmanesti -- E E E

Targu Ocna -- E E E

E…Extension, R…Rehabilitation

The following table shows number and percentage of population that will have access to water services before/after the project:

EFFECT OF CF PROJECT EFFECT OF

ROC EFFORTS

Water supply services (years 2008 / 2015)

Wastewater services (years 2008 / 2015)

Water Services Agglomeration

Nr. % Nr. % % / Year

Bacau 177,311/175,377 90 / 90 143,132/175,377 73/90 97 / 2013

Moinesti 20,317/21,242 84 / 90 16,060/21,242 67/90 97 / 2013

Buhushi 16,697/17,457 85 / 90 10,700/17,457 54/90 97 / 2013

Darmanesti 10,357/10,227 90 / 90 0/10,227 0/90 97 / 2013

Targu Ocna 11,754/11,606 97 / 97 6,544/10,769 54/90 97 / 2013

Currently, in Bacau County the institutional set up is under implementation: the IDA created is “ADI Bacau”, the operating ROC is “Compania Regionala de Apa Bacau CRAB” and the delegation contract will be signed in the near future.

The current connection rate to water services in the project area is 89% for water supply and 64% for wastewater and shall be increased close to 100% in water supply sector and in wastewater sector (90 % with CF project and 100 % with additional ROC efforts). 5 of 6 WWTP need extension (partly new WWTPs at other locations) and rehabilitation, the WWTP Moinesti South is completely new.

The Project shows satisfactory financial and economic indicators with benefits exceeding costs and no serious risks for a successful implementation and operation.

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(b) Where the project is a phase of an overall project, provide a description of the proposed stages of implementation (explaining whether they are technically and financially independent).

N/A

(c) What criteria have been used to determine the division of the project into phases?

N/A

B.4.2. Technical description of the investment in infrastructure

(a) Describe the proposed infrastructure and the work for which assistance is being proposed specifying its main characteristics and component elements.

General The project comprises water supply and wastewater investments in the 3 agglomerations Bacau, Moinesti and Buhushi and only wastewater investments in the 2 agglomerations Darmanesti and Targu Ocna due to financial constraints. The following table shows the current service levels of these agglomerations:

Agglomeration Service Level WS Service Level WW

Bacau 90% 73%

Moinesti 84% 67%

Buhushi 85% 54%

Darmanesti 90% 0%

Targu Ocna 97% 54%

Total 89% 64%

In order to achieve connection rates of at least 90% extensions of the infrastructure are proposed. The condition of the existing infrastructure is partly poor with old and obsolete parts. Within the present Cohesion Fund Application the following components are included:

1. Extension and rehabilitation of water and wastewater infrastructure in the agglomeration “Bacau”

2. Extension and rehabilitation water and wastewater infrastructure in the agglomeration “Moinesti”

3. Extension of water and wastewater infrastructure in the agglomeration “Buhusi”

4. Extension of wastewater infrastructure in the agglomeration “Darmanesti”

5. Extension of wastewater infrastructure in the agglomeration “Targu Ocna”

6. Technical Assistance and Supervision of Works

An overview of the investment costs (net investment in thousand Euro, constant rates) is given in the following table

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N° Item Total County Bacau Moinesti Buhusi Darmanesti Targ u Ocna

1 Water Supply

1.1 Water Abstraction 0

1.2 Water Treatment Plant 0

1.3 Water Main 3,591 3,591

1.4 Pumping Station, Reservoirs 0

1.5 Distribution Network 1,644 648 997

SUM WS 5,236 3,591 648 997 0 0

2 Wastewater

2.1 WWTP 37,494 13,095 7,960 7,450 5,027 3,962

2.2 Main Collector 0 0 0 0 0 0

2.3 Pumping Stations 1,720 228 176 442 532 342

2.4 Wastewater Network (incl pressure lines) 40,168 9,839 5,309 5,260 13,073 6,687

SUM WW 79,382 23,162 13,445 13,152 18,632 10,991

Total 84,618 26,754 14,093 14,148 18,632 10,991

Component 1: Extension and Rehabilitation of Water and Wastewater Infrastructure in the Agglomeration “BACAU” The works of these components are located inside the agglomeration Bacau except the WTP Caraboaia, which is located in Darmanesti. With its population of 197,013 inhabitants (year 2008), the agglomeration of Bacau is the largest agglomeration in Bacau county and situated in the middle of Bacau county.

An overview is shown in the following figure, red lines correspond to the agglomeration = WSZ Bacau.

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Water Supply

The main water source in the county of Bacau is the artificial Poiana Uzului Lake located in the Carpathian mountains which has a volume of 90 Millions m³. The untreated water flows after passing a hydropower plant to the Water Treatment Plant Caraboaia, located on approx. 420 m.a.s.l. nearby Darmanesti. There a coagulation and flocculation, sedimentation, filtration and chlorination process take place. The treated water is conducted by three transmission mains to cities in Bacau county.

The southern branch is approx. 29 km long and supplies Onesti and Targu Ocna as well as several localities in between. The water flows by gravity.

The northern branch supplies Darmanesti, Moinesti as well as several other localities.

The third branch – the largest with approx. 65 km passes its highest point in Moinesti and supplies WSZ Bacau. Furthermore Bacau City has also additional groundwater sources. To supply localities by the northern branch and as well as Bacau City the water is pumped from WTP Caraboaia.

On the way to Bacau there is one additional chlorination station in locality Stejaru, commune of Scorteni, approx. 17 km located in the east of Bacau City..

The Bacau Water Supply Zone includes a main reservoir at Barati with a storage capacity of 20,000 m³.

The water quantity is sufficient for the system including all connected localities. Judging from the few available data, the water quality is not sufficient.

Measures of an ongoing ISPA project (No 2002 RO 16 P PE 018) consist of investments concerning water supply sector, transport and treatment. A new main pipe from Poiana Uzului including intake at the barrage and pumping station is planned to be built. Furthermore a micro-hydro-power plant at Stejaru is in construction ( capacity max. 800 l/s ) and as well a new Water treatment Plant at RSV Barati is also under construction. By this measure the groundwater sources shall only be used for industry.

The main deficiencies of Water Supply Zone Bacau are the water quality from existing WTP and wellfields, high losses in networks and partly old and worn-out equipment.

The Cohesion Fund measures focus on the rehabilitation of the WTP Caraboaia in order to improve the quality of the produced water. It was commonly agreed to include this investment at the agglomeration Bacau, although this WTP will supply the agglomerations Moinesti, Darmanesti and Targu Ocna in future while Bacau will be supplied by a new WTP Barati (ongoing ISPA project)

1. Rehabilitation of the WTP Caraboaia

Rehabilitation of WTP Caraboaia will improve the general situation of the plant. Most important measures to be executed there are replacement of M&E equipment (for filter backwashing process), a new inflow metering and regulation chamber as well as a new rapid mixing, coagulation and flocculation chamber. Water losses will decrease by implementing facilities for sludge dewatering and a new treatment technology. Additional Sludge dewatering facilities will cause water losses of approx. 7.8 m³/d respectively approx. 2,847 m³/year (max. daily sludge: 12 t, dry solid : 35%) This sums up to approx. 0,11 per mill of water losses ( produced water : 69,120 m³/d). Comparing to the year 2008 this would mean a saving of more than 1.8 million m³ raw water.

The existing production capacity of 800 l/s shall remain unchanged.

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Wastewater

1. Wastewater Collection System

The sewer network in Bacau is a combined wastewater collection system. The system consists of 138 km of sewers. The overall connection rate in the service area is 73 %.

The wastewater collection system and treatment system is presently owned and operated by C.A.B. (former name: R.A.G.C. Bacau). A regional operation company for the County of Bacau (CRAB – Comania Regionala De Apa Bacau) has already been formed but is not operating yet.

The extension of the wastewater collection system has been established together with C.A.B. The sewers were sized taking into account the existing population and the population in the area which will be connected to this network in the future years.

To achieve a connection rate of at least 90 % within this project, 42.5 km of sewer extensions and 6 pumping stations are to be added to the existing wastewater collection system.

2. Wastewater Treatment Plant

The WWTP Bacau is located at the south-eastern side of the agglomeration Bacau. The whole agglomeration is served by one central plant.

The waste water treatment plant is under refurbishment, ISPA Project Number ISPA /2002 RO 16 P PE 018 and will be extended on the established site within the current site boundaries. Additional land purchase is not necessary. The proposed treatment concept employs existing structures and equipment to utmost extent.

The resulting design flow data are presented in the following table.

Design Flow Data Daily Flow Qday,DW 73,965 m³/d

Q24,DW 3,082 m³/h

Maximum Dry Weather Flow Qmax,DW 3,720 m³/h 1,033 l/s Maximum Design Flow Qmax,Storm 5,899 m³/h 1,638 l/s

Including industrial pollution loads the final design pollution loads will be as follows.

BOD5 210 mg/l 15,879 kg/d

COD 421 mg/l 31,759 kg/d

SS 245 mg/l 18,526 kg/d

organic N 0 mg/l 0 kg/d

NH4-N 35 mg/l 2,646 kg/d

NO3-N 4 mg/l 265 kg/d

Total N 39 mg/l 2,911 kg/d

P 7 mg/l 529 kg/d

Design Pollution Loads

Based on a specific BOD5 of 60 g/p.e./day the plant has a size of 241,000 p.e. Consequently the following discharge effluent parameters as set out in the Urban

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Wastewater Treatment Directive 91/271/EEC which has been implemented in the Romanian standard NTPA 001 – 011 apply for the WWTP Bacau.

• Extension of the mechanical treatment (screening station, grit and grease trap, inlet flow meter, inlet pumping station, primary sedimentation tanks). Rehabilitation measures comprise civil structures and electromechanical equipment.

• Extension of the biological treatment (activated sludge tanks, blowers, return sludge pumping station, excess sludge pumping station).

• Extension of sludge treatment (anaerobic digesters, gas holding tank, cogeneration unit).

• Extension of sludge dewatering and storage facilities

The following table summarizes the proposed investments for component 1:

Measure Quantity Investment [Euro]

WATER SUPPLY 3,591,286

Rehabilitation WTP Caraboaia 1 pc 3,591,286

WASTEWATER 23,162,220

Network extension 42.5 km 9,826,850

WW Pumping Stations 6 pcs 228,000

Pressure Lines 0.15 km 12,000

WWTP Bacau 1 pc 13,095,370

Component 2: Extension and Rehabilitation of Water and Wastewater Infrastructure in the Agglomeration “Moinesti” The works of these components are located inside the agglomeration Moinesti which includes the administrative area of the city of Moinesti. The population is 23,902 (year 2008) inhabitants.

An overview is shown in the following figure, red lines correspond to the agglomeration = WSZ Moinesti.

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Water Supply

Water from WTP Caraboaia is pumped approx. 20 km by a steel pipe DN 800 which changes into two pipes (1x DN 300, 1x DN 400). The water goes first into the reservoirs of PS Vasiesti located in the south of Moinesti, situated at approx. 420 m.a.s.l. From there the water is pumped by two pipes DN 300 and DN 400, both made up of steel, to several reservoirs. The pumping station Vasiesti is in bad condition and will be abandoned, the existing new PS Vermesti will provide future supply.

The main deficiencies of Water Supply Zone Moinesti are the water quality from existing WTP, high losses in networks and partly old and worn-out equipment.

The WTP is included in component 1, Cohesion Fund measures focus on the extensions of the network in order to achieve a connection rate of 90%.

1. Network extensions

In the WSZ some streets will be connected to the existing water supply system. The connection rate will increase from 84% to 90%.

Wastewater


Monesti has a separate wastewater collection system which is basically confined to the City of Moinesti and has presently around 67 % connection rate in this service area.

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The stormwater drainage system was built in 1984 and has a total length of 2.2 km. The total sewer network is 11.7 km long, of which 2.9 km are main collectors. The sewer network is currently owned and operated by Apa Prim. A regional operation company for the County of Bacau (CRAB – Comania Regionala De Apa Bacau) has already been formed but is not operating yet.

The extension of the wastewater collection system has been established together with Apa Prim. The sewers were sized taking into account the existing population and the population in the area which will be connected to this network in the future years.

To increase the connection rate from 67 % to at least 90 % within this project, 21.2 km of sewer extensions and 4 pumping stations are to be added to the existing wastewater collection system.


The WWTP Moinesti is located at the middle of the agglomeration Moinesti close to Tazlaul Sarat River. The agglomeration is served by two plants, WWTP Moinesti North (existing) and WWTP Moinesti South (not existing yet) which must be located at the southern end of the agglomeration. The existing WWTP is extended at the existing site, to utmost extent within the current site boundaries. The proposed treatment concept employs existing structures to a smaller extent.

The WWTP Moinesti South is located at the southern side of the agglomeration Moinesti. The basic design parameters concerning the calculation of flows and loads are presented in Chapter 8.3 of this Feasibility Study.

The resulting design flow data for WWTP Moinesti North are presented in the following table.


Q24,DW 257 m³/h

Maximum Dry Weather Flow Qmax,DW 388 m³/h 108 l/s Maximum Design Flow Qmax,Storm 666 m³/h 185 l/s


Design Pollution Loads Parameter Loads Concentration

kg/d mg/l BOD5 1,531 242

COD 3,061 483 SS 1,786 282 organic N 0 0 NH4-N 254 40 NO3-N 27 4 Total N 281 44 P 105 17

Based on a specific BOD5 of 60 g/p.e./day the plant has a size of 25,500 p.e.. Consequently the following discharge effluent parameters as set out in the Urban

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Wastewater Treatment Directive 91/271/EEC which has been implemented in the Romanian standard NTPA 001 – 011 apply for the WWTP Moinesti North.

Parameter Plant Size Effluent Concentration

Minimum percentage of reduction

p.e. mg/l %

BOD5 -- 25

COD -- 125

SS > 10,000 35 90

P > 100,000 or sensitive areas 1 80

Total N (1) > 100,000 or sensitive areas 10 70 - 80

The resulting design flow data for the WWTP Moinesti South are presented in the following table.


Q24,DW 54 m³/h




kg/d mg/l BOD5 373 279

COD 745 558 SS 435 325

organic N 0 0 NH4-N 62 46

NO3-N 6 5 Total N 68 51

P 27 20

Based on a specific BOD5 of 60 g/p.e./day the plant has a size of 6,200 p.e.

The investments proposed in this project mainly include but are not limited to the following.

• Construction/Rehabilitation of the mechanical treatment (screening station, grit and grease trap, inlet flow meter, inlet pumping station, primary sedimentation tanks). Rehabilitation measures comprise civil structures and electromechanical equipment.

• Construction/Rehabilitation of the biological treatment (activated sludge tanks, blowers, return sludge pumping station, excess sludge pumping station).

• Construction/Rehabilitation and extension of sludge treatment (anaerobic digesters, gas holding tank, cogeneration unit).

• Construction/Rehabilitation and extension of sludge dewatering and storage facilities.

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WATER SUPPLY 647,752

Network Extension 3.529 km 458,752

House Connections 315 189,000


Network Extension 21.2 km 5,019,938

WW Pumping Stations 4 pcs 176,000


Wastewater Treatment Plant 2 pcs 7,960,299

Component 3: Extension of Water and Wastewater Infrastructure in the Agglomeration “Buhusi” The works of these component are located inside the agglomeration Buhusi which includes the administrative area of the city of Buhusi. The population is 19,644 (year 2008) inhabitants.

An overview is shown in the following figure, red lines correspond to the agglomeration = WSZ Buhusi.

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Water Supply

The Buhusi Water Supply Zone is fed by ground water sources. There are three groundwater sources whereas only source Poiana Morii is usually in operation. The sources Coscau and Bistrita are used additional in peak days when the demand of water is very high

There are two RSVs and the total storage capacity sums up to 2,500 m³. The water quantity is sufficient for the system and even leaves additional capacity for the supply of more people. Judging from the few available data, the water quality is also sufficient, but nitrate levels are relative high and close to limit.

The main deficiencies of Water Supply Zone Buhusi are the high nitrate levels, partly poor and broken technical equipment as well as high losses.

The Cohesion Fund measures focus on increasing the connection rate.

1. Network extensions

In the city of Buhusi some streets will be connected to the existing water supply system. The connection rate will increase from 85% to 90%.

Wastewater


The sewer network in Buhusi is a combined wastewater collection system. The system consists of 24.6 km of of sewers, of which 6.7 km are main collectors. No information is available on the number of overflow devices in the network. The overall connection rate in the service area is 54 %.

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The wastewater collection system and treatment system is presently owned and operated by Directia de Gospodarire Comunala.

The extension of the wastewater collection system has been established together with Apa Prim. The sewers were sized taking into account the existing population and the population in the area which will be connected to this network in the future years.



The WWTP Buhusi is located in the middle of the agglomeration Buhusi. The whole agglomeration is served by one central plant. The existing WWTP will be abandoned. A new plant will be built on public property located eastern to the existing Plant.

The design flow data are as follows:


Q24,DW 302 m³/h


Industrial discharges have been assessed in detail (see Chapter 6 of FS). Including industrial pollution loads the final design loads are as follows:


kg/d mg/l BOD5 2,089 282

COD 4,179 563 SS 2,438 329


NO3-N 34 5 Total N 383 52

P 70 9

Based on a specific BOD5 of 60 g/p.e./day the plant has a size of 34,800 p.e.. Consequently the following discharge effluent parameters as set out in the Urban Wastewater Treatment Directive 91/271/EEC which has been implemented in the Romanian standard NTPA 001 – 011 apply for the WWTP Buhusi.


Minimum percentage of

reduction

p.e. mg/l %

BOD5 -- 25

COD -- 125

SS > 10,000 35 90

P 10,000 – 100,000 2 80

Total N (1) 10,000 – 100,000 15 70 - 80

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• Mechanical treatment (screening station, grit and grease trap, inlet flow meter, inlet pumping station, primary sedimentation tanks

• Biological treatment (activated sludge tanks, blowers, return sludge pumping station, excess sludge pumping station).

• Sludge treatment (anaerobic digesters, gas holding tank, cogeneration unit).

• Sludge dewatering and storage facilities.



WATER SUPPLY 996,672

Network Extension 6.282 km 816,672

House Connections 300 pc 180,000



Wastewater PS 11 pcs 442,000


Wastewater Treatment Plant 1 pc 7,449,590

Component 4: Extension of Wastewater Infrastructure in the Agglomeration “Darmanesti” The works of these components are located inside the agglomeration Darmanesti which includes the localities Darmanesti, Darmaneasca and Lapos. The population is 11,508 (year 2008) inhabitants.

An overview is shown in the following figure, red lines correspond to the agglomeration = WSZ Darmanesti.

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Water Supply

The agglomeration is supplied by the WTP Caraboaia. The connection rate is already 90 %.

Due to budget limitation of the Cohesion Fund no water supply projects are scheduled for implementation under the Cohesion Fund in the agglomeration Darmanesti.

Wastewater


The Agglomeration of Darmanesti does not have a functioning wastewater collection system at present. There are currently only 0.5 km of sewers which are in a very poor condition. The existing sewer system will not be used in the future, instead an entirely new wastewater collection system will be built.

The extension of the wastewater collection system has been established together with Apa Serv Bacau. The sewers were sized taking into account the existing population and the population in the area which will be connected to this network in the future years.

To increase the connection rate to at least 90 % within this project, 50.4 km of sewer extensions and 14 pumping stations are to be added to the existing wastewater collection system.

2. Wastewater Treatment

The existing WWTP of Darmanesti is located in the middle of the town and serves a block of flats with high population density. It has only mechanical treatment and is not sufficient for the whole town. Because of the size and the location of the WWTP, it is recommended to dismantle the old WWTP and build a new central WWTP in the south eastern part of Darmanesti where a site in public ownership is available.


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Q24,DW 184 m³/h




kg/d mg/l BOD5 1,292 286

COD 2,584 572 SS 1,507 333


NO3-N 17 4 Total N 237 52

P 43 10

Based on a specific BOD5 of 60 g/p.e./day the plant has a size of 21,500 p.e. Consequently the following discharge effluent parameters as set out in the Urban Wastewater Treatment Directive 91/271/EEC which has been implemented in the Romanian standard NTPA 001 – 011 apply for the WWTP Darmanesti.



reduction

p.e. mg/l %

BOD5 -- 25

COD -- 125

SS > 10,000 35 90

P 10,000 – 100,000 2 80

Total N (1) 10,000 – 100,000 15 70 - 80






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Pressure Lines 5 km 400,000

Wastewater Treatment Plant 1 pc 5,026,520

Component 5: Extension Wastewater Infrastructure in the Agglomeration “Targu Ocna” The works of these components are located inside the agglomeration Targu Ocna which includes the administrative area of the city Targu Ocna and connected locality Valcele. The population is 12,118 (year 2008) inhabitants.

An overview is shown in the following figure, red lines correspond to the agglomeration = WSZ Targu Ocna:

Water Supply

The agglomeration is supplied by the WTP Caraboaia via the southern branch, a main pipe with gravity flow. The connection rate is already 97 %.

Due to budget limitation of the Cohesion Fund no water supply projects are scheduled for implementation under the Cohesion Fund in the agglomeration Targu Ocna.

Wastewater


EN 22 EN

Targu Ocna has a separate wastewater collection system which is basically confined to the City of Targu Ocna and has presently around a 54 % connection rate in this service area.

The stormwater drainage system was built in 1984 and has a total length of 5.9 km. The total sewer network is 15.5 km long, of which 2.1 km are main collectors. Although the main area of the agglomeration is connected to the existing central Wastewater Treatment Plant, parts of the network are covered by a small-sized Biological Wastewater Treatment Plant (BWWTP). The sewer network is currently owned and operated by Consiliul Local Targu Ocna. A regional operation company for the County of Bacau (CRAB – Comania Regionala De Apa Bacau) has already been formed but is not operating yet.

The extension of the wastewater collection system has been established together with Consiliul Local Targu Ocna. The sewers were sized taking into account the existing population and the population in the area which will be connected to this network in the future years.


2. Wastewater Treatment

The existing waste water treatment plant is located in the eastern part of Targu Ocna. The capacity of the WWTP is insufficient and the site is endangered by flooding. So it is recommended to dismantle the old WWTP and build a new central WWTP within an area of higher flood protection. There is already a site available (ca. 1.2 ha) which is adjacent to the existing plant but higher situated. The available site is in public ownership.



Q24,DW 138 m³/h




kg/d mg/l BOD5 956 282

COD 1,911 563 SS 1,115 328


NO3-N 17 5 Total N 175 52

P 32 9

EN 23 EN

Based on a specific BOD5 of 60 g/p.e./day the plant has a size of 16,000 p.e. Consequently the following discharge effluent parameters as set out in the Urban Wastewater Treatment Directive 91/271/EEC which has been implemented in the Romanian standard NTPA 001 – 011 apply for the WWTP Targu Ocna.



reduction

p.e. mg/l %

BOD5 -- 25

COD -- 125

SS 2,000 – 10,000 60 70

P 10,000 – 100,000 2 80

Total N (1) 10,000 – 100,000 15 70 - 80












Wastewater Treatment Plant 1 pcs 3,962,130

Component 7: Technical Assistance The new founded regional operating company CRAB must achieve experience in implementing internationally funded projects (ISPA) from the included local operators and must be able to face new challenges in future when extending its services in the region. One of the two companies from the merger process, SC Compania Regionala Apa Bacau SA, is implementing an ISPA Project.

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The recommended Technical Assistance should help implementing the project in order to ensure putting in place a reliable system and effectively improve the water service.

Technical Assistance has been recommended within the Investment Plan (Master Plan Level). These accompanying measures are necessary for a smooth implementation of the projects and will include the following:

• TA for Preparation of Tender Documents for CF Priority II works

• TA for Project Management and Project publicity;

• TA for Supervision of implementation.

The Technical Assistance for Tender Preparation CF II should include the following:

• Performing of designs based on FS results and at the level of conceptual or detailed design depending on the type of contract defined in procurement plan (yellow book, red book)

• Preparation of Tender Documents and confidential cost estimates

• Support during Tendering and Evaluation

• Acting as designer in the Red FIDIC Contracts during the works contracts implementation, according to the Law No. 10/1995 requirements

The Technical Assistance for Project Management should include the following:

• Support the Beneficiary in Project Implementation and Project Publicity;

• Support the Beneficiary in implementing an action plan for the protection of water sources;

• Support the Beneficiary in documenting the water supply networks and in developing hydraulic network models and carrying out calibration measurements;

• Support the Beneficiary in developing the sewer network documentation and hydraulic modelling;

• Support the Beneficiary in implementation of the Action Plan for Sludge Reuse;

• Support the Beneficiary in the procurement of equipment;

• Training in the field of new technologies, equipment and instruments

The Technical Assistance for Site Supervision should include the following:

• Acting as Engineer on site, according to the Law 10/1995 requirements

• Quality surveillance of the construction works and technologies

• Inspection, control and coordination of the construction works and technologies

• Design inspection and coordination with progress schedule

• Inspection and coordination of the construction sequences with progress schedule

• Stage payment monitoring, Cost control

• Inspection completeness and quantity of the construction works

• Quality control and abidance of required construction methods

• Quality and quantity control of delivered materials on site

• Inspection of the materials storage and movement on site

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• Inspection of process of required tests and measurements

• Safety supervision on site

• Environmental monitoring on site

(b) In respect of the work involved, identify and quantify the key output indicators and, where relevant, the core indicators to be used:

Performance Performance indicators for drinking water a Units

Existing After

Connected Population 1,000 capita 236 236

Service coverage % population 89 90

Specific domestic consumption l/c,d 96 94

Average production 1,000 m3/d 76.5 59.5

Water treatment capacity m3/d 161,200 164,000

Minimum production capacity of wells, WTP m3/d 84,800 83,800

Non revenue water m3/d 41,580 27,310

Non revenue water % water into supply 54 46

Length of transmission mains km 135 135

Length of distribution network km 238.0 247.8

Percentage of distribution network rehabilitated-of total network % 0

Population served per length of WS network and mains Capita/km 633 616

Specific water loss rate m³/km pipe main/d 62 56

Compliance of delivered water with EU DWD % water into supply 0 100

Metering Level % 88 100

Average electricity consumption 1,000 kWh/year 6,848 7,575

Performance Performance indicators for wastewater Unit

Existing After

Population connected to centralised collection network % of total population 64 90

Length of Wastewater network km 190 348

Average flow collected 1000 m3/d 66 68

Average flow treated (primary, secondary, tertiary) 1000 m3/d 66 68

Infiltration 1000 m3/d 35 35

Compliance with EU UWWTD standards % of treated effluent meeting EU standards

0 100

(c) Main beneficiaries of the infrastructure (i.e. target population served, quantified where possible):

Beneficiary Population:

Additional Connected:

WS – approx. 1,660 (= 0.6 % of agglomerations or 0.2 % of county)

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WW – 58,636 (= 21% of agglomerations or 8 % of county)

Provided with sufficient wastewater treatment:

235,072 (= 90 % of agglomerations or 33 % of county)

Beneficiary administrative units:

Cities: Bacau, Moinesti, Buhushi, Darmanesti, Targu Ocna

Communes: Margineni, Hemeius, Letea Veche, Magura

(d) Is the construction of the infrastructure to be delivered through a public-private partnership (PPP)?

Yes No X

If yes, describe the form of the PPP (i.e., selection process for private partner, structure of PPP, infrastructure ownership arrangements, risk allocation arrangements, etc.):

N/A

Give details of how the infrastructure is to be managed after the project is completed (i.e., public management, concession, other form of PPP).

The infrastructure resulted after the project will be managed by the Regional Operating Company (ROC) CRAB.

In line with SOP provisions, the local municipalities in the project area created an Intercommunity Development Association (IDA) to which they transfer, by a power of attorney, the right to exercise in their name and on their behalf the competencies related to the management of water and wastewater services. On this ground, IDA will conclude a delegation contract with the ROC. Through this mechanism, IDA exercises the contractual rights of the Contracting Authority, especially the monitoring of the contract performance in the name and on behalf of its members (municipalities).

The Granting Authority has a general power of economical, financial and technical control over the Operator’s activities and performance. The ROC has as shareholders local authorities from the area of operation.

This institutional set-up is in line with the regional strategy of the Sectoral Operational Programme for Environment and supported by Romanian legal provisions. The regionalisation of water services, by creating regional operators, is considered a key element in improving the quality and cost-efficiency of water infrastructure and services, in order to fulfil environmental targets, but also to assure sustainability of investments of operations, of a long term water sector development strategy and of regional balance growth. For details please check the Institutional Analysis Report.

(e) Does the project form part of a Trans-European Network agreed at Community level?

Yes No X

TEXT BOX

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B.5. Project objectives

B.5.1. Current infrastructure endowment and impact of the project

Indicate the extent to which the region(s) is/are at present endowed with the type of infrastructure covered by this application; compare it with the level of infrastructure endowment aimed for by target year 20…….(i.e., according to the relevant strategy or national/regional plans, where applicable). Indicate the foreseeable contribution of the project to the strategy/plan objectives. Specify potential bottlenecks or other problems to be resolved.

The overall objective of the project is to improve the infrastructure in the water and wastewater sectors of Bacau County, not only for the benefit of inhabitants and a better environment but also to meet the obligations regarding the environmental aquis within the transition periods agreed between Romania and EU.

The specific objectives of the project are:

• improvement of drinking water quality in order to meet EU standards (98/83/EC);

• increasing the accessibility to and the quality of water and sewerage services;

• increasing the connection rate to wastewater treatment plants in order to meet the Urban Waste Water Treatment Directive;

The new investments will have an essential contribution in the pursuit of the following objectives of Article 174 of EC Treaty

• preserving, protecting and improving the quality of the environment;

• protecting human health;

• prudent and rational utilization of natural resources;

• promoting measures at international level to deal with regional or worldwide environment

• improvement of water quality in watercourses

The detailed objectives and impacts of each measure are included at the description of each component in chapter B.4.2.

The following tables show an overview about the impacts of the main investments, details can be found in annex II

MAIN WS INVESTMENT

WSZ Investment Quantity [€] Result Impact

Bacau Rehabilitation WTP Caraboaia

3,591,286 Rehabilitation of the mixing, filtration and sludge treatment

facilities

Compliance with regulation 98/83 EC

Moinesti Extension of WS Network 647,752 Additional 3,529 m WS

network

Increase CR to 90 %

Buhushi Extension of WS Network 996,672 Additional 6,282 m WS network

Increase CR to 90 %

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Main WW Investments

Cluster Agglomeration

p.e. in 2037 p.e. in 2008 Investment

Description Quantity [€] Result Impact

Bacau Bacau Total for agglomeration: 23,162,220

314,862 237,013 Extension of WWTP Bacau

13,095,370

Extension and rehabilitation of civil works and electromechanical equipment for a design load of 241,000 p.e..

Compliance with UWWTD 91/271/EEC

Extension of the wastewater network

9,826,850 Extension of 42.5 km sewer network

Increase of connection rate

Construction of wastewater pumping stations and pressure lines

240,000

6 PS, Connection of catchment areas that can not discharge by gravity to the WWTP

Increase of connection rate

Moinesti Moinesti Total for agglomeration: 13,445,037

31,719 27,727

Extension of WWTP Moinesti North, Construction of WWTP Moinesti South 7,960,299

Extension and rehabilitation of civil works and electromechanical equipment for a design load of 31,700 p.e..


Extension of the wastewater network 5,019,938

Extension of 21.2 km sewer network Increase of connection rate

Construction of wastewater pumping stations and pressure lines 464,800

4 PS, Connection of catchment areas that can not discharge by gravity to the WWTP Increase of connection rate

Buhusi Buhusi Total for agglomeration: 13,151,506

34,823 25,937 Construction of WWTP Buhusi 7,449,590

Civil works and electromechanical equipment for a design load of 34,800 p.e..





11 PS, Connection of catchment areas that can not discharge by gravity to the WWTP Increase of connection rate

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Main WW Investments

Cluster Agglomeration

p.e. in 2037 p.e. in 2008 Investment

Description Quantity [€] Result Impact

Darmanesti Darmanesti Total for agglomeration: 18,631,868

21,530 18,668

Construction of WWTP Darmanesti 5,026,520

Construction of a WWTP (Civil works and electromechanical equipment) for a design load of 21,500 p.e..





14 PS, Connection of catchment areas that cannot discharge by gravity to the WWTP Increase of connection rate

Targu Ocna Targu Ocna Total for agglomeration: 10,991,280

15,926 13,756

Construction of WWTP Targu Ocna 6,351,150

Construction of a WWTP (civil works and electromechanical equipment) for a design load of 16,000 p.e..





9 PS, Connection of catchment areas that cannot discharge by gravity to the WWTP Increase of connection rate

Summary of Physical Indicators

Physical indicators Water Supply Unit 2010 - 2014 Rehabilitation Water Treatment Plant pc 1 Network extension m 9,811 New house connections m 615

Physical indicators Wastewater Unit 2010 - 2014 Network extension m 158,000 Network rehabilitation m 0 New main collector m 0 Main collector rehabilitation m 0 New River Undercrossings / Canal Undercrossings pcs 0 New WW Pumping Stations pcs 44 New WWTP pcs 4 p.e. 266,500

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WWTP extension pcs 2 p.e. 78,500

Details on Sludge Disposal

Detailed information on the sludge disposal strategy is provided in the FS Chapter 7, Sludge Disposal Strategy. The following table summarizes the current sludge disposal practice.

WWTP Current Sludge Treatment Final Disposal Current Production

(t DS/a)

Bacău City anaerobic digestion

mech. Dewatering sludge lagoon 15,858

Buhuşi Imhoff tanks

drying beds drying beds 390

Moineşti Imhoff tanks


Comăneşti aerobic stabilization


Dărmăneşti unknown unknown unknown

Slanic Maldova drying beds drying beds 2

Târgu Ocna Imhoff tanks

drying beds non-compliant landfill 4

Oneşti Imhoff tanks sludge lagoon 692

CăiuŃi not functioning none none

Faraoani drying beds unknown << 1

Răcăciuni unknown non-compliant landfill 0.05

Podu Turcului not functioning none none

A detailed list of WTP sludge production for each treatment plant is presented the following table.

Water Treatment Plant Unit 2010 2013 2015 2018 2021 2024 2030 2037

Caraboaia

Sludge Production t DS/a 1,895 818 928 1,055 1,143 1,206 1,236 1,254

BaraŃi

Sludge Production t DS/a 0 1,141 1,100 1,133 1,166 1,197 1,231 1,259

Based on the WWTP design and corresponding sludge treatment, the following values for specific sludge production are applied:

• WWTP without primary settling tanks and simultaneous aerobic stabilization

(WWTP ≤ 50,000 p.e.): 70 g DS/p.e./d

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• WWTP with primary settling tanks and anaerobic sludge digestion (WWTP >

50,000 p.e.): 49 g DS/p.e./d

Above mentioned treatment processes include tertiary treatment. According to the Accession Treaty of Romania to the European Union all the agglomerations with more than 10,000 p.e., should get equipped with such a tertiary treatment phase when they discharge into sensitive areas. Thus all treatment plants that are exceeding 10,000 p.e. need to be equipped with a tertiary treatment.

The basis for the sludge prediction is the forecast for the connected population equivalents. The following table shows the forecast for the annual sludge amount.

Parameter Unit 2010 2013 2015 2018 2021 2024 2030 2037

Population connected to the WWTPs

capita 176,607 220,689 235,071 233,988 232,642 230,951 226,904 221,433

P.E. connected to the WWTPs p.e. 51,746 58,906 58,906 58,906 58,906 58,906 58,906 58,906

Total P.E. connected to the WWTPs

p.e. 228,353 279,595 293,977 292,894 291,548 289,857 285,810 280,339

Total urban sludge production t DS/a 4,431 5,553 5,860 5,839 5,812 5,778 5,697 5,589

Total urban sludge volume (20 % DS)

m³/a 12,659 15,866 16,744 16,682 29,059 28,890 28,487 27,944

Total urban sludge weight

(wet sludge 1.1 t/m³) t/a 13,925 17,453 18,418 18,350 31,964 31,779 31,336 30,738

Different sludge disposal alternative have been analyzed for Bacau County. The following is the result of the cost assessment.

Sludge Disposal Costs – Bacau WWTP:

Disposal Route Drying €/t DS

Transport €/t DS

Laboratory Analyses €/t

DS

Entrance Fee €/t DS

Application Costs €/t

DS

Total Costs €/t DS

Agriculture 0 9 75 0 40 124

Reforestation 0 11 60 0 40 111

Land Reclamation 0 11 60 0 40 111

Co-Incineration 290 5 0 0 0 295

Land Filling 0 4 0 37 0 41

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Sludge Disposal Costs – Moinesti WWTP:


Transport €/t DS


DS



DS


Agriculture 0 21 75 0 40 136





Sludge Disposal Costs – Buhusi WWTP:


Transport €/t DS


DS



DS


Agriculture 0 9 75 0 40 124





Sludge Disposal Costs – Darmanesti WWTP:


Transport €/t DS


DS



DS


Agriculture 0 24 75 0 40 139





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Sludge Disposal Costs – Targu Ocna WWTP:


Transport €/t DS


DS



DS


Agriculture 0 24 75 0 40 139





Specially, the short-term sludge disposal will be:

Bacău WWTP:

- The sludge will go to the central county Chimiei Street landfill.

Buhuşi WWTP:


Moineşti WWTP:


Dărmăneşti WWTP:


Târgu Ocna WWTP:


The water treatment plant sludge will go to the Chimiei Street landfill over the whole planning period. This sludge cannot be utilized in any other way; it is mainly mineral with significant heavy metal concentrations.

At this point in time, however, it is not at all possible to state which of the disposal paths in the long-term best meets the objectives set down by the County, the Romanian Ministry of Environment and Forests and the EU. This will only be possible after several years of operation of the CF facilities to be built, the implementation of the recommended harmonization of the legal and administrative regulations dealing with wastewater and sludge management in Romania (given below), and further intensive investigations and negotiations.

Strategy Implementation Steps:

I. First Step Activities – completed by 2012

A. Industrial Dischargers 5

Regional Operator responsible for execution of activities

5 See Chapter 6.9 Action Plan to Manage Industrial Dischargers

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1. Setup Inventory

complete in detail and with ongoing updating

2. Modify Contracts

implement a unified contract for all the agglomerations making adjustments after changes in NTPA-002, MO 344/2004, etc

3. Setup Discharge Data Base

==> must have dedicated staff !!

4. Monitor Industrial Discharges

ongoing expanded program for agricultural sludge management

B. Sludge 11


1. Setup Data Base

==> must have dedicated staff !!

2. Monitor Sludge

- establish unified sampling procedures

- carry out parallel laboratory analyses of samples to establish the uncertainty limits of the laboratory results

- carry out an ongoing program according to MO 344/2004 to establish quality standards needed for agricultural, land reclamation and forestry use of sludge

II. Second Step Activities – completed by 2018

Regional Operator responsible for execution of most activities

A. Co-Incineration

Negotiate possible contract(s)

- Lafarge Ciment factories

- Carpatcement cement factory in Bicaz

- General Energetic biomass-power plant in PângăraŃi

B. Bio-Gas Production

Negotiate possible contract

- Scandinavian Biogas

C. Agriculture

1. Determination of Usable Areas

according to MO 344/2004, an ICPA and OSPA activity

2. Agricultural Use Field Trials


3. Negotiate Possible Contracts with Agricultural Operators

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D. Forestry

1. Determination of Reforestation Areas

a National Forest Authority, Bacău Forest Directorate (Regia NaŃională a Pădurilor-Romsilva, DirecŃia Silvică Bacău) activity in cooperation with local councils

2. Reforestation Field Trails

according to MO 344/2004, an ICPA activity

3. Negotiate Funding

with the Ministry of Environment and Forests and the Ministry of Agriculture and Rural Development to have funds provided from the State budget according to the Forestry Code, Law 46/2008

E. Land Reclamation

1. Determination of Reclamation Sites/Areas

an ICPA, OSPA and APM activity

2. Reclamation Field Trials


3. Negotiate Funding

with the Ministry of Environment and Forests and the Ministry of Agriculture and Rural Development to have funds provided from the State budget according to Article 41 of the Land Reclamation Law, Law 138/2004

III. Third Step Activities – completed by 2020


A. CO2 and Energy Balance Study

B. Select Disposal Scheme

using multi-objective decision making procedure which includes monetary and non-monetary criteria to select a scheme which can include simultaneously several disposal paths, considering the goals of

- disposal security

- environmental security

- affordability

C. Implement Selected Disposal Scheme

D. Post-Implementation Monitoring – continuing

- environment

- economics

E. Plan Modification – continuing

The middle and long-term urban-sludge disposal alternatives must be coordinated with the solid-waste disposal from large scale, intensive animal production units in the County.

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B.5.2. Socio-economic objectives

Indicate the project’s socio-economic objectives and targets.

The Project will lead to the achievement of the following objectives:

- Creation of new jobs during the construction and operation phase;

- Economic growth by the improvement of infrastructure in the project area. Reliable and compliant DW and WW services will lead to increase the number of investors in the project region.

- Improvement of the hygienic and the health conditions in the project area: safe drinking water will contribute to reduce health risks for the population. Wastewater disposal and treatment will contribute to improve the hygienic conditions.

- Improvement of the quality of life of the population living in the service area by ensuring the access to drinking water and waste water services both in quantity and quality:

- 90 % of the population will have access to compliant drinking water supply after project implementation, compared with approx. 89% before (in the project area).

- 90% of the population instead of about 64 % will be connected to the sewerage system (in the project area).

- Resource cost savings for the future customers by avoiding cost for well pumping and septic tank cleaning.

- Increased attractiveness of the region by reduction of visual disseminates, odors and direct health risks

B.5.3. Contribution to the achievement of the Operational Programme

Describe how the project contributes to the achievement of the priorities of the Operational Programme (provided quantified indicators where possible).

Indicator Unit Baseline (2008) Target (2015)

Output

Localities provided with

new/rehabilitated water facilities in a regional management system

Number of communes

45 49

New/ rehabilitated wastewater treatment plants

Number 2 6

Result

Population connected to basic water services in a regional system

% 40 53

Wastewater treated (of the total wastewater volume)

% 67 89

Number of Regional Water Companies created

Number 0 0

The specific objectives as set-out in SOP ENV are

1. Improvement of quality and access to water and wastewater infrastructure.

2. Development of sustainable waste management system.

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3. Reduction of negative environmental impact and mitigation of climate change caused by heating plants.

4. Protection and improvement of biodiversity and natural heritage.

5. Reduction of the incidence of natural disasters affecting the population.

The project is a major step in providing water supply and wastewater services in line with EU practices and policies, in urban areas by 2015 and by setting efficient regionalised water and wastewater management structures. All urban areas of the county are involved; the project comprises the county’s urban population which is a major contribution to objective No. 1.

By reducing the discharge of untreated sewage into receiving water bodies and improving the WWTPs efficiency to tertiary treatment, the project contributes to objective No. 3, protection and improvement of biodiversity and natural heritage.

The Priority Axis 1 objectives stipulated in SOP-ENV are:

• Provision of adequate water and sewerage services, at accessible tariffs;

• provision of adequate drinking water quality in all urban agglomerations;

• improvement of the purity of water courses;

• improvement of the WWTP sludge management;

• introduction of innovative and efficient water management structures.

The above-mentioned objectives are directly and substantially supported through the projects technical water supply and wastewater measures.

In addition Chapter 7, Sludge Disposal Strategy, provides the basic documentation for the ROCs for improved WWTP sludge management.

EN 38 EN

C. RESULTS OF FEASIBILITY STUDIES

C.1. Provide a summary of the main conclusions of the feasibility studies conducted

Item Key dimension of the Feasibility

Study

Description Reference

1 Technical aspects The project comprises water supply measures in the water supply zones Bacau (rehabilitation WTP Carboaia), Moinesti (extension of network) and Buhushi (extension of network). Main objectives are achieving sufficient water quality and connection rates above 90%, modernised systems and reduction of water losses.

In the wastewater field the agglomerations Bacau (Extension of the WWTP, WW network extension, construction of pumping stations), Moinesti (Construction/extension of 2 WWTP’s, WW network extension, construction of pumping stations), Buhusi (Construction of the WWTP, WW network extension, construction of pumping stations), Darmanesti (Construction of the WWTP, WW network extension, construction of pumping stations), Targu Ocna (Construction of the WWTP, WW network extension, construction of pumping stations)

Main objectives are achieving connection rates above 90%, modernised systems, reduction of infiltration and improved wastewater treatment.

FS Report

2 Institutional aspects

The beneficiary of the project is Compania Regionala de Apa Bacau SA which is the Regional Operating Company (ROC) from Bacau County.

The key institutional elements according to the strategy from the Sectoral Operational Programme (SOP) (the Intercommunity Development Association (IDA), the Regional Operating Company (ROC)) are implemented at the level of Bacau County and the Delegation Contract is going to be signed in the near future.

Institutional Analysis Report

3 Environmental aspects

Analysing the adverse and beneficial environmental impacts and the necessary mitigation measures determined to comply with the admissible environmental standards that are provided by extensive Technical Memoirs for each agglomeration, the LEPA Bacau will take the screening decision in the Technical Review Committee that will be held soon.

Chap. 13, EIA summary report (EIA Vol. V)

4 O&M The particular O&M cost categories are estimated as a composite

of: (i) the cost which is related to the proposed Project measures (“With Project Scenario”), and (ii) the O&M cost which is related to the existing system assets, assumed to be used further on (“Without Project Scenario”).

In the “With Project Case” the O&M cost for water activity are anticipated to decrease from EUR 8.3 million in 2009 to a level of EUR 7.8 million in 2018 and then increase to a level of EUR 14.9 million by the year 2039.

In the “With Project Case” the O&M cost for wastewater activity are anticipated to increase from EUR 2.6 million in 2009 to a level of EUR 5.4 million in 2018 and to a level of EUR 10.4 million by the year 2039.

In the “Without Project Case” the O&M cost for water activity

Financial and Economic Analysis, Chapter 4.3 – Projection of Operating Costs

EN 39 EN


Study


are anticipated to decrease from EUR 8.4 million in 2009 to a level of EUR 7.6 million in 2018 and then to increase to a level of EUR 14.5 million by the year 2039.

In the “Without Project Case” the O&M cost for wastewater activity are anticipated to decrease from EUR 2.6 million in 2009 to a level of EUR 3.7 million in 2018 and to a level of EUR 8.2 million by the year 2039.

5 Financial Indicators

The financial analysis uses the “incremental method”: that means, the project is evaluated on the basis of the differences between the scenario “with the project” and an alternative scenario “without the project”.

Based on a detailed analysis and assessment the Consultants propose the following financing scheme for the project (as percentage of total eligible costs):

- EU Grant: 76.98%;

- State Budget contribution: 11.77%;

- Local Budgets contribution: 1.81%;

- Loan contracted by the ROC: 9.44%.

The balance of the cash flow statement for the ROC shows positive ending balances in all years of the analysis; highlighting the sustainability of the operation of the ROC after project implementation.

Financial and Economic Analysis, Chapter 4.7 – Projection of EU Intervention Level

6 Tariff and affordability

The Consultant has elaborated a relatively detailed tariff study, performed to identify the most suitable tariff strategy for the particular regional operator.

The affordability policy for the water and wastewater sector is the following:

- The affordability limit for the poorest 10% of households is set at 4%, based on a per capita consumption of 75 litres per day.

- This corresponds to approximately 2% - 2.5% of the net income of an average income household.

The maximum affordability ratio for average income households, reached in 2013 is between 0.9% and 2.2%. These levels are relatively low and with good measures from the ROC they will assure a high collection ratio.

Financial and Economic Analysis, Chapter 4.6 – Affordability Analysis

7 Economic analysis

In order to prove that the project is advantageous to the society of the country the Consultant has performed a detailed economic analysis.

The results of the economic analysis are as follows:

- The Benefit/Cost ratio is about 2.67;

- The EIRR is 19.0 %;

- The NPV calculated at a discount rate of 5.5% is about EURO 201.6 million.

The project shows very satisfactory economic indicators with economic benefits significantly exceeding economic cost.

Financial and Economic Analysis, Chapter 5 – Economic Analysis

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8 Sensitivity analysis

In order to validate the assumptions used and to identify the most sensitive variables, a detailed sensitivity and risk analysis is performed in three parts.

The sensitivity analysis indicates that the results of the financial and economic analysis are rather robust.

Regarding the financial and economical analysis there are no critical parameters for which a variation of 1% would lead to a change of the financial NPV by more than 5%.

Financial and Economic Analysis, Chapter 6 – Sensitivity and Risk Analysis

9 Risk analysis A detailed risk analysis is conducted for the sensitive variables; it

is conducted at 2 levels:

- for the financial analysis parameters;

- for the economic analysis parameters.

The risk analysis indicates that there is no serious risk for a successful implementation and operation of the Project Measure.

Financial and Economic Analysis, Chapter 6 – Sensitivity and Risk Analysis

Give precise references if ERDF, Cohesion Fund, ISPA or other Community assistance is/was involved in the financing of the feasibility studies.

FS is part of the ISPA Project 2005 RO 16 P PA 001-002

C.1.1. Demand analysis

Provide a summary of the demand analysis, including the predicted utilisation rate on completion and the demand growth rate.

The demand forecast for the project agglomerations was prepared considering the following assumptions:

The population forecast was build based on previous figures from the past census and the estimated future growth of the population realised by the National Statistics Institute (Projection of the population of Romania on averages until year 2025 - Proiectarea populatiei Romaniei pe medii pana in anul 2025). The summary of the total population evolution is presented in the following table:

Total population 2008 2014 2018 2039

Bacau 197,013 195,142 193,993 183,710

Moinesti 23,902 23,641 23,483 22,178

Buhushi 19,644 19,429 19,299 18,227

Darmanesti 11,508 11,382 11,306 10,678

Targu Ocna 12,118 11,985 11,905 11,244

Total 264,184 261,579 259,986 246,036

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The evolution of connection rates is correlated with the implementation of investments and considers the impact of the proposed investments costs and additional ROC efforts. The evolution of connection rates is presented in the following 2 tables:

Connection level water services

2008 2014 2018 (reached by application)

2018 (finally as effect of ROC

effort*)

2039

Bacau 90% 90% 90% 100% 100%

Moinesti 84% 90% 90% 100% 100%

Buhushi 85% 90% 90% 100% 100%

Darmanesti 90% 90% 90% 100% 100%

Targu Ocna 97% 97% 97% 100% 100%

Total 89% 90% 90% 100% 100%

Connection level wastewater services

2008 2014 2018 (reached by application)

2018 (finally as effect of ROC

effort*)

2039

Bacau 73% 90% 90% 100% 100%

Moinesti 67% 90% 90% 100% 100%

Buhusi 54% 90% 90% 100% 100%

Darmanesti 0% 90% 90% 100% 100%

Targu Ocna 54% 90% 90% 100% 100%

Total 64% 90% 90% 100% 100%

*The ROC is aware of spending additional investments from other funds to reach 100% Connection Rate

In designing the individual demand forecast the following 2 elements were considered: a) The elasticity of quantity determined by the tariffs (the significant increases of tariff

on medium term will lead to a decrease of domestic water consumption);

b) The elasticity of quantity determined by the individual wealth (the increases of household revenues on long term will lead to increase in quantity);

The trend of the average individual consumption is presented in the following chart:

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Average individual consumption evolution

70

80

90

100

110

120

130

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

Lite

rs /

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pit

a /

da

y

The individual demand forecast was prepared considering the specific situation of each agglomeration and based on discussions with the ROC. Considering the significant differences between the current individual consumptions, the usage of unique parameters for price elasticity was not possible. The elasticity factors used for calculating the individual water consumptions are the following:

• Price elasticity on medium term:

o We have used a similar approach for all the agglomerations. We started from the actual individual consumption data in 2009 provided by the operator. An average elasticity factor of -0.18 was considered for the period 2011-2014.

o For Buhusi, Targu Ocna and Darmanesti agglomerations, which have a low actual consumption, we have used an increasing trend of consumption determined by the increase of connection to sewerage services (the households which are also connected to sewerage have the tendency to consume more water). We have considered that due to the low actual consumption the individual consumption will be very inelastic to price adjustments. This effect will be counterbalanced by the increase in household wealth: due to the fact that the need for water and wastewater services is basic it will be amongst the first to be satisfied when an increase in wealth is recorded.

The evolution of the individual consumption is not linked only to the evolution of price but should be also linked to the level of primary and secondary metering. The historical evolution recorded in the Romanian Water Sector proves that the impact of increase of metering on the evolution of individual consumption has a significant impact regardless the evolution of the tariff.

• Individual wealth elasticity: for the long term individual consumption we have used an average elasticity factor of 0.24.

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On medium term, it was considered that the average water consumption of water will equal the average wastewater generation considering the fact that the connection rates to the both services will become equal (or very close). In the case of Bacau County, after the finalization of investments (starting with 2014), in all except one of the agglomerations the connection level to wastewater services will be almost equal to the connection level to water services.

The evolution of individual consumptions is presented in the following table:

Individual water consumption (lcd)

2009 2014 2018 2039

Bacau 104 96 100 123 Moinesti 87 83 87 107 Buhusi 45 82 86 106 Darmanesti 59 83 87 108 TarguOcna 76 84 88 109 Other 72 66 69 86

Average 94 91 96 118 Non-domestic water consumption (invoiced water sales) is assumed to remain approximately constant on medium term (2009-2014) as result of the present international crisis and due to the price elasticity (increase of tariffs will lead to decrease of consumption) and will have an increasing trend starting with 2014 as result of the economic growth.

The evolution of the total water and wastewater consumption for each agglomeration is presented synthetically in the following tables:

Domestic water quantity (m3/year) 2009 2014 2018 2039

Bacau 6,720,325 6,126,572 6,398,745 7,352,194 Moinesti 639,103 642,501 670,507 776,305 Buhusi 276,088 523,366 546,181 632,336 Darmanesti 222,387 310,336 323,859 374,921 TarguOcna 325,400 356,417 371,960 430,628 Other 209,463 190,956 199,439 231,577

Total 8,392,765 8,150,146 8,510,693 9,797,961 Non-domestic water quantity (m3/year)

2009 2014 2018 2039

Bacau 3,355,270 3,019,743 3,142,357 3,872,615 Moinesti 272,246 245,021 249,959 277,559 Buhusi 89,010 80,458 83,725 103,182 Darmanesti 46,805 47,275 47,654 49,696 TarguOcna 273,546 276,292 278,509 290,444 Other 145,000 113,682 118,298 145,789

Total 4,181,877 3,782,472 3,920,502 4,739,285

The development of the wastewater generation was estimated starting from the actual consumptions, considering the level of water consumption for each category of consumers and the impact of the investment project. The evolution of the wastewater generation for each agglomeration is presented in the following table:

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Total wastewater invoiced (m3/year)

2008 2014 2018 2038

Bacau 10,175,056 9,448,289 9,855,338 11,598,076 Moinesti 748,586 863,020 895,470 1,027,910 Buhusi 525,307 837,978 873,568 1,034,301 Darmanesti 2,562 352,883 366,748 421,051 Targu Ocna 429,759 579,373 595,790 662,030

Total 11,881,270 12,081,543 12,586,914 14,743,368

The detailed assumptions used for the demand forecast for each agglomeration are presented in the Technical Feasibility Study and in the Financial and Economic Analysis (Chapter 1.4).

C.1.2. Options considered

Outline the alternative options considered in the feasibility studies.

A. Selection of the Strategic Options Performed in Masterplan Option analyses have been made for water supply and wastewater. The results of these option analyses tip the scale for the implementation of centralized or de-centralized water supply and wastewater systems.

The strategy towards determining the most appropriate solution for the wastewater sector has been developed in a case-by-case analysis taking different sound technical solutions into consideration.

The decision about a common or a separate system has been based on an economic analysis through calculation of the net present values for all possible solutions. In the end, the most cost efficient solution has been selected.

The option analysis gives a detailed overview of the approach, and the assumptions and details of the refined calculations. The economic analysis includes investment costs as well as operation and maintenance costs for all relevant elements. The basis for the selection of the most preferable solution for a clustered agglomeration is the Net Present Value.

As an economic result of the option analysis the solution with one central WWTP for several agglomerations turned out to be most cost efficient solution for all investigated agglomerations. Also the more efficient maintenance and operation costs of a central treatment facility are reasons for centralized wastewater systems. Agglomerations below 2,000 P.E. were connected to a wastewater system in case a main collecting sewer of a bigger agglomeration runs through the agglomerations or if the WWTP is located in the smaller agglomerations.

Depending on the different compliance dates and the geographic locations of the settlements, the Consultant proposes a phasing of investments in the clustered agglomerations.

Results for project area are shown in chapter B below.

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The option analysis for the water supply sector has been performed based on the existing conditions. As different regional solutions have been planed for the County of Bacau and as local sources are partly contaminated and/or inadequate for human consumptions, option analyses have been carried out within the five of the 19 supply areas W10 Damienesti - Plopana, W13 Horgesti - Ungureni, W14 Pancesti – Dealu Morii, W15 Filipeni - Rachitoasa and W16 Podu Turcului - Motoseni. In the supply areas W01 Bacau city and surroundings, W02 Moinesti till Onesti and W04 Slanic Moldova centralized solutions represent the only conceivable solution. In all other 10 supply areas de-centralized solutions represent the only conceivable ones.

In the areas W10 Damienesti - Plopana Region that lies in the north-eastern corner of the county the centralised option including a transport system from Bacau city is 34 % more expensive than the de-centralised one. In the neighbouring areas W13 Horgesti – Ungureni and W15 Filipeni - Rachitoasa that lies in the east of the county the centralised option including a transport system from Bacau city is 18 % more expensive than the de-centralised one. In the neighbouring areas W14 Pancesti – Dealu Morii and W16 Podu Turcului - Motoseni that lie in the south-east corner of the county the centralised option including a transport system from Siret valley is 55 % more expensive than the de-centralised one. For all 5 areas the de-centralised option is significantly cheaper and was selected.

B) SELECTION OF THE TECHNICAL SOLUTIONS 1 Agglomeration Bacau

Water Supply

There are no supply options inside Water Supply Zone Bacau

Wastewater

The agglomeration Bacau contains the capital Bacau City as well as the settlements Crihan, Padureni, Trebes, Valea Budului, Margineni, Barati, Letea Veche, Dealu Mare, Magura, Hemeius and Lilieci. Furthermore, the settlement Saucesti will join the cluster of Bacau in phase 2 (compliance date 2018) and the settlements Fantanele, Sohodol and Bogdan Voda in phase 3.

In the master plan study, the goal of the option analysis has been to find the most economical solution, comparing the following 2 options:

Option 1: 1 WWTP 1 in Bacau for Bacau Agglomeration, 1 WWTP 2 at Saucesti and 1 WWTP 3 at Hemeius

Option 2: 1 central WWTP in Bacau for the whole cluster

The following table summarizes the screening of options.

Existing assets Description of key deficiencies

Identification of options First screening Justifications for selection

Advantages:

- Only 2 pumping stations and pressure lines necessary

WWTP Bacau

Existing sewer network in Bacau

- Effluent quality does not meet

requirements of UWWTD because no

efficient Nitrogen and Phosphorous

removal is existing

- Poor condition of

1) 1 WWTP in Bacau, 1 decentral

WWTP in Saucesti, 1 decentral WWTP in

Hemeius

rejected

Disadvantages:

- Higher NPV than option 2 because of higher investment

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and operational costs

- 3 WWTPs to operate

Advantages:

- Only 1 WWTP to operate

- Lowest NPV due to lowest investment and operational costs

Disadvantages:

- 3 pumping stations and pressure lines necessary

electro-mechanical equipment and of civil structures

2) 1 central WWTP in Bacau

retained

Justification for selection: Lowest NPV

The financial evaluation (NPV assessment) is compiled in the following table.

Option 2/ Final cost Option 1

P.E. 314,862 314,862

Investment Sum 45,787,616 52.926.853

specific costs Investment Sum 145 168

100.0% 115.6%

Operation cost 2,952,416 3,026,789

100.0% 102.5%

Discounted Present Value 94,112,507 102,710,793

spec. NPV Euro/p.e. 299 326

100.0% 109.1%

Due to economic reasons Option 2 was selected as preferred solution.

2 Agglomeration Moinesti

Water Supply

There are no supply options inside Water Supply Zone Moinesti.

Wastewater

The agglomeration of Moinesti comprises the town Moinesti and the locality Gazarie. The settlement Zemes will join the clustered agglomeration in phase 3.

For Moinesti cluster the following 2 options have been analysed:

Option 1: 1 central WWTP in Moinesti North with 3 PS

Option 2: 1 WWTP in Moinesti North and 1 WWTP in Moinesti South


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Advantages:


- Lower NPV compared to option 2 due to lower operation

costs

Disadvantages:

- 3 pumping stations in Moinesti South and one in Gazarie

necessary

1) 1 central WWTP in Moinesti North

with 3 PS retained


Advantages:

- Only 1 pumping station in Gazarie necessary

WWTP Moinesti North

Existing sewer network Moinesti North




removal is existing

- Poor condition of electro-mechanical equipment and of civil structures

2) 1 WWTP in

Moinesti North and 1 WWTP in Moinesti

South

rejected Disadvantages:


- Higher NPV compared to option 1 due to higher operation

costs


Option 1/ Final cost Option 2

P.E. 31,719 31,719

Investment Sum 17,814,902 17,491,511


100.0% 98.2%

Operation cost 486,833 504,638

100.0% 103,7%



100.0% 100.1%

Due to economic reasons Option 2 was selected as preferred solution.

3 Agglomeration Buhushi

Water Supply

There are no supply options inside Water Supply Zone Buhusi

Wastewater

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The agglomeration of Buhusi comprises only the town Buhusi itself. The settlements Blagesti, Buda, Valea Lui Ion, Tardenii Mari and Racova will join the cluster in phase 2 (compliance date 2018).

For Buhusi Cluster the following 2 options have been analysed:

Option 1: 1 WWTP 1 in Buhusi, 1 WWTP 2 in Blagesti, 1 WWTP 3 in Racova and 1 WWTP 4 in Valea Lui Ion

Option 2: 1 central WWTP in Buhusi




Advantages:

- No pumping station and pressure line necessary 1) 1 WWTP 1 in

Buhusi, 1 WWTP 2 in Blagesti, 1 WWTP

3 in Racova and 1 WWTP 4 in Valea

Lui Ion

rejected Disadvantages:


- Higher NPV compared to option 2 because of higher

investment and operational costs

Advantages:

- Lower NPV compared to option 1 due to lower investment

and operational costs


Disadvantages:

- Pumping station in Buda and pressure line necessary

WWTP Buhusi

Existing sewer network Buhusi




removal is existing

- Poor condition of electro-mechanical equipment and of civil structures

2) 1 central WWTP in Buhusi

retained



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Option 2 / Final Option 1

P.E. 34,823 34,823

Investment Sum 22,620,442 23,681,501


100.0% 104.7%

Operation cost 497,317 602,879

100.0% 121.2%



100.0% 109.5%

Option 2 was selected as preferred solution due to economic reasons.

4 Agglomeration Darmanesti

Water Supply

There are no water supply measures inside Darmanesti WSZ.

Wastewater

The agglomeration Darmanesti includes the settlements Darmanesti, Darmaneasca and Lapos. The cluster will be joined in phase 3 by the settlements Salatruc, Pagubeni and Plopu. Due to the position of Darmanesti Agglomeration with no proximity to other relevant settlements and no possibility to connect it to other agglomerations by gravity, no option analysis was carried out.

5. Agglomeration Targu Ocna

Water Supply

There are no water supply measures inside Targu Ocna WSZ.

Wastewater

The agglomeration Targu Ocna includes the town Targu Ocna and Valcele. The cluster will be joined in phase 3 by the settlements Poieni and Bogata. Due to the position of Targu Ocna Agglomeration with no proximity to other relevant settlements and no possibility to connect it to other agglomerations by gravity, no option analysis was carried out.

D. TIMETABLE

D.1. Project timetable

Give below the timetable for the development of the overall project.

Where the application concerns a project stage, clearly indicate in the table the elements of the overall project for which assistance is being sought by this application:

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Start date (A)

Completion date (B)

1. Feasibility studies: 01/06/2008 31/08/2010

2. Cost-benefit analysis (including financial) 15/03/2009 23/08/2010

3. Environmental impact assessment: 16/12/2009 ongoing

4. Design studies: 01/12/2009 31/12/2010**

5. Preparation of Tender documentation: 30/03/2010 31/01/2011**

6. Expected launch of tender procedure(s)* 15/10/2010 15/02/2011**

7. Land acquisition: n/a n/a

8. Construction phase / contract: 01/12/2010 31/12/2013

9. Operational phase: 01/01/2014 01/01/2054

**…Latest Contracts

An overview about the planned procurement is shown in the following table, details can be found in annex III:

Contract Nr. TitleSum incl. Conting.

Start works End Works

1 WWTP Bacau 14,064,427 € Dec-2010 Dec-20122 WW-Network Buhusi and Moinesti 12,014,467 € Jan-2011 Dec-20133 WS-Networks Buhusi and Moinesti 1,766,111 € Jan-2011 Dec-20124 WW-Network Bacau 10,811,797 € Jan-2011 Dec-20135 Rehabilitation WTP Caraboaia 3,857,041 € Feb-2011 Dec-20126 WWTPs Moinesti and Buhusi 16,550,220 € Feb-2011 Dec-20137 WW-Networks Darmanesti and Targu Ocna 22,161,451 € Mar-2011 Dec-20138 New WWTP Darmanesti and Rehabilitation WWTP Targu Ocna 9,653,810 € Mar-2011 Dec-2013

9 Service Contracts Bacau 7,580,989 € Dec-2010 Dec-2013 * Specify for each tender

Please attach a summary schedule of the main categories of works (i.e., a Gantt chart, where available).

D.2. Project maturity

Describe the project timetable (D.1) in terms of the technical and financial progress and current maturity of the project under the following headings:

D.2.1. Technical (feasibility studies, etc.):

Masterplan: Approved by MEF on 04/02/2009

Feasibility Study: Draft version delivered on 31/08/2010

Service and Work contracts: planned during years 2010/2011

D.2.2. Administrative (authorisations, EIA, land purchase, invitations to tender, etc.):

Authorisations and permits:

The following authorisations and permits have been already issued:

- Urbanism Certificates for each agglomeration …ongoing

- Water Management permits from the responsible National Administration “Apele Romane” … ongoing;

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- Environmental Impact Assessment Permits – ongoing

- Natura 2000 Declaration (See Annex I)…ongoing;

- Special permits like “Building permits” have to be obtained by the Work Contractors after the signatures of the Work Contracts.

Land purchase:

Declarations regarding the availability of the land for the location of the future work: There is no land acquisition required. Lands required for the proposed investments are owned by the local authorities and are available for the project objectives.

D.2.3. Financial (commitment decisions in respect of national public expenditure, loans requested or granted, etc. - give references):

Considering (i) the level of the financing gap calculated, (ii) the provisions regarding the financing of the financing gap according to the Sectoral Operational Programme (SOP Environment), and (iii) the decisions of the local stakeholders, the financing scheme proposed to cover the project investment cost which are considered after approval by the EC as eligible cost, has the following structure (% in total eligible investment costs):

� EU Grant: 76.98%;

� State Budget contribution: 11.77%;

� Local Budgets contribution: 1.81%;

� Loan contracted by the ROC: 9.44%

All costs related to the project are expected to be eligible. Considering this, the financial plan for the total investments is identical with the financing plan for the eligible costs.

The financing plan for the eligible cost is presented in the following table in EUR (current prices):

Financing plan (Euro)

Total 2009 2010 2011 2012 2013

Eligible cost (117,301,887) - (1,112,581) (44,779,166) (47,213,316) (24,196,824)

EU Grant 90,297,149 - 856,447 34,470,298 36,344,068 18,626,335

State Budget 13,810,152 - 130,986 5,271,928 5,558,505 2,848,734

Local Budget 2,124,639 - 20,152 811,066 855,155 438,267

ROC Loan 11,069,948 - 104,996 4,225,874 4,455,588 2,283,489

The local authorities decided that their co-financing contribution to be financed by each local authority part of the project.

The operator is still in process of analyzing the options for the co-financing loan (IFI vs. commercial banks). This process will be finalized in the following months.

The loan will be repaid by the ROC from the revenues generated by the water and wastewater activities.

The contribution from the central authorities is in line with the provisions of the Sectoral Operational Programme (SOP Environment).

The financing plan in the structured required by the Managing Authority is presented in the following table in EUR (current prices):

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D.2.4. If the project has already started, indicate the current state of works:

The project has not started

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E. COST-BENEFIT ANALYSIS

This section should be based on the Guidelines on the methodology for carrying out the cost-benefit-analysis of major projects. In addition to the summary elements to be provided, the full cost-benefit analysis document shall be provided in support of this application as Annex II.

E.1. Financial analysis

The key elements from the financial analysis of the CBA should be summarised below.

E.1.1. Short description of methodology and specific assumptions made

Methodology

The cost benefit analysis was carried out in accordance with the rules set put in the Council Regulation 1083/2006 for the 2007 – 2013 programming period of the Cohesion Fund and follows the principles presented in the EU “Working Document no.4: Guidance on the Methodology for carrying out Cost – Benefit Analysis” (version August 2006) and in the “Guidelines for the Cost Benefit Analysis of Water and Wastewater Projects to be supported by the Cohesion Fund and the European Regional Development Fund in 2007 – 2013” (version December 2008 and updated in April 2009).

The financial analysis of the project is carried out at incremental level on a 30 – year period (2010 – 2039) based on the two scenarios envisaged:

- “With Project”: one ROC covering the entire project area, implementing the current project and operating the existing infrastructure and the one to be built following the implementation of the project,

- “Without Project: business as usual, based on the existing infrastructure,

General approach

In general terms the financial analysis takes into account all relevant data and information made available from the various sources and especially the reports, financial statements and production / service data provided by the former water utilities for the years 2007 and 2008. It takes further into account the socio-economic data and background information presented in the Master Plan Report and the technical concepts, demand projections and cost estimates, as detailed in the respective chapters of the Feasibility Study.

According to EU standard the CBA, and thus also the financial analysis has to use the “incremental method”: that means, the project is evaluated on the basis of the differences between the scenario “with project” and the scenario “without project”. For the “with project” scenario costs and revenues considered must be those of a scenario of efficient operation. For the “without project” scenario costs and revenues considered are those of a “business as usual”, without any major new investments or rehabilitations.

Institutional issues

The financial forecast considers the impact of the regionalization process on the financial performances of the Regional Operating Company (ROC). The implemented institutional set-up is in line with the provisions of the Sectoral Operational Programme (SOP Environment).

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Projection of water and wastewater sales

The projection of water and wastewater sales is carried out in line with the assumptions and projections outlined in Section C1.

Affordability analysis approach

The affordability policy for the water and wastewater sector as applied for the project is in line with the provisions of the SOP and with the policy of the Ministry of Environment; the key issues are:

- The affordability limit for the poorest decile (10%) of households is set at 4%, calculated on an assumed per capita consumption of 75 litres per day;

- This corresponds to approximately 2.0% - 2.5% of the net income of an average income household.

Considering this policy, the affordability analysis is performed at 2 levels:

- Affordability analysis for low income households;

- Affordability analysis for average income households.

Projection of operating cost

The projection of operating costs is based on the actual O&M cost as provided by the particular water utilities for the years 2007 and 2008 (in RON) and then projected on an annual basis in line with the implementation schedule elaborated within the Feasibility Study for the period 2010 to 2039; in EUR (constant prices).

The operating costs are calculated with specific assumptions separately for the “with project” and the “without project” scenario.

Projection of revenues

The revenues are calculated with specific assumptions separately for the “with project” and the “without project” scenario.

The projection of the revenues for the “with project case” is based on the development of tariff levels as defined in a detailed Tariff Strategy Study and the demand projections as outlined above. It is assumed that from 2013 onwards there will be a unified tariff for the whole service area of the ROC with in principle equal tariffs for domestic and non-domestic customers.

The revenues for the “without project case” are defined as required for cost recovery in the “without case” (that means to cover in each year O&M cost, depreciation and a profit charge. The revenues are calculated and stated on an annual basis in EUR (constant prices).

Calculation of financing gap

The financing gap is calculated based on the methodology as provided by the “Guidelines for Cost Benefit Analysis of Water and Wastewater projects to be supported by the Cohesion Fund and the European Regional Development Fund in 2007-2013” prepared by the Ministry of Environment and JASPERS for the Romanian Water Sector Projects.

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Financing the gap

According to the Sectoral Operational Programme, the financing mix considered for financing the “financing gap” has the following structure:

- EU Grant for the priority axis: 85%;

- State Budget Contribution: 10% - 13%;

- Local Budget Contribution: 2% - 5%.

A detailed analysis was conducted in order to define and set appropriate percentage portions for the local and state budget contributions.

Projection of financial statements for the ROC

In order to assess the sustainability of the Regional Operator with the Project Measure the Consultant has elaborated the following financial statements (in constant EUR):

- Balance sheet;

- Income statement;

- Cash flow statement.

Economic analysis

In order to prove that the project is advantageous to the society of the country the Consultant has performed a detailed economic analysis. The economic analysis is based on the methodology provided by the “Guidelines for Cost Benefit Analysis of Water and Wastewater projects to be supported by the Cohesion Fund and the European Regional Development Fund in 2007-2013” prepared by the Ministry of Environment and JASPERS for the Romanian Water Sector Projects.

Sensitivity analysis

In order to validate the assumptions used and to identify the most sensitive variables, a detailed sensitivity and risk analysis is performed in three parts:

Analysis (1) shows the effects of variation in key parameters on the “financing mix”;

Analysis (2) shows the effects of variation in key parameters on the “financial results” (FNPV and FRR);

Analysis (3) shows the effects of variation in key parameters on the “economic results” (B/C ratio, ENPV, ERR).

Risk analysis

A detailed risk analysis is conducted for the sensitive variables at 2 levels:

- For the financial analysis parameters;

- For the economic analysis parameters.

The risk analysis regarding the financial parameters considers the following variables:

- Investment costs;

- Operating and maintenance costs;

- Revenues.

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The risk analysis regarding the economic parameters considers the following variables:

- Investment costs;


- Environmental benefits.

Both risk analyses are carried out for a number of scenarios and anticipated probability distributions for each scenario. The variables tested are:

- FNPV/C and FNPV/K for the financial analysis;

- ENPV and ERR for the economic analysis.

E.1.2. Main elements and parameters used in the CBA for financial analysis

Main elements and parameters Value Not discounted

Value Discounted (Net Present Value)

1 Reference period (years) 30

2 Financial discount rate (%)6 5.0%

3 Total investment cost excluding contingencies (in euro, not discounted)7

97,732,908

4 Total investment cost (in euro, discounted)

89,621,847

5 Residual value (in euro, not discounted)

21,126,216

6 Residual value (in euro, discounted) 5,132,536 7 Revenues (in euro, discounted) 42,580,091 8 Operating costs (in euro, discounted) 39,254,885

Funding gap calculation8

9 Net revenue = revenues – operating costs + residual value (in euro, discounted) = (7) – (8) + (6)

8,457,742

10 Investment cost – net revenue (in euro, discounted) = (4) – (9) (Article 55 (2))

81,164,104

11 Funding gap rate (%) = (10) / (4)

90.5629%

6 Specify if the rate is real or nominal. If the financial analysis is conducted in constant prices, a financial discount

rate expressed in real terms shall be used. If the analysis is conducted in current prices, a discount rate in nominal terms shall be used.

7 Investment cost should here exclude contingencies in accordance with working document number 4. 8 This does not apply: 1) for projects subject to the rules on State aids in the meaning of Article 87 of the EC Treaty

(see point G.1), pursuant to Article 55(6) of Regulation (EC) No 1083/2006 and 2) if operating costs are higher than revenues the project is not considered as revenue generating in the sense of Article 55 of Regulation (EC) No 1083/2006, in which case, ignore items 9 and 10 and set funding gap to 100%.

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Where VAT is recoverable, the costs and revenues should be based on figures excluding VAT.

The analysis is conducted in real terms and 5% real discount rate was used.

E.1.3. Main results of the financial analysis

Without Community assistance (FRR/C)

A

With Community assistance (FRR/K)

B9

1. Financial rate of return (%) -5.09% FRR/C -0.28% FRR/K 2. Net present value (euro) -87,558,333 FNPV/C -11,300,021 FNPV/K

E.1.4. Revenues generated over its lifetime

If the project is expected to generate revenues through tariffs or charges borne by users, please give details of charges (types and level of charges, principle or Community legislation on the basis of which the charges have been established).

(a) Do the charges cover the operational costs and depreciation of the project?

The water and wastewater tariffs are set in order to assure full cost recovery and a sustainable development of the Regional Operator. The designed tariff strategy also considers affordability constrains for domestic customers according to the policy principles as presented in Section E.1.1- paragraph 4.

In order to achieve both objectives, the following annual increase of tariffs (in real terms) is to be implemented by the ROC in ordered to assure tariff unification by the year 2014x and a sustainable development:

Tariff unification strategy Actual Tariffs

2011 2012 2013 2014

Bacau

Water 2.62 0.0% 0.0% 5.0% 0.0%

Wastewater 1.00 30.0% 0.0% 20.0% 25.0%

Moinesti

Water 2.57 0.0% 0.0% 7.0% 0.0%

Wastewater 0.77 24.0% 0.0% 40.0% 45.9%

Buhusi

Water 2.62 0.0% 0.0% 5.0% 0.0%

Wastewater 0.75 24.0% 0.0% 35.0% 55.3%

Darmanesti Water 1.06 49.0% 0.0% 33.0% 31.0% Wastewater 0.43 67.0% 0.0% 65.0% 64.6%

Targu Ocna Water 2.05 9.3% 0.0% 10.0% 11.7% Wastewater 0.87 16.0% 0.0% 30.0% 48.6%

Traian

9 For the calculation of the project profitability without ("/C") and with ("/K") Community assistance, refer to the

guidance provided by the Commission in line with Article 40 of Regulation (EC) No 1083/2006.

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2011 2012 2013 2014

Water 1.66 19.3% 0.0% 18.6% 16.9% Wastewater - - 0.0% 0.0% 0.0%

Filipesti Water 1.66 19.3% 0.0% 18.6% 16.9% Wastewater - - 0.0% 0.0% 0.0%

Magiresti Water 1.66 19.3% 0.0% 18.6% 16.9% Wastewater - - 0.0% 0.0% 0.0%

Ardeoani Water 1.80 15.0% 0.0% 15.5% 15.0% Wastewater - 0.0% 0.0% 0.0% 0.0%

Poduri Water 1.61 20.5% 0.0% 19.5% 18.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Tatarasti Water 1.71 17.5% 0.0% 17.0% 16.8% Wastewater - 0.0% 0.0% 0.0% 0.0%

Prajesti Water 1.61 20.5% 0.0% 19.5% 18.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Tg Trotus Water 1.67 18.6% 0.0% 18.0% 17.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Faraoani Water 1.62 20.4% 0.0% 19.0% 18.5% Wastewater 0.65 34.0% 0.0% 45.0% 54.4%

Buciumi Water 1.59 21.4% 0.0% 19.6% 19.0% Wastewater - 0.0% 0.0% 0.0% 0.0%

Casin Water 1.94 11.3% 0.0% 13.0% 12.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Racaciuni Water 2.52 1.2% 0.0% 3.5% 4.2% Wastewater 1.35 1.0% 0.0% 15.0% 24.5%

Ungureni Water 3.00 -4% 0.0% -4.4% -0.1% Wastewater - 0.0% 0.0% 0.0% 0.0%

Dealu Morii Water 3.00 -4% 0.0% -4.4% -0.1% Wastewater - 0.0% 0.0% 0.0% 0.0%

Gaiceana (populatie) Water 1.01 52.5% 0.0% 35.0% 32.5% Wastewater 0.5 54.0% 0.0% 55.0% 63.5%

Gaiceana (ag economici)

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2011 2012 2013 2014

Water 1.35 31.1% 0.0% 25.0% 24.5% Wastewater 0.5 54.0% 0.0% 55.0% 63.5%

Nicolae Balcescu Water 1.80 15.0% 0.0% 15.0% 15.6% Wastewater - 0.0% 0.0% 0.0% 0.0%

Hemeiusi Water 4.07 -13.4% 0.0% -11.9% -11.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Sarata Water 1.68 18.5% 0.0% 18.0% 17.0% Wastewater - 0.0% 0.0% 0.0% 0.0%

Izvorul Berheciului Water 2.00 10.0% 0.0% 11.0% 12.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Margineni Water 3.42 -8.2% 0.0% -7.3% -5.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Parincea Water 3.50 -9.0% 0.0% -7.5% -6.5% Wastewater 0.50 54.0% 0.0% 55.0% 63.0%

Parincea Water 1.70 17.7% 0.0% 17.4% 17.0% Wastewater 0.50 54.0% 0.0% 55.0% 63.0%

Pargaresti Water 1.39 29.5% 0.0% 25.0% 22.0% Wastewater - 0.0% 0.0% 0.0% 0.0%

Sat Parau Boghii Water 0.71 88.7% 0.0% 45.0% 41.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Colonesti Water 1.14 43.0% 0.0% 30.0% 30.0% Wastewater - 0.0% 0.0% 0.0% 0.0%

Palanca Water 1.00 54.0% 0.0% 35.0% 32.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Rachitoasa Water 1.20 39.2% 0.0% 30.0% 26.5% Wastewater - 0.0% 0.0% 0.0% 0.0%

Stefan cel Mare Water 1.53 23.5% 0.0% 21.0% 20.3% Wastewater - 0.0% 0.0% 0.0% 0.0%

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The local authorities (the entities responsible for approval of tariff adjustments) are aware of the need of these tariff increases and will include them in the delegation contract.

The ROC is preparing and updating the corporate business plan on an annual basis. As part of the business plan process the ROC is performing the following activities related to tariff strategy:

- Prepare a medium term financial forecast in order to assure the sustainable development of the Operator;

- Identify the impact of any new elements on the activity of the Operator and adjust the tariff strategy based on these impacts and considering the affordability constrains;

- Perform an affordability study and identify the categories of population that are not able to pay the water and wastewater bill and assess the impact on the collection ratio. Together with IDA and the local authorities find solutions, on a year to year basis, for these categories of inhabitants.

(b) Do the charges differ between the various users of the infrastructure?

Currently there are equal tariffs for domestic and non-domestic customers, both for water and wastewater services (except for Gaiceana and Parincea agglomerations). The tariff levels are also unified between the different sub-areas within the overall service area of the ROC.

With the implementation of the Project Measure it is assumed that from now onwards there will be one unified water tariff for the whole service area of the ROC, with equal tariff rates for domestic and non-domestic customers.

There will also be one unified wastewater tariff with equal tariff rates for domestic and non-domestic customers.

The increase of tariff rates in real terms in order to assure a sustainable development is presented in the table in Section E.1.4.a).

(c) Are the charges proportional

i) To the use of the project/real consumption?

It is assumed that after completion of the Project Measure 100% of the connected customers are metered, with functioning water meters.

As there is no “fixed charge” (“standing charge”) the charges for all categories of customers are proportional to the actually metered volumes of water consumption.

As wastewater tariffs are applied on the quantities of metered water sales, also wastewater charges are proportional to the volumes of metered water consumption.

ii) To the pollution generated by users?

Regarding water consumption there is no indication for different levels / quantities of pollution generated by domestic and non-domestic customers. Thus the equal water tariffs applied are considered proportional to pollution generation.

Regarding wastewater discharge, domestic and non-domestic customers have to pay in principle equal wastewater tariffs; non-domestic customers have, however, to pay in addition a “pollution charge” in case that they exceed the agreed levels for the

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quality of the discharged wastewater. The ROC is constantly monitoring the industrial companies and this extra “pollution charge” is applied only for exceeding the contractual requirements (according to the legal provisions).

If no tariffs or charges are proposed, how will operating and maintenance costs be covered?

For this project a full cost covering tariff system is applied.

E.2. Socio-economic analysis

E.2.1. Provide a short description of methodology (key assumptions made in valuing costs and benefits) and the main findings of the socio-economic analysis:

In order to prove that the project is advantageous to the society of the country the Consultant has performed a detailed economic analysis. It is based on the following assumptions:

- The period of evaluation is 2010 to 2039:

- The base year for evaluation is 2010, the first year of project implementation;

- All cost and benefit figures are stated in constant economic prices;

- Social discount rate used for calculation of NPV is 5.5%.

The cost components considered are:

- Project investment cost;

- Replacement cost;

- Project OM&A cost.

- CO2 emissions;

For the negative externalities (CO2 emissions) the following assumptions were used:

Negative Externalities

Type Base for calculation Monetary value Comments

Increase in CO2 emission – sludge digestion

CO2 emission (in tonnes)

From 25 Euro/tonne in 2010 to 45 Euro/tonne in 2030

Increase in CO2 emission – sludge transportation

CO2 emission (in tonnes)

From 25 Euro/tonne in 2010 to 45 Euro/tonne in 2030

For the economic analysis the financial cost have to be transferred into economic cost by applying appropriate conversion factors.

Within the framework of the economic analysis for Bacau County there is only one conversion factor applied. It is a conversion factor for labour cost, used to exclude the transfer payments included in labour cost (like taxes and social security payments) and to establish a shadow price for labour considering unemployment.

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The determination of the economic benefit is based on a comparison of the situation “with project” and “without project”. The comparison of “without project” and “with project” scenarios differs from the comparison of the situations “before” and “after” the project, as the latter does not describe the situation which would prevail if the project was not undertaken.

The estimation of the project economic benefits involves the identification of the project benefits, which can be classified into the following three main categories:

a). Benefits from improved access to drinking water, which translates into more water of adequate quality sold to the customers, either through increase of the coverage of the water supply service or to the increase in individual consumption due to the improvement of the quality of the service (i.e.: increase of pressure and decrease of service interruptions).

b). Benefits from improved quality of bathing and other surface waters, which translates into an improvement in the overall conditions of water bodies in the project area as a result of pollution prevention.

c). Resource cost savings:

- for the customers, which takes place (i) when the customer does no longer need to rely on private wells, private pumps, septic tanks, and does no longer have to buy bottled water

- for the operator, through the optimization of the system which allows for a reduced resource depletion through water abstraction as well as a reduction in emissions related to energy savings.

The summarizations of the individual benefits are presented in the following table (according to the JASPERS CBA Guide for Romania).

Project Benefits Type Base for calculation Monetary value Comments

Access to drinking water Nr. Of households in project service area

148 Euro/household/year (2008 value)

Values for following years of projection to be increased by real GDP growth

Improvement of water bodies (use value)

Nr. Of people living in the project service area

20.4 Euro/person/year (2008 value)

Values for following years of projection to be increased by real GDP growth

Improvement of water bodies (non use value)

Nr. Of households in project service area

0.004 – 0.011 Euro/household/year/KM

river

Cost savings to customers – private well

Nr. Of households newly connected

315 Euro/household/year

Cost savings to customers – sewage disposal

Nr. Of households newly connected

348 Euro/household/year

Cost savings to operator – water abstraction

Incremental water savings (in m3)

Water abstraction fee (Apele Romane)

Cost savings to operator – energy consumption

CO2 emission savings (in tonnes)

From 25 Euro/tonne in 2010 to 45 Euro/tonne in

2030

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E.2.2. Give details of main economic costs and benefits identified in the analysis together with values assigned to them:

Benef i t Unit value (where

appl icable)

Total value

( in euro, discounted)

% of tota l benef i ts

Access to dr inking water

148 Euro/household/year 147,114,850 45.68%

Improvement of water bodies (use

value) 20.4 Euro/person/year 105,369,237 32.71%

Improvement of water bodies (non

use value)

0.004 – 0.011 Euro/household/year/KM r iver

313,761 0.10%

Cost saving to customers - pr ivate wel l

315 Euro/household/year 804,097 0.25%

Cost saving to customers -

sewage disposal 348 Euro/household/year 67,378,039 20.92%

Cost saving to operator water

abstract ion 0.012 Euro/m3 0 0.00%

Cost saving to operator - energy

consumpt ion

From 25 Euro/ tonne CO2 in 2010 to 45 Euro/ tonne CO2 in

2030 1,102,629 0.34%

Cost Unit value (where

appl icable)

Total value

( in euro, discounted)

% of tota l costs

Result ing overa l l economic capital

costs N/a 91,078,195 75.62%

Incrementa l economic

operat ion cost for water

&wastewater

N/a 28,934,796 24.02%

CO2 emissions From 25 Euro/ tonne in 2010 to

45 Euro/ tonne in 2030 433,791 0.36%

E.2.3. Main indicators of the economic analysis

Main parameters and indicators Values

1. Social discount rate (%) 5,5%

2. Economic rate of return (%) 19.0%

3. Economic net present value (in euro) 201,635,832

4. Benefit-cost ratio 2.67

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E.2.4. Employment effects of project

Provide an indication of the number of jobs to be created (expressed in terms of full-time equivalents (FTE)).

Number of jobs directly created: No (FTE)

(A)

Average duration of these jobs (months)10

(B)

1. During implementation phase 200 36

2. During operational phase 10 permanent

[NB: indirect jobs created or lost are not sought for public infrastructure investments.]

E.2.5. Identify the main non-quantifiable / non valuable benefits and costs:

The main non-quantifiable / non valuable benefits and costs identified for the project are the following:

(1) Development effects:

One of the most important general effects not considered within the quantitative economic assessment is the anticipated impact of the improved public water and wastewater infrastructure on the regional economic development of Bacau County. The improvement of the water quality and rehabilitation of the sewerage and water network will be an incentive for the commercial companies, real estate investors and residential house developers to invest in Bacau County.

(2) Health effects:

There will be a significant impact on the immediate communities from the reduced level of pollutants in water and wastewater. This will also in the long term improve the ground water aquifer leading to a further reduction in pollutants in potential drinking water resources. The availability of safe drinking water for an increased number of inhabitants will considerably reduce the risk of water born diseases, the extent of drug consumptions and the number of sickness days of employees. The estimate of the health effects considered in the quantitative economic analysis covers just a part of these effects.

(3) Water quality:

There will be a significant improvement of the water quality of the rivers and their surrounding environment and of the groundwater quality in the project area. Stopping the infiltrations of untreated wastewater into the underground layer will lead to considerable reduction of organic and nutrient pollution load discharged directly into receiving water body.

(4) Environmental effects:

(i) Considerable reduction of organic and nutrient pollution load discharged directly into the receiving water body;

(ii) Elimination of groundwater and subsoil contamination through rehabilitation of wastewater collectors and elimination of leakages;

10 In case of permanent jobs, instead of duration in months, type "permanent".

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(iii) Reduction of health risks for the population by eliminating discharge of untreated or insufficiently treated wastewater;

(iv) Generation of energy by gas generation in sewage sludge digesters; the energy is used for heating and saves energy, which usually is generated from non-renewable energy sources.

(5) Employment effect

The project will generate additional employment in the area during the 4 years of implementation period; with a considerable portion of manual labour, with benefits for all social groups in the area.

(6) Impact from construction works:

There will be limited impact on population and neighbouring land ownership, the main works will be extension and rehabilitation works.

The main hindrance will be the impact on local traffic flows caused by truck and staff transport during the 4 years of construction period. In general there will be a certain hindrance but it will have just limited impact on the inhabitants or economic and recreational activities in the local area; the impact will be mitigated by appropriate traffic management at key junction points.

(7) Impact on real estate:

The impact on real estate prices in Bacau County is expected to have more positive than negative effects; on the one side there will be some noise and nuisance from the works during the period of construction, on the other side there will be an increase of the attractiveness of the real estate connected to functioning water supply and wastewater collection and treatment systems.

E.3. Risk and sensitivity analysis

E.3.1. Short description of methodology and summary results

Sensitivity Analysis

In order to validate the assumptions used and to identify the most sensitive variables, a detailed sensitivity and risk analysis has been performed, showing (i) the effects of variation in key parameters on the “financial results”, and (ii) the effects of variation in key parameters on the “economic results”.

(i) Sensitivity Analysis regarding the Financial Analysis:

This Sensitivity Analysis shows the effects of reasonable variations in investment cost, operation cost and revenues on:

- NPV/C and FIRR/C;

- NPV/K and FIRR/K;

both “before community assistance” and “after community assistance”.

(ii) Sensitivity Analysis regarding the Economic Analysis:

This Sensitivity Analysis shows the effects of key parameters on the “economic results” (NPV, EIRR and B/C).

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The analysis is carried out for variations of +/- 1%; +/-5%; and +/-10% for the following parameters:

- Investment cost;

- CO2 emissions;

- Access to drinking water benefit;

- Improvement of water bodies (use value);

- Improvement of water bodies (non-use value);

- Cost saving to customers - private well

- Cost saving to customers - sewage disposal;

- Cost saving to operator water abstraction;

- Cost saving to operator - energy consumption;

- Operating costs.

Risk Analysis

A detailed risk analysis is conducted for the most sensitive variables at 2 levels:

- For the financial analysis parameters;

- For the economic analysis parameters.

The risk analysis regarding the financial parameters considers the following sensitive variables:

- Investment costs;


- Revenues.

The risk analysis regarding the economic parameters considers the following variables:

- Investment costs;


- Environmental benefits cumulating the sensitive environmental variables;

Both risk analyses are carried out for a number of scenarios and anticipated probability distributions for each scenario. The variables tested are:

- FNPV/C and FNPV/K for the financial analysis;

- ENPV and ERR for the economic analysis.

The results of the Sensitivity and Risk Analysis are stated in the following sections.

E.3.2. Sensitivity analysis

State the percentage change applied to the variables tested: ± 1

Present the estimated effect on results of financial and economic performance indexes.

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Variable tested Financial Rate of Return (FRR/C)

variation

Financial Net Present Value

(FNPV/C) variation

Economic Rate of Return

(ERR) variation

Economic Net Present Value

(ENPV) variation

Project investment cost (increase of 1%)

-0.50% -1.14%

Project investment cost (decrease of 1%)

0.50% 1.14%

O&M costs (increase of 1%) -8.10% -2.83% O&M costs (decrease of 1%) 7.84% 2.83% Revenues development (increase of 1%)

8.38% 2.91%

Revenues development (decrease of 1%)

-8.69% -2.91%

Variation in investment costs (increase of 1%)

-1.55% -0.91%

Variation in investment costs (decrease of 1%)

1.59% 0.90%

Variation in CO2 emissions (increase of 1%)

-0.002% -0.002%

Variation in CO2 emissions (decrease of 1%)

0.002% 0.002%

Variation of access to drinking water benefit (increase of 1%)

0.40% 0.73%

Variation of access to drinking water benefit (decrease of 1%)

-0.40% -0.73%

Variation of improvement of water bodies (use value) (increase of 1%)

0.24% 0.52%

Variation of improvement of water bodies (use value) (decrease of 1%)

-0.24% -0.52%

Variation in improvement of water bodies (non use value) (increase of 1%)

0.001% 0.002%

Variation in improvement of water bodies (non use value) (decrease of 1%)

-0.001% -0.002%

Variation in cost saving to customers - private well (increase of 1%)

0.003% 0.00%

Variation in cost saving to customers - private well (decrease of 1%)

-0.003% 0.00%

Variation in cost saving to customers - sewage disposal (increase of 1%)

0.23% 0.33%

Variation in cost saving to customers - sewage disposal (decrease of 1%)

-0.23% -0.33%

Variation in cost saving to operator water abstraction (increase of 1%)

0.000% 0.000%

Variation in cost saving to operator water abstraction (decrease of 1%)

0.000% 0.000%

Variation in cost saving to operator - energy consumption (increase of 1%)

0.00% 0.01%

Variation in cost saving to 0.00% -0.01%

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Variable tested Financial Rate of Return (FRR/C)

variation

Financial Net Present Value

(FNPV/C) variation

Economic Rate of Return

(ERR) variation

Economic Net Present Value

(ENPV) variation

operator - energy consumption (decrease of 1%) Variation in operating costs (increase of 1%)

-0.76% -0.91%

Variation in operating costs (decrease of 1%)

0.77% 0.91%

Which variables were identified as critical variables? State which criterion is applied.

From the Sensitivity Analysis it turns out that regarding the financial analysis none of the variables tested is critical, when the criterion is, that a variation of a variable by 1% will lead to a change of the FNPV/C or the FRR/C by more than 5%. Therefore the Consultant has selected as “critical variable” the variables for which a variation of 1% leads to a change in the FNPV or FIRR of approximately 1% (the variables with the higher impact). Thus the risk analysis considers the following variables:


- Revenues;

- Investment costs.

The Consultant has selected as “critical variable” the variables for which a variation of 1% leads to a change in the ENPV or EIRR of approximately 0.3% (the variables with the higher impact).Therefore the Consultant has selected the following variables for the risk analysis:




- Investment costs.

Which are the switching values of the critical variables?

The switching value of a particular variable is defined as the percentage value at which the NPV/C, NPV/K and ENPV equals 0 (%). The switching values for key variables are presented in the following table:

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Critical value Switching value

Project investment cost Maximum decrease before NPV/C equals 0 (%) 88.0% Project investment cost Maximum decrease before NPV/K equals 0 (%) 48.5% Project investment cost Maximum increase before ENPV equals 0 (%) 221.4% Revenue scenario Maximum increase before NPV/C equals 0 (%) 34.4% Revenue scenario Maximum increase before NPV/K equals 0 (%) 4.4% O&M costs Maximum decrease before NPV/C equals 0 (%) 35.3% O&M costs Maximum decrease before NPV/K equals 0 (%) 4.6% O&M costs Maximum increase before ENPV equals 0 (%) 109.7% Access to drinking water benefit Maximum decrease before ENPV equals 0 (%) 137.1% Improvement of water bodies (use value) Maximum decrease before ENPV equals 0 (%) 191.4%

E.3.3. Risk analysis

Describe the probability distribution estimate of the project’s financial and economic performance indexes. Provide relevant statistical information (expected values, standard deviation).

The risk analysis regarding the financial performance parameters considers the following sensitive variables:

- Investment costs;


- Revenues.

Regarding the two cost variables it has to be noted that reliable estimates have been established based on a profound analysis of current market prices, their historic trends and their most probable development in the future, thus reducing the risk of unexpected variations. In the case of revenues, two issues have been considered:

- Regarding the specific water demand, the Consultant has taken into account the general trends observed in Romania as well as the experience from other projects under similar conditions;

- Regarding the tariff development the Consultant has seriously considered the affordability constrains.

The following three tables show the assumptions for and results of the risk analysis regarding the financial performance parameters in the following sequence:

- scenarios studied;

- probabilities assigned to the particular scenarios;

- statistical parameters for the financial performance parameters.

The detailed risk analysis as presented in the Financial and Economic Analysis, Chapter 6.2, indicates that there is no serious risk for a successful implementation and operation of the Project Measure.

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Scenarios Variation in Key Variables Investment Cost (I) O&M Cost (O) Revenues (R )

Scenario O2 -10.0% -10.0% 10.0%

Scenario O1 -5.0% -5.0% 5.0%

Base Case 0.0% 0.0% 0.0%

Scenario P1 5.0% 5.0% -5.0%

Scenario P2 10.0% 10.0% -10.0%

Probabilities for Key Variables / Scenarios

Investment Cost (I) O&M Cost (O) Revenues (R ) 1 Optimistic Scenario 2 (O2) 1.0% 3.0% 2.0% 2 Optimistic Scenario 1 (O1) 3.0% 5.0% 4.0% 3 Base Case (BC) 70.0% 70.0% 85.0% 4 Pessimistic Scenario (P1) 19.0% 15.0% 6.0% 5 Pessimistic Scenario (P2) 7.0% 7.0% 3.0% 6 Total 100.0% 100.0% 100.0%

The probability of the FNPV/C falling below the base case scenario values is around 41%. On the other hand, the probability that the FNPV/C becomes larger than 0 (i.e. FRR/C > 5%) is 0%. The following table provides an overview of the distribution of probabilities for the FNPV/C.

P (in %)

FNP/C< Base Case 43.4%

Base Case<FNPV/C<0 56.6%

FNP/C>0 (=FRR/C>5%) 0.0%

The probability of the FNPV/K falling below the base case scenario values is around 41%. On the other hand, the probability that the FNPV/K becomes larger than 0 (i.e. FRR/K > 5%) is 0%. The following table provides an overview of the distribution of probabilities for the FNPV/K.

P (in %)

FNP/K< Base Case 43.9%

Base Case<FNPV/K<0 56.1%

FNP/K>0 (=FRR/K>5%) 0.0%

The following table shows the standard deviation, the mean and the corresponding normal cumulative distribution for the FNPV/K based on the probability distribution shown above.

FNPV/C FNPV/K

Base case (87,558,333) (11,300,021)

Mean (91,692,238) (14,018,032)

Standard deviation 26,195,602 11,971,564

Norm. cum. distribution 0.563 0.590

Std. norm. cum. distribution 0.713 0.722

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The risk analysis regarding the economic performance parameters considers the following sensitive variables:




- Investment costs.

The detailed risk analysis as presented in the Financial and Economic Analysis, Chapter 6.2, indicates that there is no serious risk for a successful implementation and operation of the Project Measure.

Scenarios Variation in Key Variables

OM Cost (OM) Sewerage (SW) Water (W)

Optimistic (O) -5.0% 5.0% 5.0%

Base Case 0.0% 0.0% 0.0%

Pessimistic (P) 5.0% -5.0% -5.0%

Probabilities for Key Variables /Scenarios OM Cost (OM) Sewerage (SW) Water (W) Optimistic Scenario (O) 11.0% 3.0% 3.0% Base Case (BC) 70.0% 90.0% 90.0% Pessimistic Scenario (P) 19.0% 7.0% 7.0% Total 100.0% 100.0% 100.0%

There is a probability of 57% that the values of the selected variables will actually achieve the base case value.

The probability that the ERR becomes lower than 5.5% (i.e. ENPV=0) is 0%. The following table provides an overview of the distribution of probabilities for the ERR.

P (in %)

5.5%>ERR 0.0%

5.5%<ERR<=Base Case 85.0%

Base Case<ERR 15.0%

The following table shows the standard deviation, the mean and the corresponding normal cumulative distribution for the ERR and ENPV based on the probability distribution shown above.

ERR ENPV

Base case 19.0% 201,635,832

Mean 18.9% 200,261,082

Standard deviation 0.81% 13,290,321

Norm. cum. distribution 0.544 0.541

Std. norm. cum. distribution 0.707 0.706

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F. ANALYSIS OF THE ENVIRONMENTAL IMPACT

F.1. How does the project:

(a) contribute to the objective of environmental sustainability (European climate change policy, halting loss of biodiversity, other …);

(b) respect the principles of preventive action and that environmental damage should as a priority be rectified at source;

(c) respect the "polluter pays" principle.

a) The project contributes to the protection of the receiver water bodies by implementing the EU Directive for Urban Waste Water Treatment (Directive 91/271/EC amended by Directive 98/15/EC), together with an improved sludge management and disposal and by ensuring an efficient and sustainable use of water resources thanks to a reduction of technical water losses. After the implementation of the project the connection rate of the population to the sewerage system will increase from 64% to 100% (90 % with CF project and 100 % with additional ROC efforts).. Insofar the project respects the targets given by the Water Framework Directive (WFD 2000/60/EC amended by Directive 2008/32/EC), contributing to the public health. The project will contribute to the improvement of the quality of life of the population by rising the connexion rate to the drinking water system from 89% to aprox. 100% (90 % with CF project and 100 % with additional ROC efforts). After implementation of the project Implementation of the extension/rehabilitation of the WWTPs will directly contribute to the protection and improvement of biodiversity and natural heritage trough the better quality of the discharged water into the body receptors.

b) The project respects the principles of preventive action: as a major focus is on an integrated water/wastewater management policy, meaning the extension of the sewage networks in correlation with the existing water supply networks or extending both networks in the same project.

Positive impacts on environmental components are expected after the implementation of the project.

Furthermore, the project will contribute to: - Improve the environmental situation in Bacau County - and reduce the health risk for the population living in the area due to the extension of sewer networks and the extension of the existing new wastewater treatment plant together with implementation of the tertiary treatment for reducing the concentration of N and P, - Improve the water quality in the receptors rivers. After project implementation, only advanced treated wastewater will be discharged into the receiving water course, reducing considerably the pollution loads discharged, especially for N and P. - Reduce the pollution of soil & subsoil and groundwater. The measures in sewer network extension for those areas that were connected only to the distribution water system will cut of the uncontrolled discharge of wastewater on soil or into the ground.

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- Implement an effective and environmentally sound sludge disposal management.

c) The project respects the polluter pays principle. Quality parameters for industrial wastewater discharged to sewers are set out in the Romanian legislation and are applied nationally (NTPA 002/2002). In order to meet these standards, it is necessary for most industries to provide pre-treatment prior to discharge to the municipal sewerage system. The ROC will most likely establish service contracts, which transpose the fining, and penalty system, applies by “Apele Romane”, on all non-domestic and industrial customers. One of the future contract provisions could be additional payment when established limit values for certain pollutants, both concentrations and loads, are exceeded, according to the polluter pays principle. The tariffing and fining tools have to encourage industrial customers to pre-treat their wastewater according to established standards. The project developer (ROC) will have the responsibility to not exceed the maximum limits of the quality indicators for the discharged treated waste water according with the Technical Norms NTPA 001/2005 approved by GD no. 188/2002 completed and modified with the GD no. 352/2005. Elaboration of a Strategy and an Action Plan for Monitoring the Wastewater quality received in the sewage network and WWTPs from the potential polluter companies is a task imposed by the Water Management Directorate. The Action Plan will contain also specific measures to be taken in order to prevent the accidental pollution.

F.2. Consultation of environmental authorities

Have the environmental authorities likely to be concerned by the project been consulted by reason of their specific responsibilities?

Yes X No

If yes, please give name(s) and address(es) and explain that authority's responsibility:

Prior to obtain the development consent (building permit), the project for each agglomeration have to enter in the EIA procedure.

According to the national legislation, the authorities likely to be concerned by the project by reason of their specific environmental responsibilities are consulted in the all stages of the EIA procedure, (respectively screening, scooping and reviewing) during the Technical Review Committee (TRC) meetings. For this project, the TRC for the screening stage will be held soon; the representatives of the statutory consultees will make the proposal for the component of each agglomeration included into the FS for Bacau County according with the national EIA legislation.

In case of this project, the environment competent authority, including also the Natura 2000 procedure is the Local Environmental Authority, which is developing the EIA procedure:

Agentia de Protectia Mediului Bacau

(Environmental Protection Agency Bacau)

Address: Str. Oituz, nr. 23, 600266, Bacau, County Bacau, Romania, Tel: 0040-0234-524691, Fax: 0040- 0234-517547, mail: [email protected]

Other statutory consultees with responsibilities in environmental sector having representatives into the Technical Review Committee were:

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Water Authority in charge of issuing the Water Management Permit:

Administratia Nationala ÀPELE ROMANE`- Directia Ap elor Siret (National Administration ÀPELE ROMANE` - Water Management Directorate Siret)

Directia Judeteana de Sanatate Publica (Directorate for Public Health of Bacau County) is in charge with the drinking water quality monitoring.

Inspectoratul pentru Situatii de Urgenta al Judetului Bacau (Inspectorate of Emergency Situation Bacau County) is in charge with fire fighting and assurance of fire fight water reserves.

- Garda Nationla de Mediu – Comisariatul Judetului Bacau (National Environmental Guard – Bacau County Commissariat) is in charge with monitoring of the Environmental legal requirements and applying penalties in case of non-compliance.

Water Authority in charge of issuing the Water Management Permit:

Administratia Nationala ÀPELE ROMANE`- Directia Ap elor Siret (National Administration ÀPELE ROMANE` - Water Management Directorate Siret)

Directia Judeteana de Sanatate Publica (Directorate for Public Health of Bacau County) is in charge with the drinking water quality monitoring.

Inspectoratul pentru Situatii de Urgenta al Judetului Bacau (Inspectorate of Emergency Situation Bacau County) is in charge with fire fighting and assurance of fire fight water reserves.

- Garda Nationla de Mediu – Comisariatul Judetului Bacau (National Environmental Guard – Bacau County Commissariat) is in charge with monitoring of the Environmental legal requirements and applying penalties in case of non-compliance.

If no, please give reasons:

N/A

F.3. Environmental Impact Assessment

F.3.1. DEVELOPMENT CONSENT11

F.3.1.1. Has development consent already been given to this project?

Yes No X

F.3.1.2. If yes, on which date

N/A

F.3.1.3. If no, when was the formal request for the development consent introduced:

Semester II 2010

11 The decision of the competent (national) authority or authorities which entitles the developer to proceed

with the project. In cases where the project submitted is part of a wider operation, the development consent should refer only to the project submitted to the Commission. In cases where more than one development consent decisions are required, please repeat the information as many times as necessary.

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The `Building permits` have to be obtained by the Work Contractors after the signatures of the Work Contracts, according with Romanian current legislation.

According with the Implementation Plan the following dates can be estimated for introducing the formal requests for the development consent for each agglomeration and investment component:

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Nr.crt. Agglomeration Investment

component

Date

Rehabilitation WTP Caraboaia

December 2010

Upgrading WWTP October 2010

Waste Water

network

November 2010

1. Bacau

WW Pumping

Stations

November 2010

New WWTP South December 2010

Rehabilitation WWTP

North

December 2010

Water Supply network

November 2010

Waste Water

network

November 2010

2. Moinesti

WW Pumping

Stations

November 2010

Rehabilitation WWTP December 2010

Water Supply

network

November 2010

Waste Water network

November 2010

3. Buhusi

WW Pumping Stations

November 2010

New WWTP January 2011

Waste Water network

January 2011

4. Darmanesti

WW Pumping

Stations January 2011

Rehabilitation

WWTP

January 2011

Waste Water network

January 2011

5. Targu Ocna

WW Pumping

Stations January 2011

F.3.1.4 By which date is the final decision expected?

One month later, as following:

Nr.crt. Agglomeration Investment component

Date

Rehabilitation WTP

Caraboaia January 2011

Upgrading WWTP November 2010

1. Bacau

Waste Water

network December 2010

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WW Pumping

Stations December 2010

New WWTP South January 2011

Rehabilitation WWTP North

January 2011

Water Supply

network

December 2010

Waste Water

network

December 2010

2. Moinesti

WW Pumping Stations

December 2010

Rehabilitation WWTP January 2011

Water Supply network

December 2010

Waste Water

network December 2010

3. Buhusi

WW Pumping

Stations December 2010

New WWTP February 2011

Waste Water

network February 2011

4. Darmanesti

WW Pumping

Stations February 2011

Rehabilitation

WWTP February 2011

Waste Water

network February 2011

5. Targu Ocna

WW Pumping

Stations February 2011

F.3.1.5. Specify the competent authority or authorities, which has given or will give the development consent.

Bacau agglomeration - The Local Council of Bacau

Buhusi agglomeration - The Local Council of Buhusi

Moinesti agglomeration – The Local Council of Moinesti

Darmanesti agglomeration – The Local Council of Darmanesti

Targu Ocna agglomeration - The Local Council of Targu Ocna

F.3.2. APPLICATION OF COUNCIL DIRECTIVE 85/337/EEC ON ENVIRONMENTAL IMPACT ASSESSMENT (EIA)12

F.3.2.1. Is the project a class of development covered by:

� Annex I to that Directive (go to question F3.2.2)

12 OJ L 175, 5.7.1985, p. 40.

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� Annex II to that Directive (go to question F.3.2.3)

� Neither of the two annexes (go to question F.3.3)

Not decided yet – The Technical Review Meeting for screening stage will be held soon.

F.3.2.2. When covered by Annex I to that Directive, include the following documents:

(a) the information referred to in Article 9(1) of that Directive;

(b) the non-technical summary13 of the Environmental Impact Study carried out for the project;

(c) information on consultations with environmental authorities, the public concerned and, if applicable, with other Member States.

F.3.2.3. When covered by Annex II to that Directive, has an Environmental Impact Assessment been carried out for this project?

Yes

in which case, include the necessary documents listed under point F3.2.2

No

in which case, explain the reasons and give the thresholds, criteria or case by case examination carried out to reach the conclusion that the project has no significant environmental effects:

The Technical Review Committee will be held soon. After the Decision the EIA part of the Application will be revised and completed.

The public was informed about the submission of the Requests of S.C. APA SERV S.A for releasing the Environmental Agreement for all six agglomerations.

F.3.3. APPLICATION OF THE STRATEGIC ENVIRONMENTAL ASSESSMENT DIRECTIVE 2001/42/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL14 (SEA-Directive)

F.3.3.1. Does the project result from a plan or programme falling within the scope of the SEA Directive?

No

in which case please provide a short explanation:

N/A

Yes X

13 Prepared under Article 5(3) of Directive 85/337/EEC. 14 OJ L 197, 21.7.2001, p. 30.

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in which case, in order to appreciate if wider potential cumulative effects of the project have been addressed, please provide either an internet link to or an electronic copy of the non-technical summary15 of the Environmental Report carried out for the plan or programme.

The present project is part of the Sectoral Operational Programme Environment that falls under SEA procedure and the procedure was undertaken accordingly. SEA procedure for SOP ENV started on 23rd January 2006. A SEA Working Group was established in February 2006, comprising representatives of relevant ministries –Ministry of Health – Institute of public health, Ministry of Economy and Trade, Ministry of Administration and Interior, Ministry of Agriculture, Forests and Rural Development, technical departments of the Ministry of Environment, Ministry of Public Finance, and external consultants. The external consultants elaborated the Environmental Report in November 2006. A public hearing was organized on 17th January 2007 with the aim to discuss both the draft SOP and the Environmental Report. The comments made by the public and relevant stakeholders during consultation process were taken into account in the final SOP ENV.

The SEA procedure was finalized on 31st January 2007.

The internet link where can be found Non-Technical Summary of the Environmental Report is: htpp://www.mediu.ro/proiecteeuropene/alte documente.htm

F.4. Assessment of effects on NATURA 2000 Sites

F.4.1. Is the project likely to have significant negative effects on sites included or intended to be included in the NATURA 2000 network?

Yes

in which case

(1) Please provide a summary of the conclusions of the appropriate assessment carried out according to Article 6(3) of Council Directive 92/43/EEC16.

N/A

(2) In case, compensation measures were deemed necessary according to Article 6 (4), please provide a copy of the form “Information on projects likely to have significant negative effect on NATURA 2000 sites, as notified to the Commission (DG Environment) under Directive 92/43/EEC17”.

No X

in which case attach a completed Appendix I declaration filled in by the relevant authority.

The procedure is still ongoing

15 Prepared under Annex I (j) to Directive 2001/42/EC. 16 OJ L 206, 22.7.1992, p. 7. 17 Document 99/7 rev. 2 adopted by the Habitats Committee (established under Directive 92/43/EEC) at

its meeting on 4 October 1999.

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F.5. Additional environmental integration measures

Does the project envisage, apart from Environmental Impact Assessment, any additional environmental integration measures (e.g. environmental audit, environmental management, specific environmental monitoring)?

Yes X No

If yes, specify

After finalizing the EIA procedure this part of the Application will be completed.

F.6. Cost of measures taken for correcting negative environmental impacts

If included in total cost, estimate proportion of cost of measures taken to reduce and/or to compensate for negative environmental impacts

% 0.25

Explain briefly:

The environmental impact is reduced.

Therefore, a certain measures taken for rehabilitation of the existing components of the project will save energy consumption, or will save the chemical demand for treatment by the technologies proposed.

The above estimated percentage from the total cost, meaning cost of measures for correcting the negative impacts on environmental components consists in the cost under the budgetary line called Ènvironmental protection arrangements` (chap. 1, p. 1.3 from the General Cost Breakdown – annex 6-3 of FS). Apart from this, other costs that are included into the costs for main works and daily operating costs will contribute to the correction of the potential negative impact on environment during the construction and operating stages.

The cost of measures to be taken for correcting the potential negative environmental impacts was included in the costs for the main works. The measures consist in:

- Monitoring of the impacts during the construction period Control under construction contract according to the Law 10/1995, on the Quality in construction work, and FIDIC conditions, human health and safety (clause 6.7) as well as the protection of the environment by construction activities (clause 4.18);

- Strict control under construction Contract has to be determined to comply with standards and regulations;

- In-house structures for sludge dewatering in order to protect the equipments and reduce odour impact;

- Provision of noise protection measures for blower station;

- Planting of trees surrounding the WWTPs, near the fence;

- Soil, subsoil and water protection by assuring of the hygienic conditions during the construction period.

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The auto-monitoring of the treated waste water and sludge quality during the O&M period enters under the daily operating costs. The auto-monitoring is one of the most important measures for environmental protection.

F.7. In case of projects in the areas of water, waste water and solid waste:

Explain whether the project is consistent with a sectoral/integrated plan and programme associated with the implementation of Community policy or legislation18 in those areas:

The proposed project contributes to the fulfilment of the commitments of Romania as per the Accession Treaty and is in line with the Sectoral Operational Programme for Environment (SOP ENV). The overall objective of SOP ENV is to protect and improve the environment and living standards in Romania, focusing in particular on meeting the Environmental Acquis.

The SOP ENV is closely linked to the national objectives of the strategy laid down in the National Development Plan 2007-2013 (NDP) and National Strategic Reference Framework (NSRF), which takes into consideration the European Union’s supporting objectives, principles and practices.

The project took into account the SOP’s key strategic considerations - relevant contribution to the achievement of the environmental acquis aimed at improving the environmental quality and living standards for the population in the project region, setting efficient management of environmental services, regional convergence, speed up implementation of national programmes, avoidance/ reduction of further economic and environmental losses (associated with lack of sustainable actions in short term) – as well as specific objective constraints during the implementation period.

Following the negotiations on Chapter 22 – Environment, Romania has certain commitments that imply substantial investments in the water and wastewater sector within relatively short transition periods. According to the Accession Treaty, Romania has been granted transition periods for compliance with the acquis for urban wastewater collection, respectively treatment and discharge.

Moreover, as a result of the negotiations for accession, the whole territory of Romania is declared as sensitive area, thus all agglomerations of more than 10,000 p.e. should be endowed with wastewater treatment plants providing advanced treatment level. In this context, additional costs for compliance are needed. Romania has prepared implementation plans for the fulfilment of the requirements set by the Directive No 98/83/EC on drinking water quality and Directive 91/271/EEC concerning urban wastewater treatment as amended by Directive 98/15/EC.

The implementation of the proposed investments for water supply and wastewater for all agglomerations of Bacau County included in this project is expected to be implemented until 2013, in line with the transitions periods agreed for compliance with the Directive No 98/83/EC on drinking water quality by 2015 and the transitions periods agreed for compliance with the Directive 91/271/EC on urban wastewater by 2013 (collection) and 2015 (treatment) for agglomerations above 10,000 p.e..The

18 In particular, Directive 2000/60/EC of the European Parliament and of the Council (Water Framework

Directive) (OJ L 327, 22.12.2000, p. 1) Council Directive 1991/271/EC (Urban Waste Water Treatment Directive) (OJ L 135, 30.5.1991, p. 40), Article 7 of Directive 2006/12/EC of the European Parliament and of the Council (Waste Framework Directive) (OJ L 114, 27.4.2006, p. 9), Council Directive 1999/31/EC (Landfill of Waste Directive) (OJ L 182, 16.7.1999, p. 1).

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proposed investments will grant compliance with the above mentioned targets and requirements for each agglomeration until 2013, for the Directive 91/271/EEC concerning urban wastewater treatment as amended by Directive 98/15/EC, too.

The project has been checked against the River Basin Management Plan, the modelling of the combined sewage overflow discharges show no significant increase of the overflow return frequencies due to the extensions, the WWTPs will be a major step in improvement of river water qualities.

G. JUSTIFICATION FOR THE PUBLIC CONTRIBUTION

G.1. Competition

Does this project involve State Aids?

Yes No X

If yes, please give in the table below the amount of aid, and, for approved aid the state aid number and the reference of the approval letter, for block-exempted aid the respective registry number, and for pending notified aid the state aid number19.

Sources of aid (local, regional, national and Community):

Amount of aid euro

State Aid number/ registry number for block-exempted aid

Reference of approval letter

Approved aid schemes, approved ad hoc aid, or aid falling under a block exemption regulation: ………………………….. …………………………..

Aid foreseen under pending notifications (ad hoc aid or schemes) : ………………………….. …………………………..

Aid for which a notification is outstanding (ad hoc aid or schemes) ………………………….. …………………………..

Total aid granted:

Total cost of the investment project

G.2. Impact of Community assistance on project implementation

For each affirmative answer, give details:

19 This application does not replace notification to the Commission under Article 88(3) of the EC Treaty.

A positive decision by the Commission on the major project under Regulation (EC) No 1083/2006 does not constitute state aid approval.

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Will Community assistance:

a) accelerate implementation of the project?

Yes X No

b) be essential to implementation of the project?

Yes X No

(a) The Community assistance will significantly accelerate the implementation of the project by providing the largest share of the funds required (76.98%) in due time. In the absence of the Community assistance, the local stakeholders and the central authorities had to find the respective financial resources from other donors (in form of grant money as proven by the financing gap analysis), which would be difficult and certainly delay the project implementation. The amount is significant and finding another funding source, even if possible, would be in any case be time consuming.

(b) The Community assistance is essential for the implementation of the Project Measure; as it is providing the largest share of the funds required (76.98%). In the absence of the Community assistance, the local stakeholders and the central authorities will need to find respective financial resources from other donors in form of grant money. Currently, grant money for infrastructure investment projects can be obtained from 3 main sources: EU cohesion funds, state budget and local budget.

The local budgets are obviously limited and would not be able to provide a significant portion of the funds required.

Also the state budget has limited resources compared with the nationwide needs in water sector infrastructure.

In this context, the Community assistance is absolute essential for the implementation of the project in due time.

H. FINANCING PLAN

The decision amount and other financial information in this section must be coherent with the basis (total or public cost) for the co-financing rate of the priority axis. Where private expenditure is not eligible for financing under the priority axis it shall be excluded from the eligible costs; where private expenditure is eligible it may be included.

H.1. Cost breakdown

A breakdown of the Project investment cost by cost categories is given in the following table.

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Euro TOTAL PROJECT COSTS

(A)

INELIGIBLE COSTS(1)

(B)

ELIGIBLE COSTS

(C)=(A)-(B)

1 Planning/design fees 2,199,243 - 2,199,243 2 Land purchase - - - 3 Building and construction 64,545,600 - 64,545,600 4 Plant and machinery 22,744,600 - 22,744,600 5 Contingencies(2) 6,972,926 - 6,972,926 6 Price adjustment (if

applicable)(3) 12,596,053 - 12,596,053 7 Technical assistance 2,207,397 - 2,207,397 8 Publicity 316,059 - 316,059 9 Supervision during

construction implementation 3,621,508 - 3,621,508

10 Sub-TOTAL 115,203,387 - 115,203,387 11 (VAT(4) and other taxes

and fees)* 30,137,196 28,038,696 2,098,500 12 TOTAL 145,340,584 28,038,696 117,301,887 * As eligible expenditures are recorded taxes and fees related to the investments. As ineligible cost is recorded the VAT related to the total value of investment without Salaries of the PIU.

A detailed description of the approach for the calculation of investment costs in current prices is presented in the Financial and Economic Analysis, Chapter 3.3.4. - Project Investment in Current Prices.

______________________________________________

(1) Ineligible costs comprise (i) expenditure outside the eligibility period, (ii) expenditure ineligible under national rules (Article 56(4) of Regulation (EC) No 1083/2006), (iii) other expenditure not presented for co-financing. NB: The starting date for eligibility of expenditure is the date of receipt of the draft operational programme by the Commission or 1 January 2007, whichever is the earlier.

(2) Contingencies should not exceed 10% of total investment cost net of contingencies. These contingencies may be included in the total eligible costs used to calculate the planned contribution of the funds – Section H2.

(3) A price adjustment may be included, where relevant, to cover expected inflation where the eligible cost values are in constant prices.

(4) Where VAT is considered as eligible, give reasons. (5) Total cost must include all costs incurred for the project, from planning to supervision and

must include VAT even if VAT is considered non eligible.

H.2. Total planned resources and planned contribution from the Funds

The funding gap rate was already presented under Section E.1.2. This should be applied to the eligible cost to calculate the “amount to which the co-financing rate for the priority axis applies” (Article 41(2) of Council Regulation (EC) No 1083/2006). This is then multiplied by the co-financing rate of the priority axis to determine the Community contribution.

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H.2.1. Community contribution calculation

Value

1. Eligible cost (in euro, not discounted) (Section H.1.12(C))

117,301,887

2. Funding gap rate (%), if applicable = (E.1.2.11) 90.56%

3.

Decision amount, i.e. the “amount to which the co-financing rate for the priority axis applies” (Article 41(2)) = (1)*(2).

If H.2.1.2 not applicable, the decision amount must respect the maximum public contribution according to state aid rules

106,231,940

4. Co-financing rate of the priority axis (%) 85.0%

5. Community contribution (in euro) = (3)*(4) 90,297,149

H.2.2. Sources of co-financing

In the light of the results of the financing gap calculation (where relevant) the total investment costs of the project shall be met from the following sources (in Euro, current prices):

Source of total investment costs (€) Of which

(for Information)

Total investment cost

[H.1.12.(A)]

Community assistance [H.2.1.5]

National public (or

equivalent)

National private

Other sources (specify)

EIB/EIF loans:

(a)= (b)+(c)+(d)+(e)

(b) (c) (d) (e) (f)

145,340,584 90,297,149 55,043,435

H.2.3. Expenditure already certified

Have expenditure for this major project been already certified?

Yes No X

If yes, state the amount: ………. EUR.

H.3. Annual financing plan of Community contribution

The Community contribution (H.2.1.5) shall be presented below in terms of the share of annual programme commitment.

The following table shows the anticipated annual disbursements of the required community contribution according to the implementation scheme of the project. The annual disbursement figures will be correlated by the Ministry of Environment with the programming scheme for Sectoral Operational Programme (SOP)

(in Euro) 2007 2008 2009 2010 2011 2012 2013

CF - - - 856,447 34,470,298 36,344,068 18,626,336

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I. COMPATIBILITY WITH COMMUNITY POLICIES AND LAW

With regard to Article 9 (5) of Regulation (EC) No 1083/2006 provide the following information:

I.1. Other Community financing sources

I.1.1. Has an application been made for assistance from any other Community source (TEN-T Budget, LIFE+, R&D Framework Programme, other source of Community finance) for this project?

Yes No X

If yes, please give details (financial instrument concerned, reference Nos, dates, amounts requested, amounts granted, etc.):

TEXT BOX

I.1.2. Is this project complementary to any project already financed or to be financed by the ERDF, ESF, Cohesion Fund, TEN-T Budget, other source of Community finance?

Yes No X

If yes, give details (provide precise details, reference Nos, dates, amounts requested, amounts granted, etc.):

TEXT BOX

I.1.3. Has an application been made for loan or equity support from EIB / EIF for this project?

Yes No X


TEXT BOX

I.1.4. Has an application been made for assistance from any other Community source (including ERDF, ESF, Cohesion Fund, EIB, EIF, other sources of Community finance) for an earlier phase of this project (including feasibility and preparatory phases)?

Yes X No


An application for ISPA/PHARE assistance has been made for the preparation of this CF/ERDF application and supporting documents (feasibility studies, environmental studies, tender documents, etc.). This is part of the TA (ref. no 2005/RO/16/P/PA/001-2).

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I.2. Is the project subject to a legal procedure for non-compliance with Community legislation?

Yes No X

If yes, please give details:

TEXT BOX

I.3. Publicity measures

Give details of the proposed measures to publicise Community assistance (for example, type of measure, brief description, estimated costs, duration, etc.):

All publicity activities within the Project will be implemented in compliance with the provisions of EU Regulation No. 1159/2000. The measures will include:

- Erection of billboards according to established standard (under § 6.1 of the above mentioned Regulation). Billboards will be placed on all project sites;

- After finalization of works, the billboards will be removed not later than six months after completion of the work and replaced by permanent commemorative plaques for infrastructures accessible to the general public;

- Posters will be displayed on the premises of bodies implementing or benefiting from the Project (County councils, local councils, regional and local environmental agencies, employment agencies, vocational training centres, chambers of commerce and industry, development agencies, etc.;

- All notifications of aid to beneficiaries sent by the competent authorities shall mention the fact of part-financing by the European Union and may state the amount or percentage of the assistance funded by the Community instrument concerned;

- All publications (such as booklets, leaflets and newsletters) concerning the Project will contain a clear indication on the title page of the European Union's participation and, where appropriate, that of the Fund concerned as well as the Community emblem if the national or regional emblem is also used;

- Information will be also available by electronic means (e.g. websites) and by audio-visual material (presentations, CD-ROMs, etc.) with due regard to new technologies which permit the rapid and efficient distribution of information and facilitate a dialogue with the general public;

- In all events such as conferences, seminars, fairs and exhibitions in connection with the Project Implementation it will be clearly stated that make the Community contribution to these assistance packages explicit by displaying the European flag in meeting rooms and using the Community emblem on documents.

The details of the campaigns have still to be designed. The measures directed to the general public will include, but not be limited to campaigns in print, radio and TV media.

During the project implementation, the progress reports of the project will include copies of the communication material produced and evidence of the information events carried out in the period of time reported.

Publicity measures will be implemented in order to raise public awareness and acceptance among the population. The measures aim at:

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- Increasing the beneficiaries’ awareness of the Community assistance

- Increasing the beneficiaries’ awareness of the value of the improved water supply and/ wastewater services

- Increasing the beneficiaries’ willingness to pay adequate fees for the improved services

- Inform the public about the project measures, cost and benefits in order to ensure project acceptance through transparency.

The total budget estimated for the implementation of publicity measures is 354,081 Euro (in current prices).

I.4. Involvement of JASPERS in project preparation

I.4.1. Has JASPERS technical assistance contributed to any part of the preparation of this project?

Yes X No

I.4.2. Describe the elements of the project where JASPERS had an input (e.g. environmental compliance, procurement, review of technical description).

JASPERS followed up the preparation of the documentation required (Feasibility Study, Economic and Financial Analysis, Institutional Analysis and Application Form). JASPERS was involved in the process of preparation of the financial model for the financial and economic analysis. JASPERS prepared general guidance for the financial and economic analysis which was considered by the Consultant in preparing the financial and economic analysis. JASPERS also provided guidance for filling in the Application Form and specific recommendation during the finalisation process of the Application.

I.4.3. What were the principal conclusions and recommendations of the JASPERS contribution and were these taken into account in the finalisation of the project?

• The proposed project is coherent with the EU policies for environment and with the Convergence objective; the project brings an important contribution to the Accession Treaty obligations of Romania in the field of environment;

• The proposed project is compliant with the SOP Environment document;

• Social, institutional and economic contexts are well described, project objectives are defined; relevant options assessed;

• The Managing Authority should ensure that the co-financing funds are available in due time in order to avoid project bottlenecks during implementation;

• The IDA shall support the ROC in the implementation of the action plan for connections of new customers, as detailed in the annexes of this application form;

• The ROC shall monitor closely the implementation of ongoing investment projects, so as to ensure that they are fully integrated and consistent with the projects proposed for CF financing;

• The ROC shall monitor closely the implementation of the sludge strategy presented in the documentation.

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I.5. Public procurement

In cases where contracts have been advertised in the Official Journal of the European Union, give reference.

Contract Date Reference

… … …

J. ENDORSEMENT OF COMPETENT NATIONAL AUTHORITY

I confirm that the information presented in this form is accurate and correct.

NAME: Doina Frant

SIGNATURE:

ORGANISATION: Ministry of Environment and Forests

(MANAGING AUTHORITY)

DATE: